1
<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 14, 1999
REGISTRATION NO. 333-_____
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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TV GUIDE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 4841 73-1290412
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NO.)
INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NUMBER)
(For Co-Registrants, please see "Table of Co-Registrants" on the following page)
7140 SOUTH LEWIS AVENUE
TULSA, OKLAHOMA 74136-5422
(918) 488-4000
(ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
PETER C. BOYLAN III
EXECUTIVE VICE PRESIDENT;
CHAIRMAN AND CHIEF EXECUTIVE
OFFICER OF TV GUIDE ENTERTAINMENT
GROUP AND UNITED VIDEO GROUP
7140 SOUTH LEWIS AVENUE
TULSA, OKLAHOMA 74136-5422
(918) 488-4000
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF AGENT FOR SERVICE FOR THE REGISTRANT)
---------------
COPIES TO:
FRANCIS R. WHEELER, ESQ.
HOLME ROBERTS & OWEN LLP
1700 LINCOLN STREET, SUITE 4100
DENVER, COLORADO 80203
(303) 861-7000
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES 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. [ ]
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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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CALCULATION OF REGISTRATION FEE
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- --------------------------------------------------------------------------------
PROPOSED PROPOSED
TITLE OF EACH CLASS AMOUNT OFFERING MAXIMUM MAXIMUM
OF SECURITIES TO TO BE PRICE AGGREGATE AMOUNT OF
BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) REGISTRATION
FEE(2)
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8 1/8% Series B
Senior Subordinated
Notes Due 2009 ... $400,000,000 100% $400,000,000 $113,082
Guarantees of
the Notes (3)..... N/A N/A N/A N/A
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- --------=-----------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 of the Securities Act of 1933, as amended.
(2) Calculated pursuant to Rule 457(f)(2) based on the book value on May 9,
1999 of the notes to be received by the Registrant in the exchange
described herein.
(3) Represents the guarantees of the notes to be issued by the
co-registrants. Pursuant to Rule 457(n) under the Securities Act, no
additional registration fee is being paid in respect of the guarantees.
The guarantees are not traded separately.
The Co-Registrants hereby amend this registration statement on such date or
dates as may be necessary to delay its effective date until the Co-Registrants
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933, as amended, or until this registration statement
shall become effective on such date as the Commission, acting pursuant to said
section 8(a), may determine.
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TABLE OF CO-REGISTRANTS
<TABLE>
<CAPTION>
EXACT NAME OF (STATE OR OTHER (PRIMARY STANDARD
CO-REGISTRANT AS JURISDICTION INDUSTRIAL (I.R.S. EMPLOYER
SPECIFIED IN ITS CHARTER OF INCORPORATION OR CLASSIFICATION NUMBER) IDENTIFICATION NO.)
ORGANIZATION)
<S> <C> <C> <C>
TV Guide Affiliate Sales, Inc. Delaware 7389 73-1511385
UV Corp. Delaware 7389 73-1437655
Telluride Cablevision Inc. Delaware 4841 91-1362254
UVTV-A, Inc. Delaware 4841 73-1539065
UVTV-X, Inc. Delaware 4841 73-1539064
DirectCom Networks, Inc. Delaware 4899 73-1469587
TV Guide Media Sales, Inc. Delaware 7389 73-1559714
EuroMedia Group, Inc. Delaware 2721 73-1552011
TV Guide Interactive Group Inc. Delaware 4841 73-1559148
Prevue Data Services, Inc. Delaware 7389 73-1558837
TV Guide Online, Inc. Delaware 4899 73-1559667
TV Guide Interactive, Inc. Delaware 4841 73-1437657
TV Guide Entertainment Group, Inc. Delaware 4841 73-1539062
TV Guide International, Inc. Delaware 4841 73-1469597
Sneak Holdings, Inc. Delaware 4841 73-1539060
LMC Netlink Corporation Delaware 4899 84-1083020
Westlink, Inc. Delaware 4899 84-1111254
TV Guide Networks, Inc. Delaware 4841 73-1319863
UVTV, Inc. Delaware 4841 73-1539066
Netlink USA Delaware 4899 91-1360581
TV Guide Magazine Group, Inc. Delaware 2721 23-1162684
TVSM, Inc. Delaware 2721 23-2133606
TVSM Publishing, Inc. Delaware 2721 26-2688844
TV Guide Distribution, Inc. Delaware 7389 23-2775457
Continental Paper Company Delaware 5111 23-2731610
</TABLE>
The address, including zip code, and telephone number, including area
code, of the principal executive offices of each Co-Registrant is 7140 South
Lewis Avenue, Tulsa, Oklahoma 74136-5422, (918) 488-4000.
The name, address, including zip code, and telephone number, including
area code, of agent for service for each Co-Registrant is Peter C. Boylan III,
Executive Vice President, Chairman and Chief Executive Officer of Tv Guide
Entertainment Group and United Video Group, South Lewis Avenue, Tulsa, Oklahoma
7140 74136-5422, (918) 488-4000.
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Prospectus
[Logo]
Offer to Exchange All Outstanding
8 1/8% Senior Subordinated Notes due 2009
for
8 1/8% Series B Senior Subordinated Notes due 2009
of
TV Guide, Inc.
Our offer to exchange old notes for new notes will be open until 5:00 p.m., New
York City time, on __________, 1999.
We do not intend to list the new notes on any securities exchange and,
therefore, no active public market is anticipated.
You should carefully review the Risk Factors beginning on page 14 of this
prospectus.
-------------------------------------------------
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 __________, 1999
The information in this prospectus is not complete and may be changed. We may
not sell the notes until the registration statement filed with the Securities
and Exchange Commission is effective. This prospectus is not an offer to buy the
notes in any state where the offer or sale is not permitted.
----------------
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Table of Contents
Page
Prospectus Summary.............................................. 7
Risk Factors....................................................14
The Exchange Offer..............................................24
Use of Proceeds.................................................31
Capitalization..................................................32
Description of the Notes........................................33
Description of Certain Debt.....................................34
United States Federal Income Tax Considerations.................83
Plan of Distribution............................................88
Legal Matters...................................................89
Experts.........................................................89
Where You Can Find More Information.............................90
Incorporation of Certain Documents by Reference.................90
------------------------
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Prospectus Summary
Who We Are
We are a media and communications company that provides print, passive and
interactive program listings guides to households, distributes programming to
cable television systems and direct-to-home satellite providers, and markets
satellite-delivered programming to C-band satellite dish owners.
On March 1, 1999, we acquired from Liberty Media Corporation 40% of
Superstar/Netlink Group LLC and Liberty Media's Netlink Wholesale Division,
which includes a business that provides six Denver-based television channels and
a separate business that sells programming packages to satellite master antenna
television systems serving hotels and multi-unit dwellings. The acquisition
increased our ownership interest in Superstar/Netlink to 80%.
We also acquired from The News Corporation Limited the stock of certain
corporations which publish TV Guide Magazine and other printed television
program listings guides and distribute, through the Internet, an entertainment
service known as TV Guide Online.
Liberty Media and News Corp. each own 44% of our common stock representing
49% of the total voting power of our common stock.
We are organized into three operating groups: TV Guide magazine group; TV
Guide entertainment group; and United Video group.
The TV Guide magazine group provides TV Guide Magazine to households and
newsstands. TV Guide Magazine is the most widely circulated paid weekly magazine
in the U.S. It is printed in over 175 separate editions and had circulation of
12 million as of December 31, 1998. In addition, the TV Guide magazine group
provides customized monthly program guides for cable and satellite operators.
The TV Guide entertainment group supplies satellite-delivered on-screen
program promotion and guide services, both nationally and internationally. Its
customers are cable television systems and other multi-channel video programming
distributors. Its services include:
o TV Guide Channel,
o Sneak Prevue,
o TV Guide Interactive, and
o TV Guide Online.
TV Guide Interactive provides a service that allows television viewers to
retrieve on demand continuously updated program guide information through their
cable television system. TV Guide Online is an Internet-based program listings
guide.
The United Video group provides:
o direct-to-home satellite services,
o satellite distribution of video entertainment services, o software
development and systems integration services and o satellite
transmission services for private networks.
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Through Superstar/Netlink, we market satellite entertainment programming to
C-band direct-to-home satellite dish owners in North America. We own 80% of
Superstar/Netlink. Through UVTV, we market and distribute WGN (Chicago), KTLA
(Los Angeles) and WPIX (New York), three independent satellite-delivered
television "superstations," to cable television systems and other multi-channel
video programming distributors. In addition, we offer six Denver-based
television channels and programming packages to satellite master antenna
television systems. Through SSDS, Inc., we provide software development and
systems integration services to large organizations with complex computer needs.
We own 70% of SSDS. Our SpaceCom subsidiary provides satellite-delivered point-
to-multipoint audio and data transmission services for various customers,
including radio programmers, paging network operators, financial information
providers, news services and other private business networks.
We are considering selling or entering into joint ventures with respect to
Superstar/Netlink, SSDS and SpaceCom. We are currently in discussions with
several parties regarding a possible sale of the Superstar/Netlink business and
certain other assets or a strategic marketing alliance or other transaction
consistent with our strategy of converting our C-band business into an equity
position in a direct broadcast satellite company.
Our principal executive offices are at 7140 South Lewis Avenue, Tulsa,
Oklahoma 74136-5422, and our telephone number is (918) 488-4000.
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The Exchange Offer
On March 1, 1999, we issued $400.0 million aggregate principal amount of notes
in a transaction exempt from the registration requirements of the Securities
Act. We are offering to exchange $1,000 principal amount of new notes in
exchange for each $1,000 principal amount of old notes. The terms of the new
notes and the old notes are substantially identical.
We believe that new notes issued in the exchange offer in exchange for old notes
may be offered for resale or resold by holders without compliance with the
registration and prospectus delivery requirements of the Securities Act,
provided that:
o the new notes are acquired in the ordinary course of the
holders' business and the holders have no arrangement with any
person to engage in a distribution of new notes and
o the holders are not "affiliates" of our company or
broker-dealers who purchased old notes directly from us to
resell under Rule 144A or any other available exemption under
the Securities Act.
Each holder, other than a broker-dealer, must acknowledge that it is not engaged
in and does not intend to engage in a distribution of the new notes and has no
arrangement to participate in a distribution of new notes. Each broker-dealer
that receives new notes for its own account in the exchange offer must
acknowledge that it will comply with the prospectus delivery requirements of the
Securities Act in connection with any resale of the new notes. Broker-dealers
who acquired old notes directly from us and not as a result of market-making
activities or other trading activities may not participate in the exchange offer
and must comply with the prospectus delivery requirements of the Securities Act
in order to resell the old notes.
Expiration Date..............
The exchange offer will expire at 5:00 p.m., New York City time,
________, 1999 or a later date and time to which we extend it.
Withdrawal...................
The tender of the old notes in the exchange offer may be withdrawn at
any time prior to 5:00 p.m., New York City time, on the expiration
date.
Interest on the New Notes and
the Old Notes..............
Interest on the new notes will accrue from the date of the original
issuance of the old notes or from the date of the last periodic payment
of interest on the old notes, whichever is later. No additional
interest will be paid on old notes tendered and accepted for exchange.
Procedures for Tendering Old
Notes......................
To accept the exchange offer, you must complete, sign and date a copy
of the letter of transmittal and mail or otherwise deliver it, together
with the old notes and any other required documentation, to the
exchange agent at the address set forth in this prospectus. Persons
holding the old notes through the Depository Trust Company and wishing
to accept the exchange offer must do so under the Depository
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Trust Company's automated tender offer program. Under this program,
each tendering participant will agree to be bound by the letter of
transmittal.
Exchange Agent...............
The Bank of New York Company, Inc.
Federal Income Tax
Considerations.............
In the opinion of our counsel, the exchange of old notes for new notes
in the exchange offer should not be a taxable exchange for United
States federal income tax purposes. This opinion is subject to
limitations and assumptions set forth in the discussion under the
caption "United States Income Tax Considerations."
Effect of not Tendering......
Old notes that are not tendered or that are tendered but not accepted
will continue to be subject to the existing restrictions on transfer.
The New Notes
Some of the terms and conditions described below are subject to important
limitations and exceptions. The "Description of the Notes" section of this
prospectus beginning on page 35 contains a more detailed description of the
terms and conditions of the new notes.
Issuer
TV Guide, Inc.
Notes Offered
$400,000,000 aggregate principal amount of 8 1/8% Series B Senior
Subordinated Notes due 2009.
Maturity Date
March 1, 2009.
Interest Payment Dates
March 1 and September 1 of each year, commencing September 1, 1999.
Guarantees
The notes are guaranteed on an unsecured senior subordinated basis by
certain of our existing and future domestic restricted subsidiaries.
Sinking Fund
None.
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Optional Redemption
We may not redeem the notes prior to March 1, 2004, except as set forth
below. On or after March 1, 2004, we may, at our option, redeem the
notes, in whole or in part, at any time prior to maturity at the
redemption prices set forth under "Description of Notes--Optional
Redemption."
In addition, prior to March 1, 2002, we may redeem up to 35% of the
original aggregate principal amount of the notes with the proceeds of
certain public offerings of our common stock at a redemption price of
108.125% of the principal amount of the notes being redeemed, plus
accrued and unpaid interest, if any, to the date of redemption;
provided that at least 65% of the original aggregate principal amount
of the notes remains outstanding.
Change of Control
Upon a change of control, as defined under the indenture for the notes,
you have the right to require us to repurchase all or a portion of your
notes at a price equal to 101% of the principal amount, plus accrued
and unpaid interest to the date of repurchase.
Ranking
The notes are unsecured senior subordinated obligations. The notes
rank:
x subordinate in right of payment to all existing and
future senior debt, including the senior debt of our
guarantor subsidiaries,
x equal with any future senior subordinated debt, and
x senior to any future junior subordinated debt.
If we had completed the TV Guide and Netlink acquisitions and had
incurred the related initial bank borrowings and had sold the old notes
on December 31, 1998, the notes would have been subordinated to $203.8
million of senior debt on that date.
The notes are structurally subordinated to all debt and other
liabilities of our non-guarantor subsidiaries. If we had completed the
TV Guide and Netlink acquisitions and had incurred the related initial
bank borrowings and had sold the old notes on December 31, 1998, the
total balance sheet liabilities of our non-guarantor subsidiaries would
have been $171.1 million at December 31, 1998.
Unrestricted Subsidiaries
Subsidiaries that generate a significant portion of our consolidated
revenues and cash flow are classified as "unrestricted subsidiaries"
under the indenture for the notes. The unrestricted subsidiaries are
not subject to the covenants in the indenture and are not guarantors of
the notes.
Certain Covenants
The indenture for the notes limits our ability and the ability of our
restricted subsidiaries to, among other things:
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x incur additional debt,
x make any dividend or other distribution with respect
to our capital stock or purchase, redeem or retire
our capital stock,
x create liens,
x in the case of our restricted subsidiaries, create or
permit to exist dividend or payment restrictions with
respect to us,
x consolidate, merge or transfer all or substantially
all our assets or the assets of any guarantor
subsidiary,
x sell assets, and
x transact business with our affiliates.
In addition, the indenture limits our ability and the ability of our restricted
subsidiaries to make investments, but only if the credit ratings on the notes
decrease from the ratings on the issue date. All of these limitations are
subject to a number of important qualifications, including the suspension of
certain covenants if the notes achieve an investment grade credit rating.
Risk Factors
We urge you to carefully review the risk factors beginning on page 14
for a discussion of factors you should consider before exchanging your
old notes for new notes.
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Summary Historical and Pro Forma Financial Data
(Dollars in thousands)
The following table sets forth certain comparative data related to operations
and financial position:
o on a historical basis as of and for the years ended December
31, 1998 and 1997;
o on a pro forma basis assuming that the TV Guide and Netlink
acquisitions and the related financings had each occurred as
of January 1, 1997 for the years ended December 31, 1998 and
1997 with respect to the operating data and as of December 31,
1998 with respect to the balance sheet data; and
o on a pro forma basis for our restricted subsidiaries assuming
the TV Guide and Netlink acquisitions and the related
financings had each occurred as of January 1, 1997 for the
years ended December 31, 1998 and 1997 with respect to the
operating data and as of December 31, 1998 with respect to the
balance sheet data.
The following information should be read in conjunction with the consolidated
historical financial statements and notes of our company, the businesses
acquired from Liberty Media and News Corp., and our unaudited pro forma combined
financial statements and notes, all of which are incorporated by reference in
this prospectus.
<TABLE>
<CAPTION>
Historical Pro Forma Pro Forma
Restricted Group (1)
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1998 1997 1998 1997 1998 1997
Operating Data:
<S> <C> <C> <C> <C> <C> <C>
Revenues ................ . $598,420 $507,598 $1,300,535 $1,244,994 $ 840,158 $ 852,144
Depreciation and amortization .............. (28,027) (18,651) (129,428) (118,800) (113,828) (111,562)
Operating income ....................... ... 95,699 85,344 157,561 178,571 102,476 130,859
Interest expense ............................ (1,629) (2,122) (48,986) (50,169) (48,279) (49,597)
Income tax expense ......................... (37,507) (25,892) (59,562) (49,300) (22,127) (37,306)
Net income .............................. .. 64,777 45,760 103,059 85,971 44,041 (4) 48,203 (4)
Other Data:
EBITDA (2) ................................. 123,726 103,995 286,989 297,371 216,304 242,421
Capital expenditures ........................ 11,111 10,238
Net cash provided by operating activities ... 94,242 77,986
Net cash provided by (used in)
investing activities ...................... 61,739 (66,924)
Net cash used in financing activities ...... (31,217) (23,106)
Ratio of earnings to fixed charges (3) ...... 24.9x 17.8x 3.9x 3.4x
Balance Sheet Data:
Cash, cash equivalents and marketable
securities ............................... 161,320 143,086 61,448 4,353
Total assets ............................... 403,782 294,452 3,773,274 3,566,177
Capital lease obligations and long-term
debt, including current portion ........... 18,470 28,164 603,788 602,034
</TABLE>
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- --------------------
(1) Represents the pro forma combined results of TV Guide and its restricted
subsidiaries. We have one partially owned subsidiary and one foreign subsidiary
that are restricted subsidiaries but not guarantors of the notes.
(2) EBITDA means operating income before depreciation and amortization. EBITDA
is presented supplementally as TV Guide believes it is a widely used financial
indicator of a leveraged company's ability to service and incur debt. TV Guide
believes EBITDA is a standard measure commonly reported and widely used by
analysts, investors and others associated with the media and entertainment
industry. However, EBITDA does not take into account substantial costs of doing
business, such as income taxes and interest expenses. While many in the
financial community consider EBITDA to be an important measure of comparative
operating performance, it should be considered in addition to, but not as a
substitute for, operating income, net income, cash flow provided by operating
activities and other measures of financial performance prepared under generally
accepted accounting principles that are presented in the financial statements
incorporated by reference in this prospectus. Additionally, TV Guide's
calculation of EBITDA may be different than the calculation used by other
companies and therefore, comparability may be affected.
(3) For the ratio of earnings to fixed charges calculations, earnings available
for fixed charges consists of earnings before income taxes plus fixed charges
and minority interests in earnings of consolidated subsidiaries. Fixed charges
consist of interest on debt and that portion of rental expense which TV Guide
believes to be representative of interest expense.
(4) Pro forma net income of the Restricted Group excludes equity in the earnings
of the unrestricted subsidiaries as TV Guide believes this presentation is a
better indication of the financial performance of the Restricted Group.
Risk Factors
In addition to the other information in this prospectus, the following risk
factors should be considered carefully in evaluating us and our business before
participating in the exchange offer.
If you do not exchange your old notes,
they will continue to be subject to
restrictions on transfer.
Holders of old notes who do not exchange their old notes for new notes will
continue to be subject to the restrictions on transfer of the old notes as set
forth in the legends on the old notes. The old notes may not be offered or sold
unless they are registered under the Securities Act or are exempt from
registration.
Most of our revenues are from TV Guide Magazine,
which has experienced significant declines in
circulation and cash flows.
If we had acquired TV Guide Magazine on January 1, 1998, it would have
represented approximately 75% of our restricted subsidiary group's revenues and
approximately 70% of its EBITDA for the twelve months ended December 31, 1998.
TV Guide Magazine has seen circulation decline significantly. These declines
have been steady since the late 1980s and continued through the most recent
period. The primary causes of these declines have been the continued effects of
increased competition from television listings included in local newspapers,
free television listings supplements in Sunday newspapers, electronic program
guides and other sources. EBITDA for the TV Guide businesses, which include TV
Guide Magazine, has also declined significantly, from $203 million in fiscal
1994, to $185 million in fiscal 1997, and to $151 million in fiscal 1998. These
declines are
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largely due to the effects of lower circulation for TV Guide Magazine on the
financial performance of the business. Declines in TV Guide Magazine's
circulation and EBITDA may continue, and the declines could be significant.
We may have conflicts of interest with Liberty Media and
News Corp., who control our company.
Liberty Media and News Corp. each own shares representing approximately 49% of
the voting power of our common stock. As a result of this ownership, they will
be able to control our business and affairs, and to determine the outcome of any
matter submitted to a vote of our stockholders. Liberty Media's parent
corporation, Tele-Communications, Inc., and News Corp. have agreed that if they
are unable to agree as to any proposal submitted to our stockholders for their
approval, each of them will vote against the proposal. This may prevent us from
being able to pursue new opportunities, implement our business strategy or take
other action. Because Tele- Communications, Inc. and News Corp. are engaged in
the sale of program services and the solicitation of advertising to those
services, there exist numerous actual and potential conflicts of interest
between them and us. Tele-Communications, Inc. and News Corp. both offer program
services to multi-channel video providers. We will compete with them for
budgeted programming dollars and limited channel capacity and/or position in the
distribution of our programming services. We will also be competing with them
when soliciting advertising customers, who often are deciding how much of their
advertising budgets to allocate to television, radio, outdoor or other media. In
addition, as major advertisers, Tele-Communications, Inc. and News Corp.
purchase our advertising time and space. Similarly, we promote our products and
services on stations and networks owned by Tele-Communications, Inc. and News
Corp. The success of TV Guide Interactive may also be dependent on Tele-
Communications, Inc.'s continued deployment of its digital set-top cable boxes.
To the extent we derive benefits from our close relationships with
Tele-Communications, Inc. and News Corp., those benefits could be reduced or
eliminated in the future. We have been a party to various business arrangements
with Tele-Communications, Inc., News Corp. and their affiliates as described in
"Certain Relationships and Related Transactions" in the SEC filings that we have
incorporated by reference in this prospectus. Tele-Communications, Inc. and News
Corp. are not obligated to use any of our products or services, or to engage in
any future business transactions or jointly pursue opportunities with us, except
as described under "Certain Relationships and Related Transactions" in the SEC
filings that we have incorporated by reference in this prospectus. In addition,
neither Tele-Communications, Inc. nor News Corp. nor any of their affiliates,
other than us and the subsidiary guarantors, has any obligations under the
notes. Our business relationship with Tele-Communications, Inc. may also be
adversely affected by AT&T's acquisition of Tele-Communications, Inc..
Our inability to integrate successfully TV Guide with our other businesses could
negatively impact us; other transactions could also negatively affect
noteholders.
Our business strategy depends to a large extent on using the TV Guide brand name
to improve and expand our other program listings guide platforms. Our existing
platforms may not benefit from the TV Guide brand name and program listings
guide experience, and we may not be able to improve TV Guide Magazine's
business. We have no prior experience in the printing or publication business
and have never consummated a transaction the size of the TV Guide acquisition.
To integrate successfully TV Guide's business, we may need to implement enhanced
operational, distribution, financial and information systems and may require
additional employee and management, operational and financial resources. Failure
to implement these systems successfully and use these resources effectively
could have a material adverse effect on us. The TV Guide acquisition, as well as
any future acquisitions we may pursue, involve special risks, all of which may
impact future operations. The risks include:
x diversion of management attention;
15
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x difficulties in improving or assimilating the operations,
technologies and services of the acquired entity;
x the risk of entering into markets or services where we have
limited direct prior experience or where competitors have
stronger market positions or name-recognition.
We evaluate possible strategic acquisitions, dispositions and joint ventures,
some of which may be significant, on an on-going basis. We are currently engaged
in active discussions regarding dispositions of, or joint ventures with respect
to, some of our non-strategic assets. These non-strategic assets are
unrestricted subsidiaries for purposes of the indenture, and therefore the
benefits of these transactions may not be realized by the noteholders. In
particular, we are currently in discussions with several parties regarding a
possible sale of our Superstar/Netlink business and certain other assets or a
strategic marketing alliance or other transaction consistent with our strategy
of converting our C-band business into an equity position in a direct broadcast
satellite company.
Any infringement by us on patent rights of others could result in litigation.
Patents of third parties may have an important bearing on our ability to offer
certain of our products and services, including TV Guide Interactive. Many of
our competitors as well as other companies and individuals have obtained, and
may be expected to obtain in the future, patents that concern products or
services related to the types of products and services we offer or plan to
offer. For example, Personalized Media Communications L.L.C. has brought actions
against several direct broadcast satellite companies in the International Trade
Commission. Personalized Media owns a number of patents and over 300 U.S. patent
applications in the interactive and directed content fields, and has exclusively
licensed its interactive program guides to our competitor StarSight Telecast,
Inc. Source Media, Inc. also has brought suit on its patents against another
company in connection with internet services provided through a cable system. We
cannot assure you that we are or will be aware of all patents containing claims
that may pose a risk of infringement by our products and services. In addition,
patent applications in the United States are generally confidential until a
patent is issued and so we cannot evaluate the extent to which our products and
services may be covered or asserted to be covered by claims contained in pending
patent applications. In general, if one or more of our products or services were
to infringe patents held by others, we may be required to stop developing or
marketing the products or services, to obtain licenses to develop and market the
services from the holders of the patents or to redesign the products or services
in such a way as to avoid infringing the patent claims. We cannot assess the
extent to which we may be required in the future to obtain licenses with respect
to patents held by others, whether the licenses would be available or, if
available, whether we would be able to obtain the licenses on commercially
reasonable terms. If we were unable to obtain the licenses, we may not be able
to redesign our products or services to avoid infringement.
Litigation with Gemstar may adversely affect the future of TV Guide interactive
guides.
We are a defendant in a lawsuit charging infringement of patents owned by or
licensed to Gemstar Development Corporation and its affiliates relating to
interactive television guides. This lawsuit relates to our analog interactive
guide products and a complete ruling with respect to the suit may be announced
shortly. On February 19, 1999, the District Court entered Partial Findings of
Fact and Conclusions of Law determining that a patent of StarSight Telecast,
Inc. is not unenforceable by reason of inequitable conduct. The Court referred
the case to a Magistrate Judge to schedule a settlement conference prior to the
Court entering additional findings of fact and conclusions of law with respect
to the validity of certain claims of the patent and whether or not our Prevue
Express guide infringes claims of the patent. If we are not successful in our
lawsuits, we may be required to obtain a license to develop and market one or
more of our services, to cease developing or marketing those services or to
redesign those services. We cannot assure you that we will be able to obtain
these licenses or that we will be able to obtain them at commercially reasonable
rates, or if we are unable to obtain licenses, that we will be able to redesign
our
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services to avoid infringement. These lawsuits could materially adversely affect
our operations and financial condition, including our ability to offer
interactive guides in the future. Gemstar and its affiliates also have brought
lawsuits on patents relating to interactive television guides against three
major manufacturers of cable television set-top boxes with which our interactive
television guides may now or in the future be used.
TV Guide interactive guides are in
early stages of deployment.
Our TV Guide interactive guides are in the early stages of deployment. Our TV
Guide Interactive product is only available on digital cable systems, and to
date only a limited number of cable systems have been upgraded to digital. These
upgrades are expensive and time-consuming and whether the cable operators choose
to upgrade to digital is outside our control. We have offered Prevue Express in
the United States, but so far it has been used only in foreign cable systems.
The success of our TV Guide Interactive technology will depend on:
o the on-going development by certain third party manufacturers
to design new models of set-top converters that are capable of
using more advanced interactive software and technology and
o the willingness of cable television systems to acquire and
install a sufficient number of the set- top converters to
enable us to market this technology in a viable manner.
TV Guide Interactive technology may not gain widespread market acceptance and
may face increased competition. Our TV Guide Interactive business may not
achieve a profitable level of operations in the foreseeable future.
We have segregated our patent rights into
an unrestricted subsidiary that is not
subject to the covenants in the indenture.
We have segregated ownership of all patent rights of our "TV Guide" businesses
into our "intellectual property" subsidiary, UV Properties. UV Properties is an
unrestricted subsidiary and not subject to the covenants in the indenture.
Future patent rights on developments of the TV Guide businesses also will be
owned by UV Properties. TV Guide Interactive and other of our subsidiaries have
entered into, or are expected to enter into, licensing arrangements with UV
Properties that will require royalty payments to UV Properties of 3% of gross
revenues in the licensed field of use. This could represent in the future a
significant transfer of funds from the restricted group to the unrestricted
group of subsidiaries under the indenture. These licenses will be on a
non-exclusive basis, which will permit UV Properties to license our patent
rights to others, including competitors. Since UV Properties will not be subject
to the covenants under the indenture, it will be free to reinvest the proceeds
in other assets that will not be subject to the indenture covenants. While our
restricted subsidiaries will retain a license for patent rights owned by UV
Properties, UV Properties may also sell our patents without having to comply
with any terms of the indenture. Any of these actions by UV Properties may
materially adversely affect the noteholders.
Subsidiaries that generate a significant
portion of our consolidated revenues and cash flow
are not subject to the covenants in the indenture.
The indenture provides that certain of our subsidiaries, including TVGES,
SpaceCom, UV Properties, SSDS and ODS, are classified as unrestricted
subsidiaries. The unrestricted subsidiaries represent a substantial majority of
our historical operations. For the twelve months ended December 31, 1998, the
unrestricted subsidiaries accounted for approximately 81% of our historical
revenues and approximately 57% of our historical EBITDA,
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and, after giving effect to the TV Guide and Netlink acquisitions, would have
accounted for 37% of our revenues and 25% of our EBITDA. The unrestricted
subsidiaries are not subject to the covenants in the indenture and are not
guarantors of the notes. This may be material to you because the unrestricted
subsidiaries can do any of the following:
x incur an unlimited amount of debt as long as we are not liable
for those obligations;
x enter into agreements that restrict their ability to
distribute earnings to us;
x grant liens on their assets; and
x sell all or any portion of their assets without the
restrictions in the indenture.
In evaluating your decision to acquire the notes, you should not rely on the
cash flows from the unrestricted subsidiaries to help us service our debt
obligations, including paying the notes. The indenture provides that any newly
acquired business may also be designated as an unrestricted subsidiary.
We operate in highly competitive industries.
Each of the industries in which we operate is highly competitive. TV Guide
Magazine and TV Guide Channel face competition from numerous sources, including
each other and:
x television listings included in local and national newspapers
and free supplements in Sunday newspapers;
x niche cable-guide publications;
x general entertainment magazines and other magazines and
television programming focused on television celebrities and
programs; and
x other electronic and interactive programming guides.
Competition from all these services has increased over the past several years
and we expect it to continue to increase. See "--Most of our revenues are from
TV Guide Magazine, which has experienced significant declines in circulation and
cash flows." In addition, due to the inherent overlap in certain of our program
listings guide services, our products compete, and will continue to compete,
with each other. Our video programming services, such as TV Guide Channel and
WGN, compete with other analog programming services for basic and expanded basic
channel slots. We may be negatively impacted by the recapture of analog channels
by multi-channel video providers who require the channel to offer additional
digital products.
TV Guide Interactive will face competition from a number of companies including
large, well-known programmers and cable television operators that are attempting
to develop viable interactive television technologies which may be accessed
through cable television systems or otherwise. Our most significant competitors
include Gemstar and its subsidiary, StarSight, which have developed an advanced
interactive programming guide with features that include the ability to activate
a VCR to record programs selected with the guide, a feature not currently
offered on the TV Guide Interactive digital guide. Microsoft Corporation, a
licensee under the Gemstar and StarSight patents, also is marketing an
interactive television guide. A number of direct broadcast satellite companies
and major television and set-top box manufacturers also provide interactive
guides as licensees of Gemstar and StarSight. Finally, manufacturers of cable
television set-top boxes provide their own "native guide" interactive guides
with the set-top boxes.
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The Denver 6 Service competes with other providers of programming to the cable
television and direct-to-home wholesale markets including PrimeTime 24, which
retransmits other network affiliate channels from the west and east coasts.
There are no specific statutory or regulatory restrictions that prevent a
satellite carrier from retransmitting the network signals comprising the Denver
6 Service or the signals of competitive network affiliates so long as that
carrier meets the requirements of applicable law.
Our C-band business, which was our
most significant business, is rapidly declining.
Superstar/Netlink markets entertainment services to C-band satellite dish owners
in the United States. It faces significant competition and has experienced a
significant decline in subscribers in recent years.Superstar/Netlink represented
69% of our historical consolidated revenues and 49% of EBITDA for the year ended
December 31, 1998. Although the C-band satellite industry experienced rapid
growth during the early 1990s, with the continued expansion of cable systems and
the introduction of DBS services, the C-band satellite industry is shrinking. C-
band satellite dishes are substantially larger and less attractive than DBS
dishes, which are small and less obtrusive. At December 31, 1998, we had
approximately 1.2 million C-band subscribers as compared to 892,000 subscribers
at December 31, 1997 and 961,000 subscribers at December 31, 1996. The increase
in subscribers from 1997 to 1998 was due to the acquisition of the retail C-band
home satellite dish operations of Turner Vision, Inc., among others. We expect
the decline in the C-band industry to continue and this decline could accelerate
significantly as DBS services aggressively pursue our customers and become more
well-known and popular with consumers.
Paper and postal price increases can materially raise our costs.
TV Guide Magazine's operating performance depends largely on the price of paper.
We do not hedge against increases in paper costs. The price of paper began to
rise around mid-year 1994 and continued to rise more dramatically in 1995 and
early 1996. In mid-1996 paper prices began to fall, then increased moderately in
1997 and 1998. Although we intend to continue to use News Corp.'s bulk paper
procurement services after the TV Guide acquisition, paper prices may increase.
If they do increase and we cannot pass these costs on to our customers, the
increases may have a material adverse effect on us. Postage for product
distribution and direct mail solicitations is also a significant expense to us.
Postal rates increased in January 1999 and may increase in the future.
Government mandated copyright royalty fees are subject to increase.
The Satellite Home Viewer Act of 1994 requires that we pay copyright royalty
fees for all C-band subscribers who receive the satellite broadcast superstation
and network station programming that we provide. Effective January 1, 1998,
copyright fees were significantly increased. In response we increased retail
prices to our subscribers. This caused decreases in subscribers to our services
during 1998. The Act is set to expire at the end of 1999. Unless Congress
extends the Act or passes substitute copyright legislation, we will no longer be
permitted to retransmit superstations and network stations to individual dish
owners.
Our financial condition may be adversely affected if
our systems or those of our suppliers fail because of
year 2000 problems.
The year 2000 problem is the result of computer programs being written using two
digits, rather than four, to define the applicable year. Certain programs may
recognize a date using "00" as the year 1900 rather than the
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year 2000, which could result in miscalculations or system failures. In 1997, we
began the process of identifying, evaluating and implementing changes to our
computer systems, applications and certain equipment with embedded technology
necessary to address the year 2000 issue. Due to the uncertainties inherent in
the year 2000 remediation, we cannot assure you that the projects will be
completed on time or that the costs will not be significant. As part of our year
2000 project, we are in the process of contacting our significant suppliers and
customers to determine the extent to which we are vulnerable to those third
parties' failure to remediate their year 2000 compliance issues. The systems of
other companies on which our business relies may not be be timely converted and
failure to convert by another company, or a conversion that is incompatible with
our systems, could have a material adverse effect on us. Our failure to resolve
year 2000 issues before December 31, 1999 could result in system failures
causing disruption in routine business activities. Also, if critical systems
related to our services are not successfully remediated, we could face claims of
breach of contract from customers, certain programming providers and from other
businesses that rely on our programming services. Additionally, failure of third
parties upon whom we rely to timely remediate their year 2000 issues could
result in disruption in our daily operations and core services. The risks
associated with the year 2000 issue remain difficult to accurately describe and
quantify until we obtain additional information regarding the remediation
activities of our third party suppliers and customers. The year 2000 issue could
have a material adverse effect on our operations and financial condition.
Subordination of the notes and our holding
company structure may limit payments on the notes.
The notes are contractually subordinated in right of payment to all our senior
debt and the guarantees are contractually subordinated in right of payment to
all senior debt of the subsidiary guarantors. As of December 31, 1998, after
giving effect to the TV Guide and Netlink acquisitions, our senior debt would
have been $203.8 million, comprised of $185.3 million under our new bank credit
facilities and $18.5 million of existing debt, and the guarantors would have had
senior debt of $202.1 million. We would have had an additional unused commitment
of $414.7 million on our bank credit facility. Certain of our unrestricted
subsidiaries that are not guaranteeing the notes are guarantors under the bank
credit facilities. The indenture for the notes allows us and the guarantors to
borrow additional debt that may be senior debt. If we or the guarantors are
declared bankrupt or insolvent, or if there is a payment default or acceleration
of maturity under any senior debt, we are required to pay the creditors who are
holders of senior debt in full before we pay you. This could cause us not to
have enough assets remaining to pay amounts we owe you. In addition, upon notice
by certain holders of senior debt, we may not pay any amount we owe you if any
non-payment default exists under our senior debt. See "Description of
Notes--Subordination." We are a holding company and derive all of our operating
income from our subsidiaries. Therefore, our ability to service our debt
obligations, including the notes, depends on the earnings of our subsidiaries
and the distribution of those earnings to us. You will have no direct claim
against our subsidiaries other than the claim created by the guarantees, which
may be subject to legal challenge under applicable fraudulent transfer laws. See
"--Fraudulent conveyance considerations could void the guarantees for the
notes." In addition, a substantial portion of our historical revenues and cash
flow was derived from subsidiaries that are not guarantors of the notes. See
"--Subsidiaries that generate a significant portion of our consolidated revenues
and cash flow are not subject to the covenants in the indenture." Obligations of
the non-guarantor subsidiaries will represent prior claims with respect to the
assets and earnings of those subsidiaries. The notes, therefore, are
structurally subordinated to all current and future liabilities of those
subsidiaries, including trade payables and accrued liabilities. As of December
31, 1998, after giving effect to the TV Guide and Netlink acquisitions, our
non-guarantor subsidiaries would have had outstanding balance sheet liabilities
of $171.1 million. The bank credit facilities prohibit us from repurchasing the
notes, even though the indenture requires us to offer to repurchase the notes in
certain circumstances. See "--We may have limitations on our ability to
repurchase the notes upon a change of control."
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Fraudulent conveyance considerations
could void the guarantees for the notes.
Various fraudulent conveyance laws have been enacted for the protection of
creditors. A court may use those laws to subordinate or avoid the guarantees of
the notes issued by any of our subsidiaries. A court could avoid or subordinate
the guarantees by any of our subsidiaries in favor of that subsidiary's other
debts or liabilities to the extent that the court determined either of the
following were true at the time the subsidiary issued the guarantee:
x that the subsidiary issued the guarantee with the intent to
hinder, delay or defraud any of its present or future
creditors or the subsidiary contemplated insolvency with a
design to favor one or more creditors to the total or partial
exclusion of others; or
x that the subsidiary did not receive fair consideration or
reasonably equivalent value for issuing the guarantee and, at
the time it issued the guarantee, the subsidiary:
x was insolvent or rendered insolvent by reason of the
issuance of the guarantee;
x was engaged or about to engage in a business or
transaction for which the remaining assets of the
subsidiary constituted unreasonably small capital; or
x intended to incur, or believed it would incur, debts
beyond its ability to pay its debts as they matured.
Among other things, a legal challenge of a subsidiary's guarantee of the notes
on fraudulent conveyance grounds may focus on the benefits, if any, realized by
that subsidiary as a result of our issuance of the notes. To the extent a
subsidiary's guarantee of the notes is avoided as a result of fraudulent
conveyance or held unenforceable for any other reason, you would cease to have
any claim in respect of that guarantee and would be creditors solely of us and
any subsidiaries whose guarantees were not avoided. This would be material to
you because we are a holding company that depends solely on funds received from
our subsidiaries to pay our expenses, including servicing the notes.
We are subject to extensive restrictions
as a result of covenants in the bank credit
facilities and the indenture.
The bank credit facilities and the indenture for the notes impose significant
operating and financial restrictions on us and our restricted subsidiaries.
These restrictions may significantly limit or prohibit us from engaging in
certain transactions, including the following:
x borrowing additional money,
x paying dividends or other distributions to stockholders,
x allowing restricted subsidiaries to guarantee other debt,
x limiting the ability of restricted subsidiaries to make
payments to us and our other restricted subsidiaries,
x creating liens on our assets,
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x selling assets,
x entering into transactions with affiliates, and
x engaging in certain mergers or consolidations.
In addition, the indenture limits our ability and the ability of our restricted
subsidiaries to make investments, but only if the credit ratings on the notes
fall below B+ by Standard & Poor's or Ba3 by Moody's Investor Services, which
were the credit ratings in effect on the issue date. The restrictions referred
to above could limit our ability to obtain financing for working capital,
capital expenditures, acquisitions, debt service requirements and other
purposes. The restrictions may also affect our ability to actively manage our
business, including entering into joint ventures that advance our strategy.
Leverage may impair our financial condition.
We have a significant amount of debt. As of December 31, 1998, after giving
effect to the TV Guide and Netlink acquisitions and related financings, we would
have had approximately $603.8 million of long-term debt and unused borrowing
capacity under our new bank credit facilities of $414.7 million. In addition, we
may borrow more money for working capital, capital expenditures, acquisitions
and other purposes. Our significant debt could have important consequences to
you. For example,
x our ability to obtain any necessary financing in the future
for working capital, capital expenditures, acquisitions, debt
service requirements and other purposes may be limited;
x a large portion of the money earned by our subsidiaries must
be dedicated to the payment of interest on our debt and will
not be available for financing our operations and other
business activities;
x our level of debt and the covenants for our current debt could
limit our flexibility in planning for, or reacting to, changes
in our business because certain financing options may be
limited or prohibited;
x our degree of leverage may be more than that of our
competitors, which may place us at a competitive disadvantage;
and
x our level of debt may make us more vulnerable in the event of
a downturn in our business or the economy in general.
Our bank credit facilities also require us to maintain specified financial
ratios and satisfy certain financial tests. Our ability to meet these financial
ratios and tests may be affected by events beyond our control and, as a result,
we cannot assure you that we will be able to meet these ratios and tests. In the
event of a default under our bank credit facilities, the lenders could terminate
their commitments and declare all amounts borrowed, together with accrued
interest and other fees, to be due and payable. Borrowings under other debt
instruments that contain cross-acceleration or cross-default provisions may also
be accelerated and become due and payable. If any of these events should occur,
we may not be able to pay these amounts and the notes. See "Description of
Certain Debt."
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We may have limitations on our ability to repurchase
the notes upon a change of control.
If certain change of control events occur, you will have the right to require
us, subject to certain conditions, to repurchase all or any part of your notes
at a price equal to 101% of the principal amount of those notes, plus accrued
and unpaid interest, if any, to the date of repurchase. Prior to repurchasing
the notes, however, we may be required to repay some or all of the debt under
our bank credit facilities or other debt instruments or obtain consents from the
lenders under our bank credit facilities or other debt instruments to permit the
repurchase. If we cannot repay the debt required or obtain the consents
necessary under the bank credit facilities or these other debt instruments, we
may not be able to repurchase the notes. Also, we may not have sufficient funds
available or be able to obtain the financing necessary to make any of the debt
payments and note repurchases. If a change of control occurred and we did not
have the funds or financing available to make the debt payments and repurchase
the notes, an event of default would be triggered under the indenture for the
notes, under the bank credit facilities and other debt instruments. Each of
these defaults could have a material adverse effect on us.
Lack of public market for the notes and limitations
on transfer may adversely affect the liquidity and
price of the notes.
There is no established trading market for the notes, and we cannot assure you
that a market for the notes will develop in the future. If such a market were to
develop, the notes could trade at prices that are higher or lower than the
initial offering price depending on many factors, including:
x the number of holders of the notes,
x the overall market for similar securities,
x our financial performance and prospects, and
x prospects for companies in our industry generally.
The initial purchasers of the notes have informed us that they currently intend
to make a market in the new notes. However, the initial purchasers have no
obligation to do so and may discontinue making a market at any time without
notice. Therefore, we cannot assure you as to the liquidity of any trading
market for the new notes.
Cautionary Statement Regarding
Forward-looking Statements
This prospectus and the documents incorporated by reference in this
prospectus contain certain "forward-looking statements" within the meaning of
federal securities laws about our financial condition, results of operations and
business. Such forward-looking statements may include, among other things,
statements concerning: future acquisitions, changes in net revenues from the
Company's businesses, the impact of governmental regulations, competitive
conditions in industries in which the Company does business, liquidity and
future capital expenditures, Year 2000 matters, the outcome of certain
litigation, alternative sources of supplies and services needed by the Company
and developments in the Company's interactive guide businesses. These
forward-looking statements are subject to numerous assumptions, risks and
uncertainties that may cause our actual results, performance or achievements to
be materially different from any future results, performance or achievements
expressed or implied by us in those statements. The most important factors that
could prevent the Company from achieving our stated goals include, but are not
limited to, the following:
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-- continued declines in circulation and operating profits for TV Guide
Magazine,
-- changes in the regulation of the cable television and/or satellite
industries adverse to the Company's
services,
-- loss of the cable and/or satellite compulsory licenses provided by
federal law,
-- the willingness of cable and satellite television systems to acquire
and install new equipment that will allow us effectively to market our
interactive technology,
-- increased price and service competition within the industry,
-- our ability to keep pace with technological developments to protect the
Company's intellectual property rights, and defend against claims by
others asserting infringement of their intellectual property rights,
-- a reduction in demand for advertising and competition from other media
companies for audience and advertising revenues,
-- changes in paper prices or postal rates and
-- operating and financial risks related to integrating the TV Guide
businesses and other acquired businesses.
Because forward-looking statements are subject to risks and uncertainties,
actual results may differ materially from those expressed or implied by such
statements. You should consider the cautionary statements contained or referred
to in this section in connection with any subsequent written or oral
forward-looking statements that we or persons acting on our behalf may issue. We
undertake no obligation to review or confirm analysts' expectations or estimates
or to release publicly any revisions to any forward-looking statements to
reflect events or circumstances after the date of this prospectus or to reflect
the occurrence of unanticipated events.
The Exchange Offer
Purpose of the Exchange Offer
TV Guide originally issued and sold the old notes on March 1, 1999 in an
offering that was exempt from registration under the Securities Act in reliance
upon the exemptions provided by Section 4(2), Rule 144A and Regulation S of the
Securities Act. As a result, the old notes may not be transferred in the United
States unless registered or unless an exemption from the registration
requirements of the Securities Act and applicable state securities laws is
available.
As a condition to the sale of the old notes, TV Guide and the initial purchasers
of the old notes entered into a registration rights agreement as of March 1,
1999. In the registration rights agreement, TV Guide agreed that it would:
o file with the SEC a registration statement under the
Securities Act with respect to the new notes by May 29, 1999;
o use its best efforts to cause the registration statement to be
declared effective under the Securities Act by July 28, 1999;
and
o close an offer of the new notes in exchange for surrender of
the old notes by August 27, 1999.
We have filed a copy of the registration rights agreement as an exhibit to the
registration statement of which this prospectus is a part. The registration
statement satisfies certain of TV Guide's obligations under the registration
rights agreement.
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Resale of the New Notes
Based on no-action letters issued by the staff of the SEC to third parties, TV
Guide believes that the new notes issued in the exchange offer in exchange for
old notes would be freely transferable after the exchange offer without further
registration under the Securities Act if the holder of the new notes:
o is not an "affiliate," as defined in Rule 405 of the
Securities Act, of TV Guide,
o is acquiring the new notes in the ordinary course of its
business and
o no arrangement to participate in the distribution, within the
meaning of the Securities Act, of the new notes;
provided that, in the case of broker-dealers, a prospectus meeting the
requirements of the Securities Act must be delivered if required.
The SEC has not, however, considered this exchange offer in the context of a
no-action letter and TV Guide cannot assure you that the staff of the SEC would
make a similar determination with respect to this exchange offer. Holders of old
notes wishing to accept this exchange offer must represent to TV Guide that the
conditions have been met.
A broker-dealer that acquired old notes for its own account as a result of
market-making or other trading activities and exchanges them for new notes for
its own account in this exchange offer may be deemed to be an "underwriter"
within the meaning of the Securities Act and must deliver a prospectus in
connection with any resale of the new notes.
TV Guide has agreed that it will make this prospectus available to any
broker-dealer for use in connection with a resale for a period of one year after
closing of the exchange offer. A broker-dealer that delivers a prospectus to
purchasers in connection with resales will be subject to the civil liability
provisions under the Securities Act and will be bound by the provisions of the
registration rights agreement, including indemnification and contribution rights
and obligations. See "Plan of Distribution."
Terms of the Exchange Offer; Period for Tendering Old Notes
This prospectus and the accompanying letter of transmittal together make up the
exchange offer. On the terms and subject to the conditions set forth in this
prospectus and the letter of transmittal, TV Guide will accept for exchange any
old notes that are properly tendered on or before the expiration date unless
they are withdrawn as permitted below. TV Guide will issue $1,000 principal
amount at maturity of new notes in exchange for each $1,000 principal amount at
maturity of outstanding old notes surrendered in the exchange offer. Old notes
may be exchanged only in integral multiples of $1,000. The form and terms of the
new notes are the same as the form and terms of the old notes except that the
exchange will be registered under the Securities Act and so the new notes will
not bear legends restricting their transfer. The new notes will evidence the
same debt as the old notes and will be issued under the same indenture.
As of the date of this prospectus, an aggregate of $400,000,000 in principal
amount at maturity of the old notes is outstanding. This prospectus is first
being sent on or about ________, 1999, to all holders of old notes known to TV
Guide.
Holders of the old notes do not have any appraisal or dissenters' rights under
the indenture in connection with the exchange offer.
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TV Guide may, at any time or from time to time, extend the period of time during
which the exchange offer is open and delay acceptance for exchange of any old
notes, by giving written notice of the extension to the holders as described
below. During the extension, all old notes previously tendered will remain
subject to the exchange offer and may be accepted for exchange by TV Guide. Any
old notes not accepted for exchange for any reason will be returned without
expense to the tendering holder as promptly as practicable after the expiration
of the exchange offer.
TV Guide reserves the right to amend or terminate the exchange offer if any of
the conditions of the exchange offer are not met. The conditions of the exchange
offer are specified below under "--Conditions of the Exchange Offer." TV Guide
will give written notice of any extension, amendment, nonacceptance or
termination to the holders of the old notes as promptly as practicable. Any
extension to be issued by means of a press release or other public announcement
will be issued no later than 9:00 a.m., New York City time, on the next business
day after the previously scheduled expiration date.
Procedures for Tendering Old Notes
The tender to TV Guide of old notes by a holder as set forth below and the
acceptance by TV Guide will create a binding agreement between the tendering
holder and TV Guide upon the terms and subject to the conditions set forth in
this prospectus and in the accompanying letter of transmittal. Except as set
forth below, a holder who wishes to tender old notes for exchange must send a
completed and signed letter of transmittal, including all other documents
required by the letter of transmittal, to the exchange agent at one of the
addresses set forth below under "--Exchange Agent" on or before the expiration
date. In addition, either:
o the exchange agent must receive before the expiration date
certificates for the old notes along with the letter of
transmittal, or
o the exchange agent must receive confirmation before the
expiration date of a book-entry transfer of the old notes into
the exchange agent's account at The Depository Trust Company
as described below, or
o the holder must comply with the guaranteed delivery procedures
described below.
The method of delivery of old notes, letters of transmittal and all other
required documents is at the election and risk of the holders. If the delivery
is by mail, TV Guide recommends that holders use registered mail, properly
insured, with return receipt requested. In all cases, holders should allow
sufficient time to assure timely delivery.
Holders should not send letters of transmittal or old notes to TV Guide.
Some beneficial owners' old notes are registered in the name of a broker,
dealer, commercial bank, trustee or other nominee. If one of those beneficial
owners wishes to tender, the beneficial owner should contact the registered
holder of the old notes promptly and instruct the registered holder to tender on
the beneficial owner's behalf. If one of those beneficial owners wishes to
tender on its own behalf, then before completing and signing the letter of
transmittal and delivering its old notes, the beneficial owner must either
register ownership of the old notes in the beneficial owner's name or obtain a
properly completed power of attorney from the registered holder of old notes.
The transfer of record ownership may take considerable time. If the letter of
transmittal is signed by a person other than the registered holder of the old
notes, the old notes must be endorsed or accompanied by appropriate powers of
attorney. In either case the letter of transmittal must be signed exactly as the
name of the registered holder that appears on the old notes.
Signatures on a letter of transmittal or a notice of withdrawal must be
guaranteed unless the old notes surrendered for exchange are tendered:
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o by a registered holder of the old notes who has not completed
the box entitled "Special Issuance Instructions" or "Special
Delivery Instructions" on the letter of transmittal or
o for the account of a firm or other entity identified in Rule
17Ad-15 under the Exchange Act as an eligible guarantor
institution. Eligible guarantor institutions include:
o a member of a registered national securities
exchange,
o a member of the National Association of Securities
Dealers, Inc. or
o a commercial bank or trustee having an office or
correspondent in the United States.
If signatures on a letter of transmittal or a notice of withdrawal are required
to be guaranteed, the guarantees must be by an eligible guarantor institution.
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 the registered holder with the signature guaranteed by an eligible guarantor
institution. Alternatively, the old notes may be accompanied by a written
assignment, signed by the registered holder with the signature guaranteed by an
eligible guarantor institution.
All questions as to the validity, form, eligibility, time of receipt and
acceptance of old notes tendered for exchange will be determined by TV Guide in
its sole discretion, and its determination shall be final and binding. TV Guide
reserves the absolute right to reject any tenders of any particular old notes
not properly tendered or not to accept any particular old notes whose acceptance
might, in the judgment of TV Guide or its counsel, be unlawful. TV Guide also
reserves the absolute right to waive any defects or irregularities or conditions
of the exchange offer as to any particular old notes either before or after the
expiration date. The interpretation of the terms and conditions of the exchange
offer as to any particular old notes either before or after the expiration date
by TV Guide will be binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of old notes for exchange must be
cured within a reasonable period of time as TV Guide shall determine. Neither TV
Guide, the exchange agent nor any other person shall be under any duty to give
notification of any defect or irregularity with respect to any tender of old
notes for exchange.
If the letter of transmittal or 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,
those persons should so indicate when signing. Unless waived by TV Guide, those
persons must submit proper evidence satisfactory to TV Guide of their authority
to act.
By tendering, each holder will represent to TV Guide:
o that it is not an "affiliate," as defined in Rule 405 of the
Securities Act, of TV Guide, or if it is an affiliate, it will
comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable,
o that it is acquiring the new notes in the ordinary course of
its business and
o at the time of the closing of the exchange offer it has no
arrangement to participate in the distribution, within the
meaning of the Securities Act, of the new notes.
If the holder 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, the holder may be deemed to be an
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"underwriter" within the meaning of the Securities Act. Those holders will be
required to acknowledge in the letter of transmittal that it will deliver a
prospectus in connection with any resale of the new notes. However, by so
acknowledging and by delivering a prospectus, the holder will not be deemed to
admit that it is 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, TV
Guide will accept, promptly after the expiration date, all old notes properly
tendered and will issue the new notes promptly after acceptance of the old
notes. See "--Conditions of the Exchange Offer" below. TV Guide will be deemed
to have accepted properly tendered old notes for exchange when TV Guide has
given oral or written notice to the exchange agent.
The new notes will bear interest at the same rate and on the same terms as the
old notes. Consequently, cash interest on the new notes will accrue at a rate of
per annum and will be payable semiannually in arrears commencing on September 1,
1999. and then on March 1 and September 1 of each year. Interest on each new
note will accrue from the last interest payment date on which interest was paid
on the surrendered old note. If no interest has been paid on the old note,
interest on the new notes will accrue from the date of issuance of the old
notes. Consequently, holders whose old notes are accepted for exchange will be
deemed to have waived the right to receive any accrued but unpaid interest on
the old notes.
The issuance of new notes for old notes that are accepted for exchange in the
exchange offer will be made only after timely receipt by the exchange agent of
certificates for the old notes or a timely book-entry confirmation of the old
notes into the exchange agent's account at the book-entry transfer facility, a
completed and signed letter of transmittal and all other required documents. If
any tendered old notes are not accepted for any reason set forth in the terms
and conditions of the exchange offer, or if old notes are submitted for a
greater amount than the holder desires to exchange, the unaccepted or
non-exchanged old notes will be returned without expense to the tendering holder
as promptly as practicable after the exchange offer expires or terminates. In
the case of old notes tendered by book-entry procedures described below, the non
exchanged old notes will be credited to an account maintained with the
book-entry transfer facility.
Conditions of the Exchange Offer
TV Guide will not be required to accept for exchange any old notes and may
terminate or amend the exchange offer prior to the expiration date, if TV Guide
determines that it is not permitted to effect the exchange offer because of:
o any changes in law, or applicable interpretations by the SEC,
or
o any action or proceeding is instituted or threatened in any
court or governmental agency with respect to the exchange
offer.
Holders may have certain rights and remedies against TV Guide under the
registration rights agreement if TV Guide fails to close the exchange offer,
whether or not the conditions stated above occur. These conditions are not
intended to modify those rights or remedies.
Book-Entry Transfer
The exchange agent will make a request to establish an account for the old notes
at the book-entry transfer facility for the exchange offer within two business
days after the date of this prospectus, and any financial institution that is a
participant in the book-entry transfer facility's systems may make book-entry
delivery of old notes by causing
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the book-entry transfer facility to transfer the old notes into the exchange
agent's account at the book-entry transfer facility under the book-entry
transfer facility's procedures for transfer. However, although delivery of old
notes may be effected through book-entry transfer at the book-entry transfer
facility, the letter of transmittal or facsimile, or an agent's message, with
any required signature guarantees and any other required documents, must be
received by the exchange agent at one of the addresses set forth below under
"--Exchange Agent" on or before the expiration date or the guaranteed delivery
procedures described below must be complied with.
The term "agent's message" means a message, transmitted by Depository Trust
Company to the exchange agent and forming a part of a book-entry confirmation,
which states that DTC has received an express acknowledgment from the tendering
participant stating that the participant has received and agrees to be bound by
the terms of the letter of transmittal, and that TV Guide may enforce the letter
of transmittal against the participant.
Guaranteed Delivery Procedures
If a registered holder of the old notes wishes to tender the old notes and the
old notes are not immediately available, or time will not permit the holder's
old notes or other required documents to reach the exchange agent before the
expiration date, or the procedure for book-entry transfer cannot be completed on
time, the old notes may nevertheless be exchanged if:
o the tender is made through an eligible guarantor institution,
o before the expiration date, the exchange agent has received
from the eligible guarantor institution a completed and
signed letter of transmittal, or a facsimile, and a notice
of guaranteed delivery, substantially in the form provided
by TV Guide. Delivery may be made by telegram, telex,
facsimile transmission, mail or hand deliver. The letter of
transmittal and notice of guaranteed delivery must set forth
the name and address of the holder of the old notes and the
amount of old notes, state that the tender is being made and
guarantee that within five trading days on the Nasdaq
National Market after the date of signing of the notice of
guaranteed delivery, the certificates for all physically
tendered old notes, in proper form for transfer, or a
book-entry confirmation, and any other documents required by
the letter of transmittal, will be deposited by the eligible
guarantor institution with the exchange agent, and
o the certificates for all physically tendered old notes, in
proper form for transfer, or a book-entry confirmation and all
other documents required by the letter of transmittal, are
received by the exchange agent within five Nasdaq National
Market trading days after the date of signing the notice of
guaranteed delivery.
Withdrawal Rights
Tenders of old notes may be withdrawn at any time prior to the expiration date.
For a withdrawal to be effective, a written notice of withdrawal must be
received by the exchange agent at one of the addresses set forth below under
"--Exchange Agent." Any notice of withdrawal must:
o specify the name of the person who tendered the old notes to
be withdrawn,
o identify the old notes to be withdrawn, including the amount
of the old notes, and,
o where certificates for old notes have been transmitted,
specify the name in which the old notes are registered, if
different from that of the withdrawing holder.
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If certificates for old notes have been delivered or otherwise identified to the
exchange agent, then, prior to the release of the certificates the withdrawing
holder 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 guarantor institution unless the holder is an eligible guarantor
institution. If old notes have been tendered under the procedure for book-entry
transfer described above, any notice of withdrawal 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 the
facility. All questions as to the validity, form, eligibility and time of
receipt of the notices will be determined by TV Guide whose determination shall
be final and binding on all parties. Any old notes so withdrawn will be deemed
not to have been validly tendered for exchange for purposes of the exchange
offer. Any old notes that have been tendered for exchange but that are not
exchanged for any reason will be returned to the holder without cost to the
holder as soon as practicable after withdrawal, rejection of tender or
termination of the exchange offer. In the case of old notes tendered by
book-entry transfer into the exchange agent's account at the book-entry transfer
facility under the book-entry transfer procedures described above, the old notes
will be credited to an account with the book-entry transfer facility specified
by the holder. 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.
Exchange Agent
The Bank of New York has been appointed as the exchange agent for the exchange
offer. All signed letters of transmittal should be directed to the exchange
agent at the addresses set forth below. Questions and requests for assistance,
requests for additional copies of this prospectus or of the letter of
transmittal and requests for notices of guaranteed delivery should be directed
to the exchange Agent addressed as follows:
By Registered or Certified Mail:
The Bank of New York
101 Barclay Street, (7 East)
New York, New York 10286
Attention: Odell Romeo
Reorganization Section
By Hand or Overnight Delivery Service:
The Bank of New York
101 Barclay Street
Corporate Trust Services Window
Ground Level
New York, New York 10286
Attention: Odell Romeo
Reorganization Section
By Facsimile Transmission (for Eligible Institutions only):
(212) 815-6339
Confirm by Telephone:
(212) 815-6337
Delivery to other than the above addresses or facsimile number will not
constitute a valid delivery.
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Fees and Expenses
TV Guide will not make any payment to brokers, dealers or others soliciting
acceptances of the exchange offer.
TV Guide will pay the expenses that will be incurred in connection with the
exchange offer. TV Guide estimates the expenses will be approximately $200,000.
Accounting Treatment
For accounting purposes, TV Guide will recognize no gain or loss as a result of
the exchange offer. The expenses of the exchange offer will be amortized over
the term of the new notes.
Transfer Taxes
Holders who instruct TV Guide to register new notes in the name of a person
other than the registered tendering holder will be responsible for paying any
applicable transfer tax, as will holders who request that old notes not tendered
or not accepted in the exchange offer be returned to a person other than the
registered tendering holder.
In all other cases, no transfer taxes will be due.
Regulatory Matters
TV Guide is not aware of any governmental or regulatory approvals that are
required in order to complete the exchange offer.
Consequences of Failure to Exchange
Participation in the exchange offer is voluntary. Old notes that are not
exchanged for new notes will remain restricted securities. As a result, those
old notes may only be transferred:
o to a person who the seller reasonably believes is a qualified
institutional buyer under Rule 144A,
o in an offshore transaction under Rule 903 or Rule 904 of
Regulation S under the Securities Act,
or
o under Rule 144 under the Securities Act, if available;
and after complying with all applicable securities laws of the states of the
United States. Under certain circumstances, TV Guide is required to file a shelf
registration statement under the Securities Act. See "Description of the
Notes--Exchange Offer; Registration Rights."
Payment of Additional Interest upon Registration Defaults
If TV Guide fails to meet its obligations to complete the exchange offer or file
a shelf registration statement, additional interest will accrue on the notes.
See "Description of the Notes--Exchange Offer; Registration Rights."
Use of Proceeds
TV Guide will not receive any proceeds from the issuance of the new notes or the
closing of the exchange offer.
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Capitalization
The following table sets forth, as of December 31, 1998, the consolidated cash
and capitalization of TV Guide on an actual basis and on a pro forma basis as
adjusted to give effect to:
o initial borrowings under the bank credit facilities,
o the issuance of the notes,
o the addition of cash equity from News Corp.,
o the use of cash on hand to finance a portion of the TV Guide
acquisition and
o the issuance of equity in connection with the TV Guide and
Netlink acquisitions, in each case as if the transactions had
occurred on December 31, 1998.
This table should be read in conjunction with the historical and pro forma
financial statements incorporated by reference in this prospectus.
December 31, 1998
Actual Pro Forma
(in thousands)
Cash, cash equivalents and marketable securities
(including $57,095 in the Unrestricted Group on a
pro forma basis) .................................$ 161,320 $ 61,448
Long-term debt (including current portion):
Existing debt ....................................$ 18,470 $ 18,470
Initial bank borrowings ..............................-- 185,318(1)
Notes ............................................. -- 400,000
-------- ----------
Total debt ..................................... 18,470 603,788
Stockholders' equity:
Class A common stock .................................. 479 769
Class B common stock .................................. 247 750
Additional paid in capital ......................... 22,319 1,273,008
Accumulated other comprehensive losses ................ (54) (54)
Retained earnings ................................. 180,610 176,853
--------- ----------
203,601 1,451,326
-------- ----------
Minority interest .................................. (1,179) --
--------- ----------
Total stockholders' equity .................... 202,422 1,451,326
-------- ----------
Total capitalization ........................ $ 220,892 $2,055,114
========= ==========
(1) Represents the amount drawn at closing under TV Guide's bank credit
facilities, which consist of a $300 million six-year revolving credit facility
and a $300 million 364-day revolving credit/five- year term loan facility.
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Description of Certain Debt
Bank Credit Facilities
TV Guide entered into a $300 million six-year revolving credit facility and a
$300 million 364-day revolving credit facility with a group of banks on March 1,
1999. Borrowings outstanding under the 364- day revolving credit facility
convert to a five-year term loan at maturity. Borrowings under the credit
facilities bear interest either at the bank's prime rate or LIBOR, both plus a
margin based on a sliding scale tied to TV Guide's leverage ratio. For the first
year of the credit facilities, the LIBOR margin is fixed at a minimum of 1.25%.
The credit facilities are subject to prepayment or reduction at any time without
penalty. Borrowings to consummate the TV Guide acquisition were drawn under the
$300 million six-year revolving credit facility.
SSDS
SSDS has a revolving credit facility with a bank that provides for borrowings up
to the lesser of 80% of the billed trade accounts receivable outstanding less
than 90 days, subject to certain conditions, or $5.0 million. Borrowings under
this credit facility, which expires April 30, 2000, bear interest at the bank's
stated prime rate plus a margin. Outstanding borrowings under the credit
facility as of December 31, 1998 were $1.7 million.
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Description of the Notes
You can find the definitions of certain terms used in this description
under the subheading "Certain Definitions." In this description, the words "TV
Guide" and "we" refer only to TV Guide, Inc. and not to any of its subsidiaries.
TV Guide will issue the new notes under the indenture for the old notes
dated as of March 1, 1999 among TV Guide, the Subsidiary Guarantors and The Bank
of New York, as trustee.
We urge you to read the indenture because it, and not this description,
defines your rights as a holder of these notes. A copy of the indenture is
available upon request to TV Guide at the address set forth under "Where You Can
Find More Information".
TV Guide will issue notes only in fully registered form without
coupons, in denominations of $1,000 and integral multiples of $1,000.
Principal, Maturity and Interest
The notes will mature on March 1, 2009. We can issue a maximum of $400
million aggregate principal amount of notes.
Interest on the notes will accrue at a rate of 8 1/8% per annum and
will be payable semi-annually in arrears on March 1 and September 1, commencing
on September 1, 1999. TV Guide will pay interest to those persons who were
holders of record on the February 15 and August 15 immediately preceding each
interest payment date.
Interest on the notes will accrue from the date of original issuance
or, if interest has already been paid, from the date it was most recently paid.
Interest will be computed on the basis of a 360-day year comprised of twelve
30-day months.
The interest rate on the notes will increase if:
(1) TV Guide does not file either:
(A) a registration statement to allow for an
exchange offer or
(B) a resale shelf registration statement for
the notes;
(2) the registration statement referred to above is not
declared effective on a timely basis; or
(3) certain other conditions are not satisfied.
You should refer to the description under the heading "Exchange Offer;
Registration Rights" for a more detailed description of the circumstances under
which the interest rate will increase.
Subordination
The notes are:
x senior subordinated, unsecured obligations of TV
Guide;
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x guaranteed on a senior subordinated, unsecured basis
by the Subsidiary Guarantors;
x equal in ranking ("pari passu") in right of payment
with all future Senior Subordinated Debt of TV Guide
and the Subsidiary Guarantors; and
x senior to all future Subordinated Obligations of TV
Guide and the Subsidiary Guarantors.
The payment of the principal of, premium, if any, and interest on the notes, and
payment under any Subsidiary Guaranty, will be subordinated in right of payment
to the payment when due of all Senior Debt of TV Guide or the relevant
Subsidiary Guarantor, as the case may be. As a result of this subordination,
holders of Senior Debt will be entitled, in any of the following situations, to
receive full payment on all obligations owed to them before any kind of payment
can be made to holders of the notes:
x liquidation or dissolution of TV Guide;
x bankruptcy, reorganization, receivership or similar
proceedings;
x assignments for the benefit of TV Guide's creditors;
or
x any marshaling of TV Guide's assets and liabilities.
As of December 31, 1998, after giving effect to the TV Guide and
Netlink acquisitions, the offering and the initial borrowings under the bank
credit facilities, the total outstanding Debt of TV Guide and the Subsidiary
Guarantors on a combined basis, excluding unused commitments made by lenders,
would have been as follows:
$202.1 million approximate Senior Debt of TV Guide and the Subsidiary
Guarantors, combined
$400.0 million approximate Senior Subordinated Debt of TV Guide and the
Subsidiary Guarantors.
TV Guide only has a stockholder's claim in the assets of its
subsidiaries. This stockholder's claim is junior to the claims that creditors of
TV Guide's subsidiaries have against those subsidiaries. Holders of the notes
will only be creditors of TV Guide and of those subsidiaries that are Subsidiary
Guarantors. In the case of subsidiaries that are not Subsidiary Guarantors, all
the existing and future liabilities of those subsidiaries, including any claims
of trade creditors and preferred stockholders, will be effectively senior to the
notes.
All the operations of TV Guide are conducted through its subsidiaries.
Therefore, TV Guide's ability to service its debt, including the notes, is
dependent upon the earnings of its subsidiaries, and their ability to distribute
those earnings as dividends, loans or other payments to TV Guide. Certain laws
restrict the ability of TV Guide's subsidiaries to pay dividends and make loans
and advances to it. If these restrictions are applied to subsidiaries that are
not Subsidiary Guarantors, then TV Guide would not be able to use the earnings
of those subsidiaries to make payments on the notes. Furthermore, under certain
circumstances, bankruptcy "fraudulent conveyance" laws or other similar laws
could invalidate the Subsidiary Guaranties. If this were to occur, the
Subsidiary Guarantors could also face restrictions on distributing funds to TV
Guide. Any of the situations described above could make it more difficult for TV
Guide to service its debt.
The total balance sheet liabilities of the Subsidiary Guarantors and TV
Guide's other subsidiaries, after giving effect to the TV Guide and Netlink
acquisitions, the offering and the initial borrowings under the bank
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credit facilities, as of December 31, 1998, excluding unused commitments made by
lenders, would have been as follows:
$2,228.4 million approximate total balance sheet liabilities of the
SubsidiaryGuarantors
$171.1 million approximate total balance sheet liabilities of all other
subsidiaries.
Certain of the Unrestricted Subsidiaries will be guarantors under the bank
credit facilities. The Subsidiary Guarantors and TV Guide's other subsidiaries
have other liabilities, including contingent liabilities, that may be
significant. The indenture contains limitations on the amount of additional Debt
which TV Guide and the Restricted Subsidiaries may Incur. However, the amounts
of this Debt could be substantial and may be Incurred either by Subsidiary
Guarantors or by TV Guide's other subsidiaries.
The notes are unsecured obligations of TV Guide and the Subsidiary
Guarantors. Secured Debt of TV Guide and the Subsidiary Guarantors will be
effectively senior to the notes to the extent of the value of the assets
securing this Debt.
As of December 31, 1998, after giving effect to the TV Guide and
Netlink acquisitions, the offering and the initial borrowings under the bank
credit facilities, TV Guide and the Subsidiary Guarantors would have had no
outstanding secured Debt other than Senior Debt.
TV Guide may not pay principal of, or premium, if any, or interest on,
the notes, or make any deposit under the provisions described in "--Defeasance",
and may not repurchase, redeem or otherwise retire any notes (collectively, "pay
the notes"), if:
(a) any principal, premium or interest in respect of any
Senior Debt is not paid within any applicable grace period, including
at maturity, or
(b) any other default on Senior Debt occurs and the
maturity of the Senior Debt is accelerated,
unless, in either case,
(1) the default has been cured or waived and the
acceleration has been rescinded, or
(2) the Senior Debt has been paid in full in cash;
provided, however, that TV Guide may pay the notes without regard to the
foregoing if TV Guide and the trustee receive written notice approving payment
from the Representative of the issue of Senior Debt.
During the continuance of any default (other than a default described
in clause (a) or (b) above) with respect to any Designated Senior Debt as a
result of which the maturity thereof may be accelerated immediately without
further notice (except any notice required to effect the acceleration) or the
expiration of any applicable grace period, TV Guide may not pay the notes for a
period (a "Payment Blockage Period") commencing upon the receipt by TV Guide and
the trustee of written notice of such default from the Representative of the
holders of such Designated Senior Debt specifying an election to effect a
Payment Blockage Period (a "Payment Blockage Notice") and ending 179 days
thereafter (unless such Payment Blockage Period is earlier terminated
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(a) by written notice to the trustee and TV Guide from the
Representative that gave such Payment Blockage Notice,
(b) because such default is no longer continuing, or
(c) because such Designated Senior Debt has been repaid in
full in cash).
Unless the holders of such Designated Senior Debt or the Representative of such
holders have accelerated the maturity of such Designated Senior Debt and not
rescinded such acceleration, TV Guide may (unless otherwise prohibited as
described in the first sentence of this paragraph) resume payments on the notes
after the end of such Payment Blockage Period. Not more than one Payment
Blockage Notice with respect to all issues of Designated Senior Debt may be
given in any consecutive 360-day period, irrespective of the number of defaults
with respect to one or more issues of Designated Senior Debt during such period.
Upon any payment or distribution of the assets of TV Guide upon a total
or partial liquidation, dissolution or winding up of TV Guide or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to TV Guide or its Property:
(a) the holders of Senior Debt will be entitled to receive
payment in full in cash before the holders of the notes are entitled to
receive any payment of principal of or interest on the notes, except
that holders of notes may receive and retain shares of stock and any
debt securities that are subordinated to Senior Debt to at least the
same extent as the notes; and
(b) until the Senior Debt is paid in full in cash, any
distribution to which holders of the notes would be entitled but for
the subordination provisions of the indenture will be made to holders
of the Senior Debt.
If a payment or distribution is made to holders of notes that, due to
the subordination provisions, should not have been made to them, such holders
are required to hold it in trust for the holders of Senior Debt and pay it over
to them as their interests may appear.
If payment of the notes is accelerated when any Designated Senior Debt
is outstanding, TV Guide may not pay the notes until three business days after
the Representatives of all issues of Designated Senior Debt receive notice of
such acceleration and, thereafter, may pay the notes only if the indenture
otherwise permits payment at that time.
The Subsidiary Guaranty of each Subsidiary Guarantor will be
subordinated to Senior Debt of such Subsidiary Guarantor to the same extent and
in the same manner as the notes are subordinated to Senior Debt of TV Guide.
Because of the indenture's subordination provisions, holders of Senior
Debt and other creditors (including trade creditors) of TV Guide or the
Subsidiary Guarantors may recover disproportionately more than the holders of
the notes recover in a bankruptcy or similar proceeding relating to TV Guide or
a Subsidiary Guarantor. This would apply even if the notes or the applicable
Subsidiary Guaranty ranked evenly ("pari passu") with the other creditors'
claims. In such a case, there may be insufficient assets, or no assets,
remaining to pay the principal of or interest on the notes.
Payment from the money or the proceeds of U.S. Government Obligations
held in any defeasance trust under the provisions described in "--Defeasance"
will not be subject to the subordination provisions described above.
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See "Risk Factors--Leverage may impair our financial condition,"
"--Subordination of notes and our holding company structure may limit payments
on the notes" and "--Fraudulent conveyance considerations could void the
guarantees for the notes" and "Description of Certain Debt."
Subsidiary Guaranties
The obligations of TV Guide under the indenture, including the
repurchase obligation resulting from a Change of Control, will be fully and
unconditionally guaranteed, jointly and severally, on a senior subordinated,
unsecured basis, by all the existing and any future Restricted Subsidiaries of
TV Guide, other than Sneak Prevue, certain other non-Wholly Owned Subsidiaries
and all Foreign Restricted Subsidiaries.
As of or for the year ended December 31, 1998, after giving effect to
the TV Guide and Netlink acquisitions, the offering and the initial borrowings
under the bank credit facilities, the subsidiaries of TV Guide that were not
Subsidiary Guarantors represented the following approximate percentages of the
assets, revenues and EBITDA of TV Guide, on a consolidated basis:
7.7% of TV Guide's consolidated assets represented by subsidiaries that
are not Subsidiary Guarantors,
38.0% of TV Guide's consolidated total revenues
represented by subsidiaries that are not
Subsidiary Guarantors, and
25.2% of TV Guide's consolidated EBITDA
represented by subsidiaries that are not
Subsidiary Guarantors.
If a Subsidiary Guarantor ceases to be a Subsidiary of TV Guide or TV
Guide sells or otherwise disposes of all or substantially all the assets of a
Subsidiary Guarantor, such Subsidiary Guarantor will be released from all its
obligations under its Subsidiary Guaranty. In addition, if TV Guide designates a
Subsidiary Guarantor as an Unrestricted Subsidiary, which TV Guide can do under
certain circumstances, the redesignated Subsidiary Guarantor will be released
from all its obligations under its Subsidiary Guaranty. See "--Certain
Covenants--Designation of Subsidiaries" and "--Merger, Consolidation and Sale of
Property".
If any Subsidiary Guarantor makes payments under its Subsidiary
Guaranty, each of TV Guide and the other Subsidiary Guarantors must contribute
their share of such payments. TV Guide's and the other Subsidiary Guarantors'
shares of such payment will be computed based on the proportion that the net
worth of TV Guide or the relevant Subsidiary Guarantor represents relative to
the aggregate net worth of TV Guide and all the Subsidiary Guarantors combined.
Optional Redemption
Except as set forth in the following paragraph, the notes will not be
redeemable at the option of TV Guide prior to March 1, 2004. Starting on that
date, TV Guide may redeem all or any portion of the notes, at once or over time,
after giving the required notice under the indenture. The notes may be redeemed
at the redemption prices set forth below, plus accrued and unpaid interest, if
any, to the redemption date (subject to the right of holders of record on the
relevant record date to receive interest due on the relevant interest payment
date). The following prices are for notes redeemed during the 12-month period
commencing on March 1 of the years set forth below, and are expressed as
percentages of principal amount:
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Redemption
Year Price
2004 .............................. 104.063%
2005 .............................. 102.708%
2006 .............................. 101.354%
2007 and after .................... 100.000%
At any time and from time to time, prior to March 1, 2002, TV Guide may
redeem up to a maximum of 35% of the original aggregate principal amount of the
notes with the proceeds of one or more Public Equity Offerings, at a redemption
price equal to 108.125% of the principal amount thereof, plus accrued and unpaid
interest thereon, if any, to the redemption date (subject to the right of
holders of record on the relevant record date to receive interest due on the
relevant interest payment date); provided, however, that after giving effect to
any such redemption, at least 65% of the original aggregate principal amount of
the notes remains outstanding. Any such redemption shall be made within 75 days
of such Public Equity Offering upon not less than 30 nor more than 60 days'
prior notice.
Sinking Fund
There will be no mandatory sinking fund payments for the notes.
Repurchase at the Option of Holders Upon a Change of Control
Upon the occurrence of a Change of Control, each holder of notes shall
have the right to require TV Guide to repurchase all or any part of such
holder's notes in the offer described below (the "Change of Control Offer") at a
purchase price (the "Change of Control Purchase Price") equal to 101% of the
principal amount thereof, plus accrued and unpaid interest, if any, to the
purchase date (subject to the right of holders of record on the relevant record
date to receive interest due on the relevant interest payment date).
Within 30 days following any Change of Control, TV Guide shall:
(a) cause a notice of the Change of Control Offer to be sent
at least once to the Dow Jones News Service or similar business news
service in the United States, and
(b) send, by first-class mail, with a copy to the trustee, to
each holder of notes, at such holder's address appearing in the
Security Register, a notice stating:
(1) that a Change of Control has occurred and a
Change of Control Offer is being made under the covenant entitled
"Repurchase at the Option of Holders Upon a Change of Control" and that
all notes timely tendered will be accepted for payment;
(2) the Change of Control Purchase Price and the
purchase date, which shall be, subject to any contrary requirements of
applicable law, a business day no earlier than 30 days nor later than
60 days from the date such notice is mailed;
(3) the circumstances and relevant facts regarding
the Change of Control (including information with respect to pro forma
historical income, cash flow and capitalization after giving effect to
the Change of Control); and
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(4) the procedures that holders of notes must follow
in order to tender their notes (or portions thereof) for payment, and
the procedures that holders of notes must follow in order to withdraw
an election to tender notes (or portions thereof) for payment.
TV Guide will comply, to the extent applicable, with the requirements
of Section 14(e) of the Exchange Act and any other securities laws or
regulations in connection with the repurchase of notes in a Change of Control
Offer. To the extent that the provisions of any securities laws or regulations
conflict with the provisions of the covenant described hereunder, TV Guide will
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under the covenant described hereunder
by virtue of such compliance.
The Change of Control repurchase feature is a result of negotiations
between TV Guide and the initial purchasers of the notes. Management has no
present intention to engage in a transaction involving a Change of Control,
although it is possible that TV Guide would decide to do so in the future.
Subject to certain covenants described below, TV Guide could, in the future,
enter into certain transactions, including acquisitions, refinancings or other
recapitalizations, that would not constitute a Change of Control under the
indenture, but that could increase the amount of debt outstanding at such time
or otherwise affect TV Guide's capital structure or credit ratings.
The definition of Change of Control includes a phrase relating to the
sale, transfer, assignment, lease, conveyance or other disposition of "all or
substantially all" TV Guide'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. Therefore, if TV
Guide disposes of less than all its assets by any of the means described above,
the ability of a holder of notes to require TV Guide to repurchase its notes may
be uncertain. In such a case, holders of the notes may not be able to resolve
this uncertainty without resorting to legal action.
The bank credit facility will prohibit TV Guide from purchasing any
notes, and also will provide that the occurrence of certain of the events that
would constitute a Change of Control would constitute a default under such
existing debt. Other future debt of TV Guide may contain prohibitions of certain
events which would constitute a Change of Control or require such debt to be
repurchased upon a Change of Control. To the extent other debt of TV Guide is
both subject to similar repurchase obligations in the event of a Change of
Control and ranks senior in right of payment to the notes, all available funds
will first be expended for the repurchase of such debt. Moreover, the exercise
by holders of notes of their right to require TV Guide to repurchase such notes
could cause a default under existing or future debt of TV Guide, even if the
Change of Control itself does not, due to the financial effect of such
repurchase on TV Guide. Finally, TV Guide's ability to pay cash to holders of
notes upon a repurchase may be limited by TV Guide's then existing financial
resources. There can be no assurance that sufficient funds will be available
when necessary to make any required repurchases. TV Guide's failure to purchase
notes in connection with a Change of Control would result in a default under the
indenture. Such a default would, in turn, constitute a default under existing
debt of TV Guide and may constitute a default under future debt as well. If such
debt constitutes Designated Senior Debt, the subordination provisions in the
indenture would likely restrict payment to holders of notes. TV Guide's
obligation to make an offer to repurchase the notes as a result of a Change of
Control may be waived or modified at any time prior to the occurrence of such
Change of Control with the written consent of the holders of a majority in
principal amount of the notes. See "--Amendments and Waivers".
Certain Covenants
Covenant Suspension. Set forth below are summaries of certain covenants
contained in the indenture.
During any period of time that:
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(a) the notes have Investment Grade Ratings from both
Rating Agencies and
(b) no Default or Event of Default has occurred and is
continuing under the indenture,
TV Guide and the Restricted Subsidiaries will not be subject to the following
provisions of the indenture:
"--Limitation on Debt",
"--Limitation on Restricted Payments",
"--Limitation on Asset Sales",
"--Limitation on Restrictions on Distributions from
Restricted Subsidiaries",
"--Limitation on Transactions with Affiliates",
clause (x) of the fourth paragraph (and such clause
(x) as referred to in the first paragraph) of
"Designation of Subsidiaries", and
clause (e) of the first and second paragraphs of
"--Merger, Consolidation and Sale of Property"
(collectively, the "Suspended Covenants"). If TV Guide and the Restricted
Subsidiaries are not subject to the Suspended Covenants for any period of time
as a result of the preceding sentence and, subsequently, one or both of the
Rating Agencies withdraws its ratings or downgrades the ratings assigned to the
notes below the required Investment Grade Ratings or a Default or Event of
Default occurs and is continuing, then TV Guide and the Restricted Subsidiaries
will thereafter again be subject to the Suspended Covenants and compliance with
the Suspended Covenants with respect to Restricted Payments made after the time
of such withdrawal, downgrade, Default or Event of Default will be calculated
under the terms of the covenant described below in "--Limitation on Restricted
Payments" as though such covenant had been in effect during the entire period of
time from the Issue Date.
Notwithstanding the foregoing, any actions relating to the consummation
of obligations Incurred prior to such withdrawal, downgrade, Default or Event of
Default shall not constitute a breach of any covenant set forth in the indenture
or cause a Default or Event of Default thereunder, provided that:
(1) TV Guide and the Restricted Subsidiaries did not Incur
such obligations in anticipation of a withdrawal or downgrade of the
notes below an Investment Grade Rating or a Default or Event of Default
and
(2) TV Guide reasonably believed in good faith at the time of
such Incurrence that such Incurrence or related actions would not
result in such a withdrawal, downgrade, Default or Event of Default.
For purposes of clauses (1) and (2) in the preceding sentence, anticipation and
reasonable belief may be determined by TV Guide and conclusively evidenced by a
Board Resolution to such effect adopted in good faith by the Board of Directors
of TV Guide delivered to the trustee. In reaching their determination, the Board
of Directors may, but need not, consult with the Rating Agencies.
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Limitation on Debt. TV Guide shall not, and shall not permit any
Restricted Subsidiary to, Incur, directly or indirectly, any Debt unless, after
giving effect to the application of the proceeds thereof, no Default or Event of
Default would occur as a consequence of such Incurrence or be continuing
following such Incurrence and either:
(1) such Debt is Debt of TV Guide or a Subsidiary Guarantor
and after giving effect to the Incurrence of such Debt and the
application of the proceeds thereof, the Leverage Ratio of TV Guide and
the Restricted Subsidiaries (on a consolidated basis) would not exceed
7.0 to 1, or
(2) such Debt is Permitted Debt.
The term "Permitted Debt" is defined to include the following:
(a) Debt of TV Guide evidenced by the notes and of Subsidiary
Guarantors evidenced by Subsidiary Guaranties;
(b) Debt of TV Guide or a Subsidiary Guarantor under the
Credit Facility, provided that the aggregate principal amount of all
such Debt under the Credit Facility at any one time outstanding shall
not exceed $600 million, which amount shall be permanently reduced by
the amount of Net Available Cash used to Repay Debt under the Credit
Facility, and not subsequently reinvested in Additional Assets or used
to purchase notes or Repay other Debt, under the covenant described
under "--Limitation on Asset Sales";
(c) Debt in respect of Capital Lease Obligations or Purchase
Money Debt of TV Guide or a Subsidiary Guarantor, provided that:
(1) the aggregate principal amount of such Debt does
not exceed the Fair Market Value (on the date of the
Incurrence thereof) of the Property acquired, constructed or
leased, and
(2) the aggregate principal amount of all Debt
Incurred and then outstanding under this clause (c) (together
with all Permitted Refinancing Debt Incurred and then
outstanding in respect of Debt previously Incurred under this
clause (c)) does not exceed $75 million;
(d) Debt of TV Guide owing to and held by any Wholly Owned
Subsidiary and Debt of a Restricted Subsidiary owing to and held by TV
Guide or any Wholly Owned Subsidiary; provided, however, that any
subsequent issue or transfer of Capital Stock or other event that
results in any such Wholly Owned Subsidiary ceasing to be a Wholly
Owned Subsidiary or any subsequent transfer of any such Debt (except to
TV Guide or a Wholly Owned Subsidiary) shall be deemed, in each case,
to constitute the Incurrence of such Debt by the issuer thereof;
(e) Debt under Interest Rate Agreements and Currency Exchange
Protection Agreements entered into by TV Guide or a Restricted
Subsidiary for the purpose of limiting risk in the ordinary course of
the financial management of TV Guide or such Restricted Subsidiary and
not for speculative purposes, provided that the obligations under such
agreements are directly related to payment obligations on Debt
otherwise permitted by the terms of this covenant;
(f) Debt in connection with one or more standby letters of
credit or performance bonds issued by TV Guide or a Restricted
Subsidiary in the ordinary course of business or under self-insurance
obligations and not in connection with the borrowing of money or the
obtaining of advances or credit;
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(g) Debt of TV Guide or any Restricted Subsidiary outstanding
on the Issue Date not otherwise described in clauses (a) through (f)
above;
(h) Debt of TV Guide or a Subsidiary Guarantor in an aggregate
principal amount outstanding at any one time not to exceed $150
million; and
(i) Permitted Refinancing Debt Incurred in respect of Debt
Incurred under clause (1) of the first paragraph of this covenant and
clauses (a), (c) and (g) above.
Notwithstanding anything to the contrary contained in this
covenant,
(a) TV Guide shall not, and shall not permit any Subsidiary
Guarantor to, Incur any Debt under this covenant if the proceeds
thereof are used, directly or indirectly, to Refinance:
(1) any Subordinated Obligations unless such new Debt
shall be subordinated to the notes or the applicable
Subsidiary Guaranty, as the case may be, to at least the same
extent as such Subordinated Obligations, or
(2) any Senior Subordinated Debt unless such new Debt
shall be Senior Subordinated Debt or shall be subordinated to
the notes or the applicable Subsidiary Guaranty, as the case
may be, and
(b) TV Guide shall not permit any Non-Guarantor Subsidiary to
Incur any Debt under this covenant if the proceeds thereof are used,
directly or indirectly, to Refinance any Subordinated Obligations or
Senior Subordinated Debt of TV Guide or any Subsidiary Guarantor.
Limitation on Restricted Payments. TV Guide shall not make, and shall
not permit any Restricted Subsidiary to make, directly or indirectly, any
Restricted Payment if at the time of, and after giving effect to, such proposed
Restricted Payment,
(a) a Default or Event of Default shall have occurred and
be continuing,
(b) TV Guide could not Incur at least $1.00 of additional Debt
under clause (1) of the first paragraph of the covenant described under
"--Limitation on Debt" or
(c) the aggregate amount of such Restricted Payment and all
other Restricted Payments declared or made since the Issue Date (the
amount of any Restricted Payment, if made other than in cash, to be
based upon Fair Market Value) would exceed an amount equal to the sum
of:
(1) the result of:
(A) Cumulative EBITDA, minus
(B) the product of 1.5 and Cumulative
Interest Expense, plus
(2) Capital Stock Sale Proceeds (other than
Capital Stock Sale Proceeds used to make a
Permitted Investment under clause (i) of
the definition thereof), plus
(3) the sum of:
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(A) the aggregate net cash proceeds received
by TV Guide or any Restricted Subsidiary from the
issuance or sale after the Issue Date of convertible
or exchangeable Debt that has been converted into or
exchanged for Capital Stock (other than Disqualified
Stock) of TV Guide, and
(B) the aggregate amount by which Debt
(other than Subordinated Obligations) of TV Guide or
any Restricted Subsidiary is reduced on TV Guide's
consolidated balance sheet on or after the Issue Date
upon the conversion or exchange of any Debt issued or
sold on or prior to the Issue Date into Capital Stock
(other than Disqualified Stock) of TV Guide,
excluding, in the case of clause (A) or (B):
(x) any such Debt issued or sold to TV Guide
or a Subsidiary of TV Guide or an employee
stock ownership plan or trust established by
TV Guide or any such Subsidiary for the
benefit of their employees, and
(y) the aggregate amount of any cash or
other Property distributed by TV Guide or
any Restricted Subsidiary upon any such
conversion or exchange, plus
(4) an amount equal to the sum of:
(A) the net reduction in Investments in any
Person (other than TV Guide, a Restricted Subsidiary
or, with respect to any Investment made on or prior
to the Issue Date, an Initial Unrestricted
Subsidiary) resulting from dividends, repayments of
loans or advances or other transfers of Property, in
each case to TV Guide or any Restricted Subsidiary
from such Person, plus
(B) the portion (proportionate to TV Guide's
equity interest in such Unrestricted Subsidiary) of
the Fair Market Value of the net assets of an
Unrestricted Subsidiary (other than the Initial
Unrestricted Subsidiaries) at the time such
Unrestricted Subsidiary is designated a Restricted
Subsidiary;
provided, however, that the foregoing sum
shall not exceed, in the case of any Person,
the amount of Investments previously made
(and treated as a Restricted Payment) by TV
Guide or any Restricted Subsidiary in such
Person.
Notwithstanding the foregoing limitation, TV Guide may:
(a) pay dividends on its Capital Stock within 60 days of the
declaration thereof if, on said declaration date, such dividends could
have been paid in compliance with the indenture; provided, however,
that such dividend shall be included in the calculation of the amount
of Restricted Payments;
(b) purchase, repurchase, redeem, legally defease, acquire or
retire for value Capital Stock of TV Guide or Subordinated Obligations
in exchange for, or out of the proceeds of the substantially concurrent
sale of, Capital Stock of TV Guide (other than Disqualified Stock and
other than Capital Stock issued or sold to a Subsidiary of TV Guide or
an employee stock ownership plan or trust established by TV Guide or
any such Subsidiary for the benefit of their employees); provided,
however, that:
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(1) such purchase, repurchase, redemption, legal
defeasance, acquisition or retirement shall be excluded in the
calculation of the amount of Restricted Payments, and
(2) the Capital Stock Sale Proceeds from such
exchange or sale (i) shall be excluded from the calculation
under clause (c)(2) above and (ii) shall not be used to make
Investments under clause (i) of the definition of Permitted
Investments;
(c) purchase, repurchase, redeem, legally defease, acquire or
retire for value any Subordinated Obligations in exchange for, or out
of the proceeds of the substantially concurrent sale of, Permitted
Refinancing Debt; provided, however, that such purchase, repurchase,
redemption, legal defeasance, acquisition or retirement shall be
excluded in the calculation of the amount of Restricted Payments; and
(d) repurchase shares of, or options to purchase shares of,
common stock of TV Guide or any of its Subsidiaries from current or
former officers, directors or employees of TV Guide or any of its
Subsidiaries (or permitted transferees of such current or former
officers, directors or employees), under the terms of agreements
(including employment agreements) or plans (or amendments thereto)
approved by the Board of Directors under which such individuals
purchase or sell, or are granted the option to purchase or sell, shares
of such common stock; provided, however, that:
(1) the aggregate amount of such repurchases
shall not exceed $3 million in any calendar year and
(2) at the time of such repurchase, no other Default
or Event of Default shall have occurred and be continuing (or
result therefrom);
provided further, however, that such repurchases shall be
included in the calculation of the amount of Restricted
Payments.
Limitation on Liens. TV Guide shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, Incur or suffer to exist, any
Lien (other than Permitted Liens or Liens securing Senior Debt) upon any of its
Property (including Capital Stock of a Restricted Subsidiary), whether owned at
the Issue Date or thereafter acquired, or any interest therein or any income or
profits therefrom, unless:
(a) if such Lien secures Senior Subordinated Debt, the notes
or the applicable Subsidiary Guaranty are secured on an equal and
ratable basis with such Debt, and
(b) if such Lien secures Subordinated Obligations, such Lien
shall be subordinated to a Lien securing the notes or the applicable
Subsidiary Guaranty in the same Property as that securing such Lien to
the same extent as such Subordinated Obligations are subordinated to
the notes and the Subsidiary Guaranties.
Limitation on Asset Sales. TV Guide shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, consummate any Asset Sale
unless:
(a) after giving effect to such Asset Sale, no Default or
Event of Default would occur as a result thereof;
(b) TV Guide or such Restricted Subsidiary receives
consideration at the time of such Asset Sale at least equal to the Fair
Market Value of the Property subject to such Asset Sale;
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(c) at least 75% of the consideration paid to TV Guide or suc
Restricted Subsidiary in connection with such Asset Sale is in the form
of (1) cash or cash equivalents, (2) notes, obligations or other
securities (debt or equity) that are converted by TV Guide or such
Restricted Subsidiary into cash within 90 days of the date of such
Asset Sale, (3) Additional Assets, (4) the assumption of Priority Debt
(as a result of which TV Guide and the Restricted Subsidiaries are
no longer liable with respect to such Priority Debt) or (5) any
combination of the foregoing; and
(d) TV Guide delivers an Officers' Certificate to the trustee
certifying that such Asset Sale complies with the foregoing clauses
(a), (b) and (c).
The Net Available Cash (or any portion thereof) from Asset Sales may be
applied by TV Guide or a Restricted Subsidiary, to the extent TV Guide or such
Restricted Subsidiary elects (or is required by the terms of any Debt):
(a) to Repay Priority Debt; or
(b) to reinvest in Additional Assets (including by means of an
Investment in Additional Assets by a Restricted Subsidiary with Net
Available Cash received by TV Guide or another Restricted Subsidiary).
Pending final application of any such Net Available Cash, TV Guide may
temporarily reduce revolving credit borrowings or otherwise invest such Net
Available Cash in any Temporary Cash Investments that are not prohibited by the
indenture.
Any Net Available Cash from an Asset Sale not applied as described in
the preceding paragraph within 18 months from the date of the receipt of such
Net Available Cash shall constitute "Excess Proceeds". When the aggregate amount
of Excess Proceeds exceeds $20 million (taking into account income earned on
such Excess Proceeds, if any), TV Guide will be required to make an offer to
purchase (the "Prepayment Offer") the notes which offer shall be in the amount
of the Allocable Excess Proceeds, on a pro rata basis according to principal
amount, at a purchase price equal to 100% of the principal amount thereof, plus
accrued and unpaid interest, if any, to the purchase date (subject to the right
of holders of record on the relevant record date to receive interest due on the
relevant interest payment date), under the procedures (including prorating in
the event of oversubscription) set forth in the indenture. To the extent that
any portion of the amount of Net Available Cash remains after compliance with
the preceding sentence and provided that all holders of notes have been given
the opportunity to tender their notes for purchase as required by the indenture,
TV Guide or such Restricted Subsidiary may use such remaining amount for any
purpose permitted by the indenture and the amount of Excess Proceeds will be
reset to zero.
The term "Allocable Excess Proceeds" will mean the product of:
(a) the Excess Proceeds, and
(b) a fraction,
(1) the numerator of which is the aggregate
principal amount of the notes outstanding on the date of the
Prepayment Offer, and
(2) the denominator of which is the sum of the
aggregate principal amount of the notes outstanding on the
date of the Prepayment Offer and the aggregate principal
amount of other Debt of TV Guide outstanding on the date of
the Prepayment Offer that is pari passu in
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right of payment with the notes and subject to terms and
conditions in respect of Asset Sales similar in all material
respects to the covenant described hereunder and requiring TV
Guide to make an offer to purchase such Debt at substantially
the same time as the Prepayment Offer.
Within five business days after TV Guide is obligated to make a
Prepayment Offer as described in the preceding paragraph, TV Guide shall send a
written notice, by first-class mail, to the holders of notes, accompanied by
such information regarding TV Guide and its Subsidiaries as TV Guide in good
faith believes will enable such holders to make an informed decision with
respect to such Prepayment Offer. Such notice shall state, among other things,
the purchase price and the purchase date, which shall be, subject to any
contrary requirements of applicable law, a business day no earlier than 30 days
nor later than 60 days from the date such notice is mailed.
TV Guide will comply, to the extent applicable, with the requirements
of Section 14(e) of the Exchange Act and any other securities laws or
regulations in connection with the repurchase of notes under the covenant
described hereunder. To the extent that the provisions of any securities laws or
regulations conflict with provisions of the covenant described hereunder, TV
Guide will comply with the applicable securities laws and regulations and will
not be deemed to have breached its obligations under the covenant described
hereunder by virtue thereof.
Limitation on Restrictions on Distributions from Restricted
Subsidiaries. TV Guide shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, create or otherwise cause or suffer to exist any
consensual restriction on the right of any Restricted Subsidiary to:
(a) pay dividends, in cash or otherwise, or make any other
distributions on or in respect of its Capital Stock, or pay any Debt or
other obligation owed, to TV Guide or any other Restricted Subsidiary,
(b) make any loans or advances to TV Guide or any other
Restricted Subsidiary or
(c) transfer any of its Property to TV Guide or any other
Restricted Subsidiary.
The foregoing limitations will not apply:
(1) with respect to clause (a), (b) or (c), to
restrictions:
(A) in effect on the Issue Date,
(B) relating to Debt of a Restricted Subsidiary and
existing at the time it became a Restricted Subsidiary if such
restriction was not created in connection with or in
anticipation of the transaction or series of transactions in
which such Restricted Subsidiary became a Restricted
Subsidiary or was acquired by TV Guide,
(C) that result from the Refinancing of Debt Incurred
under an agreement referred to in clause (1)(A) or (B) above
or in clause (2)(A) or (B) below, provided such restriction is
no less favorable to the holders of notes than those under the
agreement evidencing the Debt so Refinanced,
or
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(D) in the form of supermajority voting, veto or
similar rights held by a Permitted Interactive Partner in any
joint venture or other Person formed with respect to the
intellectual property used or usable in TV Guide's TV Guide
Interactive business, and
(2) with respect to clause (c) only, to restrictions:
(A) relating to Debt that is permitted to be Incurred
and secured without also securing the notes or the applicable
Subsidiary Guaranty under the covenants described in
"--Limitation on Debt" and "--Limitation on Liens" that limit
the right of the debtor to dispose of the Property securing
such Debt,
(B) encumbering Property at the time such Property
was acquired by TV Guide or any Restricted Subsidiary, so long
as such restriction relates solely to the Property so acquired
and was not created in connection with or in anticipation of
such acquisition,
(C) resulting from customary provisions restricting
subletting or assignment of leases or customary provisions in
other agreements that restrict assignment of such agreements
or rights thereunder, or
(D) customary restrictions contained in asset sale
agreements limiting the transfer of such Property pending the
closing of such sale.
Limitation on Transactions with Affiliates. TV Guide shall not, and
shall not permit any Restricted Subsidiary to, directly or indirectly, conduct
any business or enter into or suffer to exist any transaction or series of
transactions (including the purchase, sale, transfer, assignment, lease,
conveyance or exchange of any Property or the rendering of any service) with, or
for the benefit of, any Affiliate of TV Guide (an "Affiliate Transaction"),
unless:
(a) the terms of such Affiliate Transaction are no less
favorable to TV Guide or such Restricted Subsidiary, as the case may
be, than those that could be obtained in a comparable arm's-length
transaction with a Person that is not an Affiliate of TV Guide,
(b) if such Affiliate Transaction involves aggregate payments
or value in excess of $20 million, the Board of Directors (including a
majority of the disinterested members of the Board of Directors)
approves such Affiliate Transaction and, in its good faith judgment,
believes that such Affiliate Transaction complies with clause (a) of
this paragraph as evidenced by a Board Resolution promptly delivered to
the trustee, and
(c) if such Affiliate Transaction involves aggregate payments
or value in excess of $40 million, TV Guide obtains a written opinion
from an Independent Financial Advisor to the effect that the
consideration to be paid or received in connection with such Affiliate
Transaction is fair, from a financial point of view, to TV Guide and
the Restricted Subsidiaries.
Notwithstanding the foregoing limitation, TV Guide or any Restricted
Subsidiary may enter into or suffer to exist the following:
(a) any transaction or series of transactions between TV Guide
and one or more Restricted Subsidiaries or between two or more
Restricted Subsidiaries in the ordinary course of business, provided
that no more than 5% of the total voting power of the Voting Stock (on
a fully diluted basis) of any such Restricted Subsidiary is owned by an
Affiliate of TV Guide (other than a Restricted Subsidiary);
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(b) any Restricted Payment permitted to be made under the
covenant described in "--Limitation on Restricted Payments" or any
Permitted Investment;
(c) the payment of compensation (including amounts paid under
employee benefit plans) for the personal services of officers,
directors and employees of TV Guide or any of the Restricted
Subsidiaries, so long as the Board of Directors in good faith shall
have approved the terms thereof and deemed the services theretofore or
thereafter to be performed for such compensation to be fair
consideration therefor;
(d) loans and advances to employees made in the ordinary
course of business and consistent with the past practices of TV Guide
or such Restricted Subsidiary, as the case may be, provided that such
loans and advances do not exceed $3 million in the aggregate at any one
time outstanding;
(e) any agreement between TV Guide or any Restricted
Subsidiary on the one hand and a Permitted Holder on the other relating
to the provision of products or services in the ordinary course of
business, provided that such agreement satisfies the condition set
forth in clause (a) of the preceding paragraph; and
(f) any transaction or series of transactions under any
agreement in existence on the Issue Date or any agreement contemplated
as part of or in connection with the the TV Guide Acquisition (as
defined in the Offering Memorandum) (which contemplated agreements are
described under "Certain Relationships and Related Transactions" in the
Offering Memorandum) and, in either case, any renewal, extension or
replacement of any such agreement on terms no less favorable to TV
Guide and the Restricted Subsidiaries than the original agreement.
In addition to the foregoing, TV Guide shall cause the IP Subsidiary to maintain
the IP Agreements in full force and effect and to comply with the terms thereof
in all material respects (except with respect to any IP Agreement the
counterparty to which is no longer TV Guide or a Restricted Subsidiary),
provided that the foregoing covenant shall be satisfied if, following a transfer
of all or substantially all the assets of the IP Subsidiary or a change of
control of the IP Subsidiary (whether by merger, consolidation, stock purchase
or otherwise) in connection with which the transferee, successor or survivor
Person assumes the IP Subsidiary's obligations under the IP Agreements,TV Guide
and the Restricted Subsidiaries take all actions reasonably necessary to enforce
such assumption of obligations against such Person.
Limitation on Layered Debt. TV Guide shall not, and shall not permit
any Subsidiary Guarantor to, Incur, directly or indirectly, any Debt that is
subordinate or junior in right of payment to any Senior Debt unless such Debt is
Senior Subordinated Debt or is expressly subordinated in right of payment to
Senior Subordinated Debt. In addition, no Subsidiary Guarantor shall Guarantee,
directly or indirectly, any Debt of TV Guide that is subordinate or junior in
right of payment to any Senior Debt unless such Guarantee is expressly
subordinate in right of payment to, or ranks pari passu with, the Subsidiary
Guaranty of such Subsidiary Guarantor.
Designation of Subsidiaries. The Board of Directors may designate any
Subsidiary of TV Guide to be an Unrestricted Subsidiary or Non-Guarantor
Subsidiary if:
(a) the Subsidiary to be so designated does not own any
Capital Stock or Debt of, or own or hold any Lien on any Property of,
TV Guide or any other Restricted Subsidiary,
(b) no Default or Event of Default shall have occurred
and be continuing or would result therefrom,
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(c) in the case of Unrestricted Subsidiaries, TV Guide would
be permitted to make an Investment at the time of such designation in
an amount equal to the portion (proportionate to TV Guide's equity
interest in such Subsidiary) of the Fair Market Value of the net assets
of such Subsidiary at such time, and
(d) in the case of Non-Guarantor Subsidiaries, the
Subsidiary to be so designated is not a Wholly Owned Subsidiary.
Unless so designated as an Unrestricted Subsidiary, any Person that becomes a
Subsidiary of TV Guide will be classified as a Restricted Subsidiary; provided,
however, that such Subsidiary shall not be designated a Restricted Subsidiary
and shall be automatically designated as an Unrestricted Subsidiary if either of
the requirements set forth in clauses (x) and (y) of the third immediately
following paragraph will not be satisfied after giving pro forma effect to such
classification or if such Person is a Subsidiary of an Unrestricted Subsidiary.
Except as provided in the preceding paragraph, no Restricted Subsidiary
may be designated as an Unrestricted Subsidiary or Non-Guarantor Subsidiary. In
addition, neither TV Guide nor any Restricted Subsidiary shall at any time be
directly or indirectly liable for any Debt that provides that the holder thereof
may (with the passage of time or notice or both) declare a default thereon or
cause the payment thereof to be accelerated or payable prior to its Stated
Maturity upon the occurrence of a default with respect to any Debt, Lien or
other obligation of any Unrestricted Subsidiary or Non-Guarantor Subsidiary
(including any right to take enforcement action against such Unrestricted
Subsidiary or Non-Guarantor Subsidiary).
Upon designation of a Restricted Subsidiary as an Unrestricted
Subsidiary or Non-Guarantor Subsidiary in compliance with this covenant, such
Restricted Subsidiary shall, by execution and delivery of a supplemental
indenture in form satisfactory to the trustee, be released from any Subsidiary
Guaranty previously made by such Restricted Subsidiary.
The Board of Directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary if, immediately after giving pro forma effect to such
designation,
(x) TV Guide could Incur at least $1.00 of additional Debt
under clause (1) of the first paragraph of the covenant described under
"--Limitation on Debt", and
(y) no Default or Event of Default shall have occurred and be
continuing or would result therefrom.
The Board of Directors may designate any Non-Guarantor Subsidiary to be a
Subsidiary Guarantor if concurrently with such designation, such Subsidiary
executes and delivers to the trustee a Subsidiary Guaranty.
Any such designation or redesignation will be evidenced to the trustee
by filing with the trustee a Board Resolution giving effect to such designation
or redesignation and an Officers' Certificate that:
(a) certifies that such designation or redesignation
complies with the foregoing provisions, and
(b) gives the effective date of such designation or
redesignation,
such filing with the trustee to occur within 45 days after the end of the fiscal
quarter of TV Guide in which such designation or redesignation is made (or, in
the case of a designation or redesignation made during the last fiscal quarter
of TV Guide's fiscal year, within 90 days after the end of such fiscal year).
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TV Guide may, at its option (the "SNG-Netlink Option"), designate
SNG-Netlink as an Initial Unrestricted Subsidiary by delivering an Officers'
Certificate to such effect to the trustee by no later than 120th day following
the Issue Date. Upon such designation, TV Guide may contribute SNG-Netlink to
another Initial Unrestricted Subsidiary, and SNG-Netlink will be treated, for
all purposes of the indenture, as if it had been an Initial Unrestricted
Subsidiary owned by such other Initial Unrestricted Subsidiary since the Issue
Date, and such contribution shall not be subject to any of the provisions of the
indenture. In the event of such designation, all transactions and actions taken
with respect to SNG-Netlink since the Issue Date shall have complied with the
provisions of the indenture, including the covenant described under
"--Limitation on Transactions with Affiliates", as if SNG-Netlink had been an
Initial Unrestricted Subsidiary since the Issue Date. Such designation and
contribution will not be subject to the requirements set forth above under this
"--Designation of Subsidiaries" covenant, and the making of such designation and
contribution will not be considered an Investment for purposes of the covenant
described under "--Limitation on Restricted Payments" or an Asset Sale for
purposes of "-- Limitation on Asset Sales". TV Guide may, at its option,
terminate its SNG-Netlink Option at any time by delivering an Officers'
Certificate to such effect to the trustee. Until the earlier of such termination
or the 120th day following the Issue Date, the net income (loss) of SNG-Netlink
shall be excluded from Consolidated Net Income, provided that upon such
termination or 120th day, such net income (loss) shall be included (or excluded)
in Consolidated Net Income as if SNG-Netlink had been a Restricted Subsidiary
since the Issue Date, provided further that upon the designation of SNG-Netlink
as an Initial Unrestricted Subsidiary, such net income (loss) shall be included
or excluded in Consolidated Net Income as if SNG-Netlink had been an Initial
Unrestricted Subsidiary since the Issue Date. Except as otherwise provided in
this paragraph, SNG-NetLink shall be considered for all purposes of the
indenture as a Restricted Subsidiary. Upon designation as an Initial
Unrestricted Subsidiary in compliance with this paragraph, SNG-Netlink shall, by
execution and delivery of a supplemental indenture in form satisfactory to the
trustee, be released from the Subsidiary Guaranty previously made by
SNG-Netlink.
If, at the time the SNG-Netlink Option is exercised, the assets of
Netlink USA consist of assets other than the SNG Interest and any de minimis
assets, the SNG-Netlink Option shall only be exercisable if Telluride, Inc., the
other partner in Netlink USA, is also designated as an Unrestricted Subsidiary
at that time under the other paragraphs of this "--Designation of Subsidiaries"
covenant. For purposes of determining the amount of the Investment deemed to be
made upon such designation, the assets of Telluride, Inc. shall be deemed to
consist of the D6/SMATV Interest. If, immediately following such designation, TV
Guide contributes Telluride, Inc. to an Initial Unrestricted Subsidiary, the
separate investments represented by such contribution and designation will be
considered together as only one Investment for purposes of calculations under
the indenture.
Future Subsidiary Guarantors. TV Guide shall cause each Person that
becomes a Restricted Subsidiary following the Issue Date to execute and deliver
to the trustee a Subsidiary Guaranty at the time such Person becomes a
Restricted Subsidiary (unless such Person is a Non-Guarantor Subsidiary).
Merger, Consolidation and Sale of Property
TV Guide shall not merge, consolidate or amalgamate with or into any
other Person (other than a merger of a Wholly Owned Subsidiary into TV Guide) or
sell, transfer, assign, lease, convey or otherwise dispose of all or
substantially all its Property in any one transaction or series of transactions
unless:
(a) TV Guide shall be the surviving Person (the "Surviving
Person") or the Surviving Person (if other than TV Guide) formed by
such merger, consolidation or amalgamation or to which such sale,
transfer, assignment, lease, conveyance or disposition is made shall be
a corporation or limited liability company organized and existing under
the laws of the United States of America, any State thereof or the
District of Columbia;
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(b) the Surviving Person (if other than TV Guide) expressly
assumes, by supplemental indenture in form satisfactory to the trustee,
executed and delivered to the trustee by such Surviving Person, the due
and punctual payment of the principal of, and premium, if any, and
interest on, all the notes, according to their tenor, and the due and
punctual performance and observance of all the covenants and conditions
of the indenture to be performed by TV Guide;
(c) in the case of a sale, transfer, assignment, lease,
conveyance or other disposition of all or substantially all the
Property of TV Guide, such Property shall have been transferred as an
entirety or virtually as an entirety to one Person;
(d) immediately before and after giving effect to such
transaction or series of transactions on a pro forma basis (and, for
purposes of this clause (d) and clause (e) below, (1) treating any Debt
that becomes, or is anticipated to become, an obligation of the
Surviving Person, TV Guide or any Restricted Subsidiary as a result of
such transaction or series of transactions as having been Incurred by
the Surviving Person, TV Guide or such Restricted Subsidiary at the
time of such transaction or series of transactions and (2) giving pro
forma effect to the Repayment of any Debt in connection with such
transaction or series of transactions), no Default or Event of Default
shall have occurred and be continuing;
(e) immediately after giving effect to such transaction or
series of transactions and to the Repayment of any Debt in connection
with such transaction or series of transactions on a pro forma basis,
TV Guide or the Surviving Person, as the case may be, would be able to
Incur at least $1.00 of additional Debt under clause (1) of the first
paragraph of the covenant described under "--Certain
Covenants--Limitation on Debt"; and
(f) TV Guide shall deliver, or cause to be delivered, to the
trustee, in form and substance reasonably satisfactory to the trustee,
an Officers' Certificate and an Opinion of Counsel, each stating that
such transaction and the supplemental indenture, if any, in respect
thereto comply with this covenant and that all conditions precedent
herein provided for relating to such transaction have been satisfied.
TV Guide shall not permit any Subsidiary Guarantor to merge,
consolidate or amalgamate with or into any other Person (other than a merger of
a Wholly Owned Subsidiary into such Subsidiary Guarantor) or sell, transfer,
assign, lease, convey or otherwise dispose of all or substantially all its
Property in any one transaction or series of transactions unless:
(a) the Surviving Person (if not such Subsidiary Guarantor)
formed by such merger, consolidation or amalgamation or to which such
sale, transfer, assignment, lease, conveyance or disposition is made
shall be a corporation or limited liability company organized and
existing under the laws of the United States of America, any State
thereof or the District of Columbia;
(b) the Surviving Person (if other than such Subsidiary
Guarantor) expressly assumes, by Subsidiary Guaranty in form
satisfactory to the trustee, executed and delivered to the trustee by
such Surviving Person, the due and punctual performance and observance
of all the obligations of such Subsidiary Guarantor under its
Subsidiary Guaranty;
(c) in the case of a sale, transfer, assignment, lease,
conveyance or other disposition of all or substantially all the
Property of such Subsidiary Guarantor, such Property shall have been
transferred as an entirety or virtually as an entirety to one Person;
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(d) immediately before and after giving effect to such
transaction or series of transactions on a pro forma basis (and
treating, for purposes of this clause (d) and clause (e) below, any
Debt that becomes, or is anticipated to become, an obligation of the
Surviving Person, TV Guide or any Restricted Subsidiary as a result of
such transaction or series of transactions as having been Incurred by
the Surviving Person, TV Guide or such Restricted Subsidiary at the
time of such transaction or series of transactions), no Default or
Event of Default shall have occurred and be continuing;
(e) immediately after giving effect to such transaction or
series of transactions on a pro forma basis, TV Guide would be able to
Incur at least $1.00 of additional Debt under clause (1) of the first
paragraph of the covenant described under "--Certain
Covenants--Limitation on Debt"; and
(f) TV Guide shall deliver, or cause to be delivered, to the
trustee, in form and substance reasonably satisfactory to the trustee,
an Officers' Certificate and an Opinion of Counsel, each stating that
such transaction and such Subsidiary Guaranty, if any, in respect
thereto comply with this covenant and that all conditions precedent
herein provided for relating to such transaction have been satisfied.
The foregoing provisions (other than clause (d)) shall not apply to any
transactions which constitute an Asset Sale if TV Guide has complied with the
covenant described under "--Certain Covenants--Limitation on Asset Sales".
The Surviving Person shall succeed to, and be substituted for, and may
exercise every right and power of TV Guide under the indenture (or of the
Subsidiary Guarantor under the Subsidiary Guaranty, as the case may be), but the
predecessor Company in the case of:
(a) a sale, transfer, assignment, conveyance or other disposition
(unless such sale, transfer, assignment, conveyance or other disposition is of
all the assets of TV Guide as an entirety or virtually as an entirety), or
(b) a lease, shall not be released from any of the obligations or
covenants under the indenture, including with respect to the payment of the
notes.
SEC Reports
Notwithstanding that TV Guide may not be subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, TV Guide shall file
with the SEC and provide the trustee and holders of notes with such annual
reports and such information, documents and other reports as are specified in
Sections 13 and 15(d) of the Exchange Act and applicable to a U.S. corporation
subject to such Sections, such information, documents and reports to be so filed
and provided at the times specified for the filing of such information,
documents and reports under such Sections; provided, however, that TV Guide
shall not be so obligated to file such information, documents and reports with
the SEC if the SEC does not permit such filings. In addition, at such times as
information is delivered as required by the immediately preceding sentence, TV
Guide shall provide to the trustee and the holders of the notes (1) the same
line-item financial information (excluding the ratio of earnings to fixed
charges and the line items from the statement of cash flows) on a consolidated
basis (excluding the Unrestricted Subsidiaries) with respect to TV Guide and its
Restricted Subsidiaries as set forth under "Selected Historical Financial Data
- --United Video Satellite Group, Inc." in the Offering Memorandum and (2) segment
reporting information for its businesses. Delivery of such reports, information
and documents to the trustee is for informational purposes only and the
trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including TV Guide's compliance with any of its covenants hereunder (as
to which the trustee is entitled to rely exclusively on Officers' Certificates).
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Events of Default
Events of Default in respect of the notes include:
(1) failure to make the payment of any interest on the notes when the
same becomes due and payable, and such failure continues for a period of 30
days;
(2) failure to make the payment of any principal of, or premium, if
any, on, any of the notes when the same becomes due and payable at its Stated
Maturity, upon acceleration, redemption, optional redemption, required
repurchase or otherwise;
(3) failure to comply with the covenant described under "--Merger,
Consolidation and Sale of Property";
(4) failure to comply with any other covenant or agreement in the notes
or in the indenture (other than a failure that is the subject of the foregoing
clause (1), (2) or (3)) and such failure continues for 30 days after written
notice is given to TV Guide as provided below;
(5) a default under any Debt by TV Guide or any Restricted Subsidiary
that results in acceleration of the maturity of such Debt, or failure to pay any
such Debt at maturity, in an aggregate amount greater than $10 million or its
foreign currency equivalent at the time (the "cross acceleration provisions");
(6) any judgment or judgments for the payment of money in an aggregate
amount in excess of $10 million (or its foreign currency equivalent at the time)
that shall be rendered against TV Guide or any Restricted Subsidiary and that
shall not be waived, satisfied or discharged for any period of 30 consecutive
days during which a stay of enforcement shall not be in effect (the "judgment
default provisions");
(7) certain events involving bankruptcy, insolvency or reorganization
of TV Guide or any Significant Subsidiary (the "bankruptcy provisions"); and
(8) any Subsidiary Guaranty ceases to be in full force and effect
(other than under the terms of such Subsidiary Guaranty) or any Subsidiary
Guarantor denies or disaffirms its obligations under its Subsidiary Guaranty
(the "guaranty provisions").
A Default under clause (4) is not an Event of Default until the trustee
or the holders of not less than 25% in aggregate principal amount of the notes
then outstanding notify TV Guide of the Default and TV Guide does not cure such
Default within the time specified after receipt of such notice. Such notice must
specify the Default, demand that it be remedied and state that such notice is a
"Notice of Default".
TV Guide shall deliver to the trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any event that with the giving of notice and the lapse of time would become an
Event of Default, its status and what action TV Guide is taking or proposes to
take with respect thereto.
If an Event of Default with respect to the notes (other than an Event
of Default resulting from certain events involving bankruptcy, insolvency or
reorganization with respect to TV Guide) shall have occurred and be continuing,
the trustee or the registered holders of not less than 25% in aggregate
principal amount of the notes then outstanding may declare to be immediately due
and payable the principal amount of all the notes then outstanding, plus accrued
but unpaid interest to the date of acceleration. In case an Event of Default
resulting from certain events of bankruptcy, insolvency or reorganization with
respect to TV Guide shall occur, such amount with respect to all the notes shall
be due and payable immediately without any declaration or other act on
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the part of the trustee or the holders of the notes. After any such
acceleration, but before a judgment or decree based on acceleration is obtained
by the trustee, the registered holders of a majority in aggregate principal
amount of the notes then outstanding may, under certain circumstances, rescind
and annul such acceleration if all Events of Default, other than the nonpayment
of accelerated principal, premium or interest, have been cured or waived as
provided in the indenture.
Subject to the provisions of the indenture relating to the duties of
the trustee, in case an Event of Default shall occur and be continuing, the
trustee will be under no obligation to exercise any of its rights or powers
under the indenture at the request or direction of any of the holders of the
notes, unless such holders shall have offered to the trustee reasonable
indemnity. Subject to such provisions for the indemnification of the trustee,
the holders of a majority in aggregate principal amount of the notes then
outstanding will have the right to 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 the trustee with respect to the notes.
No holder of notes will have any right to institute any proceeding with
respect to the indenture, or for the appointment of a receiver or trustee, or
for any remedy thereunder, unless:
(a) such holder has previously given to the trustee written notice of a
continuing Event of Default,
(b) the registered holders of at least 25% in aggregate principal
amount of the notes then outstanding have made written request and offered
reasonable indemnity to the trustee to institute such proceeding as trustee, and
(c) the trustee shall not have received from the registered holders of
a majority in aggregate principal amount of the notes then outstanding a
direction inconsistent with such request and shall have failed to institute such
proceeding within 60 days.
However, such limitations do not apply to a suit instituted by a holder of any
Note for enforcement of payment of the principal of, and premium, if any, or
interest on, such Note on or after the respective due dates expressed in such
Note.
Amendments and Waivers
Subject to certain exceptions, the indenture may be amended with the
consent of the registered holders of a majority in aggregate principal amount of
the notes then outstanding (including consents obtained in connection with a
tender offer or exchange offer for the notes) and any past default or compliance
with any provisions may also be waived (except a default in the payment of
principal, premium or interest and certain covenants and provisions of the
indenture which cannot be amended without the consent of each holder of an
outstanding Note) with the consent of the registered holders of at least a
majority in aggregate principal amount of the notes then outstanding. However,
without the consent of each holder of an outstanding Note, no amendment may:
(1) reduce the amount of notes whose holders must consent to an
amendment or waiver,
(2) reduce the rate of or extend the time for payment of interest
on any Note,
(3) reduce the principal of or extend the Stated Maturity of any Note,
(4) make any Note payable in money other than that stated in the Note,
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(5) impair the right of any holder of the notes to receive payment of
principal of and interest on such holder's notes on or after the due dates
therefor or to institute suit for the enforcement of any payment on or with
respect to such holder's notes or any Subsidiary Guaranty,
(6) release any security interest that may have been granted in favor
of the holders of the notes other than under the terms of such security
interest,
(7) reduce the premium payable upon the redemption of any Note nor
change the time at which any Note may be redeemed, as described under
"--Optional Redemption",
(8) reduce the premium payable upon a Change of Control or, at any time
after a Change of Control has occurred, change the time at which the Change of
Control Offer relating thereto must be made or at which the notes must be
repurchased in the Change of Control Offer,
(9) at any time after TV Guide is obligated to make a Prepayment Offer
with the Excess Proceeds from Asset Sales, change the time at which the
Prepayment Offer must be made or at which the notes must be repurchased under
the Prepayment Offer,
(10) make any change to the subordination provisions of the indenture
that would adversely affect the holders of the notes or
(11) make any change in any Subsidiary Guaranty that would
adversely affect the holders of the notes.
Without the consent of any holder of the notes, TV Guide and the
trustee may amend the indenture to:
x cure any ambiguity, omission, defect or inconsistency,
x provide for the assumption by a successor corporation of the
obligations of TV Guide under the indenture,
x provide for uncertificated notes in addition to or in place of
certificated notes (provided that the uncertificated notes are
issued in registered form for purposes of Section 163(f) of
the Code, or in a manner such that the uncertificated notes
are described in Section 163(f)(2)(B) of the Code),
x add additional Guarantees with respect to the notes or to
release Subsidiary Guarantors from Subsidiary Guaranties as
provided by the terms of the indenture,
x secure the notes or add to the covenants of TV Guide for the
benefitof the holders of the notes or surrender any right or
power conferred upon TV Guide,
x make any change that does not adversely affect the rights of
any holder of the notes,
x make any change to the subordination provisions of the
indenture that would limit or terminate the benefits available
to any holder of Senior Debt under such provisions or to
comply with any requirement of the SEC in connection with the
qualification of the indenture under the Trust Indenture Act.
No amendment may be made to the subordination provisions of the
indenture that adversely affects the rights of any holder of Senior Debt then
outstanding unless the holders of such Senior Debt (or their
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Representative) consent to such change. The consent of the holders of the notes
is not necessary to approve the particular form of any proposed amendment. It is
sufficient if such consent approves the substance of the proposed amendment.
After an amendment becomes effective, TV Guide is required to mail to each
registered holder of the notes at such holder's address appearing in the
Security Register a notice briefly describing such amendment. However, the
failure to give such notice to all holders of the notes, or any defect therein,
will not impair or affect the validity of the amendment.
Defeasance
TV Guide at any time may terminate all its obligations under the notes
and the indenture ("legal defeasance"), except for certain obligations,
including those respecting the defeasance trust and obligations to register the
transfer or exchange of the notes, to replace mutilated, destroyed, lost or
stolen notes and to maintain a registrar and paying agent in respect of the
notes. TV Guide at any time may terminate:
(1) its obligations under the covenants described under "--Repurchase
at the Option of Holders Upon a Change of Control" and "--Certain Covenants",
(2) the operation of the cross acceleration provisions, the judgment
default provisions, the bankruptcy provisions with respect to Significant
Subsidiaries and the guaranty provisions described under "--Events of Default"
above, and
(3) the limitations contained in clause (e) under the first paragraph
of, and in the second paragraph of, "--Merger, Consolidation and Sale of
Property" above ("covenant defeasance").
TV Guide may exercise its legal defeasance option notwithstanding its
prior exercise of its covenant defeasance option.
If TV Guide exercises its legal defeasance option, payment of the notes
may not be accelerated because of an Event of Default with respect thereto. If
TV Guide exercises its covenant defeasance option, payment of the notes may not
be accelerated because of an Event of Default specified in clause (4) (with
respect to the covenants described under "--Certain Covenants"), (5), (6), (7)
(with respect only to Significant Subsidiaries) or (8) under "--Events of
Default" above or because of the failure of TV Guide to comply with clause (e)
under the first paragraph of, or with the second paragraph of, "--Merger,
Consolidation and Sale of Property" above. If TV Guide exercises its legal
defeasance option or its covenant defeasance option, each Subsidiary Guarantor
will be released from all its obligations under its Subsidiary Guaranty.
The legal defeasance option or the covenant defeasance option may be
exercised only if:
(a) TV Guide irrevocably deposits in trust with the trustee money or
U.S. Government Obligations for the payment of principal of and interest on the
notes to maturity or redemption, as the case may be;
(b) TV Guide delivers to the trustee a certificate from a nationally
recognized firm of independent certified public accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any deposited
money without investment will provide cash at such times and in such amounts as
will be sufficient to pay principal and interest when due on all the notes to
maturity or redemption, as the case may be;
(c) 123 days pass after the deposit is made and during the 123-day
period no Default described in clause (7) under "--Events of Default" occurs
with respect to TV Guide or any other Person making such deposit which is
continuing at the end of the period;
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(d) no Default or Event of Default has occurred and is continuing on
the date of such deposit and after giving effect thereto;
(e) such deposit does not constitute a default under any other
agreement or instrument binding on TV Guide;
(f) TV Guide delivers to the trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the Investment Company Act of
1940;
(g) in the case of the legal defeasance option, TV Guide delivers to
the trustee an Opinion of Counsel stating that:
(1) TV Guide has received from the Internal Revenue
Service a ruling, or
(2) since the date of the indenture there has been a change in
the applicable Federal income tax law, to the effect, in either case, that, and
based thereon such Opinion of Counsel shall confirm that, the holders of the
notes will not recognize income, gain or loss for Federal income tax purposes as
a result of such defeasance and will be subject to Federal income tax on the
same amounts, in the same manner and at the same time as would have been the
case if such defeasance has not occurred;
(h) in the case of the covenant defeasance option, TV Guide delivers to
the trustee an Opinion of Counsel to the effect that the holders of the notes
will not recognize income, gain or loss for Federal income tax purposes as a
result of such covenant defeasance and will be subject to Federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if such covenant defeasance had not occurred; and
(i) TV Guide delivers to the trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent to the defeasance
and discharge of the notes have been complied with as required by the indenture.
Governing Law
The indenture and the notes are governed by the internal laws of the
State of New York without reference to principles of conflicts of law.
The Trustee
The Bank of New York Company, Inc. is trustee under the indenture. The Bank
of New York Company, Inc. is an agent under the New Credit Facility, and BNY
Capital Markets, Inc., an affiliate of The Bank of New York Company, Inc., was
an initial purchaser of the notes.
Except during the continuance of an Event of Default, the trustee will
perform only such duties as are specifically set forth in the indenture. During
the existence of an Event of Default, the trustee will exercise such of the
rights and powers vested in it under the indenture and use the same degree of
care and skill in its exercise as a prudent person would exercise under the
circumstances in the conduct of such person's own affairs.
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Certain Definitions
Set forth below is a summary of certain of the defined terms used in
the indenture. Reference is made to the indenture for the full definition of all
such terms as well as any other capitalized terms used herein for which no
definition is provided.
"Additional Assets" means:
(a) any Property (other than cash, cash equivalents and securities) to
be owned by TV Guide or any Restricted Subsidiary and used in a Related
Business; or
(b) Capital Stock of a Person that becomes a Restricted Subsidiary as a
result of the acquisition of such Capital Stock by TV Guide or another
Restricted Subsidiary from any Person other than TV Guide or an Affiliate of TV
Guide; provided, however, that such Restricted Subsidiary is primarily engaged
in a Related Business.
"Affiliate" of any specified Person means:
(a) any other Person directly or indirectly controlling or controlled
by (including under direct or indirect common control with) such specified
Person, or
(b) any other Person who is a director or officer of:
(1) such specified Person,
(2) any Subsidiary of such specified Person, or
(3) any Person described in clause (a) above.
For the purposes of this definition, "control" when used with respect to any
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing. For purposes of the covenants described
under "--Certain Covenants--Limitation on Transactions with Affiliates
and--Limitation on Asset Sales" and the definition of "Additional Assets" only,
"Affiliate" shall also mean any beneficial owner of shares representing 5% or
more of the total voting power of the Voting Stock (on a fully diluted basis) of
TV Guide or of rights or warrants to purchase such Voting Stock (whether or not
currently exercisable) and any Person who would be an Affiliate of any such
beneficial owner under the first sentence of this paragraph.
"Asset Sale" means any sale, lease, transfer, issuance or other
disposition (or series of related sales, leases, transfers, issuances or
dispositions) by TV Guide or any Restricted Subsidiary, including any
disposition by means of a merger, consolidation or similar transaction (each
referred to for the purposes of this definition as a "disposition"), of:
(a) any shares of Capital Stock of a Restricted Subsidiary (other
than directors' qualifying shares), or
(b) any other assets of TV Guide or any Restricted Subsidiary outside
of the ordinary course of business of TV Guide or such Restricted Subsidiary,
other than, in the case of clause (a) or (b) above,
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(1) any disposition by a Restricted Subsidiary to TV Guide or
another Restricted Subsidiary or by TV Guide to a Restricted Subsidiary,
(2) any disposition to the extent the Property received in
exchange therefor constitutes a Permitted Investment or Restricted Payment
permitted by the covenant described under "--Certain Covenants-- Limitation on
Restricted Payments", and
(3) any disposition effected in compliance with the first
paragraph of the covenant described under "--Merger, Consolidation and Sale of
Property".
"Attributable Debt" in respect of a Sale and Leaseback Transaction
means, at any date of determination,
(a) if such Sale and Leaseback Transaction is a Capital Lease
Obligation, the amount of Debt represented thereby according to the definition
of "Capital Lease Obligation", and
(b) in all other instances, the greater of:
(1) the Fair Market Value of the Property subject to such
Sale and Leaseback Transaction, and
(2) the present value (discounted at the interest rate borne
by the notes, compounded annually) of the total obligations of the lessee for
rental payments during the remaining term of the lease included in such Sale and
Leaseback Transaction (including any period for which such lease has been
extended).
"Average Life" means, as of any date of determination, with respect to
any Debt or Preferred Stock, the quotient obtained by dividing:
(a) the sum of the product of the numbers of years (rounded to the
nearest one-twelfth of one year) from the date of determination to the dates of
each successive scheduled principal payment of such Debt or redemption or
similar payment with respect to such Preferred Stock multiplied by the amount of
such payment by
(b) the sum of all such payments.
"Capital Lease Obligations" means any obligation under a lease that is
required to be capitalized for financial reporting purposes under GAAP; and the
amount of Debt represented by such obligation shall be the capitalized amount of
such obligations determined under GAAP; and the Stated Maturity thereof shall be
the date of the last payment of rent or any other amount due under such lease
prior to the first date upon which such lease may be terminated by the lessee
without payment of a penalty. For purposes of "--Certain Covenants--Limitation
on Liens", a Capital Lease Obligation shall be deemed secured by a Lien on the
Property being leased.
"Capital Stock" means, with respect to any Person, any shares or other
equivalents (however designated) of any class of corporate stock or partnership
interests or any other participations, rights, warrants, options or other
interests in the nature of an equity interest in such Person, including
Preferred Stock, but excluding any debt security convertible or exchangeable
into such equity interest.
"Capital Stock Sale Proceeds" means the aggregate cash proceeds
received by TV Guide from the issuance or sale (other than to a Subsidiary of TV
Guide or an employee stock ownership plan or trust established by TV Guide or
any such Subsidiary for the benefit of their employees) by TV Guide of its
Capital Stock (other than Disqualified Stock) after the Issue Date, net of
attorneys' fees, accountants' fees, underwriters' or placement
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agents' fees, discounts or commissions and brokerage, consultant and other fees
actually incurred in connection with such issuance or sale and net of taxes paid
or payable as a result thereof.
For purposes of the foregoing, the value of the aggregate cash proceeds received
by TV Guide from the issuance of Capital Stock upon the exercise of any
participations, rights, warrants, options or other interests, will be the cash
proceeds received upon the issuance of such participations, rights, warrants,
options or other interest plus any incremental amount received by TV Guide upon
the exercise thereof.
"Change of Control" means the occurrence of any of the following
events:
(a) if (1) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act or any successor provisions to either of the
foregoing), including any group acting for the purpose of acquiring, holding,
voting or disposing of securities within the meaning of Rule 13d-5(b)(1) under
the Exchange Act, other than any one or more of the Permitted Holders, becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act, except
that a person will be deemed to have "beneficial ownership" of all shares that
any such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of 35%
or more of the total voting power of the Voting Stock of TV Guide, and (2) the
Permitted Holders are the "beneficial owners" (as defined in Rule 13d-3 under
the Exchange Act, except that a person will be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, in the aggregate of a lesser percentage of the total
voting power of the Voting Stock of TV Guide than such other person or group
(for purposes of this clause (a), such person or group shall be deemed to
beneficially own any Voting Stock of a corporation held by any other corporation
(the "parent corporation") so long as such person or group beneficially owns,
directly or indirectly, in the aggregate a majority of the total voting power of
the Voting Stock of such parent corporation); or
(b) the sale, transfer, assignment, lease, conveyance or other
disposition, directly or indirectly, of all or substantially all the assets of
TV Guide and the Restricted Subsidiaries, considered as a whole (other than a
disposition of such assets as an entirety or virtually as an entirety to a
Wholly Owned Subsidiary or one or more Permitted Holders) shall have occurred;
or
(c) TV Guide merges, consolidates or amalgamates with or into any other
Person (other than one or more Permitted Holders) or any other Person (other
than one or more Permitted Holders) merges, consolidates or amalgamates with or
into TV Guide, in any such event in a transaction in which the outstanding
Voting Stock of TV Guide is reclassified into or exchanged for cash, securities
or other Property, other than any such transaction where:
(1) the outstanding Voting Stock of TV Guide is reclassified
into or exchanged for other Voting Stock of TV Guide or for Voting Stock of the
surviving corporation, and
(2) the holders of the Voting Stock of TV Guide immediately
prior to such transaction own not less than a majority of the Voting Stock of TV
Guide or the surviving corporation immediately after such transaction; or
(d) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors (together with any
new directors whose election or appointment by such Board or whose nomination
for election by the shareholders of TV Guide was approved by a Permitted Holder
or a vote of not less than three-fourths 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 Board of Directors then in office; or
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(e) the shareholders of TV Guide shall have approved any plan of
liquidation or dissolution of TV Guide.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commodity Price Protection Agreement" means, in respect of a Person,
any forward contract, commodity swap agreement, commodity option agreement or
other similar agreement or arrangement designed to protect such Person against
fluctuations in commodity prices.
"Consolidated Interest Expense" means, for any period, the total
interest expense of TV Guide and its consolidated Restricted Subsidiaries
(including the amortization of capitalized interest), plus, to the extent not
included in such total interest expense, and to the extent Incurred by TV Guide
or its Restricted Subsidiaries, without duplication,
(a) interest expense attributable to leases constituting part of a
Sale and Leaseback Transaction and to Capital Lease Obligations,
(b) amortization of debt discount and debt issuance cost,
including commitment fees,
(c) capitalized interest,
(d) non-cash interest expense,
(e) commissions, discounts and other fees and charges owed with respect
to letters of credit and bankers' acceptance financing,
(f) net costs associated with Hedging Obligations (including
amortization of fees),
(g) Disqualified Stock Dividends,
(h) Preferred Stock Dividends,
(i) interest Incurred in connection with Investments in
discontinued operations,
(j) interest accruing on any Debt of any other Person to the extent
such Debt is Guaranteed by TV Guide or any Restricted Subsidiary, and
(k) the cash contributions to any employee stock ownership plan or
similar trust to the extent such contributions are used by such plan or trust to
pay interest or fees to any Person (other than TV Guide) in connection with Debt
Incurred by such plan or trust.
"Consolidated Net Income" means, for any period, the net income (loss)
of TV Guide and its consolidated Subsidiaries; provided, however, that there
shall not be included in such Consolidated Net Income:
(a) any net income (loss) of any Person (other than TV Guide) if such
Person is not a Restricted Subsidiary, except that:
(1) subject to the exclusion contained in clause (d) below, TV
Guide's equity in the net income of any such Person for such period shall be
included in such Consolidated Net Income up to the aggregate amount of cash
distributed by such Person during such period to TV Guide or a Restricted
Subsidiary as a
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dividend or other distribution (subject, in the case of a dividend or other
distribution to a Restricted Subsidiary, to the limitations contained in clause
(c) below), and
(2) TV Guide's equity in a net loss of any such Person other
than an Unrestricted Subsidiary for such period shall be included in determining
such Consolidated Net Income,
(b) for purposes of the covenant described under "--Certain
Covenants--Limitation on Restricted Payments" only, any net income (loss) of any
Person acquired by TV Guide or any of its consolidated Subsidiaries in a pooling
of interests transaction for any period prior to the date of such acquisition,
(c) any net income (loss) of any Restricted Subsidiary if such
Restricted Subsidiary is subject to restrictions, directly or indirectly, on the
payment of dividends or the making of distributions, directly or indirectly, to
TV Guide, except that:
(1) subject to the exclusion contained in clause (d) below, TV
Guide's equity in the net income of any such Restricted Subsidiary for such
period shall be included in such Consolidated Net Income up to the aggregate
amount of cash distributed by such Restricted Subsidiary during such period to
TV Guide or another Restricted Subsidiary as a dividend or other distribution
(subject, in the case of a dividend or other distribution to another Restricted
Subsidiary, to the limitation contained in this clause), and
(2) TV Guide's equity in a net loss of any such Restricted
Subsidiary for such period shall be included in determining such Consolidated
Net Income,
(d) any gain (but not loss) realized upon the sale or other disposition
of any Property of TV Guide or any of its consolidated Subsidiaries (including
in any Sale and Leaseback Transaction) that is not sold or otherwise disposed of
in the ordinary course of business,
(e) any extraordinary gain or loss,
(f) the cumulative effect of a change in accounting principles,
and
(g) any non-cash compensation expense realized for grants of
performance shares, stock options or other rights to officers, directors and
employees of TV Guide or any Restricted Subsidiary, provided that such shares,
options or other rights can be redeemed at the option of the holder only for
Capital Stock of TV Guide (other than Disqualified Stock).
Notwithstanding the foregoing, for purposes of the covenant described under
"--Certain Covenants--Limitation on Restricted Payments" only, there shall be
excluded from Consolidated Net Income any dividends, repayments of loans or
advances or other transfers of assets from Unrestricted Subsidiaries to TV Guide
or a Restricted Subsidiary to the extent such dividends, repayments or transfers
increase the amount of Restricted Payments permitted under such covenant under
clause (c)(4).
"Credit Facility" means, with respect to TV Guide or any Restricted
Subsidiary, one or more debt or commercial paper facilities with banks or other
institutional lenders (including the New Credit Facility) providing for
revolving credit loans, term loans, receivables or inventory financing
(including through the sale of receivables or inventory to such lenders or to
special purpose, bankruptcy remote entities formed to borrow from such lenders
against such receivables or inventory) or trade letters of credit, in each case
together with any extensions, revisions, refinancings or replacements thereof by
a lender or syndicate of lenders.
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"Cumulative EBITDA" means, as of any date of determination, the
cumulative EBITDA of TV Guide and its consolidated Restricted Subsidiaries from
and after the last day of the fiscal quarter of TV Guide immediately preceding
the Issue Date to the end of the fiscal quarter ending prior to the date of
determination for which financial statements are available or required or, if
such cumulative EBITDA for such period is negative, the amount (expressed as a
negative number) by which such cumulative EBITDA is less than zero.
"Cumulative Interest Expense" means, at any date of determination, the
aggregate amount of Consolidated Interest Expense accrued from and after the
last day of the fiscal quarter of TV Guide immediately preceding the Issue Date
to the end of the fiscal quarter ending prior to the date of determination for
which financial statements are available or required.
"Currency Exchange Protection Agreement" means, in respect of a Person,
any foreign exchange contract, currency swap agreement, currency option or other
similar agreement or arrangement designed to protect such Person against
fluctuations in currency exchange rates.
"D6/SMATV Interest" means all the assets of Netlink USA other than an
approximate 40% interest in Superstar/Netlink Group L.L.C. and 80% of the Fair
Market Value of Netlink USA's Temporary Cash Investments.
"Debt" means, with respect to any Person on any date of determination
(without duplication):
(a) the principal of and premium (if any) in respect of:
(1) debt of such Person for money borrowed, and
(2) debt evidenced by notes, debentures, bonds or other
similar instruments for the payment of which such Person is responsible or
liable;
(b) all Capital Lease Obligations of such Person and all Attributable
Debt in respect of Sale and Leaseback Transactions entered into by such Person;
(c) all obligations of such Person issued or assumed as the deferred
purchase price of Property, all conditional sale obligations of such Person and
all obligations of such Person under any title retention agreement (but
excluding trade accounts payable arising in the ordinary course of business);
(d) all obligations of such Person for the reimbursement of any obligor
on any letter of credit, banker's acceptance or similar credit transaction
(other than obligations with respect to letters of credit securing obligations
(other than obligations described in (a) through (c) above) entered into in the
ordinary course of business of such Person to the extent such letters of credit
are not drawn upon or, if and to the extent drawn upon, such drawing is
reimbursed no later than the third Business Day following receipt by such Person
of a demand for reimbursement following payment on the letter of credit);
(e) the amount of all obligations of such Person with respect to the
Repayment of any Disqualified Stock or, with respect to any Subsidiary of such
Person, any Preferred Stock (but excluding, in each case, any accrued
dividends);
(f) all obligations of the type referred to in clauses (a) through (e)
of other Persons and all dividends of other Persons for the payment of which, in
either case, such Person is responsible or liable, directly or indirectly, as
obligor, guarantor or otherwise, including by means of any Guarantee;
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(g) all obligations of the type referred to in clauses (a) through (f)
of other Persons secured by any Lien on any Property of such Person (whether or
not such obligation is assumed by such Person), the amount of such obligation
being deemed to be the lesser of the value of such Property or the amount of the
obligation so secured; and
(h) to the extent not otherwise included in this definition, Hedging
Obligations of such Person.
The amount of Debt of any Person at any date shall be the outstanding balance at
such date of all unconditional obligations as described above and the maximum
liability, upon the occurrence of the contingency giving rise to the obligation,
of any contingent obligations of a type described above at such date. The amount
of Debt represented by a Hedging Obligation shall be equal to:
(1) zero if such Hedging Obligation has been Incurred under clause
(e) of the definition of Permitted Debt, or
(2) the notional amount of such Hedging Obligation if not Incurred
under such clause.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Designated Rating" means a rating equal to or higher than Ba3 (or the
equivalent) by Moody's and B+ (or the equivalent) by S&P.
"Designated Senior Debt" means:
(a) any Senior Debt that has, at the time of determination, an
aggregate principal amount outstanding of at least $25.0 million (including the
amount of all undrawn commitments and matured and contingent reimbursement
obligations under letters of credit thereunder) that is specifically designated
in the instrument evidencing such Senior Debt and is designated in a notice
delivered by TV Guide to the holders or a Representative of the holders of such
Senior Debt and in an Officers' Certificate delivered to the trustee as
"Designated Senior Debt" of TV Guide for purposes of the indenture, and
(b) the Credit Facility.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock that by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable, in either case at the option of the
holder thereof) or otherwise:
(a) matures or is mandatorily redeemable under a sinking fund
obligation or otherwise,
(b) is or may become redeemable or repurchaseable at the option of the
holder thereof, in whole or in part, or
(c) is convertible or exchangeable at the option of the holder thereof
for Debt or Disqualified Stock, on or prior to, in the case of clause (a), (b)
or (c), the first anniversary of the Stated Maturity of the notes.
"Disqualified Stock Dividends" means all dividends with respect to
Disqualified Stock of TV Guide held by Persons other than a Wholly Owned
Subsidiary. The amount of any such dividend shall be equal to the quotient of
such 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 TV Guide.
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"EBITDA" means, for any period, an amount equal to, for TV Guide and
its consolidated Restricted Subsidiaries:
(a) the sum of Consolidated Net Income for such period, plus the
following to the extent reducing Consolidated Net Income for such period:
(1) the provision for taxes based on income or profits or
utilized in computing net loss,
(2) Consolidated Interest Expense,
(3) depreciation,
(4) amortization of intangibles, and
(5) any other non-cash items (other than any such
non-cash item to the extent that it represents an
accrual of or reserve for cash expenditures in any
future period), minus
(b) all non-cash items increasing Consolidated Net Income for such
period (other than any such non-cash item to the extent that it will result in
the receipt of cash payments in any future period).
Notwithstanding the foregoing clause (a), the provision for taxes and the
depreciation, amortization and non-cash items of a Restricted Subsidiary shall
be added to Consolidated Net Income to compute EBITDA only to the extent (and in
the same proportion) that the net income of such Restricted Subsidiary was
included in calculating Consolidated Net Income and only if a corresponding
amount would be permitted at the date of determination to be dividended to TV
Guide by such Restricted Subsidiary without prior approval (that has not been
obtained), under the terms of its charter and all agreements, instruments,
judgments, decrees, orders, statutes, rules and governmental regulations
applicable to such Restricted Subsidiary or its shareholders.
"Event of Default" has the meaning set forth under "--Events of Default".
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means, with respect to any Property, the price that
could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under undue
pressure or compulsion to complete the transaction. Fair Market Value shall be
determined, except as otherwise provided,
(a) if such Property has a Fair Market Value equal to or less than $5
million, by any Officer of TV Guide, or
(b) if such Property has a Fair Market Value in excess of $5 million, by a
majority of the Board of Directors and evidenced by a Board Resolution, dated
within 30 days of the relevant transaction, delivered to the trustee.
"Foreign Restricted Subsidiary" means any Restricted Subsidiary which is
not organized under the laws of the United States of America or any State
thereof or the District of Columbia.
"GAAP" means United States generally accepted accounting principles as in
effect on the Issue Date, including those set forth:
(a) in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants,
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(b) in the statements and pronouncements of the Financial Accounting
Standards Board,
(c) in such other statements by such other entity as approved by a
significant segment of the accounting profession, and
(d) the rules and regulations of the SEC governing the inclusion of
financial statements (including pro forma financial statements) in periodic
reports required to be filed under Section 13 of the Exchange Act, including
opinions and pronouncements in staff accounting bulletins and similar written
statements from the accounting staff of the SEC.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Debt of any other Person and any
obligation, direct or indirect, contingent or otherwise, of such Person:
(a) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt of such other Person (whether arising by virtue of
partnership arrangements, or by agreements to keep-well, to purchase assets,
goods, securities or services, to take-or-pay or to maintain financial statement
conditions or otherwise), or
(b) entered into for the purpose of assuring in any other manner the
obligee against loss in respect thereof (in whole or in part); provided,
however, that the term "Guarantee" shall not include:
(1) endorsements for collection or deposit in the ordinary
course of business, or
(2) a contractual commitment by one Person to invest in another
Person for so long as such Investment will, when made, constitute a Permitted
Investment under clause (b) of the definition of "Permitted Investment".
The term "Guarantee" used as a verb has a corresponding meaning. The term
"Guarantor" shall mean any Person Guaranteeing any obligation.
"Hedging Obligation" of any Person means any obligation of such Person
under any Interest Rate Agreement, Currency Exchange Protection Agreement,
Commodity Price Protection Agreement or any other similar agreement or
arrangement.
"Incur" means, with respect to any Debt or other obligation of any Person,
to create, issue, incur (by merger, conversion, exchange or otherwise), extend,
assume, Guarantee or become liable in respect of such Debt or other obligation
or the recording, as required by GAAP or otherwise, of any such Debt or
obligation on the balance sheet of such Person (and "Incurrence" and "Incurred"
shall have meanings correlative to the foregoing); provided, however, that a
change in GAAP that results in an obligation of such Person that exists at such
time, and is not theretofore classified as Debt, becoming Debt shall not be
deemed an Incurrence of such Debt; provided further, however, that solely for
purposes of determining compliance with "--Certain Covenants --Limitation on
Debt", amortization of debt discount shall not be deemed to be the Incurrence of
Debt, provided that in the case of Debt sold at a discount, the amount of such
Debt Incurred shall at all times be the aggregate principal amount at Stated
Maturity.
"Independent Financial Advisor" means an investment banking firm of
national standing or any third party appraiser of national standing, provided
that such firm or appraiser is not an Affiliate of TV Guide.
"Initial Unrestricted Subsidiaries" means (1) UV Ventures, Inc., SNTV
Holdings, Inc., Prevue Ventures, Inc., UV Acquisition Subsidiary, Inc., TV Guide
Technology Ventures, Inc., Superstar/Netlink Group L.L.C., SSDS, Inc., SpaceCom
Systems, Inc., ODS Technologies, LP, TV Guide Enterprises Solutions, Inc., the
IP Subsidiary
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and any of their respective subsidiaries and (2) following TV Guide's exercise
of its SNG-Netlink Option, SNG- Netlink and any of its subsidiaries.
"Initial Unrestricted Subsidiaries" means (1) UV Ventures, Inc., SNTV
Holdings, Inc., Prevue Ventures, Inc., UV Acquisition Subsidiary, Inc., TV Guide
Technology Ventures, Inc., SNG, SSDS, SpaceCom, ODS, TVGES, the IP Subsidiary
and any of their respective Subsidiaries and (2) following TV Guide's exercise
of its SNG- Netlink Option, SNG-Netlink and any of its Subsidiaries.
"Interest Rate Agreement" means, for any Person, any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement designed to protect against fluctuations in interest rates.
"Investment" by any Person means any direct or indirect loan (other than
advances to customers in the ordinary course of business that are recorded as
accounts receivable on the balance sheet of such Person), advance or other
extension of credit or capital contribution (by means of transfers of cash or
other Property to others or payments for Property or services for the account or
use of others, or otherwise) to, or Incurrence of a Guarantee of any obligation
of, or purchase or acquisition of Capital Stock, bonds, notes, debentures or
other securities or evidence of Debt issued by, any other Person. For purposes
of the covenant described under "--Certain Covenants--Limitation on Restricted
Payments", "--Designation of Subsidiaries" and the definition of "Restricted
Payment", "Investment" shall include the portion (proportionate to TV Guide's
equity interest in such Subsidiary) of the Fair Market Value of the net assets
of any Subsidiary of TV Guide (other than the Initial Unrestricted Subsidiaries)
at the time that such Subsidiary is designated an Unrestricted Subsidiary;
provided, however, that upon a redesignation of such Subsidiary as a Restricted
Subsidiary, TV Guide shall be deemed to continue to have a permanent
"Investment" in an Unrestricted Subsidiary of an amount (if positive) equal to:
(a) TV Guide's "Investment" in such Subsidiary at the time of such
redesignation, less
(b) the portion (proportionate to TV Guide's equity interest in such
Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at the
time of such redesignation.
In determining the amount of any Investment made by transfer of any Property
other than cash, such Property shall be valued at its Fair Market Value at the
time of such Investment.
"Investment Grade Rating" means a rating equal to or higher than Baa3 (or
the equivalent) by Moody's and BBB- (or the equivalent) by S&P.
"IP Agreements" means each of the Assignment and License Agreements to
which the Company or the IP Subsidiary is a party on the Issue Date or any
assignment or license agreement in substantially the same form and scope and on
substantially the same terms entered into subsequent to the Issue Date in each
case with respect to patents, patent applications and the inventions disclosed
therein.
"IP Subsidiary" means United Video Properties, Inc.
"Issue Date" means the date on which the notes are initially issued.
"Leverage Ratio" means the ratio of:
(a) the outstanding Debt of TV Guide and the Restricted
Subsidiaries on a consolidated basis, to
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(b) the LTM Pro Forma EBITDA.
"Lien" means, with respect to any Property of any Person, any mortgage or
deed of trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien, charge, easement (other than any easement not materially
impairing usefulness or marketability), encumbrance, preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever on or with respect to such Property (including any Capital Lease
Obligation, conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing or any Sale and
Leaseback Transaction). An operating lease that is not a Capital Lease
Obligation or Sale and Leaseback Transaction shall not be deemed to constitute a
Lien.
"LTM Pro Forma EBITDA" means Pro Forma EBITDA for the four most recent
consecutive fiscal quarters for which financial statements are available or
required.
"Moody's" means Moody's Investors Service, Inc. or any successor to the
rating agency business thereof.
"Net Available Cash" from any Asset Sale means cash payments received
therefrom (including any cash payments received by way of deferred payment of
principal under a note or installment receivable or otherwise, but only as and
when received, but excluding any other consideration received in the form of
assumption by the acquiring Person of Debt or other obligations relating to the
Property that is the subject of such Asset Sale or received in any other
non-cash form), in each case net of:
(a) all legal, title and recording tax expenses, commissions and other
fees and expenses incurred, and all Federal, state, provincial, foreign and
local taxes required to be accrued as a liability under GAAP, as a consequence
of such Asset Sale,
(b) all payments made on any Debt that is secured by any Property
subject to such Asset Sale, on the terms of any Lien upon or other security
agreement of any kind with respect to such Property, or which must by its terms,
or in order to obtain a necessary consent to such Asset Sale, or by applicable
law, be repaid out of the proceeds from such Asset Sale,
(c) all distributions and other payments required to be made to
minority interest holders in Subsidiaries or joint ventures as a result of such
Asset Sale, and
(d) the deduction of appropriate amounts provided by the seller as a
reserve, under GAAP, against any liabilities associated with the Property
disposed in such Asset Sale and retained by TV Guide or any Restricted
Subsidiary after such Asset Sale.
"New Credit Facility" means:
(i) the Facility A Loan Agreement dated March 1, 1999 for $300,000,000
Revolving Credit Facility among the Company, the financial institutions defined
as lenders therein and Bank of America National Trust and Savings Association,
as administrative agent, with TD Securities (USA) Inc., as syndication agent,
and The Bank of New York Company, Inc., as documentation agent, and
(ii) the Facility B Loan Agreement dated March 1, 1999 for $300,000,000
364-day Credit Facility among the Company, the financial institutions defined as
lenders therein and Bank of America National Trust and Savings Association, as
administrative agent, with TD Securities (USA) Inc., as syndication agent, and
The Bank of New York Company, Inc., as documentation agent.
"Non-Guarantor Subsidiary" means:
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(a) Sneak Prevue L.L.C.;
(b) any Foreign Restricted Subsidiary;
(c) any Subsidiary (other than a Wholly Owned Subsidiary) that is
designated after the Issue Date as a Non-Guarantor Subsidiary as permitted under
the covenant described in "--Certain Covenants--Designation of Subsidiaries" and
not later redesignated as a Subsidiary Guarantor as permitted by the indenture;
and
(d) any Subsidiary of a Non-Guarantor Subsidiary;
provided, however, that if any Subsidiary referred to in the preceding clause
(a), (b), (c) or (d) ceases to be a Restricted Subsidiary, then it shall also
cease to be a Non-Guarantor Subsidiary.
"Officer" means the Chief Executive Officer, the President, the Chief
Financial Officer or any Executive Vice President of TV Guide.
"Officers' Certificate" means a certificate signed by two Officers of TV
Guide, at least one of whom shall be a member of the Office of the Chairman, the
principal executive officer or the principal financial officer of TV Guide, and,
except for purposes of clause (j) of "Permitted Investment", delivered to the
trustee.
"Opinion of Counsel" means a written opinion from legal counsel. The
counsel may be an employee of or counsel to TV Guide or the trustee.
"Permitted Holders" means The News Corporation Limited,
Tele-Communications, Inc., Liberty Media Corporation, AT&T Corp. and any Person
who is a controlled Affiliate of any of the foregoing.
"Permitted Interactive Partner" means any Person (or any controlled
Affiliate of such Person) who, on the Issue Date, owns or has a license to use
and sell (excluding specifications to use or sell) intellectual property used or
usable in an interactive video programming guide.
"Permitted Investment" means any Investment by TV Guide or a Restricted
Subsidiary in:
(a) any Restricted Subsidiary or any Person that will, upon the making
of such Investment, become a Restricted Subsidiary, provided that the primary
business of such Restricted Subsidiary is a Related Business;
(b) any Person if as a result of such Investment such Person is merged
or consolidated with or into, or transfers or conveys all or substantially all
its Property to, TV Guide or a Restricted Subsidiary, provided that such
Person's primary business is a Related Business;
(c) Temporary Cash Investments;
(d) receivables owing to TV Guide or a Restricted Subsidiary, if
created or acquired in the ordinary course of business and payable or
dischargeable under customary trade terms; provided, however, that such trade
terms may include such concessionary trade terms as TV Guide or such Restricted
Subsidiary deems reasonable under the circumstances;
(e) payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as expenses for
accounting purposes and that are made in the ordinary course of business;
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(f) loans and advances to employees made in the ordinary course of
business consistent with past practices of TV Guide or such Restricted
Subsidiary, as the case may be, provided that such loans and advances do not
exceed $3 million at any one time outstanding;
(g) stock, obligations or other securities received in settlement of
debts created in the ordinary course of business and owing to TV Guide or a
Restricted Subsidiary or in satisfaction of judgments;
(h) (1) any Person to the extent such Investment represents the
non-cash portion of the consideration received in connection with an Asset Sale
consummated in compliance with the covenant described under "--Certain
Covenants--Limitation on Asset Sales" or (2) the IP Subsidiary to the extent
such Investment consists of intellectual property, including patent applications
and issued patents, required to be assigned to the IP Subsidiary according to
the IP Agreements, provided that such intellectual property is, at the same
time, licensed back to the Company and its Restricted Subsidiaries under the IP
Agreements;
(i) any Person to the extent such Investment is made with Capital
Stock Sale Proceeds, provided such Investment is made at substantially the same
time such Capital Stock Sale Proceeds are received;
(j) any Person to the extent such Investment is expressly made under
this clause (j) (as evidenced by an Officers' Certificate executed on or prior
to the date such Investment is made) unless either (1) the notes are rated below
a Designated Rating by at least one of the Rating Agencies on the date such
Investment would be made or (2) a Rating Decline occurs, in which case such
Investment shall be returned to TV Guide or such Restricted Subsidiary within 20
days of such Rating Decline, provided that if both Rating Agencies shall have
made a public announcement affirming that the notes will retain their Designated
Rating after giving pro forma effect to such Investment, then such Investment
may be maintained notwithstanding a subsequent Rating Decline, provided further
that, so long as the notes are rated below a Designated Rating by at least one
of the Rating Agencies, the Fair Market Value of all Investments made under this
clause (j) (in each case determined as of the date such Investment was
originally made) shall be included in the calculation of the amount of
Restricted Payments except to the extent such Investment may be made as a
Permitted Investment under clause (k) below; and
(k) other Investments (including any Investments made under clause (j)
above not otherwise included in the calculation of the amount of Restricted
Payments) made for Fair Market Value that do not exceed $100 million in the
aggregate.
"Permitted Liens" means:
(a) Liens to secure Debt (including related Debt under any Interest
Rate Agreements) permitted to be Incurred under clause (b) (or clause (e) with
respect to such Interest Rate Agreements) of the definition of Permitted Debt;
(b) Liens to secure Debt permitted to be Incurred under clause (c) of
the definition of Permitted Debt, provided that any such Lien may not extend to
any Property of TV Guide or any Restricted Subsidiary, other than the Property
acquired, constructed or leased with the proceeds of such Debt and any
improvements or accessions to such Property;
(c) Liens for taxes, assessments or governmental charges or levies on
the Property of TV Guide or any Restricted Subsidiary if the same shall not at
the time be delinquent or thereafter can be paid without penalty, or are being
contested in good faith and by appropriate proceedings promptly instituted and
diligently concluded, provided that any reserve or other appropriate provision
that shall be required in conformity with GAAP shall have been made therefor;
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(d) Liens imposed by law, such as carriers', warehousemen's and
mechanics' Liens and other similar Liens, on the Property of TV Guide or any
Restricted Subsidiary arising in the ordinary course of business and securing
payment of obligations that are not more than 60 days past due or are being
contested in good faith and by appropriate proceedings;
(e) Liens on the Property of TV Guide or any Restricted Subsidiary
Incurred in the ordinary course of business to secure performance of obligations
with respect to statutory or regulatory requirements, performance or
return-of-money bonds, surety bonds or other obligations of a like nature and
Incurred in a manner consistent with industry practice, in each case which are
not Incurred in connection with the borrowing of money, the obtaining of
advances or credit or the payment of the deferred purchase price of Property and
which do not in the aggregate impair in any material respect the use of Property
in the operation of the business of TV Guide and the Restricted Subsidiaries
taken as a whole;
(f) Liens on Property at the time TV Guide or any Restricted
Subsidiary acquired such Property, including any acquisition by means of a
merger or consolidation with or into TV Guide or any Restricted Subsidiary;
provided, however, that any such Lien may not extend to any other Property of TV
Guide or any Restricted Subsidiary; provided further, however, that such Liens
shall not have been Incurred in anticipation of or in connection with the
transaction or series of transactions in which such Property was acquired by TV
Guide or any Restricted Subsidiary;
(g) Liens on the Property of a Person at the time such Person becomes
a Restricted Subsidiary; provided, however, that any such Lien may not extend to
any other Property of TV Guide or any other Restricted Subsidiary that is not a
direct Subsidiary of such Person; provided further, however, that any such Lien
was not Incurred in anticipation of or in connection with the transaction or
series of transactions in which such Person became a Restricted Subsidiary;
(h) pledges or deposits by TV Guide or any Restricted Subsidiary under
workmen's compensation laws, unemployment insurance laws or similar legislation,
or good faith deposits in connection with bids, tenders, contracts (other than
for the payment of Debt) or leases to which TV Guide or any Restricted
Subsidiary is party, or deposits to secure public or statutory obligations of TV
Guide, or deposits for the payment of rent, in each case Incurred in the
ordinary course of business;
(i) utility easements, building restrictions and such other
encumbrances or charges against real Property as are of a nature generally
existing with respect to properties of a similar character;
(j) Liens existing on the Issue Date not otherwise described in
clauses (a) through (i) above; and
(k) Liens on the Property of TV Guide or any Restricted Subsidiary to
secure any Refinancing, in whole or in part, of any Debt secured by Liens
referred to in clause (b), (f), (g) or (j) above; provided, however, that any
such Lien shall be limited to all or part of the same Property that secured the
original Lien (together with improvements and accessions to such Property) and
the aggregate principal amount of Debt that is secured by such Lien shall not be
increased to an amount greater than the sum of:
(1) the outstanding principal amount, or, if greater, the
committed amount, of the Debt secured by Liens described under clause (b), (f),
(g) or (j) above, as the case may be, at the time the original Lien became a
Permitted Lien under the indenture, and
(2) an amount necessary to pay any fees and expenses, including
premiums and defeasance costs, incurred by TV Guide or such Restricted
Subsidiary in connection with such Refinancing.
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"Permitted Refinancing Debt" means any Debt that Refinances any other Debt,
including any successive Refinancings, so long as:
(a) such Debt is in an aggregate principal amount (or if Incurred with
original issue discount, an aggregate issue price) not in excess of the sum of:
(1) the aggregate principal amount (or if Incurred with original
issue discount, the aggregate accreted value) then outstanding of the Debt being
Refinanced, and
(2) an amount necessary to pay any fees and expenses, including
premiums and defeasance costs, related to such Refinancing,
(b) the Average Life of such Debt is equal to or greater than the
Average Life of the Debt being Refinanced,
(c) the Stated Maturity of such Debt is no earlier than the Stated
Maturity of the Debt being Refinanced, and
(d) the new Debt shall not be senior in right of payment to the Debt
that is being Refinanced; provided, however, that Permitted Refinancing Debt
shall not include: (x) Debt of a Subsidiary that is not a Subsidiary Guarantor
that Refinances Debt of TV Guide or a Subsidiary Guarantor, or (y) Debt of TV
Guide or a Restricted Subsidiary that Refinances Debt of an Unrestricted
Subsidiary.
"Person" means any individual, corporation, company (including any limited
liability company), association, partnership, joint venture, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Stock" means any Capital Stock of a Person, however designated,
which entitles the holder thereof to a preference with respect to the payment of
dividends, or as to the distribution of assets upon any voluntary or involuntary
liquidation or dissolution of such Person, over shares of any other class of
Capital Stock issued by such Person.
"Preferred Stock Dividends" means all dividends with respect to Preferred
Stock of Restricted Subsidiaries held by Persons other than TV Guide or a Wholly
Owned Subsidiary. The amount of any such dividend shall be equal to the quotient
of such dividend divided by the difference between one and the maximum statutory
federal income rate (expressed as a decimal number between 1 and 0) then
applicable to the issuer of such Preferred Stock.
"Priority Debt" means Senior Debt of TV Guide or any Subsidiary Guarantor
or Debt of any Restricted Subsidiary that is not a Subsidiary Guarantor
(excluding, in any such case, any Debt owed to TV Guide or an Affiliate of TV
Guide).
"pro forma" means, with respect to any calculation made or required to be
made under the terms hereof, a calculation performed under Article 11 of
Regulation S-X promulgated under the Securities Act, as interpreted in good
faith by the Board of Directors after consultation with the independent
certified public accountants of TV Guide, or otherwise a calculation made in
good faith by the Board of Directors after consultation with the independent
certified public accountants of TV Guide, as the case may be.
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"Pro Forma EBITDA" means, for any period, the EBITDA of TV Guide and its
consolidated Restricted Subsidiaries, after giving effect to the following:
if: (a) since the beginning of such period, TV Guide or any Restricted
Subsidiary shall have made any Asset Sale or an Investment (by merger or
otherwise) in any Restricted Subsidiary (or any Person that becomes a Restricted
Subsidiary) or an acquisition of Property,
(b) the transaction giving rise to the need to calculate Pro Forma
EBITDA is such an Asset Sale, Investment or acquisition, or
(c) since the beginning of such period any Person (that subsequently
became a Restricted Subsidiary or was merged with or into TV Guide or any
Restricted Subsidiary since the beginning of such period) shall have made such
an Asset Sale, Investment or acquisition,
EBITDA for such period shall be calculated after giving pro forma effect to such
Asset Sale, Investment or acquisition as if such Asset Sale, Investment or
acquisition occurred on the first day of such period.
"Property" means, with respect to any Person, any interest of such Person
in any kind of property or asset, whether real, personal or mixed, or tangible
or intangible, including Capital Stock in, and other securities of, any other
Person. For purposes of any calculation required under the indenture, the value
of any Property shall be its Fair Market Value.
"Public Equity Offering" means an underwritten public offering of common
stock of TV Guide under an effective Securities Act registration statement.
"Purchase Money Debt" means Debt:
(a) consisting of the deferred purchase price of property, conditional
sale obligations, obligations under any title retention agreement, other
purchase money obligations and obligations in respect of industrial revenue
bonds, in each case where the maturity of such Debt does not exceed the
anticipated useful life of the Property being financed, and
(b) Incurred to finance the acquisition, construction or lease by TV
Guide or a Restricted Subsidiary of such Property, including additions and
improvements thereto;
provided, however, that such Debt is Incurred within 180 days after the
acquisition, construction or lease of such Property by TV Guide or such
Restricted Subsidiary.
"Rating Agencies" means Moody's and S&P.
"Rating Decline" means that at least one of the Rating Agencies shall have
rated the notes below a Designated Rating on, or within 90 days after, the
earlier of the date of public announcement of the making of a Permitted
Investment under clause (j) of the definition thereof or of the intention of TV
Guide to make such a Permitted Investment (which period shall be extended so
long as either of the Rating Agencies shall have publicly announced that the
rating of the notes is under consideration for possible downgrade or for a
possible change in rating that does not indicate the direction of the possible
change). For TV Guide to have "publicly announced" a Permitted Investment, TV
Guide must have issued a press release and, if TV Guide is announcing its
intention to make the Permitted Investment, the press release must include the
primary economic terms of the Permitted Investment.
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"Refinance" means, in respect of any Debt, to refinance, extend, renew,
refund, repay, prepay, repurchase, redeem, defease or retire, or to issue other
Debt, in exchange or replacement for, such Debt. "Refinanced" and "Refinancing"
shall have correlative meanings.
"Related Business" means any business that is related, ancillary or
complementary to the businesses of TV Guide and the Restricted Subsidiaries on
the Issue Date.
"Repay" means, in respect of any Debt, to repay, prepay, repurchase,
redeem, legally defease or otherwise retire such Debt. "Repayment" and "Repaid"
shall have correlative meanings. For purposes of the covenant described under
"--Certain Covenants--Limitation on Asset Sales", Debt shall be considered to
have been Repaid only to the extent the related loan commitment, if any, shall
have been permanently reduced in connection therewith.
"Representative" means the trustee, agent or representative expressly
authorized to act in such capacity, if any, for an issue of Senior Debt.
"Restricted Payment" means:
(a) any dividend or distribution (whether made in cash, securities or
other Property) declared or paid on or with respect to any shares of Capital
Stock of TV Guide or any Restricted Subsidiary (including any payment in
connection with any merger or consolidation with or into TV Guide or any
Restricted Subsidiary), except for any dividend or distribution that is made
solely to TV Guide or a Restricted Subsidiary (and, if such Restricted
Subsidiary is not a Wholly Owned Subsidiary, to the other shareholders of such
Restricted Subsidiary on a pro rata basis or on a basis that results in the
receipt by TV Guide or a Restricted Subsidiary of dividends or distributions of
greater value than it would receive on a pro rata basis) or any dividend or
distribution payable solely in shares of Capital Stock (other than Disqualified
Stock) of TV Guide;
(b) the purchase, repurchase, redemption, acquisition or retirement
for value of any Capital Stock of TV Guide or any Restricted Subsidiary (other
than from TV Guide or a Restricted Subsidiary) or any securities exchangeable
for or convertible into any such Capital Stock, including the exercise of any
option to exchange any Capital Stock (other than for or into Capital Stock of TV
Guide that is not Disqualified Stock);
(c) the purchase, repurchase, redemption, acquisition or retirement
for value, prior to the date for any scheduled maturity, sinking fund or
amortization or other installment payment, of any Subordinated Obligation (other
than the purchase, repurchase or other acquisition of any Subordinated
Obligation purchased in anticipation of satisfying a scheduled maturity, sinking
fund or amortization or other installment obligation, in each case due within
one year of the date of acquisition); or
(d) any Investment (other than Permitted Investments) in any Person.
"Restricted Subsidiary" means any Subsidiary of TV Guide unless such
Subsidiary is an Unrestricted Subsidiary.
"Sale and Leaseback Transaction" means any direct or indirect arrangement
relating to Property now owned or hereafter acquired whereby TV Guide or a
Restricted Subsidiary transfers such Property to another Person and TV Guide or
a Restricted Subsidiary leases it from such Person.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" of TV Guide means:
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(a) all obligations consisting of the principal, premium, if any, and
accrued and unpaid interest (including interest accruing on or after the filing
of any petition in bankruptcy or for reorganization relating to TV Guide to the
extent post-filing interest is allowed in such proceeding) in respect of:
(1) Debt of TV Guide for borrowed money, including under the
Credit Facility, and
(2) Debt of TV Guide evidenced by notes, debentures, bonds or
other similar instruments permitted under the indenture for the payment of which
TV Guide is responsible or liable;
(b) all Capital Lease Obligations of TV Guide and all Attributable
Debt in respect of Sale and Leaseback Transactions entered into by TV Guide;
(c) all obligations of TV Guide
(1) for the reimbursement of any obligor on any letter of credit,
bankers' acceptance or similar credit transaction,
(2) under Hedging Obligations, or
(3) issued or assumed as the deferred purchase price of Property
and all conditional sale obligations of TV Guide and all obligations under any
title retention agreement permitted under the indenture; and
(d) all obligations of other Persons of the type referred to in
clauses (a), (b) and (c) for the payment of which TV Guide is responsible or
liable as Guarantor;
provided, however, that Senior Debt shall not include:
(A) Debt of TV Guide that is by its terms subordinate or pari
passu in right of payment to the notes, including any Senior Subordinated Debt
or any Subordinated Obligations;
(B) any Debt Incurred in violation of the provisions of the
indenture;
(C) accounts payable or any other obligations of TV Guide to
trade creditors created or assumed by TV Guide in the ordinary course of
business in connection with the obtaining of materials or services (including
Guarantees thereof or instruments evidencing such liabilities);
(D) any liability for Federal, state, local or other taxes owed
or owing by TV Guide;
(E) any obligation of TV Guide to any Subsidiary; or
(F) any obligations with respect to any Capital Stock of TV
Guide.
"Senior Debt" of any Subsidiary Guarantor has a correlative meaning.
"Senior Subordinated Debt" of TV Guide means the notes and any other
subordinated Debt of TV Guide that specifically provides that such Debt is to
rank pari passu with the notes and is not subordinated by its terms to any other
subordinated Debt or other obligation of TV Guide which is not Senior Debt.
"Senior Subordinated Debt" of any Subsidiary Guarantor has a correlative
meaning.
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"Significant Subsidiary" means any Subsidiary that would be a "Significant
Subsidiary" of TV Guide within the meaning of Rule 1-02 under Regulation S-X
promulgated by the SEC.
"SNG Interest" means (1) an approximate 40% interest in Superstar/Netlink
Group L.L.C. and (2) Netlink USA's Temporary Cash Investments.
"SNG-Netlink" means LMC Netlink, Inc., Westlink, Inc. and Netlink USA
(excluding, subject to the last paragraph of the covenant described under
"--Certain Covenants--Designation of Subsidiaries", the D6/SMATV Interest).
"S&P" means Standard & Poor's Ratings Service or any successor to the
rating agency business thereof.
"Stated Maturity" means, with respect to any security, the date specified
in such security as the fixed date on which the payment of principal of such
security is due and payable, including under any mandatory redemption provision
(but excluding any provision providing for the repurchase of such security at
the option of the holder thereof upon the happening of any contingency beyond
the control of the issuer unless such contingency has occurred).
"Subordinated Obligation" means any Debt of TV Guide or any Subsidiary
Guarantor (whether outstanding on the Issue Date or thereafter Incurred) that is
subordinate or junior in right of payment to the notes or the applicable
Subsidiary Guaranty under a written agreement to that effect.
"Subsidiary" means, in respect of any Person, any corporation, company
(including any limited liability company), association, partnership, joint
venture or other business entity of which a majority of the total voting power
of the Voting Stock is at the time owned or controlled, directly or indirectly,
by:
(a) such Person,
(b) such Person and one or more Subsidiaries of such Person, or
(c) one or more Subsidiaries of such Person.
"Subsidiary Guarantor" means each Restricted Subsidiary of TV Guide as of
the Issue Date and any other Person that becomes a Subsidiary Guarantor under
the covenant described under "--Certain Covenants--Future Subsidiary Guarantors"
(except if such Restricted Subsidiary or Person is a Non-Guarantor Subsidiary).
"Subsidiary Guaranty" means a Guarantee on the terms set forth in the
indenture by a Subsidiary Guarantor of TV Guide's obligations with respect to
the notes.
"Temporary Cash Investments" means any of the following:
(a) Investments in U.S. Government Obligations maturing within 365
days of the date of acquisition thereof;
(b) Investments in time deposit accounts, certificates of deposit and
money market deposits maturing within 90 days of the date of acquisition thereof
issued by a bank or trust company organized under the laws of the United States
of America or any state thereof having capital, surplus and undivided profits
aggregating in excess of $500 million and whose long-term debt is rated "A-3" or
"A-" or higher according to Moody's or S&P (or such similar equivalent rating by
at least one "nationally recognized statistical rating organization" (as defined
in Rule 436 under the Securities Act));
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(c) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (a) entered into with:
(1) a bank meeting the qualifications described in clause (b)
above, or
(2) any primary government securities dealer reporting to the
Market Reports Division of the Federal Reserve Bank of New York;
(d) Investments in commercial paper, maturing not more than 90 days
after the date of acquisition, issued by a corporation (other than an Affiliate
of TV Guide) organized and in existence under the laws of the United States of
America with a rating at the time as of which any Investment therein is made of
"P-1" (or higher) according to Moody's or "A-1" (or higher) according to S&P (or
such similar equivalent rating by at least one "nationally recognized
statistical rating organization" (as defined in Rule 436 under the Securities
Act)); and
(e) direct obligations (or certificates representing an ownership
interest in such obligations) of any state of the United States of America
(including any agency or instrumentality thereof) for the payment of which the
full faith and credit of such state (including any agency or instrumentality
thereof) is pledged and which are not callable or redeemable at the issuer's
option, provided that:
(1) the long-term debt of such state is rated "A-3" or "A-" or
higher according to Moody's or S&P (or such similar equivalent rating by at
least one "nationally recognized statistical rating organization" (as defined in
Rule 436 under the Securities Act)), and
(2) such obligations mature within 180 days of the date of
acquisition thereof.
"Unrestricted Subsidiary" means:
(a) the Initial Unrestricted Subsidiaries;
(b) any Subsidiary of TV Guide that is designated after the Issue Date
as an Unrestricted Subsidiary as permitted or required under the covenant
described under "--Certain Covenants--Designation of Subsidiaries" and not later
redesignated as a Restricted Subsidiary as permitted by that covenant; and
(c) any Subsidiary of an Unrestricted Subsidiary.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the issuer's option.
"Voting Stock" of any Person means all classes of Capital Stock or other
interests (including partnership interests) of such Person then outstanding and
normally entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof.
"Wholly Owned Subsidiary" means, at any time, a Restricted Subsidiary all
the Voting Stock of which (except directors' qualifying shares) is at such time
owned, directly or indirectly, by TV Guide and its other Wholly Owned
Subsidiaries.
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Book-Entry System
The notes will be initially issued in the form of one or more Global
Securities registered in the name of The Depository Trust Company ("DTC") or its
nominee.
Upon the issuance of a Global Security, DTC or its nominee will credit the
accounts of Persons holding through it with the respective principal amounts of
the notes represented by such Global Security purchased by such Persons in the
Offering. Such accounts shall be designated by the initial purchasers of the
notes. Ownership of beneficial interests in a Global Security will be limited to
Persons that have accounts with DTC ("participants") or Persons that may hold
interests through participants. Any Person acquiring an interest in a Global
Security through an offshore transaction in reliance on Regulation S of the
Securities Act may hold such interest through Cedel or Euroclear. Ownership of
beneficial interests in a Global Security will be shown on, and the transfer of
that ownership interest will be effected only through, records maintained by DTC
(with respect to participants' interests) and such participants (with respect to
the owners of beneficial interests in such Global Security other than
participants). The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Global Security.
Payment of principal of and interest on notes represented by a Global
Security will be made in immediately available funds to DTC or its nominee, as
the case may be, as the sole registered owner and the sole holder of the notes
represented thereby for all purposes under the indenture. TV Guide has been
advised by DTC that upon receipt of any payment of principal of or interest on
any Global Security, DTC will immediately credit, on its book-entry registration
and transfer system, the accounts of participants with payments in amounts
proportionate to their respective beneficial interests in the principal or face
amount of such Global Security as shown on the records of DTC. Payments by
participants to owners of beneficial interests in a Global Security held through
such participants will be governed by standing instructions and customary
practices as is now the case with securities held for customer accounts
registered in "street name" and will be the sole responsibility of such
participants.
A Global Security may not be transferred except as a whole by DTC or a
nominee of DTC to a nominee of DTC or to DTC. A Global Security is exchangeable
for certificated notes only if:
(a) DTC notifies TV Guide that it is unwilling or unable to continue
as a depositary for such Global Security or if at any time DTC ceases to be a
clearing agency registered under the Exchange Act,
(b) TV Guide in its discretion at any time determines not to have all
the notes represented by such Global Security, or
(c) there shall have occurred and be continuing a Default or an Event
of Default with respect to the notes represented by such Global Security.
Any Global Security that is exchangeable for certificated notes under the
preceding sentence will be exchanged for certificated notes in authorized
denominations and registered in such names as DTC or any successor depositary
holding such Global Security may direct. Subject to the foregoing, a Global
Security is not exchangeable, except for a Global Security of like denomination
to be registered in the name of DTC or any successor depositary or its nominee.
In the event that a Global Security becomes exchangeable for certificated notes,
(a) certificated notes will be issued only in fully registered form in
denominations of $1,000 or integral multiples thereof,
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(b) payment of principal of, and premium, if any, and interest on, the
certificated notes will be payable, and the transfer of the certificated notes
will be registerable, at the office or agency of TV Guide maintained for such
purposes, and
(c) no service charge will be made for any registration of transfer or
exchange of the certificated notes, although TV Guide may require payment of a
sum sufficient to cover any tax or governmental charge imposed in connection
therewith.
So long as DTC or any successor depositary for a Global Security, or any
nominee, is the registered owner of such Global Security, DTC or such successor
depositary or nominee, as the case may be, will be considered the sole owner or
holder of the notes represented by such Global Security for all purposes under
the indenture and the notes. Except as set forth above, owners of beneficial
interests in a Global Security will not be entitled to have the notes
represented by such Global Security registered in their names, will not receive
or be entitled to receive physical delivery of certificated notes in definitive
form and will not be considered to be the owners or holders of any notes under
such Global Security. Therefore, each Person owning a beneficial interest in a
Global Security must rely on the procedures of DTC or any successor depositary,
and, if such Person is not a participant, on the procedures of the participant
through which such Person owns its interest, to exercise any rights of a holder
under the indenture. TV Guide understands that under existing industry
practices, in the event that TV Guide requests any action of holders or that an
owner of a beneficial interest in a Global Security desires to give or take any
action which a holder is entitled to give or take under the indenture, DTC or
any successor depositary would authorize the participants holding the relevant
beneficial interest to give or take such action and such participants would
authorize beneficial owners owning through such participants to give or take
such action or would otherwise act upon the instructions of beneficial owners
owning through them.
DTC has advised TV Guide that DTC is a limited-purpose trust company
organized under the Banking Law of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code and a "clearing agency" registered under the
Exchange Act. DTC was created to hold the securities of its participants and to
facilitate the clearance and settlement of securities transactions among its
participants in such securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical movement
of securities certificates. DTC's participants include securities brokers and
dealers (which may include the Underwriters), banks, trust companies, clearing
corporations and certain other organizations some of whom (or their
representatives) own DTC. Access to DTC's book-entry system is also available to
others, such as banks, brokers, dealers and trust companies, that clear through
or maintain a custodial relationship with a participant, either directly or
indirectly.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in Global Securities among participants of DTC, it is
under no obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. None of TV Guide, the trustee or the
Underwriters will have any responsibility for the performance by DTC or its
participants or indirect participants of their respective obligations under the
rules and procedures governing their operations.
Exchange Offer; Registration Rights
TV Guide and the Subsidiary Guarantors agreed, jointly and severally, under
a registration rights agreement with the initial purchasers of the notes, for
the benefit of the holders of the notes, to keep this exchange offer open for
not less than 30 days (or longer if required by applicable law) and not more
than 45 days after the date notice of this exchange offer is mailed to the
holders of the notes.
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If
o applicable interpretations of the SEC do not permit TV Guide
and the Subsidiary Guarantors to effect this exchange offer,
o the initial purchasers of the notes so request with respect
this exchange offer or
o any holder of notes (other than an initial purchaser of the
notes) is not eligible to participate in this exchange offer
or does not receive freely tradeable new notes in this
exchange offer other than by reason of such holder being an
affiliate of TV Guide,
TV Guide and the Subsidiary Guarantors will, at their cost,
o as promptly as practicable, file a Shelf Registration
Statement covering resales of the notes or the
Exchange Notes, as the case may be,
o cause the Shelf Registration Statement to be declared
effective under the Securities Act and
o use their best efforts to keep the Shelf Registration
Statement effective until two years after its
effective date.
The requirement that a Participating Broker-Dealer deliver a prospectus in
connection with sales of new notes will not result in the new notes being not
"freely tradeable."
TV Guide and the Subsidiary Guarantors will, if a Shelf Registration Statement
is filed, provide to each holder for whom such Shelf Registration Statement was
filed copies of the prospectus which is a part of the Shelf Registration
Statement, notify each such holder when the Shelf Registration Statement has
become effective and take certain other actions as are required to permit
unrestricted resales of the notes or the new notes, as the case may be. A holder
selling old notes or new notes under the Shelf Registration Statement generally
would be required to be named as a selling security holder in the related
prospectus and to deliver a prospectus to purchasers, will be subject to certain
of the civil liability provisions under the Securities Act in connection with
such sales and will be bound by the provisions of the registration rights
agreement which are applicable to such holder (including certain indemnification
obligations).
If on or prior to August 27, 1999, neither this exchange offer has been
consummated nor the Shelf Registration Statement has been declared effective, or
the registration statement of which this prospectus is a part ceases to be
effective or usable (subject to certain exceptions) in connection with resales
of notes or new notes under and during the periods specified in the registration
rights agreement (a "Registration Default"), interest ("Special Interest") will
accrue on the principal amount of the old notes and the new notes (in addition
to the stated interest on the old notes and the new notes) from and including
the date on which any such Registration Default shall occur to but excluding the
date on which all Registration Defaults have been cured. Special Interest will
accrue at a rate of 0.25% per annum during the 90-day period immediately
following the occurrence of such Registration Default and shall increase by
0.25% per annum at the end of each subsequent 90-day period, but in no event
shall such rate exceed 1.0% per annum.
This summary of certain provisions of the registration rights agreement is
not complete and is subject to the provisions of the registration rights
agreement. You may obtain a copy of the registration rights agreement upon
request to TV Guide.
Based upon no-action letters issued by the staff of the SEC to third
parties, TV Guide believes that the new notes issued in the exchange offer in
exchange for old notes would in general be freely transferable after the
exchange offer without further registration under the Securities Act if the
holder of the new notes represents:
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o that it is not an "affiliate," as defined in Rule 405 of the Securities
Act, of TV Guide,
o that it is acquiring the new notes in the ordinary course of its
business and
o that it has no arrangement or understanding with any person to
participate in the distribution (within the meaning of the Securities
Act) of the new notes;
provided that, in the case of broker-dealers, a prospectus meeting the
requirements of the Securities Act be delivered as required. However, the SEC
has not considered the exchange offer in the context of a no-action letter and
there can be no assurance that the staff of the SEC would make a similar
determination with respect to the exchange offer. Holders of old notes wishing
to accept the exchange offer must represent to TV Guide that the conditions have
been met. Each broker-dealer that receives new notes for its own account in the
exchange offer, where it acquired the old notes exchanged for the new notes for
its own account as a result of market-making or other trading activities, may be
deemed to be an "underwriter" within the meaning of the Securities Act and must
acknowledge that it will deliver a prospectus in connection with the resale of
the new notes. The letter of transmittal states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act. This prospectus, as
it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of new notes received in exchange for
old notes where the old notes were acquired by the broker-dealer as a result of
market-making activities or other trading activities. TV Guide has agreed that,
for a period of one year after closing of the exchange offer, it will make this
prospectus available to any broker-dealer for use in connection with the resale.
A broker-dealer that delivers a prospectus to purchasers in connection with
those resales will be subject to certain of the civil liability provisions under
the Securities Act, and will be bound by the provisions of the Registration
Agreement (including certain indemnification and contribution rights and
obligations). See "The Exchange Offer--Resale of the New Notes" and "Plan of
Distribution."
Each holder of the old notes (other than certain specified holders) who
wishes to exchange old notes for new notes in the exchange offer will be
required to represent that
o it is not an affiliate of TV Guide,
o any new notes to be received by it will be acquired in the ordinary
course of its business and
o at the time of commencement of this exchange offer, it had no
arrangement with any person to participate in the distribution (within
the meaning of the Securities Act) of the new notes.
If the holder is a broker-dealer who acquired the old notes for its own
account as a result of market-making or other trading activities, it may be
deemed to be an "underwriter" within the meaning of the Securities Act and will
be required to acknowledge that it must deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of the new
notes. The SEC has taken the position that those broker-dealers may fulfill
their prospectus delivery requirements with respect to the new notes with the
prospectus contained in the exchange offer registration statement, except that
the prospectus cannot be used for a resale of an unsold allotment from the
original sale of the old notes. Under the registration rights agreement, TV
Guide is required to allow those broker-dealers and any other persons subject to
similar prospectus delivery requirements to use the prospectus contained in the
exchange offer registration statement in connection with the resale of the new
notes.
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United States Federal Income Tax Considerations
General
The following is a general discussion of the material United States federal
income tax consequences that TV Guide expects to apply to holders. As used in
this discussion, the term "holder" means a holder of the old notes who purchased
the old notes for cash in the original offering, exchanges the old notes for new
notes in this exchange offer, and holds the old notes, and will hold the new
notes, as capital assets. This discussion is a descriptive summary only and is
not a complete technical analysis or listing of all potential tax considerations
that may be relevant to holders. This discussion is based on the current
provisions of the Internal Revenue Code of 1986, as amended, the applicable
Treasury regulations, and public administrative and judicial interpretations of
the Internal Revenue Code and applicable Treasury regulations, all of which are
subject to change. Any change could be applied retroactively. This discussion is
also based on the information contained in this prospectus and the related
documents, and on certain representations from TV Guide as to factual matters.
This discussion does not cover all aspects of United States federal taxation
that may be relevant to, or the actual tax effect that any of the matters
described in this discussion will have on, particular holders and does not
address foreign, state, or local tax consequences. TV Guide has not sought and
will not seek any ruling from the Internal Revenue Service with respect to the
notes. The Internal Revenue Service could take a different position concerning
the tax consequences of the exchange of old notes for new notes or the ownership
or disposition of the new notes, and the Internal Revenue Service's position
could be sustained by a court.
The United States federal income tax consequences to a holder may vary depending
upon the holder's particular situation or status. Some of the rules applicable
to holders that are subject to special rules under the Internal Revenue Code are
not discussed below. Examples of these holders include insurance companies,
tax-exempt organizations, mutual funds, retirement plans, financial
institutions, dealers in securities or foreign currency, persons that hold the
notes as part of a "straddle" or as a "hedge" against currency risk or in
connection with a conversion transaction, persons that have a functional
currency other than the United States dollar, investors in pass-through
entities, traders in securities that elect to mark to market, and except as
expressly addressed in this discussion, non-U.S. holders.
As used in this discussion, the term "U.S. holder" means a holder that, for
United States federal income tax purposes, is
o a citizen or resident of the United States,
o a corporation, partnership, or other entity created or
organized in or under the laws of the United States, of the
District of Columbia, or of any State, except, in the case of
a partnership, to the extent provided in applicable Treasury
regulations,
o an estate the income of which is subject to United States
federal income tax, regardless of its source, or
o a trust if
-- a court within the United States is able to exercise
primary supervision over the administration of the
trust and
-- one or more United States persons have the authority
to control all substantial decisions of the trust.
To the extent to be prescribed in Treasury regulations, which regulations have
not been issued, a trust that was in existence on August 20, 1996, other than a
trust treated as owned by the grantor under sections 671 through 679 of the
Internal Revenue Code, and which was a United States person on August 19, 1996,
may elect to continue to be treated as a United States person, and if such
election is made, will be treated as a U.S. holder for purposes of this
discussion notwithstanding the previous sentence. An individual may, subject to
certain exceptions, be
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deemed to be a United States resident, as opposed to a non-resident alien, by
virtue of being present in the United States on at least 31 days in the calendar
year and for an aggregate of at least 183 days during a three-year period ending
in the current calendar year. For purposes of making this computation, all of
the days present in the current year are counted, one-third of the days present
in the immediately preceding year are counted, and one-sixth of the days present
in the second preceding year are counted.
A"non-U. S. holder" is a holder that is, for United States federal income tax
purposes, not a U.S. holder.
This discussion is for general information purposes only and a holder should not
construe this discussion as tax advice. Each holder is urged to consult its tax
advisor as to the particular tax consequences to the holder of exchanging old
notes for new notes and of holding and disposing of the new notes, including the
applicability and effect of all foreign, state, or local tax laws and of any
change in United States federal income tax law or administrative or judicial
interpretation since the date of this prospectus.
Exchange of Notes
Although there is no direct authority as to whether the exchange of old notes
for new notes in this exchange offer will be treated as a taxable exchange for
United States federal income tax purposes, it is the opinion of Holme Roberts &
Owen LLP, counsel to TV Guide, that based on its analysis of applicable law, the
exchange should not be treated as a taxable exchange for United States federal
income tax purposes. A U.S. holder should not recognize gain or loss upon the
exchange of old notes for new notes in this exchange offer and, upon the
exchange, should have the same adjusted tax basis in, and holding period for,
the new notes as it had in the old notes immediately prior to the exchange.
Stated Interest
TV Guide was advised by the initial purchasers at the time of the sale of the
old notes that the initial purchasers intended to sell the old notes at a price
equal to 100 percent of the stated principal amount of the old notes, and TV
Guide believes that substantially all of the old notes were sold to holders at
that price. This discussion is therefore based on the assumption that the old
notes were not issued with original issue discount for United States federal
income tax purposes. Each U.S. holder is required to include stated interest on
the notes in gross income in accordance with the U.S. holder's regular method of
tax accounting.
Market Discount
Under the market discount rules of the Internal Revenue Code, a U.S. holder who
purchases a note at a "market discount" will generally be required to treat any
gain recognized on the disposition of the note as ordinary income to the extent
of the lesser of the gain or the portion of the market discount that accrued
during the period that the U.S. holder held the note. Market discount is
generally defined as the amount by which a U.S. Holder's purchase price for a
note is less than the stated redemption price at maturity of the note on the
date of purchase, subject to a statutory de minimis exception. In this case, the
stated redemption price at maturity is the stated principal amount. A U.S.
holder who acquires a note at a market discount may be required to defer all or
a portion of any interest expense that otherwise may be deductible on any debt
incurred or continued to purchase or carry the note until the earlier of the
retirement or taxable disposition of the note. A U.S. holder who has elected
under applicable Internal Revenue Code provisions to include market discount in
income annually as the discount accrues will not, however, be required to treat
any gain recognized as ordinary income or to defer any deduction for interest
expense under these rules. This election to include market discount in income
currently, once made, applies to all market discount obligations acquired on or
after the first day of the taxable year to which the election applies and may
not be revoked without the consent of the Internal Revenue Service. Holders
should consult their tax advisors
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as to the portion of any gain that would be taxable as ordinary income under
these provisions and any other consequences of the market discount rules that
may apply to them in particular.
Amortizable Bond Premium
Generally, if the tax basis of an obligation held as a capital asset exceeds the
amount payable at maturity of the obligation, the excess will constitute
amortizable bond premium that the holder of the debt instrument may elect, under
section 171 of the Internal Revenue Code, to amortize as an offset to interest
income under the constant yield method over the period from its acquisition date
to the obligation's maturity date, subject to special rules for early call
provisions. A U.S. holder who elects to amortize bond premium must reduce its
tax basis in the related notes by the amount of the aggregate amortization
allowable as amortizable bond premium. An election to amortize bond premium
applies to all obligations with amortizable bond premium held by the electing
U.S. holder at the beginning of the first taxable year to which the election
applies or later acquired by the U.S. holder, and is irrevocable without the
consent of the Internal Revenue Service.
Sale, Retirement, or Other Taxable Disposition
Upon the sale, retirement, or other taxable disposition of a note, a U.S. holder
will generally recognize gain or loss equal to the difference between
o the amount of cash plus the fair market value of property
received in exchange for the note, except to the extent
attributable to accrued interest not previously taken into
account, and
o the U.S. holder's adjusted tax basis in the note.
If the note has market discount or amortizable bond premium, appropriate
adjustments may be required in computing the U.S. holder's adjusted tax basis
for the note. Any gain or loss on the sale, retirement, or other taxable
disposition of a note, measured as described above, will generally be capital
gain or loss, except as discussed under "--Market Discount." In the case of an
individual U.S. holder, the capital gain will generally be taxable at a
preferential rate if the U.S. holder's holding period for the note exceeds one
year at the time of disposition.
With respect to tax matters relating to legal defeasance and covenant defeasance
in certain circumstances, see "Description of Notes-Defeasance."
Backup Withholding
The backup withholding rules of the Internal Revenue Code require a payor to
deduct and withhold a tax amount if
o the payee fails to furnish a taxpayer identification number to
the payor,
o the Internal Revenue Service notifies the payor that the
taxpayer identification number furnished by the payee is
incorrect,
o the payee has failed to report properly the receipt of a
"reportable payment" and the Internal Revenue Service has
notified the payor that withholding is required, or
o there has been a failure on the part of the payee to certify
under penalty of perjury that the payee is not subject to
withholding under section 3406 of the Internal Revenue Code.
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If any one of the events described above occurs, TV Guide or its paying agent or
other withholding agent will be required to withhold a tax equal to 31 percent
of any "reportable payment" which includes, among other things, gross proceeds
from the sale of the notes, interest actually paid on the notes, and amounts
paid through brokers in retirement of securities. Any amount withheld from a
payment to a U.S. holder under the backup withholding rules will be allowed as a
refund or credit against the U.S. holder's United States federal income tax,
provided that the required information is furnished to the Internal Revenue
Service. Certain U.S. holders, including corporations, are not subject to the
backup withholding or information reporting requirements.
Certain Tax Consequences to Non-U.S. Holders
General. The following discussion is for general information purposes only and
does not cover all aspects of United States federal taxation that may apply to,
or the actual tax effect that any of the matters described in this discussion
will have on, any particular non-U.S. holder. Non-U.S. holders are urged to
consult their tax advisors as to the particular tax consequences to them of
exchanging old notes for new notes and of holding and disposing of the new
notes.
Portfolio Interest Exemption. A non-U.S. holder will generally, under the
portfolio interest exemption rules of the Internal Revenue Code, not be subject
to United States federal withholding tax on payments of principal, premium (if
any), and interest paid on the notes, provided that the interest is not
effectively connected with the conduct of a United States trade or business by
such non-U.S. holder and
o the non-U.S. holder does not actually or constructively own
10 percent or more of the total combined voting power of all
classes of stock of TV Guide entitled to vote,
o the non-U.S. holder is not
-- a bank receiving interest under a loan agreement
entered into in the ordinary course of its trade or
business or
-- a controlled foreign corporation for United States
federal income tax purposes that is related to TV
Guide through stock ownership, and
o either
-- the beneficial owner of the notes certifies to TV
Guide or its agent, under penalties of perjury, that
it is not a U.S. holder and provides a completed IRS
Form W-8 or IRS Form W-8 BEN or
-- a securities clearing organization, bank, qualified
intermediary, or other financial institution which
holds customers' securities in the ordinary course of
its trade or business and which holds the notes,
certifies to TV Guide or its agent, under penalties
of perjury, that it has received IRS Form W-8 or IRS
Form W-8 BEN, or, in the case of a qualified
intermediary, any other appropriate documentation
permitted under the qualified intermediary's
agreement with the Internal Revenue Service from the
beneficial owner or that it has received from another
financial institution an IRS Form W-8 or IRS Form W-8
BEN and, except in the case of a qualified
intermediary, furnishes the payor with a copy of the
certification and none of the persons reviewing the
relevant certification or form has actual knowledge
that the certification or any statement on the form
is false.
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If any of the above requirements is not met, interest on the notes, when paid,
is subject to United States withholding tax at the rate of 30 percent, unless an
income tax treaty between the United States and the country of which the
non-U.S. holder is a tax resident provides for the elimination or reduction in
the rate and the non-U.S. holder provides a properly completed IRS Form 1001 or
IRS Form W-8 BEN establishing the exemption or reduction. Interest for this
purpose includes income, other than capital gains, received from the sale or
exchange of the notes or from a payment on the notes to the extent of unpaid
interest accrued while the notes were held by a non-U.S. holder and the amounts
so accrued were not previously subject to United States withholding tax.
If a non-U.S. holder is engaged in a trade or business in the United States and
interest on the notes is effectively connected with the conduct of the trade or
business, the non-U. S. holder will be exempt from United States federal
withholding tax; provided that the non-U.S. holder delivers a properly completed
IRS Form 4224 or IRS Form W-8 ECI. The non-U.S. holder will, however, be subject
to United States federal income tax on the interest in the same manner as if it
were a U.S. holder. In addition, if the non-U.S. holder is a corporation, it may
be subject to a branch profits tax equal to 30 percent of its effectively
connected earnings and profits for that taxable year, subject to certain
adjustments, unless it qualifies for a reduced rate under an applicable income
tax treaty.
Disposition of the Notes. A non-U.S. holder generally will not be subject to
United States federal income tax on any gain realized in connection with the
sale, exchange, or other disposition of the notes, unless:
o either
-- gain is effectively connected with a trade or business
carried on by the non-U.S. holder within the United States
or
-- if a tax treaty applies, the gain is generally attributable
to the United States permanent establishment maintained by
the non-U.S. holder, in which case the non-U.S. holder will
be subject to tax in the same manner as if it were a U.S.
holder and, if the non-U.S. holder is a corporation, it may
also be subject to a 30 percent branch profits tax on its
effectively connected earnings and profits for that taxable
year, subject to certain adjustments, unless it qualifies
for a reduced rate under an applicable income tax treaty,
o in the case of a non-U.S. holder who is an individual, such
non-U.S. holder is present in the United States for 183 days
or more in the taxable year of disposition, and certain other
conditions are satisfied, or
o the non-U.S. holder is subject to tax under provisions of the
Internal Revenue Code applicable to United States expatriates.
Information Reporting and Backup Withholding Tax. In the case of payments of
interest to non-U.S. holders, the Treasury regulations provide that the 31
percent backup withholding tax and certain information reporting requirements
will not apply if either the requisite certification, as described above with
respect to the portfolio interest exemption, has been received or an exemption
has otherwise been established; provided that neither TV Guide nor its payment
agent has actual knowledge that the holder is a U.S. holder or that the
conditions of any exemption are not in fact satisfied.
In general, backup withholding and information reporting will not apply to a
payment of the gross proceeds of a sale of the notes effected by or through a
foreign office of a broker. If, however, the broker is, for United States
federal income tax purposes, a United States person, a controlled foreign
corporation, a foreign person 50 percent or more of whose gross income for
certain periods is derived from activities that are effectively connected with
the conduct of a trade or business in the United States, or, for taxable years
beginning after December 31, 1999, a
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foreign partnership in which one or more United States persons, in the
aggregate, own more than 50 percent of the income or capital interest in the
partnership or a foreign partnership which is engaged in a trade or business in
the United States, the payments will not be subject to backup withholding, but
will be subject to information reporting, unless:
o the broker has documentary evidence in its records that the
beneficial owner is a non-U.S. holder and has no actual
knowledge to the contrary and certain other conditions are met
or
o the beneficial owner otherwise establishes an exemption.
Payment by TV Guide of principal on the notes or payment by a United States
office of a broker of the proceeds of a sale of the notes is subject to both
backup withholding and information reporting unless the beneficial owner
provides a completed IRS Form W-8 or IRS Form W-8 BEN or otherwise establishes
an exemption. Backup withholding is not an additional tax. Any amount withheld
under the backup withholding rules will be allowed as a refund or a credit
against the non-U.S. holder's United States federal income tax liability,
provided that the required information is furnished to the Service.
Recently promulgated Treasury regulations would modify the procedures to be
followed by non-United States persons and payors of interest and sale proceeds
in complying with the United States federal withholding, backup withholding, and
information reporting rules, and the availability of any exemption. The new
Treasury regulations are not currently effective, but will generally be
effective for payments made after December 31, 2000. In general, the new
Treasury regulations do not significantly alter the current substantive
withholding and information requirements, but unify current certification
procedures and forms and clarify reliance standards. Each holder of a note is
strongly urged to consult its tax advisor regarding the effect of the new
Treasury regulations on the exchange of old notes for new notes and the
ownership and disposition of the notes.
United States Federal Estate Tax. Notes owned or treated as owned by an
individual who is neither a United States citizen nor a United States resident,
as defined for United States federal estate tax purposes, at the time of death
will be excluded from the individual's gross estate for United States federal
estate tax purposes, and will not be subject to United States federal estate tax
if the individual does not own, actually or constructively, 10 percent or more
of the total combined voting power of all classes of stock of TV Guide entitled
to vote and, at the time of such individual's death, payments with respect to
such notes would not have been effectively connected with the conduct of a trade
or business in the United States by such individual.
Plan of Distribution
Each broker-dealer that receives new notes for its own account in the
exchange offer must acknowledge that it will deliver a prospectus in connection
with any resale of the new notes. A broker-dealer may use this prospectus, as it
may be amended or supplemented from time to time, by in connection with resales
of new notes received in exchange for old notes where the old notes were
acquired as a result of market-making activities or other trading activities. TV
Guide has agreed that for a period of one year after closing of the exchange
offer, it will make this prospectus, as amended or supplemented, available to
any broker-dealer for use in connection with any the resale.
TV Guide will not receive any proceeds from any sale of new notes by any
broker-dealer. New notes received by broker-dealers for their own account in 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 the methods of resale, at market
prices prevailing at the time of resale, at prices related to the prevailing
market prices or negotiated prices. Any resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from the
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broker-dealer and/or the purchasers of the new notes. Any broker-dealer that
resells new notes that were received by it for its own account in the exchange
offer and any broker or dealer that participates in a distribution of the new
notes may be deemed to be an "underwriter" within the meaning of the Securities
Act and any profit on any resale of new notes and any commissions or concessions
received by those 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 one year after closing of the exchange offer, TV Guide will
promptly send additional copies of this prospectus and any amendment or
supplement to this prospectus to any broker-dealer that requests the documents
in the letter of transmittal. TV Guide has agreed to pay all expenses incident
to TV Guide's performance of, or compliance with, the Registration Agreement and
all expenses incident to the exchange offer, including the expenses of one
counsel for the holders of the old notes but excluding commissions or
concessions of any brokers or dealers, and will indemnify the holders, including
any broker-dealers, and certain parties related to the holders against certain
liabilities, including liabilities under the Securities Act.
TV Guide has not entered into any arrangements or understandings with any
person to distribute the new notes to be received in the exchange offer.
Legal Matters
Holme Roberts & Owen LLP, Denver, Colorado, is passing on the validity of
the new notes and certain United States federal income tax matters in connection
with the new notes
Experts
The consolidated financial statements and financial statement schedule of TV
Guide, Inc. as of December 31, 1998 and 1997 and for the years then ended have
been incorporated by reference herein and in the registration statement in
reliance upon the report of KPMG LLP, independent certified public accountants,
incorporated by reference herein and in the registration statement, and upon the
authority of said firm as experts in accounting and auditing.
The consolidated supplemental financial statements of TV Guide, Inc. as of
December 31, 1998 and 1997 and for the years then ended have been incorporated
by reference herein and in the registration statement in reliance upon the
report of KPMG LLP, independent certified public accountants, incorporated by
reference herein and in the registration statement, and upon the authority of
said firm as experts in accounting and auditing. The supplemental financial
statements will become the historical financial statements of the Company after
financial statements covering the date of consummation of the Netlink
acquisition are issued.
The combined financial statements of Netlink Wholesale Division (as defined in
note 1 to the combined financial statements) as of December 31, 1998 and 1997
and for each of the years in the three-year period ended December 31, 1998 have
been incorporated by reference herein and in the registration statement in
reliance upon the report of KPMG LLP, independent certified public accountants,
incorporated by reference herein and in the registration statement, and upon the
authority of said firm as experts in accounting and auditing.
The consolidated financial statements of TV Guide, Inc. (formerly United Video
Satellite Group, Inc.) and supplemental consolidated financial statements of TV
Guide, Inc. (formerly United Video Satellite Group, Inc.) for the period ended
December 31, 1996, each incorporated by reference in this Prospectus and
Registration
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Statement have been audited by Ernst & Young LLP, independent auditors, as set
forth in their reports thereon incorporated by reference elsewhere herein which,
as to the supplemental consolidated financial statements, are based in part on
the reports of KPMG LLP, independent auditors. The financial statements referred
to above are included in reliance upon such reports given on the authority of
such firms as experts in accounting and auditing.
The combined financial statements and schedule of News America Publications Inc.
and subsidiaries incorporated by reference in this prospectus and elsewhere in
the registration statement to the extent and for the periods indicated in their
report have been audited by Arthur Andersen LLP, independent public accountants,
as indicated in their report with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said report.
Where You Can Find More Information
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any reports, statements and
other information we file at the SEC's public reference rooms in Washington,
D.C., New York, New York, and Chicago, Illinois. Please call 1-800-SEC-0330 for
further information on the public reference rooms. Our filings are also
available to the public from commercial document retrieval services and at the
web site maintained by the SEC at http://www.sec.gov. We have filed a
Registration Statement on Form S-4 to register with the SEC the new notes to be
issued in exchange for the old notes. This prospectus is part of that
Registration Statement. As allowed by the SEC's rules, this prospectus does not
contain all of the information you can find in the Registration Statement or the
exhibits to the Registration Statement.
We have not authorized anyone to give you any information or to make any
representations about the transactions we discuss in this prospectus other than
those contained in this prospectus or in the documents we incorporate in this
prospectus by reference. if you are given any information or representations
about these matters that is not discussed or incorporated in this prospectus,
you must not rely on that information. This prospectus is not an offer to sell
or a solicitation of an offer to buy securities anywhere or to anyone where or
to whom we are not permitted to offer or sell securities under applicable law.
The delivery of this prospectus does not, under any circumstances, mean that
there has not been a change in our affairs since the date of this prospectus. It
also does not mean that the information in this prospectus or in the documents
we incorporate in this prospectus by reference is correct after this date.
Incorporation of Certain Documents by Reference
The SEC allows us to "incorporate by reference" information into this
prospectus. This means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is considered to be part of this prospectus, except
for any information that is superseded by information that is included directly
in this document.
This prospectus includes by reference the documents listed below that we
have previously filed with the SEC and that are not included in or delivered
with this document. They contain important information about us and our
financial condition.
Filing Period
Annual Report on Form 10-K Year ended December 31, 1998
Current Reports on Form 8-K Filed January 12, February 24
and March 16, 1999
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The description of the Class A Common Stock, $.01 par value per share, of TV
Guide contained in TV Guide's Registration Statement on Form 8-A/A, filed on
March 29,
1996; SEC File No. 0-22662.
We incorporate by reference additional documents that we may file with the SEC
between the date of this prospectus and the date of the closing of this
offering. These documents include periodic reports, such as Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as
well as proxy statements.
You can obtain any of the documents incorporated by reference in this document
without charge, excluding any exhibits to those documents unless the exhibit is
specifically incorporated by reference as an exhibit to this prospectus. You can
obtain documents incorporated by reference in this prospectus by requesting them
in writing or by telephone at the following address:
Investor Relations
TV Guide, Inc.
7140 South Lewis Avenue
Tulsa, Oklahoma 74136-5422
Telephone number 1-918-488-4902.
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TV Guide, Inc.
Offer to Exchange
8 1/8% Series B Senior Subordinated Notes Due 2009
for any and all of its outstanding
8 1/8% Senior Subordinated Notes Due 2009
[Logo]
The exchange offer will expire at 5:00 p.m., New York City time, on ___________,
1999, unless we extend it.
Prospectus
Dated _____________, 1999
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 102(b)(7) of the Delaware General Corporation Law permits a Delaware
corporation to limit the personal liability of its directors in accordance with
the provisions set forth therein. The Restated Certificate of Incorporation of
TV Guide provides that the personal liability of its directors shall be limited
to the fullest extent permitted by applicable law.
Section 145 of the Delaware General Corporation Law contains provisions
permitting corporations organized thereunder to indemnify directors, officers,
employees or agents against expenses, judgments and fines and amounts paid in
settlement actually and reasonably incurred and against certain other
liabilities in connection with any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that such person was or is a director, officer, employee or
agent of the corporation. The Restated Certificate of Incorporation of TV Guide
provides for indemnification of TV Guide's directors and officers to the fullest
extent permitted by applicable law. The Bylaws of TV Guide provide that TV Guide
shall indemnify to the fullest extent permitted by law any party to a proceeding
against liability incurred in, relating to or as a result of a proceeding by
reason of the fact that he is or was a director, officer or employee of TV
Guide. The Bylaws of TV Guide also allow TV Guide to purchase and maintain of
directors' and officers' liability insurance.
ITEM 21. EXHIBITS AND FINANCIAL DATA SCHEDULES.
(a) The following is a complete list of Exhibits filed as part of this
Registration Statement, which are incorporated herein:
1.1** Purchase Agreement dated March 1, 1999, between TV Guide and the
Initial Purchasers named therein
3.1 Restated Certificate of Incorporation (2)
3.1.1 Certificate of Amendment to Restated Certificate of
Incorporation (3)
3.1.2 Certificate of Amendment of Restated Certificate of
Incorporation (4)
3.2 Amended and Restated Bylaws (4)
4.1 The Restated Certificate of Incorporation, amendments to the
Restated Certificate of Incorporation and Bylaws of the
Company are filed as Exhibits 3.1, 3.1.1, 3.1.2 and 3.2
4.2** Indenture dated as of March 1, 1999 between the Company and The Bank
of New York Company, Inc.
5.1** Opinion of Holme Roberts & Owen LLP with respect to the legality of
the securities being registered.
8.1** Opinion of Holme Roberts & Owen LLP with respect to certain tax
matters.
II-1
<PAGE>
12.0 Computation of Ratio of Earnings to Fixed Charges (4)
21.1 List of Subsidiaries of TV Guide (4)
23.1** Consent of KPMG LLP
23.2** Consent of Ernst & Young LLP
23.3** Consent of KPMG LLP
23.4** Consent of Arthur Andersen LLP
23.4 Consent of Holme Roberts & Owen LLP (contained in Exhibit 5.1).
24.1 Power of Attorney. Included on the signature page hereof.
25** Form T-1, Statement of Eligibility of Trustee.
- ---------------
* Management Compensation Plan
** Filed herewith
(1) Incorporated herein by reference from Amendment No. 1 to Form S-1 filed
October 21, 1993; registration number 33-69838.
(2) Incorporated herein by reference from TV Guide's report on Form 8-K
dated January 25, 1996; SEC File Number 0- 22662.
(3) Incorporated herein by reference from TV Guide's report on Form 10-Q for
the period ended September 30, 1998; SEC File Number 0-22662.
(4) Incorporated herein by reference from TV Guide's Annual Report on Form
10-K for the year ended December 31, 1998; SEC File Number 0-22662.
II-2
<PAGE>
ITEM 22. UNDERTAKINGS.
(a) The undersigned Company hereby undertakes:
(1) That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c) under the Securities Act of 1933, as amended (the
"Securities Act"), the issuer undertakes that such reoffering prospectus will
contain the information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters, in addition to
the information called for by the other Items of the applicable form.
(2) That every prospectus (i) that is filed pursuant to paragraph (1)
immediately preceding, or (ii) that purports to meet the requirements of section
10(a)(3) of the Securities Act and is used in connection with an offering of
securities subject to Rule 415 under the Securities Act, will be filed as a part
of an amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(b) 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 proceedings) 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 indemnification by it is against public policy
as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
(c) The undersigned Company hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(d) The undersigned Company 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.
(e) The undersigned Company 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 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(f) The undersigned Company hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of Prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(4) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of a
registration statement in reliance upon Rule 430A and contained in the form of
prospectus filed by the Company pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed part of the registration statement as
of the time it was declared effective.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, TV
Guide, Inc. and the Co-Registrants named below have duly caused this
registration statement to be signed on their behalf by the undersigned thereunto
duly authorized, in the city of Denver, State of Colorado, on May 14, 1999.
TV GUIDE, INC.
a Delaware corporation
By: /s/ Peter C. Boylan III
Peter C. Boylan III
Executive Vice President;
Chairman and Chief Executive
Officer of TV Guide Entertainment
Group and United Video Group
CO-REGISTRANTS:
TV Guide Affiliate Sales, Inc.
UV Corp.
Telluride Cablevision Inc.
UVTV, Inc.
UVTV-A, Inc.
UVTV-X, Inc.
DirectCom Networks, Inc.
TV Guide Media Sales, Inc.
TV Guide Interactive Group Inc.
Prevue Data Services, Inc.
TV Guide Online, Inc.
TV Guide Interactive, Inc.
TV Guide Entertainment Group, Inc.
TV Guide Networks Inc.
Sneak Holdings, Inc.
LMC Netlink Corporation
Westlink, Inc.
Netlink USA
By: /s/ Peter C. Boylan III
Peter C. Boylan III
President and Chief
Executive Officer
TV Guide Magazine Group, Inc.
TV Guide Distribution, Inc.
TVSM, Inc.
EuroMedia Group, Inc.
TV Guide International, Inc.
TVSM Publishing, Inc.
Continental Paper Company
By: /s/ Joachim Kiener
Joachim Kiener
President and Chief Executive
Officer
II-5
<PAGE>
POWER OF ATTORNEY
Each of the undersigned constitutes and appoints Peter C. Boylan III
and Craig M. Waggy, and each of them, as attorneys for him and in his name,
place, and stead, and in his capacity as a director, officer, or both, of TV
Guide, to execute and file any amended registration statement or statements or
supplements thereto, with all exhibits thereto and other documents in connection
therewith, with the Securities Exchange Commission, hereby giving and granting
to said attorneys full power and authority to do and perform all and every act
and thing whatsoever requisite and necessary to be done in and about the
premises as fully, to all intents and purposes, as he or she might or could do
if personally present at the doing thereof, hereby ratifying and confirming all
that said attorneys may or shall lawfully do, or cause to be done, by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement or amendment thereto has been signed on May 14, 1999 by
the following persons in the capacities indicated.
REGISTRANT OFFICERS AND DIRECTORS
Principal Executive Officer:
/s/ Anthea Disney
Anthea Disney
Chairman and Chief
Executive Officer;
Member, Office of the Chairman
Principal Financial and
Accounting Officer:
/s/ Craig M. Waggy
Craig M. Waggy
Senior Vice President
Chief Financial Officer and Treasurer
Other Directors:
/s/ Joachim Kiener
Joachim Kiener
/s/ Peter C. Boylan III
Peter C. Boylan III
/s/ Robert R. Bennett
Robert R. Bennett
/s/ Gary S. Howard
Gary S. Howard
/s/ Chase Carey
Chase Carey
/s/ Peter Chernin
Peter Chernin
/s/ Larry E. Romrell
Larry E. Romrell
/s/ J. David Wargo
J. David Wargo
II-6
<PAGE>
CO-REGISTRANT OFFICERS AND DIRECTORS
TV Guide Affiliate Sales, Inc.
UV Corp.
Telluride Cablevision Inc.
UVTV, Inc.
UVTV-A, Inc.
UVTV-X, Inc.
DirectCom Networks, Inc.
TV Guide Media Sales, Inc.
TV Guide Interactive Group Inc.
Prevue Data Services, Inc.
TV Guide Online, Inc.
TV Guide Interactive, Inc.
TV Guide Entertainment Group, Inc.
TV Guide Networks Inc.
Sneak Holdings, Inc.
LMC Netlink Corporation
Westlink, Inc.
Principal Executive Officer:
/s/ Peter C. Boylan III
Peter C. Boylan III
Chief Executive Officer and President
Principal Financial and
Accounting Officer:
/s/ Craig M. Waggy
Craig M. Waggy
Senior Vice President
Chief Financial Officer
and Treasurer
Other Directors:
/s/ Anthea Disney
Anthea Disney
/s/ Joachim Kiener
Joachim Kiener
Netlink USA
By LMC Netlink Corporation
Westlink, Inc.
Telluride Cablevision Inc.
Principal Executive Officer:
/s/ Peter C. Boylan III
Peter C. Boylan III
Chief Executive Officer and President
Principal Financial and
Accounting Officer:
/s/ Craig M. Waggy
Craig M. Waggy
Senior Vice President
Chief Financial Officer
and Treasurer
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<PAGE>
Other Directors:
/s/ Anthea Disney
Anthea Disney
/s/ Joachim Kiener
Joachim Kiener
T/V Guide Magazine Group, Inc.
TV Guide Distribution, Inc.
TVSM, Inc.
EuroMedia Group, Inc.
TV Guide International, Inc.
TVSM Publishing, Inc.
Continental Paper Company
Principal Executive Officer:
/s/ Joachim Kiener
Joachim Kiener
Chief Executive Officer and President
Principal Financial and
Accounting Officer:
/s/ Craig M. Waggy
Craig M. Waggy
Senior Vice President
Chief Financial Officer and Treasurer
Other Directors:
/s/ Anthea Disney
Anthea Disney
/s/ Peter C. Boylan III
Peter C. Boylan III
EXECUTION COPY
UNITED VIDEO SATELLITE GROUP, INC.
$400,000,000
8-1/8% Senior Subordinated Notes due 2009
Purchase Agreement
New York, New York
February 23, 1999
Salomon Smith Barney Inc.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
As Representatives of the Initial Purchasers
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
United Video Satellite Group, Inc. (to be renamed TV Guide,
Inc.), a corporation organized under the laws of Delaware ("UVSG"), proposes to
issue and sell to the several parties named in Schedule I hereto (the "Initial
Purchasers"), for whom you (the "Representatives") are acting as
representatives, $400,000,000 aggregate principal amount of its 8-1/8% Senior
Subordinated Notes due 2009 (the "Securities"). The Securities are to be issued
under an indenture (the "Indenture") dated as of March 1, 1999, among UVSG, the
subsidiary guarantors party thereto and The Bank of New York, as trustee (the
"Trustee"). The Securities have the benefit of a Registration Rights Agreement
(the "Registration Rights Agreement"), dated as of February 23, 1999, among
UVSG, the subsidiary guarantors party thereto and the Initial Purchasers,
pursuant to which UVSG and such subsidiary guarantors have agreed to register
the Securities under the Act subject to the terms and conditions therein
specified. The use of the neuter in this Agreement shall include the feminine
and masculine wherever appropriate. Certain terms used herein are defined in
Section 17 hereof.
The sale of the Securities to the Initial Purchasers will be
made without registration of the Securities under the Act in reliance upon
exemptions from the registration requirements of the Act.
In connection with the sale of the Securities, (i) UVSG
intends to acquire (the "TV Guide Acquisition"), pursuant to a Share Exchange
Agreement, effective as of June 10, 1998, all the outstanding capital stock of
News America Publications Inc., a Delaware corporation ("Publications"), and all
the outstanding capital stock of TVSM, Inc., a Delaware corporation ("TVSM"), on
the terms described in the definitive proxy statement, dated January 20, 1999
(the "Proxy Statement"), of UVSG, (ii) UVSG intends to acquire (the "Netlink
Acquisition"), pursuant to an Amended and Restated Stock Purchase Agreement,
effective as of May 18, 1998, all the outstanding shares of three subsidiaries
of Liberty Media Corporation (the "Liberty Subsidiaries"), a Delaware
corporation, on the terms described in the Proxy Statement and (iii) UVSG
intends to change its name to TV Guide, Inc. As used herein, the "Company" means
TV Guide, Inc., taken as
1.1-1
<PAGE>
a whole, on a pro forma basis after giving effect to the TV Guide Acquisition,
the Netlink Acquisition and the aforementioned name change.
In connection with the sale of the Securities, UVSG has
prepared a preliminary offering memorandum, dated February 11, 1999 (as amended
or supplemented at the Execution Time, the "Preliminary Memorandum"), and a
final offering memorandum, dated February 23, 1999 (as amended or supplemented
at the Execution Time, the "Final Memorandum"). Each of the Preliminary
Memorandum and the Final Memorandum sets forth certain information concerning
the Company and the Securities. UVSG hereby confirms that it has authorized the
use of the Preliminary Memorandum and the Final Memorandum, and any amendment or
supplement thereto, in connection with the offer and sale of the Securities by
the Initial Purchasers.
For purposes of this Agreement, all references to Subsidiary
Guarantors shall mean those entities set forth on Schedule II hereto for periods
prior to the Closing Date and shall mean those entities set forth on Schedule II
hereto plus any other entity that becomes a Subsidiary Guarantor pursuant to
Section 5(o) for the period on and after the Closing Date, provided, however,
that any such Subsidiary Guarantor shall cease to be a Subsidiary Guarantor
under this Agreement and the Registration Rights Agreement at such time as such
entity ceases to be a Subsidiary Guarantor under the Indenture.
1. Representations and Warranties. UVSG and each of the
Subsidiary Guarantors jointly and severally represent and warrant to each
Initial Purchaser as set forth below in this Section 1.
(a) The Preliminary Memorandum, at the date thereof, did not
contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading. At the
Execution Time, on the Closing Date (as defined in Section 3 hereof)
and on any settlement date, the Final Memorandum did not, and will not
(and any amendment or supplement thereto, at the date thereof, at the
Closing Date and on any settlement date, will not), contain any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that UVSG and the Subsidiary Guarantors make no representation
or warranty as to the information contained in or omitted from the
Preliminary Memorandum or the Final Memorandum, or any amendment or
supplement thereto, in reliance upon and in conformity with information
furnished in writing to UVSG by or on behalf of the Initial Purchasers
through the Representatives specifically for inclusion therein.
(b) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf has, directly or indirectly, made
offers or sales of any security, or solicited offers to buy any
security, under circumstances that would require the registration of
the Securities under the Act.
(c) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation
D) in connection with any offer or sale of the Securities in the United
States.
(d) The Securities satisfy the eligibility requirements of
Rule 144A(d)(3) under the Act.
1.1-2
<PAGE>
(e) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf has engaged in any directed
selling efforts with respect to the Securities, and each of them has
complied with the offering restrictions requirement of Regulation S.
Terms used in this paragraph have the meanings given to them by
Regulation S.
(f) The Company is not, and after giving effect to the
offering and sale of the Securities and the application of the proceeds
thereof as described in the Final Memorandum will not be, an
"investment company" within the meaning of the Investment Company Act,
without taking account of any exemption arising out of the number of
holders of the Company's securities.
(g) The Company is subject to and in full compliance with the
reporting requirements of Section 13 or Section 15(d) of the Exchange
Act.
(h) The Company has not paid or agreed to pay to any person
any compensation for soliciting another to purchase any securities of
the Company (except as contemplated by this Agreement).
(i) The Company has not taken, directly or indirectly, any
action designed to cause or which has constituted or which might
reasonably be expected to cause or result, under the Exchange Act or
otherwise, in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
(j) The information provided by the Company pursuant to
Section 5(h) hereof will not, at the date thereof, contain any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(k) Each of UVSG, Publications, TVSM, the Liberty Subsidiaries
and their respective subsidiaries has (i) been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the jurisdiction in which it is chartered or organized with full
corporate power and authority to own or lease, as the case may be, and
to operate its properties and conduct its business as described in the
Final Memorandum and (ii) is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each jurisdiction
which requires such qualification, except, in the case of this clause
(ii), to the extent the failure to so qualify or be in good standing
would not, individually or in the aggregate, be reasonably expected to
have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole ("Material Adverse Effect").
(l) All the outstanding shares of capital stock of each
subsidiary of UVSG, Publications and TVSM have been duly and validly
authorized and issued and are fully paid and nonassessable, and, except
as otherwise set forth in the Final Memorandum, all outstanding shares
of capital stock of the subsidiaries are owned by UVSG, Publications or
TVSM, as applicable, either directly or through wholly owned
subsidiaries free and clear of any perfected security interest or any
other security interests, claims, liens or encumbrances.
(m) This Agreement has been duly authorized, executed and
delivered by UVSG and each of the Subsidiary Guarantors; the Indenture
has been duly authorized and, assuming due authorization, execution and
delivery thereof by the Trustee, when executed and delivered by UVSG
and each of the Subsidiary Guarantors, will constitute a legal, valid,
binding instrument enforceable against the Company and each of the
Subsidiary Guarantors in accordance with its terms (subject, as to the
enforcement of remedies, to applicable
1.1-3
<PAGE>
bankruptcy, reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally from time to time in effect and
to general principles of equity); the Securities have been duly
authorized, and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the
Initial Purchasers, will have been duly executed and delivered by UVSG
and each of the Subsidiary Guarantors and will constitute the legal,
valid and binding obligations of the Company and each of the Subsidiary
Guarantors entitled to the benefits of the Indenture (subject, as to
the enforcement of remedies, to applicable bankruptcy, insolvency,
moratorium or other laws affecting creditors' rights generally from
time to time in effect and to general principles of equity); each of
the IP Agreements has been duly authorized, executed and delivered; and
the Registration Rights Agreement has been duly authorized and, when
executed and delivered by UVSG and each of the Subsidiary Guarantors,
will constitute the legal, valid, binding and enforceable instrument of
the Company and each of the Subsidiary Guarantors (subject, as to the
enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors' rights
generally from time to time in effect and to general principles of
equity).
(n) No consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in connection
with the transactions contemplated herein or in the Indenture or the
Registration Rights Agreement, except such as will be obtained under
the Act and the Trust Indenture Act and such as may be required under
the blue sky laws of any jurisdiction in connection with the purchase
and distribution of the Securities by the Initial Purchasers in the
manner contemplated herein and in the Final Memorandum and the
Registration Rights Agreement.
(o) Neither the execution and delivery of the Indenture, this
Agreement or the Registration Rights Agreement, the issue and sale of
the Securities, nor the consummation of any other of the transactions
herein or therein contemplated, nor the fulfillment of the terms hereof
or thereof will conflict with, result in a breach or violation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to (i) the
charter or by-laws of UVSG, Publications, TVSM, the Liberty
Subsidiaries or any of their respective subsidiaries; (ii) the terms of
any material indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which UVSG, Publications, TVSM, the Liberty
Subsidiaries or any of their respective subsidiaries is a party or
bound or to which any of their property is subject; or (iii) any
statute, law, rule, regulation, judgment, order or decree applicable to
UVSG, Publications, TVSM, the Liberty Subsidiaries or any of their
respective subsidiaries of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over UVSG, Publications, TVSM, the Liberty Subsidiaries or
any of their respective subsidiaries or any of their properties.
(p) The consolidated historical financial statements and
schedules of each of UVSG, Publications, the Netlink Wholesale Division
(as defined in the Final Memorandum) and their respective consolidated
subsidiaries, as applicable, included in the Final Memorandum present
fairly in all material respects the financial condition, results of
operations and cash flows of each of UVSG, Publications and the Netlink
Wholesale Division, respectively, as of the dates and for the periods
indicated, comply as to form with the applicable accounting
requirements of the Act and have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved (except as otherwise noted therein);
the selected financial data set forth under the caption "Selected
Historical Financial Information--United Video Satellite Group, Inc.",
"Selected Historical Financial Data--News America Publications Inc."
and "Selected Historical Financial Data-- Netlink Wholesale Division"
in the Final Memorandum fairly present, on the basis stated in the
Final Memorandum, the information included therein; the pro forma
financial statements included in the Final Memorandum include
assumptions that provide a reasonable basis for presenting the
significant effects directly attributable to the transactions and
events described therein, the related pro forma adjustments give
appropriate effect to those assumptions, and the pro forma adjustments
reflect the proper application of those adjustments to the historical
financial statement amounts in the pro forma financial statements
included in the Final Memorandum; the pro forma financial statements
included in the Final Memorandum comply as to form in all material
respects with the applicable accounting requirements of Regulation S-X
under the Act; and the pro forma adjustments have been properly applied
to the historical amounts in the compilation of those statements.
(q) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving any
of UVSG, Publications, TVSM, any of the Liberty Subsidiaries or any of
their respective subsidiaries, as applicable, or any of their property
is pending or, to the best knowledge of UVSG, threatened that (i) would
reasonably be expected to have a material adverse effect on the
performance of this Agreement, the Indenture or the Registration Rights
Agreement, or the consummation of any of the transactions contemplated
hereby or thereby; or (ii) would reasonably be expected to have a
Material Adverse Effect, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated
in the Final Memorandum (exclusive of any amendment or supplement
thereto).
(r) Except as provided in Section 1(t) below, each of UVSG,
Publications, TVSM, the Liberty Subsidiaries and each of their
respective subsidiaries, as applicable, owns or leases all such
properties as are necessary to the conduct of its operations as
presently conducted.
(s) None of UVSG, Publications, TVSM, the Liberty Subsidiaries
nor any of their respective subsidiaries is in violation or default of
(i) any provision of its charter or bylaws; (ii) the terms of any
material indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which it is a party or bound or to which its
property is subject; or (iii) in any material respect, any statute,
law, rule, regulation, judgment, order or decree applicable to UVSG,
Publications, TVSM, the Liberty Subsidiaries or such subsidiary of any
court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over UVSG,
Publications, TVSM, the Liberty Subsidiaries or such subsidiary or any
of its properties, as applicable.
(t) Subject to any disclosure to the contrary in the Final
Memorandum and excepting patents owned by or licensed to Gemstar
Development Corporation and/or its affiliates, UVSG has no actual
knowledge that it and its subsidiaries do not own, possess, license or
have other rights to use all patents, patent applications, trade and
service marks, trade and service mark registrations, trade names and
copyrights necessary for the conduct of UVSG's business as now
conducted or as proposed in the Final Memorandum to be conducted. In
addition, (i) to UVSG's actual knowledge, there are no rights of third
parties to any patents, patent applications, trade and service marks,
trade and service mark registrations, trade names and copyrights owned
by UVSG (collectively, the "Intellectual Property"); (ii) there is no
pending or, to UVSG's actual knowledge, threatened action, suit,
proceeding or claim by others challenging UVSG's rights in or to any
such Intellectual property, and UVSG has no actual knowledge of any
facts which lead it to believe that any such claim has been or is being
made; (iii) to UVSG's actual knowledge, there is no pending or
threatened action, suit, proceeding or claim by others challenging the
validity or scope of any such Intellectual
1.1-4
<PAGE>
Property (except as described in the Final Memorandum), and UVSG has no
actual knowledge of any facts which lead it to believe that any such
claim has been or is being made; and (iv) there is no pending or, to
UVSG's actual knowledge, threatened action, suit, proceeding or claim
by others that UVSG infringes or otherwise violates any patent,
trademark, copyright, trade secret or other proprietary rights of
others (except as described in the Final Memorandum), and UVSG has no
actual knowledge of any other facts which lead it to believe that any
such claim has been or is being made.
(u) The statements contained in the Final Memorandum under the
captions "Risk Factors -- Any infringement by us on patent rights of
others could result in litigation", "-- Litigation with Gemstar may
adversely affect the future of TV Guide Interactive and its guides",
"-- We are segregating our patent rights to an unrestricted subsidiary
that will not be subject to the covenants in the indenture",
"Business--Patents and Trademarks", "-- Regulation" and "--Legal
Proceedings", insofar as such statements summarize legal matters,
agreements, documents, or proceedings discussed therein, are accurate
and fair summaries of such legal matters, agreements, documents or
proceedings.
(v) The Company and its subsidiaries have implemented a
comprehensive, detailed program to analyze and address the risk that
the computer hardware and software used by them may be unable to
recognize and properly execute date-sensitive functions involving
certain dates prior to and any dates after December 31, 1999 (the "Year
2000 Problem"), and has determined that such risk will be remedied on a
timely basis without material expense and will not have a material
adverse effect upon the financial condition and results of operations
of the Company and its subsidiaries, taken as a whole; and UVSG
believes, after due inquiry, that each supplier, vendor, customer or
financial service organization used or serviced by the Company and its
subsidiaries has remedied or will remedy on a timely basis the Year
2000 Problem, except to the extent that a failure to remedy by any such
supplier, vendor, customer or financial service organization would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole. The Company is in compliance with the Commission's
staff legal bulletin No. 5 dated January 12, 1998, as amended to date,
related to Year 2000 compliance.
(w) Other than Prevue Networks, Inc., UVTV, Inc.,
Superstar/Netlink Group L.L.C., Publications, Murdoch Magazines
Distribution, Inc. ("MMDI") and TVSM (the "Subsidiaries"), there is no
entity or other person (i) of which a majority of the voting equity
securities or other interests is owned, directly or indirectly, by the
Company and (ii) which, directly or indirectly, held more than 5% of
the total assets of the Company or would have contributed more than 5%
of the revenues or EBITDA of the Company, in each case on a pro forma
basis as of December 31, 1998.
(x) Each of the TV Guide Acquisition and the Netlink
Acquisition has been consummated in accordance with the terms of the
Proxy Statement and as described in the Final Memorandum, including the
transfer of the TVGOS (as defined in the Final Memorandum) intellectual
property to the IP Subsidiary (as defined in the Final Memorandum).
Any certificate signed by any officer of UVSG and delivered to
the Representatives or counsel for the Initial Purchasers in connection with the
offering of the Securities shall be deemed a representation and warranty by
UVSG, as to matters covered thereby, to each Initial Purchaser.
2. Purchase and Sale. Subject to the terms and conditions and
in reliance upon the representations and warranties herein set forth, UVSG
agrees to sell to each Initial Purchaser, and each Initial Purchaser agrees,
severally and not jointly, to purchase from UVSG, at a purchase price
1.1-5
<PAGE>
of 98.5% of the principal amount thereof, plus accrued interest, if any, from
March 1, 1999 to the Closing Date, the principal amount of Securities set forth
opposite such Initial Purchaser's name in Schedule I hereto.
3. Delivery and Payment. Delivery of and payment for the
Securities shall be made at 10:00 A.M., New York City time, on March 1, 1999, or
at such time on such later date (not later than March 8, 1999) as the
Representatives shall designate, which date and time may be postponed by
agreement between the Representatives and UVSG or as provided in Section 9
hereof (such date and time of delivery and payment for the Securities being
herein called the "Closing Date"). Delivery of the Securities shall be made to
the Representatives for the respective accounts of the several Initial
Purchasers against payment by the several Initial Purchasers through the
Representatives of the purchase price thereof to or upon the order of UVSG by
wire transfer payable in same-day funds to the account specified by UVSG.
Delivery of the Securities shall be made through the facilities of The
Depository Trust Company unless the Representatives shall otherwise instruct.
4. Offering by Initial Purchasers. Each Initial Purchaser,
severally and not jointly, represents and warrants to and agrees with UVSG that:
(a) It has not offered or sold, and will not offer or sell,
any Securities except (i) to those it reasonably believes to be
qualified institutional buyers (as defined in Rule 144A under the Act)
and that, in connection with each such sale, it has taken or will take
reasonable steps to ensure that the purchaser of such Securities is
aware that such sale is being made in reliance on Rule 144A or (ii) in
accordance with the restrictions set forth in Exhibit A hereto.
(b) Neither it nor any person acting on its behalf has made or
will make offers or sales of the Securities in the United States by
means of any form of general solicitation or general advertising
(within the meaning of Regulation D) in the United States.
5. Agreements. UVSG and each of the Subsidiary Guarantors
jointly and severally agree with each Initial Purchaser that:
(a) The Company will furnish to each Initial Purchaser and to
counsel for the Initial Purchasers, without charge, during the period
referred to in paragraph (c) below, as many copies of the Final
Memorandum and any amendments and supplements thereto as it may
reasonably request.
(b) The Company will not amend or supplement the Final
Memorandum without the prior written consent of the Representatives.
(c) If at any time prior to the completion of the sale of the
Securities by the Initial Purchasers (as determined by the
Representatives), any event occurs as a result of which the Final
Memorandum, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it
should be necessary to amend or supplement the Final Memorandum to
comply with applicable law, the Company promptly (i) will notify the
Representatives of any such event; (ii) subject to the requirements of
paragraph (b) of this Section 5, will prepare an amendment or
supplement that will correct such statement or omission or effect such
compliance; and (iii) will supply any supplemented or amended Final
Memorandum to the several Initial Purchasers and counsel for the
Initial Purchasers without charge in such quantities as you may
reasonably request.
1.1-6
<PAGE>
(d) The Company will arrange, if necessary, for the
qualification of the Securities for sale by the Initial Purchasers
under the laws of such jurisdictions as the Initial Purchasers may
designate and will maintain such qualifications in effect so long as
required for the sale of the Securities; provided that in no event
shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action
that would subject it to service of process in suits, other than those
arising out of the offering or sale of the Securities, in any
jurisdiction where it is not now so subject. The Company will promptly
advise the Representatives of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose.
(e) The Company will not, and will not permit any of its
Affiliates to, resell any Securities that have been acquired by any of
them.
(f) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf will, directly or indirectly, make
offers or sales of any security, or solicit offers to buy any security,
under circumstances that would require the registration of the
Securities under the Act.
(g) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf will engage in any form of general
solicitation or general advertising (within the meaning of Regulation
D) in connection with any offer or sale of the Securities in the United
States.
(h) So long as any of the Securities are "restricted
securities" within the meaning of Rule 144(a)(3) under the Act, the
Company will, during any period in which it is not subject to and in
compliance with Section 13 or 15(d) of the Exchange Act or it is not
exempt from such reporting requirements pursuant to and in compliance
with Rule 12g3-2(b) under the Exchange Act, provide to each holder of
such restricted securities and to each prospective purchaser (as
designated by such holder) of such restricted securities, upon the
request of such holder or prospective purchaser, any information
required to be provided by Rule 144A(d)(4) under the Act. This covenant
is intended to be for the benefit of the holders, and the prospective
purchasers designated by such holders, from time to time of such
restricted securities.
(i) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf will engage in any directed
selling efforts with respect to the Securities, and each of them will
comply with the offering restrictions requirement of Regulation S.
Terms used in this paragraph have the meanings given to them by
Regulation S.
(j) The Company will cooperate with the Representatives and
use its best efforts to permit the Securities to be eligible for
clearance and settlement through The Depository Trust Company.
(k) The Company will not offer, sell, contract to sell, grant
any other option to purchase or otherwise dispose of, directly or
indirectly, or announce the offering of, or file a registration
statement for, (i) any debt securities issued or guaranteed by the
Company or any of its direct or indirect subsidiaries or (ii) any
shares of capital sock of any of the Company's direct or indirect
subsidiaries which are preferred to as payments of dividends or as to
distribution upon liquidation over any other class of capital stock, or
enter into an agreement to do any of the foregoing (other than (x) the
Securities and the New Securities (as defined in the Registration
Rights Agreement), (y) pursuant to any credit facility permitted under
the Indenture and (z) purchase money debt permitted under the
Indenture)
1.1-7
<PAGE>
for a period of 90 days from the date the Securities are issued without
the prior written consent of Salomon Smith Barney Inc.
(l) The Company will not take, directly or indirectly, any
action designed to cause or which has constituted or which might
reasonably be expected to cause or result, under the Exchange Act or
otherwise, in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
(m) The Company will not, for so long as the Securities are
outstanding, be or become, or be or become owned by, an open-end
investment company, unit investment trust or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act of 1940, as amended, and will not be or become,
or be or become owned by, a closed-end investment company required to
be registered but not registered thereunder.
(n) UVSG and the Subsidiary Guarantors agree to pay the costs
and expenses relating to the following matters: (i) the preparation of
the Indenture and the Registration Rights Agreement, the issuance of
the Securities and the fees of the Trustee (excluding the fees of
counsel to the Initial Purchasers with respect thereto); (ii) the
preparation, printing or reproduction of the Preliminary Memorandum and
Final Memorandum and each amendment or supplement to either of them;
(iii) the printing (or reproduction) and delivery (including postage,
air freight charges and charges for counting and packaging) of such
copies of the Preliminary Memorandum and Final Memorandum, and all
amendments or supplements to either of them, as may, in each case, be
reasonably requested for use in connection with the offering and sale
of the Securities; (iv) the preparation, printing, authentication,
issuance and delivery of certificates for the Securities, including any
stamp or transfer taxes in connection with the original issuance and
sale of the Securities; (v) the printing (or reproduction) and delivery
of this Agreement, any blue sky memorandum and all other agreements or
documents printed (or reproduced) and delivered in connection with the
offering of the Securities; (vi) any registration or qualification of
the Securities for offer and sale under the securities or blue sky laws
of the several states (including filing fees and the reasonable fees
and expenses of counsel for the Initial Purchasers relating to such
registration and qualification); (vii) admitting the Securities for
trading in The Portal Market; (viii) the transportation and other
expenses incurred by or on behalf of Company representatives in
connection with presentations to prospective purchasers of the
Securities; (ix) the fees and expenses of the Company's accountants and
the fees and expenses of counsel (including local and special counsel)
for the Company; and (x) all other costs and expenses incident to the
performance by the Company of its obligations hereunder.
(o) The Company shall cause any entity that is a Subsidiary
Guarantor under the Indenture and not set forth on Schedule II hereto
to become a party to this Agreement and the Registration Rights
Agreement on or prior to the Closing Date.
(p) The Company will take any and all actions reasonably
requested by the Initial Purchasers to ensure that the Securities are
designated as Portal-eligible securities in accordance with the rules
and regulations of the NASD.
6. Conditions to the Obligations of the Initial Purchasers.
The obligations of the Initial Purchasers to purchase the Securities shall be
subject to the accuracy of the representations and warranties on the part of
UVSG and each of the Subsidiary Guarantors contained herein at the Execution
Time and the Closing Date, to the accuracy of the statements of UVSG and each of
the
1.1-8
<PAGE>
Subsidiary Guarantors made in any certificates pursuant to the provisions
hereof, to the performance by UVSG and each of the Subsidiary Guarantors of its
obligations hereunder and to the following additional conditions:
(a) The Company shall have requested and caused Holme Roberts
& Owen LLP, counsel for UVSG, to furnish to the Representatives its
opinion, dated the Closing Date and addressed to the Representatives,
to the effect that:
(i) each of Prevue Networks, Inc., UVTV, Inc. and
Superstar/Netlink Group L.L.C. (the "UVSG Subsidiaries") (A)
has been duly formed or incorporated, as applicable, and is
validly existing and in good standing under the laws of the
jurisdiction in which it is chartered or organized, with full
power and authority to own or lease, as the case may be, and
to operate its properties and conduct its business as
described in the Final Memorandum and (B) is duly qualified to
do business and is in good standing under the laws of each
jurisdiction which requires such qualification, except, in the
case of this clause (B), to the extent the failure to so
qualify or be in good standing could not, individually or in
the aggregate, be reasonably expected to have a Material
Adverse Effect;
(ii) all the outstanding shares of capital stock of
UVSG and each UVSG Subsidiary have been duly and validly
authorized and issued and are fully paid and nonassessable,
and, except as otherwise set forth in the Final Memorandum, to
the knowledge of such counsel, after due inquiry, all
outstanding shares of capital stock of the UVSG Subsidiaries
are owned by UVSG either directly or through wholly owned
subsidiaries free and clear of any security interests, claims,
liens or encumbrances;
(iii) the Indenture has been duly authorized,
executed and delivered, and constitutes a legal, valid and
binding instrument enforceable against the Company and each
Subsidiary Guarantor in accordance with its terms (subject, as
to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect and to
general principles of equity, including, without limitation,
concepts of materiality, reasonableness, good faith and fair
dealing, regardless of whether considered in a proceeding in
equity or at law); the Securities have been duly and validly
authorized and, when executed and authenticated in accordance
with the provisions of the Indenture and delivered to and paid
for by the Initial Purchasers under this Agreement, will
constitute legal, valid and binding obligations of the Company
and each Subsidiary Guarantor entitled to the benefits of the
Indenture (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium
or other laws affecting creditors' rights generally from time
to time in effect and to general principles of equity,
including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing, regardless of
whether considered in a proceeding in equity or at law); the
Registration Rights Agreement has been duly authorized,
executed and delivered and constitutes the legal, valid,
binding and enforceable instrument of the Company and each
Subsidiary Guarantor (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors'
rights generally from time to time in effect and to general
principles of equity, including, without limitation, concepts
of materiality, reasonableness, good faith and fair dealing,
regardless of whether considered in a proceeding in equity or
at law); each of the IP Agreements has been duly authorized,
executed and delivered; and the statements set forth under the
heading "Description of Notes" and "Exchange Offer;
1.1-9
<PAGE>
Registration Rights" in the Final Memorandum, insofar as such
statements purport to summarize certain provisions of the
Securities, the Indenture and the Registration Rights
Agreement, provide a fair summary of such provisions;
(iv) to the knowledge of such counsel, there is no
pending or threatened action, suit or proceeding by or before
any court or governmental agency, authority or body or any
arbitrator involving UVSG or any of its subsidiaries or its or
their property that is not adequately disclosed in the Final
Memorandum, except in each case for such proceedings that, if
the subject of an unfavorable decision, ruling or finding
would not singly or in the aggregate, result in a material
adverse change in the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and
its subsidiaries, taken as a whole; and the statements in the
Final Memorandum under the headings "Certain United States
Federal Income Tax Considerations", "Certain Relationships and
Related Transactions", "Description of Bank Credit Facilities"
and "Business -- Legal Proceedings" (except for the first two
paragraphs thereof) fairly summarize the matters therein
described;
(v) such counsel has no reason to believe that at the
Execution Time and on the Closing Date the Final Memorandum
contained or contains any untrue statement of a material fact
or omitted or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading (in each case,
other than the financial statements and other financial
information contained therein, as to which such counsel need
express no opinion);
(vi) this Agreement has been duly authorized,
executed and delivered by UVSG and each of the Subsidiary
Guarantors;
(vii) no consent, approval, authorization, filing
with or order of any court or governmental agency or body is
required in connection with the transactions contemplated
herein or in the Indenture and the Registration Rights
Agreement, except such as will be obtained under the Act and
the Trust Indenture Act and such as may be required under the
blue sky or securities laws of any jurisdiction in connection
with the purchase and sale of the Securities by the Initial
Purchasers in the manner contemplated in this Agreement and
the Final Memorandum and the Registration Rights Agreement and
such other approvals (specified in such opinion) as have been
obtained;
(viii) neither the execution and delivery of the
Indenture, this Agreement or the Registration Rights
Agreement, the IP Agreements, the issue and sale of the
Securities, nor the consummation of any other of the
transactions herein or therein contemplated, nor the
fulfillment of the terms hereof or thereof will conflict with,
result in a breach or violation of, or imposition of any lien,
charge or encumbrance upon any property or asset of UVSG or
its subsidiaries pursuant to, (A) the charter or by-laws of
UVSG or its subsidiaries; (B) to the knowledge of such
counsel, the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or
other agreement, obligation, condition, covenant or instrument
to which UVSG or any of its subsidiaries is a party or bound
or to which its respective property is subject; or (C) to the
knowledge of such counsel, any statute, law, rule, regulation,
judgment, order or decree applicable to UVSG or any of its
subsidiaries of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority
having jurisdiction over UVSG, any of its subsidiaries or any
of their respective properties;
1.1-10
<PAGE>
(ix) assuming the accuracy of the representations and
warranties and compliance with the agreements contained
herein, no registration of the Securities under the Act, and
no qualification of an indenture under the Trust Indenture
Act, are required for the offer and sale by the Initial
Purchasers of the Securities in the manner contemplated by
this Agreement; and
(x) UVSG is not and, after giving effect to the
offering and sale of the Securities and the application of the
proceeds thereof as described in the Final Memorandum, will
not be an "investment company" as defined in the Investment
Company Act without taking account of any exemption arising
out of the number of holders of UVSG's securities.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than the
General Corporation Law of the State of Delaware, the State of New York, the
State of Colorado or the Federal laws of the United States, to the extent they
deem proper and specified in such opinion, upon the opinion of other counsel of
good standing whom they believe to be reliable and who are satisfactory to
counsel for the Initial Purchasers; and (B) as to matters of fact, to the extent
they deem proper, on certificates of responsible officers of the Company and the
Subsidiary Guarantors and public officials. References to the Final Memorandum
in this Section 6(a) include any amendment or supplement thereto at the Closing
Date.
(b) The Company shall have requested and caused Squadron,
Ellenoff, Plesent & Sheinfeld, LLP, counsel for Publications, to
furnish to the Representatives its opinion, dated the Closing Date and
addressed to the Representatives, to the effect that:
(i) each of Publications, TVSM and MMDI has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction in which it is
chartered or organized, with full corporate power and
authority to own or lease, as the case may be, and to operate
its properties and conduct its business as described in the
Final Memorandum;
(ii) all the outstanding shares of capital stock of
Publications, TVSM and MMDI have been duly and validly
authorized and issued and are fully paid and nonassessable,
and, except as otherwise set forth in the Final Memorandum, to
the knowledge of such counsel, all outstanding shares of
capital stock of MMDI are owned by Publications free and clear
of any security interests, claims, liens or encumbrances;
(iii) to the knowledge of such counsel, there is no
pending or threatened action, suit or proceeding by or before
any court or governmental agency, authority or body or any
arbitrator involving Publications, TVSM or MMDI or any of
their subsidiaries or its or their property that is not
adequately disclosed in the Final Memorandum, except in each
case for such proceedings that, if the subject of an
unfavorable decision, ruling or finding would not singly or in
the aggregate, be reasonably expected to result in a material
adverse change in the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and
its subsidiaries, taken as a whole; and
(iv) neither the execution and delivery of the
Indenture, this Agreement or the Registration Rights
Agreement, the issue and sale of the Securities, nor the
consummation of any other of the transactions herein or
therein contemplated, nor the fulfillment of the terms hereof
or thereof will conflict with, result in a breach or
1.1-11
<PAGE>
violation of, or imposition of any lien, charge or encumbrance
upon any property or asset of Publications, TVSM or MMDI
pursuant to, (A) the charter or by-laws of Publications, TVSM
or MMDI, as applicable, (B) the terms of the contracts and
agreements listed on a schedule to such opinion and reasonably
acceptable to the Representatives; or (C) to the knowledge of
such counsel, any statute, law, rule, regulation, judgment,
order or decree applicable to Publications, TVSM or MMDI or
any of their subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other
authority having jurisdiction over Publications, TVSM or MMDI,
any of their subsidiaries or any of their respective
properties;
(c) The Representatives shall have received from Cravath,
Swaine & Moore, counsel for the Initial Purchasers, such opinion or
opinions, dated the Closing Date and addressed to the Representatives,
with respect to the issuance and sale of the Securities, the Indenture,
the Registration Rights Agreement, the Final Memorandum (as amended or
supplemented at the Closing Date) and other related matters as the
Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(d) The Company shall have requested and caused Cole, Raywid &
Braverman, L.L.P., regulatory counsel for the Company, to furnish to
the Representatives its opinion, dated the Closing Date and addressed
to the Representatives, to the effect that:
(i) the statements regarding regulatory matters in
the Final Memorandum under the headings "Business--Regulation"
and "Risk Factors--Certain of our businesses are subject to
extensive government regulation" fairly summarize the matters
therein described;
(ii) to the knowledge of such counsel, based on
information provided to such counsel regarding existing
operations, UVSG and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the
FCC necessary to conduct their respective businesses, and none
of UVSG or any such subsidiary has received any notice of
proceedings relating to the revocation or modification of any
such license, certificate, authorization or permit which,
singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse
effect on the condition (financial or otherwise), prospects,
earnings, business or properties of UVSG, whether or not
arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Final Memorandum
(exclusive of any amendment or supplement thereto);
(iii) to the knowledge of such counsel, there is no
pending or threatened action, suit or proceeding by or before
the FCC against UVSG or any of its respective subsidiaries or
properties that is not adequately disclosed in the Final
Memorandum, except in each case for such proceedings that, if
the subject of an unfavorable decision, ruling or finding
would not singly or in the aggregate, result in a material
adverse change in the condition (financial or otherwise),
prospects, earnings, business or properties of UVSG;
(iv) no consent, approval, authorization, filing with
or order of the FCC is required under the Communications Act
of 1934, as amended (the "Communications Act"), in connection
with the transactions contemplated herein or in the Indenture
and the Registration Rights Agreement, except such as have
been obtained; and
1.1-12
<PAGE>
(v) the execution and delivery of the Indenture, this
Agreement and the Registration Rights Agreement, the issue and
sale of the Securities, the consummation of any other of the
transactions herein or therein contemplated and the
fulfillment of the terms hereof or thereof will not conflict
with, result in a breach or violation of the Communications
Act or any FCC regulation in effect or cause the suspension,
revocation, impairment, forfeiture, nonrenewal or termination
of any FCC license or other authorization of the FCC. To the
extent that any agreement or other document purports to grant
a security interest in licenses issued by the FCC, the FCC has
taken the position that security interests in FCC licenses are
not valid. To the extent that any party seeks to exercise
control of an FCC license in the event of a default or for any
other reason, it may be necessary to obtain prior FCC consent.
(e) The Company shall have requested and caused Fish & Neave,
intellectual property counsel for UVSG, to furnish to the
Representatives its opinion, dated the Closing Date and addressed to
the Representatives, to the effect that:
In its capacity as UVSG's patent counsel and in the context of
its representation, such counsel has reviewed certain statements under
the headings "Business--Patents and Trademarks", "--Legal Proceedings",
"Risk Factors--Any infringement by us on patent rights of others could
result in litigation" and "--Litigation with Gemstar may adversely
affect the future of TV Guide Interactive and its guides" in the Final
Memorandum (collectively, the "Statements").
Although such counsel has not independently verified the
completeness of the matters contained in the Statements, insofar as the
Statements constitute facts pertaining to such counsel's representation
and involve matters of United States law, the statements, to such
counsel's actual knowledge, fairly summarize the matters therein set
forth. As to questions of material fact relevant thereto, such counsel
has relied, to the extent such counsel deems appropriate, upon
representations made to such counsel by officers of UVSG.
Specifically, such counsel believes as to certain aspects of the
Statements that:
(i) Subject to any disclosure to the contrary in the
Final Memorandum, to such counsel's actual knowledge there are
no legal or governmental proceedings, except patent office
proceedings, pending or threatened against UVSG relating to
the patents or patent applications of UVSG referenced in the
Statements, except with respect to patents and patent
applications arising from the joint venture known as TV Guide
On Screen for which such counsel is not the prosecuting
attorneys.
(ii) Subject to any disclosure to the contrary in the
Final Memorandum, to such counsel's actual knowledge there are
no facts that would preclude UVSG from having clear title to
or a valid license under the patents and patent applications
of UVSG referenced in the Statements, except with respect to
patents and patent applications arising from the joint venture
known as TV Guide On Screen for which such counsel is not the
prosecuting attorneys.
(iii) Subject to any disclosure to the contrary in
the Final Memorandum, and excepting patents owned by or
licensed to Gemstar Development Corporation and its
affiliates, such counsel has no actual knowledge of any charge
asserted by a third party of infringement of any third party
patent by UVSG and its subsidiaries.
Further, such counsel has no actual knowledge that causes such counsel
to believe, as of the date thereof, that the Statements contain any untrue
statement of a material fact or omit to state a
1.1-13
<PAGE>
material fact necessary to make such Statements not misleading in the context in
which they are made.
(f) The Representatives shall have received from Morgan &
Finnegan, L.L.P., intellectual property counsel for the
Representatives, its report and opinion, dated the Closing Date and
addressed to the Representatives, with respect to certain intellectual
property and other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them
to pass on such matters.
(g) The Company and each of the Subsidiaries shall have
furnished to the Representatives a certificate of the Company and each
such Subsidiary, signed by the Chairman of the Board, a Vice Chairman,
the President or any Executive Vice President and the principal
financial or accounting officer of the Company or such Subsidiary, as
applicable, dated the Closing Date, to the effect that the signers of
such certificate, in their representative capacities, have carefully
examined the Final Memorandum, any amendment or supplement to the Final
Memorandum and this Agreement and that:
(i) the representations and warranties of the Company
or such Subsidiary Guarantor, as applicable, in this Agreement
are true and correct in all material respects on and as of the
Closing Date with the same effect as if made on the Closing
Date, and the Company or such Subsidiary Guarantor, as
applicable, has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date; and
(ii) with respect to the officers of the Company
only, since the date of the most recent financial statements
included in the Final Memorandum (exclusive of any amendment
or supplement thereto), there has been no material adverse
change in the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated by the Final Memorandum (exclusive of
any amendment or supplement thereto).
(h) At the Execution Time and at the Closing Date, the Company
shall have requested and caused Arthur Andersen LLP to furnish to the
Representatives letters, dated respectively as of the Execution Time
and as of the Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants
within the meaning of the Act and the Exchange Act and the respective
applicable rules and regulations adopted by the Commission thereunder,
that they have performed a review of the unaudited interim financial
information of Publications for the six-month period ended December 31,
1998 and as at December 31, 1998, as well as for the twelve-month
period ended December 31, 1998, and stating in effect that:
(i) in their opinion the audited financial statements
and financial statement schedules of Publications included in
the Final Memorandum and reported on by them comply as to form
in all material respects with the applicable accounting
requirements of the Exchange Act and the related rules and
regulations adopted by the Commission thereunder;
(ii) on the basis of a reading of the latest
unaudited financial statements made available by Publications
and its subsidiaries; their limited review in accordance with
the standards established under Statement on Auditing
Standards No. 71, of the unaudited interim financial
information for the six-month period
1.1-14
<PAGE>
ended December 31, 1998 and as at December 31, 1998, as well
as for the twelve-month period ended December 31, 1998,
carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of
significance with respect to the comments set forth in such
letter; a reading of the minutes of the meetings of the
stockholders, directors and committees of Publications and its
subsidiaries; and inquiries of certain officials of
Publications who have responsibility for financial and
accounting matters of Publications and its subsidiaries as to
transactions and events subsequent to June 30, 1998, nothing
came to their attention which caused them to believe that with
respect to the period subsequent to December 31, 1998, there
were any changes, at a specified date not more than six days
prior to the date of the letter, in the total current assets,
total assets, total current liabilities or total liabilities
(excluding amounts due affiliates) of Publications and its
subsidiaries as compared with the amounts shown on the
December 31, 1998 consolidated balance sheet included in the
Final Memorandum, or for the period from January 1, 1999 to
such specified date there were any decreases, as compared with
the corresponding period in the preceding year, in revenues or
EBITDA, or increases in net loss of Publications and its
subsidiaries, except in all instances for changes or decreases
set forth in such letter, in which case the letter shall be
accompanied by an explanation by Publications as to the
significance thereof unless said explanation is not deemed
necessary by the Representatives; and
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of
Publications and its subsidiaries) set forth in the Final
Memorandum, including the information set forth under the
captions "Selected Historical Financial Data--News America
Publications Inc." and "Management's Discussion and Analysis
of Financial Condition and Results of Operations" in the Final
Memorandum, agrees with the accounting records of Publications
and its subsidiaries, excluding any questions of legal
interpretation.
References to the Final Memorandum in this Section 6(h)
include any amendment or supplement thereto at the date of the
applicable letter.
(i) At the Execution Time and at the Closing Date, the Company
shall have requested and caused KPMG LLP to furnish to the
Representatives letters, dated respectively as of the Execution Time
and as of the Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants
within the meaning of the Act and the Exchange Act and the respective
applicable rules and regulations adopted by the Commission thereunder,
and stating in effect that:
(i) in their opinion the audited financial statements
and financial statement schedules for UVSG following the
fiscal year ended December 31, 1996 and for the Netlink
Wholesale Division included in the Final Memorandum and
reported on by them comply as to form in all material respects
with the applicable accounting requirements of the Exchange
Act and the related rules and regulations adopted by the
Commission thereunder; and
(ii) on the basis of a reading of the minutes of the
meetings of the stockholders, directors and committees of UVSG
and its subsidiaries and the Liberty Subsidiaries; and
inquiries of certain officials of UVSG who have responsibility
for financial and accounting matters of UVSG and its
subsidiaries and the Netlink
1.1-15
<PAGE>
Wholesale Division as to transactions and events subsequent to
December 31, 1998, nothing came to their attention which
caused them to believe that:
(1) with respect to the period subsequent to December 31,
1998, there were any changes, at a specified date not more than five
days prior to the date of the letter, in the total current assets,
total assets, total current liabilities or capital lease obligations
and long-term debt of UVSG and its subsidiaries as compared with the
amounts shown on the December 31, 1998 consolidated balance sheet
included in the Final Memorandum, or for the period from January 1,
1999 to such specified date there were any decreases, as compared with
the corresponding period in the preceding year, in revenues, EBITDA or
net income of UVSG and its subsidiaries, except in all instances for
changes or decreases set forth in such letter, in which case the letter
shall be accompanied by an explanation by UVSG as to the significance
thereof unless said explanation is not deemed necessary by the
Representatives;
(2) with respect to the period subsequent to December 31,
1998, there were any changes, at a specified date not more than five
days prior to the date of the letter, in the total current assets or
total current liabilities of the Netlink Wholesale Division as compared
with the amounts shown on the December 31, 1998 balance sheet included
in the Final Memorandum, or for the period from January 1, 1999 to such
specified date there were any decreases, as compared with the
corresponding period in the preceding year, in revenues, EBITDA or net
earnings of the Netlink Wholesale Division, except in all instances for
changes or decreases set forth in such letter, in which case the letter
shall be accompanied by an explanation by the Netlink Wholesale
Division as to the significance thereof unless said explanation is not
deemed necessary by the Representatives; and
(3) the information included in the Final Memorandum in
response to Regulation S-K, Item 301 ("Selected Historical Financial
Data--UVSG" and "--Netlink Wholesale Division") and Item 503(d) ("Ratio
of Earnings to Fixed Charges") is not in conformity with the applicable
disclosure requirements of Regulation S-X.
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of
UVSG and its subsidiaries and the Netlink Wholesale Division)
set forth in the Final Memorandum, including the information
set forth under the captions "Capitalization", "Summary
Historical and Pro Forma Financial Data ", "Selected
Historical Financial Data--Netlink Wholesale Division",
"Selected Historical Financial Data--United Video Satellite
Group, Inc." and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the Final
Memorandum, agrees with the accounting records of UVSG and its
subsidiaries and the Netlink Wholesale Division, as
applicable, excluding any questions of legal interpretation.
(iv) On the basis of a reading of the unaudited pro
forma financial statements (the "pro forma financial
statements") included in the Final Memorandum; carrying out
certain specified procedures; inquiries of certain officials
of UVSG, Publications and TVSM who have responsibility for
financial and accounting matters; and proving the arithmetic
accuracy of the application of the pro forma adjustments to
the historical amounts in the pro forma financial statements,
nothing came to their attention which caused them to believe
that the pro forma financial statements do not comply in form
in all material respects with the applicable accounting
requirements
1.1-16
<PAGE>
of Rule 11-02 of Regulation S-X or that the pro forma
adjustments have not been properly applied to the historical
amounts in the compilation of such statements.
References to the Final Memorandum in this Section 6(i)
include any amendment or supplement thereto at the date of the
applicable letter.
(j) At the Execution Time and at the Closing Date, the Company
shall have requested and caused Ernst & Young LLP to furnish to the
Representatives a letter, dated as of the Execution Time, in form and
substance satisfactory to the Representatives, confirming that they are
independent accountants within the meaning of the Act and the Exchange
Act and the respective applicable rules and regulations adopted by the
Commission thereunder, and stating in effect that:
(i) in their opinion the audited financial statements
and financial statement schedules for UVSG as of and for the
fiscal year ended December 31, 1996 comply as to form in all
material respects with the applicable accounting requirements
of the Exchange Act and the related rules and regulations
adopted by the Commission thereunder; and
(ii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of
UVSG and its subsidiaries) set forth in the Final Memorandum,
including the information set forth under the captions
"Selected Historical Financial Data--United Video Satellite
Group, Inc." and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the Final
Memorandum, agrees with the accounting records of UVSG and its
subsidiaries, excluding any questions of legal interpretation.
References to the Final Memorandum in this Section 6(j)
include any amendment or supplement thereto at the date of the
applicable letter.
(k) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Final Memorandum (exclusive of
any amendment or supplement thereto), there shall not have been (i) any
change or decrease specified in the letter or letters referred to in
paragraphs (h) and (i) of this Section 6; or (ii) any change, or any
development involving a prospective change, in or affecting the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Final
Memorandum (exclusive of any amendment or supplement thereto) the
effect of which, in any case referred to in clause (i) or (ii) above,
is, in the sole judgment of the Representatives, so material and
adverse as to make it impractical or inadvisable to market the
Securities as contemplated by the Final Memorandum (exclusive of any
amendment or supplement thereto).
(l) Each of the TV Guide Acquisition and the Netlink
Acquisition shall have been consummated or shall be consummated
simultaneously with the transactions contemplated herein in accordance
with the terms of the Proxy Statement and as described in the Final
Memorandum.
(m) The Company shall have obtained new senior secured credit
facilities in an aggregate principal amount of at least $300,000,000,
which facilities shall consist of a $300,000,000 aggregate principal
amount six-year revolving credit facility (having a
1.1-17
<PAGE>
minimum availability after the closing of the TV Guide Acquisition of
not less than $114.7 million) and, at the Company's option, an up to
$300,000,000 aggregate principal amount 364-day revolving credit
facility that automatically converts at maturity into a five-year term
loan.
(n) The Company shall have segregated certain of its patent
rights into the IP Subsidiary (as defined in the Final Memorandum) and
licensed such rights to the relevant subsidiaries of the Company, in
each case in a manner reasonably acceptable to the Representatives.
(o) The Company shall have received gross proceeds from the
sale of the Equalization Shares (as defined in the Final Memorandum) of
not less than $128 million.
(p) The Securities shall have been designated as
Portal-eligible securities in accordance with the rules and regulations
of the NASD, and the Securities shall be eligible for clearance and
settlement through The Depository Trust Company.
(q) Subsequent to the Execution Time, there shall not have
been any decrease in the rating of any of the Company's debt securities
by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act) or any notice given
of any intended or potential decrease in any such rating or of a
possible change in any such rating that does not indicate the direction
of the possible change.
(r) Publications and TVSM shall have been released as
guarantors with respect to all indebtedness of News Corp. and its
affiliates (other than the Company).
(s) Prior to the Closing Date, the Company shall have
furnished to the Representatives such further information, certificates
and documents as the Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
Initial Purchasers, this Agreement and all obligations of the Initial Purchasers
hereunder may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancelation shall be given to the Company in
writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 will
be delivered at the office of Baker & Botts, L.L.P., 599 Lexington Avenue, New
York, NY 10022, on the Closing Date.
7. Reimbursement of Expenses. If the sale of the Securities
provided for herein is not consummated because any condition to the obligations
of the Initial Purchasers set forth in Section 6 hereof is not satisfied through
no fault of the Initial Purchasers, because of any termination pursuant to
Section 10 hereof or because of any refusal, inability or failure on the part of
UVSG or any Subsidiary Guarantor to perform any agreement herein or comply with
any provision hereof other than by reason of a default by any of the Initial
Purchasers, UVSG and the Subsidiary Guarantors will reimburse the Initial
Purchasers severally through Salomon Smith Barney Inc. on demand for all
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by them in connection with the proposed purchase
and sale of the Securities.
1.1-18
<PAGE>
8. Indemnification and Contribution. (a) UVSG and each of the
Subsidiary Guarantors jointly and severally agree to indemnify and hold harmless
each Initial Purchaser, the directors, officers, employees and agents of each
Initial Purchaser and each person who controls any Initial Purchaser within the
meaning of either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Preliminary Memorandum, the Final Memorandum (or in any
supplement or amendment thereto) or any information provided by the Company to
any holder or prospective purchaser of Securities pursuant to Section 5(h), or
in any amendment thereof or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that UVSG and the Subsidiary Guarantors will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon any such untrue statement or alleged untrue statement or omission or
alleged omission made in the Preliminary Memorandum or the Final Memorandum, or
in any amendment thereof or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any Initial Purchasers through the Representatives specifically for inclusion
therein. This indemnity agreement will be in addition to any liability which
UVSG and the Subsidiary Guarantors may otherwise have.
(b) Each Initial Purchaser severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers, and each person who controls the Company within the meaning of either
the Act or the Exchange Act, to the same extent as the foregoing indemnity from
UVSG to each Initial Purchaser, but only with reference to written information
relating to such Initial Purchaser furnished to the Company by or on behalf of
such Initial Purchaser through the Representatives specifically for inclusion in
the Preliminary Memorandum or the Final Memorandum (or in any amendment or
supplement thereto). This indemnity agreement will be in addition to any
liability which any Initial Purchaser may otherwise have. UVSG acknowledges that
the statements set forth in the last paragraph of the cover page regarding the
delivery of the Securities and, under the heading "Plan of Distribution", (i)
the list of Initial Purchasers and their respective participation in the sale of
the Securities and (ii) the paragraph related to stabilization, syndicate
covering transactions and penalty bids in the Preliminary Memorandum and the
Final Memorandum, constitute the only information furnished in writing by or on
behalf of the Initial Purchasers for inclusion in the Preliminary Memorandum or
the Final Memorandum (or in any amendment or supplement thereto).
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses;
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the
1.1-19
<PAGE>
indemnified party or parties except as set forth below); provided, however, that
such counsel shall be satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest; (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party; (iii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of the institution
of such action; or (iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding. An indemnifying party
shall not be liable under this Section 8 to any indemnified party regarding any
settlement or compromise or consent to the entry of any judgment with respect to
any pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent is consented to by such
indemnifying party, which consent shall not be unreasonably withheld.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, UVSG, each Subsidiary Guarantor and the
Initial Purchasers agree to contribute to the aggregate losses, claims, damages
and liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively "Losses") to
which the Company and one or more of the Initial Purchasers may be subject in
such proportion as is appropriate to reflect the relative benefits received by
the Company and the Subsidiary Guarantors on the one hand and by the Initial
Purchasers on the other from the offering of the Securities; provided, however,
that in no case shall any Initial Purchaser (except as may be provided in any
agreement among the Initial Purchasers relating to the offering of the
Securities) be responsible for any amount in excess of the purchase discount or
commission applicable to the Securities purchased by such Initial Purchaser
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, UVSG, each Subsidiary Guarantor and the Initial
Purchasers shall contribute in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Company and the
Subsidiary Guarantors on the one hand and of the Initial Purchasers on the other
in connection with the statements or omissions which resulted in such Losses, as
well as any other relevant equitable considerations. Benefits received by the
Company and the Subsidiary Guarantors shall be deemed to be equal to the total
net proceeds from the offering (before deducting expenses) received by the
Company, and benefits received by the Initial Purchasers shall be deemed to be
equal to the total purchase discounts and commissions in each case set forth on
the cover of the Final Memorandum. Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information provided by the Company on the one hand or
the Initial Purchasers on the other, the intent of the parties and their
relative knowledge, information and opportunity to correct or prevent such
untrue statement or omission. UVSG, each Subsidiary Guarantor and the Initial
Purchasers agree that it would not be just and equitable if contribution
1.1-20
<PAGE>
were determined by pro rata allocation or any other method of allocation which
does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person who
controls an Initial Purchaser within the meaning of either the Act or the
Exchange Act and each director, officer, employee and agent of an Initial
Purchaser shall have the same rights to contribution as such Initial Purchaser,
and each person who controls UVSG within the meaning of either the Act or the
Exchange Act and each officer and director of the Company shall have the same
rights to contribution as the Company, subject in each case to the applicable
terms and conditions of this paragraph (d).
9. Default by an Initial Purchaser. If any one or more Initial
Purchasers shall fail to purchase and pay for any of the Securities agreed to be
purchased by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchasers shall be obligated severally to take
up and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Initial Purchasers)
the Securities which the defaulting Initial Purchaser or Initial Purchasers
agreed but failed to purchase; provided, however, that in the event that the
aggregate amount of Securities which the defaulting Initial Purchaser or Initial
Purchasers agreed but failed to purchase shall exceed 10% of the aggregate
amount of Securities set forth in Schedule I hereto, the remaining Initial
Purchasers shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the Securities, and if such nondefaulting Initial
Purchasers do not purchase all the Securities, this Agreement will terminate
without liability to any nondefaulting Initial Purchaser or the Company. In the
event of a default by any Initial Purchaser as set forth in this Section 9, the
Closing Date shall be postponed for such period, not exceeding five Business
Days, as the Representatives shall determine in order that the required changes
in the Final Memorandum or in any other documents or arrangements may be
effected. Nothing contained in this Agreement shall relieve any defaulting
Initial Purchaser of its liability, if any, to the Company or any nondefaulting
Initial Purchaser for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given
to UVSG prior to delivery of and payment for the Securities, if at any time
prior to such time (i) trading in UVSG's Class A Common Stock shall have been
suspended by the Commission or the Nasdaq National Market or trading in
securities generally on the New York Stock Exchange or the Nasdaq National
Market shall have been suspended or limited or minimum prices shall have been
established on such Exchange or the Nasdaq National Market; (ii) a banking
moratorium shall have been declared either by Federal or New York State
authorities; or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the sole judgment of the Representatives, impracticable or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Final Memorandum (exclusive of any amendment or supplement
thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of
UVSG or its officers and of the Initial Purchasers set forth in or made pursuant
to this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of the Initial Purchasers or UVSG or any of
the officers, directors, employees, agents or controlling persons referred to in
Section 8 hereof, and will survive delivery of and payment for the Securities.
The provisions of Sections 7 and 8 hereof shall survive the termination or
cancelation of this Agreement.
1.1-21
<PAGE>
12. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or telefaxed to the Salomon Smith Barney Inc. General Counsel
(fax no.: (212) 816-7912) and confirmed to the General Counsel, Salomon Smith
Barney Inc. at 388 Greenwich Street, New York, New York 10013 Attention: General
Counsel; or, if sent to the Company, will be mailed, delivered or telefaxed to
(918) 488-4928 and confirmed to it at United Video Satellite Group, Inc., 7140
South Lewis Avenue, Tulsa, OK 74136, Attention: General Counsel.
13. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and, except as expressly set forth in Section 5(h) hereof, no
other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
15. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument.
16. Headings. The section headings used herein are for
convenience only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Affiliate" shall have the meaning specified in Rule 501(b)
of Regulation D.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or trust
companies are authorized or obligated by law to close in The City of New York.
"Commission" shall mean the Securities and Exchange
Commission.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean, the date and time that this
Agreement is executed and delivered by the parties hereto.
"Investment Company Act" shall mean the Investment Company Act
of 1940, as amended, and the rules and regulations of the Commission promulgated
thereunder.
"IP Agreements" shall mean those assignment and licensing
arrangements entered into among UVSG, subsidiaries of UVSG and United Video
Properties, Inc. relating to assignment and licensing of intellectual property
of the Company as described in the Final Memorandum.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
1.1-22
<PAGE>
"Regulation D" shall mean Regulation D under the Act.
"Regulation S" shall mean Regulation S under the Act.
"Trust Indenture Act" shall mean the Trust Indenture Act of
1939, as amended, and the rules and regulations of the Commission promulgated
thereunder.
1.1-23
<PAGE>
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this Agreement and your acceptance shall represent a binding agreement
between the Company and the several Initial Purchasers.
Very truly yours,
United Video Satellite Group, Inc.,
by /s/ Peter C. Boylan III
---------------------------
Name: Peter C. Boylan III
Title: Executive Vice President;
Chairman and Chief Executive
Officer of TV Guide Entertainment
Group and United Video Group
Each of the Subsidiary
Guarantors listed on Schedule II hereto,
by /s/ Peter C. Boylan III
----------------------------------
Name: Peter C. Boylan III
Title:
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
Salomon Smith Barney Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
by: Salomon Smith Barney Inc.
by /s/ Robert D. Miller
----------------------------------
Name: Robert D. Miller
Title: Vice President
For themselves and the other several Initial Purchasers named in Schedule I to
the foregoing Agreement.
1.1-24
<PAGE>
SCHEDULE I
Principal
Amount of
Securities
Initial Purchasers to be Purchased
Salomon Smith Barney Inc................................... $166,000,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated...........166,000,000
Credit Lyonnais Securities (USA) Inc..........................28,000,000
BNY Capital Markets, Inc......................................20,000,000
TD Securities (USA) Inc.......................................20,000,000
-------------
Total .......................................$400,000,000
1.1-25
<PAGE>
SCHEDULE II
United Video Network Sales, Inc.
UV Corp
UVTV, Inc.
UVTV-A, Inc.
UVTV-X, Inc.
DirectCom Networks, Inc.
TV Guide Media Sales, Inc.
EuroMedia Group, Inc.
TV Guide Interactive Group Inc.
Prevue Data Services, Inc.
TV Guide Online, Inc.
Prevue Interactive, Inc.
PNI Holdings, Inc.
Prevue Networks Inc.
Prevue International, Inc.
Sneak Holdings, Inc.
1.1-26
<PAGE>
EXHIBIT A
Selling Restrictions for Offers and
Sales outside the United States
(1)(a) The Securities have not been and will not be registered
under the Act and may not be offered or sold within the United States or to, or
for the account or benefit of, U.S. persons except in accordance with Regulation
S under the Act or pursuant to an exemption from the registration requirements
of the Act. Each Initial Purchaser represents and agrees that, except as
otherwise permitted by Section 4(a)(i) or (ii) of the Agreement to which this is
an exhibit, it has offered and sold the Securities, and will offer and sell the
Securities, (i) as part of their distribution at any time; and (ii) otherwise
until 40 days after the later of the commencement of the offering and the
Closing Date, only in accordance with Rule 903 of Regulation S under the Act.
Accordingly, each Initial Purchaser represents and agrees that neither it, nor
any of its Affiliates nor any person acting on its or their behalf has engaged
or will engage in any directed selling efforts with respect to the Securities,
and that it and they have complied and will comply with the offering
restrictions requirement of Regulation S. Each Initial Purchaser agrees that, at
or prior to the confirmation of sale of Securities (other than a sale of
Securities pursuant to Section 4(a)(i) or (ii) of the Agreement to which this is
an exhibit), it shall have sent to each distributor, dealer or person receiving
a selling concession, fee or other remuneration that purchases Securities from
it during the distribution compliance period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933 (the "Act") and may not be
offered or sold within the United States or to, or for the
account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days after
the later of the commencement of the offering and March 1,
1999, except in either case in accordance with Regulation S or
Rule 144A under the Act. Terms used above have the meanings
given to them by Regulation S."
(b) Each Initial Purchaser also represents and agrees that it
has not entered and will not enter into any contractual arrangement
with any distributor with respect to the distribution of the
Securities, except with its Affiliates or with the prior written
consent of the Company.
(c) Terms used in this section have the meanings given to them
by Regulation S.
(2) Each Initial Purchaser represents and agrees that (i) it
has not offered or sold, and will not offer or sell, any Securities in the
United Kingdom, by means of any document, other than to persons whose ordinary
business it is to buy, hold, manage or dispose of investments, whether as
principal or as agent, for the purpose of their businesses or in circumstances
which do not constitute an offer to the public within the meaning of the
Companies Act 1989 of Great Britain; (ii) it has complied and will comply with
all applicable provisions of the Financial Services Act 1986 of the United
Kingdom with respect to anything done by it in relation to the Securities in,
from or otherwise involving the United Kingdom; and (iii) it has only issued or
passed on and will only issue or pass on in the United Kingdom any document
received by it in connection with the issue of the Securities to a person who is
of a kind described in Article 9(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1996 or is a person to whom the
document may otherwise lawfully be issued or passed on.
A-1
<PAGE>
EXECUTION COPY
UNITED VIDEO SATELLITE GROUP, INC.
(to be renamed TV Guide, Inc.), Issuer
81/8% Senior Subordinated Notes due 2009
INDENTURE
Dated as of March 1, 1999
The Bank of New York,
Trustee
4.3-1
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01.
Definitions............................................................... 1
SECTION 1.02.
Other Definitions.........................................................22
SECTION 1.03.
Incorporation by Reference of Trust
Indenture Act.........................................................23
SECTION 1.04.
Rules of Construction.....................................................23
ARTICLE II
The Securities
SECTION 2.01.
Form and Dating...........................................................24
SECTION 2.02.
Execution and Authentication..............................................24
SECTION 2.03.
Registrar and Paying Agent................................................25
SECTION 2.04.
Paying Agent to Hold Money in Trust.......................................25
SECTION 2.05.
Securityholder Lists......................................................26
SECTION 2.06.
Replacement Securities....................................................26
SECTION 2.07.
Outstanding Securities....................................................26
SECTION 2.08.
Temporary Securities......................................................26
SECTION 2.09.
Cancelation...............................................................27
SECTION 2.10.
Defaulted Interest........................................................27
SECTION 2.11.
CUSIP Numbers.............................................................27
ARTICLE III
Redemption
SECTION 3.01.
Notices to Trustee........................................................27
SECTION 3.02.
Selection of Securities To Be Redeemed....................................28
SECTION 3.03.
Notice of Redemption......................................................28
SECTION 3.04.
Effect of Notice of Redemption............................................29
SECTION 3.05.
Deposit of Redemption Price...............................................29
SECTION 3.06.
Securities Redeemed in Part...............................................29
ARTICLE IV
Covenants
SECTION 4.01.
Payment of Securities.....................................................29
SECTION 4.02.
SEC Reports...............................................................30
SECTION 4.03.
Limitation on Debt........................................................30
SECTION 4.04.
Limitation on Restricted Payments.........................................32
SECTION 4.05.
Limitation on Liens.......................................................34
SECTION 4.06.
Limitation on Asset Sales.................................................35
4.3-i
<PAGE>
SECTION 4.07.
Limitation on Restrictions on Distributions from Restricted Subsidiaries..38
SECTION 4.08.
Limitation on Transactions with
Affiliates..............................................................39
SECTION 4.09.
Limitation on Layered Debt................................................41
SECTION 4.10.
Designation of Subsidiaries...............................................41
SECTION 4.11.
Change of Control.........................................................44
SECTION 4.12.
Future Subsidiary Guarantors..............................................45
SECTION 4.13.
Maintenance of Non-Investment
Company Status..........................................................46
SECTION 4.14.
Compliance Certificate....................................................46
SECTION 4.15.
Covenant Suspension.......................................................46
SECTION 4.16.
Further Instruments and Acts..............................................47
ARTICLE V
Successor Company
SECTION 5.01.
When Company May Merge or Transfer
Assets..................................................................47
SECTION 5.02.
When a Subsidiary Guarantor May Merge
or Transfer Assets........................................................48
ARTICLE VI
Defaults and Remedies
SECTION 6.01.
Events of Default.........................................................50
SECTION 6.02.
Acceleration..............................................................52
SECTION 6.03.
Other Remedies............................................................52
SECTION 6.04.
Waiver of Past Defaults...................................................52
SECTION 6.05.
Control by Majority.......................................................52
SECTION 6.06.
Limitation on Suits.......................................................53
SECTION 6.07.
Rights of Holders to Receive Payment......................................53
SECTION 6.08.
Collection Suit by Trustee................................................53
SECTION 6.09.
Trustee May File Proofs of Claim..........................................54
SECTION 6.10.
Priorities................................................................54
SECTION 6.11.
Undertaking for Costs.....................................................54
SECTION 6.12.
Waiver of Stay or Extension Laws..........................................55
ARTICLE VII
Trustee
SECTION 7.01.
Duties of Trustee.........................................................55
SECTION 7.02.
Rights of Trustee.........................................................56
SECTION 7.03.
Individual Rights of Trustee..............................................57
SECTION 7.04.
Trustee's Disclaimer......................................................57
SECTION 7.05.
Notice of Defaults........................................................57
SECTION 7.06.
Reports by Trustee to Holders.............................................57
SECTION 7.07.
Compensation and Indemnity................................................58
SECTION 7.08.
Replacement of Trustee....................................................58
4.3-ii
<PAGE>
SECTION 7.09.
Successor Trustee by Merger...............................................59
SECTION 7.10.
Eligibility; Disqualification.............................................60
SECTION 7.11.
Preferential Collection of Claims Against
Company.................................................................60
SECTION 7.12.
Trustee's Application for
Instructions from the Company...........................................60
ARTICLE VIII
Discharge of Indenture; Defeasance
SECTION 8.01.
Discharge of Liability on Securities;
Defeasance............................................................60
SECTION 8.02.
Conditions to Defeasance..................................................61
SECTION 8.03.
Application of Trust Money................................................63
SECTION 8.04.
Repayment to Company......................................................63
SECTION 8.05.
Indemnity for Government Obligations......................................63
SECTION 8.06.
Reinstatement.............................................................63
ARTICLE IX
Amendments
SECTION 9.01.
Without Consent of Holders................................................63
SECTION 9.02.
With Consent of Holders...................................................64
SECTION 9.03.
Compliance with Trust Indenture Act.......................................66
SECTION 9.04.
Revocation and Effect of Consents and
Waivers...............................................................66
SECTION 9.05.
Notation on or Exchange of Securities.....................................66
SECTION 9.06.
Trustee to Sign Amendments................................................66
SECTION 9.07.
Payment for Consent.......................................................67
ARTICLE X
Subordination
SECTION 10.01.
Agreement To Subordinate..................................................67
SECTION 10.02.
Liquidation, Dissolution, Bankruptcy......................................67
SECTION 10.03.
Default on Senior Debt....................................................67
SECTION 10.04.
Acceleration of Payment of Securities.....................................68
SECTION 10.05.
When Distribution Must Be Paid Over.......................................68
SECTION 10.06.
Subrogation...............................................................68
SECTION 10.07.
Relative Rights...........................................................69
SECTION 10.08.
Subordination May Not Be Impaired
by Company..............................................................69
SECTION 10.09.
Rights of Trustee and Paying Agent........................................69
SECTION 10.10.
Distribution or Notice to
Representative............................................................69
SECTION 10.11.
Article X Not To Prevent Events of Default
or Limit Right To Accelerate..........................................69
SECTION 10.12.
Trust Moneys Not Subordinated.............................................70
SECTION 10.13.
Trustee Entitled To Rely..................................................70
SECTION 10.14.
Trustee to Effectuate Subordination.......................................71
4.3-iii
<PAGE>
SECTION 10.15.
Trustee Not Fiduciary for Holders of Senior
Debt..................................................................70
SECTION 10.16.
Reliance by Holders of Senior Debt on
Subordination Provisions..............................................71
ARTICLE XI
Subsidiary Guarantees
SECTION 11.01.
Subsidiary Guarantees.....................................................71
SECTION 11.02.
Contribution..............................................................73
SECTION 11.03.
Successors and Assigns....................................................73
SECTION 11.04.
No Waiver.................................................................73
SECTION 11.05.
Modification..............................................................74
SECTION 11.06.
Execution of Supplemental Indenture for
Future Subsidiary Guarantors .........................................74
ARTICLE XII
Subordination of Subsidiary Guarantees
SECTION 12.01.
Agreement to Subordinate..................................................74
SECTION 12.02.
Liquidation, Dissolution, Bankruptcy......................................74
SECTION 12.03.
Default on Senior Debt of Subsidiary
Guarantor.............................................................75
SECTION 12.04.
Demand for Payment........................................................75
SECTION 12.05.
When Distribution Must Be Paid Over.......................................76
SECTION 12.06.
Subrogation...............................................................76
SECTION 12.07.
Relative Rights...........................................................76
SECTION 12.08.
Subordination May Not Be Impaired by
Subsidiary Guarantor..................................................76
SECTION 12.09.
Rights of Trustee and Paying Agent........................................76
SECTION 12.10.
Distribution or Notice to Representative..................................77
SECTION 12.11.
Article XII Not To Prevent Events of Default
under a Subsidiary Guarantee or Limit
Right to Accelerate...................................................77
SECTION 12.12.
Trustee Entitled to Rely..................................................77
SECTION 12.13.
Trustee to Effectuate Subordination.......................................78
SECTION 12.14.
Trustee Not Fiduciary for Holders of Senior
Debt of a Subsidiary Guarantor........................................78
SECTION 12.15.
Reliance by Holders of Senior Debt of a
Subsidiary Guarantor on Subordination
Provisions............................................................78
4.3-iv
<PAGE>
ARTICLE XIII
Miscellaneous
SECTION 13.01.
Trust Indenture Act Controls..............................................78
SECTION 13.02.
Notices...................................................................78
SECTION 13.03.
Communication by Holders with
Other Holders...........................................................79
SECTION 13.04.
Certificate and Opinion as to Conditions
Precedent.............................................................79
SECTION 13.05.
Statements Required in Certificate or
Opinion...............................................................80
SECTION 13.06.
When Securities Disregarded...............................................80
SECTION 13.07.
Rules by Trustee, Paying Agent and
Registrar.................................................................80
SECTION 13.08.
Legal Holidays............................................................80
SECTION 13.09.
Governing Law.............................................................80
SECTION 13.10.
No Recourse Against Others................................................81
SECTION 13.11.
Successors................................................................81
SECTION 13.12.
Multiple Originals........................................................81
SECTION 13.13.
Table of Contents; Headings...............................................82
Schedule I - Initial Subsidiary Guarantors
Appendix A - Provisions Relating to Initial Securities
and Exchange Securities
Exhibit 1 to Appendix A - Form of Initial Security
Exhibit A - Form of Exchange Security
Exhibit B - Form of Supplemental Indenture
4.3-v
<PAGE>
4.3-1
INDENTURE dated as of March 1, 1999, among
UNITED VIDEO SATELLITE GROUP, INC. (to be renamed TV
Guide, Inc.), a Delaware corporation (the "Company"),
each Subsidiary listed on Schedule I hereto
(collectively, the "Subsidiary Guarantors") and THE
BANK OF NEW YORK, a New York banking corporation, as
Trustee (the "Trustee").
Each party agrees as follows for the benefit of the other
parties and for the equal and ratable benefit of the Holders of the Company's
81/8% Senior Subordinated Notes due 2009, to be issued as in this Indenture
provided (the "Initial Securities") and, if and when issued pursuant to a
registered or private exchange for the Initial Securities, the Company's 81/8%
Senior Subordinated Notes due 2009 (the "Exchange Securities" and, together with
the Initial Securities, the "Securities"):
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.
"Additional Assets" means (a) any Property (other than cash,
cash equivalents and securities) to be owned by the Company or any Restricted
Subsidiary and used in a Related Business; or (b) Capital Stock of a Person that
becomes a Restricted Subsidiary as a result of the acquisition of such Capital
Stock by the Company or another Restricted Subsidiary from any Person other than
the Company or an Affiliate of the Company; provided, however, that such
Restricted Subsidiary is primarily engaged in a Related Business.
"Affiliate" of any specified Person means: (a) any other
Person directly or indirectly controlling or controlled by (including under
direct or indirect common control with) such specified Person, or (b) any other
Person who is a director or officer of: (1) such specified Person, (2) any
Subsidiary of such specified Person, or (3) any Person described in clause (a)
above. For the purposes of this definition, "control" when used with respect to
any Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing. For purposes of Sections 4.06 and 4.08
and the definition of "Additional Assets" only, "Affiliate" shall also mean any
beneficial owner of shares representing 5% or more of the total voting power of
the Voting Stock (on a fully diluted basis) of the Company or of rights or
warrants to purchase such Voting Stock (whether or not currently exercisable)
and any Person who would be an Affiliate of any such beneficial owner pursuant
to the first sentence hereof.
"Asset Sale" means any sale, lease, transfer, issuance or
other disposition (or series of related sales, leases, transfers, issuances or
dispositions) by the Company or any
<PAGE>
4.3-2
Restricted Subsidiary, including any disposition by means of a merger,
consolidation or similar transaction (each referred to for the purposes of this
definition as a "disposition"), of: (a) any shares of Capital Stock of a
Restricted Subsidiary (other than directors' qualifying shares), or (b) any
other assets of the Company or any Restricted Subsidiary outside of the ordinary
course of business of the Company or such Restricted Subsidiary, other than, in
the case of clause (a) or (b) above, (1) any disposition by a Restricted
Subsidiary to the Company or another Restricted Subsidiary or by the Company to
a Restricted Subsidiary, (2) any disposition to the extent the Property received
in exchange therefor constitutes a Permitted Investment or Restricted Payment
permitted by Section 4.04 and (3) any disposition effected in compliance with
Section 5.01(a).
"Attributable Debt" in respect of a Sale and Leaseback
Transaction means, at any date of determination, (a) if such Sale and Leaseback
Transaction is a Capital Lease Obligation, the amount of Debt represented
thereby according to the definition of "Capital Lease Obligation", and (b) in
all other instances, the greater of: (1) the Fair Market Value of the Property
subject to such Sale and Leaseback Transaction, and (2) the present value
(discounted at the interest rate borne by the Securities, compounded annually)
of the total obligations of the lessee for rental payments during the remaining
term of the lease included in such Sale and Leaseback Transaction (including any
period for which such lease has been extended).
"Average Life" means, as of any date of determination, with
respect to any Debt or Preferred Stock, the quotient obtained by dividing: (a)
the sum of the product of the numbers of years (rounded to the nearest
one-twelfth of one year) from the date of determination to the dates of each
successive scheduled principal payment of such Debt or redemption or similar
payment with respect to such Preferred Stock multiplied by the amount of such
payment by (b) the sum of all such payments.
"Board of Directors" means the Board of Directors of the
Company or any committee thereof duly authorized to act on behalf of such Board.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification.
"Business Day" means each day that is not a Legal
Holiday.
"Capital Lease Obligations" means any obligation under a lease
that is required to be capitalized for financial reporting purposes in
accordance with GAAP; and the amount of Debt represented by such obligation
shall be the capitalized amount of such obligations determined in accordance
with GAAP; and the Stated Maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon
which such lease may be terminated by the lessee without
<PAGE>
4.3-3
payment of a penalty. For purposes of Section 4.05, a Capital Lease Obligation
shall be deemed secured by a Lien on the Property being leased.
"Capital Stock" means, with respect to any Person, any shares
or other equivalents (however designated) of any class of corporate stock or
partnership interests or any other participations, rights, warrants, options or
other interests in the nature of an equity interest in such Person, including
Preferred Stock, but excluding any debt security convertible or exchangeable
into such equity interest.
"Capital Stock Sale Proceeds" means the aggregate cash
proceeds received by the Company from the issuance or sale (other than to a
Subsidiary of the Company or an employee stock ownership plan or trust
established by the Company or any such Subsidiary for the benefit of their
employees) by the Company of its Capital Stock (other than Disqualified Stock)
after the Issue Date, net of attorneys' fees, accountants' fees, underwriters'
or placement agents' fees, discounts or commissions and brokerage, consultant
and other fees actually incurred in connection with such issuance or sale and
net of taxes paid or payable as a result thereof. For purposes of the foregoing,
the value of the aggregate cash proceeds received by the Company from the
issuance of Capital Stock upon the exercise of any participations, rights,
warrants, options or other interests, will be the cash proceeds received upon
the issuance of such participations, rights, warrants, options or other interest
plus any incremental amount received by the Company upon the exercise thereof.
"Change of Control" means the occurrence of any of the
following events: (a) if (1) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act or any successor provisions to
either of the foregoing), including any group acting for the purpose of
acquiring, holding, voting or disposing of securities within the meaning of Rule
13d-5(b)(1) under the Exchange Act, other than any one or more of the Permitted
Holders, becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act, except that a person will be deemed to have "beneficial ownership"
of all shares that any such person has the right to acquire, whether such right
is exercisable immediately or only after the passage of time), directly or
indirectly, of 35% or more of the total voting power of the Voting Stock of the
Company, and (2) the Permitted Holders are the "beneficial owners" (as defined
in Rule 13d-3 under the Exchange Act, except that a person will be deemed to
have "beneficial ownership" of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, in the aggregate of a lesser percentage of the
total voting power of the Voting Stock of the Company than such other person or
group (for purposes of this clause (a), such person or group shall be deemed to
beneficially own any Voting Stock of a corporation held by any other corporation
(the "parent corporation") so long as such person or group beneficially owns,
directly or indirectly, in the aggregate a majority of the total voting power of
the Voting Stock of such parent corporation); or (b) the sale, transfer,
<PAGE>
4.3-4
assignment, lease, conveyance or other disposition, directly or indirectly, of
all or substantially all the assets of the Company and the Restricted
Subsidiaries, considered as a whole (other than a disposition of such assets as
an entirety or virtually as an entirety to a Wholly Owned Subsidiary or one or
more Permitted Holders) shall have occurred; or (c) the Company merges,
consolidates or amalgamates with or into any other Person (other than one or
more Permitted Holders) or any other Person (other than one or more Permitted
Holders) merges, consolidates or amalgamates with or into the Company, in any
such event pursuant to a transaction in which the outstanding Voting Stock of
the Company is reclassified into or exchanged for cash, securities or other
Property, other than any such transaction where (1) the outstanding Voting Stock
of the Company is reclassified into or exchanged for other Voting Stock of the
Company or for Voting Stock of the surviving corporation and (2) the holders of
the Voting Stock of the Company immediately prior to such transaction own not
less than a majority of the Voting Stock of the Company or the surviving
corporation immediately after such transaction; or (d) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the 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 Permitted Holder or a vote of not less than
three-fourths 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
Board of Directors then in office; or (e) the shareholders of the Company shall
have approved any plan of liquidation or dissolution of the Company.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Commodity Price Protection Agreement" means, in respect of a
Person, any forward contract, commodity swap agreement, commodity option
agreement or other similar agreement or arrangement designed to protect such
Person against fluctuations in commodity prices.
"Company" means the party named as such in this Indenture
until a successor replaces it pursuant to the applicable provisions hereof and,
thereafter, means the successor and, for purposes of any provision contained
herein and required by the TIA, each other obligor on the indenture securities.
"Consolidated Interest Expense" means, for any period, the
total interest expense of the Company and its consolidated Restricted
Subsidiaries (including the amortization of capitalized interest), plus, to the
extent not included in such total interest expense, and to the extent Incurred
by the Company or its Restricted Subsidiaries, without duplication, (a) interest
expense attributable to leases constituting part of a Sale and Leaseback
Transaction and to Capital Lease Obligations, (b) amortization of debt discount
and debt issuance cost, including commitment fees, (c) capitalized interest, (d)
non-cash interest expense,
<PAGE>
4.3-5
(e) commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing, (f) net costs associated
with Hedging Obligations (including amortization of fees), (g) Disqualified
Stock Dividends, (h) Preferred Stock Dividends, (i) interest Incurred in
connection with Investments in discontinued operations, (j) interest accruing on
any Debt of any other Person to the extent such Debt is Guaranteed by the
Company or any Restricted Subsidiary, and (k) the cash contributions to any
employee stock ownership plan or similar trust to the extent such contributions
are used by such plan or trust to pay interest or fees to any Person (other than
the Company) in connection with Debt Incurred by such plan or trust.
"Consolidated Net Income" means, for any period, the net
income (loss) of the Company and its consolidated Subsidiaries; provided,
however, that there shall not be included in such Consolidated Net Income: (a)
any net income (loss) of any Person (other than the Company) if such Person is
not a Restricted Subsidiary, except that: (1) subject to the exclusion contained
in clause (d) below, the Company's equity in the net income of any such Person
for such period shall be included in such Consolidated Net Income up to the
aggregate amount of cash distributed by such Person during such period to the
Company or a Restricted Subsidiary as a dividend or other distribution (subject,
in the case of a dividend or other distribution to a Restricted Subsidiary, to
the limitations contained in clause (c) below), and (2) the Company's equity in
a net loss of any such Person other than an Unrestricted Subsidiary for such
period shall be included in determining such Consolidated Net Income, (b) for
purposes of Section 4.04 only, any net income (loss) of any Person acquired by
the Company or any of its consolidated Subsidiaries in a pooling of interests
transaction for any period prior to the date of such acquisition, (c) any net
income (loss) of any Restricted Subsidiary if such Restricted Subsidiary is
subject to restrictions, directly or indirectly, on the payment of dividends or
the making of distributions, directly or indirectly, to the Company, except
that: (1) subject to the exclusion contained in clause (d) below, the Company's
equity in the net income of any such Restricted Subsidiary for such period shall
be included in such Consolidated Net Income up to the aggregate amount of cash
distributed by such Restricted Subsidiary during such period to the Company or
another Restricted Subsidiary as a dividend or other distribution (subject, in
the case of a dividend or other distribution to another Restricted Subsidiary,
to the limitation contained in this clause), and (2) the Company's equity in a
net loss of any such Restricted Subsidiary for such period shall be included in
determining such Consolidated Net Income, (d) any gain (but not loss) realized
upon the sale or other disposition of any Property of the Company or any of its
consolidated Subsidiaries (including pursuant to any Sale and Leaseback
Transaction) that is not sold or otherwise disposed of in the ordinary course of
business, (e) any extraordinary gain or loss, (f) the cumulative effect of a
change in accounting principles, and (g) any non-cash compensation expense
realized for grants of performance shares, stock options or other rights to
officers, directors and employees of the Company or any Restricted Subsidiary,
provided that such
<PAGE>
4.3-6
shares, options or other rights can be redeemed at the option of the holder only
for Capital Stock of the Company (other than Disqualified Stock).
Notwithstanding the foregoing, for purposes of Section 4.04 only, there shall be
excluded from Consolidated Net Income any dividends, repayments of loans or
advances or other transfers of assets from Unrestricted Subsidiaries to the
Company or a Restricted Subsidiary to the extent such dividends, repayments or
transfers increase the amount of Restricted Payments permitted under Section
4.04 pursuant to clause (c)(4) thereof.
"Credit Facility" means, with respect to the Company or any
Restricted Subsidiary, one or more debt or commercial paper facilities with
banks or other institutional lenders (including the New Credit Facility)
providing for revolving credit loans, term loans, receivables or inventory
financing (including through the sale of receivables or inventory to such
lenders or to special purpose, bankruptcy remote entities formed to borrow from
such lenders against such receivables or inventory) or trade letters of credit,
in each case together with any extensions, revisions, refinancings or
replacements thereof by a lender or syndicate of lenders.
"Cumulative EBITDA" means, as of any date of determination,
the cumulative EBITDA of the Company and its consolidated Restricted
Subsidiaries from and after the last day of the fiscal quarter of the Company
immediately preceding the Issue Date to the end of the fiscal quarter ending
prior to the date of determination for which financial statements are available
or required or, if such cumulative EBITDA for such period is negative, the
amount (expressed as a negative number) by which such cumulative EBITDA is less
than zero.
"Cumulative Interest Expense" means, at any date of
determination, the aggregate amount of Consolidated Interest Expense accrued
from and after the last day of the fiscal quarter of the Company immediately
preceding the Issue Date to the end of the fiscal quarter ending prior to the
date of determination for which financial statements are available or required.
"Currency Exchange Protection Agreement" means, in respect of
a Person, any foreign exchange contract, currency swap agreement, currency
option or other similar agreement or arrangement designed to protect such Person
against fluctuations in currency exchange rates.
"D6/SMATV Interest" means all the assets of Netlink USA
other than an approximate 40% interest in Superstar/Netlink Group
L.L.C. and 80% of the Fair Market Value of Netlink USA's Temporary
Cash Investments.
"Debt" means, with respect to any Person on any date of
determination (without duplication): (a) the principal of and premium (if any)
in respect of (1) debt of such Person for money borrowed, and (2) debt evidenced
by notes, debentures, bonds or other similar instruments for the payment of
which such Person is responsible or liable; (b) all Capital Lease Obligations of
such Person and all Attributable Debt in respect of Sale and Leaseback
<PAGE>
4.3-7
Transactions entered into by such Person; (c) all obligations of such Person
issued or assumed as the deferred purchase price of Property, all conditional
sale obligations of such Person and all obligations of such Person under any
title retention agreement (but excluding trade accounts payable arising in the
ordinary course of business); (d) all obligations of such Person for the
reimbursement of any obligor on any letter of credit, banker's acceptance or
similar credit transaction (other than obligations with respect to letters of
credit securing obligations (other than obligations described in (a) through (c)
above) entered into in the ordinary course of business of such Person to the
extent such letters of credit are not drawn upon or, if and to the extent drawn
upon, such drawing is reimbursed no later than the third Business Day following
receipt by such Person of a demand for reimbursement following payment on the
letter of credit); (e) the amount of all obligations of such Person with respect
to the Repayment of any Disqualified Stock or, with respect to any Subsidiary of
such Person, any Preferred Stock (but excluding, in each case, any accrued
dividends); (f) all obligations of the type referred to in clauses (a) through
(e) of other Persons and all dividends of other Persons for the payment of
which, in either case, such Person is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise, including by means of any
Guarantee; (g) all obligations of the type referred to in clauses (a) through
(f) of other Persons secured by any Lien on any Property of such Person (whether
or not such obligation is assumed by such Person), the amount of such obligation
being deemed to be the lesser of the value of such Property or the amount of the
obligation so secured; and (h) to the extent not otherwise included in this
definition, Hedging Obligations of such Person. The amount of Debt of any Person
at any date shall be the outstanding balance at such date of all unconditional
obligations as described above and the maximum liability, upon the occurrence of
the contingency giving rise to the obligation, of any contingent obligations of
a type described above at such date. The amount of Debt represented by a Hedging
Obligation shall be equal to: (1) zero if such Hedging Obligation has been
Incurred pursuant to clause (e) of the definition of Permitted Debt, or (2) the
notional amount of such Hedging Obligation if not Incurred pursuant to such
clause.
"Default" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
"Designated Rating" means a rating equal to or higher than Ba3
(or the equivalent) by Moody's and B+ (or the equivalent) by S&P.
"Designated Senior Debt" means: (a) any Senior Debt that has,
at the time of determination, an aggregate principal amount outstanding of at
least $25 million (including the amount of all undrawn commitments and matured
and contingent reimbursement obligations pursuant to letters of credit
thereunder) that is specifically designated in the instrument evidencing such
Senior Debt and is designated in a notice delivered by the Company to the
holders or a Representative of the holders of such Senior Debt and in an
Officers' Certificate
<PAGE>
4.3-8
delivered to the Trustee as "Designated Senior Debt" of the Company for purposes
of this Indenture, and (b) the Credit Facility.
"Disqualified Stock" means, with respect to any Person, any
Capital Stock that by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable, in either case at the option of
the holder thereof) or otherwise: (a) matures or is mandatorily redeemable
pursuant to a sinking fund obligation or otherwise, (b) is or may become
redeemable or repurchaseable at the option of the holder thereof, in whole or in
part, or (c) is convertible or exchangeable at the option of the holder thereof
for Debt or Disqualified Stock, on or prior to, in the case of clause (a), (b)
or (c), the first anniversary of the Stated Maturity of the Securities.
"Disqualified Stock Dividends" means all dividends with
respect to Disqualified Stock of the Company held by Persons other than a Wholly
Owned Subsidiary. The amount of any such dividend shall be equal to the quotient
of such 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 Company.
"EBITDA" means, for any period, an amount equal to, for the
Company and its consolidated Restricted Subsidiaries: (a) the sum of
Consolidated Net Income for such period, plus the following to the extent
reducing Consolidated Net Income for such period: (1) the provision for taxes
based on income or profits or utilized in computing net loss, (2) Consolidated
Interest Expense, (3) depreciation, (4) amortization of intangibles, and (5) any
other non-cash items (other than any such noncash item to the extent that it
represents an accrual of or reserve for cash expenditures in any future period),
minus (b) all non-cash items increasing Consolidated Net Income for such period
(other than any such non-cash item to the extent that it will result in the
receipt of cash payments in any future period). Notwithstanding the foregoing
clause (a), the provision for taxes and the depreciation, amortization and
non-cash items of a Restricted Subsidiary shall be added to Consolidated Net
Income to compute EBITDA only to the extent (and in the same proportion) that
the net income of such Restricted Subsidiary was included in calculating
Consolidated Net Income and only if a corresponding amount would be permitted at
the date of determination to be dividended to the Company by such Restricted
Subsidiary without prior approval (that has not been obtained), pursuant to the
terms of its charter and all agreements, instruments, judgments, decrees,
orders, statutes, rules and governmental regulations applicable to such
Restricted Subsidiary or its shareholders.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Fair Market Value" means, with respect to any Property, the
price that could be negotiated in an arm's-length free market transaction, for
cash, between a willing seller and a willing buyer, neither of whom is under
undue pressure or
<PAGE>
4.3-9
compulsion to complete the transaction. Fair Market Value shall be determined,
except as otherwise provided, (a) if such Property has a Fair Market Value equal
to or less than $5 million, by any Officer of the Company, or (b) if such
Property has a Fair Market Value in excess of $5 million, by a majority of the
Board of Directors and evidenced by a Board Resolution, dated within 30 days of
the relevant transaction, delivered to the Trustee.
"Foreign Restricted Subsidiary" means any Restricted
Subsidiary which is not organized under the laws of the United States of America
or any State thereof or the District of Columbia.
"GAAP" means United States generally accepted accounting
principles as in effect on the Issue Date, including those set forth: (a) in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants, (b) in the statements and
pronouncements of the Financial Accounting Standards Board, (c) in such other
statements by such other entity as approved by a significant segment of the
accounting profession, and (d) the rules and regulations of the Commission
governing the inclusion of financial statements (including pro forma financial
statements) in periodic reports required to be filed pursuant to Section 13 of
the Exchange Act, including opinions and pronouncements in staff accounting
bulletins and similar written statements from the accounting staff of the
Commission.
"Guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Debt of any other Person and
any obligation, direct or indirect, contingent or otherwise, of such Person: (a)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Debt of such other Person (whether arising by virtue of partnership
arrangements, or by agreements to keep-well, to purchase assets, goods,
securities or services, to take-or-pay or to maintain financial statement
conditions or otherwise), or (b) entered into for the purpose of assuring in any
other manner the obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "Guarantee" shall not include: (1) endorsements
for collection or deposit in the ordinary course of business, or (2) a
contractual commitment by one Person to invest in another Person for so long as
such Investment will, when made, constitute a Permitted Investment under clause
(b) of the definition of "Permitted Investment". The term "Guarantee" used as a
verb has a corresponding meaning. The term "Guarantor" shall mean any Person
Guaranteeing any obligation.
"Hedging Obligation" of any Person means any obligation of
such Person pursuant to any Interest Rate Agreement, Currency Exchange
Protection Agreement, Commodity Price Protection Agreement or any other similar
agreement or arrangement.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Security register described in Section 2.03 as the
registered holder of any Security.
<PAGE>
4.3-10
"Incur" means, with respect to any Debt or other obligation of
any Person, to create, issue, incur (by merger, conversion, exchange or
otherwise), extend, assume, Guarantee or become liable in respect of such Debt
or other obligation or the recording, as required pursuant to GAAP or otherwise,
of any such Debt or obligation on the balance sheet of such Person (and
"Incurrence" and "Incurred" shall have meanings correlative to the foregoing);
provided, however, that a change in GAAP that results in an obligation of such
Person that exists at such time, and is not theretofore classified as Debt,
becoming Debt shall not be deemed an Incurrence of such Debt; provided further,
however, that solely for purposes of determining compliance with Section 4.03,
amortization of debt discount shall not be deemed to be the Incurrence of Debt,
provided that in the case of Debt sold at a discount, the amount of such Debt
Incurred shall at all times be the aggregate principal amount at Stated
Maturity.
"Indenture" means this Indenture as amended or
supplemented from time to time.
"Independent Financial Advisor" means an investment banking
firm of national standing or any third party appraiser of national standing,
provided that such firm or appraiser is not an Affiliate of the Company.
"Initial Unrestricted Subsidiaries" means (1) UV Ventures,
Inc., SNTV Holdings, Inc., Prevue Ventures, Inc., UV Acquisition Subsidiary,
Inc., TV Guide Technology Ventures, Inc., Superstar/Netlink Group L.L.C., SSDS,
Inc., SpaceCom Systems, Inc., ODS Technologies, LP, TV Guide Enterprises
Solutions, Inc., the IP Subsidiary and any of their respective subsidiaries and
(2) following the Company's exercise of its SNG-Netlink Option, SNG-Netlink and
any of its subsidiaries.
"Interest Rate Agreement" means, for any Person, any interest
rate swap agreement, interest rate cap agreement, interest rate collar agreement
or other similar agreement designed to protect against fluctuations in interest
rates.
"Investment" by any Person means any direct or indirect loan
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of such Person), advance or
other extension of credit or capital contribution (by means of transfers of cash
or other Property to others or payments for Property or services for the account
or use of others, or otherwise) to, or Incurrence of a Guarantee of any
obligation of, or purchase or acquisition of Capital Stock, bonds, notes,
debentures or other securities or evidence of Debt issued by, any other Person.
For purposes of Sections 4.04 and 4.10 hereof and the definition of "Restricted
Payment", "Investment" shall include the portion (proportionate to the Company's
equity interest in such Subsidiary) of the Fair Market Value of the net assets
of any Subsidiary of the Company (other than the Initial Unrestricted
Subsidiaries) at the time that such Subsidiary is designated an Unrestricted
Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a
Restricted Subsidiary, the Company shall be deemed to continue
<PAGE>
4.3-11
to have a permanent "Investment" in an Unrestricted Subsidiary of an amount (if
positive) equal to: (a) the Company's "Investment" in such Subsidiary at the
time of such redesignation, less (b) the portion (proportionate to the Company's
equity interest in such Subsidiary) of the Fair Market Value of the net assets
of such Subsidiary at the time of such redesignation. In determining the amount
of any Investment made by transfer of any Property other than cash, such
Property shall be valued at its Fair Market Value at the time of such
Investment.
"Investment Grade Rating" means a rating equal to or higher
than Baa3 (or the equivalent) by Moody's and BBB- (or the equivalent) by S&P.
"IP Agreements" means each of the Assignment and License
Agreements to which the Company or the IP Subsidiary is a party on the Issue
Date or any assignment or license agreement in substantially the same form and
scope and on substantially the same terms entered into subsequent to the Issue
Date in each case with respect to patents, patent applications and the
inventions disclosed therein.
"IP Subsidiary" means United Video Properties, Inc.
"Issue Date" means the date on which the Initial
Securities are initially issued.
"Leverage Ratio" means the ratio of: (a) the
outstanding Debt of the Company and the Restricted Subsidiaries on
a consolidated basis, to (b) the LTM Pro Forma EBITDA.
"Lien" means, with respect to any Property of any Person, any
mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, security interest, lien, charge, easement (other than any easement
not materially impairing usefulness or marketability), encumbrance, preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such Property (including any Capital
Lease Obligation, conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing or any Sale and
Leaseback Transaction). An operating lease that is not a Capital Lease
Obligation or Sale and Leaseback Transaction shall not be deemed to constitute a
Lien.
"LTM Pro Forma EBITDA" means Pro Forma EBITDA for the four
most recent consecutive fiscal quarters for which financial statements are
available or required.
"Moody's" means Moody's Investors Service, Inc. or any
successor to the rating agency business thereof.
"Net Available Cash" from any Asset Sale means cash payments
received therefrom (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise,
but only as and when received, but excluding any other consideration received in
the
<PAGE>
4.3-12
form of assumption by the acquiring Person of Debt or other obligations relating
to the Property that is the subject of such Asset Sale or received in any other
non-cash form), in each case net of: (a) all legal, title and recording tax
expenses, commissions and other fees and expenses incurred, and all Federal,
state, provincial, foreign and local taxes required to be accrued as a liability
under GAAP, as a consequence of such Asset Sale, (b) all payments made on any
Debt that is secured by any Property subject to such Asset Sale, in accordance
with the terms of any Lien upon or other security agreement of any kind with
respect to such Property, or which must by its terms, or in order to obtain a
necessary consent to such Asset Sale, or by applicable law, be repaid out of the
proceeds from such Asset Sale, (c) all distributions and other payments required
to be made to minority interest holders in Subsidiaries or joint ventures as a
result of such Asset Sale, and (d) the deduction of appropriate amounts provided
by the seller as a reserve, in accordance with GAAP, against any liabilities
associated with the Property disposed in such Asset Sale and retained by the
Company or any Restricted Subsidiary after such Asset Sale.
"New Credit Facility" means (i) the Facility A Loan Agreement
dated March 1, 1999 for $300,000,000 Revolving Credit Facility among the
Company, the financial institutions defined as lenders therein and Bank of
America National Trust and Savings Association, as administrative agent, with TD
Securities (USA) Inc., as syndication agent, and The Bank of New York Company,
Inc., as documentation agent, and (ii) the Facility B Loan Agreement dated March
1, 1999 for $300,000,000 364-day Credit Facility among the Company, the
financial institutions defined as lenders therein and Bank of America National
Trust and Savings Association, as administrative agent, with TD Securities (USA)
Inc., as syndication agent, and The Bank of New York Company, Inc., as
documentation agent.
"Non-Guarantor Subsidiary" means: (a) Sneak Prevue, L.L.C.;
(b) any Foreign Restricted Subsidiary; (c) any Subsidiary (other than a Wholly
Owned Subsidiary) that is designated after the Issue Date as a Non-Guarantor
Subsidiary as permitted pursuant to Section 4.10 and not thereafter redesignated
as a Subsidiary Guarantor as permitted pursuant thereto; and (d) any Subsidiary
of a Non-Guarantor Subsidiary; provided, however, that if any Subsidiary
referred to in the preceding clause (a), (b), (c) or (d) ceases to be a
Restricted Subsidiary, then it shall also cease to be a Non-Guarantor
Subsidiary.
"Offering Memorandum" means the Offering Memorandum dated
February 23, 1999, excluding any supplement or amendment thereto, relating to
the offering of the Securities.
"Officer" means the Chief Executive Officer, the
President, the Chief Financial Officer or any Executive Vice
President of the Company.
"Officers' Certificate" means a certificate signed by two
Officers of the Company, at least one of whom shall be a member of the Office of
the Chairman, the principal executive
<PAGE>
4.3-13
officer or the principal financial officer of the Company, and, except for
purposes of clause (j) of "Permitted Investment", delivered to the Trustee.
"Opinion of Counsel" means a written opinion from legal
counsel. The counsel may be an employee of or counsel to the Company or the
Trustee.
"Permitted Holders" means The News Corporation Limited,
Tele-Communications, Inc., Liberty Media Corporation, AT&T Corp.
and any Person who is a controlled Affiliate of any of the
foregoing.
"Permitted Interactive Partner" means any Person (or any
controlled Affiliate of such Person) who, on the Issue Date, owns or has a
license to use and sell (excluding specifications to use or sell) intellectual
property used or usable in an interactive video programming guide.
"Permitted Investment" means any Investment by the Company or
a Restricted Subsidiary in: (a) any Restricted Subsidiary or any Person that
will, upon the making of such Investment, become a Restricted Subsidiary,
provided that the primary business of such Restricted Subsidiary is a Related
Business; (b) any Person if as a result of such Investment such Person is merged
or consolidated with or into, or transfers or conveys all or substantially all
its Property to, the Company or a Restricted Subsidiary, provided that such
Person's primary business is a Related Business; (c) Temporary Cash Investments;
(d) receivables owing to the Company or a Restricted Subsidiary, if created or
acquired in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms; provided, however, that such trade terms
may include such concessionary trade terms as the Company or such Restricted
Subsidiary deems reasonable under the circumstances; (e) payroll, travel and
similar advances to cover matters that are expected at the time of such advances
ultimately to be treated as expenses for accounting purposes and that are made
in the ordinary course of business; (f) loans and advances to employees made in
the ordinary course of business consistent with past practices of the Company or
such Restricted Subsidiary, as the case may be, provided that such loans and
advances do not exceed $3 million at any one time outstanding; (g) stock,
obligations or other securities received in settlement of debts created in the
ordinary course of business and owing to the Company or a Restricted Subsidiary
or in satisfaction of judgments; (h)(1) any Person to the extent such Investment
represents the non-cash portion of the consideration received in connection with
an Asset Sale consummated in compliance with Section 4.06 or (2) the IP
Subsidiary to the extent such Investment consists of intellectual property,
including patent applications and issued patents, required to be assigned to the
IP Subsidiary according to the IP Agreements, provided that such intellectual
property is, at the same time, licensed back to the Company and its Restricted
Subsidiaries in accordance with the IP Agreements; (i) any Person to the extent
such Investment is made with Capital Stock Sale Proceeds, provided such
Investment is made at substantially the same time such
<PAGE>
4.3-14
Capital Stock Sale Proceeds are received; (j) any Person to the extent such
Investment is expressly made pursuant to this clause (j) (as evidenced by an
Officers' Certificate executed on or prior to the date such Investment is made)
unless either (1) the Securities are rated below a Designated Rating by at least
one of the Rating Agencies on the date such Investment would be made or (2) a
Rating Decline occurs, in which case such Investment shall be returned to the
Company or such Restricted Subsidiary within 20 days of such Rating Decline,
provided that if both Rating Agencies shall have made a public announcement
affirming that the Securities will retain their Designated Rating after giving
pro forma effect to such Investment, then such Investment may be maintained
notwithstanding a subsequent Rating Decline, provided further that, so long as
the Securities are rated below a Designated Rating by at least one of the Rating
Agencies, the Fair Market Value of all Investments made pursuant to this clause
(j) (in each case determined as of the date such Investment was originally made)
shall be included in the calculation of the amount of Restricted Payments except
to the extent such Investment may be made as a Permitted Investment pursuant to
clause (k) below; and (k) other Investments (including any Investments made
pursuant to clause (j) above not otherwise included in the calculation of the
amount of Restricted Payments) made for Fair Market Value that do not exceed
$100 million in the aggregate.
"Permitted Liens" means: (a) Liens to secure Debt (including
related Debt under any Interest Rate Agreements) permitted to be Incurred under
clause (b) (or clause (e) with respect to such Interest Rate Agreements) of the
definition of Permitted Debt; (b) Liens to secure Debt permitted to be Incurred
under clause (c) of the definition of Permitted Debt, provided that any such
Lien may not extend to any Property of the Company or any Restricted Subsidiary,
other than the Property acquired, constructed or leased with the proceeds of
such Debt and any improvements or accessions to such Property; (c) Liens for
taxes, assessments or governmental charges or levies on the Property of the
Company or any Restricted Subsidiary if the same shall not at the time be
delinquent or thereafter can be paid without penalty, or are being contested in
good faith and by appropriate proceedings promptly instituted and diligently
concluded, provided that any reserve or other appropriate provision that shall
be required in conformity with GAAP shall have been made therefor; (d) Liens
imposed by law, such as carriers', warehousemen's and mechanics' Liens and other
similar Liens, on the Property of the Company or any Restricted Subsidiary
arising in the ordinary course of business and securing payment of obligations
that are not more than 60 days past due or are being contested in good faith and
by appropriate proceedings; (e) Liens on the Property of the Company or any
Restricted Subsidiary Incurred in the ordinary course of business to secure
performance of obligations with respect to statutory or regulatory requirements,
performance or return-of-money bonds, surety bonds or other obligations of a
like nature and Incurred in a manner consistent with industry practice, in each
case which are not Incurred in connection with the borrowing of money, the
obtaining of advances or credit or the payment of the deferred purchase price of
Property and which do not in the aggregate impair in any material respect the
use of
<PAGE>
4.3-15
Property in the operation of the business of the Company and the Restricted
Subsidiaries taken as a whole; (f) Liens on Property at the time the Company or
any Restricted Subsidiary acquired such Property, including any acquisition by
means of a merger or consolidation with or into the Company or any Restricted
Subsidiary; provided, however, that any such Lien may not extend to any other
Property of the Company or any Restricted Subsidiary; provided further, however,
that such Liens shall not have been Incurred in anticipation of or in connection
with the transaction or series of transactions pursuant to which such Property
was acquired by the Company or any Restricted Subsidiary; (g) Liens on the
Property of a Person at the time such Person becomes a Restricted Subsidiary;
provided, however, that any such Lien may not extend to any other Property of
the Company or any other Restricted Subsidiary that is not a direct Subsidiary
of such Person; provided further, however, that any such Lien was not Incurred
in anticipation of or in connection with the transaction or series of
transactions pursuant to which such Person became a Restricted Subsidiary; (h)
pledges or deposits by the Company or any Restricted Subsidiary under workmen's
compensation laws, unemployment insurance laws or similar legislation, or good
faith deposits in connection with bids, tenders, contracts (other than for the
payment of Debt) or leases to which the Company or any Restricted Subsidiary is
party, or deposits to secure public or statutory obligations of the Company, or
deposits for the payment of rent, in each case Incurred in the ordinary course
of business; (i) utility easements, building restrictions and such other
encumbrances or charges against real Property as are of a nature generally
existing with respect to properties of a similar character; (j) Liens existing
on the Issue Date not otherwise described in clauses (a) through (i) above; and
(k) Liens on the Property of the Company or any Restricted Subsidiary to secure
any Refinancing, in whole or in part, of any Debt secured by Liens referred to
in clause (b), (f), (g) or (j) above; provided, however, that any such Lien
shall be limited to all or part of the same Property that secured the original
Lien (together with improvements and accessions to such Property) and the
aggregate principal amount of Debt that is secured by such Lien shall not be
increased to an amount greater than the sum of: (1) the outstanding principal
amount, or, if greater, the committed amount, of the Debt secured by Liens
described under clause (b), (f), (g) or (j) above, as the case may be, at the
time the original Lien became a Permitted Lien under this Indenture, and (2) an
amount necessary to pay any fees and expenses, including premiums and defeasance
costs, incurred by the Company or such Restricted Subsidiary in connection with
such Refinancing.
"Permitted Refinancing Debt" means any Debt that Refinances
any other Debt, including any successive Refinancings, so long as: (a) such Debt
is in an aggregate principal amount (or if Incurred with original issue
discount, an aggregate issue price) not in excess of the sum of: (1) the
aggregate principal amount (or if Incurred with original issue discount, the
aggregate accreted value) then outstanding of the Debt being Refinanced, and (2)
an amount necessary to pay any fees and expenses, including premiums and
defeasance costs, related to such Refinancing, (b) the Average Life of such Debt
is equal to or greater than the
<PAGE>
4.3-16
Average Life of the Debt being Refinanced, (c) the Stated Maturity of such Debt
is no earlier than the Stated Maturity of the Debt being Refinanced, and (d) the
new Debt shall not be senior in right of payment to the Debt that is being
Refinanced; provided, however, that Permitted Refinancing Debt shall not
include: (x) Debt of a Subsidiary that is not a Subsidiary Guarantor that
Refinances Debt of the Company or a Subsidiary Guarantor, or (y) Debt of the
Company or a Restricted Subsidiary that Refinances Debt of an Unrestricted
Subsidiary.
"Person" means any individual, corporation, company (including
any limited liability company), association, partnership, joint venture, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Stock" means any Capital Stock of a Person, however
designated, which entitles the holder thereof to a preference with respect to
the payment of dividends, or as to the distribution of assets upon any voluntary
or involuntary liquidation or dissolution of such Person, over shares of any
other class of Capital Stock issued by such Person.
"Preferred Stock Dividends" means all dividends with respect
to Preferred Stock of Restricted Subsidiaries held by Persons other than the
Company or a Wholly Owned Subsidiary. The amount of any such dividend shall be
equal to the quotient of such dividend divided by the difference between one and
the maximum statutory federal income rate (expressed as a decimal number between
1 and 0) then applicable to the issuer of such Preferred Stock.
"principal" of any Debt (including the Securities) means the
principal amount of such Debt plus the premium, if any, on such Debt.
"Priority Debt" means Senior Debt of the Company or any
Subsidiary Guarantor or Debt of any Non-Guarantor Subsidiary (excluding, in any
such case, any Debt owed to the Company or an Affiliate of the Company).
"pro forma" means, with respect to any calculation made or
required to be made pursuant to the terms hereof, a calculation performed in
accordance with Article 11 of Regulation S-X promulgated under the Securities
Act, as interpreted in good faith by the Board of Directors after consultation
with the independent certified public accountants of the Company, or otherwise a
calculation made in good faith by the Board of Directors after consultation with
the independent certified public accountants of the Company, as the case may be.
"Pro Forma EBITDA" means, for any period, the EBITDA of the
Company and its consolidated Restricted Subsidiaries, after giving effect to the
following: if: (a) since the beginning of such period, the Company or any
Restricted Subsidiary shall have made any Asset Sale or an Investment (by merger
or otherwise) in any Restricted Subsidiary (or any Person that becomes a
Restricted
<PAGE>
4.3-17
Subsidiary) or an acquisition of Property, (b) the transaction giving rise to
the need to calculate Pro Forma EBITDA is such an Asset Sale, Investment or
acquisition, or (c) since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged with or into the
Company or any Restricted Subsidiary since the beginning of such period) shall
have made such an Asset Sale, Investment or acquisition, EBITDA for such period
shall be calculated after giving pro forma effect to such Asset Sale, Investment
or acquisition as if such Asset Sale, Investment or acquisition occurred on the
first day of such period.
"Property" means, with respect to any Person, any interest of
such Person in any kind of property or asset, whether real, personal or mixed,
or tangible or intangible, including Capital Stock in, and other securities of,
any other Person. For purposes of any calculation required pursuant to this
Indenture, the value of any Property shall be its Fair Market Value.
"Public Equity Offering" means an underwritten public offering
of common stock of the Company pursuant to an effective registration statement
under the Securities Act.
"Purchase Money Debt" means Debt: (a) consisting of the
deferred purchase price of property, conditional sale obligations, obligations
under any title retention agreement, other purchase money obligations and
obligations in respect of industrial revenue bonds, in each case where the
maturity of such Debt does not exceed the anticipated useful life of the
Property being financed, and (b) Incurred to finance the acquisition,
construction or lease by the Company or a Restricted Subsidiary of such
Property, including additions and improvements thereto; provided, however, that
such Debt is Incurred within 180 days after the acquisition, construction or
lease of such Property by the Company or such Restricted Subsidiary.
"Rating Agencies" means Moody's and S&P.
"Rating Decline" means that at least one of the Rating
Agencies shall have rated the Securities below a Designated Rating on, or within
90 days after, the earlier of the date of public announcement of the making of a
Permitted Investment pursuant to clause (j) of the definition thereof or of the
intention of the Company to make such a Permitted Investment (which period shall
be extended so long as either of the Rating Agencies shall have publicly
announced that the rating of the Securities is under consideration for possible
downgrade or for a possible change in rating that does not indicate the
direction of the possible change). For the Company to have "publicly announced"
a Permitted Investment, the Company must have issued a press release and, if the
Company is announcing its intention to make the Permitted Investment, the press
release must include the primary economic terms of the Permitted Investment.
"Refinance" means, in respect of any Debt, to refinance,
extend, renew, refund, repay, prepay, repurchase, redeem, defease or retire, or
to issue other Debt, in exchange or
<PAGE>
4.3-18
replacement for, such Debt. "Refinanced" and "Refinancing" shall
have correlative meanings.
"Related Business" means any business that is related,
ancillary or complementary to the businesses of the Company and the Restricted
Subsidiaries on the Issue Date.
"Repay" means, in respect of any Debt, to repay, prepay,
repurchase, redeem, legally defease or otherwise retire such Debt. "Repayment"
and "Repaid" shall have correlative meanings. For purposes of Section 4.06, Debt
shall be considered to have been Repaid only to the extent the related loan
commitment, if any, shall have been permanently reduced in connection therewith.
"Representative" means the trustee, agent or representative
expressly authorized to act in such capacity, if any, for an issue of Senior
Debt.
"Restricted Payment" means (a) any dividend or distribution
(whether made in cash, securities or other Property) declared or paid on or with
respect to any shares of Capital Stock of the Company or any Restricted
Subsidiary (including any payment in connection with any merger or consolidation
with or into the Company or any Restricted Subsidiary), except for any dividend
or distribution that is made solely to the Company or a Restricted Subsidiary
(and, if such Restricted Subsidiary is not a Wholly Owned Subsidiary, to the
other shareholders of such Restricted Subsidiary on a pro rata basis or on a
basis that results in the receipt by the Company or a Restricted Subsidiary of
dividends or distributions of greater value than it would receive on a pro rata
basis) or any dividend or distribution payable solely in shares of Capital Stock
(other than Disqualified Stock) of the Company; (b) the purchase, repurchase,
redemption, acquisition or retirement for value of any Capital Stock of the
Company or any Restricted Subsidiary (other than from the Company or a
Restricted Subsidiary) or any securities exchangeable for or convertible into
any such Capital Stock, including the exercise of any option to exchange any
Capital Stock (other than for or into Capital Stock of the Company that is not
Disqualified Stock); (c) the purchase, repurchase, redemption, acquisition or
retirement for value, prior to the date for any scheduled maturity, sinking fund
or amortization or other installment payment, of any Subordinated Obligation
(other than the purchase, repurchase or other acquisition of any Subordinated
Obligation purchased in anticipation of satisfying a scheduled maturity, sinking
fund or amortization or other installment obligation, in each case due within
one year of the date of acquisition); or (d) any Investment (other than
Permitted Investments) in any Person.
"Restricted Subsidiary" means any Subsidiary of the Company
unless such Subsidiary is an Unrestricted Subsidiary.
"S&P" means Standard & Poor's Ratings Service or any successor
to the rating agency business thereof.
<PAGE>
4.3-19
"Sale and Leaseback Transaction" means any direct or indirect
arrangement relating to Property now owned or hereafter acquired whereby the
Company or a Restricted Subsidiary transfers such Property to another Person and
the Company or a Restricted Subsidiary leases it from such Person.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as
amended.
"Senior Debt" of the Company means: (a) all obligations
consisting of the principal, premium, if any, and accrued and unpaid interest
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company to the extent
post-filing interest is allowed in such proceeding) in respect of: (1) Debt of
the Company for borrowed money, including under the Credit Facility, and (2)
Debt of the Company evidenced by notes, debentures, bonds or other similar
instruments permitted under this Indenture for the payment of which the Company
is responsible or liable; (b) all Capital Lease Obligations of the Company and
all Attributable Debt in respect of Sale and Leaseback Transactions entered into
by the Company; (c) all obligations of the Company (1) for the reimbursement of
any obligor on any letter of credit, bankers' acceptance or similar credit
transaction, (2) under Hedging Obligations, or (3) issued or assumed as the
deferred purchase price of Property and all conditional sale obligations of the
Company and all obligations under any title retention agreement permitted under
this Indenture; and (d) all obligations of other Persons of the type referred to
in clauses (a), (b) and (c) for the payment of which the Company is responsible
or liable as Guarantor; provided, however, that Senior Debt shall not include:
(A) Debt of the Company that is by its terms subordinate or pari passu in right
of payment to the Securities, including any Senior Subordinated Debt or any
Subordinated Obligations; (B) any Debt Incurred in violation of the provisions
of this Indenture; (C) accounts payable or any other obligations of the Company
to trade creditors created or assumed by the Company in the ordinary course of
business in connection with the obtaining of materials or services (including
Guarantees thereof or instruments evidencing such liabilities); (D) any
liability for Federal, state, local or other taxes owed or owing by the Company;
(E) any obligation of the Company to any Subsidiary; or (F) any obligations with
respect to any Capital Stock of the Company. "Senior Debt" of any Subsidiary
Guarantor has a correlative meaning.
"Senior Subordinated Debt" of the Company means the Securities
and any other subordinated Debt of the Company that specifically provides that
such Debt is to rank pari passu with the Securities and is not subordinated by
its terms to any other subordinated Debt or other obligation of the Company
which is not Senior Debt. "Senior Subordinated Debt" of any Subsidiary Guarantor
has a correlative meaning.
"Significant Subsidiary" means any Subsidiary that
would be a "Significant Subsidiary" of the Company within the
<PAGE>
4.3-20
meaning of Rule 1-02 under Regulation S-X promulgated by the
Commission.
"SNG Interest" means (1) an approximate 40% interest in
Superstar/Netlink Group L.L.C. and (2) Netlink USA's Temporary
Cash Investments.
"SNG-Netlink" means LMC Netlink, Inc., Westlink, Inc.
and Netlink USA (excluding, subject to the last paragraph of
Section 4.10, the D6/SMATV Interest).
"Stated Maturity" means, with respect to any security, the
date specified in such security as the fixed date on which the payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency beyond the control of the issuer unless such
contingency has occurred).
"Subordinated Obligation" means any Debt of the Company or any
Subsidiary Guarantor (whether outstanding on the Issue Date or thereafter
Incurred) that is subordinate or junior in right of payment to the Securities or
the applicable Subsidiary Guaranty pursuant to a written agreement to that
effect.
"Subsidiary" means, in respect of any Person, any corporation,
company (including any limited liability company), association, partnership,
joint venture or other business entity of which a majority of the total voting
power of the Voting Stock is at the time owned or controlled, directly or
indirectly, by: (a) such Person, (b) such Person and one or more Subsidiaries of
such Person, or (c) one or more Subsidiaries of such Person.
"Subsidiary Guarantor" means each Restricted Subsidiary of the
Company as of the Issue Date and any other Person that becomes a Subsidiary
Guarantor pursuant to Section 4.12 (except if such Restricted Subsidiary or
Person is a Non-Guarantor Subsidiary).
"Subsidiary Guaranty" means a Guarantee on the terms set forth
in this Indenture by a Subsidiary Guarantor of the Company's obligations with
respect to the Securities.
"Temporary Cash Investments" means any of the following: (a)
Investments in U.S. Government Obligations maturing within 365 days of the date
of acquisition thereof; (b) Investments in time deposit accounts, certificates
of deposit and money market deposits maturing within 90 days of the date of
acquisition thereof issued by a bank or trust company organized under the laws
of the United States of America or any state thereof having capital, surplus and
undivided profits aggregating in excess of $500 million and whose long-term debt
is rated "A-3" or "A-" or higher according to Moody's or S&P (or such similar
equivalent rating by at least one "nationally recognized statistical rating
organization" (as defined in Rule 436 under the Securities Act)); (c) repurchase
obligations with a term of not
<PAGE>
4.3-21
more than 30 days for underlying securities of the types described in clause (a)
entered into with: (1) a bank meeting the qualifications described in clause (b)
above, or (2) any primary government securities dealer reporting to the Market
Reports Division of the Federal Reserve Bank of New York; (d) Investments in
commercial paper, maturing not more than 90 days after the date of acquisition,
issued by a corporation (other than an Affiliate of the Company) organized and
in existence under the laws of the United States of America with a rating at the
time as of which any Investment therein is made of "P-1" (or higher) according
to Moody's or "A-1" (or higher) according to S&P (or such similar equivalent
rating by at least one "nationally recognized statistical rating organization"
(as defined in Rule 436 under the Securities Act)); and (e) direct obligations
(or certificates representing an ownership interest in such obligations) of any
state of the United States of America (including any agency or instrumentality
thereof) for the payment of which the full faith and credit of such state
(including any agency or instrumentality thereof) is pledged and which are not
callable or redeemable at the issuer's option, provided that: (1) the long-term
debt of such state is rated "A-3" or "A-" or higher according to Moody's or S&P
(or such similar equivalent rating by at least one "nationally recognized
statistical rating organization" (as defined in Rule 436 under the Securities
Act)), and (2) such obligations mature within 180 days of the date of
acquisition thereof.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in effect on the date of this Indenture; provided, however,
that, in the event the TIA is amended after such date, "Trust Indenture Act"
means, to the extent required by any such amendments, the Trust Indenture Act of
1939 as so amended.
"Trustee" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor.
"Trust Officer" means any officer within the Corporate Trust
Administration department of the Trustee (or any successor group of the trustee)
with direct responsibility for the administration of this Indenture and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of his knowledge of and familiarity with
the particular subject.
"Uniform Commercial Code" means the New York Uniform
Commercial Code as in effect from time to time.
"Unrestricted Subsidiary" means: (a) the Initial Unrestricted
Subsidiaries; (b) any Subsidiary of the Company that is designated after the
Issue Date as an Unrestricted Subsidiary as permitted or required pursuant to
Section 4.10 hereof and not thereafter redesignated as a Restricted Subsidiary
as permitted pursuant thereto; and (c) any Subsidiary of an Unrestricted
Subsidiary.
<PAGE>
4.3-22
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"Voting Stock" of any Person means all classes of Capital
Stock or other interests (including partnership interests) of such Person then
outstanding and normally entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof.
"Wholly Owned Subsidiary" means, at any time, a Restricted
Subsidiary all the Voting Stock of which (except directors' qualifying shares)
is at such time owned, directly or indirectly, by the Company and its other
Wholly Owned Subsidiaries.
SECTION 1.02. Other Definitions.
Defined in
Term Section
"Affiliate Transaction"............................... 4.08
"Allocable Excess Proceeds"........................... 4.06
"Bankruptcy Law"...................................... 6.01
"Change of Control Offer"............................. 4.11
"Change of Control Payment Date"...................... 4.11
"Change of Control Purchase Price".................... 4.11
"Claiming Guarantor".................................. 11.02
"Contributing Party".................................. 11.02
"covenant defeasance option".......................... 8.01
"Custodian"........................................... 6.01
"Events of Default"................................... 6.01
"Excess Proceeds"..................................... 4.06
"Exchange Security"................................... Appendix A
"Global Security"..................................... Appendix A
"legal defeasance option"............................. 8.01
"Legal Holiday"....................................... 13.08
"Notice of Default"................................... 6.01
"Obligations"......................................... 11.01
"Offer Amount"........................................ 4.06
"Offer Period"........................................ 4.06
"pay its Subsidiary Guaranty"......................... 12.03
"pay the Securities".................................. 10.03
"Paying Agent"........................................ 2.03
<PAGE>
4.3-23
"Payment Blockage Notice"............................. 10.03
"Payment Blockage Period"............................. 10.03
"Permitted Debt"...................................... 4.03
"Prepayment Offer".................................... 4.06
"Purchase Date"....................................... 4.06
"Registered Exchange Offer............................ Appendix A
"Registrar"........................................... 2.03
"Shelf Registration Statement......................... Appendix A
"SNG-Netlink Option".................................. 4.10
"Surviving Person".................................... 5.01
"Suspended Covenants.................................. 4.14
SECTION 1.03. Incorporation by Reference of Trust Indenture
Act. This Indenture is subject to the mandatory provisions of the TIA, which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities and the
Subsidiary Guarantees.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means
the Trustee.
"obligor" on the indenture securities means the Company, each
Subsidiary Guarantor and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
SECTION 1.04. Rules of Construction. Unless the
context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
<PAGE>
4.3-24
(5) words in the singular include the plural and words
in the plural include the singular;
(6) unsecured Debt shall not be deemed to be subordinate or
junior to secured Debt merely by virtue of its nature as unsecured
Debt;
(7) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal amount thereof
that would be shown on a balance sheet of the issuer dated such date
prepared in accordance with GAAP; and
(8) the principal amount of any Preferred Stock shall be the
greater of (i) the maximum liquidation value of such Preferred Stock or
(ii) the maximum mandatory redemption or mandatory repurchase price
with respect to such Preferred Stock.
ARTICLE II
The Securities
SECTION 2.01. Form and Dating. Provisions relating to the
Initial Securities and the Exchange Securities are set forth in Appendix A,
which is hereby incorporated in and expressly made part of this Indenture. The
Initial Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit 1 to Appendix A which is hereby
incorporated in and expressly made a part of this Indenture. The Exchange
Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A, which is hereby incorporated in and
expressly made a part of this Indenture. The Securities may have notations,
legends or endorsements required by law, stock exchange rule, agreements to
which the Company is sub ject, if any, or usage, provided that any such
notation, legend or endorsement is in a form reasonably acceptable to the
Company. Each Security shall be dated the date of its authentication. The terms
of the Securities set forth in Exhibit 1 to Appendix A and Exhibit A are part of
the terms of this Indenture.
SECTION 2.02. Execution and Authentication. Two Officers shall
sign the Securities for the Company by manual or facsimile signature. The
Company's seal shall be impressed, affixed, imprinted or reproduced on the
Securities and may be in facsimile form.
If an Officer whose signature is on a Security no longer holds
that office at the time the Trustee authenticates the Security, the Security
shall be valid nevertheless.
At any time after the execution and delivery of this
Indenture, the Company may deliver Securities executed by the Company to the
Trustee for authentication, together with a written order of the Company in the
form of an Officers' Certificate for the authentication and delivery of such
Securities, and the
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4.3-25
Trustee in accordance with such written order of the Company shall authenticate
and deliver such Securities.
A Security shall not be valid until an authorized signatory of
the Trustee manually signs the certificate of authentication on the Security.
The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Securities. Unless limited by the
terms of such appointment, an authenticating agent may authenticate Securities
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 any Registrar, Paying Agent or agent
for service of notices and demands.
SECTION 2.03. Registrar and Paying Agent. The Company shall
maintain an office or agency where Securities may be presented for registration
of transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Registrar
shall keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement
with any Registrar, Paying Agent or co-registrar not a party to this Indenture,
which shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07. The
Company or any of its domestically incorporated Wholly Owned Subsidiaries may
act as Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and
Paying Agent in connection with the Securities.
SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to
each due date of the principal and interest on any Security, the Company shall
deposit with the Paying Agent a sum sufficient to pay such principal and
interest when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of Securityholders or the Trustee all money held by the
Paying Agent for the payment of principal of or interest on the Securities and
shall notify the Trustee of any default by the Company in making any such
payment. If the Company or a Wholly Owned Subsidiary acts as Paying Agent, it
shall segregate the money held by it as Paying Agent and hold it as a separate
trust fund. The Company at any time may require a Paying
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4.3-26
Agent to pay all money held by it to the Trustee and to account for any funds
disbursed by the Paying Agent. Upon complying with this Section, the Paying
Agent shall have no further liability for the money delivered to the Trustee.
SECTION 2.05. Securityholder 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 Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Securityholders.
SECTION 2.06. Replacement Securities. If a mutilated Security
is surrendered to the Registrar or if the Holder of a Security claims that such
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies
any other reasonable requirements of the Trustee. If required by the Trustee or
the Company, such Holder shall furnish an indemnity bond sufficient in the
judgment of the Company and the Trustee to protect the Company, the Trustee, the
Paying Agent, the Registrar and any co-registrar from any loss which any of them
may suffer if a Security is replaced. The Company and the Trustee may charge the
Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.07. Outstanding Securities. Securities outstanding
at any time are all Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancelation and those described in
this Section as not outstanding. A Security does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.06, it ceases
to be outstanding unless the Trustee and the Company receive proof satisfactory
to them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a redemption date or maturity date money
sufficient to pay all principal and interest payable on that date with respect
to the Securities (or portions thereof) to be redeemed or maturing, as the case
may be, and the Paying Agent is not prohibited from paying such money to the
Securityholders on that date pursuant to the terms of this Indenture, then on
and after that date such Securities (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.08. Temporary Securities. Until definitive
Securities are ready for delivery, the Company may prepare and the
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4.3-27
Trustee shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of definitive Securities but may have variations that
the Company considers appropriate for temporary Securities. Without unreasonable
delay, the Company shall prepare and the Trustee shall authenticate definitive
Securities and deliver them in exchange for temporary Securities.
SECTION 2.09. Cancelation. The Company at any time may deliver
Securities to the Trustee for cancelation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel and
dispose of in its customary manner (subject to the record reten tion
requirements of the Exchange Act) all Securities surrendered for registration of
transfer, exchange, payment or cancelation and deliver a certificate of such
destruction to the Company unless the Company directs the Trustee to deliver
canceled Securities to the Company. The Company may not issue new Securities to
replace Securities it has redeemed, paid or delivered to the Trustee for
cancelation.
SECTION 2.10. Defaulted Interest. If the Company defaults in a
payment of interest on the Securities, the Company shall pay the defaulted
interest (plus interest on such defaulted interest to the extent lawful) in any
lawful manner. The Company may pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date. The Company shall fix or
cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
SECTION 2.11. CUSIP Numbers. The Company in issuing the
Securities may use "CUSIP" numbers (if then generally in use) and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided, however, that neither the Company nor the Trustee shall have
any responsibility for any defect in the "CUSIP" number that appears on any
Security, check, advice of payment or redemption notice, and any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company shall promptly notify
the Trustee in the event of any change in the CUSIP numbers.
ARTICLE III
Redemption
SECTION 3.01. Notices to Trustee. If the Company
elects to redeem Securities pursuant to paragraph 5 of the
Securities, it shall notify the Trustee in writing of the
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4.3-28
redemption date, the principal amount of Securities to be redeemed and that such
redemption is being made pursuant to paragraph 5 of the Securities.
The Company shall give each notice to the Trustee provided for
in this Section at least 45 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein.
SECTION 3.02. Selection of Securities To Be Redeemed. If fewer
than all the Securities are to be redeemed, the Trustee shall select the
Securities to be redeemed pro rata or by lot or by a method that complies with
applicable legal and securities exchange requirements, if any, and that the
Trustee considers fair and appropriate and in accordance with methods generally
used at the time of selection by fiduciaries in similar circumstances. The
Trustee shall make the selection from outstanding Securities not previously
called for redemption. The Trustee may select for redemption portions of the
principal of Securities that have denominations larger than $1,000. Securities
and portions of them the Trustee selects shall be in amounts of $1,000 or a
whole multiple of $1,000. Provisions of this Indenture that apply to Securities
called for redemption also apply to portions of Securities called for
redemption. The Trustee shall notify the Company promptly of the Securities or
portions of Securities to be redeemed.
SECTION 3.03. Notice of Redemption. At least 30 days but not
more than 60 days before a date for redemption of Securities, the Company shall
mail a notice of redemption by first-class mail to each Holder of Securities to
be redeemed.
The notice shall identify the Securities (including CUSIP
numbers) to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be
surrendered to the Paying Agent to collect the redemption
price;
(5) if fewer than all the outstanding Securities are to
be redeemed, the identification and principal amounts of the
particular Securities to be redeemed;
(6) that, unless the Company defaults in making such
redemption payment or the Paying Agent is prohibited from making such
payment pursuant to the terms of this Indenture, interest on Securities
(or portion thereof) called for redemption ceases to accrue on and
after the redemption date; and
<PAGE>
4.3-29
(7) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Securities.
At the Company's written request, the Trustee shall give the
notice of redemption in the Company's name and at the Company's expense. In such
event, the Company shall provide the Trustee with the information required by
this Section at least 45 days before the redemption date.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment date that is on or prior to
the date of redemption). Failure to give notice or any defect in the notice to
any Holder shall not affect the validity of the notice to any other Holder.
SECTION 3.05. Deposit of Redemption Price. Prior to the
redemption date, the Company shall deposit with the Paying Agent (or, if the
Company or a Wholly Owned Subsidiary is the Paying Agent, shall segregate and
hold in trust) money sufficient to pay the redemption price of and accrued
interest (subject to the right of Holders of record on the relevant record date
to receive interest due on the related interest payment date that is on or prior
to the date of redemption) on all Securities to be redeemed on that date other
than Securities or portions of Securities called for redemption that have been
delivered by the Company to the Trustee for cancelation.
SECTION 3.06. Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
ARTICLE IV
Covenants
SECTION 4.01. Payment of Securities. The Company shall
promptly pay the principal of and interest on the Securities on the dates and in
the manner provided in the Securities and in this Indenture. Principal and
interest shall be considered paid on the date due if on such date the Trustee or
the Paying Agent holds in accordance with this Indenture money sufficient to pay
all principal and interest then due and the Trustee or the Paying Agent, as the
case may be, is not prohibited from paying such money to the Securityholders on
that date pursuant to the terms of this Indenture.
<PAGE>
4.3-30
The Company shall pay interest on overdue principal at the
rate specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the rate borne by the Securities to the extent
lawful.
SECTION 4.02. SEC Reports. Notwithstanding that the Company
may not be subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, the Company shall file with the Commission and provide the Trustee
and Holders of Securities with such annual reports and such information,
documents and other reports as are specified in Sections 13 and 15(d) of the
Exchange Act and applicable to a U.S. corporation subject to such Sections, such
information, documents and reports to be so filed and provided at the times
specified for the filing of such information, documents and reports under such
Sections; provided, however, that the Company shall not be so obligated to file
such information, documents and reports with the Commission if the Commission
does not permit such filings. In addition, at such times as information is
delivered as required by the immediately preceding sentence, the Company shall
provide to the Trustee and the Holders of the Securities (i) the same line-item
financial information (excluding the ratio of earnings to fixed charges and the
line items from the statement of cash flows) on a consolidated basis (excluding
the Unrestricted Subsidiaries) with respect to the Company and its Restricted
Subsidiaries as set forth under the caption "Selected Historical Financial
Data--United Video Satellite Group, Inc." in the Offering Memorandum and (ii)
segment reporting information for its businesses. Delivery of such reports,
information and documents to the Trustee is for informational purposes only and
the Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).
SECTION 4.03. Limitation on Debt. The Company shall not, and
shall not permit any Restricted Subsidiary to, Incur, directly or indirectly,
any Debt unless, after giving effect to the application of the proceeds thereof,
no Default or Event of Default would occur as a consequence of such Incurrence
or be continuing following such Incurrence and either:
(1) such Debt is Debt of the Company or a Subsidiary Guarantor and
after giving effect to the Incurrence of such Debt and the
application of the proceeds thereof, the Leverage Ratio of the
Company and the Restricted Subsidiaries (on a consolidated
basis) would not exceed 7.0 to 1, or
(2) such Debt is Permitted Debt.
The term "Permitted Debt" means: (a) Debt of the Company
evidenced by the Securities and of Subsidiary Guarantors evidenced by Subsidiary
Guaranties; (b) Debt of the Company or a Subsidiary Guarantor under the Credit
Facility, provided that the aggregate principal amount of all such Debt under
the Credit
<PAGE>
4.3-31
Facility at any one time outstanding shall not exceed $600 million, which amount
shall be permanently reduced by the amount of Net Available Cash used to Repay
Debt under the Credit Facility, and not subsequently reinvested in Additional
Assets or used to purchase Securities or Repay other Debt, pursuant to Section
4.06 hereof; (c) Debt in respect of Capital Lease Obligations or Purchase Money
Debt of the Company or a Subsidiary Guarantor, provided that: (1) the aggregate
principal amount of such Debt does not exceed the Fair Market Value (on the date
of the Incurrence thereof) of the Property acquired, constructed or leased, and
(2) the aggregate principal amount of all Debt Incurred and then outstanding
pursuant to this clause (c) (together with all Permitted Refinancing Debt
Incurred and then outstanding in respect of Debt previously Incurred pursuant to
this clause (c)) does not exceed $75 million; (d) Debt of the Company owing to
and held by any Wholly Owned Subsidiary and Debt of a Restricted Subsidiary
owing to and held by the Company or any Wholly Owned Subsidiary; provided,
however, that any subsequent issue or transfer of Capital Stock or other event
that results in any such Wholly Owned Subsidiary ceasing to be a Wholly Owned
Subsidiary or any subsequent transfer of any such Debt (except to the Company or
a Wholly Owned Subsidiary) shall be deemed, in each case, to constitute the
Incurrence of such Debt by the issuer thereof; (e) Debt under Interest Rate
Agreements and Currency Exchange Protection Agreements entered into by the
Company or a Restricted Subsidiary for the purpose of limiting risk in the
ordinary course of the financial management of the Company or such Restricted
Subsidiary and not for speculative purposes, provided that the obligations under
such agreements are directly related to payment obligations on Debt otherwise
permitted by the terms of this covenant; (f) Debt in connection with one or more
standby letters of credit or performance bonds issued by the Company or a
Restricted Subsidiary in the ordinary course of business or pursuant to
self-insurance obligations and not in connection with the borrowing of money or
the obtaining of advances or credit; (g) Debt of the Company or any Restricted
Subsidiary outstanding on the Issue Date not otherwise described in clauses (a)
through (f) above; (h) Debt of the Company or a Subsidiary Guarantor in an
aggregate principal amount outstanding at any one time not to exceed $150
million; and (i) Permitted Refinancing Debt Incurred in respect of Debt Incurred
pursuant to clause (1) of the first paragraph of this Section 4.03 and clauses
(a), (c) and (g) above.
Notwithstanding anything to the contrary contained in
this Section 4.03,
(a) the Company shall not, and shall not permit any Subsidiary
Guarantor to, Incur any Debt pursuant to this Section 4.03 if
the proceeds thereof are used, directly or indirectly, to
Refinance:
(1) any Subordinated Obligations unless such new Debt
shall be subordinated to the Securities or the
applicable Subsidiary Guaranty, as the case may be,
to at least the same extent as such Subordinated
Obligations, or
<PAGE>
4.3-32
(2) any Senior Subordinated Debt unless such new Debt
shall be Senior Subordinated Debt or shall be
subordinated to the Securities or the applicable
Subsidiary Guaranty, as the case may be, and
(b) the Company shall not permit any Non-Guarantor Subsidiary to
Incur any Debt pursuant to this Section 4.03 if the proceeds
thereof are used, directly or indirectly, to Refinance any
Subordinated Obligations or Senior Subordinated Debt of the
Company or any Subsidiary Guarantor.
SECTION 4.04. Limitation on Restricted Payments. The
Company shall not make, and shall not permit any Restricted
Subsidiary to make, directly or indirectly, any Restricted Payment
if at the time of, and after giving effect to, such proposed
Restricted Payment,
(a) a Default or Event of Default shall have occurred and
be continuing,
(b) the Company could not Incur at least $1.00 of additional Debt
pursuant to clause (1) of the first paragraph of Section 4.03,
or
(c) the aggregate amount of such Restricted Payment and all other
Restricted Payments declared or made since the Issue Date (the
amount of any Restricted Payment, if made other than in cash,
to be based upon Fair Market Value) would exceed an amount
equal to the sum of:
(1) the result of:
(A) Cumulative EBITDA, minus
(B) the product of 1.5 and Cumulative Interest
Expense, plus
(2) Capital Stock Sale Proceeds (other than Capital Stock
Sale Proceeds used to make a Permitted Investment
pursuant to clause (i) of the definition thereof),
plus
(3) the sum of:
(A) the aggregate net cash proceeds received by
the Company or any Restricted Subsidiary
from the issuance or sale after the Issue
Date of convertible or exchangeable Debt
that has been converted into or exchanged
for Capital Stock (other than Disqualified
Stock) of the Company, and
(B) the aggregate amount by which Debt (other
than Subordinated Obligations) of the
Company or any Restricted Subsidiary is
reduced on the Company's consolidated
<PAGE>
4.3-33
balance sheet on or after the Issue Date
upon the conversion or exchange of any Debt
issued or sold on or prior to the Issue Date
into Capital Stock (other than Disqualified
Stock) of the Company,
excluding, in the case of clause (A) or (B):
(x) any such Debt issued or sold to the
Company or a Subsidiary of the
Company or an employee stock
ownership plan or trust established
by the Company or any such
Subsidiary for the benefit of their
employees, and
(y) the aggregate amount of any cash or
other Property distributed by the
Company or any Restricted Subsidiary
upon any such conversion or
exchange,
plus
(4) an amount equal to the sum of:
(A) the net reduction in Investments in any
Person (other than the Company, a Restricted
Subsidiary or, with respect to any
Investment made on or prior to the Issue
Date, an Initial Unrestricted Subsidiary)
resulting from dividends, repayments of
loans or advances or other transfers of
Property, in each case to the Company or any
Restricted Subsidiary from such Person, plus
(B) the portion (proportionate to the Company's
equity interest in such Unrestricted
Subsidiary) of the Fair Market Value of the
net assets of an Unrestricted Subsidiary
(other than the Initial Unrestricted
Subsidiaries) at the time such Unrestricted
Subsidiary is designated a Restricted
Subsidiary; provided, however, that the
foregoing sum shall not exceed, in the case
of any Person, the amount of Investments
previously made (and treated as a Restricted
Payment) by the Company or any Restricted
Subsidiary in such Person.
Notwithstanding the foregoing limitation, the Company may:
(a) pay dividends on its Capital Stock within 60 days of the
declaration thereof if, on said declaration date, such
dividends could have been paid in compliance with this
Indenture; provided, however, that such dividend shall be
included in the calculation of the amount of Restricted
Payments;
<PAGE>
4.3-34
(b) purchase, repurchase, redeem, legally defease, acquire
or retire for value Capital Stock of the Company or
Subordinated Obligations in exchange for, or out of the
proceeds of the substantially concurrent sale of,
Capital Stock of the Company (other than Disqualified
Stock and other than Capital Stock issued or sold to a
Subsidiary of the Company or an employee stock
ownership plan or trust established by the Company or
any such Subsidiary for the benefit of their
employees); provided, however, that:
(1) such purchase, repurchase, redemption, legal
defeasance, acquisition or retirement shall be
excluded in the calculation of the amount of
Restricted Payments, and
(2) the Capital Stock Sale Proceeds from such exchange or
sale (i) shall be excluded from the calculation
pursuant to clause (c)(2) of the immediately
preceding paragraph and (ii) shall not be used to
make Investments pursuant to clause (i) of the
definition of Permitted Investments;
(c) purchase, repurchase, redeem, legally defease, acquire
or retire for value any Subordinated Obligations in
exchange for, or out of the proceeds of the
substantially concurrent sale of, Permitted Refinancing
Debt; provided, however, that such purchase,
repurchase, redemption, legal defeasance, acquisition
or retirement shall be excluded in the calculation of
the amount of Restricted Payments; and
(d) repurchase shares of, or options to purchase shares of,
common stock of the Company or any of its Subsidiaries
from current or former officers, directors or employees
of the Company or any of its Subsidiaries (or permitted
transferees of such current or former officers,
directors or employees), pursuant to the terms of
agreements (including employment agreements) or plans
(or amendments thereto) approved by the Board of
Directors under which such individuals purchase or
sell, or are granted the option to purchase or sell,
shares of such common stock; provided, however, that:
(1) the aggregate amount of such repurchases shall not
exceed $3 million in any calendar year, and
(2) at the time of such repurchase, no other Default or
Event of Default shall have occurred and be
continuing (or result therefrom);
provided further, however, that such repurchases shall be
included in the calculation of the amount of Restricted
Payments.
SECTION 4.05. Limitation on Liens. The Company shall
not, and shall not permit any Restricted Subsidiary to, directly
<PAGE>
4.3-35
or indirectly, Incur or suffer to exist, any Lien (other than Permitted Liens or
Liens securing Senior Debt) upon any of its Property (including Capital Stock of
a Restricted Subsidiary), whether owned at the Issue Date or thereafter
acquired, or any interest therein or any income or profits therefrom, unless:
(a) if such Lien secures Senior Subordinated Debt, the Securities
or the applicable Subsidiary Guaranty are secured on an equal
and ratable basis with such Debt, and
(b) if such Lien secures Subordinated Obligations, such Lien shall
be subordinated to a Lien securing the Securities or the
applicable Subsidiary Guaranty in the same Property as that
securing such Lien to the same extent as such Subordinated
Obligations are subordinated to the Securities and the
Subsidiary Guaranties.
SECTION 4.06. Limitation on Asset Sales. (a) The
Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, consummate any Asset Sale unless:
(1) after giving effect to such Asset Sale, no Default or Event of
Default would occur as a result thereof;
(2) the Company or such Restricted Subsidiary receives
consideration at the time of such Asset Sale at least equal to
the Fair Market Value of the Property subject to such Asset
Sale;
(3) at least 75% of the consideration paid to the Company
or such Restricted Subsidiary in connection with such
Asset Sale is in the form of (A) cash or cash
equivalents, (B) notes, obligations or other securities
(debt or equity) that are converted by the Company or
such Restricted Subsidiary into cash within 90 days of
the date of such Asset Sale, (C) Additional Assets, (D)
the assumption of Priority Debt (as a result of which
the Company and the Restricted Subsidiaries are no
longer liable with respect to such Priority Debt) or
(E) any combination of the foregoing; and
(4) the Company delivers an Officers' Certificate to the Trustee
certifying that such Asset Sale complies with the foregoing
clauses (1), (2) and (3).
(b) The Net Available Cash (or any portion thereof) from Asset Sales
may be applied by the Company or a Restricted Subsidiary, to the extent the
Company or such Restricted Subsidiary elects (or is required by the terms of any
Debt):
(1) to Repay Priority Debt; or
(2) to reinvest in Additional Assets (including by means of
an Investment in Additional Assets by a Restricted
<PAGE>
4.3-36
Subsidiary with Net Available Cash received by the Company or
another Restricted Subsidiary).
Pending final application of any such Net Available Cash, the Company may
temporarily reduce revolving credit borrowings or otherwise invest such Net
Available Cash in any Temporary Cash Investments that are not prohibited by this
Indenture.
(c) Any Net Available Cash from an Asset Sale not applied in accordance
with Section 4.06(b) within 18 months from the date of the receipt of such Net
Available Cash shall constitute "Excess Proceeds". When the aggregate amount of
Excess Proceeds exceeds $20 million (taking into account income earned on such
Excess Proceeds, if any), the Company will be required to make an offer to
purchase (the "Prepayment Offer") the Securities which offer shall be in the
amount of the Allocable Excess Proceeds, on a pro rata basis according to
principal amount, at a purchase price equal to 100% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the purchase date (subject
to the right of holders of record on the relevant record date to receive
interest due on the relevant interest payment date), in accordance with the
procedures (including prorating in the event of oversubscription) set forth
below. To the extent that any portion of the amount of Net Available Cash
remains after compliance with the preceding sentence and provided that all
holders of Securities have been given the opportunity to tender their Securities
for purchase in accordance with this Section 4.06, the Company or such
Restricted Subsidiary may use such remaining amount for any purpose permitted by
this Indenture and the amount of Excess Proceeds will be reset to zero.
The term "Allocable Excess Proceeds" means the product of:
(a) the Excess Proceeds, and
(b) a fraction,
(1) the numerator of which is the aggregate principal
amount of the Securities outstanding on the date
of the Prepayment Offer, and
(2) the denominator of which is the sum of the aggregate
principal amount of the Securities outstanding on the
date of the Prepayment Offer and the aggregate
principal amount of other Debt of the Company
outstanding on the date of the Prepayment Offer that
is pari passu in right of payment with the Securities
and subject to terms and conditions in respect of
Asset Sales similar in all material respects to this
Section 4.06 and requiring the Company to make an
offer to purchase such Debt at substantially the same
time as the Prepayment Offer.
(d)(1) Within five business days after the Company is
obligated to make a Prepayment Offer as described in this
<PAGE>
4.3-37
Section 4.06, the Company shall send a written notice, by first-class mail, to
the holders of Securities, accompanied by such information regarding the Company
and its Subsidiaries as the Company in good faith believes will enable such
holders to make an informed decision with respect to such Prepayment Offer. Such
notice shall state, among other things, the purchase price and the purchase
date, which shall be, subject to any contrary requirements of applicable law, a
Business Day no earlier than 30 days nor later than 60 days from the date such
notice is mailed (the "Purchase Date").
(2) Not later than the date upon which written notice of a Prepayment
Offer is delivered to the Trustee as provided above, the Company shall deliver
to the Trustee an Officers' Certificate as to (i) the amount of the Prepayment
Offer (the "Offer Amount"), (ii) the allocation of the Net Available Cash from
the Asset Sales pursuant to which such Prepayment Offer is being made and (iii)
the compliance of such allocation with the provisions of Section 4.06(b). On or
before the Purchase Date, the Company shall also irrevocably deposit with the
Trustee or with the Paying Agent (or, if the Company or a Wholly Owned
Subsidiary is the Paying Agent, shall segregate and hold in trust) in cash an
amount equal to the Offer Amount to be held for payment in accordance with the
provisions of this Section. Upon the expiration of the period for which the
Prepayment Offer remains open (the "Offer Period"), the Company shall deliver to
the Trustee for cancelation the Securities or portions thereof that have been
properly tendered to and are to be accepted by the Company. The Trustee or the
Paying Agent shall, on the Purchase Date, mail or deliver payment to each
tendering Holder in the amount of the purchase price. In the event that the
aggregate purchase price of the Securities delivered by the Company to the
Trustee is less than the Offer Amount, the Trustee or the Paying Agent shall
deliver the excess to the Company immediately after the expiration of the Offer
Period for application in accordance with this Section.
(3) Holders electing to have a Security purchased shall be required to
surrender the Security, with an appropriate form duly completed, to the Company
or its agent at the address specified in the notice at least three Business Days
prior to the Purchase Date. Holders shall be entitled to withdraw their election
if the Trustee or the Company receives not later than one Business Day prior to
the Purchase Date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Security that was
delivered for purchase by the Holder and a statement that such Holder is
withdrawing its election to have such Security purchased. If at the expiration
of the Offer Period the aggregate principal amount of Securities surrendered by
Holders exceeds the Offer Amount, the Company shall select the Securities to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Securities in denominations of $1,000,
or integral multiples thereof, shall be purchased). Holders whose Securities are
purchased only in part shall be issued new Securities equal in principal amount
to the unpurchased portion of the Securities surrendered.
<PAGE>
4.3-38
(4) At the time the Company delivers Securities to the Trustee that are
to be accepted for purchase, the Company shall also deliver an Officers'
Certificate stating that such Securities are to be accepted by the Company
pursuant to and in accordance with the terms of this Section 4.06. A Security
shall be deemed to have been accepted for purchase at the time the Trustee or
the Paying Agent mails or delivers payment therefor to the surrender ing Holder.
(e) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to the
covenant described hereunder. To the extent that the provisions of any
securities laws or regulations conflict with provisions of the covenant
described hereunder, the Company will comply with the applicable securities laws
and regulations and will not be deemed to have breached its obligations under
the covenant described hereunder by virtue thereof.
SECTION 4.07. Limitation on Restrictions on Distributions from
Restricted Subsidiaries. The Company shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, create or otherwise cause or
suffer to exist any consensual restriction on the right of any Restricted
Subsidiary to:
(a) pay dividends, in cash or otherwise, or make any other
distributions on or in respect of its Capital Stock, or pay
any Debt or other obligation owed, to the Company or any other
Restricted Subsidiary,
(b) make any loans or advances to the Company or any other
Restricted Subsidiary or
(c) transfer any of its Property to the Company or any
other Restricted Subsidiary.
The foregoing limitations will not apply:
(1) with respect to clause (a), (b) or (c), to
restrictions:
(A) in effect on the Issue Date,
(B) relating to Debt of a Restricted Subsidiary
and existing at the time it became a
Restricted Subsidiary if such restriction
was not created in connection with or in
anticipation of the transaction or series of
transactions pursuant to which such
Restricted Subsidiary became a Restricted
Subsidiary or was acquired by the Company,
(C) that result from the Refinancing of Debt
Incurred pursuant to an agreement referred
to in clause (1)(A) or (B) above or in
<PAGE>
4.3-39
clause (2)(A) or (B) below, provided such
restriction is no less favorable to the
holders of Securities than those under the
agreement evidencing the Debt so Refinanced,
or
(D) in the form of supermajority voting, veto or
similar rights held by a Permitted
Interactive Partner in any joint venture or
other Person formed with respect to the
intellectual property used or usable in the
Company's TV Guide Interactive business, and
(2) with respect to clause (c) only, to restrictions:
(A) relating to Debt that is permitted to be
Incurred and secured without also securing
the Securities or the applicable Subsidiary
Guaranty pursuant to Sections 4.03 and 4.05
that limit the right of the debtor to
dispose of the Property securing such Debt,
(B) encumbering Property at the time such
Property was acquired by the Company or any
Restricted Subsidiary, so long as such
restriction relates solely to the Property
so acquired and was not created in
connection with or in anticipation of such
acquisition,
(C) resulting from customary provisions
restricting subletting or assignment of
leases or customary provisions in other
agreements that restrict assignment of such
agreements or rights thereunder, or
(D) customary restrictions contained in asset
sale agreements limiting the transfer of
such Property pending the closing of such
sale.
SECTION 4.08. Limitation on Transactions with Affiliates. The
Company shall not, and shall not permit any Restricted Subsidiary to, directly
or indirectly, conduct any business or enter into or suffer to exist any
transaction or series of transactions (including the purchase, sale, transfer,
assignment, lease, conveyance or exchange of any Property or the rendering of
any service) with, or for the benefit of, any Affiliate of the Company (an
"Affiliate Transaction"), unless:
(a) the terms of such Affiliate Transaction are no less favorable
to the Company or such Restricted Subsidiary, as the case may
be, than those that could be obtained in a comparable
arm's-length transaction with a Person that is not an
Affiliate of the Company,
<PAGE>
4.3-40
(b) if such Affiliate Transaction involves aggregate
payments or value in excess of $20 million, the Board
of Directors (including a majority of the disinterested
members of the Board of Directors) approves such
Affiliate Transaction and, in its good faith judgment,
believes that such Affiliate Transaction complies with
clause (a) above as evidenced by a Board Resolution
promptly delivered to the Trustee, and
(c) if such Affiliate Transaction involves aggregate payments or
value in excess of $40 million, the Company obtains a written
opinion from an Independent Financial Advisor to the effect
that the consideration to be paid or received in connection
with such Affiliate Transaction is fair, from a financial
point of view, to the Company and the Restricted Subsidiaries.
Notwithstanding the foregoing limitation, the Company or any
Restricted Subsidiary may enter into or suffer to exist the following:
(a) any transaction or series of transactions between the
Company and one or more Restricted Subsidiaries or
between two or more Restricted Subsidiaries in the
ordinary course of business, provided that no more than
5% of the total voting power of the Voting Stock (on a
fully diluted basis) of any such Restricted Subsidiary
is owned by an Affiliate of the Company (other than a
Restricted Subsidiary);
(b) any Restricted Payment permitted to be made pursuant to
Section 4.04 hereof or any Permitted Investment;
(c) the payment of compensation (including amounts paid
pursuant to employee benefit plans) for the personal
services of officers, directors and employees of the
Company or any of the Restricted Subsidiaries, so long
as the Board of Directors in good faith shall have
approved the terms thereof and deemed the services
theretofore or thereafter to be performed for such
compensation to be fair consideration therefor;
(d) loans and advances to employees made in the ordinary course of
business and consistent with the past practices of the Company
or such Restricted Subsidiary, as the case may be, provided
that such loans and advances do not exceed $3 million in the
aggregate at any one time outstanding;
(e) any agreement between the Company or any Restricted Subsidiary
on the one hand and a Permitted Holder on the other relating
to the provision of products or services in the ordinary
course of business, provided that such agreement satisfies the
condition set forth in clause (a) of the preceding paragraph;
and
<PAGE>
4.3-41
(f) any transaction or series of transactions pursuant to
any agreement in existence on the Issue Date or any
agreement contemplated as part of or in connection with
the TV Guide Acquisition (as defined in the Offering
Memorandum) (which contemplated agreements are
described under "Certain Relationships and Related
Transactions" in the Offering Memorandum) and, in
either case, any renewal, extension or replacement of
any such agreement on terms no less favorable to the
Company and the Restricted Subsidiaries than the
original agreement.
In addition to the foregoing, the Company shall cause the IP
Subsidiary to maintain the IP Agreements in full force and effect and to comply
with the terms thereof in all material respects (except with respect to any IP
Agreement the counterparty to which is no longer the Company or a Restricted
Subsidiary), provided that the foregoing covenant shall be satisfied if,
following a transfer of all or substantially all the assets of the IP Subsidiary
or a change of control of the IP Subsidiary (whether by merger, consolidation,
stock purchase or otherwise) in connection with which the transferee, successor
or survivor Person assumes the IP Subsidiary's obligations under the IP
Agreements, the Company and the Restricted Subsidiaries take all actions
reasonably necessary to enforce such assumption of obligations against such
Person.
SECTION 4.09. Limitation on Layered Debt. The Company shall
not, and shall not permit any Subsidiary Guarantor to, Incur, directly or
indirectly, any Debt that is subordinate or junior in right of payment to any
Senior Debt unless such Debt is Senior Subordinated Debt or is expressly
subordinated in right of payment to Senior Subordinated Debt. In addition, no
Subsidiary Guarantor shall Guarantee, directly or indirectly, any Debt of the
Company that is subordinate or junior in right of payment to any Senior Debt
unless such Guarantee is expressly subordinate in right of payment to, or ranks
pari passu with, the Subsidiary Guaranty of such Subsidiary Guarantor.
SECTION 4.10. Designation of Subsidiaries. The Board
of Directors may designate any Subsidiary of the Company to be an
Unrestricted Subsidiary or Non-Guarantor Subsidiary if:
(a) the Subsidiary to be so designated does not own any Capital
Stock or Debt of, or own or hold any Lien on any Property of,
the Company or any other Restricted Subsidiary,
(b) no Default or Event of Default shall have occurred and
be continuing or would result therefrom,
(c) in the case of Unrestricted Subsidiaries, the Company would be
permitted to make an Investment at the time of such
designation in an amount equal to the portion (proportionate
to the Company's equity interest in such Subsidiary) of the
Fair Market Value of the net assets of such Subsidiary at such
time, and
<PAGE>
4.3-42
(d) in the case of Non-Guarantor Subsidiaries, the
Subsidiary to be so designated is not a Wholly Owned
Subsidiary.
Unless so designated as an Unrestricted Subsidiary, any Person that becomes a
Subsidiary of the Company will be classified as a Restricted Subsidiary;
provided, however, that such Subsidiary shall not be designated a Restricted
Subsidiary and shall be automatically designated as an Unrestricted Subsidiary
if either of the requirements set forth in clauses (x) and (y) of the third
immediately following paragraph will not be satisfied after giving pro forma
effect to such designation or if such Person is a Subsidiary of an Unrestricted
Subsidiary.
Except as provided in the preceding paragraph, no Restricted
Subsidiary may be designated as an Unrestricted Subsidiary or Non-Guarantor
Subsidiary. In addition, neither the Company nor any Restricted Subsidiary shall
at any time be directly or indirectly liable for any Debt that provides that the
holder thereof may (with the passage of time or notice or both) declare a
default thereon or cause the payment thereof to be accelerated or payable prior
to its Stated Maturity upon the occurrence of a default with respect to any
Debt, Lien or other obligation of any Unrestricted Subsidiary or Non-Guarantor
Subsidiary (including any right to take enforcement action against such
Unrestricted Subsidiary or Non-Guarantor Subsidiary).
Upon designation of a Restricted Subsidiary as an Unrestricted
Subsidiary or Non-Guarantor Subsidiary in compliance with this Section 4.10,
such Restricted Subsidiary shall, by execution and delivery of a supplemental
indenture in form satisfactory to the Trustee, be released from any Subsidiary
Guaranty previously made by such Restricted Subsidiary.
The Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary if, immediately after giving pro forma
effect to such designation,
(x) the Company could Incur at least $1.00 of additional
Debt pursuant to clause (1) of the first paragraph of
Section 4.03 hereof, and
(y) no Default or Event of Default shall have occurred
and be continuing or would result therefrom.
The Board of Directors may designate any Non-Guarantor Subsidiary to be a
Subsidiary Guarantor if concurrently with such designation, such Subsidiary
executes and delivers to the Trustee a Subsidiary Guaranty.
Any such designation or redesignation will be evidenced to the
Trustee by filing with the Trustee a Board Resolution giving effect to such
designation or redesignation and an Officers' Certificate that:
(a) certifies that such designation or redesignation
complies with the foregoing provisions, and
<PAGE>
4.3-43
(b) gives the effective date of such designation or
redesignation, such filing with the Trustee to occur
within 45 days after the end of the fiscal quarter of
the Company in which such designation or redesignation
is made (or, in the case of a designation or
redesignation made during the last fiscal quarter of
the Company's fiscal year, within 90 days after the end
of such fiscal year).
The Company may, at its option (the "SNG-Netlink Option"),
designate SNG-Netlink as an Initial Unrestricted Subsidiary by delivering an
Officers' Certificate to such effect to the Trustee by no later than the 120th
day following the Issue Date. Upon such designation, the Company may contribute
SNG- Netlink to another Initial Unrestricted Subsidiary, and SNG- Netlink will
be treated, for all purposes of this Indenture, as if it had been an Initial
Unrestricted Subsidiary owned by such other Initial Unrestricted Subsidiary
since the Issue Date, and such contribution shall not be subject to any of the
provisions of this Indenture. In the event of such designation, all transactions
and actions taken with respect to SNG-Netlink since the Issue Date shall have
complied with the provisions of this Indenture, including Section 4.08, as if
SNG-Netlink had been an Initial Unrestricted Subsidiary since the Issue Date.
Such designation and contribution will not be subject to the requirements set
forth in this Section 4.10, and the making of such designation and contribution
will not be considered an Investment for purposes of Section 4.04 or an Asset
Sale for purposes of Section 4.06. The Company may, at its option, terminate its
SNG-Netlink Option at any time by delivering an Officers' Certificate to such
effect to the Trustee. Until the earlier of such termination or the 120th day
following the Issue Date, the net income (loss) of SNG- Netlink shall be
excluded from Consolidated Net Income, provided that upon such termination or
120th day, such net income (loss) shall be included (or excluded) in
Consolidated Net Income as if SNG-Netlink had been a Restricted Subsidiary since
the Issue Date, provided further that upon the designation of SNG-Netlink as an
Initial Unrestricted Subsidiary, such net income (loss) shall be included or
excluded in Consolidated Net Income as if SNG-Netlink had been an Initial
Unrestricted Subsidiary since the Issue Date. Except as otherwise provided in
this paragraph, SNG-Netlink shall be considered for all purposes of this
Indenture as a Restricted Subsidiary. Upon designation as an Initial
Unrestricted Subsidiary in compliance with this paragraph, SNG-Netlink shall, by
execution and delivery of a supplemental indenture in form satisfactory to the
Trustee, be released from the Subsidiary Guaranty previously made by
SNG-Netlink.
If, at the time the SNG-Netlink Option is exercised, the
assets of Netlink USA consist of assets other than the SNG Interest and any de
minimis assets, the SNG-Netlink Option shall only be exercisable if Telluride,
Inc., the other partner in Netlink USA, is also designated as an Unrestricted
Subsidiary at such time in accordance with the other paragraphs of this Section
4.10. For purposes of determining the amount of the Investment deemed to be made
upon such designation, the assets of Telluride, Inc. shall be deemed to consist
of the D6/SMATV
<PAGE>
4.3-44
Interest. If, immediately following such designation, the Company contributes
Telluride, Inc. to an Initial Unrestricted Subsidiary, the separate Investments
represented by such contribution and designation will be considered together as
only one Investment for purposes of calculations under this Indenture.
SECTION 4.11. Change of Control. Upon the occurrence of a
Change of Control, each Holder of Securities shall have the right to require the
Company to repurchase all or any part of such Holder's Securities pursuant to
the offer described below (the "Change of Control Offer") at a purchase price
(the "Change of Control Purchase Price") equal to 101.0% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the purchase date (subject
to the right of Holders of record on the relevant record date to receive
interest due on the relevant interest payment date).
Within 30 days following any Change of Control, the Company
shall:
(a) cause a notice of the Change of Control Offer to be sent at
least once to the Dow Jones News Service or similar business
news service in the United States and
(b) send, by first-class mail, with a copy to the Trustee, to each
Holder of Securities, at such Holder's address appearing in
the Security Register, a notice stating:
(1) that a Change of Control has occurred and a Change of
Control Offer is being made pursuant to this Section
4.11 and that all Securities timely tendered will be
accepted for payment;
(2) the Change of Control Purchase Price and the purchase
date, which shall be, subject to any contrary
requirements of applicable law, a Business Day no
earlier than 30 days nor later than 60 days from the
date such notice is mailed (the "Change of Control
Payment Date");
(3) that any Security (or portion thereof) accepted for
payment (and duly paid on the Change of Control
Payment Date) pursuant to the Change of Control Offer
shall cease to accrue interest after the Change of
Control Payment Date;
(4) that any Security (or portions thereof) not properly
tendered will continue to accrue interest;
(5) the circumstances and relevant facts regarding the
Change of Control (including information with respect
to pro forma historical income, cash flow and
capitalization after giving effect to the Change of
Control); and
<PAGE>
4.3-45
(6) the procedures that Holders of Securities must follow
in order to tender their Securities (or portions
thereof) for payment and the procedures that Holders
of Securities must follow in order to withdraw an
election to tender Securities (or portions thereof)
for payment.
Holders electing to have a Security purchased shall be
required to surrender the Security, with an appropriate form duly completed, to
the Company or its agent at the address specified in the notice at least three
Business Days prior to the Change of Control Payment Date. Holders shall be
entitled to withdraw their election if the Trustee or the Company receives not
later than one Business Day prior to the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Security that was delivered for purchase by
the Holder and a statement that such Holder is withdrawing its election to have
such Security purchased.
On or prior to the Change of Control Payment Date, the Company
shall irrevocably deposit with the Trustee or with the Paying Agent (or, if the
Company or any of its Wholly Owned Subsidiaries is acting as the Paying Agent,
segregate and hold in trust) in cash an amount equal to the Change of Control
Purchase Price payable to the Holders entitled thereto, to be held for payment
in accordance with the provisions of this Section 4.11. On the Change of Control
Payment Date, the Company shall deliver to the Trustee the Securities or
portions thereof that have been properly tendered to and are to be accepted by
the Company for payment. The Trustee or the Paying Agent shall, on the Change of
Control Payment Date, mail or deliver payment to each tendering Holder of the
Change of Control Purchase Price. In the event that the aggregate Change of
Control Purchase Price is less than the amount delivered by the Company to the
Trustee or the Paying Agent, the Trustee or the Paying Agent, as the case may
be, shall deliver the excess to the Company immediately after the Change of
Control Payment Date.
The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the purchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or regulations
conflict with the provisions of this Section, the Company will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under this Section by virtue thereof.
SECTION 4.12. Future Subsidiary Guarantors. The Company shall
cause each Person that becomes a Restricted Subsidiary following the Issue Date
to become a Subsidiary Guarantor by causing such Person to execute and deliver
to the Trustee a Supplemental Indenture as provided in Section 11.06 at the time
such Person becomes a Restricted Subsidiary (unless such Person is a
Non-Guarantor Subsidiary).
<PAGE>
4.3-46
SECTION 4.13. Maintenance of Non-Investment Company Status.
The Company shall not at any time be or become an "investment company"
registered or required to be registered under the Investment Company Act of
1940, as amended, or any successor law, rule or regulation.
SECTION 4.14. Compliance Certificate. The Company shall
deliver to the Trustee within 120 days after the end of each fiscal year of the
Company an Officers' Certificate stating that in the course of the performance
by the signers of their duties as Officers of the Company they would normally
have knowledge of any Default and whether or not the signers know of any Default
that occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company and the Subsidiary Guarantors also shall
comply with TIA ss. 314(a)(4).
SECTION 4.15. Covenant Suspension. During any period
of time that:
(a) the Securities have Investment Grade Ratings from both
Rating Agencies, and
(b) no Default or Event of Default has occurred and is
continuing under this Indenture,
the Company and the Restricted Subsidiaries will not be subject to the covenants
contained in Sections 4.03, 4.04, 4.06, 4.07, 4.08, 5.01(a)(5) and 5.02(a)(5),
and clause (x) of the fourth paragraph (and such clause (x) as referred to in
the first paragraph) of Section 4.10 (collectively, the "Suspended Covenants").
If the Company and the Restricted Subsidiaries are not subject to the Suspended
Covenants for any period of time as a result of the preceding sentence and,
subsequently, one or both of the Rating Agencies withdraws its ratings or
downgrades the ratings assigned to the Securities below the required Investment
Grade Ratings or a Default or Event of Default occurs and is continuing, then
the Company and the Restricted Subsidiaries will thereafter again be subject to
the Suspended Covenants and compliance with the Suspended Covenants with respect
to Restricted Payments made after the time of such withdrawal, downgrade,
Default or Event of Default will be calculated in accordance with the terms of
Section 4.04 as though Section 4.04 had been in effect during the entire period
of time from the Issue Date.
Notwithstanding the foregoing, any actions relating to the
consummation of obligations Incurred prior to such withdrawal, downgrade,
Default or Event of Default shall not constitute a breach of any covenant set
forth in this Indenture or cause a Default or Event of Default thereunder,
provided that:
(1) the Company and the Restricted Subsidiaries did not Incur such
obligations in anticipation of a withdrawal or downgrade of
the Securities below an Investment Grade Rating or a Default
or Event of Default, and
<PAGE>
4.3-47
(2) the Company reasonably believed in good faith at the time of
such Incurrence that such Incurrence or related actions would
not result in such a withdrawal, downgrade, Default or Event
of Default.
For purposes of clauses (1) and (2) in the preceding sentence, anticipation and
reasonable belief may be determined by the Company and conclusively evidenced by
a Board Resolution to such effect adopted in good faith by the Board of
Directors of the Company delivered to the Trustee. In reaching their
determination, the Board of Directors may, but need not, consult with the Rating
Agencies.
SECTION 4.16. Further Instruments and Acts. Upon request of
the Trustee, the Company shall execute and deliver such further instruments and
do such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
ARTICLE V
Successor Company
SECTION 5.01. When Company May Merge or Transfer Assets. (a)
The Company shall not merge, consolidate or amalgamate with or into any other
Person (other than a merger of a Wholly Owned Subsidiary into the Company) or
sell, transfer, assign, lease, convey or otherwise dispose of all or
substantially all its Property in any one transaction or series of transactions
unless:
(1) the Company shall be the surviving Person (the
"Surviving Person") or the Surviving Person (if other
than the Company) formed by such merger, consolidation
or amalgamation or to which such sale, transfer,
assignment, lease, conveyance or disposition is made
shall be a corporation or limited liability company
organized and existing under the laws of the United
States of America, any State thereof or the District of
Columbia;
(2) the Surviving Person (if other than the Company)
expressly assumes, by supplemental indenture in form
satisfactory to the Trustee, executed and delivered to
the Trustee by such Surviving Person, the due and
punctual payment of the principal of, and premium, if
any, and interest on, all the Securities, according to
their tenor, and the due and punctual performance and
observance of all the covenants and conditions of this
Indenture to be performed by the Company;
(3) in the case of a sale, transfer, assignment, lease, conveyance
or other disposition of all or substantially all the Property
of the Company, such Property shall have been transferred as
an entirety or virtually as an entirety to one Person;
<PAGE>
4.3-48
(4) immediately before and after giving effect to such
transaction or series of transactions on a pro forma
basis (and, for purposes of this clause (4) and clause
(5) below, (A) treating any Debt that becomes, or is
anticipated to become, an obligation of the Surviving
Person or any Restricted Subsidiary as a result of such
transaction or series of transactions as having been
Incurred by the Surviving Person or such Restricted
Subsidiary at the time of such transaction or series of
transactions and (B) giving pro forma effect to the
Repayment of any Debt in connection with such
transaction or series of transactions), no Default or
Event of Default shall have occurred and be continuing;
(5) immediately after giving effect to such transaction or
series of transactions and to the Repayment of any Debt
in connection with such transaction or series of
transactions on a pro forma basis, the Company or the
Surviving Person, as the case may be, would be able to
Incur at least $1.00 of additional Debt under clause
(1) of the first paragraph of Section 4.03 hereof; and
(6) the Company shall deliver, or cause to be delivered, to
the Trustee, in form and substance reasonably
satisfactory to the Trustee, an Officers' Certificate
and an Opinion of Counsel, each stating that such
transaction and the supplemental indenture, if any, in
respect thereto comply with this Section 5.01(a) and
that all conditions precedent herein provided for
relating to such transaction have been satisfied.
The foregoing provisions (other than clause (4)) shall not apply to any
transactions which constitute an Asset Sale if the Company has complied with
Section 4.06.
(b) The Surviving Person shall succeed to, and be substituted
for, and may exercise every right and power of the Company under this Indenture,
but the predecessor Company in the case of:
(1) a sale, transfer, assignment, conveyance or other disposition
(unless such sale, transfer, assignment, conveyance or other
disposition is of all the assets of the Company as an entirety
or virtually as an entirety), or
(2) a lease,
shall not be released from any of the obligations or covenants under this
Indenture, including with respect to the payment of the Securities.
SECTION 5.02. When a Subsidiary Guarantor May Merge or
Transfer Assets. (a) The Company shall not permit any Subsidiary Guarantor to
merge, consolidate or amalgamate with or into any other Person (other than a
merger of a Wholly Owned Subsidiary into such Subsidiary Guarantor) or sell,
transfer, assign, lease,
<PAGE>
4.3-49
convey or otherwise dispose of all or substantially all its
Property in any one transaction or series of transactions unless:
(1) the Surviving Person (if not such Subsidiary Guarantor)
formed by such merger, consolidation or amalgamation or
to which such sale, transfer, assignment, lease,
conveyance or disposition is made shall be a
corporation or limited liability company organized and
existing under the laws of the United States of
America, any State thereof or the District of Columbia;
(2) the Surviving Person (if other than such Subsidiary
Guarantor) expressly assumes, by Subsidiary Guaranty in
form satisfactory to the Trustee, executed and
delivered to the Trustee by such Surviving Person, the
due and punctual performance and observance of all the
obligations of such Subsidiary Guarantor under its
Subsidiary Guaranty;
(3) in the case of a sale, transfer, assignment, lease, conveyance
or other disposition of all or substantially all the Property
of such Subsidiary Guarantor, such Property shall have been
transferred as an entirety or virtually as an entirety to one
Person;
(4) immediately before and after giving effect to such
transaction or series of transactions on a pro forma
basis (and , for purposes of this clause (4) and clause
(5) below, (A) treating any Debt that becomes, or is
anticipated to become, an obligation of the Surviving
Person, the Company or any Restricted Subsidiary as a
result of such transaction or series of transactions as
having been Incurred by the Surviving Person, the
Company or such Restricted Subsidiary at the time of
such transaction or series of transactions and
(B) giving pro forma effect to the Repayment of any
Debt in connection with such transaction or series of
transactions), no Default or Event of Default shall
have occurred and be continuing;
(5) immediately after giving effect to such transaction or
series of transactions and to the Repayment of any Debt
in connection with such transaction or series of
transactions on a pro forma basis, the Company would be
able to Incur at least $1.00 of additional Debt under
clause (1) of the first paragraph of Section 4.03
hereof; and
(6) the Company shall deliver, or cause to be delivered, to
the Trustee, in form and substance reasonably
satisfactory to the Trustee, an Officers' Certificate
and an Opinion of Counsel, each stating that such
transaction and such Subsidiary Guaranty, if any, in
respect thereto comply with this Section 5.02(a) and
that all conditions precedent herein provided for
relating to such transaction have been satisfied.
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4.3-50
The foregoing provisions (other than clause (4)) shall not apply to any
transactions which constitute an Asset Sale if the Company has complied with
Section 4.06.
(b) The Surviving Person shall succeed to, and be substituted for, and
may exercise every right and power of a Subsidiary Guarantor under the
Subsidiary Guaranty.
ARTICLE VI
Defaults and Remedies
SECTION 6.01. Events of Default. The following events
shall be "Events of Default":
(1) the Company defaults in any payment of interest on any
Security when the same becomes due and payable, whether or not such
payment shall be prohibited by Article X, and such default continues
for a period of 30 days;
(2) the Company defaults in the payment of the principal of,
or premium, if any, on any Security when the same becomes due and
payable at its Stated Maturity, upon acceleration, redemption, optional
redemption, required repurchase or otherwise, whether or not such
payment shall be prohibited by Article X;
(3) the Company or any Subsidiary Guarantor fails to
comply with Article V;
(4) the Company fails to comply with any covenant or agreement
in the Securities or in this Indenture (other than a failure that is
the subject of the foregoing clause (1), (2) or (3)) and such failure
continues for 30 days after written notice is given to the Company as
specified below;
(5) a default by the Company or any Restricted Subsidiary
under any Debt which results in acceleration of the maturity of such
Debt, or the failure to pay any such Debt at maturity, in an aggregate
amount in excess of $10 million or its foreign currency equivalent at
the time;
(6) the Company or any Significant Subsidiary pursuant
to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief
against it in an involuntary case;
(C) consents to the appointment of a Custodian of
it or for any substantial part of its property; or
(D) makes a general assignment for the benefit of
its creditors;
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4.3-51
or takes any comparable action under any foreign laws
relating to insolvency;
(7) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
Significant Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any
Significant Subsidiary or for any substantial part of
its property; or
(C) orders the winding up or liquidation of the
Company or any Significant Subsidiary; or
(D) grants any similar relief under any foreign
laws;
and in each such case the order or decree remains unstayed
and in effect for 30 days;
(8) any judgment or judgments for the payment of money in an
aggregate amount in excess of $10 million or its foreign currency
equivalent at the time is entered against the Company or any Restricted
Subsidiary and shall not be waived, satisfied or discharged for any
period of 30 consecutive days during which a stay of enforcement shall
not be in effect; or
(9) any Subsidiary Guaranty ceases to be in full force and
effect (other than in accordance with the terms of this Indenture and
such Subsidiary Guaranty) or any Subsidiary Guarantor denies or
disaffirms its obligations under its Subsidiary Guaranty.
The foregoing will constitute Events of Default what ever the
reason for any such Event of Default and whether it is voluntary or involuntary
or is effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body.
The term "Bankruptcy Law" means Title 11, United States Code,
or any similar Federal or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
A Default under clause (4) is not an Event of Default until
the Trustee or the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding notify the Company (and in the case of such notice
by Holders, the Trustee) of the Default and the Company does not cure such
Default within the time specified after receipt of such notice. Such notice must
specify the Default, demand that it be remedied and state that such notice is a
"Notice of Default".
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4.3-52
The Company shall deliver to the Trustee, within 30 days after
the occurrence thereof, written notice in the form of an Officers' Certificate
of any Event of Default and any event that with the giving of notice or the
lapse of time would become an Event of Default, its status and what action the
Company is taking or proposes to take with respect thereto.
SECTION 6.02. Acceleration. If an Event of Default (other than
an Event of Default specified in Section 6.01(6) or (7) with respect to the
Company) occurs and is continuing, the Trustee by notice to the Company, or the
Holders of at least 25% in aggregate principal amount of the Securities then
outstanding by notice to the Company and the Trustee, may declare the principal
of and accrued and unpaid interest on all the Securities to be due and payable.
Upon such a declaration, such principal and interest shall be due and payable
immediately. If an Event of Default specified in Section 6.01(6) or (7) with
respect to the Company occurs, the principal of and accrued and unpaid interest
on all the Securities shall, automatically and without any action by the Trustee
or any Holder, become and be immediately due and payable. The Holders of a
majority in aggregate principal amount of the outstanding Securities by notice
to the Trustee and the Company may rescind any declaration of acceleration 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. No
such rescission shall affect any subsequent Default or impair any right
consequent thereto.
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 of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Securityholder 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. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults. The Holders of a
majority in aggregate principal amount of the Securities then outstanding by
notice to the Trustee may waive an existing Default and its consequences except
(i) a Default in the payment of the principal of or interest on a Security or
(ii) a Default in respect of a provision that under Section 9.02 cannot be
amended without the consent of each Securityholder affected. When a Default is
waived, it is deemed cured, but no such waiver shall extend to any subsequent or
other Default or impair any consequent right.
SECTION 6.05. Control by Majority. The Holders of a
majority in aggregate principal amount of the Securities then
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4.3-53
outstanding may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or of exercising any trust or power
conferred on the Trustee with respect to the Securities. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee determines is unduly prejudicial to
the rights of other Securityholders or would involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction. Prior to
taking any action hereunder, the Trustee shall be entitled to reasonable
indemnification against all losses and expenses caused by taking or not taking
such action.
SECTION 6.06. Limitation on Suits. A Securityholder
may not pursue any remedy with respect to this Indenture or the
Securities unless:
(1) such Holder shall have previously given to the
Trustee written notice of a continuing Event of Default;
(2) the Holders of at least 25% in aggregate principal amount
of the Securities then outstanding shall have made a written request,
and such Holder of or Holders shall have offered reasonable indemnity,
to the Trustee to pursue such proceeding as trustee; and
(3) the Trustee has failed to institute such proceeding and
has not received from the Holders of at least a majority in aggregate
principal amount of the Securities outstanding a direction inconsistent
with such request, within 60 days after such notice, request and offer.
The foregoing limitations on the pursuit of remedies by a
Securityholder shall not apply to a suit instituted by a Holder of Securities
for the enforcement of payment of the principal of or interest on such Security
on or after the applicable due date specified in such Security. A Securityholder
may not use this Indenture to prejudice the rights of another Securityholder or
to obtain a preference or priority over another Securityholder.
SECTION 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
to receive payment of principal of and interest on the Securities held by such
Holder, on or after the respective due dates expressed in the Securities, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of
Default specified in Section 6.01(1) or (2) 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 then due and owing (together with
interest on any unpaid interest to the extent lawful) and the amounts provided
for in Section 7.07.
<PAGE>
54
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 Securityholders allowed in any
judicial proceedings relative to the Company, its creditors or its
property and, unless prohibited by law or applicable regulations,
may vote on behalf of the Holders in any election of a trustee in
bankruptcy or other Person performing similar functions, and any
Custodian in any such judicial proceeding is hereby authorized by
each Holder to make payments to the Trustee and, in the event that
the Trustee shall consent to the making of such payments directly
to the Holders, to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 7.07.
SECTION 6.10. Priorities. If the Trustee collects any
money or property pursuant to this Article VI, it shall pay out
the money or property in the following order:
FIRST: to the Trustee for amounts due under Section
7.07;
SECOND: to holders of Senior Debt to the extent
required by Article X or XII;
THIRD: to Securityholders for amounts due and unpaid
on the Securities for principal and interest, ratably,
without preference or priority of any kind, according to the
amounts due and payable on the Securities for principal and
interest, respectively; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section. At least 15 days before
such record date, the Company shall mail to each Securityholder and the Trustee
a notice that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court 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 and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section does
not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07
or a suit by Holders of more than 10% in aggregate principal amount of the
Securities.
<PAGE>
4.3-55
SECTION 6.12. Waiver of Stay or Extension Laws. The
---------------------------------
Company (to the extent it may lawfully do so) shall not at any
time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the
Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and
shall not hinder, delay or impede the execution of any power
herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been
enacted.
ARTICLE VII
Trustee
SECTION 7.01. Duties of Trustee. (a) If an Event of Default
has occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of
Default:
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(1) this paragraph does not limit the effect of
paragraph (b) of this Section 7.01;
(2) 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
(3) 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.
<PAGE>
4.3-56
(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 shall not be liable for interest on
any money received by it.
(f) Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers.
(h) Every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA and
the provisions of this Article VII shall apply to the Trustee in its role as
Registrar, Paying Agent and Security Custodian.
(i) The Trustee shall not be deemed to have notice of a
Default or an Event of Default unless (a) a Trust Officer of the Trustee has
received written notice thereof from the Company, a Subsidiary Guarantor or any
Holder or (b) a Trust Officer shall have actual knowledge thereof.
SECTION 7.02. Rights of Trustee. (a) The Trustee may conclusively 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. The Trustee may, however, in its discretion make
such further inquiry or investigation into such facts or matters as it may see
fit and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney at the expense of the Company
and shall incur no liability of any kind by reason of such inquiry or
investigation.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents, attorneys or
custodians and shall not be responsible for the misconduct or negligence of any
agent, attorney or custodian appointed with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within its
rights or powers; provided, however, that the Trustee's conduct does not
constitute wilful misconduct or negligence.
<PAGE>
4.3-57
(e) The Trustee may consult with counsel of its own selection,
and the advice or opinion of counsel with respect to legal matters relating to
this Indenture and the Securities shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or suffered by
it here under in good faith and in accordance with the advice or opinion of such
counsel.
(f) The permissive rights of the Trustee to do things
enumerated in this Indenture shall not be construed as a duty unless so
specified herein.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar or
co-registrar may do the same with like rights. However, the Trustee must comply
with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity, priority or
adequacy of this Indenture or the Secur ities, it shall not be accountable for
the Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement of the Company or any Subsidiary Guarantor in this
Indenture or in any document issued in connection with the sale of the
Securities or in the Securities other than the Trustee's certificate of
authentication.
SECTION 7.05. Notice of Defaults. If a Default or Event of
Default occurs and is continuing and if it is actually known to a Trust Officer
of the Trustee, the Trustee shall mail to each Securityholder notice of the
Default or Event of Default within 90 days after it is known to a Trust Officer
or written notice of it is received by the Trustee. Except in the case of a
Default or Event of Default in payment of principal of or interest on any
Security, 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 Securityholders.
SECTION 7.06. Reports by Trustee to Holders. As promptly as
practicable after each December 31 beginning with December 31, 1999, and in any
event prior to March 31 in each year, the Trustee shall mail to each
Securityholder a brief report dated as of December 31 each year that complies
with TIA ss. 313(a), if and to the extent required by such subsection. The
Trustee shall also comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange (if any) on
which the Securities are listed. The Company agrees to notify promptly the
Trustee whenever the Securities become listed on any stock exchange and of any
delisting thereof.
<PAGE>
4.3-58
SECTION 7.07. Compensation and Indemnity. The Company shall
pay to the Trustee from time to time such compensation as shall be agreed upon
from time to time in writing for its services. 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 out-of-pocket expenses
incurred or made by it, including costs of collection, in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee's agents,
counsel, accountants and experts. The Company and each Subsidiary Guarantor
shall jointly and severally fully indemnify the Trustee against any and all
loss, liability, claim, damage or expense (including reasonable attorneys' fees
and expenses and taxes other than taxes based upon the income of the Trustee)
incurred by it in connection with the acceptance and administration of this
trust and the performance of its duties hereunder. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Company shall not relieve the Company or any Subsidiary
Guarantor of its obligations hereunder. The Company shall defend the claim and
the Trustee may have separate counsel and the Company and the Subsidiary
Guarantors, as applicable, shall pay the fees and expenses of such counsel. The
Company need not reimburse any expense or indemnify against any loss, liability
or expense incurred by the Trustee through the Trustee's own wilful misconduct
or negligence. The Company need not pay for any settlement made by the Trustee
without the Company's consent, such consent not to be unreasonably withheld. All
indemnifications and releases from liability granted hereunder to the Trustee
shall extend to its officers, directors, employees, agents, attorneys,
custodians, successors and assigns.
To secure the Company's payment obligations in this Section
7.07, the Trustee shall have a lien prior to the Securities on all money or
property held or collected by the Trustee other than money or property held in
trust to pay principal of and interest on particular Securities.
The Company's payment obligations pursuant to this Section
shall survive the resignation or removal of the Trustee and the discharge of
this Indenture. When the Trustee incurs expenses after the occurrence of a
Default specified in Section 6.01(6) or (7) with respect to the Company, the
expenses are intended to constitute expenses of administration under the
Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. The Trustee may resign
at any time by so notifying the Company. The Holders of a majority in aggregate
principal amount of the Securities then outstanding may remove the Trustee by so
notifying the Trustee and may appoint a successor Trustee. The Company shall
remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
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4.3-59
(3) a receiver or other public officer takes charge of
the Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the
Holders of a majority in aggregate principal amount of the Securities then
outstanding and such Holders do not reasonably promptly appoint a successor
Trustee, or if a vacancy exists in the office of Trustee for any reason (the
Trustee in such event being referred to herein as the retiring Trustee), the
Company shall promptly appoint a successor Trustee.
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 Securityholders. 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.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee or the
Holders of 10% in aggregate principal amount of the Securities then outstanding
may petition at the expense of the Company any court of competent jurisdiction
for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder who has been a bona fide Holder of a Security 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.
Notwithstanding the replacement of the Trustee pursuant to
this Section, the Company's obligations under Section 7.07 shall continue for
the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation or banking
association without any further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any such successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor to
<PAGE>
4.3-60
the Trustee; and in all such cases such certificates shall have the full force
which it is anywhere in the Securities or in this Indenture provided that the
certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall
at all times satisfy the requirements of TIA ss. 310(a). The Trustee shall have
(or, in the case of a corporation included in a bank holding company system, the
related bank holding company shall have) a combined capital and surplus of at
least $50,000,000 as set forth in its (or its related bank holding company's)
most recent published annual report of condition. The Trustee shall comply with
TIA ss. 310(b), subject to the penultimate paragraph thereof; provided, however,
that there shall be excluded from the operation of TIA ss. 310(b)(1) any
indenture or indentures under which other securities or certificates of interest
or participation in other securities of the Company are outstanding if the
requirements for such exclusion set forth in TIA ss. 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against
Company. The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated.
SECTION 7.12 Trustee's Application for Instructions from the
Company. Any application by the Trustee for written instructions from the
Company may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the date
on and/or after which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable to the Company for any action taken
by, or omission of, the Trustee in accordance with a proposal included in such
application on or after the date specified in such application (which date shall
not be less than three Business Days after the date any officer of the Company
actually receives such application, unless any such officer shall have consented
in writing to any earlier date) unless prior to taking any such action (or the
effective date in the case of any omission), the Trustee shall have received
written instructions in response to such application specifying the action to be
taken or omitted.
ARTICLE VIII
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities;
Defeasance. (a) When (i) the Company delivers to the Trustee all outstanding
Securities (other than Securities replaced pursuant to Section 2.06) for
cancelation or (ii) all outstanding Securities have become due and payable,
whether at maturity or as a result of the mailing of a notice of redemption
pursuant to Article III and the Company irrevocably deposits with the Trustee
funds sufficient to pay at maturity or upon redemption all outstanding
Securities, including interest thereon to maturity or
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4.3-61
such redemption date (other than Securities replaced pursuant to Section 2.06),
and if in either case the Company pays all other sums payable hereunder by the
Company, then this Indenture shall, subject to Section 8.01(c), cease to be of
further effect. The Trustee shall acknowledge satisfaction and discharge of this
Indenture on demand of the Company accompanied by an Officers' Certificate and
an Opinion of Counsel and at the cost and expense of the Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any
time may terminate (i) all of its obligations under the Securities and this
Indenture ("legal defeasance option") or (ii) its obligations under Sections
4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12 and 4.13, and the
operation of Sections 6.01(5), 6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but, in
the case of Sections 6.01(6) and (7), with respect only to Significant
Subsidiaries) and the limitations contained in Sections 5.01(a)(5) and
5.02(a)(5) ("covenant defeasance option"). The Company may exercise its legal
defeasance option notwith standing its prior exercise of its covenant defeasance
option.
If the Company exercises its legal defeasance option, payment
of the Securities may not be accelerated because of an Event of Default. If the
Company exercises its covenant defeasance option, payment of the Securities may
not be accelerated because of an Event of Default specified in Sections 6.01(4)
(with respect to the covenants of Article IV identified in the immediately
preceding paragraph), 6.01(5), 6.01(6), 6.01(7), 6.01(8) and 6.01(9) (with
respect only to Significant Subsidiaries in the case of Sections 6.01(6) and
6.01(7)) or because of the failure of the Company to comply with the limitations
contained in Sections 5.01(a)(5) and 5.02(a)(5). If the Company exercises its
legal defeasance option or its covenant defeasance option, each Subsidiary
Guarantor, if any, shall be released from all its obligations under its
Subsidiary Guarantee.
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 7.07, 7.08, 8.05 and 8.06 shall
survive until the Securities have been paid in full. Thereafter, the Company's
obligations in Sections 7.07 and 8.05 shall survive.
SECTION 8.02. Conditions to Defeasance. The Company
may exercise its legal defeasance option or its covenant
defeasance option only if:
(1) the Company irrevocably deposits in trust with the
Trustee money or U.S. Government Obligations for the payment
of principal of and interest on the Securities to maturity or
redemption, as the case may be;
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4.3-62
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and
without reinvestment on the deposited U.S. Government Obligations plus
any deposited money without investment will provide cash at such times
and in such amounts as will be sufficient to pay principal and interest
when due on all the Securities to maturity or redemption, as the case
may be;
(3) 123 days pass after the deposit is made and during the
123-day period no Default specified in Section 6.01(6) or (7) with
respect to the Company or any other Person making such deposit occurs
that is continuing at the end of the period;
(4) no Default or Event of Default has occurred and is
continuing on the date of such deposit and after giving
effect thereto;
(5) the deposit does not constitute a default under any
other agreement or instrument binding on the Company and is
not prohibited by Article X;
(6) the Company delivers to the Trustee an Opinion of Counsel
to the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the Investment Company Act of 1940, as amended;
(7) in the case of the legal defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(i) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (ii) since the date of this
Indenture there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Securityholders 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;
(8) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Securityholders will not recognize income, gain or loss for
Federal income tax purposes as a result of such covenant defeasance and
will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
covenant defeasance had not occurred; and
(9) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance and discharge of the
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4.3-63
Securities as contemplated by this Article VIII have been complied
with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article III.
SECTION 8.03. Application of Trust Money. The Trustee shall
hold in trust money or U.S. Government Obligations deposited with it pursuant to
this Article VIII. 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 of and interest on the Securities. Money
and securities so held in trust are not subject to Article X.
SECTION 8.04. Repayment to Company. The Trustee and the Paying
Agent shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee
and the Paying Agent shall pay to the Company upon request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Securityholders entitled to the money must look to the
Company for payment as general creditors.
SECTION 8.05. Indemnity for Government Obligations.
The Company shall pay and shall indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against
deposited U.S. Government Obligations or the principal and
interest received on such U.S. Government Obligations.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with this
Article VIII by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article VIII until such time as the
Trustee or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article VIII; provided, however, that, if
the Company has made any payment of interest on or principal of any Securities
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE IX
Amendments
SECTION 9.01. Without Consent of Holders. The
Company, the Subsidiary Guarantors and the Trustee may amend this
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4.3-64
Indenture or the Securities without notice to or consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or
inconsistency;
(2) to comply with Article V;
(3) to provide for uncertificated Securities in addition to or
in place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to make any change in Article X or Article XII that would
limit or terminate the benefits available to any holder of Senior Debt
(or Representatives therefor) under Article X or Article XII;
(5) to add additional Guarantees with respect to the
Securities or to release Subsidiary Guarantors from Subsidiary
Guarantees as provided for herein;
(6) to secure the Securities or add to the covenants of the
Company for the benefit of the Holders or surrender any right or power
herein conferred upon the Company;
(7) to comply with any requirements of the SEC in connection
with qualifying, or maintaining the qualification of, this Indenture
under the TIA; or
(8) to make any change that does not adversely affect
the rights of any Securityholder.
An amendment under this Section may not make any change that
adversely affects the rights under Article X or Article XII of any holder of
Senior Debt then outstanding unless the holders of such Senior Debt (or their
Representative) consent to such change.
After an amendment under this Section 9.01 becomes effective,
the Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section.
SECTION 9.02. With Consent of Holders. The Company, the
Subsidiary Guarantors and the Trustee may amend this Indenture or the Securities
without notice to any Securityholder but with the written consent of the Holders
of at least a majority in aggregate principal amount of the Securities then
outstanding (including consents obtained in connection with a tender offer or
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4.3-65
exchange offer for the Securities). However, without the consent
of each Securityholder affected thereby, an amendment may not:
(1) reduce the amount of Securities whose Holders must
consent to an amendment or waiver;
(2) reduce the rate of or extend the time for payment
of interest on any Security;
(3) reduce the principal of or extend the Stated
Maturity of any Security;
(4) impair the right of any Holder to receive payment of
principal of and interest on such Holder's Securities on or after the
due dates therefor or to institute suit for the enforcement of any
payment on or with respect to such Holder's Securities or any
Subsidiary Guaranty;
(5) reduce the amount payable upon the redemption or
repurchase of any Security under Article III or Section 4.06 or 4.11,
change the time at which any Security may be redeemed in accordance
with Article III, or, at any time after a Change of Control or Asset
Sale has occurred, change the time at which any Change of Control Offer
or Prepayment Offer must be made or at which the Securities must be
repurchased pursuant to such Change of Control Offer or Prepayment
Offer;
(6) make any Security payable in money other than that
stated in the Security;
(7) make any change in Article X or Article XII that
adversely affects the rights of any Securityholder under
Article X or Article XII;
(8) make any change in any Subsidiary Guaranty that would
adversely affect the Securityholders;
(9) release any security interest that may have been granted
in favor of the Holders other than pursuant to such security interest;
or
(10) make any change in Section 6.04 or 6.07 or the
second sentence of this Section 9.02.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
An amendment under this Section may not make any change that
adversely affects the rights under Article X or Article XII of any holder of
Senior Debt then outstanding unless the holders of such Senior Debt (or their
Representative) consent to such change.
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4.3-66
After an amendment under this Section 9.02 becomes effective,
the Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section 9.02.
SECTION 9.03. Compliance with Trust Indenture Act.
Every amendment to this Indenture or the Securities shall comply
with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder's
Security or portion of the Security if the Trustee receives the notice of
revocation before the date the amendment or waiver becomes effective. After an
amendment or waiver becomes effective, it shall bind every Securityholder. An
amendment or waiver becomes effective upon the execution of such amendment or
waiver by the Trustee.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or
effective for more than 120 days after such record date.
SECTION 9.05. Notation on or Exchange of Securities. If an
amendment changes the terms of a Security, the Trustee may require the Holder of
the Security to deliver such Security to the Trustee. The Trustee may place an
appropriate notation on the Security regarding the changed terms and return such
Security to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Security shall issue and the Trustee
shall authenticate a new Security that reflects the changed terms. Failure to
make the appropriate notation or to issue a new Security shall not affect the
validity of such amendment.
SECTION 9.06. Trustee To Sign Amendments. The Trustee shall
sign any amendment authorized pursuant to this Article IX if the amendment does
not adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may but need not sign it. In signing such
amendment the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and to receive, and (subject to Section 7.01) shall be fully
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4.3-67
protected in relying upon, an Officers' Certificate and an Opinion of Counsel
stating that such amendment is authorized or permitted by this Indenture.
SECTION 9.07. Payment for Consent. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
ARTICLE X
Subordination
SECTION 10.01. Agreement To Subordinate. The Company agrees,
and each Securityholder by accepting a Security agrees, that the Debt evidenced
by the Securities is subordinated in right of payment, to the extent and in the
manner provided in this Article X, to the payment when due of all Senior Debt of
the Company and that the subordination is for the benefit of and enforceable by
the holders of such Senior Debt. The Securities shall in all respects rank pari
passu with any future Senior Subordinated Debt and senior to all existing and
future junior subordinated Debt of the Company, and only Senior Debt shall rank
senior to the Securities in accordance with the provisions set forth herein. All
provisions of this Article X shall be subject to Section 10.12.
SECTION 10.02. Liquidation, Dissolution, Bankruptcy. Upon any
payment or distribution of the assets of the Company upon a total or partial
liquidation, dissolution or winding up of the Company or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the
Company or its Property:
(1) the holders of Senior Debt will be entitled to receive
payment in full in cash before the Holders of the Securities are
entitled to receive any payment of principal of or interest on the
Securities; and
(2) until the Senior Debt is paid in full in cash, any
distribution to which Holders of the Securities would be entitled but
for this Article X will be made to holders of the Senior Debt as their
interests may appear, except that Holders of Securities may receive and
retain shares of stock and any debt securities that are subordinated to
the Senior Debt to at least the same extent as the Securities.
SECTION 10.03. Default on Senior Debt. The Company
may not pay principal of, or premium, if any, or interest on, the
Securities, or make any deposit pursuant to Section 8.01, and may
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4.3-68
not repurchase, redeem or otherwise retire any Securities (collectively, "pay
the Securities") if (a) any principal, premium or interest in respect of any
Senior Debt is not paid within any applicable grace period (including at
maturity) or (b) any other default on Senior Debt occurs and the maturity of
such Senior Debt is accelerated in accordance with its terms unless, in either
case, (1) the default has been cured or waived and any such acceleration has
been rescinded or (2) such Senior Debt has been paid in full in cash; provided,
however, that the Company may pay the Securities without regard to the foregoing
if the Company and the Trustee receive written notice approving such payment
from the Representative of such issue of Senior Debt. During the continuance of
any default (other than a default described in clause (a) or (b) of the
preceding sentence) with respect to any Designated Senior Debt pursuant to which
the maturity thereof may be accelerated immediately without further notice
(except any notice required to effect the acceleration) or the expiration of any
applicable grace period, the Company may not pay the Securities for a period (a
"Payment Blockage Period") commencing upon the receipt by the Company and the
Trustee of written notice of such default from the Representative of the holders
of such Designated Senior Debt specifying an election to effect a Payment
Blockage Period (a "Payment Blockage Notice") and ending 179 days thereafter
(unless such Payment Blockage Notice is earlier terminated (a) by written notice
to the Trustee and the Company from the Representative that gave such Payment
Blockage Notice, (b) because such default is no longer continuing or (c) because
such Designated Senior Debt has been repaid in full in cash). Unless the holders
of such Designated Senior Debt or the Representative of such holders have
accelerated the maturity of such Designated Senior Debt and not rescinded such
acceleration, the Company may (unless otherwise prohibited as described in the
first sentence of this paragraph) resume payments on the Securi ties after the
end of such Payment Blockage Period. Not more than one Payment Blockage Notice
with respect to all issues of Designated Senior Debt may be given in any
consecutive 360-day period, irrespective of the number of defaults with respect
to one or more issues of Designated Senior Debt during such period.
SECTION 10.04. Acceleration of Payment of Securities. If
payment of the Securities is accelerated when any Designated Senior Debt is
outstanding, the Company may not pay the Securities until three Business Days
after the Representatives of all issues of Designated Senior Debt receive notice
of such acceleration and, thereafter, may pay the Securities only if this
Indenture otherwise permits payment at that time.
SECTION 10.05. When Distribution Must Be Paid Over. If a
distribution is made to Securityholders that because of this Article X should
not have been made to them, the Securityholders who receive the distribution
shall hold it in trust for holders of Senior Debt and pay it over to them as
their interests may appear.
SECTION 10.06. Subrogation. After all Senior Debt is
paid in full and until the Securities are paid in full,
Securityholders shall be subrogated to the rights of holders of
Senior Debt to receive distributions applicable to Senior Debt. A
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4.3-69
distribution made under this Article X to holders of Senior Debt that otherwise
would have been made to Securityholders is not, as between the Company and
Securityholders, a payment by the Company on such Senior Debt.
SECTION 10.07. Relative Rights. This Article X
defines the relative rights of Securityholders and holders of
Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Company and Securityholders, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their
terms; or
(2) prevent the Trustee or any Securityholder from exercising
its available remedies upon a Default or an Event of Default, subject
to the rights of holders of Senior Debt to receive distributions
otherwise payable to Securityholders.
SECTION 10.08. Subordination May Not Be Impaired by Company.
No right of any holder of Senior Debt to enforce the subordination of the Debt
evidenced by the Securities shall be impaired by any act or failure to act by
the Company or by its failure to comply with this Indenture.
SECTION 10.09. Rights of Trustee and Paying Agent.
Notwithstanding Section 10.03, the Trustee or Paying Agent may continue to make
payments on the Securities and shall not be charged with knowledge of the
existence of facts that would prohibit the making of any such payments unless,
not less than two Business Days prior to the date of such payment, a Trust
Officer receives notice satisfactory to it that payments may not be made under
this Article X. The Company, the Registrar or co-registrar, the Paying Agent, a
Representative or a holder of Senior Debt may give the notice; provided,
however, that, if an issue of Senior Debt has a Representative, only the
Representative may give the notice.
The Trustee in its individual or any other capacity may hold
Senior Debt with the same rights it would have if it were not Trustee. The
Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article X with respect to any Senior Debt that may at any time be held by it, to
the same extent as any other holder of such Senior Debt; and nothing in Article
VII shall deprive the Trustee of any of its rights as such holder. Nothing in
this Article X shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 7.07.
SECTION 10.10. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders of Senior
Debt, the distribution may be made and the notice given to their Representative
(if any).
SECTION 10.11. Article X Not To Prevent Events of
Default or Limit Right To Accelerate. The failure to make a
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4.3-70
payment pursuant to the Securities by reason of any provision in this Article X
shall not be construed as preventing the occurrence of a Default. Nothing in
this Article X shall have any effect on the right of the Securityholders or the
Trustee to accelerate the maturity of the Securities.
SECTION 10.12. Trust Moneys Not Subordinated. Notwithstanding
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Government Obligations held in trust under Article VIII by the Trustee
for the payment of principal of and interest on the Securities shall not be
subordinated to the prior payment of any Senior Debt or subject to the
restrictions set forth in this Article X, and none of the Securityholders shall
be obligated to pay over any such amount to the Company or any holder of Senior
Debt or any other creditor of the Company.
SECTION 10.13. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article X, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 10.02
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Senior Debt
for the purpose of ascertaining the Persons entitled to participate in such
payment or distribution, the holders of Senior Debt and other Debt of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article X.
In the event that the Trustee determines, in good faith, that evidence is
required with respect to the right of any Person as a holder of Senior Debt to
participate in any payment or distribution pursuant to this Article X, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Senior Debt held by such
Person, the extent to which such Person is entitled to participate in such
payment or distribution and other facts pertinent to the rights of such Person
under this Article X, and, if such evidence is not furnished, the Trustee may
defer any payment to such Person pending judicial determination as to the right
of such Person to receive such payment. The provisions of Sections 7.01 and 7.02
shall be applicable to all actions or omissions of actions by the Trustee
pursuant to this Article X.
SECTION 10.14. Trustee To Effectuate Subordination. Each
Securityholder by accepting a Security authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Senior Debt as provided in this Article X and appoints the Trustee as
attorney-in-fact for any and all such purposes.
SECTION 10.15. Trustee Not Fiduciary for Holders of
Senior Debt. The Trustee shall not be deemed to owe any fiduciary
duty to the holders of Senior Debt and shall not be liable to any
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4.3-71
such holders if it shall mistakenly pay over or distribute to Securityholders or
the Company or any other Person, money or assets to which any holders of Senior
Debt shall be entitled by virtue of this Article X or otherwise.
SECTION 10.16. Reliance by Holders of Senior Debt on
Subordination Provisions. Each Securityholder by accepting a Security
acknowledges and agrees that the foregoing subordination provisions are, and are
intended to be, an inducement and a consideration to each holder of any Senior
Debt, whether such Senior Debt was created or acquired before or after the
issuance of the Securities, to acquire and continue to hold, or to continue to
hold, such Senior Debt and such holder of such Senior Debt shall be deemed
conclusively to have relied on such subordination provisions in acquiring and
continuing to hold, or in continuing to hold, such Senior Debt.
ARTICLE XI
Subsidiary Guarantees
SECTION 11.01. Subsidiary Guarantees. Each Subsidiary
Guarantor hereby unconditionally guarantees, jointly and severally, to each
Holder and to the Trustee and its successors and assigns (a) the full and
punctual payment of principal of and interest on the Securities when due,
whether at maturity, by acceleration, by redemption or otherwise, and all other
monetary obligations of the Company under this Indenture and the Securities and
(b) the full and punctual performance within applicable grace periods of all
other obligations of the Company under this Indenture and the Securities (all
the foregoing being hereinafter collectively called the "Obligations"). Each
Subsidiary Guarantor further agrees that the Obligations may be extended or
renewed, in whole or in part, without notice or further assent from such
Subsidiary Guarantor, and that such Subsidiary Guarantor will remain bound under
this Article XI notwithstanding any extension or renewal of any Obligation.
Each Subsidiary Guarantor waives presentation to, demand of,
payment from and protest to the Company of any of the Obligations and also
waives notice of protest for nonpayment. Each Subsidiary Guarantor waives notice
of any default under the Securities or the Obligations. The obligations of each
Subsidiary Guarantor hereunder shall not be affected by (a) the failure of any
Holder or the Trustee to assert any claim or demand or to enforce any right or
remedy against the Company or any other Person under this Indenture, the
Securities or any other agreement or otherwise; (b) any extension or renewal of
any thereof; (c) any rescission, waiver, amendment or modification of any of the
terms or provisions of this Indenture, the Securities or any other agreement;
(d) the release of any security held by any Holder or the Trustee for the
Obligations or any of them; (e) the failure of any Holder or the Trustee to
exercise any right or remedy against any other guarantor of the Obligations; or
(f) any change in the ownership of such Subsidiary Guarantor.
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4.3-72
Each Subsidiary Guarantor further agrees that its Subsidiary
Guaranty herein constitutes a guarantee of payment, performance and compliance
when due (and not a guarantee of collection) and waives any right to require
that any resort be had by any Holder or the Trustee to any security held for
payment of the Obligations.
Each Subsidiary Guaranty is, to the extent and in the manner
set forth in Article XII, subordinated and subject in right of payment to the
prior payment in full of all Senior Debt of the Subsidiary Guarantor giving such
Subsidiary Guaranty and each Subsidiary Guarantor and is made subject to such
provisions of this Indenture.
Except as expressly set forth in Sections 4.10, 5.02 and
8.01(b), the obligations of each Subsidiary Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for any reason,
including any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to any defense of set off, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Guaranteed Obligations or otherwise. Without limiting
the generality of the foregoing, the obligations of each Subsidiary Guarantor
herein shall not be discharged or impaired or otherwise affected by the failure
of any Holder or the Trustee to assert any claim or demand or to enforce any
remedy under this Indenture, the Securities or any other agreement, by any
waiver or modification of any thereof, by any default, failure or delay, willful
or otherwise, in the performance of the obligations, or by any other act or
thing or omission or delay to do any other act or thing which may or might in
any manner or to any extent vary the risk of such Subsidiary Guarantor or would
otherwise operate as a discharge of such Subsidiary Guarantor as a matter of law
or equity.
Each Subsidiary Guarantor further agrees that its Subsidiary
Guaranty herein shall continue to be effective or be reinstated, as the case may
be, if at any time payment, or any part thereof, of principal of or interest on
any Obligation is rescinded or must otherwise be restored by any Holder or the
Trustee upon the bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any
other right which any Holder or the Trustee has at law or in equity against any
Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay
the principal of or interest on any Obligation when and as the same shall become
due, whether at maturity, by acceleration, by redemption or otherwise, or to
perform or comply with any other Obligation, each Subsidiary Guarantor hereby
promises to and will, upon receipt of written demand by the Trustee, forthwith
pay, or cause to be paid, in cash, to the Holders or the Trustee an amount equal
to the sum of (i) the unpaid amount of such Obligations, (ii) accrued and unpaid
interest on such Obligations (but only to the extent not prohibited by law) and
(iii) all other monetary Obligations of the Company to the Holders and the
Trustee.
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4.3-73
Each Subsidiary Guarantor agrees that it shall not be entitled
to any right of subrogation in respect of any Obligations guaranteed hereby
until payment in full in cash of all Obligations and all obligations to which
the Obligations are subordinated as provided in Article XII. Each Subsidiary
Guarantor further agrees that, as between it, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the Obligations
guaranteed hereby may be accelerated as provided in Article VI for the purposes
of such Subsidiary Guarantor's Subsidiary Guaranty herein, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect of
the Obligations guaranteed hereby, and (y) in the event of any declaration of
acceleration of such Obligations as provided in Article VI, such Obligations
(whether or not due and payable) shall forthwith become due and payable by such
Subsidiary Guarantor for the purposes of this Section.
Each Subsidiary Guarantor also agrees to pay any and all costs
and expenses (including reasonable attorneys' fees) incurred by the Trustee or
any Holder in enforcing any rights under this Section 11.01.
SECTION 11.02. Contribution. Each of the Company and any
Subsidiary Guarantor (a "Contributing Party") agrees (subject to Articles X and
XII) that, in the event a payment shall be made by any other Subsidiary
Guarantor under any Subsidiary Guaranty (the "Claiming Guarantor"), the
Contributing Party shall indemnify the Claiming Guarantor in an amount equal to
the amount of such payment multiplied by a fraction, the numerator of which
shall be the net worth of the Contributing Party on the date hereof and the
denominator of which shall be the aggregate net worth of the Company and all the
Subsidiary Guarantors on the date hereof (or, in the case of any Subsidiary
Guarantor becoming a party hereto pursuant to Section 9.01, the date of the
amendment hereto executed and delivered by such Subsidiary Guarantor).
SECTION 11.03. Successors and Assigns. This Article XI shall
be binding upon each Subsidiary Guarantor and its successors and assigns and
shall inure to the benefit of the successors and assigns of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges conferred upon that party in this
Indenture and in the Securities shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions of this
Indenture.
SECTION 11.04. No Waiver. Neither a failure nor a delay on the
part of either the Trustee or the Holders in exercising any right, power or
privilege under this Article XI shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise of any
right, power or privilege. The rights, remedies and benefits of the Trustee and
the Holders herein expressly specified are cumulative and not exclusive of any
other rights, remedies or benefits which either may have under this Article XI
at law, in equity, by statute or otherwise.
<PAGE>
4.3-74
SECTION 11.05. Modification. No modification, amendment or
waiver of any provision of this Article XI, nor the consent to any departure by
any Subsidiary Guarantor therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Trustee, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. No notice to or demand on any Subsidiary Guarantor in any case
shall entitle such Subsidiary Guarantor to any other or further notice or demand
in the same, similar or other circumstances.
SECTION 11.06. Execution of Supplemental Indenture for Future
Subsidiary Guarantors. Each Subsidiary which is required to become a Subsidiary
Guarantor pursuant to Section 4.12 shall promptly execute and deliver to the
Trustee a supplemental indenture in the form of Exhibit B hereto pursuant to
which such Subsidiary shall become a Subsidiary Guarantor under this Article XI
and shall guarantee the Obligations. Concurrently with the execution and
delivery of such supplemental indenture, the Company shall deliver to the
Trustee an Opinion of Counsel to the effect that such supplemental indenture has
been duly authorized, executed and delivered by such Subsidiary and that,
subject to the application of bankruptcy, insolvency, moratorium, fraudulent
conveyance or transfer and other similar laws relating to creditors' rights
generally and to the principles of equity, whether considered in a proceeding at
law or in equity, the Subsidiary Guaranty of such Subsidiary Guarantor is a
legal, valid and binding obligation of such Subsidiary Guarantor, enforceable
against such Subsidiary Guarantor in accordance with its terms.
ARTICLE XII
Subordination of Subsidiary Guarantees
SECTION 12.01. Agreement To Subordinate. Each Subsidiary
Guarantor agrees, and each Securityholder by accepting a Security agrees, that
the Obligations of such Subsidiary Guarantor are subordinated in right of
payment, to the extent and in the manner provided in this Article XII, to the
payment when due of all Senior Debt of such Subsidiary Guarantor and that the
subordination is for the benefit of and enforceable by the holders of such
Senior Debt. The Obligations of a Subsidiary Guarantor shall in all respects
rank pari passu with any future Senior Subordinated Debt of such Subsidiary
Guarantor and senior to all existing and future junior subordinated Debt of such
Subsidiary Guarantor, and only Senior Debt shall rank senior to the Obligations
of such Subsidiary Guarantor in accordance with the provisions set forth herein.
SECTION 12.02. Liquidation, Dissolution, Bankruptcy.
Upon any payment or distribution of the assets of any Subsidiary
Guarantor to creditors upon a total or partial liquidation,
dissolution or winding up of such Subsidiary Guarantor or in a
<PAGE>
4.3-75
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to such Subsidiary Guarantor or its property:
(1) holders of Senior Debt of such Subsidiary Guarantor shall
be entitled to receive payment in full in cash of such Senior Debt
before Securityholders shall be entitled to receive any payment
pursuant to any Obligations of such Subsidiary Guarantor; and
(2) until the Senior Debt of any Subsidiary Guarantor is paid
in full in cash, any distribution made by or on behalf of such
Subsidiary Guarantor to which Securityholders would be entitled but for
this Article XII shall be made to holders of the Senior Debt as their
interests may appear, except that all Securityholders may receive and
retain shares of stock and any debt securities of such Subsidiary
Guarantor that are subordinated to Senior Debt of such Subsidiary
Guarantor to at least the same extent as the Obligations of such
Subsidiary Guarantor are subordinated to Senior Debt of such Subsidiary
Guarantor.
SECTION 12.03. Default on Senior Debt of Subsidiary Guarantor.
No Subsidiary Guarantor may make any payment pursuant to any of its Obligations
or repurchase, redeem or otherwise retire or defease any Securities or other
Obligations (collectively, "pay its Subsidiary Guaranty") if (i) any principal,
premium or interest in respect of any Senior Debt of such Subsidiary Guarantor
is not paid within any applicable grace period (including at maturity) or (ii)
any other default on Senior Debt of such Subsidiary Guarantor occurs and the
maturity of such Senior Debt is accelerated in accordance with its terms unless,
in either case, (x) the default has been cured or waived and any such
acceleration has been rescinded or (y) such Senior Debt has been paid in full in
cash; provided, however, that any Subsidiary Guarantor may pay its Subsidiary
Guaranty without regard to the foregoing if such Subsidiary Guarantor and the
Trustee receive written notice approving such payment from the Representatives
of such issue of Senior Debt of such Subsidiary Guarantor. No Subsidiary
Guarantor may pay its Subsidiary Guaranty during the continuance of any Payment
Blockage Period after receipt by the Company and the Trustee of a Payment
Blockage Notice under Section 10.03. Notwithstanding the provisions described in
the immediately preceding sentence, unless the holders of Designated Senior Debt
giving such Payment Blockage Notice or the Representative of such holders shall
have accelerated the maturity of such Designated Senior Debt and not rescinded
such acceleration, any Subsidiary Guarantor may resume (unless otherwise
prohibited as described in the first sentence of this paragraph) resume payments
pursuant to its Subsidiary Guaranty after the end of such Payment Blockage
Period.
SECTION 12.04. Demand for Payment. If a demand for payment is
made on a Subsidiary Guarantor pursuant to Article XI, such Subsidiary Guarantor
may not pay its Subsidiary Guaranty until three Business Days after the
Representatives of all issues of Designated Senior Debt receive notice of such
acceleration and,
<PAGE>
4.3-76
thereafter, may pay its Subsidiary Guaranty only if this Indenture otherwise
permits payment at that time.
SECTION 12.05. When Distribution Must Be Paid Over. If a
distribution is made to Securityholders that because of this Article XII should
not have been made to them, the Securityholders who receive the distribution
shall hold it in trust for holders of the relevant Senior Debt and pay it over
to them or their Representatives as their interests may appear.
SECTION 12.06. Subrogation. After all Senior Debt of a
Subsidiary Guarantor is paid in full and until the Securities are paid in full,
Securityholders shall be subrogated to the rights of holders of Senior Debt to
receive distributions applicable to Senior Debt. A distribution made under this
Article XII to holders of such Senior Debt that otherwise would have been made
to Securityholders is not, as between the relevant Subsidiary Guarantor and
Securityholders, a payment by such Subsidiary Guarantor on such Senior Debt.
SECTION 12.07. Relative Rights. This Article XII
defines the relative rights of Securityholders and holders of Senior Debt of a
Subsidiary Guarantor. Nothing in this Indenture shall:
(1) impair, as between a Subsidiary Guarantor and Secu
rityholders, the obligation of such Subsidiary Guarantor, which is
absolute and unconditional, to pay the Obligations to the extent set
forth in Article XI or the relevant Subsidiary Guaranty; or
(2) prevent the Trustee or any Securityholder from exercising
its available remedies upon a default by such Subsidiary Guarantor
under the Obligations, subject to the rights of holders of Senior Debt
of such Subsidiary Guarantor to receive distributions otherwise payable
to Securityholders.
SECTION 12.08. Subordination May Not Be Impaired by Subsidiary
Guarantor. No right of any holder of Senior Debt of any Subsidiary Guarantor to
enforce the subordination of the Obligation of such Subsidiary Guarantor shall
be impaired by any act or failure to act by such Subsidiary Guarantor or by its
failure to comply with this Indenture.
SECTION 12.09. Rights of Trustee and Paying Agent.
Notwithstanding Section 12.03, the Trustee or Paying Agent may continue to make
payments on any Subsidiary Guaranty and shall not be charged with knowledge of
the existence of facts that would prohibit the making of any such payments
unless, not less than two Business Days prior to the date of such payment, a
Trust Officer receives written notice satisfactory to it that payments may not
be made under this Article XII. The Company, the relevant Subsidiary Guarantor,
the Registrar or co-registrar, the Paying Agent, a Representative or a holder of
Senior Debt of any Subsidiary Guarantor may give the notice; provided, however,
that,
<PAGE>
4.3-77
if an issue of Senior Debt of any Subsidiary Guarantor has a Representative,
only the Representative may give the notice.
The Trustee in its individual or any other capacity may hold
Senior Debt with the same rights it would have if it were not Trustee. The
Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article XII with respect to any Senior Debt of any Subsidiary Guarantor that may
at any time be held by it, to the same extent as any other holder of Senior
Debt; and nothing in Article VII shall deprive the Trustee of any of its rights
as such holder. Nothing in this Article XII shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.07.
SECTION 12.10. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders of Senior
Debt of any Subsidiary Guarantor, the distribution may be made and the notice
given to their Representative (if any).
SECTION 12.11. Article XII Not To Prevent Events of Default
Under a Subsidiary Guaranty or Limit Right To Demand Payment. The failure to
make a payment pursuant to a Subsidiary Guaranty by reason of any provision in
this Article XII shall not be construed as preventing the occurrence of a
default under such Subsidiary Guaranty. Nothing in this Article XII shall have
any effect on the right of the Securityholders or the Trustee to make a demand
for payment on any Subsidiary Guarantor pursuant to Article XI or the relevant
Subsidiary Guaranty.
SECTION 12.12. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article XII, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 12.02
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Senior Debt
of any Subsidiary Guarantor for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of Senior Debt and
other Debt of such Subsidiary Guarantor, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XII. In the event that the Trustee determines, in
good faith, that evidence is required with respect to the right of any Person as
a holder of Senior Debt of any Subsidiary Guarantor to participate in any
payment or distribution pursuant to this Article XII, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the Trustee as
to the amount of Senior Debt of such Subsidiary Guarantor held by such Person,
the extent to which such Person is entitled to participate in such payment or
distribution and other facts pertinent to the rights of such Person under this
Article XII, and, if such evidence is not furnished, the Trustee may defer any
payment to such Person pending judicial determination as to the right of such
<PAGE>
4.3-78
Person to receive such payment. The provisions of Sections 7.01 and 7.02 shall
be applicable to all actions or omissions of actions by the Trustee pursuant to
this Article XII.
SECTION 12.13. Trustee To Effectuate Subordination. Each
Securityholder by accepting a Security authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Senior Debt of any Subsidiary Guarantor as provided in this Article XII and
appoints the Trustee as attorney-in-fact for any and all such purposes.
SECTION 12.14. Trustee Not Fiduciary for Holders of Senior
Debt of Subsidiary Guarantor. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt of any Subsidiary Guarantor and
shall not be liable to any such holders if it shall mistakenly pay over or
distribute to Securityholders or the Company or any other Person, money or
assets to which any holders of such Senior Debt shall be entitled by virtue of
this Article XII or otherwise.
SECTION 12.15. Reliance by Holders of Senior Debt of a
Subsidiary Guarantor on Subordination Provisions. Each Securityholder by
accepting a Security acknowledges and agrees that the foregoing subordination
provisions are, and are intended to be, an inducement and a consideration to
each holder of any Senior Debt of any Subsidiary Guarantor, whether such Senior
Debt was created or acquired before or after the issuance of the Securities, to
acquire and continue to hold, or to continue to hold, such Senior Debt and such
holder of Senior Debt shall be deemed conclusively to have relied on such
subordination provisions in acquiring and continuing to hold, or in continuing
to hold, such Senior Debt.
ARTICLE XIII
Miscellaneous
SECTION 13.01. Trust Indenture Act Controls. If any provision
of this Indenture limits, qualifies or conflicts with another provision that is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 13.02. Notices. Any notice or communication shall be
in writing and delivered in person or mailed by first-class mail or sent by
facsimile (with a hard copy delivered in person or by mail promptly thereafter)
and addressed as follows:
if to the Company:
TV Guide, Inc.
7140 South Lewis Avenue
Tulsa, Oklahoma 74136
Attention of: Chief Financial Officer
<PAGE>
4.3-79
if to any Subsidiary Guarantor, to such
Subsidiary Guarantor:
c/o TV Guide, Inc.
7140 South Lewis Avenue
Tulsa, Oklahoma 74136
if to the Trustee:
The Bank of New York
101 Barclay Street 21W
New York, New York 10286
Attention of:
Corporate Trust Administration
The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Securityholder shall
be mailed to the Securityholder at the Securityholder's address as it appears on
the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA ss. 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions
Precedent. Upon any request or application by the Company to the Trustee to take
or refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee:
(1) 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
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
<PAGE>
80
SECTION 13.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a covenant or
condition provided for in this Indenture shall include:
(1) a statement that the individual making such cer
tificate or opinion has read such covenant or condition;
(2) 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;
(3) a statement that, in the opinion of such individual, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 13.06. When Securities Disregarded. In determining
whether the Holders of the required principal amount of Securities have
concurred in any direction, waiver or consent, Securities owned by the Company,
any Subsidiary Guarantor or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any
Subsidiary Guarantor shall be disregarded and deemed not to be outstanding,
except that, for the purpose of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent, only Securities
that a Trust Officer of the Trustee actually knows are so owned shall be so
disregarded. Also, subject to the foregoing, only Securities outstanding at the
time shall be considered in any such determination.
SECTION 13.07. Rules by Trustee, Paying Agent and Registrar.
The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar and the Paying Agent or co-registrar may make
reasonable rules for their functions.
SECTION 13.08. Legal Holidays. A "Legal Holiday" is a
Saturday, a Sunday or a day on which banking institutions are not required to be
open in the State of New York. If a payment date is a Legal Holiday, payment
shall be made on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period. If a regular record date is a
Legal Holiday, the record date shall not be affected.
SECTION 13.09. Governing Law. THIS INDENTURE AND THE
SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
<PAGE>
81
SECTION 13.10. 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 Securities or this
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Securityholder
shall waive and release all such liability. The waiver and release shall be part
of the consideration for the issue of the Securities.
SECTION 13.11. Successors. All agreements of the
Company and each Subsidiary Guarantor in this Indenture and the
Securities shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.
SECTION 13.12. Multiple Originals. The parties may
sign any number of copies of this Indenture. Each signed copy
shall be an original, but all of them together represent the same
agreement. One signed copy is enough to prove this Indenture.
<PAGE>
82
SECTION 13.13. Table of Contents; Headings. The table of
contents and headings of the Articles and Sections of this Indenture have been
inserted for convenience of reference only, are not intended to be considered a
part hereof and shall not modify or restrict any of the terms or provisions
hereof.
IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed as of the date first written above.
UNITED VIDEO SATELLITE GROUP,
INC. (to be renamed TV Guide,
Inc.),
by /s/ Peter C. Boylan III
Name: Peter C. Boylan III
Title: Executive Vice President;
Chairman and Chief Executive
Officer of TV Guide Entertainment
Group and United Video Group
EACH OF THE SUBSIDIARIES LISTED
ON SCHEDULE I HERETO,
by /s/ Peter C. Boylan III
Name: Peter C. Boylan III
Title:
THE BANK OF NEW YORK, as Trustee,
by /s/ Van K. Brown
Name: Van K. Brown
Title: Assistant Vice President
<PAGE>
SCHEDULE I
Initial Subsidiary Guarantors
United Video Network Sales, Inc. (to be renamed TV Guide Affiliate
Sales, Inc.)
UV Corp.
Telluride Cablevision Inc.
UVTV-A, Inc.
UVTV-X, Inc.
DirectCom Networks, Inc.
TV Guide Media Sales, Inc.
EuroMedia Group, Inc.
TV Guide Interactive Group Inc.
Prevue Data Services, Inc.
TV Guide Online, Inc.
Prevue Interactive, Inc. (to be renamed TV Guide
Interactive, Inc.)
PNI Holdings, Inc. (to be renamed TV Guide Entertainment
Group, Inc.)
Prevue International, Inc. (TV Guide International, Inc.)
Sneak Holdings, Inc.
LMC Netlink Corporation
Westlink, Inc.
Prevue Networks, Inc. (to be renamed TV Guide Networks, Inc.)
UVTV, Inc.
Netlink USA
News America Publications Inc. (to be renamed TV Guide Magazine
Group, Inc.)
TVSM, Inc.
TVSM Publishing, Inc.
Murdoch Magazines Distribution, Inc. (to be renamed TV Guide
Distribution, Inc.)
Continental Paper Company
<PAGE>
1
APPENDIX A
FOR OFFERINGS TO QUALIFIED INSTITUTIONAL BUYERS PURSUANT TO RULE
144A AND TO CERTAIN PERSONS IN OFFSHORE TRANSACTIONS IN RELIANCE
ON REGULATION S.
PROVISIONS RELATING TO INITIAL SECURITIES
AND EXCHANGE SECURITIES
1. Definitions
1.1 Definitions
For the purposes of this Appendix A the following terms shall have the
meanings indicated below:
"Definitive Security" means a certificated Initial Security or
an Exchange Security bearing, if required, the restricted securities legend set
forth in Section 2.3(c) hereto.
"Depository" means The Depository Trust Company, its nominees
and their respective successors.
"Exchange Securities" means the 81/8% Senior Subordinated
Notes due 2009 to be issued as provided for in this Indenture in connection with
a Registered Exchange Offer or a Private Exchange pursuant to the Registration
Agreement.
"IAI" means an institutional "accredited investor" as
described in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
"Initial Purchasers" means the purchasers named in
Schedule I to the Purchase Agreement.
"Initial Securities" means the 81/8% Senior Subordinated Notes
due 2009 to be issued as provided for in this Indenture.
"Private Exchange" means the offer by the Company, pursuant to
Section 2 of the Registration Agreement, to issue and deliver to the Initial
Purchasers, in exchange for the Initial Securities held by the Initial
Purchasers as part of their initial distribution, a like aggregate principal
amount of Private Exchange Securities.
"Private Exchange Securities" means the 81/8% Senior
Subordinated Notes due 2009 to be issued pursuant to this Indenture in
connection with a Private Exchange pursuant to the Registration Agreement.
"Purchase Agreement" means the Purchase Agreement dated
February 23, 1999, among the Company, the Subsidiary Guarantors and the Initial
Purchasers relating to the Initial Securities.
"QIB" means a "qualified institutional buyer" as
defined in Rule 144A.
"Registered Exchange Offer" means the offer by the
Company, pursuant to the Registration Agreement, to certain
<PAGE>
2
Holders of Initial Securities, to issue and deliver to such Holders, in exchange
for the Initial Securities, a like aggregate principal amount of Exchange
Securities registered under the Securities Act.
"Registration Agreement" means the Registration Rights
Agreement dated February 23, 1999, among the Company, the Subsidiary Guarantors
and the Initial Purchasers relating to the Securities.
"Securities" means the Initial Securities and the
Exchange Securities, treated as a single class.
"Securities Custodian" means the custodian with respect to a
Global Security (as appointed by the Depository) or any successor person
thereto, who shall initially be the Trustee.
"Shelf Registration Statement" means a registration statement
issued by the Company in connection with the offer and sale of Initial
Securities pursuant to the Registration Agreement.
"Transfer Restricted Securities" means Definitive Securities
and any other Securities that bear or are required to bear the legend set forth
in Section 2.3(c) hereto.
1.2 Other Definitions
Defined in
Term Section:
"Agent Members"..........................................................2.1(b)
"Global Security"........................................................2.1(a)
"Regulation S"...........................................................2.1
"Rule 144A"..............................................................2.1
2. The Securities
2.1 Form and Dating
The Initial Securities will be offered and sold by the Company
pursuant to the Purchase Agreement. Unless registered under the Securities Act,
the Initial Securities will be resold, initially only to QIBs in reliance on
Rule 144A under the Securities Act ("Rule 144A") and in reliance on Regulation S
under the Securities Act ("Regulation S"). Initial Securities may thereafter be
transferred to, among others, QIBs, purchasers in reliance on Regulation S and
IAIs under Rule 501(a)(1), (2), (3) or (7) under the Securities Act, subject to
the restrictions on transfers set forth therein.
(a) Global Securities. Initial Securities shall be issued
initially in the form of one or more permanent global securities in definitive,
fully registered form (each, a "Global Security") without interest coupons and
with the global securities legend and the restricted securities legend set forth
in Exhibit 1 hereto, which shall be deposited on behalf of the purchasers of the
Initial Securities represented thereby with the Securities Custodian, and
registered in the name of the Depository or a nominee of the
<PAGE>
3
Depository, duly executed by the Company and authenticated by the Trustee as
provided in this Indenture. The aggregate principal amount of the Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depository or its nominee as hereinafter
provided. Initial Securities, the beneficial interests in which are sold to
QIBs, will initially be represented by Global Securities bearing CUSIP numbers
87307QAA7, and Initial Securities, the beneficial interests in which are sold
pursuant to Regulation S, will initially be represented by Global Securities
bearing CUSIP number U87310AA3. Initial Securities, the beneficial interests in
which are sold to IAIs, will initially be represented by Global Securities
bearing the CUSIP numbers 87307QAB5.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply
only to a Global Security deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.1(b) and pursuant to an order of the Company, authenticate
and deliver initially one or more Global Securities that (a) shall be registered
in the name of the Depository for such Global Security or Global Securities or
the nominee of such Depository and (b) shall be delivered by the Trustee to such
Depository or pursuant to such Depository's instructions or held by the Trustee
as Securities Custodian.
Members of, or participants in, the Depository ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depository or by the Trustee as Securities
Custodian or under such Global Security, and the Depository may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and its Agent Members, the operation of
customary practices of such Depository governing the exercise of the rights of a
holder of a beneficial interest in any Global Security.
(c) Definitive Securities. Except as provided in Section 2.4
hereto, owners of beneficial interests in Global Securities will not be entitled
to receive physical delivery of certificated Securities.
2.2 Authentication. The Trustee shall authenticate and deliver: (1)
Initial Securities for original issue in an aggregate principal amount of
$400,000,000 and (2) the Exchange Securities for issue only in a Registered
Exchange Offer or a Private Exchange pursuant to the Registration Agreement, for
a like principal amount of Initial Securities, upon a written order of the
Company signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary of the Company. Such order shall specify the
amount of the Securities to be authenticated and the date on which the original
issue of Securities is to be authenticated and whether
<PAGE>
4
the Securities are to be Initial Securities or Exchange Securities. The
aggregate principal amount of Securities outstanding at any time may not exceed
$400,000,000 except as provided in Section 2.07 of this Indenture.
2.3 Transfer and Exchange. (a) Transfer and Exchange of
Definitive Securities. When Definitive Securities are presented to
the Registrar or a co-registrar with a request:
(x) to register the transfer of such Definitive
Securities; or
(y) to exchange such Definitive Securities for an equal
principal amount of Definitive Securities of other authorized
denominations,
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Securities surrendered for transfer or
exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Company
and the Registrar or co-registrar, duly executed by the Holder thereof
or his attorney duly authorized in writing; and
(ii) are being transferred or exchanged pursuant to an
effective registration statement under the Securities Act or pursuant
to clause (A), (B) or (C) below, and are accompanied by the following
additional information and documents, as applicable:
(A) if such Definitive Securities are being delivered
to the Registrar by a Holder for registration in the name of
such Holder, without transfer, a certification from such
Holder to that effect; or
(B) if such Definitive Securities are being
transferred to the Company, a certification to that
effect; or
(C) if such Definitive Securities are being
transferred pursuant to an exemption from registration in
accordance with Rule 144 under the Securities Act, (i) a
certification to that effect and (ii) if the Company so
requests, an opinion of counsel or other evidence reasonably
satisfactory to it as to the compliance with the restrictions
set forth in the legend set forth in Section 2.3(c)(i) hereto.
(b) Transfer and Exchange of Global Securities. (i) The
transfer and exchange of Global Securities or beneficial interests
therein shall be effected through the Depository, in accordance with
this Indenture (including applicable restrictions on transfer set forth
herein, if any) and the procedures of the Depository therefor. A
transferor of a beneficial interest in a Global Security shall deliver
a
<PAGE>
5
written order given in accordance with the Depository's procedures
containing information regarding the participant account of the
Depository to be credited with a beneficial interest in the Global
Security and such account shall be credited in accordance with such
instructions with a beneficial interest in the Global Security and the
account of the Person making the transfer shall be debited by an amount
equal to the beneficial interest in the Global Security being
transferred. In the case of a transfer of a beneficial interest in a
Global Security to an IAI, the transferee must furnish a signed letter
to the Trustee containing certain representations and agreements (the
form of which letter can be obtained from the Trustee or the Company).
(ii) If the proposed transfer is a transfer of a beneficial
interest in one Global Security to a beneficial interest in another
Global Security, the Registrar shall reflect on its books and records
the date and an increase in the principal amount of the Global Security
to which such interest is being transferred in an amount equal to the
principal amount of the interest to be so transferred, and the
Registrar shall reflect on its books and records the date and a
corresponding decrease in the principal amount of Global Security from
which such interest is being transferred.
(iii) Notwithstanding any other provisions of this Appendix A
(other than the provisions set forth in Section 2.4), a Global Security
may not be transferred as a whole except by the Depository to a nominee
of the Depository or by a nominee of the Depository to the Depository
or another nominee of the Depository or by the Depository or any such
nominee to a successor Depository or a nominee of such successor
Depository.
(iv) In the event that a Global Security is exchanged for
Securities in definitive registered form pursuant to Section 2.4 hereto
prior to the consummation of a Registered Exchange Offer or the
effectiveness of a Shelf Registration Statement with respect to such
Securities, such Securities may be exchanged only in accordance with
such procedures as are substantially consistent with the provisions of
this Section 2.3 (including the certification requirements set forth on
the reverse of the Initial Securities intended to ensure that such
transfers comply with Rule 144A, Regulation S or such other applicable
exemption from registration under the Securities Act, as the case may
be) and such other procedures as may from time to time be adopted by
the Company.
(c) Legend.
(i) Except as permitted by the following paragraphs (ii),
(iii), (iv) and (vi), each Security certificate evidencing the Global
Securities and the Definitive Securities (and all Securities issued in
exchange therefor or in substitution
<PAGE>
6
thereof) shall bear a legend in substantially the following
form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS NOTE MAY NOT BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF
THE ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY HERETO) OR (Y) BY ANY
HOLDER THAT WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE
THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE, OTHER
THAN (1) TO THE COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO
A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY), (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION
S UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY), (4) TO AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT (AS
INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF
TRANSFER ON THE REVERSE OF THIS SECURITY) THAT IS ACQUIRING THIS
SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND A
CERTIFICATE WHICH MAY BE OBTAINED FROM THE COMPANY OR THE TRUSTEE IS
DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE TRUSTEE, (5)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT OR (6)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF
ANY STATE OF THE UNITED STATES. AN INSTITUTIONAL ACCREDITED INVESTOR
HOLDING THIS SECURITY AGREES THAT IT WILL FURNISH TO THE COMPANY AND
THE TRUSTEE SUCH CERTIFICATES AND OTHER INFORMATION AS THEY MAY
REASONABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF THIS SECURITY
COMPLIES WITH THE FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE
COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A OR (2) AN INSTITUTION THAT IS AN "ACCREDITED
INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT
PURPOSES AND NOT FOR DISTRIBUTION OR (3) A NON-U.S. PERSON OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE
REQUIREMENTS OF PARAGRAPH (k)(2) (1) OF RULE 902 UNDER) REGULATION S
UNDER THE SECURITIES ACT."
Each Definitive Security will also bear the following additional legend:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER
TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND
<PAGE>
7
OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY
REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE
FOREGOING RESTRICTIONS."
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a
Global Security) pursuant to Rule 144 under
the Securities Act:
(A) in the case of any Transfer Restricted Security
that is a Definitive Security, the Registrar shall permit the
Holder thereof to exchange such Transfer Restricted Security
for a Definitive Security that does not bear the legends set
forth above and rescind any restriction on the transfer of
such Transfer Restricted Security; and
(B) in the case of any Transfer Restricted Security
that is represented by a Global Security, the Registrar shall
permit the Holder thereof to exchange such Transfer Restricted
Security for a Definitive Security that does not bear the
legends set forth above and rescind any restriction on the
transfer of such Transfer Restricted Security,
in either case, if the Holder certifies in writing to the Registrar that its
request for such exchange was made in reliance on Rule 144 (such certification
to be in the form set forth on the reverse of the Initial Security).
(iii) After a transfer of any Initial Securities or Private
Exchange Securities during the period of the effectiveness of a Shelf
Registration Statement with respect to such Initial Securities or
Private Exchange Securities, all requirements pertaining to legends on
such Initial Securities or Private Exchange Securities will cease to
apply, and an Initial Security or Private Exchange Security in global
form without restricted legends will be available to the transferee of
the beneficial interests in such Initial Securities or Private Exchange
Securities. Upon the occurrence of any of the circumstances described
in this paragraph, the Company will deliver an Officers' Certificate to
the Trustee instructing the Trustee to issue Securities without
legends.
(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Securities pursuant to which certain Holders of
such Initial Securities are offered Exchange Securities not
constituting Private Exchange Securities in exchange for their Initial
Securities, Exchange Securities not constituting Private Exchange
Securities in global form will be available to Holders that exchange
such Initial Securities in such Registered Exchange Offer. Upon the
occurrence of any of the circumstances described in this paragraph, the
Company will deliver an Officers' Certificate to the Trustee
instructing the Trustee to issue Securities without legends.
(v) Upon the consummation of a Private Exchange with
respect to the Initial Securities pursuant to which Holders of
<PAGE>
8
such Initial Securities are offered Private Exchange Securities in
exchange for their Initial Securities, Private Exchange Securities in
global form with, to the extent required by applicable law, the
restricted securities legend set forth in Exhibit 1 hereto, will be
available to Holders that exchange such Initial Securities in such
Private Exchange.
(d) Cancelation or Adjustment of Global Security. At
---------------------------------------------
such time as all beneficial interests in a Global Security have
either been exchanged for Definitive Securities, redeemed,
repurchased or canceled, such Global Security shall be returned by
the Depository to the Trustee for cancelation or retained and
canceled by the Trustee. At any time prior to such cancelation, if
any beneficial interest in a Global Security is exchanged for
Definitive Securities, redeemed, repurchased or canceled, the
principal amount of Securities represented by such Global Security
shall be reduced and an adjustment shall be made on the books and
records of the Trustee (if it is then the Securities Custodian for
such Global Security) with respect to such Global Security, by the
Trustee or the Securities Custodian, to reflect such reduction.
(e) Obligations with Respect to Transfers and Exchanges
of Securities.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Definitive
Securities and Global Securities at the Registrar's
or co-registrar's request.
(ii) No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith (other than any
such transfer taxes, assessments or similar governmental charge payable
upon exchange or transfer pursuant to Sections 3.06, 4.06, 4.11 and
9.05 of this Indenture).
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of any Security for a period
beginning 15 days before the mailing of a notice of redemption or an
offer to repurchase Securities or 15 days before an interest payment
date.
(iv) Prior to the due presentation for registration of
transfer of any Security, the Company, the Trustee, the Paying Agent,
the Registrar or any co-registrar may deem and treat the person in
whose name a Security is registered as the absolute owner of such
Security for the purpose of receiving payment of principal of and
interest on such Security and for all other purposes whatsoever,
whether or not such Security is overdue, and none of the Company, the
Trustee, the Paying Agent, the Registrar or any co-registrar shall be
affected by notice to the contrary.
(iv) All Securities issued upon any transfer or exchange
pursuant to the terms of this Indenture shall evidence the same debt
and shall be entitled to the same benefits under this
<PAGE>
9
Indenture as the Securities surrendered upon such transfer or exchange.
(f) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to
any beneficial owner of a Global Security, a member of, or a
participant in the Depository or any other Person with respect to the
accuracy of the records of the Depository or its nominee or of any
participant or member thereof, with respect to any ownership interest
in the Securities or with respect to the delivery to any participant,
member, beneficial owner or other Person (other than the Depository) of
any notice (including any notice of redemption or repurchase) or the
payment of any amount, under or with respect to such Securities. All
notices and communications to be given to the Holders and all payments
to be made to Holders under the Securities shall be given or made only
to the registered Holders (which shall be the Depository or its nominee
in the case of a Global Security). The rights of beneficial owners in
any Global Security shall be exercised only through the Depository
subject to the applicable rules and procedures of the Depository. The
Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its members,
participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to
any transfer of any interest in any Security (including any transfers
between or among Depository participants, members or beneficial owners
in any Global Security) other than to require delivery of such
certificates and other documentation or evidence as are expressly
required by, and to do so if and when expressly required by, the terms
of this Indenture, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.
2.4 Certificated Securities
(a) A Global Security deposited with the Depository or with
the Trustee as Securities Custodian pursuant to Section 2.1 hereto shall be
transferred to the beneficial owners thereof in the form of certificated
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if (i) the
Depository notifies the Company that it is unwilling or unable to continue as a
Depository for such Global Security or if at any time the Depository ceases to
be a "clearing agency" registered under the Exchange Act, and a successor
Depository is not appointed by the Company within 90 days of such notice,(ii) a
Default or an Event of Default has occurred and is continuing or (iii) the
Company, in its sole discretion, notifies the Trustee in writing that it elects
to cause the issuance of certificated Securities under this Indenture.
<PAGE>
10
(b) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section 2.4 shall be surrendered by the
Depository 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 Security, an equal aggregate
principal amount of certificated Securities of authorized denominations. Any
portion of a Global Security 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 Depository shall
direct. Any certificated Initial Security delivered in exchange for an interest
in the Global Security shall, except as otherwise provided by Section 2.3(c)
hereto, bear the restricted securities legend set forth in Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b) hereto, the
registered Holder of a Global Security may grant proxies and otherwise authorize
any Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action that a Holder is entitled to take under this
Indenture or the Securities.
(d) In the event of the occurrence of any of the events
specified in Section 2.4(a)(i), (ii) or (iii), the Company will promptly make
available to the Trustee a reasonable supply of certificated Securities in
definitive, fully registered form without interest coupons.
<PAGE>
1
EXHIBIT 1
to APPENDIX A
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities 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 SECURITY 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
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES
FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF THE ISSUANCE HEREOF
(OR ANY PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT WAS AN AFFILIATE
OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH
TRANSFER, IN EITHER CASE, OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS THIS
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A") TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE
OF TRANSFER ON THE REVERSE OF THIS SECURITY), (3) IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX
CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY), (4) TO AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN
RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT (AS INDICATED BY THE
BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF
THIS SECURITY) THAT IS ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT
FOR DISTRIBUTION, AND A CERTIFICATE WHICH MAY BE OBTAINED FROM THE COMPANY OR
THE TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE TRUSTEE, (5)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT OR (6) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE
<PAGE>
2
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. AN INSTITUTIONAL ACCREDITED
INVESTOR HOLDING THIS SECURITY AGREES THAT IT WILL FURNISH TO THE COMPANY AND
THE TRUSTEE SUCH CERTIFICATES AND OTHER INFORMATION AS THEY MAY REASONABLY
REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE
FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A OR (2) AN INSTITUTION THAT
IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER
THE SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES
AND NOT FOR DISTRIBUTION OR (3) A NON-U.S. PERSON OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH
(k)(2)(1) OF RULE 902 UNDER) REGULATION S UNDER THE SECURITIES ACT.
[Definitive Securities Legend]
[IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
THE FOREGOING RESTRICTIONS.]
<PAGE>
1
No. [up to]** $__________
81/8% Senior Subordinated Note due 2009
CUSIP No. ______
United Video Satellite Group, Inc. (to be renamed TV Guide,
Inc.), a Delaware corporation, promises to pay to [ ], or registered assigns,
the principal sum [of ______ Dollars]* [as set forth on the Schedule of
Increases or Decreases annexed hereto]** on March 1, 2009.
Interest Payment Dates: March 1 and September 1.
Record Dates: February 15 and August 15.
Additional provisions of this Security are set forth on the
other side of this Security.
IN WITNESS WHEREOF, the parties have caused this instrument to
be duly executed.
UNITED VIDEO SATELLITE GROUP, INC.
(to be renamed TV Guide, Inc.),
by /s/_________________________
Name:
Title:
by /s/__________________________
Name:
Title:
[CORPORATE SEAL]
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
Dated: March 1, 1999
THE BANK OF NEW YORK,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by_________________________
Authorized Signatory
* Insert for Definitive Securities.
** Insert for Global Securities.
<PAGE>
2
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
81/8% Senior Subordinated Note due 2009
1. Interest
(a) United Video Satellite Group, Inc. (to be renamed TV
Guide, Inc.), a Delaware corporation (such corporation, and its successors and
assigns under the Indenture hereinafter referred to, being herein called the
"Company"), promises to pay interest on the principal amount of this Security at
the rate per annum shown above. The Company will pay interest semiannually on
March 1 and September 1 of each year. Interest on the Securities will accrue
from the most recent date to which interest has been paid or, if no interest has
been paid, from March 1, 1999. Interest shall be computed on the basis of a
360-day year of twelve 30-day months. The Company shall pay interest on overdue
principal at the rate borne by the Securities plus 1% per annum, and it shall
pay interest on overdue installments of interest at the rate borne by the
Securities to the extent lawful.
(b) Special Interest. The holder of this Security is entitled
to the benefits of the Registration Rights Agreement dated February 23, 1999,
among the Company, the Subsidiary Guarantors named therein (the "Subsidiary
Guarantors") and the Purchasers named therein (the "Registration Agreement").
Capitalized terms used in this paragraph (b) but not defined herein have the
meanings assigned to them in the Registration Agreement. In the event that (i)
neither the Exchange Offer Registration Statement nor the Shelf Registration
Statement has been filed with the Commission on or prior to the 90th day
following the date of the original issuance of the Securities, (ii) neither the
Exchange Offer Registration Statement nor the Shelf Registration Statement has
been declared effective on or prior to the 150th day following the date of the
original issuance of the Securities, (iii) neither the Registered Exchange Offer
has been consummated nor the Shelf Registration Statement has been declared
effective on or prior to the 180th day following the date of the original
issuance of the Securities or (iv) after either the Exchange Offer Registration
Statement or the Shelf Registration Statement have been declared effective, such
Registration Statement thereafter ceases to be effective or usable in connection
with resales of the Securities at any time that the Company is obligated to
maintain the effectiveness thereof pursuant to the Registration Agreement (each
such event referred to in clauses (i) through (iv) above being referred to
herein as a "Registration Default"), interest (the "Special Interest") shall
accrue (in addition to stated interest on the Securities) from and including the
date on which the first such Registration Default shall occur to but excluding
the date on which all Registration Defaults have been cured, at a rate per annum
equal to 0.25% of the principal amount of the Securities; provided, however,
that such rate per annum shall increase by 0.25% per annum from and including
the 91st day after the first such Registration Default (and each successive 91st
day thereafter) unless and until all Registration Defaults have been cured;
provided further, however, that in no event shall the Special Interest accrue at
a rate in excess of 1.00% per annum. The Special Interest will be payable in
cash semiannually in arrears each March 1 and September 1.
<PAGE>
3
2. Method of Payment
The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered holders of Securities at
the close of business on the March 1 or September 1 next preceding the interest
payment date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Company will pay principal and interest
in money of the United States of America that at the time of payment is legal
tender for payment of public and private debts. Payments in respect of the
Securities represented by a Global Security (including principal, premium and
interest) will be made by wire transfer of immediately available funds to the
accounts specified by The Depository Trust Company. The Company will make all
payments in respect of a certificated Security (including principal, premium and
interest), by mailing a check to the registered address of each Holder thereof;
provided, however, that payments on the Securities may also be made, in the case
of a Holder of at least $1,000,000 aggregate principal amount of Securities, by
wire transfer to a U.S. dollar account maintained by the payee with a bank in
the United States if such Holder elects payment by wire transfer by giving
written notice to the Trustee or the Paying Agent to such effect designating
such account no later than 30 days immediately preceding the relevant due date
for payment (or such other date as the Trustee may accept in its discretion).
3. Paying Agent and Registrar
Initially, The Bank of New York, a New York banking
association (the "Trustee"), will act as Paying Agent and Registrar. The Company
may appoint and change any Paying Agent, Registrar or co-registrar without
notice. The Company or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as
of March 1, 1999 (the "Indenture"), among the Company, the Subsidiary Guarantors
and the Trustee. The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. ss.ss. 77aaa-77bbbb) as in effect on the date
of the Indenture (the "TIA"). Terms defined in the Indenture and not defined
herein have the meanings ascribed thereto in the Indenture. The Securities are
subject to all such terms, and Securityholders are referred to the Indenture and
the TIA for a statement of those terms.
The Securities are senior subordinated unsecured obligations
of the Company limited to $400,000,000 aggregate principal amount at any one
time outstanding (subject to Section 2.07 of the Indenture). This Security is
one of the Initial Securities referred to in the Indenture. The Indenture
imposes certain limitations on the ability of the Company and its Restricted
Subsidiaries to, among other things, pay dividends and other distributions,
Incur Debt, enter into consensual restrictions upon
<PAGE>
4
the payment of certain dividends and distributions by the Restricted
Subsidiaries, enter into or permit certain transactions with Affiliates, create
or Incur Liens and make Asset Sales and certain Investments. The Indenture also
imposes limitations on the ability of the Company and the Subsidiary Guarantors
to consolidate or merge with or into any other Person or sell, transfer, assign,
lease, convey or otherwise dispose of all or substantially all the Property of
the Company or such Subsidiary Guarantor. If the Securities receive an
Investment Grade Rating, certain of the covenants in the Indenture will not be
applicable to the Company and its Restricted Subsidiaries for so long as the
Securities retain such Investment Grade Rating.
To guarantee the due and punctual payment of the principal and
interest on the Securities and all other amounts payable by the Company under
the Indenture and the Securities when and as the same shall be due and payable,
whether at maturity, by acceleration or otherwise, according to the terms of the
Securities and the Indenture, the Subsidiary Guarantors have jointly and
severally unconditionally guaranteed the Obligations on a senior subordinated
basis pursuant to the terms of the Indenture.
5. Optional Redemption
Except as set forth below, the Securities may not be
redeemable prior to March 1, 2004. On and after that date, the Company may
redeem the Securities in whole at any time or in part from time to time at the
following redemption prices (expressed in percentages of principal amount), plus
accrued and unpaid interest, if any, to the redemption date (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date that is on or prior to the date of
redemption), if redeemed during the 12-month period beginning on or after March
1 of the years set forth below:
Period Redemption
Price
2004.......................................................104.063%
2005.......................................................102.708%
2006.......................................................101.354%
2007 and thereafter........................................100.000%
Notwithstanding the foregoing, prior to March 1, 2002, the
Company may redeem up to 35% of the original aggregate principal amount of the
Securities issued with the proceeds from one or more Public Equity Offerings by
the Company, at a redemption price equal to 101% of the principal amount
thereof, plus accrued and unpaid interest thereon, if any, to the redemption
date (subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date that it on or prior
to the date of redemption); provided, however, that after giving effect to any
such redemption, at least 65% of the original aggregate principal amount of the
Securities remains outstanding. Any such redemption shall be made within 75 days
of such Public Equity Offering.
<PAGE>
5
6. Sinking Fund
The Securities are not subject to any sinking fund.
7. Notice of Redemption
Notice of redemption will be mailed by first-class mail at
least 30 days but not more than 60 days before the redemption date to each
Holder of Securities to be redeemed at his or her registered address. Securities
in denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued interest on all Securities (or portions thereof) to be redeemed on the
redemption date is deposited with the Paying Agent on or before the redemption
date and certain other conditions are satisfied, on and after such date interest
ceases to accrue on such Securities (or such portions thereof) called for
redemption.
8. Subordination
The Securities are subordinated to Senior Debt of the Company
and the Subsidiary Guarantors. To the extent provided in the Indenture, Senior
Debt of the Company and the Subsidiary Guarantors must be paid before the
Securities may be paid. The Company and each Subsidiary Guarantor agree, and
each Securityholder by accepting a Security agrees, to the subordination
provisions contained in the Indenture and authorizes the Trustee to give it
effect and appoints the Trustee as attorney-in-fact for such purpose.
9. Repurchase of Securities at the Option of Holders upon Change of
Control
Upon a Change of Control, any Holder of Securities will have
the right, subject to certain conditions specified in the Indenture, to cause
the Company to repurchase all or any part of the Securities of such Holder at a
purchase price equal to 101% of the principal amount of the Securities to be
repurchased plus accrued and unpaid interest, if any, to the date of purchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date that is on or prior
to the date of purchase) as provided in, and subject to the terms of, the
Indenture.
10. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or
exchange Securities in accordance with the Indenture. Upon any transfer or
exchange, the Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorse ments or transfer documents and to pay
any taxes required by law or permitted by the Indenture. The Registrar need not
register the transfer of or exchange any Securities selected for redemption
(except, in the case of a Security to be redeemed in part, the portion of the
Security not to be redeemed) or to transfer or exchange any Securities for a
period of 15 days prior to a selection
<PAGE>
6
of Securities to be redeemed or 15 days before an interest payment
date.
11. Persons Deemed Owners
The registered Holder of this Security may be treated as the
owner of it for all purposes.
12. Unclaimed Money
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its written request unless an abandoned property law designates
another Person. After any such payment, Holders entitled to the money must look
only to the Company and not to the Trustee for payment.
13. Discharge and Defeasance
Subject to certain conditions, the Company at any time may
terminate some of or all its obligations under the Securities and the Indenture
if the Company deposits with the Trustee money or U.S. Government Obligations
for the payment of principal and interest on the Securities to redemption or
maturity, as the case may be.
14. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture or the Securities may be amended without prior notice to any
Securityholder but with the written consent of the Holders of at least a
majority in aggregate principal amount of the outstanding Securities and (ii)
any default or noncompliance with any provision may be waived with the written
consent of the Holders of at least a majority in principal amount of the
outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Holder of Securities, the Company and the
Trustee may amend the Indenture or the Securities (i) to cure any ambiguity,
omission, defect or inconsistency; (ii) to comply with Article V of the
Indenture; (iii) to provide for uncertificated Securities in addition to or in
place of certificated Securities; (iv) to make certain changes in the
subordination provisions; (v) to add Guarantees with respect to the Securities
or to release Subsidiary Guarantors from Subsidiary Guarantees; (vi) to secure
the Securities; (vii) to add additional covenants or to surrender rights and
powers conferred on the Company; (viii) to comply with the requirements of the
SEC in order to effect or maintain the qualification of the Indenture under the
TIA; or (ix) to make any change that does not adversely affect the rights of any
Securityholder.
15. Defaults and Remedies
If an Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in aggregate principal amount of the Securities
then outstanding, subject to certain limitations, may declare all the Securities
to be immediately due and payable. Certain events of bankruptcy or insolvency
are Events of Default and shall result in the Securities being immediately due
and payable upon
<PAGE>
7
the occurrence of such Events of Default without any further act of
the Trustee or any Holder.
Holders of Securities may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives reasonable indemnity
or security. Subject to certain limitations, Holders of a majority in aggregate
principal amount of the Securities then outstanding may direct the Trustee in
its exercise of any trust or power under the Indenture. The Holders of a
majority in aggregate principal amount of the Securities then outstanding, by
written notice to the Company and the Trustee, may rescind any declaration of
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.
16. Trustee Dealings with the Company
Subject to certain limitations imposed by the TIA, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.
17. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the
Company or any Subsidiary Guarantor shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
18. Authentication
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
19. Abbreviations
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
20. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT
<PAGE>
8
THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
21. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
The Company will furnish to any Holder of Securities upon
written request and without charge to the Holder a copy of the Indenture which
has in it the text of this Security.
<PAGE>
9
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer
this Security on the books of the Company. The agent may substitute
another to act for him.
- ------------------------------------------------------------
Date: ________________ Your Signature: _____________________
- ------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by the Company or any Affiliate of the Company, the undersigned confirms
that such Securities are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) o to the Company; or
(2) o pursuant to an effective registration statement
under the Securities Act of 1933; or
(3) o inside the United States to a "qualified
institutional buyer" (as defined in Rule 144A under
the Securities Act of 1933) that purchases for its
own account or for the account of a qualified
institutional buyer to whom notice is given that
such transfer is being made in reliance on Rule
144A, in each case pursuant to and in compliance
with Rule 144A under the Securities Act of 1933; or
(4) o outside the United States in an offshore
transaction within the meaning of Regulation S under
the Securities Act in compliance with Rule 904 under
the Securities Act of 1933; or
<PAGE>
10
(5) o to an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act of 1933) that has furnished to the
Trustee a signed letter containing certain
representations and agreements (the form of which
letter can be obtained from the Trustee or the
Company); or
(6) o pursuant to another available exemption from
registration provided by Rule 144 under the
Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Securities evidenced by this certificate in the name of any
person other than the registered holder thereof; provided, however, that
if box (4), (5) or (6) is checked, the Trustee may require, prior to
registering any such transfer of the Securities, such legal opinions,
certifications and other information as the Company has reasonably
requested 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 of 1933.
-------------------------
Your Signature
Signature Guarantee:
Date: ______________________ __________________________
Signature must be guaranteed Signature of Signature
by a participant in a Guarantee
recognized signature guaranty
medallion program
- ------------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Security 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
<PAGE>
11
representations in order to claim the exemption from registration
provided by Rule 144A.
Dated: ________________ ______________________________
NOTICE: To be executed by
an executive officer
<PAGE>
12
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal amount of this Global Security is $[ ].
The following increases or decreases in this Global Security have been made:
<TABLE>
<S> <C> <C> <C> <C>
Date of Amount of decrease in Amount of increase in Principal amount of Signature of
Exchange Principal Amount of Principal Amount of this Global Security authorized signatory
this Global Security this Global Security following such of Trustee or
decrease or increase Securities Custodian
</TABLE>
<PAGE>
13
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by
the Company pursuant to Section 4.06 (Asset Sale) or 4.11 (Change of Control) of
the Indenture, check the box:
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.06 or 4.11 of the Indenture,
state the amount:
$
Date: __________________ Your Signature: __________________
(Sign exactly as your name appears on the other side of the Security)
Signature Guarantee:_______________________________________
Signature must be guaranteed by a
participant in a recognized signature
guaranty medallion program.
<PAGE>
1
EXHIBIT A
[FORM OF FACE OF SECURITY]
[Global Securities 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 SECURITY 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
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Definitive Securities Legend]
[IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
THE FOREGOING RESTRICTIONS.]
<PAGE>
2
No. [up to]** $__________
81/8% Senior Subordinated Note due 2009
CUSIP No. ______
TV Guide, Inc., a Delaware corporation, promises to pay to [
], or registered assigns, the principal sum [of ________ Dollars]* [as set forth
on the Schedule of Increases or Decreases annexed hereto]** on March 1, 2009.
Interest Payment Dates: March 1 and September 1.
Record Dates: February 15 and August 15.
Additional provisions of this Security are set forth on the
other side of this Security.
IN WITNESS WHEREOF, the parties have caused this instrument to
be duly executed.
TV GUIDE, INC.,
by
Name:
Title:
by
Name:
Title:
[CORPORATE SEAL]
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
Dated: March 1, 1999
THE BANK OF NEW YORK,
as Trustee, certifies that
this is one of the Securities
referred to in the Indenture.
by_________________________
Authorized Signatory
* Insert for Definitive Securities.
** Insert for Global Securities.
<PAGE>
3
[FORM OF REVERSE SIDE OF SECURITY]
81/8% Senior Subordinated Note due 2009
1. Interest.
TV Guide, Inc., a Delaware corporation (such corporation, and
its successors and assigns under the Indenture hereinafter referred to, being
herein called the "Company"), promises to pay interest on the principal amount
of this Security at the rate per annum shown above. The Company will pay
interest semiannually on March 1 and September 1 of each year. Interest on the
Securities will accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from March 1, 1999. Interest shall be computed
on the basis of a 360-day year of twelve 30-day months. The Company shall pay
interest on overdue principal at the rate borne by the Securities plus 1% per
annum, and it shall pay interest on overdue installments of interest at the rate
borne by the Securities to the extent lawful.
2. Method of Payment
The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered holders of Securities at
the close of business on the March 1 or September 1 next preceding the interest
payment date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Company will pay principal and interest
in money of the United States of America that at the time of payment is legal
tender for payment of public and private debts. Payments in respect of the
Securities represented by a Global Security (including principal, premium and
interest) will be made by wire transfer of immediately available funds to the
accounts specified by The Depository Trust Company. The Company will make all
payments in respect of a certificated Security (including principal, premium and
interest), by mailing a check to the registered address of each Holder thereof;
provided, however, that payments on the Securities may also be made, in the case
of a Holder of at least $1,000,000 aggregate principal amount of Securities, by
wire transfer to a U.S. dollar account maintained by the payee with a bank in
the United States if such Holder elects payment by wire transfer by giving
written notice to the Trustee or the Paying Agent to such effect designating
such account no later than 30 days immediately preceding the relevant due date
for payment (or such other date as the Trustee may accept in its discretion).
3. Paying Agent and Registrar
Initially, The Bank of New York, a New York banking
association (the "Trustee"), will act as Paying Agent and Registrar. The Company
may appoint and change any Paying Agent, Registrar or co-registrar without
notice. The Company or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar or co-registrar.
<PAGE>
4
4. Indenture
The Company issued the Securities under an Indenture dated as
of March 1, 1999 (the "Indenture"), among the Company, the Subsidiary Guarantors
named therein (the "Subsidiary Guarantors")and the Trustee. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in effect on the date of the Indenture (the "TIA"). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the TIA for a statement of
those terms.
The Securities are senior subordinated unsecured obligations
of the Company limited to $400,000,000 aggregate principal amount at any one
time outstanding (subject to Section 2.07 of the Indenture). This Security is
one of the Exchange Securities referred to in the Indenture issued in exchange
for Initial Securities. The Indenture imposes certain limitations on the ability
of the Company and its Restricted Subsidiaries to, among other things, pay
dividends and other distributions, Incur Debt, enter into consensual
restrictions upon the payment of certain dividends and distributions by the
Restricted Subsidiaries enter into or permit certain transactions with
Affiliates, create or Incur Liens and make Asset Sales and certain Investments.
The Indenture also imposes limitations on the ability of the Company and the
Subsidiary Guarantors to consolidate or merge with or into any other Person or
sell, transfer, assign, lease, convey or otherwise dispose of all or
substantially all the Property of the Company or such Subsidiary Guarantor. If
the Securities receive an Investment Grade Rating, certain of the covenants in
the Indenture will not be applicable to the Company and its Restricted
Subsidiaries for so long as the Securities retain such Investment Grade Rating.
To guarantee the due and punctual payment of the principal and
interest on the Securities and all other amounts payable by the Company under
the Indenture and the Securities when and as the same shall be due and payable,
whether at maturity, by acceleration or otherwise, according to the terms of the
Securities and the Indenture, the Subsidiary Guarantors have jointly and
severally unconditionally guaranteed the Obligations on a senior subordinated
basis pursuant to the terms of the Indenture.
5. Optional Redemption
Except as set forth below, the Securities may not be
redeemable prior to March 1, 2004. On and after that date, the Company may
redeem the Securities in whole at any time or in part from time to time at the
following redemption prices (expressed in percentages of principal amount), plus
accrued and unpaid interest, if any, to the redemption date (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date that is on or prior to the date of
redemption), if redeemed during the 12-month period beginning on or after March
1 of the years set forth below:
<PAGE>
5
Period Redemption
Price
2004............................................................ 104.063%
2005............................................................ 102.708%
2006 ........................................................... 101.354%
2007 and thereafter............................................. 100.000%
Notwithstanding the foregoing, prior to March 1, 2002, the
Company may redeem up to 35% of the original aggregate principal amount of the
Securities issued with the proceeds from one or more Public Equity Offerings by
the Company, at a redemption price equal to 101% of the principal amount
thereof, plus accrued and unpaid interest thereon, if any, to the redemption
date (subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date that it on or prior
to the date of redemption); provided, however, that after giving effect to any
such redemption, at least 65% of the original aggregate principal amount of the
Securities remains outstanding. Any such redemption shall be made within 75 days
of such Public Equity Offering.
6. Sinking Fund
The Securities are not subject to any sinking fund.
7. Notice of Redemption
Notice of redemption will be mailed by first-class mail at
least 30 days but not more than 60 days before the redemption date to each
Holder of Securities to be redeemed at his or her registered address. Securities
in denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued interest on all Securities (or portions thereof) to be redeemed on the
redemption date is deposited with the Paying Agent on or before the redemption
date and certain other conditions are satisfied, on and after such date interest
ceases to accrue on such Securities (or such portions thereof) called for
redemption.
8. Subordination
The Securities are subordinated to Senior Debt of the Company
and the Subsidiary Guarantors. To the extent provided in the Indenture, Senior
Debt of the Company and the Subsidiary Guarantors must be paid before the
Securities may be paid. The Company and each Subsidiary Guarantor agree, and
each Securityholder by accepting a Security agrees, to the subordination
provisions contained in the Indenture and authorizes the Trustee to give it
effect and appoints the Trustee as attorney-in-fact for such purpose.
9. Repurchase of Securities at the Option of Holders upon Change of
Control
Upon a Change of Control, any Holder of Securities will have
the right, subject to certain conditions specified in the Indenture, to cause
the Company to repurchase all or any part of the
<PAGE>
6
Securities of such Holder at a purchase price equal to 101% of the principal
amount of the Securities to be repurchased plus accrued and unpaid interest, if
any, to the date of purchase (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date that is on or prior to the date of purchase) as provided in, and subject to
the terms of, the Indenture.
10. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or
exchange Securities in accordance with the Indenture. Upon any transfer or
exchange, the Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorse ments or transfer documents and to pay
any taxes required by law or permitted by the Indenture. The Registrar need not
register the transfer of or exchange any Securities selected for redemption
(except, in the case of a Security to be redeemed in part, the portion of the
Security not to be redeemed) or to transfer or exchange any Securities for a
period of 15 days prior to a selection of Securities to be redeemed or 15 days
before an interest payment date.
11. Persons Deemed Owners
The registered Holder of this Security may be treated as the
owner of it for all purposes.
12. Unclaimed Money
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its written request unless an abandoned property law designates
another Person. After any such payment, Holders entitled to the money must look
only to the Company and not to the Trustee for payment.
13. Discharge and Defeasance
Subject to certain conditions, the Company at any time may
terminate some of or all its obligations under the Securities and the Indenture
if the Company deposits with the Trustee money or U.S. Government Obligations
for the payment of principal and interest on the Securities to redemption or
maturity, as the case may be.
14. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture or the Securities may be amended without prior notice to any
Securityholder but with the written consent of the Holders of at least a
majority in aggregate principal amount of the outstanding Securities and (ii)
any default or noncompliance with any provision may be waived with the written
consent of the Holders of at least a majority in principal amount of the
outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Holder of Securities, the Company and the
Trustee may
<PAGE>
7
amend the Indenture or the Securities (i) to cure any ambiguity, omission,
defect or inconsistency; (ii) to comply with Article V of the Indenture; (iii)
to provide for uncertificated Securities in addition to or in place of
certificated Securities; (iv) to make certain changes in the subordination
provisions; (v) to add Guarantees with respect to the Securities or to release
Subsidiary Guarantors from Subsidiary Guarantees; (vi) to secure the Securities;
(vii) to add additional covenants or to surrender rights and powers conferred on
the Company; (viii) to comply with the requirements of the SEC in order to
effect or maintain the qualification of the Indenture under the TIA; or (ix) to
make any change that does not adversely affect the rights of any Securityholder.
15. Defaults and Remedies
If an Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in aggregate principal amount of the Securities
then outstanding, subject to certain limitations, may declare all the Securities
to be immediately due and payable. Certain events of bankruptcy or insolvency
are Events of Default and shall result in the Securities being immediately due
and payable upon the occurrence of such Events of Default without any further
act of the Trustee or any Holder.
Holders of Securities may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives reasonable indemnity
or security. Subject to certain limitations, Holders of a majority in aggregate
principal amount of the Securities then outstanding may direct the Trustee in
its exercise of any trust or power under the Indenture. The Holders of a
majority in aggregate principal amount of the Securities then outstanding, by
written notice to the Company and the Trustee, may rescind any declaration of
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.
16. Trustee Dealings with the Company
Subject to certain limitations imposed by the TIA, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.
17. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the
Company or any Subsidiary Guarantor shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
<PAGE>
8
18. Authentication
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
19. Abbreviations
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
20. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
21. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
The Company will furnish to any Holder of Securities upon
written request and without charge to the Holder a copy of the Indenture which
has in it the text of this Security.
<PAGE>
9
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer
this Security on the books of the Company. The agent may substitute
another to act for him.
- ------------------------------------------------------------
Date: ________________ Your Signature: _____________________
- ------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security. Signature
must be guaranteed by a participant in a recognized signature guaranty medallion
program.
<PAGE>
10
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal amount of this Global Security is $[ ].
The following increases or decreases in this Global Security have been made:
<TABLE>
<S> <C> <C> <C> <C>
Date of Amount of decrease in Amount of increase in Principal amount of Signature of
Exchange Principal Amount of Principal Amount of this Global Security authorized signatory
this Global Security this Global Security following such of Trustee or
decrease or increase Securities Custodian
</TABLE>
<PAGE>
11
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by
the Company pursuant to Section 4.06 (Asset Sale) or 4.11 (Change of Control) of
the Indenture, check the box:
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.06 or 4.11 of the Indenture,
state the amount:
$
Date: __________________ Your Signature: __________________
(Sign exactly as your name appears on the other side of the Security)
Signature Guarantee:_______________________________________
Signature must be guaranteed by a
participant in a recognized signature
guaranty medallion program.
<PAGE>
1
EXHIBIT B
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental
Indenture") dated as of , among [GUARANTOR] (the "New
Subsidiary Guarantor"), a subsidiary of TV Guide,
Inc. (or its successor), a Delaware corporation (the
"Company"), TV GUIDE, INC., on behalf of itself and
the Subsidiary Guarantors (the "Existing Subsidiary
Guarantors") under the indenture referred to below,
and THE BANK OF NEW YORK, a New York banking
association, as trustee under the indenture referred
to below (the "Trustee").
W I T N E S S E T H :
WHEREAS the Company and the Existing Subsidiary Guarantors
have heretofore executed and delivered to the Trustee an Indenture (the
"Indenture") dated as of March 1, 1999, providing for the issuance of an
aggregate principal amount of $400,000,000 of 81/8% Senior Subordinated Notes
due 2009 (the "Securities");
WHEREAS Section 4.12 of the Indenture provides that under
certain circumstances the Company is required to cause the New Subsidiary
Guarantor to execute and deliver to the Trustee a supplemental indenture
pursuant to which the New Subsidiary Guarantor shall unconditionally guarantee
all the Company's obligations under the Securities pursuant to a Subsidiary
Guaranty on the terms and conditions set forth herein; and
WHEREAS pursuant to Section 9.01 of the Indenture, the
Trustee, the Company and the Existing Subsidiary Guarantors are authorized to
execute and deliver this Supplemental Indenture;
NOW THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the New Subsidiary Guarantor, the Company, the Existing Subsidiary Guarantors
and the Trustee mutually covenant and agree for the equal and ratable benefit of
the holders of the Securities as follows:
1. Agreement to Guarantee. The New Subsidiary Guarantor hereby
agrees, jointly and severally with all other Subsidiary Guarantors, to
unconditionally guarantee the Company's obligations under the Securities on the
terms and subject to the conditions set forth in Article XI and Article XII of
the Indenture and to be bound by all other applicable provisions of the
Indenture.
2. Ratification of Indenture; Supplemental Indentures Part of
Indenture. Except as expressly amended hereby, the Indenture is in all respects
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. This Supplemental Indenture shall form a
part of the
<PAGE>
2
Indenture for all purposes, and every holder of Securities heretofore or
hereafter authenticated and delivered shall be bound hereby.
3. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE
EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
4. Trustee Makes No Representation. The Trustee makes no
representation as to the validity or sufficiency of this Supplemental
Indenture.
5. Counterparts. The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
6. Effect of Headings. The Section headings herein are for
convenience only and shall not effect the construction thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed as of the date first above written.
[NEW SUBSIDIARY GUARANTOR],
by
Name:
Title:
TV GUIDE, INC., on behalf of itself
and the Existing Subsidiary
Guarantors,
by
Name:
Title:
THE BANK OF NEW YORK, as Trustee,
by
Name:
Title:
Exhibit 5.1
May 14, 1999
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: TV Guide, Inc.
Form S-4 Registration Statement Filed May 14, 1999
Ladies and Gentlemen:
As counsel for TV Guide, Inc., a Delaware
corporation (the "Company"), we have examined the above-referenced Registration
Statement on Form S-4 under the Securities Act of 1933, as amended (the
"Registration Statement"), which the Company has filed covering the exchange of
the Company's 8 1/8% Series B Senior Subordinated Notes Due 2009 (the "Exchange
Notes") for its outstanding 8 1/8% Series B Senior Subordinated Notes Due 2009
(the "Old Notes")
We have examined the Company's Amended and Restated Certificate of
Incorporation, By-Laws and the record of its corporate proceedings and have made
such other investigation as we have deemed necessary in order to express the
opinions set forth below.
Based on such investigation, it is our opinion that the Exchange Notes, when
sold as described in the prospectus included in the Registration Statement, will
be legally issued, fully paid and non-assessable.
We hereby consent to all references to us in the Registration Statement and
all amendments to the Registration Statement. We further consent to the use of
this opinion as an exhibit to the Registration Statement.
HOLME ROBERTS & OWEN LLP
By: /s/ Nick Nimmo
------------------------
Nick Nimmo
EXHIBIT 8.1
May 14, 1999
TV Guide, Inc.
7140 South Lewis Avenue
Tulsa, Oklahoma 74136-5422
Re: 81/8% Series B Senior Subordinated Notes Due 2009
Form S-4 Registration Statement
Filed May 14, 1999
Ladies and Gentlemen:
This opinion is given in connection with the proposed offering by TV Guide,
Inc., a Delaware corporation (the "Company"), of its 81/8% Series B Senior
Subordinated Notes due 2009 in exchange for its 81/8% Senior Subordinated Notes
due 2009, as described in the registration statement on Form S-4 to be filed
with the Securities and Exchange Commission on May 14, 1999 (the "Registration
Statement"). Capitalized terms used in this letter that are not otherwise
defined herein have the same meanings given to them in the Registration
Statement.
Our opinion is based on the current provisions of the Internal Revenue Code of
1986, as amended (the "Code"), the applicable Treasury regulations (the
"Regulations"), and public administrative and judicial interpretations of the
Code and the Regulations, all of which are subject to change, which changes
could be applied retroactively. Our opinion also is based on the facts set forth
in the Registration Statement, the Note Documents (as that term is defined in
the representation letter, dated May 14, 1999, from you), which we assume set
forth the complete agreement among the parties with respect to the Notes, and on
certain representations from you with respect to factual matters, which
representations we have not independently verified. We assume that all Note
Documents have been or will be properly executed and will be valid and binding
when executed.
We have prepared the discussion included in the Registration Statement under the
caption "United States Federal Income Tax Considerations." It is our opinion
that the discussion under that caption describes the material United States
federal income tax consequences expected to result to the Holders, subject to
the conditions, limitations, and assumptions described therein.
The discussion does not cover all aspects of United States federal taxation that
may be relevant to, or the actual tax effect that any of the matters described
therein will have on, any particular Holder, and it does not address foreign,
state, or local tax consequences. The discussion does not cover the tax
consequences that might be applicable to Holders that are subject to special
rules under the Code (including insurance companies, tax-exempt organizations,
mutual funds, retirement plans, financial institutions, dealers in securities or
foreign currency, persons that hold the Notes as part of a "straddle" or as a
"hedge" against currency risk or in connection with a conversion transaction,
persons that have a functional currency other than the United States dollar,
investors in pass-through entities, traders in securities that elect to mark to
market, and except as expressly addressed therein, Non-U.S. Holders). The
discussion does not address the United States federal income tax consequences
that may result from a modification of the Notes.
<PAGE>
Our opinion may change if the applicable law changes, if any of the facts with
respect to the Notes (as included in the Registration Statement, the Note
Documents, and the representations made by you) are inaccurate, incomplete, or
change, or if the conduct of the parties is materially inconsistent with the
facts reflected in the Registration Statement, the Note Documents, or the
representations.
Our opinion represents only our legal judgment based on current law and the
facts as described above. Our opinion has no binding effect on the Internal
Revenue Service or the courts. The Service may take a position contrary to our
opinion, and if the matter is litigated, a court may reach a decision contrary
to the opinion.
We hereby consent to the filing of this opinion letter with the Securities and
Exchange Commission as an exhibit to the Registration Statement and to the use
of our name therein.
Very truly yours,
HOLME ROBERTS & OWEN LLP
By: /s/ Charles B. Bruce, Jr.
Charles B. Bruce, Jr., Partner
Exhibit 23.1
Independent Auditors' Consent
The Board of Directors
TV Guide, Inc.:
We consent to the use of our reports incorporated by reference herein and to the
reference to our firm under the heading "Experts" in the prospectus.
KPMG LLP
Tulsa, Oklahoma
May 14, 1999
<PAGE>
Exhibit 23.2
Independent Auditors' Consent
The Board of Directors
TV Guide, Inc.:
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-4) and related Prospectus of TV Guide, Inc.
(formerly United Video Satellite Group, Inc.) for the Offer to Exchange All
Outstanding 8 1/8% Senior Subordinated Notes due 2009 for 8 1/8% Series B Senior
Subordinated Notes due 2009 of TV Guide, Inc. and to the incorporation by
reference therein of our report dated February 10, 1997 with respect to the
consolidated financial statements of TV Guide, Inc. (formerly United Video
Satellite Group, Inc.) and our report dated February 10, 1997 (except for the
Liberty Transaction described in Note 2, as to which the date is March 29,
1999), with respect to the supplemental consolidated financial statements of TV
Guide, Inc. (formerly United Video Satellite Group, Inc.) each included in its
Annual Report (Form 10-K) for the year ended December 31, 1998, filed with the
Securities and Exchange Commission.
Ernst & Young LLP
Tulsa, Oklahoma
May 14, 1999
Exhibit 23.3
Independent Auditors' Consent
The Board of Directors
TV Guide, Inc.:
We consent to the use of our reports incorporated by reference herein and to the
reference to our firm under the heading "Experts" in the prospectus.
KPMG LLP
Denver, Colorado
May 14, 1999
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated July 28, 1998,
included in TV Guide, Inc.'s Form 8-K dated February 24, 1999 that included News
America Publications Inc.'s combined financial statements for the years
ended June 30, 1998, 1997 and 1996, and to all references to our Firm included
in this registration statement.
ARTHUR ANDERSEN LLP
New York, New York
May 14, 1999
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
---------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
---------------------------
TV GUIDE, INC.
(Exact name of obligor as specified in its charter)
Delaware 73-1290412
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
7140 South Lewis Avenue 74136-5422
Tulsa, Oklahoma (Zip code)
(Address of principal executive offices)
---------------------------
8-1/8% Senior Subordinated Notes Due 2009
(Title of the indenture securities)
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
<PAGE>
1. General information. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
- ------------------------------- ----------------------------
Name Address
- ------------------------------- ----------------------------
Superintendent of Banks of the 2 Rector Street, New York, N.Y. 10006,
State of New York and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17
C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No.
33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4
to Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 21st day of April, 1999.
THE BANK OF NEW YORK
By: /s/CHERYL L. LASER
Name: CHERYL L. LASER
Title: ASSISTANT VICE PRESIDENT
<PAGE>
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December 31,
1998, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
<S> <C>
ASSETS in Thousands Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin.. $3,951,273
Interest-bearing balances........................... 4,134,162
Securities:
Held-to-maturity securities......................... 932,468
Available-for-sale securities....................... 4,279,246
Federal funds sold and Securities purchased under
agreements to resell................................ 3,161,626
Loans and lease financing receivables:
Loans and leases, net of unearned
income........................................... 37,861,802
LESS: Allowance for loan and
lease losses..................................... 619,791
LESS: Allocated transfer risk
reserve......................................... 3,572
Loans and leases, net of unearned income,
allowance, and reserve............................ 37,238,439
Trading Assets......................................... 1,551,556
Premises and fixed assets (including capitalized
leases)............................................. 684,181
Other real estate owned................................ 10,404
Investments in unconsolidated subsidiaries and
associated companies................................ 196,032
Customers' liability to this bank on acceptances
outstanding......................................... 895,160
Intangible assets...................................... 1,127,375
Other assets........................................... 1,915,742
Total assets........................................... $60,077,664
LIABILITIES
Deposits:
In domestic offices................................. $27,020,578
Noninterest-bearing................................. 11,271,304
Interest-bearing.................................... 15,749,274
In foreign offices, Edge and Agreement
subsidiaries, and IBFs............................ 17,197,743
Noninterest-bearing................................. 103,007
Interest-bearing.................................... 17,094,736
Federal funds purchased and Securities sold under
agreements to repurchase............................ 1,761,170
Demand notes issued to the U.S.Treasury................ 125,423
Trading liabilities.................................... 1,625,632
Other borrowed money:
With remaining maturity of one year or less......... 1,903,700
With remaining maturity of more than one year
through three years............................... 0
With remaining maturity of more than three years.... 31,639
Bank's liability on acceptances executed and
outstanding......................................... 900,390
Subordinated notes and debentures...................... 1,308,000
Other liabilities...................................... 2,708,852
Total liabilities...................................... 54,583,127
EQUITY CAPITAL
Common stock........................................... 1,135,284
Surplus................................................ 764,443
Undivided profits and capital reserves................. 3,542,168
Net unrealized holding gains (losses) on
available-for-sale securities....................... 82,367
Cumulative foreign currency translation adjustments....
(29,725)
Total equity capital................................... 5,494,537
Total liabilities and equity capital................... $60,077,664
- ---------------------------------------------------------------
</TABLE>
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Reyni )
Gerald L. Hassell ) Directors
Alan R. Griffith )
- -------------------------------------------------------------------------------
