-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Rj+mEuPDt1nzGkNT6tzAX7uX4GKQvBN+ttxFlbz/Fy5ZkFx70gTJCy1sydTBcCMe ax7XRzvS0j/AWWRjQ/1JbQ== 0001014909-99-000137.txt : 19990511 0001014909-99-000137.hdr.sgml : 19990511 ACCESSION NUMBER: 0001014909-99-000137 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19990429 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990510 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNITED INTERNATIONAL HOLDINGS INC CENTRAL INDEX KEY: 0000887949 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 841116217 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-21974 FILM NUMBER: 99614825 BUSINESS ADDRESS: STREET 1: 4643 S ULSTER ST STREET 2: STE 1300 CITY: DENVER STATE: CO ZIP: 80237 BUSINESS PHONE: 3037704001 MAIL ADDRESS: STREET 1: 4643 S ULSTER ST STREET 2: STE 1300 CITY: DENVER STATE: CO ZIP: 80237 8-K 1 FORM 8-K DATED 4/29/99 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report: April 29, 1999 UNITED INTERNATIONAL HOLDINGS, INC. (Exact Name of Registrant as Specified in Charter) DELAWARE 0-21974 84-1116217 (State or other (Commission (IRS Employer jurisdiction of File Number) Identification #) incorporation) 4643 SOUTH ULSTER STREET, SUITE 1300, DENVER, CO 80237 (Address of Principal Executive Office) (303) 770-4001 (Registrant's telephone number, including area code) ITEM 5. OTHER EVENTS. - ---------------------- On April 29, 1999, an indirect wholly owned subsidiary of United International Holdings, Inc. ("UIH" or the "Company"), acquired a 60% interest in VTR Hipercable S.A. ("VTRH"), a Chilean company that is the largest provider of wireline and "wireless" cable television and digital direct-to-home satellite services and a growing provider of telephone services in Chile. This acquisition, combined with the 40% interest in VTRH that is owned by another indirect wholly owned subsidiary of the Company, gives UIH an indirect 100% interest in VTRH. The purchase price for the 60% interest in VTRH was approximately $258 million in cash, which included repayment of advances from the other shareholders of VTRH and certain other expenses. In addition, the Company provided capital for VTRH to prepay approximately $126 million of existing bank indebtedness and a promissory note from the Company to one of the other shareholders of VTRH. To finance the prepayment of VTRH's indebtedness and a portion of the purchase price for the VTRH acquisition, the Company concurrently sold in a private transaction $208.9 million of 10 7/8% Senior Discount Notes due 2009 (the "Notes"). The remaining portion of the acquisition was funded with cash on hand and approximately $145 million borrowed under a Senior Secured Credit Facility between VTRH and a syndicate of banks (the "Bank Facility"). The Bank Facility consists of two tranches--Tranche A, which is a single term loan facility with an aggregate principal amount of $140 million, substantially all of which was borrowed for the VTRH acquisition, and Tranche B, which is a three-year term loan facility, with an aggregate principal amount of up to $80 million. Both tranches have been guaranteed by VTRH and its subsidiaries. The banks are in the process of syndicating the final approximately $50 million of the Bank Facility. The Company has agreed to participate in the syndication as necessary. The Notes have essentially the same terms as the Company's outstanding 10 3/4% Senior Secured Discount Notes due 2008, except for the maturity and coupon rate and that the Notes are not secured. 2 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. - ------------------------------------------- (C) EXHIBITS 10.1 Promise Agreement entered into as of October 15, 1998, among UIH Latin America, Inc., VTR S.A. and Compania Nacional de Telefonos, Telefonica del Sur S.A. 10.2 Credit Agreement dated as of April 28, 1999, among UIH Chile Holding S.A., the subsidiary guarantors named therein, Toronto Dominion (Texas), Inc., TD Securities (USA), Inc. and Citibank, N.A. 10.3 Indenture dated as of April 29, 1999, between the Company and Firstar Bank of Minnesota, N.A., as Trustee. 10.4 Note Purchase Agreement dated as of April 29, 1999, among the Company and the purchasers named therein. 10.5 Registration Rights Agreement dated as of April 29, 1999, among the Company and the purchasers named therein. 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf of the undersigned thereunto duly authorized. UNITED INTERNATIONAL HOLDINGS, INC. DATE: May 7, 1999 By: /S/ Valerie L. Cover -------------------------------- Valerie L. Cover Controller 4 EX-10 2 EXHIBIT 10.1 EXECUTION VERSION PROMISE AGREEMENT Entered Into as of October 15, 1998 among UIH LATIN AMERICA, INC., VTR S.A. and COMPANIA NACIONAL DE TELEFONOS, TELEFONICA DEL SUR S.A. TABLE OF CONTENTS PAGE ---- ONE: DEFINITIONS........................................................1 TWO: CURRENT SHARE/EQUITY INTEREST OF PARTIES...........................9 THREE: PROMISED AGREEMENTS.............................................10 FOUR: CLOSING; TERMINATION.............................................10 FIVE: REPRESENTATIONS AND WARRANTIES OF VTR............................15 SIX: REPRESENTATIONS AND WARRANTIES OF UIH.............................17 SEVEN: CONDITIONS TO CLOSING...........................................18 EIGHT: CONDUCT PENDING THE CLOSING.....................................20 NINE: AGREEMENTS REGARDING CERTAIN OTHER MATTERS.......................23 TEN: POST CLOSING ADJUSTMENT...........................................25 ELEVEN: RIGHT OF FIRST REFUSAL.........................................26 TWELVE: SURVIVAL.......................................................29 THIRTEEN: INDEMNIFICATION..............................................29 FOURTEEN: ARBITRATION..................................................32 FIFTEEN: APPLICABLE LAW; JURISDICTION..................................34 SIXTEEN: ENTIRE AGREEMENT; OTHER AGREEMENTS............................34 SEVENTEEN: NOTICES.....................................................34 EIGHTEEN: CONFIDENTIALITY; PRESS RELEASES..............................37 NINETEEN: EXPENSES.....................................................38 TWENTY: SEVERABILITY...................................................38 TWENTY ONE: COUNTERPARTS...............................................38 TWENTY TWO: NON-ASSIGNMENT.............................................38 TWENTY THREE: SECTION HEADINGS.........................................39 ii EXHIBITS: A - Form of Amendment to Shareholders Agreement B - Form of Amendment to Newcom Shareholders Agreement C - Form of Indemnification Agreements D - Form of License Agreement E - Form of Public Deeds for Hipercable F - Form of Public Deed for Newcom G - LD Purchase Agreement ANNEXES: A - Form of Opinion of General Counsel of VTR B - Form of Opinion of General Counsel of CNT C - Form of Opinion of Outside Counsel to VTR and CNT D - Form of Opinion of United States Counsel to UIH E - Form of Opinion of Chilean Counsel to UIH SCHEDULES: Schedule 1.1 - Key Employees Schedule 5(b) - Seller Required Consents or Filings Schedule 5(g)(i) and (ii) - Employee Lists Schedule 6(b) - UIH Required Consents or Filing Schedule 9(b) - June 30 Hipercable Financial Statements iii PROMISE AGREEMENT This Promise Agreement was entered into as of the 15th day of October, 1998, by UIH LATIN AMERICA, INC., a corporation duly incorporated and validly existing under the laws of the State of Colorado, United States of America, duly represented by Juan Guillermo Levine Contreras, representation which will be herein accredited (together "UIH"), both with domicile in 4643 South Ulster St., Suite 1300, Denver, CO 80237, U.S.A., VTR S.A., a stock company incorporated and validly existing under the laws of the Republic of Chile, duly represented by Blas Tomic Errazuriz, representation which will be herein accredited (together "VTR"), both with domicile in Av. Andres Bello 2711 - Piso 6, Santiago, Chile, and COMPANIA NACIONAL DE TELEFONOS, TELEFONICA DEL SUR S.A., a stock company incorporated and validly existing under the laws of the Republic of Chile, duly represented by Blas Tomic Errazuriz, representation which will be herein accredited (together "CNT"), both with domicile in Av. Andres Bello 2711 - Piso 6, Santiago, Chile. The Parties agree as follows: ONE: DEFINITIONS As used herein, unless the context requires otherwise, the following terms when capitalized have the following meanings (terms defined in the singular to have the same meanings when used in the plural and VICE VERSA): ACQUISITION FINANCING: The actual advance of funds at the Closing for the acquisition of the Seller Shares and the Newcom Shares by one or more lenders or equity participants or both, on terms and in amounts that are satisfactory to UIH in its sole discretion. ADDITIONAL AMOUNT: An amount equal to simple interest at the rate of 12 percent per annum on the Purchase Price accrued from the Initial Termination Date until the Closing Date. ADJUSTMENT NOTICE: As defined in Article 10. AFFILIATE: Affiliate means, with respect to any Person, any Person directly or indirectly controlling, controlled by, or under common control with, such other Person at the time at which the determination of affiliation is being made. The term "control" (including, with correlative meanings, the terms "controlled by" and "under common control with"), as applied to any Person, means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or similar ownership interests. 1 AGREEMENT: This Promise Agreement (including the Exhibits and Schedules attached hereto). AMENDMENT TO SHAREHOLDERS AGREEMENT: The Amendment to Shareholders Agreement executed by each of VTR, CNT and UIH Chile, Inc. on the date hereof, in the form attached hereto as Exhibit A. AMENDMENT TO NEWCOM SHAREHOLDERS AGREEMENT: The Amendment to Newcom Shareholders Agreement executed by each of VTR and UIH Chile, Inc. on the date hereof, in the form attached hereto as Exhibit B. ANNUAL BUDGET: As defined in the Shareholders Agreement. ARBITRATION COURT: As defined in Article 14. ASSETS: For any Person, all of the properties, Equipment, Systems, Licenses and other assets, privileges, rights, interests, claims and goodwill of such Person, real and personal, tangible and intangible, of every type and description, whether owned or leased or otherwise possessed, used, held for use or usable in a business and whether or not reflected on the balance sheet or other accounts of such Person. BONA FIDE OFFER: As defined in Section 11(a). BUSINESS DAY: Any day other than a Saturday, Sunday or other day on which banks in the State of New York, U.S.A., or Santiago, Chile are authorized or obligated by law or executive order to close. CIAC: As defined in Article 14. CLOSING: As defined in Section 4(a) CLOSING DATE: As defined in Section 4(a). CNT: As defined in the recitals. CNT SHARES: As defined in Section 11(a). COMPANIES: Hipercable and each of the Subsidiaries. COMPANY BUSINESSES: As defined in the Shareholders Agreement. CONSIDERATION: As defined in Section 4(b)(i). 2 CONTRACT: For any Person, any contract, mortgage, deed of trust, bond, lease, License, note, franchise, certificate, option, warrant, right, or such other instrument, document or written agreement, and any oral obligation, right or agreement to which such Person is a party, nominee, signatory, or of which such Person is a beneficiary, or by which such Person or any Assets or securities of such Person are bound, including, without limitation, any License. CONTROVERSY: As defined in Article 14. CTC: Compania de Telecomunicaciones de Chile, S.A., a Chilean stock company, together with its Affiliates, successors, and any assignees of CTC's rights under the Pledge. CTC MOBILE PURCHASE AGREEMENT: The Stock Purchase Agreement dated June 14, 1996 between VTR and CTC. DOLLARS OR US$: Dollars, the lawful currency of the United States of America. DUE DILIGENCE MAE DETERMINATION: As defined in Section 9(b). DUE DILIGENCE REVIEW: As defined in Section 9(b). EQUIPMENT: Any and all equipment, materials or other Property related to the production, transmission, retransmission or reception of voice, video or data signals (electronic or optical, digital or analog) included in the Assets of Hipercable or any of the Subsidiaries, including, without limitation, electronic devices, trunk and distribution cables; amplifiers; power supplies; conduit; cables and pedestals; grounding and pole hardware, fiber optic cables, installed subscriber devices, network interface units (including, without limitation, customer interface units, drop lines, converters, encoders, transformers behind television sets and fittings); "headend" (origination, transmission and distribution system, equipment including, without limitation, switching, repeating and regenerating equipment); hardware; tools; inventory; spare parts; maps and engineering data; vehicles; microwave equipment; studios and other broadcast facilities and other equipment for origination of local programming; and all other tangible property and facilities owned, used or held by Hipercable or any Subsidiary for use in the Systems. EXCHANGE RATE: For any date, the exchange rate between Dollars and Chilean Pesos referred to in Number Six of Chapter I of Title I of the "Compendium of Foreign Exchange Regulations" published by the Central Bank of Chile in the Diario Oficial de Chile on such date (known as the dolar observado) or, if such rate is not in effect, the official rate designated by the Central Bank of Chile for the purpose of replacing such rate. EXTENSION NOTICE: As defined in Section 4(a). 3 FINAL MAE DETERMINATION: As defined in Section 9(b). FINANCING PARTIES: As defined in Section 8(d). GAAP: Generally accepted accounting principles as used in the United States of America as in effect on the date hereof. GOVERNING DOCUMENTS: The estatutos, articles or certificate of incorporation or association, bylaws or other governing documents of any entity. GOVERNMENTAL AUTHORITY: Any court, administrative agency or commission or other governmental or quasi-governmental agency, instrumentality or official, domestic or foreign. HIPERCABLE: VTR Hipercable S.A., a Chilean stock company. HIPERCABLE FINANCIAL STATEMENTS: As defined in Section 5(f). INDEMNIFICATION AGREEMENTS: The Indemnification Agreements, to be executed by each of Quinenco and SBCI at the Closing, in the forms attached hereto as Exhibit C. INDEMNIFIED PERSONS: As defined in Section 13(a). INDEMNIFYING PARTY: As defined in Section 13(a). ING CREDIT FACILITY: Credit Agreement, entered into by and between Hipercable and ING Baring (U.S.) Capital Corporation as Administrative Agent; and ING Baring (U.S.) Capital Corporation and the Toronto Dominion Bank as Co-Arrangers, among others, and Security Documents thereto as defined therein; Master Subordination Agreement, entered into by and between VTR S.A., UIH Chile, Inc., as the Subordinated Creditors, Hipercable and ING Baring (U.S.) Capital Corporation as Administrative Agent; and Support Agreement, entered into by and between Hipercable, VTR S.A., UIH Chile, Inc. and ING Baring (U.S.) Capital Corporation as Administrative Agent; all of the above dated as of August 26, 1997. INITIAL TERMINATION DATE: The date that is a number of days after the date hereof equal to (i) 150 PLUS (ii) the number of days after November 30, 1998, if any, that the Hipercable Financial Statements are delivered to UIH pursuant to Section 5(f). JUDGMENT: Any judgment, writ, order, decree or ruling of or by any court, judge, justice or magistrate, including any bankruptcy court or judge, and any order of or by any Governmental Authority. 4 KEY EMPLOYEES: Those employees listed on Schedule 1.1 hereof. LAW: The civil law, the common law, and any statute, ordinance, code or other law, rule, regulation, order, technical or other standard, requirement or procedure enacted, adopted, promulgated, applied or followed in any country or its political subdivisions or by any Governmental Authority or court of any country or its political subdivisions. LD PURCHASE AGREEMENT: The Promise Agreement and the "Acuerdo de Uso de Marca Comercial", both executed by and between VTR and CTC on December 18, 1997, attached hereto as Exhibit G. LICENSE AGREEMENT: The License Agreement to be executed by Hipercable and VTR at the Closing, in the form attached hereto as Exhibit D, granting Hipercable the exclusive right, pursuant to a 99-year license, to use the "VTR" name in the multi-channel television, local telephony and internet businesses in Chile, and in all other telecommunications businesses in Chile subject only to the following limitations: (i) if CTC completes the acquisition of VTR Larga Distancia in accordance with the LD Purchase Agreement or other arrangement, CTC and/or any of its subsidiaries devoted to the long distance telephony business shall have the right to use the trademark "VTR Larga Distancia" in the long distance telephony and data transmission (excluding internet services) businesses in Chile for a period of two years from the consummation of such transaction; or (ii) if CTC does not complete the acquisition of VTR Larga Distancia in accordance with the LD Purchase Agreement, VTR shall have the right to use, and to license to third parties, but not to CTC or any of its Affiliates, the name VTR in the long distance telephony and data transmission and internet businesses in Chile, but shall not have the right to use the name "VTR" in conjunction with the names "Internet" or "Web." LICENSES: All franchises, concessions, licenses, permits, operating authorizations and other agreements and approvals issued by or pending with Governmental Authorities, utilities, providers of programming or other entities and all material rightsofway, satellite, microwave or other transmission agreements, pole or underground construction or usage agreements and all other agreements necessary to construct, own and operate a System in a specified geographical area in compliance with applicable Laws. LIEN: Any security agreement, financing statement (whether or not filed), conditional sale or other title retention agreement; any lease, consignment or bailment given for security purposes; any lien, charge, restrictive agreement, mortgage, pledge, option, encumbrance, adverse interest, constructive trust or other trust, claim, attachment, exception to or defect in title or other ownership interest (including, without limitation, reservations, rights of entry, possibilities of reverter, encroachments, easements, rights of way, restrictive covenants, leases and Licenses) of any kind. MATERIAL ADVERSE EFFECT: As defined in Section 9(b). 5 NEWCOM: Newcom S.A., a Chilean stock company. NEWCOM SHAREHOLDERS AGREEMENT: The Newcom Shareholders Agreement dated as of July 11, 1997 by and among VTR S.A. and UIH Chile, Inc. NOTICE OF ARBITRATION: As defined in Article 14. OFFER: As defined in Section 11(a). OFFERED SHARES: As defined in Section 11(a). ORIGINAL PROMISE AGREEMENT: Promise Agreement dated June 27, 1996, between United International Properties, Inc., and VTR, as amended. PARTIES: Generic definition for Sellers and UIH, collectively, or for VTR and UIH collectively in connection with the Newcom Shares. PARTY: Generic definition for Sellers on the one hand, and UIH on the other hand or for VTR on the one hand, and UIH on the other hand in connection with the Newcom Shares. PERSON: Any natural person, sociedad anonima, sociedad de responsabilidad limitada, corporation, general or limited partnership, limited liability company, joint venture, trust, association, unincorporated entity of any kind or Governmental Authority. PLEDGE: The Pledge of the CNT Shares pursuant to the Pledge Agreement. PLEDGE AGREEMENT: The Pledge Agreement dated June 16, 1998, pursuant to which shares of common stock of CNT are pledged by VTR to CTC to secure repayment of VTR's obligations under the CTC Mobile Purchase Agreement. PROMISED AGREEMENTS: As defined in Article 3. PROMISSORY NOTE: The Public Deed dated June 27, 1997 evidencing indebtedness of UIH to VTR in the original principal amount of US$ 7,770,251. PROPOSED TRANSFEREE: As defined in Section 11(a). PUBLIC DEEDS: The Public Deeds effecting the transfer of the Seller Shares and the Newcom Shares to the UIH Parties, in the form set forth as Exhibits E and F, respectively. PURCHASE PRICE: The purchase price shall be an amount in Dollars equal to (i) the sum of (a) US$ 236,500,000, plus (b) any capital contributions made 6 to the Companies and/or Newcom by the Sellers (converted from Chilean Pesos to Dollars at the Exchange Rate in effect on the date of such contribution) from the date hereof until the Closing, LESS (ii) a number equal to 60% of the difference between (x) Third Party Debt at Closing and (y) US$ 122,300,000; provided, however that if Third Party Debt at Closing is less than US$ 122,300,000, there will be no adjustment under this Clause (ii). PURCHASER DESIGNEE: Any Person (i) a majority of the voting interests of which is owned directly or indirectly by UIH, (ii) the minority ownership of which is disclosed to Sellers, and (iii) that would not, as a result of such Person's participation in the purchase of some or all of the Seller Shares and/or the Newcom Shares pursuant to this Agreement, cause the Closing to be unreasonably delayed as a result of regulatory or other approval requirements that would not be applicable if UIH were the sole purchaser of the Seller Shares and/or the Newcom Shares. QUALIFIED COURIER: As defined in Article 17. QUINENCO: Quinenco S.A., a Chilean stock company. REAL PROPERTY: For any Person, all realty, towers, fixtures, rightsofway, leasehold and other interests in real property, buildings, improvements and constructionin-progress owned, leased, occupied, used or held for use by such Person. RELATED PARTY AGREEMENTS: The Technical Assistance Agreement and all other Contracts (other than the License Agreement) between any of the Companies or Newcom, on the one hand, and any Seller or any Affiliate of any Seller on the other hand. REQUIRED CONSENTS: The UIH Required Consents and the Seller Required Consents. RESTRICTION: With respect to any stock, any voting or other trust or agreement, option, warrant, escrow, proxy, buysell or other share transfer agreement, power of attorney or other Contract, arrangement or understanding or any Judgment or Law that (i) grants to any Person the right to purchase or otherwise acquire, or obligates any Person to sell or otherwise dispose of, or otherwise results or may result in any Person's acquiring, any of such stock, any of the proceeds of, or any distributions paid or payable with respect to, any of such stock, or any interest in such stock, proceeds or distributions, (ii) restricts or may restrict the transfer of, or the exercise of any voting rights or the enjoyment of any other benefits arising by reason of ownership of, any such stock, proceeds or distributions (other than restrictions on future transfers that may be imposed under anti-monopoly Laws) or (iii) creates or may create a Lien or purported Lien affecting such stock, proceeds or distributions, in each case (i) through (iii) other than as a result of taxes owed by the Companies and/or Newcom or applicable exchange controls. 7 SBCI: SBC International, Inc., a Delaware corporation. SELLER REQUIRED CONSENTS: As defined in Section 5(b). SELLER SHARES: As defined in Article 2. SELLERS: VTR and CNT, collectively. SETTLEMENT DEED: As defined in Section 4(b)(iv)(A). SHAREHOLDERS AGREEMENT: The Shareholders Agreement dated as of September 6, 1996, among VTR, UIH Chile, Inc. (as successor to UIH) and CNT. SUBSIDIARIES: VTR CABLE EXPRESS S.A.; CABLEVISION S.A.; RED DE TELEVISION Y SERVICIO POR CABLE S.A.; VTR CABLE EXPRESS (CHILE) S.A.; VTR GALAXY CHILE S.A.; VTR TELEFONICA S.A., VTR NET S.A. SYSTEM: A complete cable television system, multi-point microwave distribution service ("MMDS") or system for two-way data transfer or any other pc-based application, direct broadcast satellite reception and distribution system or system for local loop telephony consisting of appropriate equipment, which is, or is capable of being, operated as an independent system without interconnections (except in the case of local loop telephony and internet) to other systems. TECHNICAL ASSISTANCE AGREEMENT: The Management Agreement between VTR Inversiones S.A., VTR Celular S.A., Telecable Sur S.A. (predecessor to VTR Cable Express) and SBC International, Inc. dated February 6, 1995, as amended. TERMINATION DATE: As defined in Section 4(d). TAX: Any tax or payment of any kind required pursuant to any Law, to be paid to any Governmental Authority. THIRD PARTY DEBT: Any indebtedness of the Companies, on a consolidated basis, and any indebtedness of Newcom, whether or not contingent, in respect of borrowed money or evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof), or representing capital lease obligations or the deferred and unpaid balance of the purchase price of any property, except any such balance that constitutes an accrued expense, accrued interest or trade payable incurred in the ordinary course of business, if and to the extent any of the foregoing indebtedness (other than letters of credit) would appear as a liability upon a balance sheet of the Companies or Newcom prepared in accordance with GAAP, as well as all 8 indebtedness of others secured by a Lien on any Asset of any of the Companies or Newcom (whether or not such indebtedness is assumed by any of the Companies or Newcom) and, to the extent not otherwise included, the Guarantee by any of the Companies or Newcom of any indebtedness of any other Person (whether or not such Guarantee would be required under GAAP to be reflected on a balance sheet). TRANSFER: As defined in Section 11(a). UF: A Chilean peso denominated monetary index which value is determined monthly by the Central Bank of the Republic of Chile for each day of the immediately succeeding month in accordance with Chapter 11.B.3. of the Compendium of Financial Regulations of the Central Bank of the Republic of Chile, according to the variation in the Indice de Precios al Consumidor during the immediately preceding month, as determined by the National Institute of Statistics of the Republic of Chile, and published in the Official Gazette under the name of "Unidad de Fomento." UIH: As defined in the recitals. UIH PARTIES: As defined in Section 3(b)(iii). UIH REQUIRED CONSENTS: As defined in Section 6(b). VALUATION: The Valuation, as defined in the Original Promise Agreement. VTR: As defined in the recitals. VTR CONTROL GROUP: Mr. Andronico Luksic Abaroa, his family and their descendants, and any Person or Persons controlled by any or all of them. TWO: CURRENT SHARE/EQUITY INTEREST OF PARTIES UIH owns 477,208 shares of Hipercable through UIH Chile, Inc., which constitute approximately 34% of Hipercable's outstanding equity. The Sellers own 926,345 shares of capital stock of Hipercable (the "Seller Shares"), which constitute approximately 66% of Hipercable's outstanding equity, of which 821,345 are owned by VTR and 105,000 are owned by CNT. UIH owns 17,745 shares of Newcom through UIH Chile, Inc., which constitutes 50% of Newcom's outstanding equity. VTR owns 17,745 shares of Newcom (the "Newcom Shares"), which constitutes 50% of Newcom's outstanding equity. 9 Except as set forth in this Article Two, there are no outstanding or authorized shares or other equity interests of Hipercable or Newcom or, except as provided in this Agreement, the Shareholders Agreement or the Newcom Shareholders Agreement, any rights to acquire any of the foregoing. THREE: PROMISED AGREEMENTS (a) Through this Agreement, the Parties agree to perform all actions and execute the agreements set forth below (the "Promised Agreements"). (b) PROMISED AGREEMENTS. The Promised Agreements are as follows: (i) AMENDMENT TO SHAREHOLDERS AGREEMENTS. UIH and the Sellers agree to execute and deliver the Amendment to Shareholders Agreement and the Amendment to Newcom Shareholders Agreement on the date hereof. (ii) VALUATION: UIH and the Sellers agree to terminate the Valuation immediately subject to the provisions of Article 4. (iii) PURCHASE OF SELLER SHARES. Subject to the terms and conditions of this Agreement, UIH or one or more Purchaser Designees (together with UIH, the "UIH Parties") will, at the Closing, purchase from the Sellers all of the Seller Shares and from VTR all of the Newcom Shares for the total consideration provided in Section 4(b)(i), and each Party will complete the other transactions required of such Party at the Closing. (iv) REPAYMENT OF PROMISSORY NOTE. Subject to the terms and conditions of this Agreement, UIH will, at the Closing, repay to VTR all sums owing under the Promissory Note, including any accrued but unpaid interest thereon through the Closing Date. FOUR: CLOSING; TERMINATION (a) CLOSING; CLOSING DATE. The closing of the purchase and sale of the Seller Shares and the Newcom Shares (the "Closing") shall occur on the date (the "Closing Date") that is five Business Days following the satisfaction or waiver 10 of all conditions to the Closing (other than those that by their terms are to be satisfied at the Closing, but subject to the satisfaction or waiver at or prior to the Closing of all such conditions). The Parties agree this Agreement may be terminated pursuant to Section 4(c)(ii) if the Closing has not occurred on or before (i) the Initial Termination Date, or (ii) 30 days after the Initial Termination Date if UIH has provided prior written notice to the Sellers (an "Extension Notice") of its election, in the event that UIH has not obtained, but reasonably expects to obtain, the Acquisition Financing, to extend the Initial Termination Date up to an additional 30 days, such election to be at UIH's option. If UIH delivers an Extension Notice in accordance with this Section 4(a), the Purchase Price shall be increased by the Additional Amount. In the event that any such extension is due to a material breach by either of the Sellers of its obligations hereunder, no Additional Amount shall be payable with respect to such extension period. (b) CLOSING TRANSACTIONS. At the Closing, the following shall occur: (i) PAYMENT OF PURCHASE PRICE. The total consideration to be paid to the Sellers for the purchase by the UIH Parties of the Seller Shares and to VTR for the Newcom Shares (the "Consideration") shall be an amount equal to the sum of (i) the Purchase Price PLUS (ii) the Additional Amount, if applicable. As required by the Foreign Investment Regulations of Chile (DL 600), the Consideration shall be paid in its Chilean currency equivalent calculated at the rate of exchange actually obtained by the UIH Parties upon the exchange of the Dollar amount of the Consideration against Chilean currency at a commercial bank in Chile on the Closing Date. For this purpose, the commercial bank in Chile shall be designated by the Sellers by means of a written notice to the UIH Parties as soon as practicable prior to the Closing Date. Failing such designation, or if the designated bank fails to complete the exchange transaction, the UIH Parties shall be entitled to effect the exchange of the Dollar amount of the Consideration into Chilean currency on the Closing Date at any of the three largest commercial banks in Chile. US $1,500,000 of the Purchase Price shall be allocated to the purchase of the Newcom Shares and US $100,000 of the Purchase Price shall be allocated to payment in full of the royalty under the License Agreement. (ii) REPAYMENT OF PROMISSORY NOTE. UIH shall repay the Promissory Note, according to its terms (including any interest accrued but unpaid thereon through the Closing Date) by wire transfer of immediately available funds to an account designated by VTR. VTR shall send written notice to UIH designating such account not later than three Business Days prior to the Closing Date. (iii) UIH DOCUMENTS. UIH shall sign and deliver, or cause to be delivered to Sellers, at the Closing, the following duly and fully executed instruments, certificates, opinions and other documents: (A) duly certified copies of resolutions of the Board of Directors and, if required, the shareholders of each of the UIH 11 Parties authorizing the execution, delivery and performance of this Agreement and the Promised Agreements to which it is a party, which resolutions shall be in full force and effect; (B) a certificate signed by the President or a Vice President of UIH certifying that (i) each of the conditions set forth in Subsection (a)(ii) of Article Seven is then satisfied, and (ii) each UIH Party has performed in all material respects all obligations to be performed by it under this Agreement at or before the Closing; and (C) opinions of counsel to UIH dated the Closing Date in the forms attached as Annex D and E; (iv) SELLER DOCUMENTS. Sellers shall sign and deliver, or cause to be delivered, at the Closing, the following duly and fully executed instruments, certificates, opinions and other documents: (A) a duly executed settlement deed certifying that the Promissory Note has been repaid in its entirety and no additional amounts are due thereunder (the "Settlement Deed"); (B) duly certified copies of resolutions of the Board of Directors and, if required, the shareholders of each of the Sellers authorizing the execution, delivery and performance of this Agreement and the Promised Agreements to which it is a party, which resolutions shall be in full force and effect; (C) a certificate signed by the President or a Vice President of each Seller certifying that (i) each of the conditions set forth in Subsection (b)(ii) of Article Seven is then satisfied, and (ii) such Seller has performed in all material respects all obliga- tions to be performed by it under this Agreement at or before the Closing; (D) opinions of counsel to VTR and CNT dated the Closing Date, addressed to UIH in the forms attached as Annexes A, B and C; (E) the Indemnification Agreements, duly executed by each of SBCI and Quinenco; (F) the Public Deeds, duly executed by the Sellers; (G) the License Agreement, duly executed by VTR and Hipercable; (H) the stock transfer ledger of Hipercable, each of the Subsidiaries and Newcom, all minutes of meetings of each of the board of directors and the shareholders of Hipercable, each of the Subsidiaries and Newcom, and all other books and records of Hipercable, each of the Subsidiaries and Newcom; 12 (I) the certificates representing the Seller Shares and the Newcom Shares in form reasonably acceptable to UIH; (J) all documents and instruments required to terminate the Technical Assistance Agreement, with respect to Hipercable, the Subsidiaries and Newcom, and each other Related Party Agreement, if any, the terms of which are less favorable to any of the Companies or Newcom, as applicable, than would have been available in an arms' length transaction on the date such contract was entered into, in each case without any further obligation of any of the Companies or Newcom except for any obligations owed with respect to any period prior to the Closing; and (K) such other documents and instruments as UIH may reasonably request. (c) EVENTS OF TERMINATION. This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time prior to the Closing: (i) by mutual consent of the Parties; (ii) by either Party, if the Closing shall not have occurred on or prior to the Initial Termination Date or, if UIH has delivered an Extension Notice pursuant to Section 4(a), the date that is 30 days after the Initial Termination Date, unless the failure to effect the Closing by such time is due to the material breach of any representation, warranty, or covenant of such Party; (iii) by either Party, if there shall be any law or regulation of any competent authority that makes consummation of the transactions contemplated by this Agreement illegal or otherwise prohibited, or if any judgment, injunction, order or decree of any competent authority prohibiting such transaction is entered and such judgment, injunction, order or decree shall have become final and nonappealable; (iv) by either Party if there is a material breach by the other Party of any representation, warranty or covenant; PROVIDED, that any such breach is not cured (or cannot reasonably be expected to be cured) within 30 days following receipt by the breaching Party of notice of such breach; (v) by UIH upon sending written notice to Sellers of a Final MAE Determination pursuant to Section 9(b). 13 (d) EFFECT OF TERMINATION. In the event that this Agreement shall be terminated pursuant to Section 4(c), or as required by applicable laws, subject to this Section 4(d), all further obligations of the Parties under this Agreement shall terminate on the date of such termination (the "Termination Date") without further liability or obligation of either Party to the other hereunder; PROVIDED, HOWEVER, that no Party shall be released from liability hereunder if this Agreement is terminated and the transactions abandoned by reason of (i) willful failure of such Party to have performed its obligations hereunder or (ii) any knowing misrepresentation made by such Party of any matter set forth herein, such liability not to exceed, in the aggregate for the UIH Parties, on the one hand, and the Sellers, on the other hand, US$ 50,000,000. Section 3(b)(i), 3(b)(ii), 4(d), 4(e), 4(f), and Articles 14 and 15, Section 16(a), Article 17 and Articles 19 through 23 (but only such Sections and Articles) shall survive termination and shall remain in full force and effect. Termination under this Section 4(d) shall not affect or limit any rights or remedies of any of the parties to the Shareholders Agreement, the Newcom Shareholders Agreement or the Original Promise Agreement under such agreements with respect to any breach thereof. (e) VALUATION UPON TERMINATION. In the event that this Agreement shall be terminated pursuant to Section 4(c), or as required by applicable laws, each of the Parties shall take such actions, and shall cause Hipercable to take such actions, as are necessary to cause an Adjustment (as defined in the Original Promise Agreement) to the UIH Equity Value (as defined in the Original Promise Agreement) in accordance with clause (b) and the last paragraph of Article 11 of the Original Promise Agreement, or at the election of VTR, by transferring shares of Hipercable from VTR to the UIH Parties at a price of one Peso per share if such transfer would not be in any way disadvantageous to UIH, in both cases such that, following such Adjustment, the UIH Equity Value will be (i) 40% if CNT has not executed the CNT Non-Compete Agreement, or (ii) 38% if CNT has executed the CNT Non-Compete Agreement. The Parties shall cause the Adjustment required under this Section 4(e) to be effected on or before the date that is 15 Business Days after the Termination Date. For purposes hereof, the term "CNT Non-Compete Agreement" shall mean an Agreement in form and substance acceptable to UIH and CNT pursuant to which CNT agrees to be bound by non-compete provisions identical to the non-compete provisions contained in Section 5.1 of the Shareholders Agreement as in effect on the day preceding the date hereof. (f) PROMISSORY NOTE. In the event that this Agreement shall be terminated pursuant to Section 4(c), or as required by applicable laws, UIH shall have the option of (i) paying to VTR all amounts due and owing under the Promissory Note, or (ii) having its ownership interest in Hipercable diluted in accordance with the terms of the Promissory Note; PROVIDED, HOWEVER, that such dilution shall occur only after giving effect to the Adjustment required under Section 4(e). UIH shall give written notice to Sellers of its election hereunder not less than 10 Business Days after any such termination. If UIH elects to repay the Promissory Note under clause (i) of this Section 4(f), such payment shall be made on or before the date that is 15 Business Days after the 14 Termination Date by wire transfer of immediately available funds, in Dollars, to an account designated by VTR not later than 12 Business Days after the Termination Date. If UIH elects not to repay the Promissory Note but to be diluted in accordance with the terms of the Promissory Note, such dilution shall occur concurrently with, but after giving effect to, the Adjustment provided for in Section 4(e) (i.e., after the UIH Equity Value has been adjusted to 40% or 38%, as applicable). Upon such payment or dilution, VTR shall duly execute and deliver to UIH the Settlement Deed. FIVE: REPRESENTATIONS AND WARRANTIES OF VTR Each Seller severally as to such Seller, and not jointly, hereby represents and warrants in favor of and covenants with UIH as set forth below: (a) ORGANIZATION, CORPORATE POWER AND AUTHORIZATION. Such Seller is a stock company duly organized and validly existing under the laws of Chile. Such Seller has full corporate power and authority to enter into this Agreement and the Promised Agreements and to perform its obligations and to consummate the transactions contemplated by this Agreement and the Promised Agreements. The execution, delivery and performance of this Agreement and the Promised Agreements and the consummation of the transactions contemplated by this Agreement and the Promised Agreements have been duly and validly authorized by all necessary corporate actions on the part of such Seller. This Agreement is a valid and binding obligation of such Seller and is enforceable against it in accordance with its terms. When executed and delivered, each of the Promised Agreements to which such Seller is a party will be a valid and binding obligation of such Seller, enforceable against such Seller in accordance with its terms. Each such Seller has previously delivered or made available to UIH complete and accurate copies of all of its Governing Documents, as amended, modified or restated to date and currently in effect. (b) NO VIOLATION; CONSENTS. The execution and delivery of this Agreement by such Seller, and the performance of its obligations hereunder and the consummation of the transactions contemplated hereby will not violate any provision of the Governing Documents of such Seller or, assuming compliance with the matters set forth on Schedule 5(b), any Law applicable to such Seller. SCHEDULE 5(B) of this Agreement lists all Persons whose approval or consent, or with whom the filing of any certificate, notice, application, report or other document, is legally or contractually required, or is otherwise necessary, in connection with the execution, delivery or performance of this Agreement and the Promised Agreements by such Seller (any such approval, consent or filing required to be obtained prior to the consummation of the transactions contemplated hereunder, the "Seller Required Consents"). 15 (c) SELLER SHARES. The Seller Shares and the Newcom Shares to be delivered to the UIH Parties at the Closing by such Seller pursuant to this Agreement will, at the Closing, be duly authorized, validly issued and fully paid, and will be free and clear of any Lien or Restriction except for any Lien or Restriction created by any of the UIH Parties effective as of the Closing. (d) NO PROCEEDINGS. Except as set forth in letter (e) of Schedule 5(b), as of the date hereof, there are no actions, proceedings, claims or investigations pending or to the knowledge of senior management of such Seller threatened by or before any Governmental Authority to which such Seller is or would be a party and which questions or would question the validity of this Agreement or the Promised Agreements or seeks or would seek to restrain or enjoin the consummation of the transactions contemplated by this Agreement or the Promised Agreements. (e) BROKERS, AGENTS, FINDERS, ETC. None of such Seller, nor any of its Affiliates has employed or retained any broker, agent or finder, or agreed to pay any finder's fee, commission or similar payment to any Person, on account of this Agreement or the Promised Agreements or the transactions contemplated hereby or thereby with respect to which UIH, Hipercable or Newcom or any Affiliate of UIH, Hipercable or Newcom would be liable. (f) FINANCIAL STATEMENTS. Sellers will deliver or cause to be delivered to UIH on or before November 30, 1998, or as soon thereafter as is commercially practicable, the audited consolidated balance sheet as of September 30, 1998, and related consolidated statements of operations, stockholders equity and changes in financial position (i) Hipercable and the Subsidiaries and (ii) of Newcom, in each case for the nine months then ended (the "Hipercable Financial Statements"). The Hipercable Financial Statements will present fairly in all material respects the consolidated financial position and the results of operations of (i) Hipercable and the Subsidiaries and (ii) Newcom, in each case as of the dates and for the periods indicated, and will have been prepared in accordance with GAAP. The Sellers shall bear the incremental costs incurred by Hipercable and its Subsidiaries as a result of the audit undertaken to prepare the Hipercable Financial Statements in addition to the year-end audit, it being agreed that such incremental costs are UF 1,500 (one thousand five hundred). (g) EMPLOYMENT MATTERS. (i) Attached hereto as SCHEDULE 5(G)(I) is a list of all senior managers of Hipercable as of the date hereof setting forth each such employee's salary, position and number of years of employment with Hipercable. In addition, Sellers have made available to UIH all employment agreements between such employees and Hipercable. The Parties acknowledge that for purposes of this Section 5(g)(i), senior managers of Hipercable are all employees of Hipercable, any of the Subsidiaries or Newcom who have direct reporting responsibilities to Alex Muller Arriagada or Jorge Salvatierra Pacheco. Except as set forth in Schedule 5(g)(i), as of the date hereof no employee is a party to any material 16 employment or consulting agreement or similar agreement with Hipercable, any Subsidiary or Newcom. Schedule 5(g)(i) is complete and accurate in all material respects as of the date hereof. (ii) On or before the date that is thirty days after the date hereof, such Seller will use its best efforts to cause Hipercable and Newcom, as applicable, to deliver to UIH, to be attached hereto as SCHEDULE 5(G)(II), a list of employees of Hipercable, each of the Subsidiaries and Newcom as of August 31, 1998, such list to identify each employee's position, salary, number of years of employment with Hipercable and the subject Subsidiary or Newcom, as applicable. Upon delivery, such list will be complete and accurate in all material respects. (iii) The Parties acknowledge that certain employees of VTR have provided services on behalf of Hipercable and the Subsidiaries but are not employees of Hipercable any of the Subsidiaries or Newcom and such Persons will not be deemed senior managers of Hipercable, Newcom or any Subsidiary. (h) SHAREHOLDERS AGREEMENT. As of the date hereof, the senior management of such Seller has no actual knowledge of any breach of the Shareholders Agreement or the Newcom Shareholders Agreement by any of the UIH Parties. SIX: REPRESENTATIONS AND WARRANTIES OF UIH Each of the UIH Parties jointly and severally represents and warrants in favor of, and covenants with VTR and CNT as follows: (a) ORGANIZATION, CORPORATE POWER AND AUTHORIZATION. Each UIH Party is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation. Each UIH Party has full corporate power and authority to enter into this Agreement and the Promised Agreements to which it is a party and to perform its obligations and to consummate the transactions contemplated by this Agreement and the Promised Agreements to which it is a party. The execution, delivery and performance by such UIH Party of this Agreement and the Promised Agreements to which it is a party and the consummation of the transactions contemplated by this Agreement and the Promised Agreements to which it is a party have been duly and validly authorized by all necessary corporate actions on the part of such UIH Party. This Agreement is a valid and binding obligation of each UIH Party and is enforceable against each UIH Party in accordance with its terms. When executed and delivered, each of the Promised Agreements to which such UIH Party is a party will be valid and binding obligations of such UIH Party, enforceable against it in accordance with its terms. 17 (b) NO VIOLATION; CONSENTS. The execution and delivery of this Agreement by each UIH Party, and the performance of its obligations hereunder and the consummation of the transactions contemplated hereby will not violate any provision of the Governing Documents of such UIH Party or, assuming compliance with the matters set forth on Schedule 6(b), any Law applicable to such UIH Party. SCHEDULE 6(B) of this Agreement lists all Persons whose approval or consent, or with whom the filing of any certificate, notice, application, report or other document, is legally or contractually required, or is otherwise necessary, in connection with the execution, delivery or performance of this Agreement and the Promised Agreements by each UIH Party (any such approval, consent or filing required to be obtained prior to the consummation of the transactions contemplated hereunder, the "UIH Required Consents"). (c) BROKERS, AGENTS, FINDERS, ETC. Neither any UIH Party nor any of its Affiliates (other than Hipercable, the Subsidiaries and Newcom, as to which each UIH Party makes no representation) has employed or retained any broker, agent or finder, or agreed to pay any finder's fee, commission or similar payment to any Person, on account of this Agreement or the Promised Agreements or the transactions contemplated hereby or thereby with respect to which the Sellers or any Affiliate of the Sellers would be liable. (d) NO PROCEEDINGS. Except as set forth in letter (f) of Schedule 6(b), as of the date hereof, there are no actions, proceedings, claims or investigations pending or to the knowledge of such UIH Party's senior management threatened by or before any Governmental Authority to which such UIH Party is or would be a party and which questions or would question the validity of this Agreement or the Promised Agreements or seeks or would seek to restrain or enjoin the consummation of the transactions contemplated by this Agreement or the Promised Agreements. (e) SHAREHOLDERS AGREEMENT. As of the date hereof, the senior management of each UIH Party has no actual knowledge of any breach of the Shareholders Agreement or the Newcom Shareholders Agreement by any of the Sellers. SEVEN: CONDITIONS TO CLOSING (a) CONDITIONS TO THE OBLIGATIONS OF THE SELLERS TO CLOSE. The obligation of the Sellers to effect the Closing is subject to the satisfaction (or waiver by the Sellers) prior to the Closing of the following conditions: (i) RECEIPT OF CONSENTS. All of the Required Consents shall have been obtained or, in the case of filings, timely made, and shall be in full force and effect. 18 (ii) REPRESENTATIONS AND WARRANTIES TRUE AND COMPLETE. Each of the representations and warranties made by UIH in Article Six and in the Promised Agreements shall be true and complete in all material respects when made and as of the Closing, with the same effect as if made at and as of the time of Closing (except to the extent a representation or warranty is limited by its terms to a specific date). (iii) NO GOVERNMENTAL PROCEEDINGS. There shall not exist any provision of applicable Law, or any Judgment, preventing consummation of the transactions contemplated by this Agreement or the Promised Agreements, questioning the legality or validity of such transactions or otherwise alleging damage as the result of such transactions. None of the Parties to this Agreement shall have been notified of a present intention by any Governmental Authority, or the legal representative thereof, to commence an action or proceeding to challenge or enjoin consummation of any of the transactions contemplated by this Agreement or the Promised Agreements. (iv) DUE DILIGENCE. UIH shall not have provided written notice to Sellers of a Final MAE Determination. (v) COMPLIANCE WITH COVENANTS. Each of the UIH Parties shall have complied in all material respects with its covenants under this Agreement. (b) CONDITIONS TO THE OBLIGATION OF UIH TO CLOSE. The obligation of the UIH Parties to effect the Closing is subject to the satisfaction (or waiver by the UIH Parties) prior to the Closing, of the following conditions: (i) RECEIPT OF CONSENTS. All of the Required Consents shall have been obtained or, in the case of filings, timely made, and shall be in full force and effect. (ii) REPRESENTATIONS AND WARRANTIES TRUE AND COMPLETE. Each of the representations and warranties made by Sellers in Article Five or in the Promised Agreements shall be true and complete in all material respects when made and as of the Closing, with the same effect as if made at and as of the time of Closing. (iii) NO GOVERNMENTAL PROCEEDINGS. There shall not exist any provision of applicable Law, or any Judgment, preventing consummation of the transactions contemplated by this Agreement or the Promised Agreements, questioning the legality or validity of such transactions or otherwise alleging damage as the result of such transactions. None of the Parties to this Agreement shall have been notified of a present intention by any Governmental Authority, or the legal representative thereof, to commence an action or proceeding to challenge or enjoin consummation of any of the transactions contemplated by this Agreement or the Promised Agreements. 19 (iv) FINANCING. UIH shall have received the Acquisition Financing. (v) NO MATERIAL ADVERSE EFFECT. There shall not have occurred any events or circumstances that, individually or in the aggregate, would reasonably be expected to have a material adverse effect on the financial condition, business, prospects or Assets of Hipercable, the Subsidiaries and Newcom taken as a whole. (vi) DUE DILIGENCE. UIH shall not have provided written notice to Sellers of a Final MAE Determination. (vii) COMPLIANCE WITH COVENANTS. The Sellers shall have complied in all material respects with the Sellers' covenants under this Agreement. (viii) RELATED PARTY AGREEMENTS. Sellers shall have terminated, or caused to be terminated, the Technical Assistance Agreement with respect to Hipercable, Newcom and the Subsidiaries, and each other Related Party Agreement, if any, the terms of which are less favorable to Hipercable, any Subsidiary or Newcom, as applicable, than would have been available in an arms' length transaction on the date such contract was entered into, in each case without further obligation thereunder on the part of any of the Companies or Newcom except with respect to any obligations with respect to any period prior to the Closing. (ix) EMPLOYMENT MATTERS. Sellers shall have complied with the covenants set forth under Section 9(c). EIGHT: CONDUCT PENDING THE CLOSING Pending the Closing, and except as otherwise approved by the Parties in writing, the Parties agree as set forth below. (a) BUSINESS IN ORDINARY COURSE. The Sellers shall cause the Companies and Newcom (i) to conduct their business in the ordinary course and in compliance with all duly approved budgets and the Shareholders Agreement and the Newcom Shareholders Agreement, as applicable, and (ii) not to make any material management change or corporate reorganization without UIH's prior written consent. (b) REPRESENTATION AND WARRANTIES. The Sellers, on the one hand, and the UIH Parties, on the other hand, will not take any action or omit to take any action that would reasonably be expected to result in any of the representations and warranties made in Articles Five or Six, respectively, being untrue or incomplete in any material respect. 20 (c) LITIGATION DURING INTERIM PERIOD. Each Party will advise the other Party promptly of the assertion, commencement or threat of any claim, litigation, proceeding or investigation of which the senior management of such Party has knowledge where any material restraining order, injunction, preliminary injunction, monetary damages or any other Judgment is or may be sought to which any of the Companies or Newcom is a party or, to the knowledge of the senior management of such Party, has been threatened to be made a party. (d) FULL ACCESS. From the date hereof until the earlier of the Closing or the termination of this Agreement, Sellers shall cause Hipercable, the Subsidiaries and Newcom to afford to UIH as part of the Due Diligence Review under Section 9(b), and each Person conducting a bona fide investigation of the Companies and Newcom in connection with the Acquisition Financing (collectively, the "Financing Parties"), and their respective bankers, attorneys, accountants and other authorized representatives, full access to the offices, properties, personnel, books and records of Hipercable, the Subsidiaries and Newcom, during normal business hours and upon reasonable notice, in order that UIH and the Financing Parties may have full opportunity to make such reasonable investigations as they shall desire to make of the affairs of the Companies and Newcom. Such access shall be subject to reasonable procedures agreed to by Hipercable and UIH to ensure minimum disruption of the ongoing business operations of Hipercable; provided however, that such procedures shall not in any way prohibit, materially impair or unreasonably delay access by UIH or the Financing Parties to personnel, properties or books and records. The Parties agree to coordinate all requests for information through one or more executive officers of Hipercable designated by Sellers and reasonably acceptable to UIH; provided, however, that such coordination shall not in any way prohibit, materially impair or unreasonably delay access by UIH or the Financing Parties to personnel, properties or books and records. UIH and each other Person participating in such investigation shall first execute a non-disclosure agreement with respect to the receipt of confidential information related to any of the Companies or Newcom, in such form as is customary for similar investigations (provided that with respect to UIH, such non-disclosure agreement shall only apply to confidential information regarding the Sellers or their respective shareholders). Sellers will cause the officers, employees and agents of the Companies and Newcom, and will use reasonable efforts to cause the attorneys and accountants of the Companies and Newcom, to cooperate fully with UIH and the Financing Parties. (e) ASSISTANCE IN OBTAINING REQUIRED APPROVALS. Each of the Parties shall take, and shall use all reasonable efforts to cause the Companies to take all reasonable legal and regulatory steps to obtain the Required Consents prior to the Closing, including, without limitation, any applicable consents of the Anti-Monopoly Commission and the Foreign Investment Commission, and will keep each other fully informed of their progress in such regard. Each Party will cooperate with the other Party and will use all reasonable efforts to obtain, as promptly as practicable, all of the Required Consents and to maintain each such Required Consent in full force and effect through the Closing Date. Each of the 21 Parties shall use all reasonable efforts to cause the parties to the ING Credit Facility to agree upon all Required Consents and/or amendments thereto, pursuant to this Agreement and the Promised Agreements. (f) PROHIBITION ON DIVIDEND PAYMENTS AND ISSUANCE OR REPURCHASE OF SHARES; REPAYMENT OF THIRD PARTY DEBT. Sellers shall cause each of the Companies and Newcom not to pay any dividends, redeem or repurchase any shares of its capital stock, issue any equity or debt securities or any rights with respect thereto or reduce its capital except, as permitted under the Shareholders Agreement or the Newcom Shareholders Agreement, as applicable. No Third Party Debt may be repaid (other than interest and principal paid as it becomes due and owing under the existing terms of such Third Party Debt). (g) DELIVER FINANCIAL STATEMENTS. The Sellers will cause Hipercable and Newcom to provide to UIH all financial statements and records, including balance sheets, statements of operations, changes in shareholders' equity and statements of change in the financial position of the Companies and Newcom in accordance with past practice prior to the Closing, but in any event no less frequently than monthly. It is expressly understood that, except for the representations and warranties set forth in Article 5, the Sellers make no representation or warranty with respect to the accuracy or completeness of the information set forth in such materials. (h) KEEPING THE PARTIES INFORMED. Each Party will promptly inform the other Party in writing of the occurrence of any event that would reasonably be expected to cause any material breach of the representations or warranties made by such Party in this Agreement. Each Party will also keep the other Party informed regarding the status of any Required Consents and filings and any other matters relating to this Agreement or the transactions contemplated by this Agreement. (i) SHAREHOLDERS AGREEMENTS. Each of the Parties will comply with their respective obligations under the Shareholders Agreement and under the Newcom Shareholders Agreement. (j) ACQUISITION FINANCING: UIH will use reasonable efforts to obtain the Acquisition Financing as promptly as commercially practicable and prior to the Initial Termination Date. (k) LICENSE AGREEMENT. On the Closing Date, VTR will execute and deliver the License Agreement and will have full legal and corporate authority to perform each of its obligations thereunder. Each of the representations and warranties of VTR set forth in the License Agreement will be true and accurate at and as of the Closing Date. The Parties will cause each of Hipercable, the Subsidiaries and Newcom not to transfer or encumber any ownership or other interest to trademarks and tradenames currently owned or utilized by Hipercable, any of the Subsidiaries or Newcom after the date hereof, it being understood 22 that such trademarks and/or tradenames are currently pledged or in the process of being pledged pursuant to the ING Credit Facility to secure outstanding indebtedness of such parties. (l) PURCHASER DESIGNEES. Promptly after making a final determination regarding which, if any, Affiliates of UIH will be Purchaser Designees, UIH shall provide written notice thereof to Sellers. NINE: AGREEMENTS REGARDING CERTAIN OTHER MATTERS (a) FUNDING OF THE COMPANIES PENDING THE CLOSING. From the date hereof through the earlier of (i) the Closing, or (ii) termination of this Agreement, interim funding of Hipercable, the Subsidiaries and Newcom shall be in accordance with any duly approved budgets, the Shareholders Agreement and the Newcom Shareholders Agreement, as applicable. During such period, VTR, CNT and UIH each agrees to contribute cash funds to Hipercable in accordance with the Annual Budget, the Shareholders Agreement and not to elect to have its ownership interest in Hipercable diluted in lieu of making such cash contributions. (b) DUE DILIGENCE REVIEW. From the date hereof through the Closing Date, UIH shall be entitled to conduct a comprehensive review ("Due Diligence Review") of the Companies and Newcom, in accordance with Section 8(d), including, without limitation, all aspects of the ownership, operations, management, Assets, Contracts, rights, liabilities, finances of the Companies and Newcom and all other matters that UIH believes in good faith to be relevant to an assessment of the value of the Companies and Newcom. If on or prior to the Closing, UIH reasonably determines that (a) the unaudited consolidated financial statements of Hipercable and the Subsidiaries as of and for the period ended June 30, 1998 (attached hereto as Schedule 9(b)) were not fairly presented in all material respects in accordance with Chilean generally accepted accounting principles or (b) Hipercable, the Subsidiaries and Newcom do not own or have in full force and effect all authorizations, permits, Assets, Contracts, or Licenses necessary to carry on the business of Hipercable, any of the Subsidiaries or Newcom as presently conducted or as contemplated by the Business Plan (subject to contingencies in the Business Plan), or Hipercable, any of the Subsidiaries or Newcom is in breach or noncompliance of any such authorizations, permits, Contracts, Licenses or applicable Laws or any litigation or governmental proceeding exists or is pending or threatened with respect to which Hipercable, any of the Subsidiaries or Newcom is a party, in each case (a) or (b) which has had or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the financial condition, business, prospects or assets of Hipercable, the Subsidiaries and Newcom taken as a whole (a "Material Adverse Effect"), UIH will promptly notify the Sellers of such determination (a "Due Diligence MAE Determination"). If Hipercable and Newcom have not within a reasonable period of time after receipt of the Due Diligence MAE Determination taken action to remedy any matters described in the Due Diligence MAE Determination so that such matters do not have or would not 23 reasonably be expected to have a Material Adverse Effect, UIH may at any time thereafter but prior to the Closing Date provide written notice to Sellers (a "Final MAE Determination") that a condition to Closing has not been satisfied and the Parties shall have no obligation to Close. (c) NO SOLICITATION OF HIPERCABLE EMPLOYEES. (i) Each of the Sellers agrees that neither it nor any of its Affiliates will employ, contract with (as a consultant, advisor or otherwise) or solicit the employment or services of any of Hipercable's senior management personnel for a period of one year beginning on the date hereof (the "Transition Period"); provided, however, that this Section 9(c) will not prohibit any Seller from making a solicitation to the general public through an advertisement in a newspaper or another publication (print or electronic) or otherwise as long as no member of Hipercable's senior management is employed by, or provides services to, any Seller or their respective Affiliates during the Transition Period. For purposes of this clause (c)(i), "Hipercable's senior management" refers to the senior managers of Hipercable as defined in Section 5(g)(i), together with their respective successors. (ii) From and after the date hereof, Sellers shall use reasonable efforts (which shall not require any payments by Sellers to the Key Employees) to cause the Key Employees, as soon as practicable after the date hereof but in no event later than the date that is 60 days after the date hereof, to enter into employment agreements with Hipercable. The Key Employees that voluntarily decide to execute employment agreements with Hipercable, shall be hired by Hipercable on terms and conditions no less favorable than those set forth in their current employment agreements, in which case Hipercable will assume the obligations regarding the years of employment of the Key Employees under their current employment agreements. (iii) In the event any of the Key Employees does not enter into employment agreements with Hipercable, after the expiration of the 60 day period mentioned in Section 9(c)(ii) and for the remainder of the Transition Period, the Sellers must reassign such Key Employees, to the extent permitted by the relevant employment agreements or upon agreement with such employees, to a position that is not directly competitive with the business of the Companies or Newcom. In the event that the abovementioned amendment of the employment agreements or reassignation does not take place, the Sellers must terminate their employment bond with such employees and shall not reemploy the Key Employees for the remainder of the Transition Period. In addition, each Seller shall ensure that such Key Employees do not, during the Transition Period, advise, consult with or assist either Seller, or any Affiliate of either Seller, in any manner with respect to any business that is directly competitive with the business of the Companies or Newcom. 24 (iv) As soon as practicable, and in any event not later than 60 days after the date hereof, Sellers and UIH shall take such actions as are necessary, and as provided for in the Shareholders Agreement, to appoint a new General Manager of Hipercable. TEN: POST CLOSING ADJUSTMENT Not less than three Business Days prior to the Closing Date, Sellers shall provide written certification to UIH of Third Party Debt as of the Closing (calculated at the Exchange Rate in effect on the date that is four Business Days prior to the Closing), providing a reasonably detailed description of each material component of such Third Party Debt. Not less than 30 days following the Closing, nor more than 90 days following the Closing, UIH shall notify the Sellers of its determination of the amount of Third Party Debt at Closing ("Adjustment Notice") providing a reasonably detailed calculation of such Third Party Debt and whether any adjustment to the Purchase Price is required as a result of the amount of such Third Party Debt. Promptly following the receipt of the Adjustment Notice, the Sellers shall verify such calculation of Third Party Debt and UIH shall provide complete access to the records of the Companies to the Sellers and their accountants for the purpose of such verification, using procedures similar to those set forth in Section 8(d) with respect to the Due Diligence Review. Not later than 30 days after receipt of the Adjustment Notice the Sellers shall notify UIH in writing (the "Response Notice") as to whether they agree with the calculation in the Adjustment Notice. If Sellers fail to provide such Response Notice within 30 days of receipt of the Adjustment Notice, the calculation of Third Party Debt set forth in the Adjustment Notice shall be final and binding on both Parties. If Sellers agree with the calculation in the Adjustment Notice, or if Sellers fail to deliver a Response Notice within 30 days after receipt of the Adjustment Notice, the Sellers or the UIH Parties, as the case may be, shall promptly make any payments required as a result of the amount of the Third Party Debt at Closing. If the Sellers disagree, they shall include in the Response Notice a reasonably detailed calculation of the amount of Third Party Debt that they assert existed at Closing. The Parties shall promptly attempt to reconcile their respective determinations as to the amount of Third Party Debt as of Closing. If the Parties are unable to agree upon the amount of Third Party Debt within 20 days after receipt of the Response Notice, either Party may refer the matter to KPMG Peat Marwick, LLP or another independent certified public accountant acceptable to the Parties, who shall promptly determine the amount of Third Party Debt at the Closing, and whose decision shall be final and binding upon both Parties. Any adjustment to the Purchase Price shall be paid within 10 days following the date that the accountants communicate the amount of Third Party Debt at the Closing to the Parties. The Parties acknowledge that payments required under this Article Ten are not subject to any limitation set forth in Article 13. 25 ELEVEN: RIGHT OF FIRST REFUSAL (a) RIGHT OF FIRST REFUSAL. If, at any time on or before the date that is three years from the date hereof, VTR desires to sell, assign, or otherwise transfer (each, a "Transfer"), directly or indirectly, any or all of its shares of capital stock of CNT or any rights in connection therewith ("CNT Shares") pursuant to a bona fide offer (the "Bona Fide Offer") from any Person other than UIH, VTR or any of their respective Affiliates (the "Proposed Transferee"), it shall first submit a written offer (the "Offer") to Transfer such CNT Shares (the "Offered Shares") to the UIH Parties on the same terms and conditions as set forth in the Bona Fide Offer. The Offer shall set forth all material terms included in the Bona Fide Offer. The Offer shall provide that the UIH Parties shall be afforded the same rights to conduct a due diligence investigation as the Proposed Transferee, which investigation will begin as soon as possible after delivery of the Offer. The Offer shall not include any terms not included in the Bona Fide Offer. The Offer shall further state that the UIH Parties may acquire, in accordance with the provisions of this Agreement, all (but not fewer than all) of the Offered Shares on the terms and other conditions set forth therein. If any portion of the consideration offered in the Bona Fide Offer is not in cash, the value of such consideration shall be deemed for all purposes under this Agreement to be the value determined in accordance with an appraisal conducted by an independent appraiser agreed upon by UIH and VTR. No Transfer to an Affiliate of VTR (an "Affiliate Transferee") shall be permitted hereunder unless (i) such Affiliate Transferee shall first agree in writing to be bound by the terms of this Article 11, and (ii) Sellers guarantee to UIH performance of, and remain fully liable for any breach by, such Affiliate Transferee of its obligations as set forth in this Article 11. For purposes hereof, any event or circumstance that results in a change of control of VTR or an Affiliate Transferee shall be deemed a Transfer of CNT Shares subject to this Article 11. A change of control shall have occurred with respect to VTR or an Affiliate Transferee if at any time VTR or such Affiliate Transferee ceases to be controlled, directly or indirectly, by one or more members of the VTR Control Group. (b) CONFIRMATION OF BONA FIDE OFFER. UIH shall be permitted to review the terms of the Bona Fide Offer to confirm that it is bona fide and subject only to conditions that would reasonably be expected to be satisfied, by review of the documents involved in such Bona Fide Offer including any financing required thereunder. If review of such documents and of such financing by UIH would violate a confidentiality obligation of VTR to the Proposed Transferee, or of the Proposed Transferee to any third party, UIH shall designate a recognized investment banker, law firm or both (the "UIH Advisors"), each reasonably satisfactory to VTR, who shall at UIH's expense confirm (i) that the offer contains and accurately reflects all material terms and conditions set forth in the Bona Fide Offer (including all written documents between VTR and the Proposed Transferee related to the Bona Fide Offer) and that such terms and conditions are no more favorable to the Proposed Transferee than the terms and conditions set forth in the Offer, (ii) that there are no terms or conditions included in the Offer that are not included in the Bona Fide Offer, and (iii) 26 that financing has been obtained, subject to no condition which, in the reasonable judgment such UIH Advisors, is likely to be unsatisfied, or based on the evidence provided, such UIH Advisors expect that financing for the Transfer to the Proposed Transferee will be obtained. The determination of the UIH Advisors shall not affect the right of VTR to sell the Offered Shares to the Proposed Transferee in accordance with the terms of this Article 11 if no UIH Party elects to purchase the Offered Shares within the 60-day period set forth in Section 11(c) by delivering notice of such election in accordance with Section 11(c); provided, however, that in the event that prior to the end of such 60-day period, UIH delivers written notice to VTR that any material term applicable to the sale to the Proposed Transferee has not been included in the Offer or has not been accurately reflected in such Offer, VTR shall revise the Offer and UIH Party shall be provided a reasonable time to respond to such revised Offer. As soon as practicable after receipt of notice by UIH that it has designated the UIH Advisors under this Section 11(b), VTR shall deliver to each such designee copies of the Bona Fide Offer and all written materials related to the Bona Fide Offer, subject to the UIH Advisors executing standard and customary confidentiality agreements, which agreements shall be delivered to such UIH Advisors by VTR within three Business Days after receipt of notice from UIH of their designation. The Parties shall use all commercially reasonable efforts to cause such confidentiality agreements to be executed as soon as possible after delivery of the Offer Notice. In the event that such agreements are not executed within five days after UIH notifies VTR of the identity of the UIH Advisors, unless such failure to execute the agreements is caused by the unreasonable failure to execute such agreements by the UIH Advisors, the 60-day period within which the UIH Parties must deliver a Purchase Notice shall be extended for a number of days equal to the total number of days required to obtain the execution of the confidentiality agreements by all parties thereto. (c) ELECTION TO PURCHASE; CLOSING. If one or more of the UIH Parties elects to purchase the Offered Shares in accordance with the terms of the Offer, the subject UIH Parties shall communicate in writing such election to purchase (a "Purchase Notice") to VTR within 60 days of the date the Offer was made. VTR agrees that any Purchase Notice delivered by any UIH Party will provide that the Offered Shares must be delivered to such UIH Party free and clear of any Liens or Restrictions including, without limitation, the Pledge but excluding Liens or Restrictions created by any of the UIH Parties effective as of the Closing, and that such condition shall be deemed to be in accordance with the terms of the Offer, even if a similar qualification is not included in the Bona Fide Offer. Such election shall be irrevocable, valid, legally binding and enforceable against the UIH Parties (to the same extent as the Bona Fide Offer would, upon acceptance thereof by Sellers, be irrevocable, valid, legally binding and enforceable against the Proposed Transferee) subject to the obtaining of required regulatory approvals and the expiration of any waiting periods mandated by applicable Law, and the Parties agree to cooperate in making any filings and obtaining any such approvals to allow the UIH Parties to exercise their rights hereunder. The Transfer of the Offered Shares to the subject UIH Parties pursuant to this Section 11(c) shall be made at 11:00 A.M. Chile time at the principal offices of UIH in Santiago on the later of (i) the date that is 120 27 days following the date the subject UIH Parties deliver the Purchase Notice to VTR (or if not a Business Day, then on the next succeeding Business Day) and (ii) the date that is five Business Days after all regulatory approvals for such transaction have been obtained and any applicable waiting period has expired. Such Transfer shall be effected by VTR's delivery to the subject UIH Parties of a certificate or certificates evidencing the Offered Shares to be purchased together with an executed contract for Transfer containing the representations, warranties, covenants and all other terms included in the Offer, and the delivery by such UIH Parties to VTR of the purchase price therefor in cash, by wire transfer of immediately available funds to an account designated by VTR, which account shall be designated at least three Business Days prior to such closing date. (d) SALE UPON ELECTION NOT TO PURCHASE. In case none of the UIH Parties elects to accept the Offer, or if such 60-day period of acceptance lapses without any of the UIH Parties electing to purchase the Offered Shares in accordance with Section 11(c), all (but not fewer than all) of the Offered Shares may be transferred by VTR to the Proposed Transferee at any time prior to the later of (i) the date 180 days after the date the Offer was rejected in writing or is deemed to have been rejected by not having been accepted within the 60-day period specified in Section 11(c), or (ii) the date five Business Days after all regulatory approvals for such transaction have been obtained and any applicable waiting period has expired with the limitation that the same number of shares as offered to the UIH Parties shall be Transferred to the Proposed Transferee (x) at the same or higher aggregate price or price per Offered Share as set forth in the Offer, (y) subject to all of the terms and conditions set forth in the Offer, and (z) subject to no material terms more favorable to the Proposed Transferee than those set forth in the Offer. If the Proposed Transferee does not carry out its purchase within the 180-day period referred to above, or else withdraws its offer or introduces any changes thereto that would be inconsistent with the limitation set forth in the immediately preceding sentence, the Offered Shares may not be sold, assigned or otherwise transferred unless previously offered to the UIH Parties pursuant to this Article 11. Any Offered Shares that go unsold within such period shall continue subject to the requirements of this Article 11. (e) NO PLEDGE OF SHARES. For a period of three years beginning on the date hereof, VTR shall not pledge or encumber, or permit to exist any Lien or Restriction (other than the Pledge or the Pledge Agreement) on or with respect to, any CNT Shares owned by VTR. During such three-year period, VTR shall not amend or modify the Pledge or consent to any such amendment or modification (except for any amendment or modification releasing CNT Shares which serve as Security under the Pledge), without the prior written consent of UIH, which consent shall not be unreasonably withheld or delayed. (f) DEFAULT UNDER PLEDGE. If at any time during the three-year period beginning on the date hereof, senior management of VTR becomes aware that there has occurred or is reasonably likely to occur any event or circumstance (each a "Default") that permits or would permit CTC to exercise any right under the 28 Pledge Agreement (an "Execution Right") to execute against any CNT Shares pledged as collateral thereunder (whether or not CTC's ability to exercise such right is subject to any notice requirement, cure period, compliance with foreclosure or similar procedures under applicable Law, or any similar requirement), VTR shall as soon as feasible provide written notice to UIH of the Default and of the terms and requirements applicable to the exercise by CTC of the Execution Right. At such time VTR shall, to the maximum extent permitted by applicable Law, take one or more of the following remedial actions: (i) repay the Pledge Agreement in full and release the Pledge, (ii) cause the CNT Shares to be released from the Pledge by substituting other collateral therefor, (iii) cure the Default, or (iv) provide UIH with the option of purchasing all of the CNT Shares owned by VTR (including the CNT Shares subject to the Pledge) to UIH for a purchase price equal to (A) the total number of CNT Shares to be purchased, multiplied by (B) the CNT Share Price; provided that in connection with such purchase UIH shall repay the entire outstanding balance on the Loan, such repayment amount to be deducted from the CNT Purchase Price and the Pledge shall be released in its entirety prior to or simultaneously with such repayment. For purposes hereof, the term "CNT Share Price" shall mean the average closing price for CNT Shares for the thirty-day period ending on the date immediately preceding the date of the closing on the purchase of the CNT Shares as reported by the Bolsa de Comercio de Santiago. TWELVE: SURVIVAL Any breach of a representation, warranty, covenant or agreement involving actual fraud will survive the Closing for the maximum period provided for under Chilean law. The representations and warranties contained in Section 5(f) shall survive the Closing and will terminate on the date that is one year after the date of delivery of the Hipercable Financial Statements to UIH pursuant to Section 5(f). All other representations, warranties and covenants of the Parties in this Agreement will survive the Closing for three years after the date hereof. A claim under this Agreement will be timely and may be pursued so long as the claim is asserted through written notice to the other Party given during the period pursuant to which such representation, warranty or covenant survives. THIRTEEN: INDEMNIFICATION (a) GENERAL. The UIH Parties jointly and severally, and the Sellers, severally and not jointly (the "Indemnifying Party") agree to indemnify and hold harmless the other Party, any entity controlling, controlled by or under common control with such Party, and all directors, officers, stockholders, employees and agents of any of the foregoing (the "Indemnified Persons") from and against all losses, claims, demands, damages, Judgments, costs, liabilities (or actions 29 or proceedings in respect thereof) and expenses (including, without limitation, reasonable attorneys' fees and expenses incurred in investigating, preparing, defending against or prosecuting any litigation or claim indemnified against under this Agreement) (collectively "Losses") of any kind paid, incurred or suffered as a result of, relating to or arising out of (i) the inaccuracy when made or deemed made of any representation or warranty made by the Indemnifying Party in or pursuant to this Agreement, and (ii) the failure by the Indemnifying Party to comply with any of its obligations under this Agreement. (b) NOTICE; DEFENSE OF THIRD PARTY CLAIMS. Any Person that wishes to assert the right to be indemnified under this Article 13 with respect to any claim or demand or action by a third party against such Indemnified Person (a "Third Party Claim") in respect of which a claim may be made against an Indemnifying Party shall notify the Indemnifying Party as soon as practicable of any such claim or demand or the commencement of such action (in any event such Person shall use its best efforts to provide such notice within 10 days), but the failure so to notify the Indemnifying Party will not relieve the Indemnifying Party from any liability that it may have to any Indemnified Person unless, and only to the extent that, such failure results in prejudice to the Indemnifying Party in the conduct of the defense of such claim. If any such action is brought against any Indemnified Person and it notifies the Indemnifying Party of the commencement thereof, the Indemnifying Party will be entitled to participate in and, to the extent that it elects by delivering written notice to the Indemnified Person within 15 days after receiving notice from the Indemnified Person of the assertion of such claim, to assume the defense of the action, with counsel reasonably satisfactory to the Indemnified Person, and after such notice from the Indemnifying Party to the Indemnified Person, the Indemnifying Party will not be liable to the Indemnified Person for any legal or other expenses except as provided below. The Indemnified Person shall not settle, compromise or discharge any claim or demand for which it is indemnified hereunder or admit to any liability with respect to such claim or demand without the prior written consent of the Indemnifying Party. Notwithstanding the foregoing, the Indemnified Person will have the right to employ its own counsel and to participate in the defense or settlement in any such action, but the fees, expenses and other charges of such counsel will be at the expense of such Indemnified Person unless (i) otherwise agreed in writing by the Indemnifying Parties, or (ii) a material conflict or potential material conflict exists (based on written advice of counsel to the Indemnified Person) between the Indemnified Person and the Indemnifying Party in the defense of such action, or (iii) the Indemnifying Party has not in fact employed counsel to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action. In each of the cases specified in clauses (i) through (iii) of the preceding sentence, the reasonable fees, disbursements and other charges of counsel will be at the expense of the Indemnifying Party, but the Indemnifying Party shall not be obligated to pay the fees, disbursements or other charges of more than one counsel for all Indemnified Persons in respect of any action or series of related actions. All such fees, disbursements and other charges will be reimbursed by the Indemnifying Party promptly as they are incurred. An Indemnifying Party shall not, without the prior written consent of each person entitled to 30 indemnification hereunder, effect any settlement of any pending or threatened action in respect of which such person is or could have been a party and indemnification could have been sought hereunder from such Indemnifying Party, unless the settlement includes an unconditional release of such person from all liability in respect of claims that are the subject matter of such action. Nothing in this Section 13(b) shall apply to or otherwise affect the right of Indemnified Persons to be indemnified hereunder for Losses incurred by such Indemnified Persons which do not result from Third Party Claims, provided notice of such claims is given in accordance with Article 12. (c) LIMITATION ON SELLERS' LIABILITY. (i) Subject to Section 13(e), VTR shall be liable to the Indemnified Persons for any Losses only to the extent such Losses exceed an aggregate amount equal to $5,000,000 or the foreign currency equivalent thereof measured at the Exchange Rate as of the date of such Loss (the "DEDUCTIBLE AMOUNT") and then only for Losses in excess of the Deductible Amount up to an aggregate maximum amount equal to 89.3% of the Purchase Price (the "VTR MAXIMUM AMOUNT") or the foreign currency equivalent thereof measured at the Exchange Rate as of the date of payment. (ii) Subject to Section 13(e), CNT shall be liable to the Indemnified Persons for any Losses only to the extent such Losses exceed an aggregate amount equal to the Deductible Amount and then only for Losses in excess of the Deductible Amount up to an aggregate maximum amount equal to 10.7% of the Purchase Price (the "CNT MAXIMUM AMOUNT") or the foreign currency equivalent thereof measured at the Exchange Rate as of the date of payment. (d) LIMITATION ON UIH PARTIES' LIABILITY. Subject to Section 13(e), the UIH Parties shall be liable to the Indemnified Persons only for Losses up to an aggregate maximum amount equal to 40% multiplied by (Purchase Price divided by 0.6) (the "UIH MAXIMUM AMOUNT"), or the foreign currency equivalent thereof measured at the Exchange Rate as of the date of payment, with respect to which amount the UIH Parties shall be jointly and severally liable. (e) NO LIMITATION ON INDEMNIFICATION FOR BREACH OF COVENANTS REGARDING COMPLIANCE WITH SHAREHOLDERS AGREEMENTS. Notwithstanding any other provision of this Agreement, (i) the Sellers shall be obligated to indemnify each Indemnified Person hereunder for the full amount of all Losses suffered by such Indemnified Person resulting from, relating to or arising out of any breach by the Sellers of Section 8(i) of this Agreement without regard to whether such Losses exceed the Deductible Amount, the VTR Maximum Amount or the CNT Maximum Amount, it being agreed by the Parties that such Losses will not to be subject to the provisions of Section 13(c) hereof; and (ii) the UIH Parties shall be obligated to indemnify each Indemnified Person hereunder for the full amount of all Losses 31 suffered by such Indemnified Person resulting from, relating to or arising out of any breach by the UIH Parties of Section 8(i) of this Agreement, it being agreed by the Parties that such Losses will not be subject to the provisions of Section 13 (d) hereof. For purposes of this Section 13(e), "Losses" shall not include the discounted buy-out remedy set forth in Section 4.4 of the Shareholders Agreement and the Newcom Shareholders Agreement. (f) SELLERS' INDEMNIFICATION FOR CERTAIN REPRESENTATIONS AND WARRANTIES. Notwithstanding anything to the contrary contained herein, only 60% of Losses related to the Companies, and 50% of Losses related to Newcom, resulting from any breach or inaccuracy of the representations and warranties set forth in Section 5(f) or Section 5(g)(i) or (ii) shall be deemed Losses hereunder. Nothing in this Section 13(f) shall limit or affect the rights and remedies available to the parties to the Shareholders Agreement and the parties to the Newcom Shareholders Agreement with respect to any breach of either or both such agreements which breach occurred prior to the date hereof. (g) SPECIFIC PERFORMANCE. The Parties acknowledge that, in addition to any other remedy available to the Parties hereunder, the Arbitration Court shall be authorized, at the request of the non-defaulting Party, to require specific performance of a Party's obligations hereunder (including, without limitation, the obligations of Sellers under Section 9(c) and of VTR under Article 11) in the event of any material breach hereof by such Party. (h) INDEMNIFICATION AS SOLE REMEDY. Subject to Sections 13(f) and Section 13(g), and except with respect to claims of actual fraud, the indemnity provided herein as it relates to this Agreement and the transactions contemplated by this Agreement shall be the sole and exclusive remedy of the Seller Indemnified Persons with respect to any and all claims for Losses sustained, incurred or suffered as a result of any breach of this Agreement and the transactions contemplated hereby, including, without limitation, any such claims arising under or based upon any Laws, and the Parties on behalf of the Indemnified Persons waive any right to pursue any other remedies to the fullest extent permitted under applicable Laws with respect to such claims for Losses. FOURTEEN: ARBITRATION Any difference, controversy, conflict, issue or difficulty arising between the Parties in respect of the validity, nullity, termination, construction, scope, applicability or breach of this Agreement or otherwise for whatever reason directly or indirectly in connection herewith and in respect of any other matter which the Parties may enter into as a result of the matters agreed and regulated under this Agreement (the "Controversy"), shall first be the object of bona fide direct negotiations between the Parties. If the Parties fail to reach an understanding in this regard within 30 days following the date one or both of the Parties has initiated negotiations to resolve the Controversy, then either Party shall have the right to initiate arbitral proceedings by giving written notice to the other Party (the "Notice of Arbitration"). The Controversy shall be exclusively settled by a Chilean Arbitral Tribunal or Tribunal Arbitrador, which shall act as Arbitrator or Arbitro Arbitrador and shall be composed of three arbitrators (the "Arbitration Court"). The Arbitration Court may act as often as necessary upon request by either or both Parties, and its awards shall be unappealable. The Parties hereby expressly waive any remedies which they could have asserted during or after the 32 arbitration with the exception of requests for clarification or interpretation and the remedy of complaint recurso de queja. The three arbitrators shall be appointed as set forth in this Article Fourteen. Within 15 days after receipt of the Notice of Arbitration, the claimant shall select one arbitrator and the respondent shall select one arbitrator. Within ten days of their selection, the two arbitrators shall select the third arbitrator, who will be the arbitrator presiding over the arbitration court. If the claimant or the respondent fail to appoint an arbitrator as required hereunder, or if the two arbitrators so selected are unable to agree on the appointment of the third arbitrator within twenty days after the Notice of Arbitration, then such arbitrator(s) shall be selected by the Santiago Section of the Inter-American Commercial Arbitration Commission (the "IACAC") pursuant to the rules of procedure of the IACAC, except that the arbitrator(s) shall be appointed within 35 days after the date of the Notice of Arbitration. The arbitrator(s) so selected by the IACAC shall be fluent in Spanish and English and shall have had considerable experience in arbitrating international commercial disputes. The Arbitration Court shall always be authorized to establish the procedural rules for the arbitral proceedings, even upon the Parties' disagreement in that respect. In reaching a determination, the Arbitration Court shall consider common legal principles under Chilean law generally applicable to the Controversy, provided, however, that to the extent those principles are inconsistent with the intent of the Parties under this Agreement or the Promised Agreements, the provisions of this Agreement and the Promised Agreements shall prevail. The place of arbitration shall be Santiago, Chile and the Spanish language shall be used throughout the arbitral proceedings (although the arbitrators may communicate with and take testimony from the Parties in English to the extent they deem it helpful). Unless the Parties otherwise agree in writing, the final arbitral award shall be rendered within 120 days of the Notice of Arbitration. The arbitral award shall be in U.S. Dollars and shall include interest from the date of the action giving rise to such award. The arbitral award shall be final and binding upon the Parties, and judgment may be entered thereon upon the application of any Party in any court of competent jurisdiction. Each Party shall bear the costs of preparing and presenting its case with respect to any arbitral proceeding. Other costs of arbitration (including the fees and expenses of the arbitrators) will be borne as provided in the arbitral award. 33 FIFTEEN: APPLICABLE LAW; JURISDICTION This Agreement shall be governed in accordance with the laws of the Republic of Chile. For all legal intents and purposes derived here from, the Parties establish their legal address in the City and District of Santiago, and subject themselves to the jurisdiction of its Courts of Justice, without prejudice to Article Fourteen. SIXTEEN: ENTIRE AGREEMENT; OTHER AGREEMENTS (a) ENTIRE AGREEMENT. This Agreement, the Promised Agreements and the other agreements to be delivered at the Closing constitute the entire agreement between the Parties with respect to the subject matter hereof and thereof and, except as provided in Section 16(b), supersede all other previous agreements, understandings and negotiations between the Parties, both written and oral, in respect to the subject matter hereof and thereof. The Parties have neither made nor relied upon any representation, statement, inducement, promise, covenant, condition or guarantee not stipulated expressly herein. (b) OTHER AGREEMENTS. The Parties shall cause the Original Promise Agreement, the Shareholders Agreement and the Newcom Shareholders Agreement to be terminated upon the Closing. Upon such termination and notwithstanding any provisions that would survive pursuant to Section 8.2 of the Shareholders Agreement and the Newcom Shareholders Agreement (i) the sole remedies for any breach of either or both such Shareholder Agreements that occurred on or after the date hereof shall be as set forth in Section 13(e), and (ii) the sole remedies for any breach of either or both such Shareholder Agreements that occurred prior to the date hereof shall be the remedies set forth in the Shareholders Agreement or the Newcom Shareholders Agreement, as applicable, which remedies shall survive the termination of such agreements in accordance with the terms thereof; provided, however, that upon the Closing, the discounted buy-out remedy set forth in Section 4.4 of each of the Shareholders Agreement and the Newcom Shareholders Agreement shall terminate and shall no longer be available to any party to such agreements with respect to any such breach. SEVENTEEN: NOTICES All notices, requests or other communications to the Parties shall be served in writing and sent to the address or telecopier number stated by said Party herein below, whether in person, or by Federal Express or another reputable international courier (a "Qualified Courier") for next Business Day delivery (or its nearest equivalent) or telecopy transmission followed by courier, or else to 34 any other address or telecopier number that said Party may specify hereinafter by means of a notice sent to each other Party as provided in this Article. If to the Sellers: VTR S.A. Avenida Andres Bello N(degree) 2711, piso 6 Las Condes, Santiago Attn: Sr. Jorge Salvatierra Telephone: (562) 310-1492 Telecopy: (562) 310-1560 Compania Nacional de Telefonos, Telefonica del Sur S.A. Avenida Andres Bello N(degree) 2711, piso 6 Las Condes, Santiago Attn: Sr. Blas Tomic Telephone: (562) 310-1491 Telecopy: (562) 310-1560 with copies to: Quinenco S.A. Agustinas 972, oficina 701 Santiago Centro, Santiago Attn: Guillermo Luksic C. Telephone: (562) 698-3580 Telecopy: (562) 672-8552 SBC International, Inc. 175 E. Houston, Room 10-A-50 San Antonio, TX 78205 Attn: President Telephone: (210) 351-5000 Telecopy: (210) 351-5166 35 SBC Communications Inc. 175 E. Houston, Room 1146 San Antonio, TX 78205 Attn: General Attorney and Assistant General Counsel Telephone: (210) 351-3476 Telecopy: (210) 351-3488 Sullivan & Cromwell 125 Broad Street New York, NY 10004 Attn: Earl Weiner Telephone: (212) 558-4000 Telecopy: (212) 558-3588 If to UIH: UIH Latin America, Inc. 4643 South Ulster St., Suite 1300 Denver, CO 80237 U.S.A. Attn: President Telephone: (303) 770-4001 Telecopy: (303) 770-4207 with copies to: United International Holdings, Inc. 4643 South Ulster St., Suite 1300 Denver, CO 80237 U.S.A. Attn: General Counsel Telephone: (303) 770-4001 Telecopy: (303) 770-4207; and Holme Roberts & Owen LLP 1700 Lincoln Street Suite 4100 Denver, CO 80203 U.S.A. Attn: W. Dean Salter Telephone: (303) 861-7000 Telecopy: (303) 866-0200 Any notice or other communication sent in accordance with this Article Seventeen shall be deemed given (a) if sent by Qualified Courier, three Business Days after being delivered to the Qualified Courier, (b) if sent by telecopy, when the sending machine receives electronic confirmation of receipt from the receiving machine, or (c) otherwise, when personally delivered to such address (or when delivery at such address is refused). 36 EIGHTEEN: CONFIDENTIALITY; PRESS RELEASES (a) CONFIDENTIAL INFORMATION. (i) All confidential information with respect to the business, operations or prospects of any of the Companies or Newcom (whether written or oral) is hereinafter referred to as "Confidential Information". The term Confidential Information will not, however, include information which (A) is or becomes publicly available other than as a result of a disclosure by any of the Sellers or any of their respective directors, officers, employees, Affiliates, representatives (including, without limitation, financial advisors, attorneys and accountants) or agents (collectively, the "Seller Representatives"), or (B) is or becomes available to Sellers from a source (other than from the Companies or Newcom, or their respective directors, officers, employees, Affiliates, representatives (including, without limitation, financial advisors, attorneys and accountants) or agents (the "Company Representatives") which, to the best of Sellers' knowledge after due inquiry, is not prohibited from disclosing such information to Seller by a legal, contractual or fiduciary obligation to the Company. (ii) Each of the Sellers hereby agrees that it and each of the Seller Representatives (A) will keep the Confidential Information confidential and will not (except as required by applicable law, regulation or legal process, and only after compliance with clause (iii) below), without UIH's prior written consent, disclose any Confidential Information in any manner whatsoever, and (B) will not use any Confidential Information for any commercial purpose (other than as necessary or appropriate in furtherance of the Company Businesses prior to the Closing). (iii) If Seller or any of the Seller Representatives are requested pursuant to, or required by, applicable law, regulation or legal process to disclose any of the Confidential Information, Sellers will, if permitted by applicable Law, exercise all reasonable efforts to notify UIH promptly so that UIH or the Companies may seek a protective order or other appropriate remedy or, in UIH's sole discretion, waive compliance with the terms of this Section 18(a). In the event that no such protective order or other remedy is obtained, or that UIH waives compliance with the terms of this Agreement, the Sellers or the Sellers Representatives, as applicable, will furnish only that portion of the Confidential Information which, upon advice of counsel, is legally required and will exercise all reasonable efforts to obtain reliable assurance that confidential treatment will be accorded the Confidential Information. (b) PRESS RELEASES. The initial press release by the Parties with respect to this Agreement shall be a joint press release and thereafter the Parties shall inform each other in advance of the making of any press release or other public statements with respect to the transactions contemplated hereby and of any filings with any Governmental Authority or with any securities exchange with respect hereto. 37 NINETEEN: EXPENSES Each of the Parties shall pay its own expenses in connection with the preparation and negotiation of this Agreement. TWENTY: SEVERABILITY In the event that any provision of this Agreement, or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto. The parties hereto further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision. TWENTY ONE: COUNTERPARTS This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the Parties hereto and delivered to the other Parties hereto, it being understood that all Parties hereto need not sign the same counterpart. TWENTY TWO: NON-ASSIGNMENT Neither this Agreement nor any rights or obligations hereunder may be assigned by any Party without the prior consent of the other Party, provided, however, that UIH may assign its rights, but not its obligations, hereunder to any Purchaser Designee without the consent of any other Party. 38 TWENTY THREE: SECTION HEADINGS The paragraph and section headings of this Agreement are for convenience only and shall not affect the construction or interpretation of this Agreement. 39 EXECUTED as of the date set forth on page 1. VTR S.A. By: /S/ Blas Tomic --------------------------------------- Its: Director --------------------------------------- COMPANIA NACIONAL DE TELEFONOS, TELEFONICA DEL SUR, S.A. By: /S/ Blas Tomic --------------------------------------- Its: Director --------------------------------------- UIH LATIN AMERICA, INC. By: /S/ Juan Guillermo Levine Contreras --------------------------------------- Its: Agent --------------------------------------- 40 EX-10 3 EXHIBIT 10.2 [EXECUTION COPY] ************************************************************ UIH CHILE HOLDING S.A. and SUBSIDIARY GUARANTORS ----------------------------- CREDIT AGREEMENT Dated as of April 29, 1999 ------------------------------ TORONTO DOMINION (TEXAS), INC., as Administrative Agent TD SECURITIES (USA), INC. and CITIBANK, N.A., as Co-Arrangers ************************************************************ TABLE OF CONTENTS This Table of Contents is not part of the Agreement to which it is attached but is inserted for convenience of reference only. PAGE ---- Section 1. Definitions and Accounting Matters...............................1 1.01 Certain Defined Terms.........................................1 1.02 Accounting Terms and Determinations..........................16 1.03 Tranches.....................................................16 1.03 Newcom.......................................................16 Section 2. Commitments, Loans, Notes and Prepayments.......................16 2.01 Loans........................................................16 2.02 Borrowings...................................................17 2.03 Commitment Reductions and Termination; Commitment Increases.........................................17 2.04 Commitment Fees..............................................17 2.05 Lending Offices..............................................17 2.06 Several Obligations; Remedies Independent....................17 2.07 Notes........................................................18 2.08 Optional Prepayments.........................................18 2.09 Mandatory Prepayments........................................18 Section 3. Payments of Principal and Interest..............................19 3.01 Repayment of Loans...........................................19 3.02 Interest.....................................................19 Section 4. Payments; Pro Rata Treatment; Computations; Etc.................19 4.01 Payments.....................................................19 4.02 Pro Rata Treatment...........................................19 4.03 Computations.................................................20 4.04 Minimum Amounts..............................................20 4.05 Certain Notices..............................................20 4.06 Non-Receipt of Funds by the Administrative Agent.............20 4.07 Sharing of Payments, Etc.....................................21 Section 5. Yield Protection, Etc...........................................22 5.01 Additional Costs.............................................22 5.02 Alternative Interest Rate....................................23 5.03 Illegality...................................................24 5.04 Chilean Taxes................................................24 5.05 Compensation.................................................25 Section 6. Guarantee.......................................................26 6.01 The Guarantee................................................26 6.02 Obligations Unconditional....................................26 6.03 Reinstatement................................................27 6.04 Subrogation..................................................27 6.05 Remedies.....................................................27 6.06 Continuing Guarantee.........................................27 6.07 Rights of Contribution.......................................27 6.08 General Limitation on Guaranty Obligations...................28 Section 7. Conditions Precedent............................................28 7.01 Initial Loan.................................................28 7.02 Initial and Subsequent Loans.................................32 (i) PAGE ---- 7.03 Pro Forma Compliance ........................................32 7.04 Consummation of the Merger...................................33 Section 8. Representations and Warranties..................................33 8.01 Corporate Existence..........................................33 8.02 Financial Condition..........................................33 8.03 Litigation...................................................33 8.04 No Breach....................................................33 8.05 Action.......................................................34 8.06 Approvals....................................................34 8.07 Legal Form...................................................34 8.08 Ranking......................................................34 8.09 Taxes........................................................34 8.10 Commercial Activity; Absence of Immunity.....................35 8.11 Material Agreements and Liens................................35 8.12 Environmental Matters........................................35 8.13 Capitalization...............................................35 8.14 Subsidiaries, Etc............................................36 8.15 Properties and Assets........................................36 8.16 True and Complete Disclosure.................................36 8.17 Investment Holding Company Act...............................37 8.18 Use of Credit................................................37 8.19 Solvency.....................................................37 8.20 No Default on Purchase Agreement.............................37 8.21 Ownership of Collateral......................................37 8.22 Liens, etc...................................................37 8.23 Year 2000....................................................37 Section 9. Covenants of the Obligor........................................38 9.01 Financial Statements, Etc....................................38 9.02 Litigation...................................................39 9.03 Existence, Etc...............................................40 9.04 Insurance....................................................40 9.05 Prohibition of Fundamental Changes...........................40 9.06 Limitation on Liens..........................................41 9.07 Indebtedness.................................................42 9.08 Investments..................................................43 9.09 Restricted Payments..........................................44 9.10 Capital Expenditures.........................................45 9.11 Total Debt to EBITDA Ratio...................................45 9.12 Debt Service Coverage Ratio..................................45 9.13 Senior Debt to EBITDA Ratio..................................46 9.14 Interest Coverage Ratio......................................46 9.15 Governmental Approvals.......................................46 9.17 Lines of Business............................................46 9.18 Transactions with Affiliates.................................47 9.19 Use of Proceeds..............................................47 9.20 Minimum Telephony Revenue....................................47 9.21 Certain Obligations in Respect of Subsidiaries...............48 9.22 Insurance....................................................48 9.23 Post-Closing Collateral Matters..............................48 9.24 Post-Closing Acquisition/Merger Matters......................50 9.25 Assumption Agreement.........................................50 (ii) PAGE ---- Section 10. Events of Default..............................................51 Section 11. The Administrative Agent.......................................53 11.01 Appointment, Powers and Immunities..........................53 11.02 Reliance by Administrative Agent............................54 11.03 Defaults....................................................54 11.04 Rights as a Lender..........................................54 11.05 Indemnification.............................................55 11.06 Non-Reliance on Administrative Agent and Other Lenders......55 11.07 Failure to Act..............................................55 11.08 Resignation or Removal of Administrative Agent..............55 11.09 Consents under Other Basic Documents........................56 Section 12. Miscellaneous..................................................56 12.01 Waiver......................................................56 12.02 Notices.....................................................56 12.03 Expenses....................................................56 12.04 Indemnification.............................................57 12.05 Amendments, Etc.............................................57 12.06 Successors and Assigns......................................57 12.07 Assignments and Participations..............................58 12.08 Survival....................................................59 12.09 Captions; Integration.......................................59 12.10 Counterparts................................................59 12.11 Judgment Currency...........................................59 12.12 Governing Law...............................................60 12.13 Jurisdiction; Service of Process; Venue.....................60 12.14 No Immunity.................................................61 12.15 Waiver of Jury Trial........................................61 12.16 Use of English Language.....................................61 12.17 Confidentiality.............................................61 SCHEDULE I - Material Agreements and Liens SCHEDULE II - Subsidiaries and Investments SCHEDULE III - Material Litigation SCHEDULE IV - Properties and Assets SCHEDULE V - Equity Rights EXHIBIT A-1 - Form of Tranche A Note EXHIBIT A-2 - Form of Tranche B Note EXHIBIT B-1 - Form of Agreement to Grant a Pledge Without Conveyance EXHIBIT B-2 - Form of Commercial Pledge Agreement EXHIBIT B-3 - Form of Pledge Without Conveyance EXHIBIT B-4 - Form of Real Property Mortgage EXHIBIT B-5 - Form of Stock Pledge Agreement EXHIBIT B-6 - Form of Conditional Assignment EXHIBIT C - Form of Public Deed Evidencing Subsidiaries' Guarantee (iii) EXHIBIT D-1 - Form of Opinion of Chilean Counsel to the Obligors EXHIBIT D-2 - Form of Opinion of New York Counsel to the Administrative Agent EXHIBIT D-3 - Form of Opinion of Chilean Counsel to the Administrative Agent EXHIBIT D-4 - Form of Opinion of U.S. Counsel to the Obligors EXHIBIT D-5 - Form of Opinion of Cayman Islands Counsel to the Obligors EXHIBIT E - Form of Compliance Certificate (iv) CREDIT AGREEMENT dated as of April 29, 1999 among: (a) UIH CHILE HOLDING S.A., a corporation duly organized and validly existing under the laws of the Republic of Chile ("Acquisition Co."); (b) Newcom and each of the Persons that (upon consummation of the Merger) will be Subsidiaries of the Company and are identified under the caption "SUBSIDIARY GUARANTORS" on the signature pages hereto (including Newcom, individually, a "Subsidiary Guarantor" and, collectively, the "Subsidiary Guarantors"; and the Subsidiary Guarantors collectively with the Company, the "Obligors"); (c) each of the lenders that is a signatory hereto identified under the caption "LENDERS" on the signature pages hereto or that, pursuant to Section 12.07(b) hereof, shall become a "Lender" hereunder (individually, a "Lender" and, collectively, the "Lenders"); and (d) TORONTO DOMINION (TEXAS), INC., as administrative agent for the Lenders (in such capacity, together with its successors in such capacity, the "Administrative Agent"). The Obligors have requested that the Lenders make loans to the Company, the Lenders are willing to make loans to the Company on the terms and conditions of this Agreement and, accordingly, the parties hereto agree as follows: Section 1. Definitions and Accounting Matters. 1.01 Certain Defined Terms. As used herein, the following terms shall have the following meanings (all terms defined in this Section 1.01 or in other provisions of this Agreement in the singular to have the same meanings when used in the plural and vice versa): "Acquisition" shall mean, collectively, (a) the acquisition by Acquisition Co. of all of the outstanding shares of capital stock of Hipercable, other than the shares owned by UIH Chile, Inc., pursuant to the Purchase Agreement and (b) the Newcom Acquisition. "Acquisition Co." is defined in the preamble. "Affiliate" shall mean any Person (other than any Wholly Owned Subsidiary of the Company) that directly or indirectly controls, or is under common control with, or is controlled by, the Company and, if such Person is an individual, any member of the immediate family (including parents, spouse, children and siblings) of such individual and any trust whose principal beneficiary is such individual or one or more members of such immediate family and any Person who is controlled by any such member or trust. As used in this definition, "control" (including, with its correlative meanings, "controlled by" and "under common control with") shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise). "Administrative Agent's Account" shall mean account no. 6550-6-52270 (for the account of Toronto Dominion (Texas), Inc., reference: VTR Hipercable S.A.) of the Administrative Agent maintained at Bank of America NT & SA (ABA No. 026009593), or such other account at such other bank in New York City as the Administrative Agent shall specify from time to time to the Company and the Lenders. "Agreement to Grant a Pledge Without Conveyance" shall mean one or more Chilean public deeds constituting an agreement to grant a pledge without conveyance (promesa de prenda sin desplazamiento) of the Obligors' network of cables and wires, executed by each Obligor and delivered to the Administrative Agent for the benefit of the Lenders, substantially in the form of Exhibit B-1 hereto. "Applicable Margin" shall mean 5.00% per annum; provided that the "Applicable Margin" shall be increased on each date set forth in Schedule A below to the applicable percentage set forth opposite such date: Schedule A Date Applicable Margin April 29, 2001 5.50% July 29, 2001 6.00% October 29, 2001 6.50% January 29, 2002 7.00% "Application Date" shall mean, with respect to any Net Disposition Proceeds, Net Equity Proceeds or Net Debt Proceeds, the earlier of (x) the date the Company is permitted by the Central Bank of Chile or the regulations thereof to effect mandatory prepayments pursuant to paragraph (b), (c) or (d), respectively, of Section 2.09 and (y) ten Business Days after receipt by the Company or any of its Subsidiaries of such Net Disposition Proceeds, Net Equity Proceeds or Net Debt Proceeds, respectively. "Basic Documents" shall mean, collectively, this Agreement, the Notes, the Effective Subordination Documents and the Security Documents. "Box Lease Financing" shall mean any financing of converter boxes for cable television systems or direct- to-home systems pursuant to which the Company or one of its Subsidiaries leases such boxes from a third party, on behalf of its subscribers, where the subscriber agrees to make rental payments to the Company or such Subsidiary sufficient to cover the lease payments due to the third party. "Business Day" shall mean (a) any day on which commercial banks are not authorized or required to close in New York City or Santiago, Chile and (b) if such day relates to a borrowing of, a payment or prepayment of principal of or interest on, or an Interest Period for, a Loan or a notice by the Company with respect to any such borrowing, payment or prepayment, any day on which dealings in Dollar deposits are carried out in the London interbank market. "Cable Subscribers" shall mean subscribers to the multi-channel television services (including wireline, wireless and DBS television services) provided by the Obligors. "Capital Expenditures" shall mean, for any period, expenditures made by the Company or any of its Subsidiaries to acquire or construct fixed assets, plant and equipment (including renewals, improvements and replacements, but excluding repairs) during such period computed in accordance with GAAP. "Capital Lease Obligations" shall mean, for any Person, all obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) Property to the extent such obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP, and, for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP. "Chile" shall mean the Republic of Chile. "Chilean Taxes" shall mean all present and future income, stamp, registration and other taxes and levies, imposts, deductions, charges, compulsory loans and withholdings whatsoever, and all interest, penalties or similar amounts with respect thereto, now or hereafter imposed, assessed, levied or collected by (a) Chile or any political subdivision or taxing authority thereof or therein, or by any federation or association of or with which Chile may be a member or associated, on or in respect of this Agreement, the Loans, the Notes, the other Basic Documents, the recording, registration, notarization or other formalization of any thereof, the enforcement thereof or the introduction thereof in any judicial proceedings, or on or in respect of any payments of principal, interest, premiums, charges, fees or other amounts made on, under or in respect of any thereof, or (b) any other jurisdiction from or -2- through which payments to or for account of any Lenders hereunder are made as a result or consequence of such payments (excluding, however, income or franchise taxes imposed on a Lender by a jurisdiction as a result of such Lender being organized under the laws of such jurisdiction or of its Lending Office being located in such jurisdiction). "Citibank" shall mean Citibank, N.A., a national banking association organized under the laws of the United States of America. "Closing Date" shall mean the date upon which the initial Loan hereunder is made. "Closing Date Contribution" shall mean a financing consisting of the following: (a) Closing Date Equity, or (b) Closing Date Debt, or (c) some combination thereof, in an aggregate amount at least equal to U.S.$250,000,000 (less expenses of up to U.S.$6,500,000 incurred in connection with the Closing Date Equity), of which at least U.S.$150,000,000 (less such expenses) consists of Closing Date Equity. "Closing Date Debt" shall mean a loan made by State Street Bank and Trust Company to the Company on or prior to the Closing Date on terms and conditions satisfactory to the Required Lenders, which terms shall include, without limitation, the following: (a) the subordination thereof to the prior payment in full of the Company's obligations hereunder pursuant to Effective Subordination Documents, (b) no cash payments shall be required to be made in respect thereof prior to the later of (x) six months after the Principal Payment Date and (y) the payment in full in cash of all amounts payable by the Obligors hereunder, and (c) the final maturity thereof shall occur no earlier than six months after the Principal Payment Date. "Closing Date Equity" shall mean a cash contribution (or some other substantially equivalent tax-advantaged form of investment that is satisfactory to the Lenders) made by UIH, one of its Affiliates or other Persons acceptable to the Majority Lenders on or prior to the Closing Date to the common equity capital of the Company. "Collateral" shall mean all of the Property of the Obligors covered by the Security Documents. "Commercial Pledge Agreement" shall mean a Chilean public deed constituting a commercial pledge (prenda comercial) of all existing trademarks owned by any of the Obligors, executed by the respective Obligors and delivered to the Administrative Agent for the benefit of the Lenders, substantially in the form of Exhibit B-2 hereto. "Commitment Percentage" shall mean, with respect to any Lender, the ratio, expressed as a percentage, of (a) the aggregate Commitments of such Lender, to (b) the aggregate Commitments of all Lenders. -3- "Commitment Termination Date" shall mean December 31, 2000. "Commitments" shall mean the Tranche A Loan Commitments and the Tranche B Loan Commitments. "Company" shall mean (a) prior to the Merger, Acquisition Co., and (b) from and after the Merger, Hipercable. "Conditional Assignment" shall mean a Chilean public deed constituting a conditional assignment of rights (cesion condicional de derechos) of (x) leaseholds held by any Obligor, which leaseholds represent pole rental agreements covering the services provided to the percentage of the total number of Cable Subscribers that is required by Section 9.23(a) hereof, and (y) any material part of the Obligors' network of cables and wires that is leased by any Obligor, in each case executed by the applicable Obligors and delivered to the Administrative Agent for the benefit of the Lenders, substantially in the form of Exhibit B-6 hereto. "Debt Service" shall mean, for any period (the "Retrospective Period"), the sum for the Company and its Subsidiaries (determined on a consolidated basis without duplication in accordance with GAAP) of the following: (a) the sum of (i) all Interest Expense for such Retrospective Period (including, without limitation, all interest in respect of Subordinated Debt paid in cash during such Retrospective Period) less (ii) any interest in respect of Subordinated Debt accrued, but not actually paid, during such Retrospective Period plus (b) all payments of principal of Indebtedness (including, without limitation, the principal component of any payments in respect of Capital Lease Obligations) scheduled to be made during the period of four consecutive fiscal quarters commencing immediately after the Retrospective Period, other than the following: (x) any mandatory prepayments of Loans made pursuant to Section 2.09 hereof, and (y) any scheduled payments of principal of the Loans. "Debt Service Coverage Ratio" shall mean, as at any date, the ratio of the following: (a) for any of the following dates: (i) June 30, 1999, the product of (x) EBITDA for the period of three consecutive months ending on, or most recently ended prior to, such date times (y) four, (ii) September 30, 1999, the product of (x) EBITDA for the period of two fiscal quarters ending on, or most recently ended prior to, such date times (y) two, (iii) December 31, 1999, the product of (x) EBITDA for the period of three fiscal quarters ending on, or most recently ended prior to, such date times (y) 1.33, and (iv) any date after December 31, 1999, EBITDA for the period of four consecutive fiscal quarters ending on, or most recently ended prior to, such date, to (b) Debt Service for the period of four consecutive fiscal quarters ending on, or most recently ended prior to, such date. "Default" shall mean an Event of Default or an event that with notice or lapse of time or both would become an Event of Default. -4- "Default Interest Period" shall mean, during any period while any principal of a Loan, interest thereon or any other amount owing hereunder is in default, each successive period as the Administrative Agent shall from time to time (with the consent of the Majority Lenders) choose; provided that (a) no such period shall exceed three months, (b) the first such period shall commence as of the date on which such principal, interest or other amount became due and each succeeding such period shall commence upon the expiry of the immediately preceding such period, and (c) in the absence of or pending such consent from the Majority Lenders, each Default Interest Period shall have a duration of one week. "Disposition" shall mean any disposition of any Property of the Company or any of its Subsidiaries made after the date hereof, other than the following: (a) a disposition made in the ordinary course of business, (b) a disposition made pursuant to Section 9.05(d)(iii) hereof, and (c) the Galaxy Disposition. "Dividend Payment" shall mean dividends (in cash, Property or obligations) on, or other payments or distributions on account of, or the setting apart of money for a sinking or other analogous fund for, or the purchase, redemption, retirement or other acquisition of, any shares of any class of stock of the Company or of any warrants, options or other rights to acquire the same, but excluding dividends payable solely in shares of common stock of the Company. "Dollars" and "U.S.$" shall mean lawful money of the United States of America. "DTH License" shall mean a license granted to the Company or any of its Subsidiaries by the Chilean Sub- Secretary of Telecommunications (Subsecretaria de Telecomunicaciones) for the provision of direct-to-home broadcasting services. "EBITDA" shall mean, for any period, the sum, for the Company and its Subsidiaries (determined on a consolidated basis, without duplication, in accordance with GAAP), of the following: (a) net operating income for such period (calculated before income taxes, Interest Expense, extraordinary and unusual items and income or loss attributable to equity in Affiliates), plus (b) depreciation and amortization (to the extent deducted in determining net operating income) for such period. "Effective Subordination Documents" shall mean, with respect to any Indebtedness, the following (which shall be in form and substance reasonably satisfactory to the Administrative Agent): (a) the agreement of the holder or holders of such Indebtedness (or of a payment agent responsible for receipt of payments in connection with such Indebtedness) to remit to the Administrative Agent all payments made in respect of such Indebtedness that are not permitted under Section 9.09(a) or that would result in an Event of Default under Section 10(e) hereof; (b) the agreement of the holder or holders of such Indebtedness (or, to the extent that any such holder grants a 100% participation interest in such Indebtedness to a Person acceptable to the Administrative Agent (a "Participant"), such Participant) grants to the Administrative Agent for the benefit of the Lenders a first priority Lien on its interest in such Indebtedness; and (c) in the event that there is a Participant with respect to such Indebtedness, the participation agreement creating and governing such participation. -5- "Eligible Assignee" shall mean, at any time, (a) a Lender, (b) an affiliate of a Lender, (c) a Person that is a bank, or a qualified financial institution duly registered with the Central Bank of Chile for the purpose of the income tax law of Chile or (d) any other Person approved by the Company and the Administrative Agent (which approval shall not be unreasonably withheld or delayed). "Environmental Claim" shall mean, with respect to any Person, any written or oral notice, claim, demand or other communication (collectively, a "claim") by any other Person alleging or asserting such Person's liability for investigatory costs, cleanup costs, governmental response costs, damages to natural resources or other Property, personal injuries, fines or penalties arising out of, based on or resulting from (a) the presence, or Release into the environment, of any Hazardous Material at any location, whether or not owned by such Person, or (b) circumstances forming the basis of any violation, or alleged violation, by such Person of any Environmental Law. "Environmental Laws" shall mean any and all present and future Chilean laws, rules or regulations, and any orders or decrees, in each case as now or hereafter in effect, relating to the regulation or protection of the environment or human health or to emissions, discharges, releases or threatened releases of pollutants, contaminants, chemicals or toxic or hazardous substances or wastes into the indoor or outdoor environment. "Equity Rights" shall mean, with respect to any Person, any subscriptions, options, warrants, commitments, preemptive rights or agreements of any kind (including, without limitation, any stockholders' agreements) for the issuance, sale, registration or voting of, or securities convertible into, any additional shares of capital stock of any class, or partnership or other ownership interests of any type in, such Person. "Eurodollar Rate" shall mean, with respect to any Loan for any Interest Period or Default Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/16 of 1%) reported, at approximately 11:00 a.m. London time (or as soon thereafter as practicable) on the date two Business Days prior to the first day of such Interest Period or Default Interest Period, on Telerate Access Service Page 3750 (British Bankers Association Settlement Rate) as the London interbank offered rate for Dollar deposits having a term comparable to the duration of such Interest Period and in an amount equal to or greater than U.S.$1,000,000. "Event of Default" shall have the meaning assigned to such term in Section 10 hereof. "Excess Cash Flow" shall mean, for any fiscal year, the sum of: (a) EBITDA for such period, minus (b) extraordinary cash losses for such period, plus (c) extraordinary cash gains for such period, minus (d) Capital Expenditures made during such period to the extent permitted by Section 9.11 hereof, minus (e) all scheduled payments of principal of Indebtedness (including, without limitation, the principal component of any payments in respect of Capital Lease Obligations) made during such period and all interest in respect of Indebtedness paid during such period, minus (f) corporate taxes actually paid by the Company or any of its Subsidiaries during such period, plus (g) the amount of the net decrease in Working Capital (or minus the net increase in Working Capital) of the Company and its Subsidiaries for such period. -6- "Excess Post-Closing Financing" shall mean the proceeds of any Post-Closing Financing which, when taken together with the proceeds of any Post-Closing Contribution, are in excess of the Post-Closing Required Amount and are not used to prepay Closing Date Debt. "Federal Funds Rate" shall mean, for any day, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that (a) if the day for which such rate is to be determined is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day and (b) if such rate is not so published for any Business Day, the Federal Funds Rate for such Business Day shall be the average rate charged on such Business Day on such transactions as determined by the Administrative Agent. "GAAP" shall mean generally accepted accounting principles in Chile as in effect on December 31, 1998. "Galaxy Disposition" shall mean a disposition by the Company of any or all or its interest in, or all or any part of the Property of, VTR Galaxy Chile, S.A., so long as the aggregate consideration received by the Obligors in connection therewith shall not exceed U.S.$15,000,000 (or the equivalent in other currencies). "Guarantee" shall mean a guarantee, an endorsement, a contingent agreement to purchase or to furnish funds for the payment or maintenance of, or otherwise to be or become contingently liable under or with respect to, the Indebtedness, other obligations, net worth, working capital or earnings of any Person, or a guarantee of the payment of dividends or other distributions upon the stock or equity interests of any Person, or an agreement to purchase, sell or lease (as lessee or lessor) Property, products, materials, supplies or services primarily for the purpose of enabling a debtor to make payment of such debtor's obligations or an agreement to assure a creditor against loss, and including, without limitation, causing a bank or other financial institution to issue a letter of credit or other similar instrument for the benefit of another Person, but excluding endorsements for collection or deposit in the ordinary course of business. The terms "Guarantee" and "Guaranteed" used as a verb shall have a correlative meaning. "Hazardous Material" shall mean, collectively, (a) any petroleum or petroleum products, flammable explosives, radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation and transformers or other equipment that contain dielectric fluid containing polychlorinated biphenyls, (b) any chemicals or other materials or substances which are now or hereafter become defined as or included in the definition of "hazardous substances", "hazardous wastes", "hazardous materials", "extremely hazardous wastes", "restricted hazardous wastes", "toxic substances", "toxic pollutants", "contaminants", "pollutants" or words of similar import under any Environmental Law and (c) any other chemical or other material or substance, exposure to which is now or hereafter prohibited, limited or regulated under any Environmental Law. "Hedge Agreement" shall mean, for any Person, an interest rate swap, cap or collar agreement, currency swap agreement, currency hedge agreement or similar arrangement between such Person and one or more financial institutions providing for the transfer or mitigation of interest risks or currency risks either generally or under specific contingencies. "Hipercable" shall mean VTR Hipercable S.A., a corporation organized under the laws of Chile. "Indebtedness" shall mean, for any Person: (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of Property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such Property from such other Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of Property or services (other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business so long as such trade accounts -7- payable are payable within 90 days of the date the respective goods are delivered or the respective services are rendered); (c) Indebtedness of others secured by a Lien on the Property of such Person, whether or not the respective Indebtedness so secured has been assumed by such Person; (d) obligations of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for account of such Person; (e) Capital Lease Obligations of such Person; and (f) Indebtedness of others Guaranteed by such Person; provided, that "Indebtedness" shall not include the outstanding obligations of VTR Cable Express S.A. to Inversiones Esmeralda S.A., in an aggregate principal amount not exceeding the lesser of (x) U.S.$1,600,000 and (y) after all or a portion of the amounts outstanding in respect of such obligations have been paid or otherwise reduced, the amount outstanding in respect of such obligations after such payment or reduction, to the extent that the same have been duly defeased and as to which the holder of such obligations has no recourse to any Obligor. "ING Credit Agreement" shall mean the credit agreement, dated as of August 26, 1997, among Hipercable, the subsidiary guarantors identified on the signature pages thereto, the various lenders identified on the signature pages thereto and ING Baring (U.S.) Capital Corporation, as administrative agent. "Interest Coverage Ratio" shall mean, as at any date, the ratio of the following: (a) for any of the following dates: (i) June 30, 1999, the product of (x) EBITDA for the period of three consecutive months ending on, or most recently ended prior to, such date times (y) four, (ii) September 30, 1999, the product of (x) EBITDA for the period of two fiscal quarters ending on, or most recently ended prior to, such date times (y) two, (iii) December 31, 1999, the product of (x) EBITDA for the period of three fiscal quarters ending on, or most recently ended prior to, such date times (y) 1.33, and (iv) any date after December 31, 1999, EBITDA for the period of four consecutive fiscal quarters ending on, or most recently ended prior to, such date, to (b) the sum of (i) Interest Expense for the period set forth in clause (a) above for which EBITDA is being calculated (and if for a period of less than four fiscal quarters, annualized as provided in said clause (a) (including, without limitation, all interest in respect of Subordinated Debt paid in cash during such period) less (ii) any interest in respect of Subordinated Debt accrued, but not actually paid, during for the period set forth in clause (a) above for which EBITDA is being calculated (and if for a period of less than four fiscal quarters, annualized as provided in said clause (a)). "Interest Expense" shall mean, for any period, the sum, for the Company and its Subsidiaries (determined on a consolidated basis, without duplication, in accordance with GAAP) of the following: (a) all interest in respect of Indebtedness accrued or capitalized during such period (whether or not actually paid during such period), plus (b) the net amounts payable (or minus the net amounts receivable) under Hedge Agreements (to the extent hedging interest rate risks) accrued during such period (whether or not actually paid or received during such period). "Interest Period" shall mean, with respect to any Loan, each period commencing on the date such Loan is made or the last day of the next preceding Interest Period for such Loan and ending on the numerically corresponding day in the third calendar month thereafter, except that each Interest Period that commences on the last Business Day of a calendar month (or on any day for which there is no numerically corresponding day in the appropriate subsequent calendar month) shall end on the last Business Day of the appropriate subsequent calendar month. Notwithstanding the foregoing, each Interest Period that would otherwise end on a day that is not a Business Day shall end on the next succeeding Business Day (or, if such next succeeding Business Day falls in the next succeeding calendar month, on the next preceding Business Day). -8- "Investment" shall mean, for any Person: (a) the acquisition (whether for cash, Property, services or securities or otherwise) of capital stock, bonds, notes, debentures, partnership or other ownership interests or other securities of any other Person or any agreement to make any such acquisition (including, without limitation, any "short sale" or any sale of any securities at a time when such securities are not owned by the Person entering into such sale); (b) the making of any deposit with, or advance, loan or other extension of credit to, any other Person (including the purchase of Property from another Person subject to an understanding or agreement, contingent or otherwise, to resell such Property to such other Person), but excluding any such advance, loan or extension of credit having a term not exceeding 90 days representing the purchase price of inventory, services or supplies sold by such Person in the ordinary course of business); (c) the entering into any Guarantee of, or other contingent obligation with respect to, Indebtedness or other liability of any other Person and (without duplication) any amount committed to be advanced, lent or extended to such other Person; or (d) the entering into of any Hedge Agreement. "Lending Office" shall mean, for each Lender, the "Lending Office" of such Lender (or of an affiliate of such Lender) designated on the signature pages hereof or such other office of such Lender (or of an affiliate of such Lender) as such Lender may from time to time specify to the Administrative Agent and the Company as the office at which its Loans are to be made and maintained. "License and Concession Pledge Agreement" shall mean a Chilean public deed constituting a commercial pledge (prenda comercial) of all existing licenses and concessions owned by any of the Obligors, executed by the respective Obligors and delivered to the Administrative Agent for the benefit of the Lenders, in form and substance satisfactory to the Adminstrative Agent. "Lien" shall mean, with respect to any Property, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such Property. For purposes of this Agreement and the other Basic Documents, a Person shall be deemed to own subject to a Lien any Property that it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement (other than an operating lease) relating to such Property. "Loans" shall mean the Tranche A Loans and the Tranche B Loans. "Majority Lenders" shall mean Lenders holding at least 51% of the aggregate outstanding principal amount of the Loans or, if the Loans shall not have been made, at least 51% of the Commitments. "Management Agreements" shall mean (a) the Technical Assistance Agreement, dated the Closing Date, between the Company and UIHLA Management, Inc. and (b) the Management Agreement, dated the Closing Date, between the Company and UIHLA Management, Inc. "Margin Stock" shall mean "margin stock" within the meaning of Regulations U and X. "Material Adverse Effect" shall mean a material adverse effect on (a) the Property, business, operations, financial condition, liabilities or capitalization of the Obligors (taken as a whole), (b) the ability of the Obligors and the Stock Pledgors (taken as a whole) to perform their respective material obligations under such of the Basic Documents and the Purchase Agreement to which they are parties, (c) the validity or enforceability of any of the Basic Documents or the Purchase Agreement, (d) the rights and remedies of the Lenders and the Administrative Agent under any of the Basic Documents or (e) the timely payment of the principal of or interest on the Loans or other amounts payable in connection therewith. "Merger" shall mean the merger of Acquisition Co. into Hipercable, with Hipercable being the surviving entity of such merger, and the cancellation by Hipercable of the shares of Hipercable acquired by Acquisition Co. in the Acquisition. "Net Debt Proceeds" shall mean, with respect to any Excess Post-Closing Financing, the sum of: -9- (a) the gross cash proceeds received by the Company or any of its Subsidiaries from such Excess Post-Closing Financing (including any cash payments received by way of deferred payment of principal pursuant to a permitted promissory note or installment receivable or otherwise, but only as and when received); minus (b) all (i) reasonable and customary fees and expenses actually paid by the Company or its Subsidiaries in connection therewith and (ii) underwriters' discounts and commissions in connection therewith not payable to the Company, any of its Subsidiaries or any of their Affiliates. "Net Disposition Proceeds" shall mean the sum of: (a) the gross cash proceeds received by the Company or any of its Subsidiaries from any Disposition; minus (b) (i) all reasonable and customary legal, investment banking, brokerage, accounting, financial advisory, title, recording, and other fees and expenses actually incurred by the Company and its Subsidiaries in connection with such Disposition, (ii) all taxes actually paid or estimated by the Company (in good faith) to be payable in cash in connection with such Disposition; provided, however, that if, after the payment of all taxes with respect to such Disposition, the amount of estimated taxes, if any, pursuant to clause (ii) above exceeded the amount of taxes actually paid in cash in respect of such Disposition, the aggregate amount of such excess shall be immediately payable, pursuant to clause (b) of Section 2.09, as Net Disposition Proceeds, (iii) the amount of income taxes payable (assuming the taxpayer is subject to taxation at the highest applicable marginal rate and determined without regard to any other tax items of the Company or the taxpayer) by the taxpayers arising from such Disposition (provided that a certificate is delivered to the Administrative Agent, satisfactory in form and substance to the Administrative Agent, by Price Waterhouse Coopers LLC (or other independent public accountants of nationally recognized standing, with the prior written approval of the Administrative Agent) at the time of such Disposition setting forth in detail the calculation of such amount, (iv) if permitted hereunder or otherwise by the Majority Lenders, the aggregate amount of any Indebtedness which is secured by such asset and required to be repaid from such gross cash proceeds and (v) the amount of any reserve or escrow established in respect of any claims or liabilities of or payable by the Company or its Subsidiaries in respect of such Disposition. "Net Equity Proceeds" shall mean, in the case of the issuance, placement or sale of equity securities or other ownership interests (whether pursuant to a public or private offering, but excluding (x) any issuance of securities or other ownership interests to employees of the Company or any of its Subsidiaries, (y) any Post-Closing Equity, and (z) a SaskTel Transaction) from and after the date hereof, the sum of: (a) the gross cash proceeds received by the Company or any of its Subsidiaries from such issuance, placement or sale of equity securities or other ownership interests (including any cash payments received by way of deferred payment of principal pursuant to a permitted promissory note or installment receivable or otherwise, but only as and when received); minus (b) all (i) reasonable and customary legal, investment banking, brokerage, accounting, financial advisory, title, recording, and other fees and expenses actually paid by the Company or its Subsidiaries in connection therewith and (ii) underwriters' discounts and commissions in connection therewith not payable to the Company, any of its Subsidiaries or any of their Affiliates. "Newcom" shall mean Newcom S.A., a Chilean corporation. "Newcom Acquisition" shall mean the acquisition by Acquisition Co. of all of the outstanding shares of Newcom not currently owned by UIH Chile, Inc., pursuant to the Purchase Agreement. -10- "Nortel Debt" shall mean accounts payable owing by the Company or any of its Subsidiaries to Northern Telecom Inc. "Notes" shall mean the Tranche A Notes and the Tranche B Notes. "Permitted Investments" shall mean: (a) direct obligations of the United States of America, or of any agency thereof, or obligations guaranteed as to principal and interest by the United States of America, or of any agency thereof, in either case maturing not more than 90 days from the date of acquisition thereof; (b) deposits maintained with Citibank N.A. (or any of its affiliates) and certificates of deposit issued by any other bank or trust company organized under the laws of the United States of America or any state thereof and having capital, surplus and undivided profits of at least U.S.$500,000,000, maturing not more than 90 days from the date of acquisition thereof; and (c) commercial paper rated A-1 or better or P-1 by Standard & Poor's Corporation or Moody's Investors Services, Inc., respectively, maturing not more than 90 days from the date of acquisition thereof. "Person" shall mean any individual, corporation, company, voluntary association, partnership, joint venture, trust, unincorporated organization or government (or any agency, instrumentality or political subdivision thereof). "Pledge Without Conveyance" shall mean one or more Chilean public deeds constituting a pledge without conveyance (prenda sin desplazamiento) of the Obligors' network of cables and wires, executed by each Obligor and delivered to the Administrative Agent for the benefit of the Lenders, substantially in the form of Exhibit B-3 hereto. "Post-Closing Contribution" shall mean a financing arrangement (other than a Post-Closing Financing) entered into by the Company after the Closing Date, consisting of the following: (a) Post-Closing Equity, or (b) Post-Closing Debt, or (c) some combination of the foregoing. "Post-Closing Debt" shall mean financing provided by UIH or one of its Affiliates after the Closing Date on terms and conditions satisfactory to the Required Lenders, which terms shall include, without limitation, the following: (a) the subordination thereof to the prior payment in full of the Company's obligations hereunder pursuant to Effective Subordination Documentation, (b) no cash payments shall be required to be made in respect thereof prior to the later of (x) six months after the Principal Payment Date and (y) the payment in full in cash of all amounts payable by the Obligors hereunder, (c) the final maturity thereof shall occur no earlier than six months after the Principal Payment Date, and (d) the Lenders' receipt of appropriate legal opinions with respect to Chilean law matters raised by the subordination of the Post-Closing Debt. "Post-Closing Equity" shall mean a cash contribution (or some other substantially equivalent tax-advantaged form of investment that is satisfactory to the Required Lenders) made by UIH, one of its Affiliates or other Persons acceptable to the Majority Lenders after the Closing Date to the common equity capital of the Company. -11- "Post-Closing Financing" shall mean a financing (other than a Post-Closing Contribution and other than other Indebtedness permitted under Section 9.07 hereof) entered into by the Company after the Closing Date on terms and conditions satisfactory to the Required Lenders, which terms shall include, without limitation, the following: (a) the subordination thereof to the prior payment in full of the Company's obligations hereunder, (b) no cash payments shall be required to be made in respect thereof prior to the later of (x) six months after the Principal Payment Date and (y) the payment in full in cash of all amounts payable by the Obligors hereunder, (c) the final maturity thereof shall occur no earlier than six months after the Principal Payment Date, and (d) the Lenders' receipt of appropriate legal opinions with respect to Chilean law matters raised by the subordination of the Post-Closing Financing. "Post-Closing Required Amount" shall mean an amount equal to the greater of (a) U.S.$70,000,000, and (b) the amount, reasonably determined by the Required Lenders, sufficient to fund all of the free cash flow deficit projected by the Company's current business plan. "Post-Default Rate" shall mean, in respect of any principal of any Loan, interest thereon or any other amount owing hereunder that is not paid when due (whether at stated maturity, by acceleration, by optional or mandatory prepayment or otherwise), a rate per annum for each Default Interest Period equal to (a) 3% plus (b) the Applicable Margin plus (c) the Eurodollar Rate for such Default Interest Period. "Principal Payment Date" shall mean April 29, 2002. "Principal Subsidiaries" shall mean VTR Cable Express S.A. and VTR Telefonica S.A. "Process Agent" has the meaning given to that term in Section 12.13(b) hereof. "Property" shall mean any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible. "Purchase Agreement" shall mean the Promise Agreement, dated as of October 15, 1998, among UIH Latin America, Inc., VTR S.A. and Compania Nacional de Telefonos, Telefonica del Sur S.A., including the Exhibits and Schedules thereto. "Quarterly Dates" shall mean the last Business Day of each March, June, September and December of each year. "Real Property Mortgage" shall mean one or more Chilean mortgages constituting a civil mortgage (hipoteca sobre bienes raices) of real property owned by each Obligor, executed by each Obligor and delivered to the Administrative Agent for the benefit of the Lenders, substantially in the form of Exhibit B-4 hereto. "Regulations A, U and X" shall mean, respectively, Regulations A, U and X of the Board of Governors of the Federal Reserve System of the United States of America (or any successor), as the same may be modified and supplemented and in effect from time to time. "Regulatory Change" shall mean, with respect to any Lender (or any Lending Office or bank holding company of which such Lender is a subsidiary), -12- any change after the date of this Agreement in law or regulations or the adoption or making after such date of any interpretation, directive or request applying to a class of financial institutions including such Lender (or such Lending Office or such bank holding company) of or under any law or regulations (whether or not having the force of law and whether or not failure to comply therewith would be unlawful) by any court or governmental or monetary authority charged with the interpretation or administration thereof. "Release" shall mean any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration of Hazardous Materials into the indoor or outdoor environment, including, without limitation, the movement of Hazardous Materials through ambient air, soil, surface water, ground water, wetlands, land or subsurface strata. "Relevant Parties" shall mean Acquisition Co., any Subsidiary of Acquisition Co., Hipercable, any Subsidiary of Hipercable, and any Stock Pledgor. "Required Lenders" shall mean Lenders holding at least 66-2/3% of the aggregate outstanding principal amount of the Loans or, if the Loans shall not have been made, at least 66-2/3% of the Commitments. "SaskTel Transaction" shall mean one or more transactions pursuant to which SaskTel International ("SaskTel") acquires an equity interest in the Company, so long as (a) the aggregate consideration paid by SaskTel for such acquisition does not exceed U.S.$50,000,000, (b) such acquisition occurs on or before December 31, 1999, and (c) SaskTel grants to the Lenders (pursuant to documents in form and substance satisfactory to the Administrative Agent, and together with such legal opinions as the Administrative Agent may request) a first priority perfected Lien upon such equity interest. "Security Documents" shall mean, collectively, each Agreement to Grant a Pledge Without Conveyance, the Commercial Pledge Agreement, each Real Property Mortgage, each Pledge Without Conveyance, the Stock Pledge Agreement, and each Conditional Assignment. "Senior Debt" shall mean, at any time, the aggregate amount of Indebtedness of the Company and its Subsidiaries (on a consolidated basis) at such time (excluding (x) Subordinated Debt, (y) up to U.S.$15,000,000 of Box Lease Financing and (z) any Nortel Debt). "Senior Debt to EBITDA Ratio" shall mean, as at any date, the ratio of the following: (a) the aggregate amount Senior Debt on such date, to (b) for any of the following dates: (i) June 30, 1999, the product of (x) EBITDA for the period of three consecutive months ending on, or most recently ended prior to, such date times (y) four, (ii) September 30, 1999, the product of (x) EBITDA for the period of two fiscal quarters ending on, or most recently ended prior to, such date times (y) two, (iii) December 31, 1999, the product of (x) EBITDA for the period of three fiscal quarters ending on, or most recently ended prior to, such date times (y) 1.33, and (iv) any date after December 31, 1999, EBITDA for the period of four consecutive fiscal quarters ending on, or most recently ended prior to, such date. "Stock Pledge Agreement" shall mean the Chilean public deed constituting a commercial pledge of shares (prenda sobre acciones) executed by -13- the Stock Pledgors, Acquisition Co., the Company and other Obligors and delivered to the Administrative Agent for the benefit of the Lenders, substantially in the form of Exhibit B-5 hereto, and granted pursuant to and in accordance with Law No. 4287 of Chile. "Stock Pledgors" shall mean each Person owning any capital stock of the Company, which, on the Closing Date, consists of UIH Chile, Inc., a Colorado corporation, and UIH Chile Ventures, Inc., a Cayman Islands company. "Subordinated Debt" shall mean Indebtedness in respect of Closing Date Debt, Post-Closing Debt and the Post-Closing Financing. "Subsidiary" shall mean, with respect to any Person, any corporation, partnership or other entity of which at least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons performing similar functions of such corporation, partnership or other entity (irrespective of whether or not at the time securities or other ownership interests of any other class or classes of such corporation, partnership or other entity shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person. "TD" shall mean Toronto Dominion (Texas), Inc. "Telecommunications License" shall mean the licenses granted to the Company or any of its Subsidiaries by the Chilean Under Secretary of Telecommunications (Subsecretaria de Telecomunicaciones) for the provision of telecommunications services (other than direct-to-home broadcasting). "Telephony Revenue" shall mean, as at any date, the aggregate amount of revenue generated by the provision of telephony services by the Obligors during the period of four consecutive fiscal quarters ending on such date (net of reserves for doubtful accounts), provided that (a) Telephony Revenue for June 30, 1999 shall be the product of (x) the aggregate amount of revenue generated by the provision of telephony services by the Obligors during the fiscal quarter ending on such date (net of reserves for doubtful accounts), times (y) four, (b) Telephony Revenue for September 30, 1999 shall be the product of (x) the aggregate amount of revenue generated by the provision of telephony services by the Obligors during the period of two consecutive fiscal quarters ending on such date (net of reserves for doubtful accounts), times (y) two, and (c) Telephony Revenue for December 31, 1999, shall be the product of (x) the aggregate amount of revenue generated by the provision of telephony services by the Obligors during the period of three consecutive fiscal quarters ending on such date (net of reserves for doubtful accounts), times (y) 1.33. "Telephony Subscribers" shall mean subscribers to telephony services provided by the Obligors. "Total Debt to EBITDA Ratio" shall mean, as at any date, the ratio of: (a) all Indebtedness of the Company and its Subsidiaries on such date (other than any Closing Date Debt), to (b) the following: (i) for June 30, 1999, the product of (x) EBITDA for the period of three consecutive months ending on, or most recently ended prior to, such date times (y) four, -14- (ii) for September 30, 1999, the product of (x) EBITDA for the period of two fiscal quarters ending on, or most recently ended prior to, such date times (y) two, (iii) for December 31, 1999, the product of (x) EBITDA for the period of three fiscal quarters ending on, or most recently ended prior to, such date times (y) 1.33, and (iv) at all times after December 31, 1999, EBITDA for the period of four consecutive fiscal quarters ending on, or most recently ended prior to, such date. "Tranche" shall have the meaning assigned to such term in Section 1.03 hereof. "Tranche A Loan Commitment" shall mean for each Lender, the obligation of such Lender to make a single Tranche A Loan in an aggregate amount up to but not exceeding the amount set opposite the name of such Lender on the signature page hereof under the caption Tranche A Loan Commitment. The aggregate principal amount of the Tranche A Loan Commitments is U.S.$140,000,000. "Tranche A Loans" shall mean Loans provided by Section 2.01(a) hereof. "Tranche A Notes" shall mean the promissory notes provided for by Section 2.07(a) hereof and all promissory notes delivered in substitution or exchange thereof, in each case as the same shall be modified and supplemented and in effect from time to time. "Tranche B Loan Commitment" shall mean for each Lender, the obligation of such Lender to make one or more Tranche B Loans in an aggregate amount up to but not exceeding the amount set opposite the name of such Lender on the signature page hereof under the caption Tranche B Loan Commitment (as such amount may be reduced from time to time, or increased, pursuant to Section 2.03 hereof). The aggregate principal amount of the Tranche B Loan Commitments on the Closing Date is U.S.$30,000,000. "Tranche B Loans" shall mean Loans provided by Section 2.01(b) hereof. "Tranche B Notes" shall mean the promissory notes provided for by Section 2.07(b) hereof and all promissory notes delivered in substitution or exchange thereof, in each case as the same shall be modified and supplemented and in effect from time to time. "UIH" shall mean United International Holdings, Inc., a Delaware corporation, and its legal successors. "VTR Larga Distancia Lease Agreements" shall mean: (a) the lease agreement N(degree) 9609007, dated as of February 1, 1997, between VTR Telefonica S.A. and Comunicaciones Mundiales S.A., (b) the lease agreement N(degree) 97003008, dated as of February 1, 1997, between VTR Telefonica S.A. and VTR Larga Distancia S.A., (c) the agreement N(degree) 01071998 for the provision of telecommunication services, dated as of July 1, 1998, between VTR Cablexpress (Chile) S.A. and VTR Larga Distancia S.A., and (d) the agreement N(degree) 02071998 for the provision of telecommunication services, dated as of July 1, 1998, between VTR Cablexpress (Chile) S.A. and VTR Larga Distancia S.A. "Wholly Owned Subsidiary" shall mean, with respect to any Person, any corporation, partnership or other entity of which all of the equity securities or other ownership interests are directly or indirectly owned or controlled by -15- such Person or one or more Wholly Owned Subsidiaries of such Person or by such Person and one or more Wholly Owned Subsidiaries of such Person. "Working Capital" shall mean, at any time of determination, the sum of (a) the consolidated current assets of the Company and its Subsidiaries at such time (other than cash and cash equivalents held by the Company and its Subsidiaries), minus (b) the consolidated current liabilities of the Company and its Subsidiaries at such time (other than the current portion of outstanding Loans). 1.02 Accounting Terms and Determinations. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all determinations with respect to accounting matters hereunder shall be made, and all financial statements and certificates and reports as to financial matters required to be furnished to the Administrative Agent or the Lenders hereunder shall be prepared, in accordance with GAAP, applied on a basis consistent with that used in the audited consolidated financial statements of the Company and its consolidated Subsidiaries referred to in Section 8.02 hereof (except for changes concurred with by the Company's independent public accountants), and all financial statements, certificates and reports as to financial matters required to be furnished hereunder shall be in Dollars. 1.03 Tranches. Loans and Commitments hereunder are distinguished by "Tranche." Loans of a "Tranche" refers to whether such Loans are Tranche A Loans or Tranche B Loans. Commitments of a "Tranche" refers to whether such Commitments are Tranche A Loan Commitments or Tranche B Loan Commitments. 1.03 Newcom. For all purposes of this Agreement and the other Basic Documents, Newcom shall be deemed to be a Wholly Owned Subsidiary of the Company and, consequently, a "Subsidiary Guarantor" and an "Obligor." Without limiting the effect of the foregoing, all of the financial statements furnished to the Lenders pursuant to Section 9.01 hereof shall include financial information with respect to Newcom as if it were a Wholly Owned Subsidiary of the Company. Section 2. Commitments, Loans, Notes and Prepayments. 2.01 Loans. (a) Tranche A Loans. Each Lender severally agrees, on the terms and conditions of this Agreement, to make a single term loan to the Company in Dollars on the Closing Date in an aggregate principal amount up to but not exceeding the amount of the Tranche A Loan Commitment of such Lender. Amounts in respect of Tranche A Loans that have been prepaid cannot be reborrowed. (b) Tranche B Loans. Each Lender severally agrees, on the terms and conditions of this Agreement, to make one or more term loans to the Company in Dollars during the period commencing on the Closing Date and ending on the Commitment Termination Date in an aggregate principal amount up to but not exceeding the amount of the Tranche B Loan Commitment of such Lender. Amounts in respect of Tranche B Loans that have been prepaid cannot be reborrowed. 2.02 Borrowings. The Company shall give the Administrative Agent notice of each borrowing hereunder as provided in Section 4.05 hereof. Not later than 1:00 p.m. New York time on the date specified for each borrowing hereunder, each Lender shall make available the amount of the Loan or Loans to be made by it on such date to the Administrative Agent, at the Administrative Agent's Account, in immediately available funds, for account of the Company. The amount so received by the Administrative Agent shall, subject to the terms and conditions of this Agreement, be made available to the Company by depositing the same in -16- immediately available funds, in an account of the Company maintained at Citibank, N.A. (or any other account of the Company maintained at another bank in Santiago, Chile designated by the Company). 2.03 Commitment Reductions and Termination; Commitment Increases. (a) The Company shall have the right at any time or from time to time to terminate or reduce the aggregate unused amount of the Tranche B Loan Commitments; provided that (x) the Company shall give notice of each such termination or reduction as provided in Section 4.05 hereof and (y) each partial reduction shall be in an aggregate amount at least equal to U.S.$3,000,000 (or a larger multiple of U.S.$500,000). (b) The Company has the right, on one or more occasions, to increase the Tranche B Commitments by up to U.S.$50,000,000, provided that (i) no Lender hereunder shall be obligated to increase its Commitments, (ii) if any such additional Tranche B Commitments are to be provided by Persons that are not then Lenders, such Persons shall be Eligible Assignees, (iii) any such increase shall be pursuant to a supplement hereto (in form and substance satisfactory to the Adminstrative Agent) entered into by the Obligors, the Adminstrative Agent and the Lender providing the additional Tranche B Commitments, (iv) after giving effect thereto, the Tranche B Loan Commitments, the outstanding Tranche B Loans and the outstanding Tranche A Loans shall be re-allocated (with appropriate assignments of outstanding Loans, purchased from existing Lenders at par) so that each Lender holds each Class of Loans and Commitments in the same pro rata portion, (v) unless such re-allocation occurs on the last day of Interest Period, the Company shall pay to each Lender compensation due under Section 5.05 hereof resulting from such reallocation as if such re-allocation constituted a voluntary prepayment of Loans, and (vi) the Company shall take all such actions as may be necessary so that each such Lender providing additional Tranche B Commitments shall benefit from the Liens on the Collateral created by the Security Documents. 2.04 Commitment Fees. The Company shall pay to the Administrative Agent for account of each Lender a commitment fee on the daily average unused amount of each of such Lender's Tranche B Loan Commitment, for the period from and including the date of this Agreement to but not including the earlier of the date such Tranche B Loan Commitment is terminated and the Commitment Termination Date, in each case at a rate per annum equal to 2.50%. Accrued commitment fees shall be payable in arrears on each Quarterly Date and on the earlier of the date such Commitment is terminated and the Commitment Termination Date. 2.05 Lending Offices. The Loans made by each Lender shall be made and maintained at such Lender's Lending Office. 2.06 Several Obligations; Remedies Independent. The failure of any Lender to make any Loan to be made by it on the date specified therefor shall not relieve any other Lender of its obligation to make its Loan on such date, but neither any Lender nor the Administrative Agent shall be responsible for the failure of any other Lender to make a Loan to be made by such other Lender, and no Lender shall have any obligation to the Administrative Agent or any other Lender for the failure by such Lender to make any Loan required to be made by such Lender. Without prejudice to the provisions of Section 10 hereof, to the extent they require action on the part of the Majority Lenders to accelerate the maturity of the Loans, the amounts payable by the Company at any time hereunder and under the Notes to each Lender shall be a separate and independent debt and each Lender shall be entitled to protect and enforce its rights arising out of this Agreement and the Notes, and it shall not be necessary for any other Lender or the Administrative Agent to consent to, or be joined as an additional party in, any proceedings for such purposes. 2.07 Notes. (a) Tranche A Notes. The Tranche A Loan made by each Lender shall be evidenced by one or more promissory notes of the Company substantially in the form of Exhibit A-1 hereto, dated the date of such Tranche A Loan, payable to the order of such Lender in a principal amount equal to the amount of such Lender's Tranche A Loan and otherwise duly completed. -17- (b) Tranche B Notes. Each Tranche B Loan made by each Lender shall be evidenced by one or more promissory notes of the Company substantially in the form of Exhibit A-2 hereto, dated the date of such Tranche B Loan, payable to the order of such Lender in a principal amount equal to the amount of such Lender's Tranche B Loan and otherwise duly completed. 2.08 Optional Prepayments. Subject to Section 4.04 hereof, the Company shall have the right to prepay Loans at any time commencing three months after the Closing Date and from time to time thereafter, provided that the Company shall give the Administrative Agent notice of each such prepayment as provided in Section 4.05 hereof (and, upon the date specified in any such notice of prepayment, the amount to be prepaid shall become due and payable hereunder). Each prepayment of Loans under this Section shall be without any penalty or premium, except as may be required under Section 5.05 hereof. 2.09 Mandatory Prepayments. (a) From Excess Cash Flow. On the last day of the first Interest Period ending after the earlier of (i) the receipt by the Lenders of the annual financial statements of the Company referred to in Section 9.01(b) hereof and (ii) the date by which such annual financial statements are required to be furnished to the Lenders pursuant to said Section, commencing with the annual financial statements for the fiscal year of the Company ending on December 31, 2000, the Company shall prepay the Loans in an aggregate amount equal to 50% (or, if the Post-Closing Financing has not been consummated and/or a Post-Closing Contribution has not been made in an aggregate amount at least equal to the Post-Closing Required Amount on or prior to December 31, 2000, 100%) of Excess Cash Flow for such fiscal year. (b) From Net Disposition Proceeds. On or before the tenth Business Day following the Application Date relating to any Net Disposition Proceeds, the Company shall prepay the Loans in an aggregate amount equal to 100% of such Net Disposition Proceeds. The Company agrees to apply to the Central Bank of Chile, no later than the Business Day following receipt of such Net Disposition Proceeds, for approval to make such prepayment. (c) From Net Equity Proceeds. On or before the tenth Business Day following the Application Date relating to any Net Equity Proceeds, the Company shall prepay the Loans in an aggregate amount equal to 50% of such Net Equity Proceeds. The Company agrees to apply to the Central Bank of Chile, no later than the Business Day following receipt of such Net Equity Proceeds, for approval to make such prepayment. (d) From Net Debt Proceeds. On or before the tenth Business Day following the Application Date relating to any Net Debt Proceeds in respect of any Excess Post-Closing Financing, the Company shall prepay the Loans in an aggregate amount equal to 100% of such Net Debt Proceeds. The Company agrees to apply to the Central Bank of Chile, no later than the Business Day following receipt of such Net Debt Proceeds, for approval to make such prepayment. Section 3. Payments of Principal and Interest. 3.01 Repayment of Loans. The Company hereby promises to pay to the Administrative Agent for account of each Lender the principal of such Lender's Loans on the Principal Payment Date. 3.02 Interest. The Company hereby promises to pay to the Administrative Agent for account of each Lender interest on the unpaid principal amount of each Loan made by such Lender for the period from and including the date of such Loan to but excluding the date such Loan shall be paid in full, at a rate per annum, for each Interest Period relating thereto, equal to the Eurodollar Rate for such Loan for such Interest Period plus the Applicable Margin. Notwithstanding the foregoing, the Company hereby promises to pay to the Administrative Agent for account of each Lender interest at the applicable Post-Default Rate on any principal of any Loan made by such Lender and on any other amount payable by the Company hereunder or under the Notes held by such Lender to or for account of such Lender, that shall not be paid in full when due (whether at stated -18- maturity, by acceleration, by mandatory prepayment or otherwise), for the period from and including the due date thereof to but excluding the date the same is paid in full. Accrued interest on each Loan shall be payable in arrears on the last day of each Interest Period therefor and upon the payment or prepayment thereof (but only on the principal amount so paid or prepaid), except that interest payable at the Post-Default Rate shall be payable from time to time on demand. Promptly after the determination of any interest rate provided for herein or any change therein, the Administrative Agent shall give notice thereof to the Lenders to which such interest is payable and to the Company. Section 4. Payments; Pro Rata Treatment; Computations; Etc. 4.01 Payments. (a) Except to the extent otherwise provided herein, all payments of principal, interest and other amounts to be made by any Obligor under this Agreement and the Notes, and, except to the extent otherwise provided therein, all payments to be made by the Obligors under any other Basic Document, shall be made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to the Administrative Agent at the Administrative Agent's Account, not later than 1:00 p.m. New York time on the date on which such payment shall become due (each such payment made after such time on such due date to be deemed to have been made on the next succeeding Business Day). (b) The Company shall, subject to Section 4.02 hereof, at the time of making each payment under this Agreement or any Note for account of any Lender, specify to the Administrative Agent (which shall so notify the intended recipient(s) thereof) the Loans or other amounts payable by the Company hereunder to which such payment is to be applied (and in the event that the Company fails to so specify, or if an Event of Default has occurred and is continuing, the Administrative Agent may distribute such payment to the Lenders for application in such manner as it or the Majority Lenders, subject to Section 4.02 hereof, may determine to be appropriate). (c) Each payment received by the Administrative Agent under this Agreement or any Note for account of any Lender shall be paid by the Administrative Agent promptly to such Lender, in immediately available funds, for account of such Lender's Lending Office for the Loan or other obligation in respect of which such payment is made. (d) If the due date of any payment under this Agreement or any Note would otherwise fall on a day that is not a Business Day, such date shall be extended to the next succeeding Business Day, and interest shall be payable for any principal so extended for the period of such extension. 4.02 Pro Rata Treatment. Except to the extent otherwise provided herein: (a) each borrowing of Loans of a Tranche under Section 2.01 hereof shall be made from the Lenders holding Commitments of such Tranche, each payment of commitment fee under Section 2.04 hereof shall be made for account of the Lenders having Tranche B Loan Commitments, and each termination or reduction of the amount of Tranche B Loan Commitments under Section 2.03 hereof shall be applied to the Tranche B Loan Commitments of the Lenders, pro rata according to the amounts of their respective Tranche B Loan Commitments; (b) each payment or prepayment (whether optional or mandatory) of principal of Loans by the Company shall be made for account of the Lenders pro rata in accordance with the respective unpaid principal amounts of such Loans held by them; and (c) each payment of interest on Loans by the Company shall be made for account of the Lenders pro rata in accordance with the amounts of interest on such Loans then due and payable to the respective Lenders. 4.03 Computations. Interest on Loans and commitment fees shall be computed on the basis of a year of 360 days and actual days elapsed (including the first day but excluding the last day) occurring in the period for which payable. -19- 4.04 Minimum Amounts. Except for mandatory prepayments made pursuant to Section 2.09 hereof, each partial prepayment of principal of Loans shall be in an aggregate amount at least equal to U.S.$5,000,000 or a larger multiple of U.S.$1,000,000. Each borrowing of Tranche B Loans shall be in an aggregate amount at least equal to U.S.$5,000,000 or a larger multiple of U.S.$1,000,000. 4.05 Certain Notices. Notices by the Company to the Administrative Agent of terminations or reductions of the Tranche B Loan Commitments, of borrowings and optional prepayments of Loans, shall be irrevocable and shall be effective only if received by the Administrative Agent not later than 10:00 a.m. New York time on the third Business Day prior to the date of the relevant termination, reduction, borrowing or prepayment. Each such notice of borrowing shall specify the Tranche and amount (subject to Sections 4.02 and 4.04 hereof) of each Loan to be borrowed and the date of borrowing (which shall be a Business Day). Each such notice of optional prepayment shall specify the amount (subject to Sections 4.02 and 4.04 hereof) of each Loan to be prepaid and the date of prepayment (which shall be a Business Day). The Administrative Agent shall promptly (and, if the Administrative Agent receives such notice by 10:00 a.m. on any Business Day, on the same Business Day) notify the Lenders of the contents of each such notice. 4.06 Non-Receipt of Funds by the Administrative Agent. Unless the Administrative Agent shall have been notified by a Lender or the Company (the "Payor") prior to the date on which the Payor is to make payment to the Administrative Agent of (in the case of a Lender) the proceeds of a Loan to be made by such Lender hereunder or (in the case of the Company) a payment to the Administrative Agent for account of one or more of the Lenders hereunder (such payment being herein called the "Required Payment"), which notice shall be effective upon receipt, that the Payor does not intend to make the Required Payment to the Administrative Agent, the Administrative Agent may assume that the Required Payment has been made and may, in reliance upon such assumption (but shall not be required to), make the amount thereof available to the intended recipient(s) on such date; and, if the Payor has not in fact made the Required Payment to the Administrative Agent, the recipient(s) of such payment shall, on demand, repay to the Administrative Agent the amount so made available together with interest thereon in respect of each day during the period commencing on the date (the "Advance Date") such amount was so made available by the Administrative Agent until the date the Administrative Agent recovers such amount at a rate per annum equal to the Federal Funds Rate for such day and, if such recipient(s) shall fail promptly to make such payment, the Administrative Agent shall be entitled to recover such amount, on demand, from the Payor, together with interest as aforesaid, provided that if neither the recipient(s) nor the Payor shall return the Required Payment to the Administrative Agent within three Business Days of the Advance Date, then, retroactively to the Advance Date, the Payor and the recipient(s) shall each be obligated to pay interest on the Required Payment as follows: (i) if the Required Payment shall represent a payment to be made by the Company to the Lenders, the Company and the recipient(s) shall each be obligated retroactively to the Advance Date to pay interest in respect of the Required Payment at the Post-Default Rate (and, in case the recipient(s) shall return the Required Payment to the Administrative Agent, without limiting the obligation of the Company under Section 3.02 hereof to pay interest to such recipient(s) at the Post-Default Rate in respect of the Required Payment) and (ii) if the Required Payment shall represent proceeds of a Loan to be made by the Lender to the Company, the Payor and the Company shall each be obligated retroactively to the Advance Date to pay interest in respect of the Required Payment at the rate of interest provided for such Required Payment pursuant to Section 3.02 hereof (and, in case the Company shall return the Required Payment to the Administrative Agent, without limiting any claim the Company may have against the Payor in respect of the Required Payment). 4.07 Sharing of Payments, Etc. (a) The Company and each Subsidiary Guarantor agrees that, in addition to (and without limitation of) any right of set-off, banker's lien or -20- counterclaim a Lender and its Affiliates may otherwise have, each Lender shall be entitled, at its option, to offset balances held by it (including any deposits, whether general or special, time or demand, or provisional or final, and including certificates of deposit) for account of the Company or any Subsidiary Guarantor, or other Indebtedness of such Lender held by the Company or any Subsidiary Guarantor, at any of its offices, in Dollars or in any other currency, against any principal of or interest on any of such Lender's Loans, to the extent due and payable, or any other amount then due and payable to such Lender hereunder (regardless of whether such balances are then due to the Company or such Subsidiary Guarantor), in which case it shall promptly notify the Company and the Administrative Agent thereof, provided that such Lender's failure to give such notice shall not affect the validity thereof. (b) If any Lender shall obtain from any Obligor payment of any principal of or interest on any Loan owing to it or payment of any other amount under this Agreement or any other Basic Document through the exercise of any right of set-off, banker's lien or counterclaim or similar right or otherwise (other than from the Administrative Agent as provided herein), and, as a result of such payment, such Lender shall have received a greater percentage of the principal of or interest on the Loans or such other amounts then due hereunder or thereunder by such Obligor to such Lender than the percentage received by any other Lender, it shall promptly purchase from such other Lenders participations in (or, if and to the extent specified by such Lender, direct interests in) the Loans or such other amounts, respectively, owing to such other Lenders (or in interest due thereon, as the case may be) in such amounts, and make such other adjustments from time to time as shall be equitable, to the end that all the Lenders shall share the benefit of such excess payment (net of any expenses that may be incurred by such Lender in obtaining or preserving such excess payment) pro rata in accordance with the unpaid principal of and/or interest on the Loans or such other amounts, respectively, owing to each of the Lenders. To such end all the Lenders shall make appropriate adjustments among themselves (by the resale of participations sold or otherwise) if such payment is rescinded or must otherwise be restored. (c) The Company agrees that any Lender so purchasing such a participation (or direct interest) may exercise all rights of set-off, banker's lien, counterclaim or similar rights with respect to such participation as fully as if such Lender were a direct holder of Loans or other amounts (as the case may be) owing to such Lender in the amount of such participation. (d) Nothing contained herein shall require any Lender to exercise any such right or shall affect the right of any Lender to exercise, and retain the benefits of exercising, any such right with respect to any other Indebtedness or obligation of any Obligor. If, under any applicable bankruptcy, insolvency or other similar law, any Lender receives a secured claim in lieu of a set-off to which this Section 4.07 applies, such Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Lender entitled under this Section 4.07 to share in the benefits of any recovery on such secured claim. Section 5. Yield Protection, Etc. 5.01 Additional Costs. (a) The Company shall pay directly to each Lender from time to time such amounts as such Lender may reasonably determine to be necessary to compensate such Lender for any costs that such Lender determines are attributable to its making or maintaining of any Loans or its obligation to make any Loans hereunder, or any reduction in any amount receivable by such Lender hereunder in respect of any Loans or such obligation (such increases in costs and reductions in amounts receivable being herein called "Additional Costs"), resulting from any Regulatory Change that: (i) shall subject any Lender (or its Lending Office or the bank holding company of which it is a subsidiary) to any tax, duty or other charge in respect of such Loans or its Notes or changes the basis of taxation of any amounts payable to such Lender under this Agreement or its Notes in respect of Loans (excluding changes in the rate of tax on the overall net income of such Lender or of such Lending Office by -21- the jurisdiction in which such Lender has its principal office or such Lending Office or such bank holding company); or (ii) imposes or modifies any reserve, special deposit or similar requirements relating to any extensions of credit or other assets of, or any deposits with or other liabilities of, such Lender (including, without limitation, any of such Loans or any deposits referred to in the definition of "Eurodollar Rate" in Section 1.01 hereof), or any commitment of such Lender (including, without limitation, the Commitments of such Lender hereunder). (b) Without limiting the effect of the foregoing provisions of this Section 5.01 (but without duplication), the Company shall pay directly to each Lender from time to time on request such amounts as such Lender may reasonably determine to be necessary to compensate such Lender (or, without duplication, the bank holding company of which such Lender is a subsidiary) for any costs that it determines are attributable to the maintenance by such Lender (or any Lending Office or such bank holding company), pursuant to any law or regulation or any interpretation, directive or request (whether or not having the force of law and whether or not failure to comply therewith would be unlawful) of any court or governmental or monetary authority (i) following any Regulatory Change or (ii) implementing any risk-based capital guideline or other requirement (whether or not having the force of law and whether or not the failure to comply therewith would be unlawful) heretofore or hereafter issued by any government or governmental or supervisory authority implementing at the national level the Basle Accord, of capital in respect of its Commitments or Loans (such compensation to include, without limitation, an amount equal to any reduction of the rate of return on assets or equity of such Lender (or any Lending Office or such bank holding company) to a level below that which such Lender (or any Lending Office or such bank holding company) could have achieved but for such law, regulation, interpretation, directive or request). For purposes of this Section 5.01(b), "Basle Accord" shall mean the proposals for risk-based capital framework described by the Basle Committee on Banking Regulations and Supervisory Practices in its paper entitled "International Convergence of Capital Measurement and Capital Standards" dated July 1988, as amended, modified and supplemented and in effect from time to time or any replacement thereof. (c) Each Lender shall notify the Company of any event occurring after the date of this Agreement entitling such Lender to compensation under paragraph (a) or (b) of this Section 5.01 as promptly as practicable, but in any event within 45 days, after such Lender obtains actual knowledge thereof; provided that (i) if any Lender fails to give such notice within 45 days after it obtains actual knowledge of such an event, such Lender shall, with respect to compensation payable pursuant to this Section 5.01 in respect of any costs resulting from such event, only be entitled to payment under this Section 5.01 for costs incurred from and after the date 45 days prior to the date that such Lender does give such notice, (ii) no Lender shall be entitled to compensation under paragraph (a) or (b) of this Section 5.01 for any period in excess of 120 days prior to the date of notice from such Lender to the Company (irrespective of the date on which such Lender had actual knowledge of the event giving rise to the request for compensation), (iii) any such Lender shall be entitled to compensation under paragraphs (a) and (b) of this Section 5.01 only if such Lender is requesting similar compensation from other borrowers similarly situated, and (iv) each Lender will designate a different Lending Office for the Loans of such Lender if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the sole opinion of such Lender, be disadvantageous to such Lender, except that such Lender shall have no obligation to designate a Lending Office located in the United States of America. Each Lender will furnish to the Company a certificate setting forth the basis and amount of each request by such Lender for compensation under paragraph (a) or (b) of this Section 5.01. Determinations and allocations by any Lender for purposes of this Section 5.01 of the effect of any Regulatory Change pursuant to paragraph (a) or (b) of this Section 5.01, or of the effect of capital maintained pursuant to paragraph (b) of this Section 5.01, on its costs or rate of return of maintaining Loans or its obligation to make Loans, or on amounts receivable by it in respect of Loans, and of the amounts required to compensate such Lender under this Section 5.01, shall be conclusive, provided that such determinations and allocations are made on a reasonable basis. (d) Provided that no Default shall have occurred and be continuing, the Company may, at any time, replace any Lender (x) as to which the Company is -22- obligated to make payments under this Section 5.01 (unless such Lender has since changed its Lending Office so as to eliminate the obligation of the Company to make such payments), or (y) which has given the Company the notice contemplated by Section 5.03 hereof, by giving not less than ten Business Days' prior notice to the Administrative Agent (who shall promptly notify such Lender), that it intends to replace such Lender with one or more lenders (including but not limited to one or more Lenders under this Agreement) selected by the Company that (i) have agreed to replace such Lender as provided in this Section 5.01(d), (ii) are reasonably acceptable to the Administrative Agent and (iii) enter into an assignment agreement with such Lender (in form reasonably acceptable to such Lender). Upon the effective date of any replacement under this paragraph and as a condition to such replacement, the replacement lender or lenders shall pay to the Lender being replaced the principal of the Loans held by such Lender and the Company shall pay to such Lender all accrued interest on such Loans and all other amounts owing to such Lender hereunder (including any amounts payable under Section 5.05 hereof as if such Loans were being prepaid by the Company) whereupon each such replacement lender (if not already a Lender) shall become a "Lender" for all purposes of this Agreement. Each Lender agrees to execute and deliver such instruments, and take such other actions, as may be required by the Central Bank of Chile in order to effect the replacement of such Lender pursuant to this Section 5.01(d). 5.02 Alternative Interest Rate. Anything herein to the contrary notwithstanding, if, on or prior to the determination of any Eurodollar Rate for any Interest Period or Default Interest Period: (a) the Administrative Agent reasonably determines (so long as the Administrative Agent is making substantially the same determination with respect to other borrowers (situated similarly to the Company) to which it has made loans), which determination shall be conclusive, that interest rate reported for the relevant deposits referred to in the definition of "Eurodollar Rate" in Section 1.01 hereof are not being provided in the relevant amounts or for the relevant maturities for purposes of determining rates of interest for Loans as provided herein; or (b) the Majority Lenders reasonably determine (so long as they are making substantially the same determination with respect to other borrowers (situated similarly to the Company) to which they respectively have made loans), which determination shall be conclusive, and notify the Administrative Agent that the relevant rates of interest referred to in the definition of "Eurodollar Rate" in Section 1.01 hereof upon the basis of which the rate of interest for Loans for such Interest Period or Default Interest Period is to be determined are not likely to adequately cover the cost to such Lenders of making or maintaining Loans for such Interest Period or Default Interest Period; then the Administrative Agent shall give the Company and each Lender prompt notice thereof and: (i) During the 15-day period next succeeding the date of any such notice (the "Negotiation Period"), the Administrative Agent (in consultation with such Lenders) and the Company will negotiate in good faith for the purpose of agreeing upon an alternative, mutually acceptable basis (the "Substitute Basis") for determining the rate of interest to be applicable to the Loans for such Interest Period or Default Interest Period; (ii) If at the expiry of the Negotiation Period, the Majority Lenders and the Company have agreed upon a Substitute Basis and the Administrative Agent has received confirmation from its Chilean counsel that such Substitute Basis has received all necessary governmental approvals and consents, the Substitute Basis shall be retroactive to, and take effect from, the beginning of such Interest Period or Default Interest Period; (iii) If at the expiry of the Negotiation Period, a Substitute Basis shall not have been agreed upon as aforesaid or the Administrative Agent shall not have received the above mentioned confirmation as to requisite governmental approvals or consents, the Administrative Agent shall forthwith notify each Lender of such failure to agree to receive such confirmation and, within five Business Days after receipt of such notice (or as soon thereafter as may be practicable), each such Lender shall notify the Company (through the -23- Administrative Agent) of the cost to such Lender (as determined by it in good faith and on commercially reasonable terms) of funding and maintaining such Loan for such Interest Period or Default Interest Period (which shall be substantially the same cost that such Lender quotes to other borrowers (similarly situated to the Company in similar situations) to which it has made loans); and the interest payable to such Lender on such Loan for such Interest Period shall be interest at a rate per annum equal to the Applicable Margin above the cost to such Lender of funding and maintaining such Loan for such Interest Period or Default Interest Period as so notified by such Lender (or, as to any principal of such Loan or other amount payable to such Lender on or in respect of such Loan which is then past due, 3% plus the Applicable Margin above such cost); and (iv) The procedures specified in clauses (i), (ii) and (iii) above shall apply to each Interest Period or Default Interest Period succeeding the first Interest Period or Default Interest Period to which they were applied unless and until the Administrative Agent shall determine in consultation with the Majority Lenders that the conditions referred to in clause (a) or clause (b) above no longer exist and so notifies the Company and the Lenders, whereupon interest on such Loans shall again be determined in accordance with the provisions of Section 3.02 hereof commencing on the first day of the Interest Period or Default Interest Period next succeeding the date of such notice. 5.03 Illegality. Notwithstanding any other provision of this Agreement, in the event that it becomes unlawful for any Lender or its Lending Office to honor its obligation to make or maintain any of its Loans hereunder (and, in the reasonable opinion of such Lender, the designation of a different Lending Office would either not avoid such unlawfulness or would be disadvantageous to the Lender), then such Lender shall promptly notify the Company thereof (through the Administrative Agent) and such Lender's obligation to make Loans shall be suspended until such time as such Lender may again make and maintain Loans and, if any of such Lender's Loans are then outstanding, the Company shall, upon the request of such Lender, promptly prepay the principal of such Loans together with accrued interest thereon. 5.04 Chilean Taxes. (a) All payments on account of the principal of and interest on the Loans, fees and all other amounts payable hereunder by the Obligors to or for the account of the Administrative Agent or any Lender, including, without limitation, amounts payable under clause (b) of this Section 5.04, shall be made free and clear of and without reduction or liability for Chilean Taxes. The Obligors will pay all Chilean Taxes for their own respective accounts, prior to the date on which penalties attach thereto, except for any Chilean Taxes (other than Chilean Taxes imposed on or in respect of any amount payable hereunder, under the Notes or under any other Basic Document) the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained, so long as no claim for such Chilean Taxes is made on the Administrative Agent or any Lender. (b) Each of the Obligors shall indemnify the Administrative Agent and each Lender against, and reimburse the Administrative Agent and each Lender on demand for, any Chilean Taxes and any loss, liability, claim or expense, including interest, penalties and legal fees, which the Administrative Agent or such Lender (as the case may be) may incur at any time arising out of or in connection with any failure of the Company or any Subsidiary Guarantor to make any payment of Chilean Taxes when due. (c) In the event that any Obligor is required by applicable law, decree or regulation to deduct or withhold Chilean Taxes from any amounts payable on, under or in respect of this Agreement or the Loans (including, without limitation, the Chilean income taxes referred to in clause (e) of this Section 5.04), such Obligor shall promptly pay the Person entitled to such amount such additional amounts as may be required, after the deduction or withholding of Chilean Taxes to enable such Person to receive from such Obligor, on the due date thereof, an amount equal to the full amount stated to be payable to such Person under this Agreement. -24- (d) Each Obligor shall furnish to the Administrative Agent, upon the request of any Lender (through the Administrative Agent), together with sufficient certified copies for distribution to each Lender requesting the same original official tax receipts in respect of each payment of Chilean Taxes required under this Section 5.04, within 30 days after the date such payment is made, and the Obligors shall promptly furnish to the Administrative Agent at its request or at the request of any Lender (through the Administrative Agent) any other information, documents and receipts that the Administrative Agent or such Lender may reasonably require to establish to its satisfaction that full and timely payment has been made of all Chilean Taxes required to be paid under this Section 5.04. (e) Each Obligor represents and warrants to the Lenders and the Administrative Agent that, on and as of the date of this Agreement, none of this Agreement, any other Basic Document, or the execution or delivery by any Obligor of this Agreement or any other Basic Document, is subject to any Chilean Taxes, and no payment to be made by any Obligor under this Agreement is subject to any Chilean Taxes, except for Chilean income taxes at the rate of 4% on interest payable by the Company hereunder, certain other Chilean Taxes of up to a rate of 35% on amounts payable by the Company hereunder (other than interest on and principal of the Loans) and Chilean stamp taxes at the rate of 1.2% on the amount of each Loan, in each case required to be withheld and paid by the Company. 5.05 Compensation. The Company shall pay to the Administrative Agent for account of each Lender, upon the request of such Lender through the Administrative Agent, such amount or amounts as shall be sufficient (in the reasonable opinion of such Lender) to compensate it for any loss, cost or expense that such Lender reasonably determines is attributable to: (a) any payment or mandatory or optional prepayment of a Loan made by such Lender for any reason (including, without limitation, the acceleration of the Loans pursuant to Section 10 hereof) on a date other than the last day of an Interest Period for such Loan; or (b) any failure by the Company for any reason (including, without limitation, the failure of any of the conditions precedent specified in Section 7 hereof to be satisfied) to borrow a Loan from such Lender on the date for such borrowing specified in the relevant notice of borrowing given pursuant to Section 2.02 hereof, or any failure by the Company for any reason to prepay a Loan from such Lender on the date specified in the relevant notice of prepayment given pursuant to Section 2.08 hereof. Without limiting the effect of the preceding sentence, such compensation shall include an amount equal to the excess, if any, of (i) the amount of interest that otherwise would have accrued on the principal amount so paid, prepaid, or not borrowed (other than the portion thereof that represents the Applicable Margin) for the period from the date of such payment, prepayment, or failure to borrow to the last day of the then current Interest Period for such Loan (or, in the case of a failure to borrow, the Interest Period for such Loan that would have commenced on the date specified for such borrowing) at the applicable rate of interest for such Loan provided for herein over (ii) the amount of interest that otherwise would have accrued on such principal amount at a rate per annum equal to the interest component of the amount such Lender would have bid in the London interbank market for Dollar deposits of leading banks in amounts comparable to such principal amount and with maturities comparable to such period (as reasonably determined by such Lender). Section 6. Guarantee. 6.01 The Guarantee. The Subsidiary Guarantors hereby irrevocably jointly and severally guarantee to each Lender and the Administrative Agent and their respective successors and assigns the prompt payment in full when due (whether at stated maturity, by acceleration or otherwise) of the principal of and interest on the Loans made by the Lenders to, and the Notes held by each Lender of, the Company and all other amounts from time to time owing to the Lenders or the Administrative Agent by the Company under this Agreement and under the Notes and by any Obligor under any of the other Basic Documents, in each case strictly in accordance with the terms thereof (and giving effect to any amendment or modification of such terms) (such obligations being herein -25- collectively called the "Guaranteed Obligations"). The Subsidiary Guarantors hereby further jointly and severally agree that if the Company shall fail to pay in full when due (whether at stated maturity, by acceleration or otherwise) any of the Guaranteed Obligations, the Subsidiary Guarantors will promptly pay the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, by acceleration or otherwise) in accordance with the terms of such extension or renewal. 6.02 Obligations Unconditional. The obligations of the Subsidiary Guarantors under Section 6.01 hereof are absolute and unconditional, joint and several, irrespective of the value, genuineness, validity, regularity or enforceability of the obligations of the Company under this Agreement, the Notes or any other agreement or instrument referred to herein or therein, or any substitution, release or exchange of any other guarantee of or security for any of the Guaranteed Obligations, and, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, it being the intent of this Section 6.02 that the obligations of the Subsidiary Guarantors hereunder shall be absolute and unconditional, joint and several, under any and all circumstances. Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following shall not alter or impair the liability of the Subsidiary Guarantors hereunder which shall remain absolute and unconditional as described above: (i) at any time or from time to time, without notice to the Subsidiary Guarantors, the time for any performance of or compliance with any of the Guaranteed Obligations shall be extended, or such performance or compliance shall be waived; (ii) any of the acts mentioned in any of the provisions of this Agreement or the Notes or any other agreement or instrument referred to herein or therein shall be done or omitted; (iii) the maturity of any of the Guaranteed Obligations shall be accelerated, or any of the Guaranteed Obligations shall be modified, supplemented or amended in any respect, or any right under this Agreement or the Notes or any other agreement or instrument referred to herein or therein shall be waived or any other guarantee of any of the Guaranteed Obligations or any security therefor shall be released or exchanged in whole or in part or otherwise dealt with; or (iv) any lien or security interest granted to, or in favor of, the Administrative Agent or any Lender or Lenders as security for any of the Guaranteed Obligations shall fail to be perfected. The Subsidiary Guarantors hereby expressly waive diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement that the Administrative Agent or any Lender exhaust any right, power or remedy or proceed against the Company under this Agreement or the Notes or any other agreement or instrument referred to herein or therein, or against any other Person under any other guarantee of, or security for, any of the Guaranteed Obligations. 6.03 Reinstatement. The obligations of the Subsidiary Guarantors under this Section 6 shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of the Company in respect of the Guaranteed Obligations is rescinded or must be otherwise restored by any holder of any of the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise and the Guarantors jointly and severally agree that they will indemnify the Administrative Agent and each Lender on demand for all reasonable costs and expenses (including, without limitation, fees of counsel) incurred by the Administrative Agent or such Lender in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law. 6.04 Subrogation. The Subsidiary Guarantors hereby jointly and severally agree that until the payment and satisfaction in full of all Guaranteed Obligations and the expiration and termination of the Commitments of the Lenders under this Agreement they shall not exercise any right or remedy -26- arising by reason of any performance by them of their guarantee in Section 6.01 hereof, whether by subrogation or otherwise, against the Company or any other guarantor of any of the Guaranteed Obligations or any security for any of the Guaranteed Obligations. Any amount paid to any Subsidiary Guarantor on account of any such subrogation rights prior to the payment in full of all Guaranteed Obligations shall be held in trust for the benefit of the Administrative Agent and the Lenders and each holder of a Note and, forthwith upon receipt by any Subsidiary Guarantor, be turned over to the Administrative Agent in the exact form received by such Subsidiary Guarantor (duly indorsed by such Subsidiary Guarantor to the Administrative Agent, if required) and credited and applied against the Guaranteed Obligations, whether matured or unmatured, in accordance with the terms of this Agreement. 6.05 Remedies. The Subsidiary Guarantors jointly and severally agree that, as between the Subsidiary Guarantors and the Lenders, the obligations of the Company under this Agreement and the Notes may be declared to be forthwith due and payable as provided in Section 10 hereof (and shall be deemed to have become automatically due and payable in the circumstances provided in said Section 10) for purposes of Section 6.01 hereof notwithstanding any stay, injunction or other prohibition preventing such declaration (or such obligations from becoming automatically due and payable) as against the Company and that, in the event of such declaration (or such obligations being deemed to have become automatically due and payable), such obligations (whether or not due and payable by the Company) shall forthwith become due and payable by the Subsidiary Guarantors for purposes of said Section 6.01. 6.06 Continuing Guarantee. The guarantee in this Section 6 is a continuing guarantee, and shall apply to all Guaranteed Obligations whenever arising. 6.07 Rights of Contribution. The Subsidiary Guarantors hereby agree, as between themselves, that if any Subsidiary Guarantor shall become an Excess Funding Subsidiary Guarantor (as defined below) by reason of the payment by such Subsidiary Guarantor of any Guaranteed Obligations, each other Subsidiary Guarantor shall, on demand of such Excess Funding Subsidiary Guarantor (but subject to the next sentence), pay to such Excess Funding Subsidiary Guarantor an amount equal to such Subsidiary Guarantor's Pro Rata Share (as defined below and determined, for this purpose, without reference to the Properties, debts and liabilities of such Excess Funding Subsidiary Guarantor) of the Excess Payment (as defined below) in respect of such Guaranteed Obligations. The payment obligation of a Subsidiary Guarantor to any Excess Funding Subsidiary Guarantor under this Section 6.07 shall be subordinate and subject in right of payment to the prior payment in full of the obligations of such Subsidiary Guarantor under the other provisions of this Section 6 and such Excess Funding Subsidiary Guarantor shall not exercise any right or remedy with respect to such excess until payment and satisfaction in full of all of such obligations. For purposes of this Section 6.07, (i) "Excess Funding Subsidiary Guarantor" shall mean, in respect of any Guaranteed Obligations, a Subsidiary Guarantor that has paid an amount in excess of its Pro Rata Share of such Guaranteed Obligations, (ii) "Excess Payment" shall mean, in respect of any Guaranteed Obligations, the amount paid by an Excess Funding Subsidiary Guarantor in excess of its Pro Rata Share of such Guaranteed Obligations and (iii) "Pro Rata Share" shall mean, for any Subsidiary Guarantor, the ratio (expressed as a percentage) of (x) the amount by which the aggregate present fair saleable value of all Properties of such Subsidiary Guarantor (excluding any shares of stock of any other Subsidiary Guarantor) exceeds the amount of all the debts and liabilities of such Subsidiary Guarantor (including contingent, subordinated, unmatured and unliquidated liabilities, but excluding the obligations of such Subsidiary Guarantor hereunder and any obligations of any other Subsidiary Guarantor that have been Guaranteed by such Subsidiary Guarantor) to (y) the amount by which the aggregate fair saleable value of all Properties of the Company and all of the Subsidiary Guarantors exceeds the amount of all the debts and liabilities (including contingent, subordinated, unmatured and unliquidated liabilities, but excluding the obligations of the Company and the Subsidiary Guarantors hereunder) of the Company and all of the Subsidiary Guarantors, all as of the Closing Date. If any Subsidiary becomes a Subsidiary Guarantor hereunder subsequent to the Closing Date, then for purposes of this Section 6.07 such subsequent Subsidiary Guarantor shall be deemed to have been a Subsidiary Guarantor as of the Closing Date and the aggregate present fair saleable value of the Properties, and the amount of the debts and -27 liabilities, of such Subsidiary Guarantor as of the Closing Date shall be deemed to be equal to such value and amount on the date such Subsidiary Guarantor becomes a Subsidiary Guarantor hereunder. 6.08 General Limitation on Guarantee Obligations. In any action or proceeding involving any state corporate law, or any state or Federal bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of any Subsidiary Guarantor under Section 6.01 hereof would otherwise, taking into account the provisions of Section 6.07 hereof, be held or determined to be void, invalid or unenforceable, or subordinated to the claims of any other creditors, on account of the amount of its liability under said Section 6.01, then, notwithstanding any other provision hereof to the contrary, the amount of such liability shall, without any further action by such Subsidiary Guarantor, any Lender, the Administrative Agent or any other Person, be automatically limited and reduced to the highest amount that is valid and enforceable and not subordinated to the claims of other creditors as determined in such action or proceeding. Section 7. Conditions Precedent. 7.01 Initial Loan. The obligation of any Lender to make its initial Loan hereunder is subject to the conditions precedent that the initial borrowing of Loans hereunder shall occur on or before April 30, 1999 and that the Administrative Agent shall have received the following documents, each of which shall be satisfactory to the Administrative Agent (and, with respect to the documents described in paragraphs (f), (g), (h), (i), (j), (p) and (t) below, Citibank) in form and substance: (a) Corporate Documents. The following documents, each certified as indicated below: (i) for each Obligor, a notarized copy of its organizational documents (estatutos sociales), as amended and in effect on the Closing Date, and for each Stock Pledgor, a copy of its certificate of incorporation and its by-laws (or other organization documents), as amended and in effect on the Closing Date, certified by the President or a senior officer of such Stock Pledgor as true and complete copies thereof; (ii) for each of the Obligors and each Stock Pledgor, a certificate of the President, the General Manager (Gerente General) or other senior officer of such Obligor or such Stock Pledgor, as the case may be, dated the Closing Date and certifying (A) that attached thereto is a true and complete copy of resolutions duly adopted by the board of directors of such Obligor or such Stock Pledgor, as the case may be, authorizing the execution, delivery and performance of such of the Basic Documents to which such Obligor or such Stock Pledgor, as the case may be, is or is intended to be a party and the Loans hereunder, and that such resolutions have not been modified, rescinded or amended and are in full force and effect, and (B) as to the incumbency and specimen signature of each officer of such Obligor or such Stock Pledgor, as the case may be, executing such of the Basic Documents to which such Obligor or such Stock Pledgor, as the case may be, is intended to be a party and each other document to be delivered by such Obligor or such Stock Pledgor, as the case may be, from time to time in connection therewith (and the Administrative Agent and each Lender may conclusively rely on such certificate until it receives notice in writing from such Obligor or such Stock Pledgor, as the case may be, to the contrary); and (iii) for each of the Obligors and each Stock Pledgor, a certificate of another officer or authorized representative of such Obligor or such Stock Pledgor, as the case may be, as to the incumbency and specimen signature of the President, the General Manager (Gerente General) or senior officer of such Obligor or such Stock Pledgor, as the case may be, signing the applicable certificate referred to in clause (ii) above. -28- (b) Officer's Certificate. A certificate of the President, the General Manager or other senior officer of the Company, dated the Closing Date (i) to the effect set forth in Sections 7.02(a) and 7.02(b) hereof and (ii) to the effect that, as of the Closing Date and after giving effect to the initial Loans hereunder and the other transactions contemplated hereby, each of the Obligors will have sufficient cash flow to enable it to pay its debts as they mature and will not have defaulted in the payment of any of its obligations. (c) Closing Date Contribution. Evidence that the Closing Date Contribution shall have been duly made in compliance with all applicable laws, statutes and regulations and that the proceeds thereof, together with all Loans made on the Closing Date, shall be used, and in an amount sufficient, to finance the Acquisition, to refinance amounts outstanding under the ING Credit Agreement and to pay any fees and expenses payable hereunder on the Closing Date. (d) Acquisition; Merger etc. A copy of the Purchase Agreement (together with all exhibits and schedules thereto, and copies of the form of all opinions, certificates and other writings to be delivered pursuant thereto), certified by the President or a senior officer of the Company to be true and complete, together with (i) evidence that, immediately following the making of the initial Loans hereunder, the Acquisition shall have been duly consummated in compliance with all applicable laws, statutes and regulations, (ii) a public deed prepared by the Company transcribing the minutes of the shareholders' meeting for each of Acquisition Co. and Hipercable approving the Merger, and the abstracts thereof, in appropriate form for publication in the Diario Oficial de la Republica de Chile and filing with the Registro de Comercio del Conservador de Bienes Raices de Santiago, (iii) evidence that, immediately following the making of the initial Loans hereunder, the Merger shall have been duly consummated in compliance with all applicable laws, statutes and regulations, except for the required publication in the Diario Oficial de la Republica de Chile and the required registration with the Registro de Comercio del Conservador de Bienes Raices de Santiago, and (iv) evidence that, immediately following the consummation of the Merger, Acquisition Co and Hipercable shall enter into an agreement in which Hipercable expressly assumes the obligations of Acquisition Co. hereunder. (e) Security Documents. (i) Stock Pledge Agreement. The Stock Pledge Agreement, duly executed and delivered by the parties thereto, and duly notarized by a notary public in Chile, together with (x) the certificates identified therein as representing all of the issued and outstanding capital stock of each of the Obligors, and (y) a certificate of a notary public in Chile to the effect that the Liens created by the Stock Pledge Agreement have been duly noted in the Stock Registry Book of such Obligor, having attached thereto copies of the pages of such book on which such notations have been made. (ii) Real Property Mortgages. A Real Property Mortgage for each Obligor, duly executed and delivered by such Obligor, and duly notarized by a notary public in Chile. (iii) Commercial Pledge Agreement. The Commercial Pledge Agreement, duly executed and delivered by the Company, and duly notarized by a notary public in Chile. -29- (iv) Agreement to Grant a Pledge Without Conveyance. An Agreement to Grant a Pledge Without Conveyance for each Obligor, duly executed and delivered by such Obligor and duly notarized by a notary public in Chile. (v) Pledge Without Conveyance. A Pledge Without Conveyance for each Obligor, duly executed and delivered by such Obligor and duly notarized by a notary public in Chile. (f) Opinion of Chilean Counsel to the Obligors. An opinion, dated the Closing Date, of Carey y Cia. Ltda., counsel to the Obligors, substantially in the form of Exhibit D-1 hereto (and each Obligor hereby instructs such counsel to deliver such opinion to the Lenders and the Administrative Agent). (g) Opinion of Special New York Counsel to the Administrative Agent. An opinion, dated the Closing Date, of Mayer, Brown & Platt, special New York counsel to the Administrative Agent, substantially in the form of Exhibit D-2 hereto (and the Administrative Agent hereby instructs such counsel to deliver such opinion to the Lenders). (h) Opinion of Special Chilean Counsel to the Administrative Agent. An opinion, dated the Closing Date, of Philippi, Yrarrazaval, Pulido y Brunner, special Chilean counsel to the Administrative Agent, substantially in the form of Exhibit D-3 hereto (and the Administrative Agent hereby instructs such counsel to deliver such opinion to the Lenders). (i) Opinion of U.S. Counsel to the Obligors. An opinion, dated the Closing Date, of Holme Roberts & Owen LLP, counsel to the Obligors, substantially in the form of Exhibit D-4 hereto (and each Obligor hereby instructs such counsel to deliver such opinion to the Lenders and the Administrative Agent). (j) Opinion of Cayman Islands Counsel to the Obligors. An opinion, dated the Closing Date, of W.S. Walker & Co., Cayman Islands counsel to the Obligors, substantially in the form of Exhibit D-5 hereto (and each Obligor hereby instructs such counsel to deliver such opinion to the Lenders and the Administrative Agent). (k) Insurance Endorsement and Acknowledgment. Each policy of insurance covering tangible Property of the Obligors, together with a copy of a notice to each insurer under such policies advising it of the assignment of such policy to the Administrative Agent. (l) Licenses. A copy of each of the DTH License and the Telecommunications License, in each case duly certified by an officer of the Company to be a true and correct copy of the original thereof. (m) Process Agent. An acceptance by the Process Agent of its appointment as the agent for service of process of each Obligor, duly executed and delivered by the Process Agent. (n) Authorization and Registration. Evidence of the authorization (which shall have been obtained prior to the execution of this Agreement) by and registration with the Central Bank of Chile of the financial terms of the Loans and substantially all of the other terms and conditions of the Loans. (o) Subsidiaries' Guarantee. A Chilean public deed (escritura publica) evidencing the Subsidiary Guarantors' guarantee of the Guaranteed Obligations, substantially in the form of Exhibit C hereto, duly executed and delivered by each Subsidiary Guarantor, and duly notarized by a notary public in Chile. (p) Effective Subordination Documents. Effective Subordination Documents for the Closing Date Debt, duly executed and delivered by the parties thereto. -30- (q) Repayment of Existing Indebtedness. Evidence that the principal of and interest on, and all other amounts owing in respect of, the Indebtedness listed in Part A of Schedule I to be repaid on the Closing Date shall have been (or shall be simultaneously) paid in full, that any commitments to extend credit under the agreements or instruments relating to such Indebtedness shall have been canceled or terminated and that all Guarantees in respect of, and all Liens securing, any such Indebtedness shall have been released. In addition, the Administrative Agent shall have received from any Person holding any Lien securing any such Indebtedness, such releases and other instruments, in each case in proper form for recording, as the Administrative Agent shall have requested to release and terminate of record the Liens securing such Indebtedness. (r) Sources and Uses. A certificate of the President or a senior financial officer of the Company setting forth the amount of Indebtedness referred to in the foregoing clause (q) and the sources of the funds to be used to repay such Indebtedness. (s) Adverse Litigation or Proceeding. A certificate or certificates of each Obligor signed on its behalf by the President or a senior officer thereof to the effect that (and each Lender shall be satisfied in its good faith judgment that) no litigation or proceeding exists (or, in the case of litigation or similar proceedings by any government or governmental or regulatory authority, agency or instrumentality, shall be threatened) with respect to the making or consummation of the Acquisition, the Merger, the Closing Date Contribution or the transactions contemplated hereby, and no law or regulation shall have been proposed, promulgated or deemed applicable to the Acquisition, the Merger, the Closing Date Contribution or the transactions contemplated hereby which would prevent or impose a materially adverse condition on the Acquisition, the Merger, the Closing Date Contribution or the transactions contemplated hereby. (t) Management Agreements. The Management Agreements, duly executed and delivered by the parties thereto. (u) Other Documents. Such other documents as the Administrative Agent or any Lender or special New York counsel to the Administrative Agent may reasonably request and are reasonably available to the Company. The obligation of any Lender to make its initial Loan hereunder is also subject to (i) the condition that no event shall have occurred that is reasonably likely to result in a material adverse change in the business, condition (financial or otherwise), operations, performance, properties or prospects of Acquisition Co., Hipercable and their respective Subsidiaries (taken as a whole) since December 31, 1998, (ii) the condition that no material adverse change shall have occurred in the loan syndication or financial or capital markets generally or in Chile, or in the market conditions for loans or debt securities issued by Chilean companies, and (iii) the condition that no law prevents or imposes materially adverse conditions on the transactions contemplated by the Purchase Agreement and the Basic Documents, and (iv) the payment by the Company of such fees as the Company shall have agreed to pay to any Lender or the Administrative Agent in connection herewith, including, without limitation, the reasonable fees and expenses of Mayer, Brown & Platt, special New York counsel to the Administrative Agent in connection with the negotiation, preparation, execution and delivery of this Agreement and the Notes and the other Basic Documents and the making of the Loans hereunder (to the extent that statements for such fees and expenses have been delivered to the Company). 7.02 Initial and Subsequent Loans. The obligation of any Lender to make any Loan to the Company upon the occasion of each borrowing hereunder (including the initial borrowing) is subject to the satisfaction of the following further conditions precedent: (a) Both immediately prior to the making of such Loan and also after giving effect thereto and to the intended use thereof, no Default shall have occurred and be continuing. -31- (b) Both immediately prior to the making of such Loan and also after giving effect thereto and to the intended use thereof, the representations and warranties made by the Company in Section 5.04(e) hereof and Section 8 hereof, and by each Obligor in each of the other Basic Documents to which it is a party, shall be true and complete on and as of the date of the making of such Loan with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date). (c) All corporate and other proceedings, and all documents, instruments and other legal matters in connection with the transactions contemplated hereby shall be reasonably satisfactory in form and substance to the Administrative Agent, and the Administrative Agent shall have received such other documents and legal opinions in respect of any aspect or consequence of the transactions contemplated hereby as it shall reasonably request. (d) Such Lender shall have received one or more Notes evidencing such Loan. (e) The Company shall have paid (or shall concurrently pay) any Chilean stamp taxes (as described in Section 5.04(e)) which are then due and payable in respect of such Loan. Each notice of borrowing by the Company hereunder shall constitute a certification by the Company to the effect set forth in clauses (a), (b), (d) and (e) above (both as of the date of such notice and, unless the Company otherwise notifies the Administrative Agent prior to the date of such borrowing, as of the date of such borrowing). 7.03 Pro Forma Compliance. The obligation of any Lender to make any Loan to the Company upon the occasion of each borrowing hereunder (including the initial borrowing) during any fiscal quarter of the Company is subject to the satisfaction of the further condition precedent that, after giving effect to the making of such Loan, the Company shall be in compliance, on a pro forma basis, as of the last day of the immediately preceding fiscal quarter, with its obligations under Sections 9.09, 9.10, 9.11, 9.12, 9.13, 9.14 and 9.20 hereof and no other Default would be continuing (and each Lender shall have received a certificate of the chief financial officer of the Company demonstrating compliance with the foregoing condition). 7.04 Consummation of the Merger. The obligation of any Lender to make any Tranche B Loan to the Company upon the occasion of each borrowing of Tranche B Loans hereunder (including the initial borrowing of Tranche B Loans) is subject to the condition precedent that, the Administrative Agent shall have received evidence that, immediately following the making of the initial Tranche B Loan hereunder, the Merger shall have been duly consummated. Section 8. Representations and Warranties. Each Obligor represents and warrants to the Administrative Agent and the Lenders that: 8.01 Corporate Existence. Each of the Company and the other Obligors: (a) is a sociedad anonima or other entity duly organized, validly existing and in good standing under the laws of Chile; (b) has all requisite corporate or other power necessary to own its assets and carry on its business as now being or as proposed to be conducted, (c) has all material governmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its business as now being or as proposed to be conducted (except where the failure to have the same could reasonably be expected to have a Material Adverse Effect); and (d) is qualified to do business and is in good standing in all jurisdictions in which the nature of the business conducted by it makes such qualification necessary and where failure so to qualify could (either individually or in the aggregate) have a Material Adverse Effect. 8.02 Financial Condition. Hipercable has heretofore furnished to each of the Lenders the consolidated balance sheets of Hipercable and the Principal Subsidiaries as at December 31, 1998 and the related consolidated statements of -32- income, retained earnings and cash flow of Hipercable and the Principal Subsidiaries for the fiscal year ended on said date, with the opinion thereon of Price Waterhouse, certified public accountants to Hipercable and VTR Cable Express S.A., and Price Waterhouse, certified public accountants to VTR Telefonica S.A. All such financial statements are complete and correct in all material respects and fairly present the consolidated financial condition of Hipercable and each of the Principal Subsidiaries in accordance with GAAP applied on a consistent basis. None of Hipercable nor any of the other Obligors has on the date hereof any material contingent liabilities, liabilities for taxes, material forward or long-term commitments or unrealized or anticipated losses from any unfavorable commitments, except as referred to or reflected or provided for in said balance sheets as at said dates. Since December 31, 1998, there has been no material adverse change in the consolidated financial condition, operations, business or prospects taken as a whole of Hipercable and the other Obligors from that set forth in said financial statements as at said date. 8.03 Litigation. Except as set forth in Schedule III hereto, there are no legal or arbitral proceedings, or any proceedings by or before any governmental or regulatory authority or agency, now pending or (to the knowledge of any Obligor) threatened against any Obligor that, if adversely determined could (either individually or in the aggregate) have a Material Adverse Effect or purport to affect in any material respect the legality, validity or enforceability of the Acquisition, the Merger, the Purchase Agreement or any Basic Document. 8.04 No Breach. None of the Merger and the Acquisition, the execution and delivery of this Agreement, the Notes, the other Basic Documents and the Purchase Agreement, the consummation of the transactions herein and therein contemplated or compliance with the terms and provisions hereof and thereof will conflict with or result in a breach of, or require any consent under, the charter or estatutos sociales of any Obligor, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which any Obligor is a party or by which any of them or any of their Property is bound or to which any of them is subject, or constitute a default under any such agreement or instrument, or (except for the Liens created pursuant to the Security Documents) result in the creation or imposition of any Lien upon any Property of any Obligor pursuant to the terms of any such agreement or instrument. 8.05 Action. Each of Acquisition Co. and Hipercable have all necessary corporate power, authority and legal right to consummate the Acquisition and the Merger; and the consummation of the Acquisition and the Merger have been duly authorized by all necessary corporate action on the part of each of Acquisition Co. and Hipercable (including, without limitation, any required shareholder approvals). On the Closing Date, after giving effect to the making of the initial Loans hereunder, the Acquisition shall have been duly consummated and, except for the required publication in the Diario Oficial de la Republica de Chile and the required registration with the Registro de Comercio del Conservador de Bienes Raices de Santiago, the Merger shall have been duly consummated. Each Obligor has all necessary corporate power, authority and legal right to execute, deliver and perform its obligations under such of the Basic Documents and the Purchase Agreement to which it is a party; the execution, delivery and performance by each Obligor of such of the Basic Documents and the Purchase Agreement to which it is a party have been duly authorized by all necessary corporate action on its part (including, without limitation, any required shareholder approvals); and each of this Agreement and the Purchase Agreement has been duly and validly executed and delivered by each Obligor and constitutes, and each of the Notes and the other Basic Documents to which it is a party when executed and delivered by such Obligor (in the case of the Notes, for value) will constitute, its legal, valid and binding obligation, enforceable against each Obligor in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws of general applicability affecting the enforcement of creditors' rights. 8.06 Approvals. Except for the registration with the Central Bank of Chile of the financial terms and conditions of the Loans and the registrations, filings and other actions required by Section 7.01 hereof (all of which have been duly made, are in full force and effect and are not subject to appeal), no authorizations, approvals or consents of, and no filings or registrations with, any governmental or regulatory authority or agency, or any securities exchange, or any other Person are necessary for (a) the consummation of the Acquisition and the Merger or (b) the execution, delivery or performance by any Obligor of such of the Basic Documents and the Purchase Agreement to which it is a party or for the legality, validity or enforceability hereof or thereof. -33- 8.07 Legal Form. This Agreement and each other Basic Document is in proper legal form under the law of Chile for the enforcement thereof against each Obligor under such law, and if this Agreement and each other Basic Document were stated to be governed by such law, they would constitute legal, valid and binding obligations of each Obligor under such law, enforceable in accordance with their respective terms; provided, however, that in order to enforce this Agreement and each other Basic Document not in the Spanish language in Chile, such documents must be accompanied with an official translation into Spanish. All formalities required in Chile for the validity and enforceability of this Agreement and each other Basic Document (including, without limitation, any necessary registration, recording or filing with any court or other authority in Chile) have been accomplished, and no Chilean Taxes (other than Chilean stamp taxes described in Section 5.04(e)) are required to be paid and except as required by Section 7.01 hereof, no notarization is required, for the validity and enforceability thereof. 8.08 Ranking. This Agreement and each other Basic Document and the obligations evidenced hereby and thereby are and will at all times be direct and unconditional general obligations of the Company and the Subsidiary Guarantors, and will at all times rank (i) in right of payment at least pari passu with, and (ii) in right of collateral security senior to, all other Indebtedness and all Hedge Agreements of the Obligors, whether now existing or hereafter outstanding, subject to statutorily preferred exceptions. There exists no Lien (including any Lien arising out of any attachment, judgment or execution), security interest or other encumbrance, nor any segregation or other preferential arrangement of any kind, on, in or with respect to any of the Property or revenues of any Obligor, except as expressly permitted by Section 9.06 hereof. 8.09 Taxes. Each of the Company and the other Obligors has filed all income tax returns and all other material tax returns that are required to be filed by it and has paid all taxes due pursuant to such returns or pursuant to any assessment received by the Company or such Obligor. The charges, accruals and reserves on the books of each of the Company and the other Obligors in respect of taxes and other governmental charges are, in the opinion of the Company and such Obligor, adequate. 8.10 Commercial Activity; Absence of Immunity. Each Obligor is subject to civil and commercial law with respect to its obligations under each of the Basic Documents to which it is a party. The execution, delivery and performance by each Obligor of each Basic Document to which it is a party constitute private and commercial acts rather than public or governmental acts. None of the Obligors, nor any of their respective Properties or revenues, is entitled to any right of immunity in any jurisdiction from suit, court jurisdiction, judgment, attachment (whether before or after judgment), set-off or execution of a judgment or from any other legal process or remedy relating to the obligations of such Obligor under any of the Basic Documents to which it is a party. 8.11 Material Agreements and Liens. (a) Part A of Schedule I hereto is a complete and correct description of all outstanding Indebtedness or Hedge Agreements of any of the Obligors (specifying which such Indebtedness is to be repaid on the Closing Date) and Part B of Schedule I hereto is a list, as of the date of this Agreement, of each credit agreement, loan agreement, indenture, purchase agreement, guarantee, letter of credit or other arrangement providing for or otherwise relating to any Indebtedness, Hedge Agreements or any extension of credit (or commitment for any extension of credit) to, or guarantee by, the Company or any other Obligor (other than any such Indebtedness, Hedge Agreements or other extensions of credit to be repaid in full on the Closing Date), and the aggregate principal or face amount outstanding or that may become outstanding under each such arrangement is correctly described in Part A of said Schedule I. (b) Part C of Schedule I hereto is a complete and correct list, as of the date of this Agreement, of each Lien securing Indebtedness or Hedge Agreements of any Person and covering any Property of the Company or any other Obligor (other than any Liens to be released and discharged of record on the Closing Date), and the aggregate Indebtedness or Hedge Agreements secured (or that may be secured) by each such Lien and the Property covered by each such Lien is correctly described in Part C of said Schedule I. -34- 8.12 Environmental Matters. Each of the Company and the other Obligors has obtained all environmental, health and safety permits, licenses and other authorizations required under all Environmental Laws to carry on its business as now being or as proposed to be conducted, except to the extent failure to have any such permit, license or authorization would not (either individually or in the aggregate) have a Material Adverse Effect. Each of such permits, licenses and authorizations is in full force and effect and each of the Company and the other Obligors is in compliance with the terms and conditions thereof, and is also in compliance with all other limitations, restrictions, conditions, standards, prohibitions, requirements, obligations, schedules and timetables contained in any applicable Environmental Law or in any regulation, code, plan, order, decree, judgment, injunction, notice or demand letter issued, entered, promulgated or approved thereunder, except to the extent failure to comply therewith would not (either individually or in the aggregate) have a Material Adverse Effect. 8.13 Capitalization. As of the date of this Agreement, after giving effect to the Merger, the authorized capital stock of the Company consists of shares of common stock, no par value, each of which shares is duly and validly issued and outstanding, is free and clear of any Liens (other than Liens created pursuant to the Basic Documents) and will be fully paid and nonassessable. As of the date of this Agreement, after giving effect to the Merger, approximately 66% of such issued and outstanding shares are owned beneficially and of record by UIH Chile Ventures, Inc. (or such lesser percentage as shall represent the number of shares owned by UIH Chile Ventures, Inc. after giving effect to any Closing Date Equity made by a Person acceptable to the Majority Lenders) and approximately 34% of such issued and outstanding shares are owned beneficially and of record by UIH Chile, Inc. (or such lesser percentage as shall represent the number of shares owned by UIH Chile, Inc. after giving effect to any Closing Date Equity made by a Person acceptable to the Majority Lenders). Except as set forth on Schedule V hereto, (x) there are no outstanding Equity Rights with respect to the Company and (y) there are no outstanding obligations of the Company or any other Obligor to repurchase, redeem, or otherwise acquire any shares of capital stock of the Company. 8.14 Subsidiaries, Etc. (a) Set forth in Part A of Schedule II hereto is a complete and correct list, as of the date of this Agreement (but after giving effect to the consummation of the Merger), of all of the Subsidiaries of the Company, together with, for each such Subsidiary, (i) the jurisdiction of organization of such Subsidiary, (ii) each Person holding ownership interests in such Subsidiary and (iii) the nature of the ownership interests held by each such Person and the percentage of ownership of such Subsidiary represented by such ownership interests. Except as disclosed in Part A of Schedule II hereto, (x) each of the Company and the other Obligors owns, free and clear of Liens, and has the unencumbered right to vote, all outstanding ownership interests in each Person shown to be held by it in Part A of Schedule II hereto, (y) all of the issued and outstanding capital stock of each such Person organized as a corporation is validly issued, fully paid and nonassessable and (z) there are no outstanding Equity Rights with respect to such Person. (b) Set forth in Part B of Schedule II hereto is a complete and correct list, as of the date of this Agreement, of all Investments (other than Investments disclosed in Part A of said Schedule II hereto) held by the Company or any other Obligor in any Person and, for each such Investment, (x) the identity of the Person or Persons holding such Investment and (y) the nature of such Investment. Except as disclosed in Part B of Schedule II hereto, each of the Company and the other Obligors owns, free and clear of all Liens, all such Investments. (c) None of the Subsidiary Guarantors is subject to any indenture, agreement, instrument or other arrangement of the type described in Section 9.21(b) hereof. (d) Newcom is a Wholly Owned Subsidiary of UIH Chile, Inc. (e) On the date hereof, each of Stock Pledgors is a Wholly Owned Subsidiary of UIH. (f) Acquisition Co. has not engaged in any business, or incurred any liabilities, other than in connection with the transactions contemplated by the Acquisition, the Merger, and this Agreement and the other Basic Documents. -35- 8.15 Properties and Assets. None of the Obligors has any interests in any real property except for the property described in Part A of Schedule IV hereto. None of the Obligors owns any material personal property (including equipment, satellite dishes and wire networks) except for the property described in Part B of Schedule IV hereto. None of the Obligors is party to any material contracts, agreements or other arrangements except for those described in Schedules I and II hereto and those described in Part C of Schedule IV hereto, and none of the Obligors is in default of any of its material obligations under any of such contracts, agreements or other arrangements. Each of the Obligors owns, free and clear of all Liens (other than the Liens permitted pursuant to Section 9.06), has good and marketable title to and enjoys peaceful and undisturbed possession of, or holds pursuant to valid leaseholds, all material Properties that are necessary for the operation and conduct of their respective businesses as conducted on the date hereof. 8.16 True and Complete Disclosure. The information, reports, financial statements, exhibits and schedules furnished in writing by or on behalf of the Obligors to the Administrative Agent or any Lender in connection with the negotiation, preparation or delivery of this Agreement and the other Basic Documents or included herein or therein or delivered pursuant hereto or thereto, when taken as a whole do not contain any untrue statement of fact or omit to state any fact necessary to make the statements herein or therein, in light of the circumstances under which they were made, not misleading in any material respects. All written information furnished after the date hereof by the Company and the other Obligors to the Administrative Agent and the Lenders in connection with this Agreement and the other Basic Documents and the transactions contemplated hereby and thereby will be true, complete and accurate in every material respect, or (in the case of projections) based on good faith estimates, on the date as of which such information is stated or certified. There is no fact known to the Company or any other Obligor that could have a Material Adverse Effect that has not been disclosed herein, in the other Basic Documents or in a report, financial statement, exhibit, schedule, disclosure letter or other writing furnished to the Lenders for use in connection with the transactions contemplated hereby or thereby. 8.17 Investment Holding Company Act. None of the Obligors is an "investment company," or a company "controlled" by an "investment company," within the meaning of the United States Investment Company Act of 1940, as amended. 8.18 Use of Credit. None of the Obligors is engaged principally, or as one of its important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying Margin Stock, and no part of the proceeds of any extension of credit hereunder will be used to buy or carry Margin Stock, as that term is used in Regulation U and Regulation X of the Board of Governors of the Federal Reserve System. 8.19 Solvency. Each of the Obligors has sufficient cash flow to enable it to pay its debts as they mature and has not defaulted in the payment of any of its obligations. 8.20 No Default on Purchase Agreement. Each Obligor, and each other Person, that is a party to the Purchase Agreement has performed or complied in all material respects with all agreements and conditions contained in the Purchase Agreement to the extent required to be performed or complied with on or prior to the making of the initial Loan hereunder. 8.21 Ownership of Collateral. Each of the Obligors is the sole and beneficial owner of the Collateral and no Lien exists or will exist upon the Collateral at any time (and no right or option to acquire the same exists in favor of any Person), except for the Liens created in favor of the Administrative Agent under the Security Documents. 8.22 Liens, etc. Each Lien created by the Security Documents constitutes a valid and perfected Lien on the Property intended to be covered thereby (other than any immaterial items of Property) in favor of the Administrative Agent, free and clear of all other Liens (other than Liens permitted under Section 9.06 hereof); and none of the Basic Documents has been -36- terminated or ceased to be in full force and effect, and none of the Obligors has contested the enforceability of any thereof. 8.23 Year 2000. In connection with the computer software relevant for the normal operation of the business of each of the Company and the other Obligors, (i) each of the Company and the other Obligors is aware of the risks associated with the date change from December 31, 1999 to January 1, 2000, (ii) each of the Company and the other Obligors is taking, or has taken, appropriate steps to remedy any foreseeable problems relating to the year 2000 date change that might materially adversely affect its business, both prior to and following January 1, 2000, and (iii) each of the Company and the other Obligors will complete all year 2000 required modification, validation and implementation, by October 31, 1999, to the extent that failure to do so would have a Material Adverse Effect. Section 9. Covenants of the Obligors. Each Obligor covenants and agrees with the Lenders and the Administrative Agent that, so long as any Commitment or Loan is outstanding and until payment in full of all amounts payable by the Company hereunder: 9.01 Financial Statements, Etc. The Company shall deliver to each of the Lenders: (a) as soon as available and in any event within 45 days after the end of each quarterly fiscal period of each fiscal year of the Company, (x) a consolidated statement of income, retained earnings and cash flow of the Company and its Subsidiaries for such period and for the period from the beginning of the respective fiscal year to the end of such period, and the related consolidated balance sheets of the Company and its Subsidiaries as at the end of such period, setting forth in each case (A) a reconciliation to generally accepted accounting principles in the United States of America, and (B) in comparative form (i) the corresponding figures for the corresponding periods in the preceding fiscal year, and (ii) the corresponding figures for the corresponding periods from the financial projections previously delivered to the Administrative Agent, accompanied by a certificate of a senior financial officer of the Company, which certificate shall state that said financial statements fairly present the financial condition and results of operations of the Company and its Subsidiaries, in each case in accordance with generally accepted accounting principles in Chile, consistently applied, as at the end of, and for, such period (subject to normal year-end audit adjustments), (y) a consolidated statement of revenue of each of the Company's telephony operations ("Telephony Operations") and the Company's cable operations ("Cable Operations") for such period, together with information setting forth gross margins, subscribers, churn, net additions, revenue per unit and Capital Expenditures for such period for Telephony Operations and Cable Operations, and (z) a report setting forth, for each of the Northern, Southern, Santiago and Central Regions of Chile, for each Obligor, the number of Telephony Subscribers, the number (reasonably approximated in accordance with industry standards) of homes and apartments passed by telephony systems, in each case as at the beginning of such period and as at the end of such period, (b) as soon as available and in any event within 90 days after the end of each fiscal year of the Company, (x) consolidated statements of income, retained earnings and cash flow of the Company and its Subsidiaries, and separately for each of the Principal Subsidiaries, for such fiscal year and the related consolidated balance sheets -37- of the Company and its Subsidiaries, and separately for each of the Principal Subsidiaries, as at the end of such fiscal year, setting forth (A) a reconciliation to generally accepted accounting principles in the United States of America, and (B) in each case in comparative form (i) the corresponding consolidated figures for the preceding fiscal year, and (ii) the corresponding figures from the financial projections previously delivered to the Administrative Agent, and accompanied by an opinion thereon of independent certified public accountants of recognized international standing, which opinion shall state that said consolidated financial statements fairly present the consolidated financial condition and results of operations of the Company and its Subsidiaries, and of each of the Principal Subsidiaries, as at the end of, and for, such fiscal year in accordance with generally accepted accounting principles in Chile, and a certificate of such accountants stating that, in making the examination necessary for their opinion, they obtained no knowledge, except as specifically stated, of any Default, and (y) a consolidated statement of revenue of each of the Company's Telephony Operations and the Company's Cable Operations for such period, together with information setting forth gross margins, subscribers, churn, net additions, revenue per unit and Capital Expenditures for such period for Telephony Operations and Cable Operations; (c) as soon as available and in any event within 30 days after the end of each month, a report setting forth, separately for each Obligor, (x) the number of Cable Subscribers and Telephony Subscribers, the number (reasonably approximated in accordance with industry standards) of homes and apartments passed by cable and telephony systems, the number of such Cable Subscribers subscribing for basic service and the number subscribing for premium services, and the number of Telephony Subscribers who are also Cable Subscribers, in each case as at the beginning of such period and as at the end of such period, (y) the number of Cable Subscribers and Telephony Subscribers installed, disconnected and reconnected during such month, and (z) a consolidated statement of revenue of each of the Company's Telephony Operations and the Company's Cable Operations for such period, together with information setting forth gross margins, revenue per unit and Capital Expenditures for such period for Telephony Operations and Cable Operations; (d) promptly upon their becoming available, copies of all reports or other filings, if any, that the Company have filed or made with any Chilean governmental agency or securities exchange; (e) promptly after the Company knows or has reason to believe that any Default has occurred, a notice of such Default describing the same in reasonable detail and, together with such notice or as soon thereafter as possible, a description of the action that the Company has taken or proposes to take with respect thereto; (f) (i) as soon as practicable and in any event not later than 15 days prior to the commencement of each fiscal year, the budget for the Company and its Subsidiaries for such fiscal year prepared on a monthly basis in such detail as shall be satisfactory to the Required Lenders, and (ii) no later than 30 days, and no earlier than 60 days, prior to the consummation of any Post-Closing Financing, the Company's business plan, in such scope and detail as the Administrative Agent may reasonably request, for the period beginning on the date thereof and ending on December 31, 2005; and (g) from time to time such other information regarding the financial condition, operations, business or prospects of the Company or any of its Subsidiaries as any Lender or the Administrative Agent may reasonably request. -38- The Company will furnish to each Lender, at the time it furnishes each set of financial statements pursuant to paragraph (a) or (b) above, a certificate of a senior financial officer of the Company in substantially the form of Exhibit E hereto (i) to the effect that no Default has occurred and is continuing (or, if any Default has occurred and is continuing, describing the same in reasonable detail and describing the action that the Company has taken or proposes to take with respect thereto) and (ii) setting forth in reasonable detail the computations necessary to determine whether the Company is in compliance with Sections 9.07, 9.09, 9.10, 9.11, 9.12, 9.13, 9.14 and 9.20 hereof as of the end of the respective quarterly fiscal period or fiscal year. 9.02 Litigation. The Company will promptly give to each Lender notice of all legal or arbitral proceedings, and of all proceedings by or before any governmental or regulatory authority or agency, and any material development in respect of such legal or other proceedings, affecting the Company or any of its Subsidiaries, except proceedings that, if adversely determined, would not (either individually or in the aggregate) have a Material Adverse Effect and would not purport to affect, to any material extent, the legality, validity or enforceability of the Acquisition, the Merger, the Purchase Agreement or any of the Basic Documents. 9.03 Existence, Etc. Each of the Company and the other Obligors will: (a) preserve and maintain its legal existence and all of its material rights, privileges, licenses and franchises, including, without limitation, the Telecommunications License and (prior to the Galaxy Disposition) the DTH License and such other telecommunications and cable licenses and permits of the Obligors as necessary for them to engage in the business of providing cable television and direct-to- home broadcasting services in Chile, but excluding any that are transferred to another Obligor or are made redundant in connection with a merger permitted under Section 9.05 hereof; (b) comply with the requirements of all applicable laws, rules, regulations and orders of governmental or regulatory authorities (including, without limitation, any laws or regulations relating to employee pensions and employee other benefits and all Environmental Laws) if failure to comply with such requirements could (either individually or in the aggregate) have a Material Adverse Effect; (c) pay and discharge all taxes, assessments and governmental charges or levies imposed on it or on its income or profits or on any of its Property prior to the date on which penalties attach thereto, except for any such tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained; (d) maintain all of its Properties used or useful in its business in good working order and condition, ordinary wear and tear excepted; (e) keep adequate records and books of account, in which complete entries will be made in accordance with generally accepted accounting principles in Chile consistently applied; and (f) permit representatives of any Lender or the Administrative Agent, at its own cost and expense, during normal business hours, to examine, copy and make extracts from its books and records (other than documents to which the Company or the relevant Subsidiary is required, pursuant to an agreement with a third party, to maintain confidential), to inspect any of its Properties, and to discuss its business and affairs with its officers, all to the extent reasonably requested by such Lender or the Administrative Agent (as the case may be). 9.04 Insurance. Each of the Company and the other Obligors will maintain insurance with financially sound and reputable insurance companies, and with respect to Property and risks of a character usually maintained by corporations engaged in Chile in the same or similar business similarly situated, against loss, damage and liability of the kinds and in the amounts customarily maintained by such corporations. The Obligors shall provide that all policies of insurance covering any tangible Property of any of the Obligors entered into after the date hereof are promptly delivered to the Agent, duly endorsed to the Agent for the benefit of the Lenders. -39- 9.05 Prohibition of Fundamental Changes. (a) Neither the Company nor any other Obligor will enter into any transaction of merger or consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution). (b) Neither the Company nor any other Obligor will acquire any material business or Property from, or capital stock of, or be a party to any acquisition of, any Person except for the Acquisition, purchases of inventory and other Property to be sold or used in the ordinary course of business, Investments permitted under Section 9.08 hereof, and Capital Expenditures permitted under Section 9.10 hereof. (c) Neither the Company nor any other Obligor will convey, sell, lease, transfer or otherwise dispose of, in one transaction or a series of transactions, all or a substantial part of its business or Property, whether now owned or hereafter acquired (including, without limitation, receivables and leasehold interests). Neither the Company nor any other Obligor will convey, sell, lease, transfer or otherwise dispose of, any of its Property, whether now owned or hereafter acquired, (x) for less than its fair market value (as determined in good faith by a senior financial officer of the Company) and (y) unless the proceeds thereof are applied to prepay Loans to the extent required by Section 2.09(b). (d) Notwithstanding the foregoing provisions of this Section 9.05: (i) Acquisition Co. and Hipercable may consummate the Merger and the Newcom Acquisition; (ii) any Subsidiary of the Company may be merged or consolidated with or into: (i) the Company if the Company shall be the continuing or surviving corporation or (ii) any other such Subsidiary; (iii) any Subsidiary of the Company may sell, lease, transfer or otherwise dispose of any or all of its Property (upon voluntary liquidation or otherwise and whether or not for fair market value) to the Company or a Wholly Owned Subsidiary of the Company; and (iv) the Company may consummate the Galaxy Disposition. 9.06 Limitation on Liens. Neither the Company nor any other Obligor will create, incur, assume or suffer to exist any Lien upon any of its Property, whether now owned or hereafter acquired, except: (a) Liens created pursuant to the Security Documents; (b) Liens in existence on the date hereof and listed in Part B of Schedule I hereto (excluding, however, following the making of the initial Loans hereunder, Liens securing Indebtedness to be repaid with the proceeds of such Loans, as indicated on said Schedule I); (c) Liens imposed by any governmental authority for taxes, assessments, customs duties or charges not yet due or that are being contested in good faith and by appropriate proceedings if adequate reserves with respect thereto are maintained on the books of the Company or the affected Subsidiaries, as the case may be, in accordance with GAAP; (d) carriers', warehousemen's, mechanics', materialmen's, repairmen's or other like Liens arising in the ordinary course of business that are not overdue for a period of more than 30 days or that are being contested in good faith and by appropriate proceedings and Liens securing judgments but only to the extent for an amount and for a period not resulting in an Event of Default under Section 10(i) hereof; -40- (e) pledges or deposits under worker's compensation, unemployment insurance and other social security legislation; (f) deposits to secure the performance of bids, trade contracts (other than for Indebtedness), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business; (g) easements, rights-of-way, restrictions and other similar encumbrances incurred in the ordinary course of business and encumbrances consisting of zoning restrictions, easements, licenses, restrictions on the use of Property or minor imperfections in title thereto that, in the aggregate, are not material in amount, and that do not in any case materially detract from the value of the Property subject thereto or interfere with the ordinary conduct of the business of the Company or any of its Subsidiaries; and (h) Liens upon real and/or tangible personal Property acquired after the date hereof (by purchase, construction or otherwise) by the Company or any of its Subsidiaries, each of which Liens either (A) existed on such Property before the time of its acquisition and was not created in anticipation thereof or (B) was created solely for the purpose of securing Indebtedness representing, or incurred to finance, refinance or refund, the cost (including the cost of construction) of such Property; provided that (i) no such Lien shall extend to or cover any Property of the Company or such Subsidiary other than the Property so acquired and improvements thereon and (ii) the principal amount of Indebtedness secured by any such Lien shall at no time exceed 80% of the fair market value (as determined in good faith by a senior financial officer of the Company) of such Property at the time it was acquired (by purchase, construction or otherwise); provided, that in no event shall the Company or any other Obligor create, incur, assume or suffer to exist any Lien upon the Telecommunications License or (prior to the Galaxy Disposition) the DTH License. 9.07 Indebtedness. Neither the Company nor any other Obligor will, nor will it permit any of its Subsidiaries to, create, incur or suffer to exist any Indebtedness except: (a) Indebtedness to the Lenders hereunder; (b) Indebtedness outstanding on the date hereof and listed in Part A of Schedule I hereto (excluding, however, following the making of the initial Loans hereunder, the Indebtedness to be repaid with the proceeds of such Loans, as indicated on said Schedule I), and any Indebtedness incurred solely to refinance such Indebtedness; (c) the Subordinated Debt; (d) Indebtedness of Subsidiaries of the Company to the Company or to other Subsidiaries of the Company and Indebtedness of the Company to any of its Subsidiaries; (e) additional unsecured Indebtedness of the Company and its Subsidiaries, the proceeds of which shall be used for working capital by the Company and its Subsidiaries, in an aggregate amount at any one time outstanding not exceeding U.S.$15,000,000 (or the equivalent in other currencies); (f) additional Indebtedness of the Company and its Subsidiaries consisting of Indebtedness secured by Liens permitted by Section 9.06(h) hereof and Capital Lease Obligations, in an aggregate amount at any one time outstanding not exceeding: -41- (i) prior to the first date on which Senior Debt to EBITDA Ratio is less than or equal to 2.0 to 1 (as evidenced by financial statements delivered by the Company to the Lenders), U.S.$5,000,000 (or its equivalent in other currencies), and (ii) thereafter, U.S.$20,000,000 (or its equivalent in other currencies); but only to the extent that such Indebtedness satisfies each of the following conditions: (x) the final maturity of such Indebtedness is after April 29, 2002, (y) less than half of the original amount of such Indebtedness is scheduled to be repaid on or prior to April 29, 2002, and (z) all of the terms thereof (including, without limitation, the final maturity thereof and the scheduled amortization thereof) are satisfactory to the Majority Lenders. (g) additional Indebtedness of the Company and its Subsidiaries consisting of Box Lease Financing in an aggregate amount at any one time outstanding not exceeding U.S.$15,000,000; (h) additional Indebtedness of the Company and its Subsidiaries consisting of Nortel Debt in an aggregate amount at any one time outstanding up to but not exceeding U.S.$5,000,000. 9.08 Investments. Neither the Company nor any other Obligor will make or permit to remain outstanding any Investments except: (a) Investments outstanding on the date hereof and identified in Part B of Schedule II hereto; (b) operating deposit accounts with banks; (c) Permitted Investments; (d) Investments by the Company in any Subsidiary Guarantor; (e) Investments by the Company and its Subsidiaries in capital stock of Subsidiaries of the Company to the extent outstanding on the date of the financial statements of the Company and its Subsidiaries referred to in Section 8.02 hereof and advances by the Company and its Subsidiaries to Subsidiaries of the Company in the ordinary course of business; (f) Hedge Agreements required or permitted to be entered into under Section 9.16 hereof; (g) additional Investments to the extent that the consideration therefor consists solely of capital stock of the Company or any of its Affiliates, so long as (i) such Investments are made in Chilean entities, (ii) such Investments are in the lines of business described in Section 9.17 hereof, (iii) the Company grants the Administrative Agent a first priority perfected Lien upon any equity interest held or acquired in respect of such Investments, and (iv) after giving effect thereto, there would be no Default under Section 10(j) hereof; and (h) additional Investments, so long as: (i) such Investments are made in Chilean entities, (ii) such Investments are in the lines of business described in Section 9.17 hereof, and -42- (iii) if such Investments is made: (A) prior to the date (the "Change Date") on which there shall have been consummated a Post-Closing Financing and/or a Post-Closing Contribution in an aggregate amount at least equal to the Post-Closing Required Amount, the aggregate amount of all such Investments made prior to the Change Date shall not exceed U.S.$5,000,000, and (B) on and after the Change Date, the aggregate amount of all such Investments made on and after the Change Date shall not exceed the sum of the following: (x) U.S.$15,000,000, plus (y) the lesser of (1) U.S.$10,000,000 and (2) the aggregate amount of prepayments of the Loans made on and after the Change Date pursuant to Section 2.09(a) hereof, minus (z) the aggregate amount of Investments made pursuant to Section 9.08(h)(iii)(A) hereof. 9.09 Restricted Payments. (a) Except to the extent the same would not result in an Event of Default under Section 10(e), neither the Company nor any other Obligor will purchase, redeem, retire or otherwise acquire for value, or set apart any money for a sinking, defeasance or other analogous fund for the purchase, redemption, retirement or other acquisition of, or make any voluntary payment or prepayment of the principal of or interest on, or any other amount owing in respect of, any Subordinated Debt. (b) None of the Company's Subsidiaries will purchase or otherwise acquire any shares of any class of stock of the Company or any warrants, options or other rights to acquire the same. (c) The Company will not consent to (i) any modification, supplement or waiver of any of the provisions of the Effective Subordination Documents without the prior approval of the Administrative Agent, or (ii) any modification, supplement or waiver of any other agreement, instrument or other document evidencing or relating to the Subordinated Debt without the prior approval of the Majority Lenders, provided that the Company may replace the holder of the Closing Date Debt with another Eligible Assignee, and enter into appropriate documentation in connection with such replacement. (d) The Company will not, without the consent of the Majority Lenders, consent to any transfer of any of the Closing Date Debt by the holder thereof. (e) Neither the Company nor any other Obligor will pay any management, advisory, consulting or other similar fees to any Affiliate except (i) reimbursements for expenses under the Management Agreements, and (ii) management fees in an aggregate amount not to exceed the aggregate amount of prepayments of Loans made pursuant to Section 2.09(a) hereof, provided, that, with respect to this clause (ii), (w) after giving effect to such payment, the Senior Debt to EBITDA Ratio shall not exceed 4.00 to 1, -43- (x) if such payment is made during any quarterly fiscal period, such payment shall be made (A) after the Administrative Agent receives from the Company a certificate of a senior officer of the Company, as described in the final paragraph of Section 9.01, for the immediately preceding quarterly fiscal period, and (B) in any event, no later than 46 days after the end of such immediately preceding quarterly fiscal period, (y) the Post-Closing Financing shall have been consummated and/or a Post- Closing Contribution shall have been made in an aggregate amount at least equal to the Post-Closing Required Amount, and (z) after giving effect to such payment, no Default shall occur or be continuing. 9.10 Capital Expenditures. The Company will not permit the aggregate amount of Capital Expenditures by the Company and its Subsidiaries to exceed: (a) if a Post-Closing Financing has not been consummated and/or a Post-Closing Contribution has not been made in an aggregate amount at least equal to the Post-Closing Required Amount, then for each fiscal year ending on the respective dates set forth below, the amount set opposite such date: Fiscal Year End Amount December 31, 1999 U.S.$80,000,000 December 31, 2000 U.S.$70,000,000 December 31, 2001 U.S.$50,000,000 (b) if a Post-Closing Financing has been consummated and/or a Post-Closing Contribution has been made in an aggregate amount at least equal to the Post-Closing Required Amount, then for each fiscal year ending on the respective dates set forth below, the amount set opposite such date: Fiscal Year End Amount December 31, 1999 U.S.$80,000,000 December 31, 2000 U.S.$100,000,000 December 31, 2001 U.S.$110,000,000 In addition, in no event will the Company or any of its Subsidiaries enter into commitments or similar arrangements for the purchase of equipment or services in any fiscal year in amounts such that the Company would not be in compliance with its obligations under this Section 9.10 for such fiscal year. 9.11 Total Debt to EBITDA Ratio. The Company will not permit the Total Debt to EBITDA Ratio to exceed 8.00 to 1 as at the last day of any fiscal quarter of the Company, beginning with the fiscal quarter ending on June 30, 1999. 9.12 Debt Service Coverage Ratio. The Company will not permit its Debt Service Coverage Ratio, as at the last day of any fiscal quarter of the Company, to be less than the ratio set forth below opposite the period in which such day occurs: Period Ratio Closing Date to December 30, 2000 1.00 to 1 December 31, 2000 and at all times thereafter 1.50 to 1 -44- 9.13 Senior Debt to EBITDA Ratio. The Company will not permit the Senior Debt to EBITDA Ratio, as at the last day of any fiscal quarter of the Company, to exceed the ratio set forth below opposite the period in which such day occurs: Period Ratio Closing Date to September 29, 2000 5.50 to 1 September 30, 2000 to December 30, 2000 5.00 to 1 December 31, 2000 to March 30, 2001 4.50 to 1 March 31, 2001 to June 29, 2001 4.00 to 1 June 30, 2001 to December 30, 2001 3.50 to 1 December 31, 2001 and at all times thereafter 3.00 to 1 9.14 Interest Coverage Ratio. The Company will not permit the Interest Coverage Ratio, as at the last day of any fiscal quarter of the Company, to be less than the ratio set forth below opposite the period in which such day occurs: Period Ratio Closing Date to December 30, 2000 1.50 to 1 December 31, 2000 to December 30, 2001 2.00 to 1 December 31, 2001 and at all times thereafter 2.50 to 1 9.15 Governmental Approvals. Each Obligor agrees that it will promptly obtain from time to time at its own expense all such governmental licenses, authorizations, consents, permits and approvals as may be required for such Obligor to (a) comply with its obligations, and preserve its rights under, each Basic Document and (b) maintain the existence, priority and perfection of the Liens purported to be created under the Security Documents, in each case, except to the extent the same would not have a Material Adverse Effect. Without in any way limiting the foregoing, the Obligors will cause each Pledge Without Conveyance delivered pursuant to the Agreement to Grant a Pledge Without Conveyance to be duly published in the Diario Oficial de la Republica de Chile within 30 days after the execution and delivery thereof. 9.16 Hedge Agreements. (a) If, at any time, (x) the Eurodollar Rate for any Loans hereunder is in excess of 6-1/2% for more than 90 consecutive days and (y) the Senior Debt to EBITDA Ratio at such time is equal to or greater than 4.0 to 1, the Company will, promptly thereafter, enter into and thereafter maintain in full force and effect one or more Hedge Agreements with one or more of the Lenders that effectively enables the Company (in a manner satisfactory to the Majority Lenders), as at any date, to protect itself against three-month London interbank offered rates as to a notional principal amount at least equal to an amount equal to 50% of the aggregate notional principal amount of the aggregate Indebtedness of the Company and its Subsidiaries for a period of at least two years. (b) In addition, the Company may (but shall not be required to), at any time and from time to time, enter into one or more Hedge Agreements, provided, however, that at no time shall the aggregate notional principal amount of all Indebtedness of the Company and its Subsidiaries covered by Hedge Agreements in respect of interest rate risks exceed 60% of the aggregate notional principal amount of the aggregate Indebtedness of the Company and its Subsidiaries. 9.17 Lines of Business. Neither the Company nor any other Obligor will engage in any line or lines of business activity other than the business of providing video, voice and data services. -45- 9.18 Transactions with Affiliates. Except as expressly permitted by this Agreement, neither the Company nor any other Obligor will directly or indirectly: (a) make any Investment in an Affiliate; (b) transfer, sell, lease, assign or otherwise dispose of any Property to an Affiliate; (c) merge into or consolidate with or purchase or acquire Property from an Affiliate; or (d) enter into any other transaction directly or indirectly with or for the benefit of an Affiliate (including, without limitation, Guarantees and assumptions of obligations of an Affiliate); provided that (x) any Affiliate who is an individual may serve as a director, officer or employee of the Company or any of its Subsidiaries and receive reasonable compensation for his or her services in such capacity and (y) the Company and its Subsidiaries may enter into transactions providing for the leasing of Property, the rendering or receipt of services or the purchase or sale of inventory and other Property in the ordinary course of business if the monetary or business consideration arising therefrom and the other terms thereof would be substantially as advantageous to the Company and its Subsidiaries as the monetary or business consideration and other terms that it would obtain in a comparable transaction with a Person not an Affiliate. 9.19 Use of Proceeds. (a) The Company will use the proceeds of the Loans hereunder solely: (i) in the case of the Tranche A Loans, to (x) finance the Acquisition and to pay costs and expenses incurred in connection therewith, and (y) repay principal of and interest on the promissory note of UIH Chile, Inc., dated June 26, 1997, to VTR S.A. in a principal amount equal to U.S.$7,770,251.00, and (ii) in the case of Tranche B Loans, for working capital purposes and to finance Capital Expenditures in accordance with Section 9.10; provided that neither the Administrative Agent nor any Lender shall have any responsibility as to the use of any of such proceeds. (b) The Company will use the proceeds of any Closing Date Debt, any Post-Closing Debt and the Post-Closing Financing solely to finance Capital Expenditures, for working capital purposes and, to the extent that the same would not result in an Event of Default under Section 10(e), to prepay Closing Date Debt. 9.20 Minimum Telephony Revenue. The Company will not permit the aggregate amount of Telephony Revenue, as at any date set forth below, to be less than amounts set forth below opposite such date: Date Amount June 30, 1999 U.S.$ 5,500,000 September 30, 1999 U.S.$ 9,600,000 December 31, 1999 U.S.$11,600,000 March 31, 2000 U.S.$12,900,000 June 30, 2000 U.S.$15,900,000 September 30, 2000 U.S.$18,700,000 December 31, 2000 U.S.$21,100,000 March 31, 2001 U.S.$23,800,000 June 30, 2001 U.S.$26,100,000 September 30, 2001 U.S.$28,000,000 December 31, 2001 U.S.$29,700,000 March 31, 2002 U.S.$32,100,000 -46- 9.21 Certain Obligations in Respect of Subsidiaries. (a) Each of the Company and any other Obligor will take such action from time to time as shall be necessary to ensure that each of its Subsidiaries is a Wholly Owned Subsidiary (provided that (x) nothing in this Section 9.21(a) shall restrict the ability of the Company to consummate the Galaxy Disposition, (y) 50% of the capital stock of Newcom is owned beneficially and of record by the Company and 50% of the capital stock of Newcom is owned beneficially and of record by UIH Chile, Inc. or the Company, and (z) up to 0.01% of the capital stock of any Subsidiary Guarantor may be held by UIH Chile, Inc.). (b) Each Obligor (other than the Company) will not, after the date of this Agreement, enter into any indenture, agreement, instrument or other arrangement that, directly or indirectly, prohibits or restrains, or has the effect of prohibiting or restraining, or imposes materially adverse conditions upon, the incurrence or payment of Indebtedness, the granting of Liens, the declaration or payment of dividends, the making of loans, advances or Investments or the sale, assignment, transfer or other disposition of Property. (c) Each of the Company and the other Obligors will take such action from time to time as shall be necessary to ensure that all Subsidiaries of the Company are Subsidiary Guarantors and, thereby, "Obligors" hereunder. Without limiting the generality of the foregoing, in the event that the Company or any other Obligor shall form or acquire any new Subsidiary, the Company or the respective Obligor will cause such new Subsidiary to become a "Subsidiary Guarantor" (and, thereby, an "Obligor") hereunder pursuant to a written instrument in form and substance satisfactory to each Lender and the Administrative Agent, to become a party to each Security Document (and to do such things as may be necessary so that its Properties are subject to the Lien of the Security Documents and its capital stock is subject to the Lien of the Stock Pledge Agreement) and to deliver such proof of corporate action, incumbency of officers, opinions of counsel and other documents as is consistent with those delivered by each Obligor pursuant to Section 7.01 hereof upon the Closing Date or as any Lender or the Administrative Agent shall have requested. (d) Each of the Obligors will take such action from time to time as shall be necessary to ensure that all of the capital stock of each Obligor shall be subject to the Lien of the Stock Pledge Agreement. Without limiting the generality of the foregoing, in the event that any Person shall acquire any capital stock of the Company, the Company will cause such Person to become a party to the Stock Pledge Agreement (and it will thereupon become a "Stock Pledgor" hereunder) pursuant to a written instrument in form and substance satisfactory to the Administrative Agent and its Chilean counsel, and to deliver such proof of corporate action, incumbency of officers, opinions of counsel and other documents as is consistent with those delivered by each Stock Pledgor pursuant to Section 7.01 hereof upon the Closing Date or as the Administrative Agent and its Chilean counsel shall have requested. 9.22 Insurance. The Company and the other Obligors agree that, subject to the Lenders' rights with respect to insurance proceeds during the continuance of any Default, they will use the proceeds of any policy of insurance covering tangible Property of the Obligors to repair or replace the property in respect of which such proceeds were received reasonably promptly (but in no event later than six months) after receipt of such proceeds. 9.23 Post-Closing Collateral Matters. (a) Pole Lease Agreements -- The Company agrees that, on and at all times after the date four months after the Closing Date, it will: (i) have caused there to be duly executed and delivered, duly notarized by a notary public in Chile, and duly consented to by the applicable lessors, Conditional Assignments covering leaseholds that represent pole rental agreements covering the services provided to at least 80% of the total number of Cable Subscribers; and -47- (ii) use commercially reasonable efforts to duly execute and deliver, have duly notarized by a notary public in Chile, and have consented to by the applicable lessors, Conditional Assignments covering the remaining 20% of the total number of Cable Subscribers. Concurrently therewith, the Company shall furnish to the Lenders opinions of Chilean counsel, in form and substance satisfactory to the Administrative Agent, as to the perfection and priority of the Liens purported to be created thereby. (b) VTR Larga Distancia Lease Agreements -- The Company agrees that, on and at all times after the date four months after the Closing Date, it will have caused there to be duly executed and delivered, duly notarized by a notary public in Chile, and duly consented to by the applicable lessors, Conditional Assignments covering the VTR Larga Distancia Lease Agreements. Concurrently therewith, the Company shall furnish to the Lenders opinions of Chilean counsel, in form and substance satisfactory to the Administrative Agent, as to the perfection and priority of the Liens purported to be created thereby. (c) License and Concession Pledge Agreement -- The Company agrees that, on and at all times after the date three months after the Closing Date, it will have caused there to be duly executed and delivered, duly notarized by a notary public in Chile, and duly consented to by the applicable Persons, the License and Concession Pledge Agreements. (d) Official Publication of the Pledge Without Conveyance -- The Company shall furnish to the Administrative Agent, by no later than May 15, 1999, a copy of the publication in the Diario Oficial de la Republica de Chile of each Pledge Without Conveyance delivered to the Administrative Agent on or prior to May 15, 1999. (e) Real Property Mortgages -- With respect to each Real Property Mortgage, the Company shall (i) deliver the same to the applicable conservador de bienes raices in Chile by no later than 15 days after the Closing Date, and (ii) furnish to the Administrative Agent, by no later than 30 days after the Closing Date, a certificate of each applicable conservador de bienes raices in Chile to the effect that the Liens created by such Real Property Mortgage have been duly registered in each public registry in Chile in which such registration is necessary to perfect the security interest purported to be granted by such mortgage. Concurrently therewith, the Company shall furnish to the Lenders opinions of Chilean counsel, in form and substance satisfactory to the Administrative Agent, as to the perfection and priority of the Liens purported to be created thereby. (f) Commercial Pledge Agreement -- The Company shall furnish to the Administrative Agent, by no later than 15 days after the Closing Date, a certificate of the departamento de propiedad industrial in Chile to the effect that the Liens created by the Commercial Pledge Agreement have been duly registered in each public registry in Chile in which such registration is necessary to perfect the security interest purported to be granted by such deed. Concurrently therewith, the Company shall furnish to the Lenders opinions of Chilean counsel, in form and substance satisfactory to the Administrative Agent, as to the perfection and priority of the Liens purported to be created thereby. (g) Insurance -- The Company shall furnish to the Administrative Agent, with respect to each policy of insurance covering tangible Property of the Obligors, (i) by no later than five Business Days after the Closing Date, the endorsement of such policies to the Administrative Agent for the benefit of the Lenders, and (ii) by no later than three Business Days after the Closing Date, the acknowledgment of each such insurer to such assignment (it being understood that, so long as no Default is continuing, the Obligors shall be entitled to use any proceeds of any such insurance to repair or replace the property in respect of which such proceeds were received, to the extent that such repair or replacement is effected reasonably promptly (but in no event later than six months) after receipt of such proceeds). (g) Further Assurances -- The Company agrees that from time to time, at the expense of the Company, the Company will, and will cause each of the other Obligors to, promptly execute and deliver all further instruments and documents, -48- and take all further action, that may be reasonably necessary or desirable, or that the Administrative Agent may reasonably request, in order to perfect and protect the assignments, security interests and Liens granted or purported to be granted under the Basic Documents or to enable the Administrative Agent or any Lender to exercise and enforce its rights and remedies under this Agreement or any other Basic Document with respect to any Collateral. Without limiting the generality of the foregoing, the Company will, and will cause each of the other Obligors to (i) execute and file such financing or continuation statements, or amendments thereto, and such other instruments or notices, as may be reasonably necessary or desirable, or as the Administrative Agent may reasonably request, in order to perfect and preserve the assignments, security interests and Liens granted or purported to be granted under the Basic Documents; (ii) furnish to the Administrative Agent, from time to time at the Administrative Agent's request, statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Administrative Agent may reasonably request, all in reasonable detail; and (iii) no later than ten days after the Closing Date, file any amendment to the authorization of the Central Bank of Chile referred to in Section 7.01(n) hereof that the Administrative Agent may request. With respect to the foregoing and the grant of the security interest under the Basic Documents, the Company and each of the other Obligors hereby authorize the Administrative Agent to file one or more financing or continuation statements, and amendments thereto, relative to all or any part of the Collateral without the signature of the Company or any such Obligor where permitted by law. 9.24 Post-Closing Acquisition/Merger Matters. The Company agrees that: (a) it shall, immediately after the making of the initial Loans hereunder, furnish to the Administrative Agent copies of all opinions, certificates and other writings delivered pursuant to the Purchase Agreement, in each case certified by a senior officer of the Company to be true and complete, together with, in the case of each such legal opinion delivered by counsel to UIH or Acquisition Co., a letter from the firm or individual delivering such opinion stating that the Administrative Agent and the Lenders may rely on such opinion as though such opinion was originally addressed; (b) with respect to the public deed prepared by the Company transcribing the minutes of the shareholders' meeting for each of Acquisition Co. and Hipercable approving the Merger, and the abstracts thereof, it shall: (i) immediately after the making of the initial Loans hereunder, and in any event no later than the Business Day after the Closing Date, deliver the same to the Registro de Comercio del Conservador de Bienes Raices de Santiago for filing, (ii) furnish to the Administrative Agent, by no later than 15 days after the Closing Date, a certificate of the Registro de Comercio del Conservador de Bienes Raices de Santiago to the effect that the Merger has been duly registered; (iii) furnish to the Administrative Agent, by no later than seven days after the Closing Date, a copy of the publication in the Diario Oficial de la Republica de Chile of the same. 9.25 Assumption Agreement. Each of Acquisition Co. and Hipercable agrees that, immediately after the consummation of the Merger, Acquisition Co. and Hipercable shall enter into an agreement in which Hipercable expressly assumes the obligations of Acquisition Co. hereunder. -49- Section 10. Events of Default. If one or more of the following events (herein called "Events of Default") shall occur and be continuing: (a) The Company shall default in the payment when due (whether at stated maturity or at mandatory or optional prepayment) of any principal of, or interest on, any Loan or any other amount payable by it hereunder or under any other Basic Document; or (b) Any Relevant Party shall default in the payment when due (beyond any applicable grace or cure period) of any principal of or interest on any of its other Indebtedness aggregating U.S.$5,000,000 (or the equivalent in other currencies) or more, or in the payment when due of any amount under any Hedge Agreement; or any event specified in any note, agreement, indenture or other document evidencing or relating to any such Indebtedness aggregating U.S.$5,000,000 (or the equivalent in other currencies) or more, or any event specified in any Hedge Agreement shall occur if the effect of such event is to cause, or (after the expiration of any applicable cure period) to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause, such Indebtedness to become due, or to be prepaid in full (whether by redemption, purchase, offer to purchase or otherwise), prior to its stated maturity (except to the extent that, in the case of any Indebtedness representing the purchase price of equipment where there is a dispute between an Obligor and the vendor of such equipment, the holder of such Indebtedness has been indefinitely stayed from exercising any right or remedy with respect to such Indebtedness) or, in the case of an Hedge Agreement, to permit the payments owing under such Hedge Agreement to be liquidated; or (c) Any representation, warranty or certification made or deemed made herein or in any other Basic Document (or in any modification or supplement hereto or thereto) by any Relevant Party, or any certificate furnished to any Lender or the Administrative Agent pursuant to the provisions hereof or thereof, shall prove to have been false or misleading as of the time made or furnished in any material respect; or (d) The Company or any other Obligor shall default in the performance of any of its obligations under any of Sections 9.01(e), 9.05, 9.06, 9.07, 9.08, 9.09, 9.10, 9.11, 9.12, 9.13, 9.14, 9.16, 9.19, 9.20, 9.22, 9.23, 9.24 or 9.25 hereof; or any Relevant Party shall default in the performance of any of its other obligations in this Agreement or any other Basic Document and such default shall continue unremedied for a period of fourteen or more days after notice thereof to the Company by the Administrative Agent or any Lender (through the Administrative Agent); or (e) The Company shall declare or make any Dividend Payment or any payments in respect of any Subordinated Debt at any time, other than a prepayment of Closing Date Debt so long as (i) the aggregate amount of all such prepayments does not exceed the sum of (x) the aggregate amount of the Post-Closing Financing and the Post-Closing Contribution, minus (y) the Post-Closing Required Amount, (ii) additional Tranche B Loan Commitments in an aggregate amount at least equal to U.S.$50,000,000 have been provided pursuant to Section 2.03(b) hereof, and (iii) the Company shall have demonstrated to the satisfaction of the Required Lenders that, on a pro forma basis, after giving effect to the incurrence of such additional Post-Closing Financing and Post-Closing Contribution, the Company and each Obligor will be in compliance with all of its obligations under Section 9 and no Default will have occurred or be continuing; or (f) Any Relevant Party shall admit in writing its inability to, or be generally unable to, pay its debts as such debts become due; or (g) Any Relevant Party shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee, examiner or liquidator of itself or of all or a substantial part of its Property, (ii) make a general assignment for the benefit of its creditors, (iii) commence a voluntary case under any applicable law relating to bankruptcy or insolvency, (iv) file a petition seeking to -50- take advantage of any other law relating to bankruptcy, insolvency, reorganization, liquidation, dissolution, arrangement or winding-up, or composition or readjustment of debts (except as expressly contemplated by and pursuant to Section 9.05 hereof), (v) fail to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against it in an involuntary case under any applicable law relating to bankruptcy or insolvency or (vi) take any corporate action for the purpose of effecting any of the foregoing; or (h) A proceeding or case shall be commenced, without the application or consent of the affected Relevant Party, in any court of competent jurisdiction, seeking (i) its reorganization, liquidation, dissolution, arrangement or winding-up, or the composition or readjustment of its debts, (ii) the appointment of a receiver, custodian, trustee, examiner, liquidator or the like of such Relevant Party or of all or any substantial part of its Property, or (iii) similar relief in respect of such Relevant Party under any law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of debts, and such proceeding or case shall continue undismissed, or a court order, judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of 60 or more days (each Lender agreeing to respond within ten Business Days to any request by the Company for an extension of this grace period (without any obligation on the part of any Lender to so consent)); or a court order for relief against any Relevant Party shall be entered in an involuntary case under any applicable law relating to bankruptcy or insolvency; or (i) (i) A final judgment or judgments for the payment of money for which the amount is in excess of U.S.$5,000,000 (or the equivalent in other currencies), exclusive of judgment amounts fully covered by insurance, or the amount is in excess of U.S.$20,000,000 (or the equivalent in other currencies), regardless of insurance coverage, in the aggregate shall be rendered by one or more courts, administrative tribunals or other bodies having jurisdiction against any Relevant Party and the same shall not be discharged (or provision shall not be made for such discharge), vacated, bonded or a stay of execution thereof shall not be procured, within 30 days from the date of entry thereof and such Relevant Party shall not, within said period of 30 days, or such longer period during which execution of the same shall have been stayed, appeal therefrom and cause the execution thereof to be stayed during such appeal; or (ii) any non-monetary judgment or order shall be rendered against the Company or any of the other Obligors that could reasonably be expected to have a Material Adverse Effect, and there shall be any period of 15 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or (j) any of the following: (x) either (A) UIH shall cease to own beneficially and control (either directly or indirectly) at least 51% of the issued and outstanding capital stock or other equity interests (or securities convertible into equity interests) in the Company having the right to vote, or at least 51% of all of the issued and outstanding capital stock or other equity interests (or securities convertible into equity interests) in the Company, or (B) UIH shall cease to have the power (whether by ownership of capital stock, contract or otherwise) to control the management or policies of the Company, (y) any Person or two or more Persons acting in concert shall have entered into a contract or arrangement that, upon consummation, will result in one or more of the events described in clause (x) above, or (z) any of the shares of capital stock or other equity interests (or securities convertible into equity interests) of the Company held by UIH shall be subject to any Lien (other than Liens created in favor of the Lenders under the Basic Documents); or -51- (k) The Liens created by the Security Documents shall at any time not constitute a valid and perfected Lien on the Property intended to be covered thereby (other than any immaterial items of Property) in favor of the Administrative Agent, free and clear of all other Liens (other than Liens permitted under Section 9.06 hereof), or, the Administrative Agent shall cease to have a valid and perfected first priority Lien on 100% of the issued and outstanding capital stock of, or other equity interests in, any Obligor, or, except for expiration in accordance with its terms, any of the Basic Documents shall for whatever reason be terminated or cease to be in full force and effect, or the enforceability thereof shall be contested by any Relevant Party; or (l) Any license, consent, authorization, registration or approval at any time necessary to enable any Relevant Party to comply with any of its obligations under this Agreement or any other Basic Document shall be revoked, withdrawn or withheld or shall be modified or amended, which revocation, withdrawal, withholding, modification or amendment could reasonably be expected to have a Material Adverse Effect; or (m) Any governmental authority shall take any action to condemn, seize, nationalize or appropriate any substantial portion of the Property of the Obligors (either with or without payment of compensation) or shall take any action which materially adversely affects any Relevant Party's ability to perform its obligations under this Agreement or any of the other Basic Documents; or the Company or any Subsidiary Guarantor shall be prevented from exercising normal control over all or a substantial part of its Property; or (n) Chile or any competent authority thereof shall declare a moratorium on the payment of Indebtedness by Chile or any governmental agency or authority thereof or corporations therein, or Chile shall cease to be a member in good standing of the International Monetary Fund or shall cease to be eligible to utilize the resources of the International Monetary Fund under the Articles of Agreement thereof, or the international monetary reserves of Chile shall become subject to any Lien; or (o) Any event, circumstance or condition shall have occurred that has had a Material Adverse Effect; or (p) An additional U.S.$50,000,000 in Tranche B Loan Commitments shall not have been provided pursuant to Section 2.03(b) hereof on or prior to August 29, 1999; THEREUPON: (1) in the case of any Event of Default other than one referred to in clause (g) or (h) of this Section 10, the Administrative Agent may, and, if so requested by the Majority Lenders, shall, by notice to the Company, terminate the Commitments and/or declare the principal amount then outstanding of, and the accrued interest on, the Loans and all other amounts payable by the Obligors hereunder and under the Notes (including, without limitation, any amounts payable under Section 5.05 hereof) to be forthwith due and payable, whereupon such amounts shall be immediately due and payable without presentment, demand, protest or other formalities of any kind, all of which are hereby expressly waived by each Obligor; and (2) in the case of the occurrence of an Event of Default referred to in clause (g) or (h) of this Section 10, the Commitments shall be automatically be terminated and the principal amount then outstanding of, and the accrued interest on, the Loans and all other amounts payable by the Obligors hereunder and under the Notes (including, without limitation, any amounts payable under Section 5.05 hereof) shall automatically become immediately due and payable without presentment, demand, protest or other formalities of any kind, all of which are hereby expressly waived by each Obligor. Section 11. The Administrative Agent. 11.01 Appointment, Powers and Immunities. Each Lender hereby irrevocably appoints and authorizes the Administrative Agent to act as its agent hereunder and under the other Basic Documents with such powers as are -52- specifically delegated to the Administrative Agent by the terms of this Agreement and of the other Basic Documents, together with such other powers as are reasonably incidental thereto. The Administrative Agent (which term as used in this sentence and in Section 11.05 and the first sentence of Section 11.06 hereof shall include reference to its affiliates and its own and its affiliates' officers, directors, employees and agents): (a) shall have no duties or responsibilities except those expressly set forth in this Agreement and in the other Basic Documents, and shall not by reason of this Agreement or any other Basic Document be a trustee for any Lender; (b) shall not be responsible to the Lenders for any recitals, statements, representations or warranties contained in this Agreement or in any other Basic Document, or in any certificate or other document referred to or provided for in, or received by any of them under, this Agreement or any other Basic Document, or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement, any Note or any other Basic Document or any other document referred to or provided for herein or therein or for any failure by the Company or any other Person to perform any of its obligations hereunder or thereunder; (c) shall not be required to initiate or conduct any litigation or collection proceedings hereunder or under any other Basic Document; and (d) shall not be responsible for any action taken or omitted to be taken by it hereunder or under any other Basic Document or under any other document or instrument referred to or provided for herein or therein or in connection herewith or therewith, except for its own gross negligence or willful misconduct. The Administrative Agent may employ agents and attorneys-in-fact and shall not be responsible for the negligence or misconduct of any such agents or attorneys-in-fact selected by it in good faith. The Administrative Agent may deem and treat the payee of any Note as the holder thereof for all purposes hereof unless and until a notice of the assignment or transfer thereof shall have been filed with the Administrative Agent. 11.02 Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely upon any certification, notice or other communication (including, without limitation, any thereof by telephone, facsimile, telex, telegram or cable) believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons, and upon advice and statements of legal counsel, independent accountants and other experts selected by the Administrative Agent. As to any matters not expressly provided for by this Agreement or any other Basic Document, the Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder or thereunder in accordance with instructions given by the Majority Lenders or, if provided herein, in accordance with the instructions given by all of the Lenders and such instructions of such Lenders and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders. 11.03 Defaults. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of a Default unless the Administrative Agent has received notice from a Lender or the Company specifying such Default and stating that such notice is a "Notice of Default". In the event that the Administrative Agent receives such a notice of the occurrence of a Default, the Administrative Agent shall give prompt notice thereof to the Lenders. The Administrative Agent shall (subject to Section 11.07 hereof) take such action with respect to such Default as shall be directed by the Majority Lenders provided that, unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default as it shall deem advisable in the best interest of the Lenders except to the extent that this Agreement expressly requires that such action be taken, or not be taken, only with the consent or upon the authorization of the Majority Lenders or all of the Lenders. 11.04 Rights as a Lender. With respect to any Commitment of or Loan made by The Toronto-Dominion Bank or any of its affiliates, The Toronto-Dominion Bank or such affiliate (as the case may be) shall have the same rights and powers hereunder as any other Lender and may exercise the same as though TD were not acting as the Administrative Agent, and the term "Lender" or "Lenders" shall, unless the context otherwise indicates, include The Toronto-Dominion Bank. The Toronto-Dominion Bank or such affiliates, as the case may be, may (without having to account therefor to any Lender) accept deposits from, lend money to, make investments in and generally engage in any kind of banking or other business with the Obligors (and any of their Subsidiaries or Affiliates) as if TD were not acting as the Administrative Agent, and The Toronto-Dominion Bank and its affiliates may accept fees and other consideration from the Obligors for services in connection with this Agreement or otherwise without having to account for the same to the Lenders. -53- 11.05 Indemnification. The Lenders agree to indemnify the Administrative Agent (to the extent not reimbursed under Section 12.03 hereof, but without limiting the obligations of the Company under said Section 12.03) ratably in accordance with the aggregate principal amount of the Loans held by the Lenders (or, if no Loans are at the time outstanding, ratably in accordance with their respective Commitments), for any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever that may be imposed on, incurred by or asserted against the Administrative Agent (including by any Lender) arising out of or by reason of any investigation in or in any way relating to or arising out of this Agreement or any other Basic Document or any other documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby (including, without limitation, the costs and expenses that the Company is obligated to pay under Section 12.03 hereof but excluding, unless a Default has occurred and is continuing, normal administrative costs and expenses incident to the performance of its agency duties hereunder) or the enforcement of any of the terms hereof or thereof or of any such other documents, provided that no Lender shall be liable for any of the foregoing to the extent they arise from the gross negligence or willful misconduct of the party to be indemnified. 11.06 Non-Reliance on Administrative Agent and Other Lenders. Each Lender agrees that it has, independently and without reliance on the Administrative Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own credit analysis of the Company and its Subsidiaries and decision to enter into this Agreement and that it will, independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own analysis and decisions in taking or not taking action under this Agreement or under any other Basic Document. The Administrative Agent shall not be required to keep itself informed as to the performance or observance by any Obligor of this Agreement or any of the other Basic Documents or any other document referred to or provided for herein or therein or to inspect the Properties or books of the Company or any of its Subsidiaries. Except for notices, reports and other documents and information expressly required to be furnished to the Lenders by the Administrative Agent hereunder or under the Security Documents, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the affairs, financial condition or business of the Company or any of its Subsidiaries (or any of their affiliates) that may come into the possession of the Administrative Agent or any of its affiliates. 11.07 Failure to Act. Except for action expressly required of the Administrative Agent hereunder and under the other Basic Documents, the Administrative Agent shall in all cases be fully justified in failing or refusing to act hereunder and thereunder unless it shall receive further assurances to its satisfaction from the Lenders of their indemnification obligations under Section 11.05 hereof against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action. 11.08 Resignation or Removal of Administrative Agent. Subject to the appointment and acceptance of a successor Administrative Agent as provided below, the Administrative Agent may resign at any time by giving notice thereof to the Lenders and the Company, and the Administrative Agent may be removed at any time with or without cause by the Majority Lenders. Upon any such resignation or removal, the Majority Lenders shall have the right to appoint a successor Administrative Agent. If no successor Administrative Agent shall have been so appointed by the Majority Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent's giving of notice of resignation or the Majority Lenders' removal of the retiring Administrative Agent, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent, that shall be a financial institution that has an office in New York, New York. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. After any retiring Administrative Agent's resignation or removal hereunder as Administrative Agent, the provisions -54- of this Section 11 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Administrative Agent. 11.09 Consents under Other Basic Documents. Except as otherwise provided in Section 12.05 hereof with respect to this Agreement, the Administrative Agent may, with the prior consent of the Majority Lenders (but not otherwise), consent to any modification, supplement or waiver under any of the Basic Documents, provided that, without the prior consent of each Lender, the Administrative Agent shall not (except as provided herein or in the Security Documents) release any collateral or otherwise terminate any Lien under any Basic Document providing for collateral security, or agree to additional obligations being secured by such collateral security. Section 12. Miscellaneous. 12.01 Waiver. No failure on the part of the Administrative Agent or any Lender to exercise and no delay in exercising, and no course of dealing with respect to, any right, power or privilege under this Agreement or any Note shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege under this Agreement or any Note preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. 12.02 Notices. All notices, requests and other communications provided for herein and under the Security Documents (including, without limitation, any modifications of, or waivers, requests or consents under, this Agreement) shall be given or made in writing (including, without limitation, by facsimile) delivered to the intended recipient at the "Address for Notices" specified below its name on the signature pages hereof (below the name of the Company, in the case of any Subsidiary Guarantor); or, as to any party, at such other address as shall be designated by such party in a notice to each other party. Except as otherwise provided in this Agreement, all such communications shall be deemed to have been duly given when transmitted by facsimile or personally delivered or, in the case of a mailed notice, upon receipt, in each case given or addressed as aforesaid. 12.03 Expenses. The Company agrees to pay or reimburse each of the Lenders and the Administrative Agent for: (a) all reasonable out-of-pocket costs and expenses of the Administrative Agent (including, without limitation, the reasonable fees and expenses of Mayer, Brown & Platt, special New York counsel to the Administrative Agent, and Philippi, Yrarrazaval, Pulido y Brunner, special Chilean counsel to the Administrative Agent) in connection with (i) the negotiation, preparation, execution and delivery of this Agreement and the other Basic Documents and the making of the Loans hereunder and (ii) the negotiation or preparation of any modification, supplement or waiver of any of the terms of this Agreement or any of the other Basic Documents (whether or not consummated). (b) all reasonable out-of-pocket costs and expenses of each of the Lenders and the Administrative Agent (including, without limitation, the reasonable fees and expenses of legal counsel) in connection with (i) any Default and any enforcement or collection proceedings resulting therefrom, including, without limitation, all manner of participation in or other involvement with (x) bankruptcy, insolvency, receivership, foreclosure, winding up or liquidation proceedings, (y) judicial or regulatory proceedings and (z) workout, restructuring or other negotiations or proceedings (whether or not the workout, restructuring or transaction contemplated thereby is consummated) and (ii) the enforcement of this Section 12.03; and (c) all transfer, stamp, documentary or other similar taxes, assessments or charges levied by any governmental or revenue authority in respect of this Agreement or any of the other Basic Documents or any other document referred to herein or therein and all costs, expenses, taxes, assessments and other charges incurred in connection with any filing, registration, recording or perfection of any security interest contemplated by any Basic Document or any other document referred to therein. -55- 12.04 Indemnification. The Company hereby agrees to indemnify the Administrative Agent and each Lender and their respective affiliates, directors, officers, employees, attorneys and agents from, and hold each of them harmless against, any and all losses, liabilities, claims, damages or expenses incurred by any of them (including, without limitation, any and all losses, liabilities, claims, damages or expenses incurred by the Administrative Agent to any Lender, whether or not the Administrative Agent or any Lender is a party thereto) arising out of or by reason of any investigation or litigation or other proceedings (including any threatened investigation or litigation or other proceedings) relating to the Loans hereunder, any actual or proposed use by the Company or any of its Subsidiaries of the proceeds of any of the Loans hereunder or any Environmental Laws or any Environmental Claim, including, without limitation, the reasonable fees and disbursements of counsel incurred in connection with any such investigation or litigation or other proceedings (but excluding any such losses, liabilities, claims, damages or expenses incurred by reason of the gross negligence or willful misconduct of the Person to be indemnified). 12.05 Amendments, Etc. Except as otherwise expressly provided in this Agreement, any provision of this Agreement may be modified or supplemented only by an instrument in writing signed by the Company and the Majority Lenders, or by the Company and the Administrative Agent acting with the consent of the Majority Lenders, and any provision of this Agreement may be waived by the Majority Lenders or by the Administrative Agent acting with the consent of the Majority Lenders; provided that: (a) no modification, supplement or waiver shall, unless by an instrument signed by all of the Lenders or by the Administrative Agent acting with the consent of all of the Lenders: (i) increase (except as provided in Section 2.03(b) hereof), or extend the term of any of the Commitments, or extend the time or waive any requirement for the reduction or termination of any of the Commitments, (ii) extend the date fixed for the payment of principal of or interest on any Loan or any fee hereunder, (iii) reduce the amount of any such payment of principal, (iv) reduce the rate at which interest is payable thereon or any fee is payable hereunder, (v) alter the rights or obligations of the Company to prepay Loans, (vi) alter the terms of Section 4.02 or this Section 12.05, (vii) modify the definition of the term "Majority Lenders" or the term "Required Lenders", or modify in any other manner the number or percentage of the Lenders required to make any determinations or waive any rights hereunder or to modify any provision hereof (including the requirement set forth in Section 11.09 hereof), (viii) waive any of the conditions precedent set forth in Section 7.01 hereof or set forth in Section 7.02 hereof (insofar as such conditions in Section 7.02 are required to be met in connection with the initial borrowing hereunder), or (ix) release any Subsidiary Guarantor from its obligations under Section 6 hereof; (b) any modification or supplement of Section 11 hereof shall require the consent of the Administrative Agent; and (c) any modification or supplement of Section 6 hereof shall require the consent of each Subsidiary Guarantor. 12.06 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. 12.07 Assignments and Participations. (a) No Obligor may assign any of its rights or obligations hereunder or under the Notes without the prior consent of all of the Lenders, the Administrative Agent and the Central Bank of Chile. (b) Each Lender may assign any of its Loans, its Notes, and its Commitments to any Eligible Assignee; provided that (i) any such partial assignment shall be in an amount at least equal to U.S.$3,000,000 (or, with respect to assignments among Lenders, U.S.$1,000,000); (ii) each such assignee Lender shall be a bank or registered as a financial institution with the Central Bank of Chile; -56- (iii) each such assignment by a Lender of its Loan shall have the prior authorization of the Central Bank of Chile; (iv) each such partial assignment by a Lender of any of its Loans, Notes or Commitments of any Tranche shall be made in such manner so that the same portion of its Loans, Notes and Commitment of such Tranche are assigned to the respective assignee; and (v) each such assignment by a Lender of any of its Loans, Notes or Commitments of any Tranche shall be made in such manner so that the same portion of its Loans, Notes and Commitment of the other Tranche are assigned to the respective assignee. Upon execution and delivery by the assignee to the Company and the Administrative Agent of an instrument in writing pursuant to which such assignee agrees to become a "Lender" hereunder (if not already a Lender) having the Commitment and Loan specified in such instrument, and the assignee shall have, to the extent of such assignment (unless otherwise provided in such assignment with the consent of the Company and the Administrative Agent, such consents not to be unreasonably withheld or delayed), the obligations, rights and benefits of a Lender hereunder holding the Commitment and Loan (or portions thereof) assigned to it (in addition to the Commitment and Loan, if any, theretofore held by such assignee) and the assigning Lender shall, to the extent of such assignment, be released from the Commitment (or portion thereof) so assigned, but shall be entitled to indemnification and other rights under this Agreement and the other Basic Documents with respect to the period prior to the date of such assignment. Upon each such assignment the assigning Lender shall pay the Administrative Agent an assignment fee of U.S.$3,500. The Company agrees to use its best efforts to cause any assignment proposed to be made pursuant to this Section 12.07(b) to be authorized by the Central Bank of Chile. (c) A Lender may sell or agree to sell to one or more other Persons a participation in all or any part of any Loan held by it, or in any of its Commitments, in which event each purchaser of a participation (a "Participant") shall be entitled to the rights and benefits of the provisions of Section 9.03(f) hereof with respect to its participation in such Loan and Commitment as if (and the Company shall be directly obligated to such Participant under such provisions as if) such Participant were a "Lender" for purposes of said Section, but, except as otherwise provided in Section 4.07(c) hereof with respect to participations purchased pursuant to Section 4.07 (b) hereof, shall not have any other rights or benefits under this Agreement or any Note or any other Basic Document (the Participant's rights against such Lender in respect of such participation to be those set forth in the agreements executed by such Lender in favor of the Participant). All amounts payable by the Company to any Lender under Section 5 hereof in respect of any Loan held by it, and its Commitments, shall be determined as if such Lender had not sold or agreed to sell any participations in such Loan and Commitments, and as if such Lender were funding each of such Loan and Commitments in the same way that it is funding the portion of such Loan and Commitments in which no participations have been sold. In no event shall a Lender that sells a participation agree with the Participant to take or refrain from taking any action hereunder or under any other Basic Document except that such Lender may agree with the Participant that it will not, without the consent of the Participant, agree to (i) increase or extend the term, or extend the time or waive any requirement for the reduction or termination, of such Lender's Commitment, (ii) extend the date fixed for the payment of principal of or interest on the Loan or any portion of any fee hereunder payable to the Participant, (iii) reduce the amount of any such payment of principal, (iv) reduce the rate at which interest is payable thereon, or any fee hereunder payable to the Participant, to a level below the rate at which the Participant is entitled to receive such interest or fee, (v) alter the rights or obligations of the Company to prepay the Loans or (vi) consent to any modification, supplement or waiver hereof or of any of the other Basic Documents to the extent that the same, under Section 11.09 or 12.05 hereof, requires the consent of each Lender. (d) In addition to the assignments and participations permitted under the foregoing provisions of this Section 12.07, any Lender may (without notice to the Company, the Administrative Agent or any other Lender and without payment of any fee) (i) assign and pledge all or any portion of its Loan and its Note to any Federal Reserve Bank as collateral security pursuant to Regulation A and any Operating Circular issued by such Federal Reserve Bank, and (ii) assign all or any portion of its rights under this Agreement and its Loan and its Note to an affiliate, so long as such assignee is a bank or registered as a financial institution with the Central Bank of Chile. No such assignment shall release the assigning Lender from its obligations hereunder, provided that each such assignment by a Lender of its loan shall have the prior authorization of the Central Bank of Chile. -57- (e) A Lender may furnish any information concerning the Company or any of its Subsidiaries in the possession of such Lender from time to time to assignees and participants (including prospective assignees and participants), provided that such assignee or participant shall have agreed, pursuant to its customary confidentiality agreement, to keep such information confidential. (f) Anything in this Section 12.07 to the contrary notwithstanding, no Lender may assign or participate any interest in any Loan held by it hereunder to the Company or any of its Affiliates or Subsidiaries without the prior consent of each Lender. 12.08 Survival. The obligations of the Company under Sections 5.01, 5.04, 5.05, 12.03 and 12.04 hereof, the obligations of each Subsidiary Guarantor under Sections 6.03 and 6.04 hereof, the obligations of the Lenders under Section 11.05 hereof, and the provisions of Sections 12.11, 12.12, 12.13, 12.14 and 12.15 shall survive the repayment of the Loans and the termination of the Commitments. In addition, each representation and warranty made, or deemed to be made by a notice of any Loan, herein or pursuant hereto shall survive the making of such representation and warranty, and no Lender shall be deemed to have waived, by reason of making any Loan, any Default that may arise by reason of such representation or warranty proving to have been false or misleading, notwithstanding that such Lender or the Administrative Agent may have had notice or knowledge or reason to believe that such representation or warranty was false or misleading at the time such Loan was made. 12.09 Captions; Integration. The table of contents and captions and section headings appearing herein are included solely for convenience of reference and are not intended to affect the interpretation of any provision of this Agreement. This Agreement, the Notes and the other Basic Documents constitute the entire understanding among the parties hereto with respect to the subject matter hereof and supersede any agreements, written or oral, with respect thereto, entered into prior to the date of this Agreement. 12.10 Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Agreement by signing any such counterpart. 12.11 Judgment Currency. This is an international loan transaction in which the specification of Dollars and payment in New York City is of the essence, and the obligations of the Obligors under this Agreement to make payment to (or for the account of) a Lender in Dollars shall not be discharged or satisfied by any tender or recovery pursuant to any judgment expressed in or converted into any other currency or in another place except to the extent that such tender or recovery results in the effective receipt by such Lender in New York City of the full amount of Dollars payable to such Lender under this Agreement. If for the purpose of obtaining judgment in any court it is necessary to convert a sum due hereunder in Dollars into another currency (in this Section 12.11 called the "judgment currency"), the rate of exchange that shall be applied shall be that at which in accordance with normal banking procedures the Administrative Agent could purchase such Dollars at its New York City office with the judgment currency on the Business Day next preceding the day on which such judgment is rendered. The obligation of the Obligors in respect of any such sum due from it to the Administrative Agent or any Lender hereunder or under any Basic Document (in this Section 12.11 called an "Entitled Person") shall, notwithstanding the rate of exchange actually applied in rendering such judgment, be discharged only to the extent that on the Business Day following receipt by such Entitled Person of any sum adjudged to be due hereunder in the judgment currency such Entitled Person may in accordance with normal banking procedures purchase and transfer Dollars to New York City with the amount of the judgment currency so adjudged to be due; and each of the Obligors hereby, as a separate obligation and notwithstanding any such judgment, agrees to indemnify such Entitled Person against, and to pay such Entitled Person on demand, in Dollars, the amount (if any) by which the sum originally due to such Entitled Person in Dollars hereunder exceeds the amount of the Dollars so purchased and transferred. -58 12.12 Governing Law. This Agreement shall be governed by, and construed in accordance with, the law of the State of New York, United States of America. 12.13 Jurisdiction; Service of Process; Venue. (a) Each Obligor hereby agrees that any suit, action or proceeding with respect to this Agreement, any Note, any other Basic Document (other than the Security Documents) or any judgment entered by any court in respect of any thereof may be brought in the Supreme Court of the State of New York, County of New York or in the United States District Court for the Southern District of New York, as the party commencing such suit, action or proceeding may elect in its sole discretion; and each Obligor hereby irrevocably and unconditionally submits to the jurisdiction of such courts for the purpose of any suit, action, proceeding or judgment. Each Obligor hereby further irrevocably and unconditionally submits, for the purpose of any such suit, action, proceedings or judgment brought against it (including any suit, action, proceedings or judgement relating to any of the Security Documents), to any ordinary court of justice of the City and Comuna of Santiago, Chile. Each Obligor agrees that final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by law suit on the judgment or in any other manner permitted by law. (b) Each Obligor hereby agrees that service of all writs, process and summonses in any such suit, action or proceeding brought in the State of New York may be made upon CT Corporation, presently located at 1633 Broadway, New York, New York 10019, U.S.A. (the "Process Agent"), and each Obligor hereby confirms and agrees that the Process Agent has been duly and irrevocably appointed as its agent and true and lawful attorney-in-fact in its name, place and stead to accept such service of any and all such writs, process and summonses, and agrees that the failure of the Process Agent to give any notice of any such service of process to such Obligor shall not impair or affect the validity of such service or of any judgment based thereon. Each Obligor hereby further irrevocably consents to the service of process in any suit, action or proceeding in said courts by the mailing thereof by the Administrative Agent or any Lender by registered or certified mail, postage prepaid, at its address set forth beneath its signature hereto. (c) Nothing herein shall in any way be deemed to limit the ability of the Administrative Agent or any Lender to serve any such writs, process or summonses in any other manner permitted by applicable law or to obtain jurisdiction over any Obligor in such other jurisdictions, and in such manner, as may be permitted by applicable law. (d) Each Obligor hereby irrevocably waives any objection that it may now or hereafter have to the laying of the venue of any suit, action or proceeding arising out of or relating to this Agreement, the Notes or any other Basic Document brought in the Supreme Court of the State of New York, County of New York or in the United States District Court for the Southern District of New York, and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. (e) Each Obligor irrevocably waives, to the fullest extent permitted by applicable law, any claim that any action or proceeding commenced by the Administrative Agent or any Lender relating in any way to this Agreement should be dismissed or stayed by reason, or pending the resolution, of any action or proceeding commenced by any Obligor relating in any way to this Agreement whether or not commenced earlier. To the fullest extent permitted by applicable law, the Obligors shall take all measures necessary for any such action or proceeding commenced by the Administrative Agent or any Lender to proceed to judgment prior to the entry of judgment in any such action or proceeding commenced by any Obligor. 12.14 No Immunity. To the extent that any Obligor may be or become entitled, in any jurisdiction in which judicial proceedings may at any time be commenced with respect to this Agreement or any other Basic Document, to claim for itself or its Property any immunity from set-off, suit, court jurisdiction, attachment prior to judgment, attachment in aid of execution of a judgment, execution of a judgment or from any other legal process or remedy relating to its obligations under this Agreement or any other Basic Document, and to the -59- extent that in any such jurisdiction there may be attributed such an immunity (whether or not claimed), each of the Obligors hereby irrevocably agrees not to claim and hereby irrevocably waives such immunity to the fullest extent permitted by the laws of such jurisdiction and agrees that the foregoing waiver shall have the fullest extent permitted under the Foreign Sovereign Immunities Act of 1976 of the United States of America and is intended to be irrevocable for purposes of such Act. 12.15 Waiver of Jury Trial. EACH OF THE OBLIGORS, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. 12.16 Use of English Language. This Agreement has been negotiated and executed in the English language. All certificates, reports, notices and other documents and communications given or delivered pursuant to this Agreement shall be in the English language, or accompanied by a certified English translation thereof. Except in the case of laws of, or official communications of, Chile, in the case of any document originally issued in a language other than English, the English language version of any such document shall for purposes of this Agreement, and absent manifest error, control the meaning of the matters set forth therein. 12.17 Confidentiality. Each Lender and the Administrative Agent agrees (on behalf of itself and each of its affiliates, directors, officers, employees and representatives) to use reasonable precautions to keep confidential, in accordance with their customary procedures for handling confidential information of the same nature and in accordance with safe and sound banking practices, any non-public information supplied to it by the Company pursuant to this Agreement that is identified by the Company in writing as being confidential at the time the same is delivered to the Lenders or the Administrative Agent (including, without limitation, the information included in Schedules I, II, III and IV hereto), provided that nothing herein shall limit the disclosure of any such information (i) to the extent required by statute, rule, regulation or judicial process, (ii) to counsel for any of the Lenders or the Administrative Agent, (iii) to bank examiners, auditors or accountants, (iv) to the Administrative Agent or any other Lender, (v) in connection with any litigation to which any one or more of the Lenders or the Administrative Agent is a party, (vi) to any assignee or participant (or prospective assignee or participant) so long as such assignee or participant (or prospective assignee or participant) first executes and delivers to the respective Lender a written confidentiality agreement or (vii) that has become generally available to the public, other than by a breach of this Section 12.17 by the Administrative Agent or such Lender, as the case may be, or that the Administrative Agent or such Lender, as the case may be, has received from a Person not party to this Agreement where the Administrative Agent or such Lender, as the case may be, is not aware of such Person being under an obligation to keep such information confidential. -60- IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written. UIH CHILE HOLDING S.A. By: /S/ Blas Tomic ------------------------------------------ Title: President Address for Notices: Attention: Facsimile No.: Telephone No.: -61- SUBSIDIARY GUARANTORS VTR HIPERCABLE S.A. By: /S/ Blas Tomic ------------------------------------------ Title: President VTR CABLE EXPRESS S.A. By: /S/ Blas Tomic ------------------------------------------ Title: President VTR NET S.A. By: /S/ Blas Tomic ------------------------------------------ Title: President VTR CABLE EXPRESS (CHILE) S.A. By: /S/ Blas Tomic ------------------------------------------ Title: President VTR GALAXY CHILE S.A. By: /S/ Blas Tomic ------------------------------------------ Title: President RED DE TELEVISION Y SERVICIOS POR CABLE S.A. By: /S/ Blas Tomic ------------------------------------------ Title: President CABLEVISION S.A. By: /S/ Blas Tomic ------------------------------------------ Title: President -62- VTR TELEFONICA S.A. By: /S/ Blas Tomic ------------------------------------------ Title: President NEWCOM S.A. By: /S/ Blas Tomic ------------------------------------------ Title: President -63- LENDERS Tranche A Loan Commitment: THE TORONTO-DOMINION BANK U.S.$28,823,529.41 Tranche B Loan Commitment: By: /S/ Jeffrey R. Lents ------------------------------------------ U.S.$6,176,470.59 Title: Manager Cr. Admin. Total Commitment Lending Office: U.S.$35,000,000 909 Fannin Street, Suite 1700 Houston, Texas 77010 Address for Notices: 909 Fannin Street, Suite 1700 Houston, Texas 77010 Attention: Jano Mott Facsimile No.: (713) 951-9921 Telephone No.: (713) 653-8241 -64- Tranche A Loan Commitment: CITIBANK, N.A. U.S.$28,823,529.41 Tranche B Loan Commitment: By: /S/ Russell Jones ------------------------------------------ U.S.$6,176,470.59 Title: Managing Director Total Commitment Lending Office: U.S.$35,000,000 399 Park Avenue New York, New York 10043 Address for Notices: 399 Park Avenue New York, New York 10043 Attention: Facsimile No.: Telephone No.: -65- Tranche A Loan Commitment: BANKBOSTON N.A., NASSAU BRANCH U.S.$28,823,529.41 Tranche B Loan Commitment: By: /S/ Paulina Valdes ------------------------------------------ U.S.$6,176,470.59 Title: Authorized Officer Total Commitment Lending Office: U.S.$35,000,000 BankBoston, N.A., Nassau Branch Rustcraft Road 100 Denham, Massachusetts 02026 Address for Notices: BankBoston, N.A., Nassau Branch Rustcraft Road 100 Denham, Massachusetts 02026 Attention: Andres Sanchez Facsimile No.: (781) 467-2094 Telephone No.: (781) 467-2087 With a copy to: BankBoston, N.A. Moneda 799, Piso 3 Santiago CHILE Attention: Derek C. Sassoon Facsimile No.: (56-2) 686-0758 Telephone No.: (56-2) 686-0327 -66- Tranche A Loan Commitment: THE CHASE MANHATTAN BANK U.S.$28,823,529.41 Tranche B Loan Commitment: By: /S/ Debra Papson ------------------------------------------ U.S.$6,176,470.59 Title: Vice President Total Commitment Lending Office: U.S.$35,000,000 270 Park Avenue New York, New York 10017 Address for Notices: 270 Park Avenue New York, New York 10017 Attention: Facsimile No.: Telephone No.: -67- Tranche A Loan Commitment: CREDIT LYONNAIS, NEW YORK BRANCH U.S.$16,470,588.24 Tranche B Loan Commitment: By: /S/ Richard Teitelbaume ------------------------------------------ U.S.$3,529,411.76 Title: Vice President Total Commitment Lending Office: U.S.$20,000,000 1301 Avenue of the Americas New York, New York 10019 Address for Notices: 1301 Avenue of the Americas New York, New York 10019 Attention: Facsimile No.: Telephone No.: -68- Tranche A Loan Commitment: BANQUE PARIBAS U.S.$8,235,294.12 Tranche B Loan Commitment: By: /S/ Lynne S. Randall ------------------------------------------ U.S.$1,764,705.88 Title: Director Total Commitment By: /s/ Salo Aizenberg U.S.$10,000,000 ------------------------------------------ Title: Vice President Lending Office: 787 Seventh Avenue New York, New York 10019 Address for Notices: 787 Seventh Avenue New York, New York 100019 Attention: Facsimile No.: Telephone No.: -69- TORONTO DOMINION (TEXAS), INC., as Administrative Agent By: /S/ Jeffrey R. Lents ------------------------------------------ Title: Vice President Address for Notices to Administrative Agent: Toronto Dominion (Texas), Inc. 909 Fannin Street, Suite 1700 Houston, Texas 77010 Attention: Jano Mott, Vice President Facsimile No.: (713) 951-9921 Telephone No.: (713) 653-8231 -70- EX-10 4 EXHIBIT 10.3 ================================================================================ UNITED INTERNATIONAL HOLDINGS, INC. INITIAL ISSUANCE OF $355,000,000 SENIOR DISCOUNT NOTES DUE 2009 -------------------- INDENTURE DATED AS OF APRIL 29, 1999 -------------------- FIRSTAR BANK OF MINNESOTA N.A. TRUSTEE ================================================================================ CROSS-REFERENCE TABLE* TRUST INDENTURE INDENTURE SECTION ACT SECTION 310(a)(1)........................................................ 7.10 (a)(2)........................................................ 7.10 (a)(3)........................................................ N.A (a)(4)........................................................ N.A (a)(5)........................................................ 7.10 (a) ........................................................ 7.10 (c) ........................................................ N.A 311(a) ........................................................ 7.11 (b) ........................................................ 7.11 (c) ........................................................ N.A 312(a) ........................................................ 2.05 (b) ........................................................ 10.03 (c) ........................................................ 10.03 313(a) ........................................................ 7.06 (b)(2)........................................................ 7.07 (c) ........................................................ 7.06;10.02 (d) ........................................................ 7.06 314(A) ........................................................ 4.03;10.02 (c)(1)........................................................ 10.04 (c)(2)........................................................ 10.04 (c)(3)........................................................ N.A (d) ........................................................ 10.05 (f) ........................................................ N.A 315(a) ........................................................ 7.01 (b) ........................................................ 7.05,10.02 (c) ........................................................ 7.01 (d) ........................................................ 7.01 (e) ........................................................ 6.11 316(a)(LAST SENTENCE)............................................ 2.09 (a)(1)(A)..................................................... 6.05 TRUST INDENTURE INDENTURE SECTION ACT SECTION (a)(1)(B)..................................................... 6.04 (a)(2)........................................................ N.A (b) ........................................................ 6.07 (c) ........................................................ 2.12 317(a)(1)........................................................ 6.08 (a)(2)........................................................ 6.09 (b) ........................................................ 2.04 318(a) ........................................................ 10.01 (b) ........................................................ N.A (c) ........................................................ 10.01 N.A. MEANS NOT APPLICABLE *THIS CROSS-REFERENCE TABLE IS NOT PART OF THE INDENTURE. TABLE OF CONTENTS PAGE ---- ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE........................... 1 Section 1.1 DEFINITIONS.................................... 1 Section 1.2 OTHER DEFINITIONS.............................. 24 Section 1.3 INCORPORATION BY REFERENCE OF TRUST............ INDENTURE ACT.................................. 25 Section 1.4 RULES OF CONSTRUCTION.......................... 25 ARTICLE II THE SECURITIES....................................................... 26 Section 2.1 FORM AND DATING................................ 26 Section 2.2 EXECUTION AND AUTHENTICATION................... 27 Section 2.3 REGISTRAR AND PAYING AGENT..................... 27 Section 2.4 PAYING AGENT TO HOLD MONEY IN TRUST............ 28 Section 2.5 HOLDER LISTS................................... 29 Section 2.6 TRANSFER AND EXCHANGE.......................... 29 Section 2.7 REPLACEMENT SECURITIES......................... 37 Section 2.8 OUTSTANDING SECURITIES......................... 37 Section 2.9 TREASURY SECURITIES............................ 38 Section 2.10 TEMPORARY SECURITIES........................... 38 Section 2.11 CANCELLATION................................... 38 Section 2.12 RECORD DATE.................................... 39 Section 2.13 CUSIP NUMBER................................... 39 ARTICLE III REDEMPTION AND REPURCHASE............................................ 40 Section 3.1 OFFER TO REPURCHASE............................ 40 Section 3.2 DEPOSIT OF REPURCHASE PRICE.................... 41 i PAGE ---- Section 3.3 DELIVERY OF SECURITIES AND PAYMENT OF PURCHASE PRICE................................. 42 Section 3.4 SECURITIES REPURCHASED IN PART................. 42 Section 3.5 RIGHT OF REDEMPTION............................ 42 ARTICLE IV COVENANTS........................................................... 46 Section 4.1 PAYMENT OF SECURITIES.......................... 46 Section 4.2 MAINTENANCE OF OFFICE OR AGENCY................ 46 Section 4.3 REPORTS........................................ 47 Section 4.4 COMPLIANCE CERTIFICATE......................... 47 Section 4.5 TAXES.......................................... 48 Section 4.6 STAY, EXTENSION AND USURY LAWS................. 48 Section 4.7 LIMITATION ON RESTRICTED PAYMENTS.............. 49 Section 4.8 LIMITATION ON DIVIDENDS AND OTHER PAYMENT...... RESTRICTIONS AFFECTING SUBSIDIARIES............ 50 Section 4.9 LIMITATION ON INCURRENCE OF ADDITIONAL IN DEBTEDNESS AND DISQUALIFIED CAPITAL STOCK ..... 51 Section 4.10 LIMITATION ON SALE OF ASSETS AND SUBSIDIARY.... STOCK. 54 Section 4.11 LIMITATION ON TRANSACTIONS WITH AFFILIATES..... 56 Section 4.12 LIMITATION ON LIENS............................ 57 Section 4.13 LINES OF BUSINESS.............................. 57 Section 4.14 CORPORATE EXISTENCE............................ 58 Section 4.15 LIMITATIONS ON SUBSIDIARY STRUCTURE............ 58 Section 4.16 LIMITATION ON STATUS AS INVESTMENT COMPANY........................................ 59 Section 4.17 RULE 144A INFORMATION REQUIREMENT.............. 59 Section 4.18 REPURCHASE OF SENIOR NOTES AT THE OPTION OF THE HOLDER UPON A CHANGE OF CONTROL..................................... 59 ii PAGE ---- ARTICLE V SUCCESSORS........................................................... 60 Section 5.1 LIMITATION ON MERGER, SALE OR CONSOLIDATION.................................. 60 Section 5.2 SUCCESSOR CORPORATION SUBSTITUTED.............. 60 ARTICLE VI DEFAULTS AND REMEDIES............................................... 61 Section 6.1 EVENTS OF DEFAULT.............................. 61 Section 6.2 ACCELERATION................................... 63 Section 6.3 OTHER REMEDIES................................. 64 Section 6.4 WAIVER OF PAST DEFAULTS........................ 65 Section 6.5 CONTROL BY MAJORITY............................ 65 Section 6.6 LIMITATION ON SUITS............................ 65 Section 6.7 RIGHTS OF HOLDERS OF SECURITIES TO RECEIVE PAYMENT................................ 66 Section 6.8 COLLECTION SUIT BY TRUSTEE..................... 66 Section 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM............... 66 Section 6.10 PRIORITIES..................................... 67 Section 6.11 UNDERTAKING FOR COSTS.......................... 68 ARTICLE VII TRUSTEE............................................................. 68 Section 7.1 DUTIES OF TRUSTEE.............................. 68 Section 7.2 RIGHTS OF TRUSTEE.............................. 70 Section 7.3 INDIVIDUAL RIGHTS OF TRUSTEE................... 70 Section 7.4 TRUSTEE'S DISCLAIMER........................... 71 Section 7.5 NOTICE OF DEFAULTS............................. 71 Section 7.6 REPORTS BY TRUSTEE TO HOLDERS OF THE SECURITIES................................. 71 Section 7.7 COMPENSATION AND INDEMNITY..................... 72 iii PAGE ---- Section 7.8 REPLACEMENT OF TRUSTEE......................... 73 Section 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC............... 74 Section 7.10 ELIGIBILITY; DISQUALIFICATION.................. 74 Section 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY........................................ 75 ARTICLE VIII LEGAL DEFEASANCE AND COVENANT DEFEASANCE............................. 75 Section 8.1 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE............................ 75 Section 8.2 LEGAL DEFEASANCE AND DISCHARGE................. 75 Section 8.3 COVENANT DEFEASANCE............................ 76 Section 8.4 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE..................................... 76 Section 8.5 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS................. 78 Section 8.6 REPAYMENT TO COMPANY........................... 79 Section 8.7 REINSTATEMENT.................................. 79 ARTICLE IX AMENDMENT, SUPPLEMENT AND WAIVER.................................... 79 Section 9.1 WITHOUT CONSENT OF HOLDERS OF SECURITIES.................................. 79 Section 9.2 WITH CONSENT OF HOLDERS OF SECURITIES.......... 80 Section 9.3 COMPLIANCE WITH TRUST INDENTURE ACT............ 82 Section 9.4 REVOCATION AND EFFECT OF CONSENTS.............. 82 Section 9.5 NOTATION ON OR EXCHANGE OF SECURITIES.......... 83 Section 9.6 TRUSTEE TO SIGN AMENDMENTS, ETC................ 83 iv ARTICLE X MICELLANEOUS 88 Section 10.1 TRUST INDENTURE ACT CONTROLS................... 88 Section 10.2 NOTICES........................................ 88 Section 10.3 COMMUNICATION BY HOLDERS OF SECURITIES WITH OTHER HOLDERS OF SECURITIES.............. 89 Section 10.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT........................... 89 Section 10.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION..................................... 90 Section 10.6 RULES BY TRUSTEE AND AGENTS.................... 90 Section 10.7 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS.......... 90 Section 10.8 GOVERNING LAW.................................. 91 Section 10.9 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS............................... 91 Section 10.10 SUCCESSORS..................................... 91 Section 10.11 SEVERABILITY................................... 91 Section 10.12 COUNTERPART ORIGINALS.......................... 91 Section 10.13 HEADINGS, ETC.................................. 91 Section 10.14 REGISTRATION RIGHTS............................ 92 EXHIBITS EXHIBIT A FORM OF SENIOR NOTE............................ A-1 1 INDENTURE dated as of April 29, 1999 by and between United International Holdings, Inc., a Delaware corporation (the "Company"), and Firstar Bank of Minnesota, N.A., as trustee (the "Trustee"). The Company and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the Series A Senior Discount Notes due 2009 and the class of Series B Senior Discount Notes due 2009 to be exchanged for the Series A Senior Discount Notes due 2009 being issued by the Company. ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE Section 1.1 DEFINITIONS. "Accreted Value" means, as of any date of determination, the sum (rounded to the nearest whole dollar) of (a) the initial offering price of each $1,000 in principal amount at maturity of Senior Notes and (b) the portion of the excess of the principal amount of Senior Notes over such initial offering price which shall have been accreted thereon through such date, such amount to be so accreted on a daily basis at the Accretion Rate, compounded semi-annually on each May 1 and November 1 from the date of issuance of the Senior Notes through the date of determination. "Accretion Rate" is as specified in paragraph 1 of the form of note attached as Exhibit A. "Acquired Indebtedness" means Indebtedness or Disqualified Capital Stock of any Person existing at the time such Person becomes a Subsidiary or Restricted Affiliate of the Company, including by designation, or is merged or consolidated into or with the Company or one of its Subsidiaries or Restricted Affiliates. "Acquisition" means the purchase or other acquisition of any Person of all or substantially all the assets or any Person by any other Person, whether by purchase, merger, consolidation, or other transfer, and whether or not for consideration. "Affiliate" means any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company. For purposes of this definition, "control" means the power to direct the management and policies of a Person, directly or through one or more intermediaries, 2 whether through the ownership of voting securities, by contract, or otherwise, provided that, with respect to ownership interest in the Company and its Subsidiaries, a Beneficial Owner of 10% or more of the total voting power normally entitled to vote in the election of directors, managers or trustees, as applicable, shall for such purposes be deemed to constitute control. "Agent" means any Registrar, Paying Agent or co-registrar. "Annualized Consolidated EBITDA" means Consolidated EBITDA multiplied by two. "Average Life" means, as of the date of determination, with respect to any security or instrument, the quotient obtained by dividing (i) the sum of the products (a) of the number of years from the date of determination to the date or dates of each successive scheduled principal (or redemption) payment of such security or instrument and (b) the amount of each such respective principal (or redemption) payment by (ii) the sum of all such principal (or redemption) payments. "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal or state law for the relief of debtors. "Beneficial Owner" or "beneficial owner" for purposes of the definition of Change of Control and Affiliate has the meaning attributed to it in Rules 13d-3 and 13d-5 under the Exchange Act (as in effect on the Issue Date), whether or not applicable, except that a "person" shall 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. "Board of Directors" or "Board" means, with respect to any Person, the board of directors of such Person or any committee of the Board of Directors of such Person authorized, with respect to any particular matter, to exercise the power of the board of directors of such Person. "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, and delivered to the Trustee. 3 "Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York, New York are authorized or obligated by law or executive order to close. "Capitalized Lease Obligation" means, as to any Person, the obligations of such Person under a lease that are required to be classified and accounted for as capital lease obligations under GAAP and, for purposes of this definition, the amount of such obligations at any date shall be the capitalized amount of such obligations at such date, determined in accordance with GAAP. "Capital Stock" means, with respect to any corporation, any and all shares, interests, rights to purchase (other than convertible or exchangeable Indebtedness that is not itself otherwise capital stock), warrants, options, participation or other equivalents of or interests (however designated) in stock issued by that corporation. "Cash Equivalent" means (i) securities issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof), (ii) time deposits and certificates of deposit and commercial paper issued by the parent corporation of any domestic commercial bank of recognized standing having capital and surplus in excess of $500 million, (iii) commercial paper issued by others rated at least A-2 or the equivalent thereof by Standard & Poor's Corporation or at least P-2 or the equivalent thereof by Moody's Investors Service, Inc., and in the case of each of (i), (ii) and (iii) maturing within one year after the date of acquisition, and (iv) Eurodollar time deposits with maturities of six months or less from the date of acquisition, bankers' acceptances with maturities not exceeding six months and overnight bank deposits, in each case with any domestic commercial bank having capital and surplus in excess of $500 million and a Keefe Bank Watch Rating of "B" or better, provided that with respect to any Non-Domestic Person, Cash Equivalents shall also mean those investments that are comparable to clauses (ii) and (iv) above in such Person's country of organization or country where it conducts business operations. "Change of Control" means (i) any merger or consolidation of the Company with or into any Person or any sale, transfer or other conveyance, whether direct or indirect, of all or substantially all of the assets of the Company, on a consolidated basis, in one transaction or a series of related transactions, if, immediately after giving effect to such transaction(s), any "person" or "group" (as such terms are used for purposes of Section 13(d) and 14(d) of the Exchange Act, whether or not applicable) other than the Principals or their Related Parties or a group that is controlled by one or more of the Principals, is or becomes the "beneficial owner," directly or indirectly, of more than 50% of the total voting power in the aggregate normally entitled to vote in the election of directors, managers, or trustees, as applicable, of the transferee(s) or surviving entity or entities, (ii) other than the Principals or their Related Parties or a group that is controlled by one or more of the Principals, any "person" or "group" (as such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable), is or 4 becomes the "beneficial owner," directly or indirectly, of more than 50% of the total voting power in the aggregate of all classes of Capital Stock of the Company then outstanding normally entitled to vote in the election of directors, or (iii) during any period of 12 consecutive months after the Issue Date, individuals who at the beginning of any such 12-month period constituted the Board of Directors of the Company (together with any new directors whose election by such Board of Directors or whose nomination for election by the shareholders of the Company was approved by a vote of a majority of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors of the Company then in office. A Person will not be deemed to be a member of a "group" for purposes of this definition solely by virtue of becoming party to an agreement with one or more Principals or their Related Parties that requires such Person to vote the voting stock of the Company in a manner specified by the Principals or their Related Parties. "Company" means United International Holdings, Inc., a Delaware corporation. "Consolidated Cash Flow Ratio" of any Person on any date of determination (the "Transaction Date") means the ratio, on a pro forma basis, of (a) Consolidated Debt of such Person on the Transaction Date to (b) the aggregate amount of Annualized Consolidated EBITDA of such Person attributable to continuing operations and businesses (exclusive of amounts attributable to operations and businesses permanently discontinued or disposed of) for the Reference Period; provided that for purposes of such calculation, (i) Acquisitions which occurred during the Reference Period or subsequent to the Reference Period and on or prior to the Transaction Date shall be assumed to have occurred on the first day of the Reference Period, (ii) transactions giving rise to the need to calculate the Consolidated Cash Flow Ratio shall be assumed to have occurred on the first day of the Reference Period and (iii) the incurrence of any Indebtedness or issuance of any Disqualified Capital Stock during the Reference Period or subsequent to the Reference Period and on or 5 prior to the Transaction Date (and the application of the proceeds therefrom to the extent used to refinance or retire other Indebtedness) shall be assumed to have occurred on the first day of the Reference Period. "Consolidated Coverage Ratio" of any Person on any date of determination (the "Transaction Date") means the ratio, on a pro forma basis, of (a) the aggregate amount of Consolidated EBITDA of such Person attributable to continuing operations and businesses (exclusive of amounts attributable to operations and business permanently discontinued or disposed of) for the Reference Period to (b) the aggregate Consolidated Fixed Charges of such Person (exclusive of amounts attributable to operations and businesses permanently discontinued or disposed of, but only to the extent that the obligations giving rise to such Consolidated Fixed Charges would no longer be obligations contributing to such Person's Consolidated Fixed Charges subsequent to the Transaction Date) during the Reference Period; provided that for purposes of such calculation, (i) Acquisitions which occurred during the Reference Period or subsequent to the Reference Period and on or prior to the Transaction Date shall be assumed to have occurred on the first day of the Reference Period, (ii) transactions giving rise to the need to calculate the Consolidated Coverage Ratio shall be assumed to have occurred on the first day of the Reference Period, (iii) the incurrence of any Indebtedness or issuance of any Disqualified Capital Stock during the Reference Period or subsequent to the Reference Period and on or prior to the Transaction Date (and the application of the proceeds therefrom to the extent used to refinance or retire other Indebtedness) shall be assumed to have occurred on the first day of such Reference Period, and (iv) the Consolidated Fixed Charges of such Person attributable to interest on any Indebtedness or dividends on any Disqualified Capital Stock bearing a floating interest (or dividend) rate shall be computed on a pro forma basis as if the average rate in effect from the beginning of the Reference Period to the Transaction Date had been the applicable rate for the entire period, unless such person or any of its Subsidiaries is a paty to an Interest Swap or Hedging Obligation (which shall remain in effect for the 12-month period immediately following the Transaction Date) that has the effect of fixing the interest rate on the date of computation, in which case such rate (whether higher or lower) shall be used. "Consolidated Debt" means, with respect to any Person as of any date of determination, the aggregate amount of Indebtedness and Disqualified Capital Stock of such Person and its Subsidiaries outstanding as of such date of determination, determined on a consolidated basis in accordance with GAAP. "Consolidated EBITDA" means, with respect to any Person, for any period, the Consolidated Net Income of such Person for such period adjusted to add thereto (to the extent deducted from net revenues in determining Consolidated Net Income), without duplication, the sum of (i) Consolidated 6 income tax expense, (ii) Consolidated depreciation and amortization expense, and (iii) Consolidated Fixed Charges, less the amount of all cash payments made by such Person or any of its Subsidiaries during such period to the extent such payments relate to non-cash charges that were added back in determining Consolidated EBITDA for such period or any prior period. "Consolidated Fixed Charges" of any Person means, for any period, the aggregate amount (without duplication and determined in each case in accordance with GAAP) of (a) interest expensed or capitalized, paid, accrued, or scheduled to be paid or accrued (including, in accordance with the following sentence, interest attributable to Capitalized Lease Obligations) of such Person and its Consolidated Subsidiaries during such period, including (i) original issue discount and non-cash interest payments or accruals on any Indebtedness, (ii) the interest portion of all deferred payment obligations, and (iii) all commissions, discounts and other fees and charges owed with respect to bankers' acceptances and letters of credit financings and currency and Interest Swap and Hedging Obligations, in each case to the extent attributable to such period and (b) the amount of dividends accrued or payable (or guaranteed) by such Person or any of its Consolidated Subsidiaries in respect of preferred stock (other than by Subsidiaries of such Person to such Person or such Person's Wholly Owned Subsidiaries). For purposes of this definition, (x) interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined in good faith by the Company to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP and (y) interest expense attributable to any Indebtedness represented by the guaranty by such Person or a Subsidiary of such Person of an obligation of another Person shall be deemed to be the interest expense attributable to the Indebtedness guaranteed. "Consolidated Invested Equity Capital" means, with respect to any Person as of any date, the sum of the Invested Equity Capital of such Person as of such date and, without duplication, the Invested Equity Capital of each of its Subsidiaries and Restricted Affiliates as of such date. For purposes of calculating the Consolidated Invested Equity Capital of any Person as of any date, in order to avoid duplication, the Invested Equity Capital of a Subsidiary or Restricted Affiliate of such Person shall not include any amounts that would be included in the Consolidated Invested Equity Capital of any equity owner of such Subsidiary or Restricted Affiliate, to the extent that such amounts were utilized by such equity owner prior to such date to permit the incurrence of Indebtedness pursuant to clause (ii)(3) of the first paragraph of Section 4.9 hereof. For example, if a direct Subsidiary of the Company has Consolidated Invested Equity Capital of $100 and incurs $225 of such Indebtedness, then a 7 direct or indirect Subsidiary (or a Restricted Affiliate) of such Subsidiary will not be deemed to have any Invested Equity Capital based on contributions or loans to it by such first Subsidiary. In addition, the Invested Equity Capital of a Subsidiary or Restricted Affiliate of a Person will never be considered to be greater than the Invested Equity Capital of such Person, except as a result of contributions of Invested Equity Capital to such Subsidiary or Restricted Affiliate by third parties. "Consolidated Net Income" means, with respect to any Person for any period, the net income (or loss) of such Person and its Consolidated Subsidiaries (determined on a consolidated basis in accordance with GAAP) for such period, adjusted to exclude (only to the extent included in computing such net income (or loss) and without duplication): (a) all gains (but not losses) which are either extraordinary (as determined in accordance with GAAP) or are nonrecurring (including any gain from the sale or other disposition of assets outside the ordinary course of business or from the issuance or sale of any capital stock), (b) the net income, if positive, of any Person, other than a Consolidated Subsidiary, in which such Person or any of its Consolidated Subsidiaries has an interest, except to the extent of the amount of any dividends or distributions actually paid in cash to such Person or a Consolidated Subsidiary of such Person during such period, but in any case not in excess of such Person's pro rata share of such Person's net income for such period, (c) the net income or loss of any Person acquired in a pooling of interests transaction for any period prior to the date of such acquisition, (d) the net income, if positive, of any of such Person's Consolidated Subsidiaries to the extent that the declaration or payment of dividends or similar distributions is not at the time permitted by operation of the terms of its charter or bylaws or any other agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such Consolidated Subsidiary other than the Indenture. "Consolidated Subsidiary" means, for any Person, each Subsidiary of such Person (whether now existing or hereafter created or acquired) the financial statements of which are consolidated for financial statement reporting purposes with the financial statements of such Person in accordance with GAAP. "Consolidation" means, with respect to any Person, the consolidation of the accounts of the Subsidiaries of such Person with those of such Person, all in accordance with GAAP; provided that "consolidation" will not include consolidation of the accounts of any other Person other than a Subsidiary of such Person with such Person. The terms "Consolidate" or "Consolidated" have a correlative meaning to the foregoing. 8 "Corporate Trust Officer of the Trustee" shall be at the address of the Trustee specified in Section 10.2 hereof or such other address as to which the Trustee may give notice to the Company. "Custodian" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law. "Default" means any event that is or with the passage of time or the giving of notice or both would be an Event of Default. "Definitive Securities" means Securities that are in the form of Security attached hereto as Exhibit A that do not include the information called for by footnotes 3 and 6 thereof. "Depositary" means, with respect to the Securities issuable or issued in whole or in part in global form, the person specified in Section 2.3 as the Depositary with respect to the Securities, until a successor shall have been appointed and become such pursuant to the applicable provision of this Indenture, and, thereafter, "Depositary" shall mean or include such successor. "Disqualified Capital Stock" means (a) except as set forth in (b), with respect to any Person, Equity Interests of such Person that, by its terms or by the terms of any security into which it is convertible, exercisable or exchangeable, is, or upon the happening of an event or the passage of time or both would be, required to be redeemed or repurchased (including at the option of the holder thereof) by such Person or any of its Subsidiaries, in whole or in part, on or prior to 91 days following the Stated Maturity of the Senior Notes and (b) with respect to any Subsidiary or Restricted Affiliate of the Company, any Equity Interests of such Subsidiary or Restricted Affiliate other than (i) any common equity with no preference, privileges, or redemption or repayment provisions or (ii) preferred stock convertible into such common equity of such Subsidiary or Restricted Affiliate with no payment of dividends or liquidation preference due or payable thereon on or prior to 91 days following the Stated Maturity of the Senior Notes and the proceeds of which are used directly or indirectly in the business of such Subsidiary or Restricted Affiliate. "DLJSC" means Donaldson, Lufkin & Jenrette Securities Corporation. "Equity Interest" of any Person means any shares, interests, participation or other equivalents (however designated) in such Person's equity, 9 and shall in any event include any Capital Stock issued by, or partnership or membership interests in, such Person. "Event of Loss" means, with respect to any property or asset, any (i) loss, destruction or damage of such property or asset or (ii) any condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, of such property or asset, or confiscation or requisition of the use of such property or asset. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Exchange Securities" means the Series B Senior Discount Notes due 2009, as supplemented from time to time in accordance with the terms hereof, to be issued pursuant to this Indenture in connection with the offer to exchange Securities for the Initial Securities that may be made by the Company pursuant to the Registration Rights Agreement that contain the information referred to in footnotes 1, 2 and 8 to the form of Security attached hereto as Exhibit A. "Exempted Affiliate Transaction" means (i) Restricted Payments comprised of pro rata dividends paid in cash on any class of Capital Stock and made in compli ance with the Indenture, (ii) transactions, at arms-length and as so set forth in a Board Resolution, between or among holders of any Equity Interest of any Subsidiary of the Company and such Subsidiary, so long as such holder is not otherwise an Affiliate of the Company, (iii) transactions between or among the Company, and its Subsidiaries and Restricted Affiliates, and (iv) the Company or any of its Subsidiaries entering into or performing any employment agreement, stock option agreement or other agreement relating to the terms of employment, or compensation, or termination of employment in the ordinary course of business and consistent with the past practice of the Company or such Subsidiary. "Existing Agreements" means (i) any and all instruments, as in effect on the Issue Date, between the Company or any of its Subsidiaries or Restricted Affiliates and a commercial lending institution or institutions, which makes borrowing of funds available to the Company or any such Subsidiary or Restricted Affiliate from such institution or institutions and (ii) any replacements of the instruments in clause (i) entered into by the respective Subsidiary or Restricted Affiliate that was party to the instrument so replaced or their respective successors and a commercial lending institution or institutions for an amount up to the maximum amount of the instrument so replaced. 10 "Existing Note Indentures" means the indenture dated November 23, 1994 between the Company and the Trustee, the indenture dated November 22, 1995 between the Company and the Trustee and the indenture dated February 5, 1998 between the Company and the Trustee, each as amended through the Issue Date, pursuant to which the Existing Notes were issued. "Existing Notes" means the 14% Senior Secured Discount Notes due 1999 and the 10 3/4% Senior Secured Discount Notes due 2008 issued by the Company pursuant to the Existing Note Indentures. "Fair Market Value" means, with respect to any asset or property, the price which would be negotiated in an arm's-length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction. "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession in the United States, which are in effect on the Issue Date. "Global Security" means a Security that contains the information referred to in footnotes 3 and 6 to the form of Security attached hereto as Exhibit A. "Government Securities" means securities that are (a) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged or (b) obligations of a person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as amended), as custodian with respect to any such Government Security or a specific payment of principal of or interest on any such Government Security held by such custodian for the account of the holder of such depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Government Security or the specific payment of principal of or interest on the Government Security evidenced by such depository receipt. 11 "Guarantee" means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness. The amount of any Guarantee shall be equal to the maximum potential liability in respect of the Guarantee, even if less than the Indebtedness supported by such Guarantee. "Holder" means a Person in whose name a Security is registered. "Indebtedness" of any Person means, without duplication, (a) all liabilities and obligations, contingent or otherwise, of such Person, to the extent such liabilities and obligations would appear as a liability upon the consolidated balance sheet of such Person in accordance with GAAP, (i) in respect of borrowed money (whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof), (ii) evidenced by bonds, notes, debentures or similar instruments, (iii) representing the balance deferred and unpaid of the purchase price of any property or services, except (other than accounts payable or other obligations to trade creditors which have remained unpaid for greater than 60 days past their original due date) those incurred in the ordinary course of its business that would constitute ordinarily a trade payable to trade creditor; (b) all liabilities and obligations, contingent or otherwise, of such Persons (iv) evidenced by bankers' acceptances or similar instruments issued or accepted by banks, (v) relating to any Capitalized Lease Obligation, or (vi) evidenced by a letter of credit or a reimbursement obligation of such Person with respect to any letter of credit (other than obligations with respect to letters of credit securing obligations (other than obligations described in (i) through (iii) above) entered into in the ordinary course of business of such Person to the extent such letters of credit are not drawn upon); (c) all net obligations of such Person under Interest Swap and Hedging Obligations; (d) all liabilities and obligations of others of the kind described in the preceding clause (a), (b) or (c) that such Person has guaranteed or that is otherwise its legal liability or which are secured by any assets or property of such Person; (e) any and all deferrals, renewals, extensions, refinancing and refundings (whether direct or indirect) of, or amendments, modifications or supplements to, any liability of the kind described in any of the preceding clauses (a), b), (c) or (d), or this clause (e), whether or not between or among the same parties; and (f) all Disqualified Capital Stock of such Person (measured at the greater of its voluntary or involuntary maximum fixed repurchase price plus accrued and unpaid dividends). For purposes hereof, the "maximum fixed repurchase price" of any Disqualified Capital Stock which does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Capital Stock as if such 12 Disqualified Capital Stock were purchased on any date on which Indebtedness shall be required to be determined pursuant to the Indenture, and if such price is based upon, or measured by, the Fair Market Value of such Disqualified Capital Stock, such Fair Market Value to be determined in good faith by the Board of Directors of the Company. The accrual of interest and the accretion of accreted value shall not be deemed to be an incurrence of Indebtedness on debt issued with original issue discount and in accordance with its original terms when issued. "Indenture" means this Indenture, as amended or supplemented from time to time. "Initial Securities" means the Series A Senior Discount Notes due 2009, as supplemented from time to time in accordance with the terms hereof, issued under this Indenture that contain the information referred to in footnotes 4, 5 and 7 to the form of Security attached hereto as Exhibit A. "Interest Payment Date" means the stated due date of an installment of interest on the Securities. "Initial Purchasers" means the Purchasers as defined in the Note Purchase Agreement. "Interest Swap and Hedging Obligation" means any obligation of any Person pursuant to any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate exchange agreement, currency exchange agreement or any other agreement or arrangement designed to protect against fluctuations in interest rates or currency values, including, without limitation, any arrangement whereby, directly or indirectly, such Person is entitled to receive from time to time periodic payments calculated by applying either a fixed or floating rate of interest on a stated notional amount in exchange for periodic payments made by such Person calculated by applying a fixed or floating rate of interest on the same notional amount. "Invested Equity Capital" means, with respect to any Person as of any date, without duplication, the sum of (i) the total dollar amount contributed in cash plus the value of all property contributed (valued at Fair Market Value at the time of contribution, determined in good faith by the Board of Directors) to such Person since the date of its creation in the form of common equity, plus, (ii) the total dollar amount contributed in cash plus the value of all property contributed (valued at Fair Market Value at the time of contribution, determined in good faith by the Board of Directors) to such Person since the date of creation by the holders of its common equity (and their Affiliates) in consideration of the issuance of preferred equity or Indebtedness, on a basis that is substantially proportionate to their common equity interests (with any disproportionately large equity interests received by the Company, a Restricted Affiliate, or a Subsidiary relative to their respective contributions being ignored for this purpose), plus, (iii) the total dollar amount contributed in cash plus the value of all property contributed (valued at Fair Market Value at the time of contribution, determined in good faith by the Board of Directors) to such Person since the date of its creation by the Company or a Wholly Owned Subsidiary of the Company in consideration of the issuance of preferred equity or Indebtedness, less (iv) the value of all interest, returns in respect of Indebtedness, dividends and other distributions (in whatever form and however designated, valued at Fair Market Value as determined in good faith by the Board of Directors) made by such Person since the date of its creation to the holders of its common equity (and their Affiliates); pro vided that in no event shall 13 the aggregate amount of interest, dividends and other distributions made to any holder of common equity of a Person (or its Affiliates) operate to reduce the Invested Equity Capital of such Person by more than the total contributions to such Person (per clauses (i) through (iii) above) by such equity holder (and its Affiliates), and less (v) the total amount of Investments (measured as of the date made but without giving effect to any proration) made by such Person pursuant to clause (e) of the definition of Permitted Investments since the date of the Indenture that are outstanding as of such date. "Investment" by any Person in any other Person means (without duplication)(a) the acquisition (whether by purchaser, merger, consolidation or otherwise) by such Person (whether for cash, property, services, securities or otherwise) of capital stock, bonds, notes, debentures, partnership or other ownership interests or other securities, including any options or warrants, of such other Person or any agreement to make any such acquisition; (b) the making by such Person of any deposit with, or advance, loan or other extension of credit to, such other Person (including the purchase of property from another Person subject to an understanding or agreement, contingent or otherwise, to resell such property to such other Person) or any commitment to make any such advance, loan or extension (but excluding accounts receivable, endorsements for collection or deposits arising in the ordinary course of business); (c) other than guarantees of Indebtedness of the Company or any Subsidiary to the extent permitted by Section 4.9 or the definition of Permitted Indebtedness the entering into by such Person of any guarantee of, or other credit support or contingent obligation with respect to, Indebtedness or other liability of such other Person; (d) the making of any capital contribution by such Person to such other Person; and (e) the designation by the Board of Directors of the Company of any Person to be an Unrestricted Subsidiary or no longer to be a Restricted 14 Affiliate (and not thence to be a Subsidiary). The Company shall be deemed to make an Investment in an amount equal to the Fair Market Value of its Pro Rata Share of any Subsidiary or Restricted Affiliate (or, if neither the Company nor any of its Subsidiaries has therefore made an Investment in such subsidiary of affiliate, in an amount equal to its Pro Rata Share of the Investments being made), at the time that such Subsidiary or Restricted Affiliate is designated an Unrestricted Subsidiary or no longer to be a Restricted Affiliate (and not thence to be a Subsidiary) andany property transferred to an Unrestricted Subsidiary or such other Person from the Company and the Company's Pro Rata Share of the property transferred by a Subsidiary or Restricted Affiliate of the Company to such Person shall be deemed an Investment valued at its Fair Market Value at the time of such transfer. "Issue Date" means the date of first issuance of the Senior Notes under the Indenture. "Legal Holiday" means a Saturday, a Sunday or a day on which banking institutions in the City of New York or at a place of payment are authorized by law, regulation or executive order to remain closed. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. "Lien" means any mortgage, charge, pledge, lien (statutory or otherwise), privilege, security interest, hypothecation or other encumbrance upon or with respect to any property of any kind, real or personal, movable or immovable, now owned or hereafter acquired. "Liquidated Damages" shall have the meaning set forth in the Registration Rights Agreement. "Market Spread Date" shall have the meaning set forth in Exhibit A. "Net Cash Proceeds" means the aggregate amount of Cash or Cash Equivalents received by the Company in the case of a sale of Qualified Capital Stock and by the Company and its Subsidiaries in respect of an Asset Sale plus, in the case of an issuance of Qualified Capital Stock upon any exercise, exchange or conversion of securities (including options, warrants, rights and convertible or exchangeable debt) of the Company that were issued for cash on or after the Issue Date, the amount of cash originally received by the Company upon the issuance of such securities (including options, warrants, rights and convertible or exchangeable debt) less, in each case, the sum of all payments, fees, commissions and (in the case of Asset Sales, reasonable and customary) expenses (including, without limitation, the fees and expenses of legal counsel 15 and investment banking fees and expenses) incurred in connection with such Asset Sale or sale of Qualified Capital Stock, and, in the case of an Asset Sale only, less the amount (estimated reasonably and in good faith by the Company) of income, franchise, sales and other applicable taxes required to be paid by the Company or any of its respective Subsidiaries in connection with such Asset Sale. "Non-Domestic Person" means any direct or indirect Subsidiary or Restricted Affiliate of the Company that is organized under the laws of any jurisdiction, or has its principal business operations outside of the United States of America and Puerto Rico. "Note Purchase Agreement" means the note purchase agreement dated the date hereof between the Company, DLJSC and the Purchasers. "Obligations" means any principal, Accreted Value, Liquidated Damages, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness. "Offering Memorandum" means the initial offering memorandum of the Company, dated April 29, 1999, relating to the offer and sale of the Initial Securities in a transaction exempt from the requirements of Section 5 of the Securities Act. "Officer" means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Vice- President of such Person. "Officers' Certificate" means a certificate signed on behalf of the Company by two Officers of the Company, one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Company, that meets the requirements of Section 10.5 hereof. "Opinion of Counsel" means an opinion from legal counsel who is reasonably acceptable to the Trustee, that meets the requirements of Section 10.5 hereof. The counsel may be an employee of or counsel to the Company, any Subsidiary of the Company or the Trustee. "Permitted Indebtedness" means any of the following: 16 (a) that the Company may incur Indebtedness whose terms are governed by the Indenture up to the amounts issued thereunder as of the Issue Date; (b) that the Company and the Subsidiaries and Restricted Affiliates, as applicable, may incur Refinancing Indebtedness with respect to any indebtedness or Disqualified Capital Stock, as applicable, described in clause (a) of this definition, incurred pursuant to the second sentence or clauses (b) or (c) of Section 4.9 or which is outstanding on the Issue Date; (c) the Company and the Subsidiaries and Restricted Affiliates may incur Indebtedness solely in respect of bankers acceptances, letters of credit and performance bonds (to the extent that such incurrence does not result in the incurrence of any obligation to repay any obligation relating to borrowed money of others), all in the ordinary course of business in accordance with customary industry practices, in amounts and for the purposes customary in the Company's industry; (d) the Company may incur Indebtedness to any Subsidiary or Restricted Affiliate and any Subsidiary or Restricted Affiliate of the Company may incur Indebtedness to any other Subsidiary or Restricted Affiliate of the Company, or to the Company; provided that, in the case of Indebtedness of the Company, such obligations shall be unsecured and subordinated in all respects to the Company's obligations pursuant to the Senior Notes and the date of any event that causes such Subsidiary or Restricted Affiliate no longer to be a Subsidiary or Restricted Affiliate shall be an Incurrence Date; (e) issuances of preferred stock or Indebtedness by a Subsidiary or a Restricted Affiliate of the Company to the holders (or their Affiliates) of the common equity of such Subsidiary or Restricted Affiliate on a basis that is substantially proportionate to their common equity interests (with any disproportionately large equity interests received by the Company, a Subsidiary of the Company or a Restricted Affiliate of the Company relative to their respective contributions being ignored for this purpose); and (f) Guarantees by the Company or a Subsidiary of the Company of up to $15 million in principal amount of Indebtedness of the Company's Subsidiaries or Restricted Affiliates at any one time outstanding and related accrued interest. "Permitted Investments" means Investments in (a) any of the Senior Notes; (b) Cash Equivalents; (c) intercompany notes to the extent permitted under clause (d) of the definition of "Permitted Indebtedness," (d) Investments 17 in any Person if as a result of such Investment such Person becomes a Subsidiary or Restricted Affiliate of the Company or is merged with or into Company or a Subsidiary or Restricted Affiliate of the Company, so long as the surviving entity if the Company or a Subsidiary or Restricted Affiliate of the Company and (e) other Investments, provided that, after giving pro forma effect to teach such Investment, the aggregate amount of all such Investments made on and after the Issue Date that are outstanding (after giving effect to any such Investments that are returned to the Company or the Subsidiary or Restricted Affiliate that made such prior Investment, without restriction, in cash on or prior to the date of any such calculation) at any time does not exceed the sum of (i) $100 million, plus (i) the Net Cash Proceeds received by the Company from the sale (other than (A) to any Subsidiary or Restricted Affiliate of the Company, (B) to the extent used to effect a Qualified Exchange, or (C) to make Restricted Payments) of its Qualified Stock after the Issue Date, minus (iii) the amount of any payments made (other than pursuant to a Qualified Exchange) in connection with the retirement of the Series A Convertible Preferred Stock, plus (iv) net proceeds received from The Wharf (Holdings) Limited ("Wharf Holdings"), or any of its affiliates due to the wrongful acts, as determined in a final judgment of a court of competent jurisdiction, or pursuant to a contractual settlement of claims, in either case no longer subject to appeal or review, of Wharf Holdings or any of its affiliates, and plus (v) to the extent that any Unrestricted Subsidiary or Affiliate is properly designated as a Subsidiary or Restricted Affiliate in accordance with the terms of the Indenture, an amount equal to the Fair Market Value of the Company's Pro Rata Share of such properly designated Subsidiary or Restricted Affiliate. For purposes of clause (e), the amount of an Investment made by a Subsidiary, other than a Wholly Owned Subsidiary, or a Restricted Affiliate, shall be deemed to equal the total amount of such Investment multiplied by the Company's Pro Rata Share in such Person making the Investment. "Permitted Lien" means (a) Liens existing on the Issue Date; (b) Liens imposed by governmental authorities for taxes, assessments or other charges not yet subject to penalty or which are being contested in good faith and by appropriate proceedings, if adequate reserves with respect thereto are maintained on the books of the company in accordance with GAAP; (c) statutory liens of carriers, warehousemen, mechanics, material men, landlords, repairmen or other like Liens arising by operation of law in the ordinary course of business, provided that (i) the underlying obligations are not overdue for a period of more than 30 days, or (ii) such Liens are being contested in good faith and by appropriate proceedings and adequate reserves with respect thereto are maintained on the books of the Company in accordance with GAAP; (d) Liens 18 securing the performance of bids, trade contracts (other than borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business; (e) easements, rights-of-way, zoning, similar restrictions and other similar encumbrances or title defects which, singly or in the aggregate, do not in any case materially detract from the value of the property, subject thereto (as such property is used by the Company or any of its Subsidiaries) or interfere with the ordinary conduct of the business of the Company or any of its Subsidiaries; (f) Liens arising by operation of law in connection with judgments, only to the extent, for an amount and for a period not resulting in an Event of Default with respect thereto; (g) pledges or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security legislation; (h) leases or subleases granted to other Persons in the ordinary course of business not materially interfering with the conduct of the business of the Company or any of its Subsidiaries or materially detracting from the value of the relative assets of the Company or any Subsidiary; and (i) Liens arising from precautionary Uniform Commercial Code financing statement filings regarding operating leases entered into by the Company or any of its Subsidiaries in the ordinary course of business. "Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or agency or political subdivision thereof (including any subdivision or ongoing business of any such entity or substantially all of the assets of any such entity, subdivision or business). "Principals" means Apollo Cable Partners, L.P., Apollo Advisors. L.P., Albert M. Carollo, Lawrence F. De George, Lawrence J. DeGeorge, Curtis Rochelle, Marian Rochelle, Rochelle Investments, Ltd (so long as it is controlled by Curtis or Marian Rochelle), Gene W. Schneider, G. Schneider Holdings, Co. and the Gene W. Schneider Family Trust (so long as each is controlled by Gene W. Schneider or trustees appointed by him), Janet S. Schneider and Mark L. Schneider. "Pro Rata Share" means that portion of an Investment that corresponds to the Company's direct or indirect percentage interest in the profits of the Person in whom such Investment was made or, in the case of a transfer of property, the direct or indirect percentage interest in the profits of the Person making such Investment (which would be 100% in the case of any Investments made by the Company directly). The Pro Rata Share of an Investment as of any date shall be determined in good faith by the Company's Board of Directors. 19 "Public Equity Offering" means a primary underwritten public offering and sale, after the Issue Date, of Qualified Capital Stock of the Company registered pursuant to the Securities Act for Net Cash Proceeds (after commissions, discounts, fees and expenses) to the Company of at least $20 million. "Purchase Money Indebtedness" means any Indebtedness of such Person to any seller or other Person incurred solely to finance the acquisition (including in the case of a Capitalized Lease Obligation, the lease) of any after-acquired real or personal tangible property which, in the reasonable good faith judgment of the Board of Directors of the Company, is directly related to a Related Business of such Person and which is incurred concurrently with such acquisition and is secured only by the assets so financed. "Purchaser Resale Notice" shall have the meaning set forth in the Note Purchase Agreement. "Purchasers" means UIH Funding Inc., Salomon Smith Barney, Inc., TD Securities (USA), Inc. and Chase Securities Inc. "Qualified Capital Stock" means any Equity Interest of the Company that is not Disqualified Capital Stock. "Qualified Exchange" means any legal defeasance, redemption, retirement, repurchase or other acquisition of Capital Stock or Indebtedness (in the case of such Indebtedness, that was issued on or after the Issue Date) of the Company with the Net Cash Proceeds received by the Company from the substantially concurrent sale of Qualified Capital Stock or any exchange of Qualified Capital Stock for any Capital Stock or Indebtedness of the Company issued on or after the Issue Date. "Record Date" means a Record Date specified in the Securities whether or not such Record Date is a Business Day. "Redemption Date," when used with respect to any Senior Note to be redeemed pursuant to Section 3.5 hereof and paragraph 4 of the Securities, means the date fixed for such redemption pursuant to such Section 3.5 and paragraph 4. "Redemption Price," when used with respect to any Senior Note to be redeemed pursuant to Section 3.5 hereof and paragraph 4 of the Securities, means the redemption price for such redemption specified pursuant thereto as Exhibit 20 A, which shall include, without duplication, in each case, accrued and unpaid interest and Liquidated Damages, if any to the Redemption Date. "Reference Period" with regard to any Person means the two full fiscal quarters (or such lesser period during which such Person has been in existence) ended immediately preceding any date upon which any determination is to be made pursuant to the terms of the Senior Notes or the Indenture. "Refinancing Indebtedness" means Indebtedness or Disqualified Capital Stock (a) issued in exchange for, or the proceeds from the issuance and sale of which are used substantially concurrently to repay, redeem, defease, refund, refinance, discharge or otherwise retire for value, in whole or in part, or (b) constituting an amendment, modification or supplement to, or a deferral or renewal of ((a) and (b) above are, collectively, a "Refinancing"), any Indebtedness or Disqualified Capital Stock in a principal amount (or, if issued with an original issue discount, an original accreted value, determined in accordance with GAAP) or, in the case of Disqualified Capital Stock, liquidation preference, not to exceed (after deduction of reasonable and customary fees and expenses incurred in connection with the Refinancing and the payment of any premium in accordance with the terms of the Indebtedness or Disqualified Capital Stock being refinanced, without regard to any modification thereof made in connection with or in contemplation of such refinancing) the lesser of (i) the principal amount or, in the case of Disqualified Capital Stock, liquidation preference, of the Indebtedness or Disqualified Capital Stock so Refinanced and (ii) if such Indebtedness being Refinanced was issued with an original issue discount, the accreted value thereof (as determined in accordance with GAAP) at the time of such Refinancing; provided that (A) such Refinancing Indebtedness of any Subsidiary or Restricted Affiliate of the Company shall only be used to Refinance outstanding Indebtedness or Disqualified Capital Stock, as the case may be, of such Subsidiary or Restricted Affiliate, (B) such Refinancing Indebtedness shall (x) not have an Average Life shorter than the Indebtedness or Disqualified Capital Stock to be so refinanced at the time of such Refinancing and (y) in all respects, be no less subordinated or junior, if applicable, to the rights of Holders of the Senior Notes than was the Indebtedness or Disqualified Capital Stock to be refinanced and (C) such Refinancing Indebtedness shall have a final installment of principal (or redemption payment) scheduled to come due no earlier than the final scheduled maturity of the Indebtedness or Disqualified Capital Stock to be so refinanced. "Registration Rights Agreement" means the Registration Rights Agreement dated as of the date hereof by and between the Initial Purchasers and the 21 Company, as such agreement may be amended, modified or supplemented from time to time in accordance with the terms thereof. "Related Business" means any business in which the Company, its Subsidiaries or affiliated companies are engaged, as of the date of the Indenture, or, directly or indirectly, (i) that consists primarily of, or is related to, operating, acquiring, developing and constructing multi-channel television systems, programming services, wire-based or "wireless" telephony services and related services, (ii) that uses existing or future technology for the transmission and delivery of programming, voice or other data or (iii) that supports or is incidental to any business listed in clause (i) or (ii). "Related Party" with respect to any Principal means (A) any controlling stockholder or, 80% (or more) owned Subsidiary of such Principal, or with respect to each individual Principal, (i) family partnerships, corporations or other entities holding Equity Interests in the Company solely for the benefit of such Principal or any of the Persons listed in (ii), (iii), (iv) or (v) below, (ii) such Principal's spouse, (iii) such Principal's children, grandchildren, stepchildren, stepgrandchildren and their spouses, (iv) heirs, legatees and devisees, and (v) trusts solely for the benefit of any of the foregoing; or (B) any trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or Persons beneficially holding an 80% or more controlling interest of which consist of such Principal and/or such other Persons referred to in the immediately preceding clause (A). "Responsible Officer," when used with respect to the Trustee, means any officer within the Corporate Trust Administration of the Trustee (or any successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Restricted Affiliate" means any Person that has been designated in a Board Resolution as a Restricted Affiliate based on a determination by the Board of Directors that the Company has, directly or indirectly, the requisite control over such Person to prevent it from incurring any Indebtedness, issuing any preferred stock, making any dividend, distribution, repurchase, retirement, or payment with respect to its Capital Stock (except on a pro rata basis with respect to all holders of its Capital Stock), or otherwise taking any action at any time in contravention of Sections 4.7, 4.9 and 4.15 that are applicable to Restricted Affiliates. The Company will be required to deliver an Officers' Certificate to the Trustee, including a copy of the Board Resolution, upon 22 designating any Person as a Restricted Affiliate. The Board of Directors may designate a Restricted Affiliate no longer to be a Restricted Affiliate, provided that no Default or Event of Default will occur as a consequence thereof and that such redesignation shall be an Investment treated as having been made as set forth in the last sentence of the definition of "Investment." The companies listed as Restricted Affiliates in Annex A to the Offering Memorandum shall be deemed to be Restricted Affiliates as of the Issue Date for purposes of this Indenture, until redesignated in compliance therewith. "Restricted Investment" means, in one or a series of related transactions, any Investment, other than Permitted Investments. "Restricted Payment" means, with respect to any Person, (a) the declaration or payment of any dividend or other distribution in respect of Equity Interests of such Person or any parent or Subsidiary or Restricted Affiliate of such Person, (b) any payment on account of the purchase, redemption or other acquisition or retirement for value of Equity Interests of such Person or any Subsidiary or Restricted Affiliate or parent of such Person, (c) other than with the proceeds from the substantially concurrent sale of, or in exchange for, Refinancing Indebtedness any purchase, redemption, or other acquisition or retirement for value of, any payment in respect of any amendment of the terms of or any defeasance of, any Subordinated Indebtedness, directly or indirectly, by such Person or a parent or Subsidiary or Restricted Affiliate of such Person prior to the scheduled maturity, any scheduled repayment of principal, or scheduled sinking fund payment, as the case may be, of such Indebtedness and (d) any Restricted Investment by such Person; provided, however, that the term "Restricted Payment" does not include (i) any dividend, distribution or other payment on or with respect to Equity Interests of an issuer to the extent payable solely in shares of Qualified Capital Stock of such issuer, or (ii) any dividend, distribution or other payment to, or Investment in, the Company or any of its Subsidiaries or Restricted Affiliates by the Company or any of its Subsidiaries or Restricted Affiliates; provided that with respect to this clause (iii), any Investment in the Company shall have resulted in the receipt by the Company or its Subsidiaries of the considerations constituting such Investment. "Retained Assets" means the Company's ownership and other interests in the Persons that comprise the Teleport St. Petersburg operating Company. "SEC" or "Commission" means the Securities and Exchange Commission. 23 "Securities" or "Senior Notes" means, collectively, the Initial Securities and, when and if issued as provided in the Registration Rights Agreement, the Exchange Securities and, to the extent not included in the definition of Initial Securities, the Additional Notes issued in compliance with clause (b) of Section 4.9 and whose terms are governed by this Indenture. "Securities Act" means the Securities Act of 1933, as amended. "Securities Custodian" means the Trustee, as custodian with respect to the Securities in global form, or any successor entity thereto. "Senior Notes" See the definition of Securities. "Series A Convertible Preferred Stock" means the 32,000 shares of the Company's Series A Convertible Preferred Stock outstanding on the Issue Date. "Series B Convertible Preferred Stock" means the 139,031 shares of the Company's Series B Convertible Preferred Stock outstanding on the Issue Date. "Significant Subsidiary" shall have the meaning provided under Regulation S-X of the Securities Act, as in effect on the Issue Date. "Stated Maturity," when used with respect to any Senior Note, means May 1, 2009. "Subordinated Indebtedness" means Indebtedness of the Company that is subordinated in right of payment by its terms or the terms of any document or instrument or instruments, relating thereto to the Senior Notes, in any respect or has a stated maturity on (except for the Senior Notes and any other Indebtedness incurred pursuant to clause (b) of Section 4.9) or after the Stated Maturity. "Subsidiary" with respect to any Person, means (i) a corporation a majority of whose Equity Interests with voting power, under ordinary circumstances, to elect directors is at the time, directly or indirectly, owned by such Person, by such Person and one or more Subsidiaries of such Person or by one or more Subsidiaries of such Person, (ii) any other Person (other than a corporation) in which such Person, one or more Subsidiaries of such Person, or such Person and one or more Subsidiaries of such Person, directly or indirectly, at the date of determination thereof has at least majority ownership interest, or (iii) a partnership in which such Person or a Subsidiary of such Person is, 24 at the time, the managing general partner. Notwithstanding the foregoing, an Unrestricted Subsidiary shall not be a Subsidiary of the Company or of any Subsidiary of the Company. Unless the context requires otherwise, Subsidiary means each direct and indirect Subsidiary of the Company. "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss. 77aaa-77bbbb) as in effect on the date on which this Indenture is qualified under the TIA. "Transfer Restricted Securities" means Securities that bear or are required to bear the legend set forth in Section 2.6. "Trustee" means the party named as such above until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder. "UIHE" means UIH Europe, Inc., a Delaware corporation, and wholly owned Subsidiary of the Company and formerly know as Joint Venture, Inc. "UIPI" means United International Properties, Inc., a Delaware corporation and a direct Wholly Owned Restricted Subsidiary of the Company. "Unrestricted Subsidiary" means (a) those subsidiaries of the Company listed in Annex B attached to the Offering Memorandum, and (b) any subsidiary of the Company that does not own any Equity Interests of, or own or hold any Lien on any property of, the Company or any other Subsidiary of the Company and that is designated as an Unrestricted Subsidiary by the Board of Directors of the Company; provided that (i) such subsidiary shall not engage, to any substantial extent, in any line or lines of business activity other than a Related Business, and (ii) after giving pro forma effect to such designation would there exist a Default or Event of Default. The Board of Directors of the Company may designate any Unrestricted Subsidiary to be a Subsidiary, provided that no Default or Event of Default will occur as a consequence thereof. Each such designation shall be evidenced by filing with the Trustee a certified copy of the resolution giving effect to such designation and an Officers' Certificate certifying that such designation complied with the foregoing conditions. "UPC" shall have the meaning set forth in the Offering Memorandum. "U.S. Government Obligations" or "U.S. Government Securities" means direct non-callable obligations of, or noncallable obligations guaranteed by, 25 the United States of America for the payment of which obligation or guarantee the full faith and credit of the United States of America is pledged. "Wholly Owned Subsidiary" means a Subsidiary at least 99% of the Equity Interests of which are owned by the Company or one or more Wholly Owned Subsidiaries of the Company. Section 1.2 OTHER DEFINITIONS. Term Defined in Section "Affiliate Transaction" 4.11 "Asset Sale" 4.10 "Asset Sale Offer" 4.10 "Asset Sale Offer Amount" 4.10 "Asset Sale Offer Price" 4.10 "Change of Control Offer" 4.18 "Change of Control Purchase Date" 4.18 "Change of Control Offer Period" 4.18 "Change of Control Purchase Price" 4.18 "Covenant Defeasance" 8.3 "Event of Default" 6.1 "Excess Proceeds" 4.10 "incur" 4.9 "Legal Defeasance" 8.2 "Paying Agent" 2.3 "Registrar" 2.3 "Repurchase Offer" 3.1 "Restricted Payments" 4.7 "Unrestricted Investment" 4.16 Section 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: "indenture securities" means the Securities; 26 "indenture security holder" means a Holder of a Security; "indenture to be qualified" means this Indenture; "indenture trustee" or "institutional trustee" means the Trustee; "obligor" on the Securities means the Company and any successor obligor upon the Securities. All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them. Section 1.4 RULES OF CONSTRUCTION. Unless the context otherwise requires: (1) a term has the meaning assigned to it; (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (3) "or" is not exclusive; (4) words in the singular include the plural, and in the plural include the singular; (5) provisions apply to successive events and transactions; and (6) references to sections of or rules under the Securities Act shall be deemed to include substitute, replacement of successor sections or rules adopted by the SEC from time to time. 27 ARTICLE II THE SECURITIES Section 2.2 FORM AND DATING. The Securities and the Trustee's certificate of authentication shall be substantially in the form of Exhibit A hereto. The Securities may have notations, legends or endorsements approved as to form by the Company and required by law, stock exchange rule, agreements to which the Company is subject or usage. Each Security shall be dated the date of its authentication. The Securities shall be issuable only in denominations of $1,000 (or such greater amount as a result of any increase in the Accretion Rate) and integral multiples thereof. The terms and provisions contained in the Securities shall constitute, and are hereby expressly made, a part of this Indenture, and the Company and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. Each Global Security shall represent such of the outstanding Securities as shall be specified therein and each shall represent the aggregate amount of outstanding Securities that may from time to time be reduced or increased, as appropriate, to reflect exchanges, repurchases and redemptions. Any endorsement of a Global Security to reflect the amount of any increase or decrease in the amount of outstanding Securities represented thereby shall be made by the Trustee or the Securities Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.6 Section 2.2 EXECUTION AND AUTHENTICATION. Two Officers of the Company shall sign the Securities for the Company by manual or facsimile signature. The Company's seal shall be 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 a Security is authenticated, the Security shall nevertheless be valid. A Security shall not be valid until authenticated by the manual signature of the Trustee. The signature shall be conclusive evidence that the 28 Security has been authenticated under this Indenture. The form of Trustee's certificate of authentication to be borne by the Securities shall be substantially as set forth in Exhibit A hereto. The Trustee shall authenticate Initial Securities for original issue in the aggregate principal amount of up to $[355,000,000] and shall authenticate Exchange Securities for original issue in the aggregate principal amount of up to $[355,000,000], in each case upon a written order of the Company in the form of an Officers' Certificate; provided that such Exchange Securities shall be issuable only upon the valid surrender for cancellation of Initial Securities of a like aggregate principal amount at maturity in accordance with the Registration Rights Agreement. The Officers' Certificate shall specify the amount of Securities to be authenticated and the date on which the Securities are to be authenticated. The aggregate principal amount of Securities outstanding at any time may not exceed $[355,000,000] (or such greater amount as would be necessary to reflect any increase in the Accretion Rate) and except as provided in Section 2.7. Upon the written order of the Company in the form of an Officers' Certificate, the Trustee shall authenticate Securities in substitution of Securities originally issued to reflect any name change of the Company. The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Securities. 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 an Agent to deal with the Company or an Affiliate of the Company. Section 2.3 REGISTRAR AND PAYING AGENT. The Company shall maintain an office or agency where Securities may be presented for registration of transfer or for exchange ("Registrar") and an office or agency where Securities may be presented for payment ("Paying Agent"). The Registrar shall keep a register of the Securities and of their transfer and exchange. The Company may appoint one or more co-registrars and one or more additional paying agents. The term "Registrar" includes any co-registrar and the term "Paying Agent" includes any additional paying agent. The Company may change any Paying Agent or Registrar without prior notice to any Holder. The Company shall notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Company may act as Paying Agent or Registrar. 29 The Company initially appoints The Depositary Trust Company ("DTC"), to act as Depositary with respect to the Global Securities. The Company initially appoints the Trustee to act as the Registrar and Paying Agent and agent for service of notices and demands in connection with the Securities. Section 2.4 PAYING AGENT TO HOLD MONEY IN TRUST. The Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal of, or premium, if any, or interest (or Liquidated Damages, if any) on the Securities, and will notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company) shall have no further liability for the money delivered to the Trustee. If the Company acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee shall serve as paying Agent for the Securities. Section 2.5 HOLDER LISTS. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is not the Registrar, the Company shall furnish to the Trustee at least seven Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Securities, including the aggregate principal amount at maturity of the Senior Notes held by each thereof. Section 2.6 TRANSFER AND EXCHANGE. (a) TRANSFER AND EXCHANGE OF DEFINITIVE SECURITIES. When Definitive Securities are presented to the Registrar with a request: (x) to register the transfer of such Definitive Securities; or 30 (y) to exchange such Definitive Securities for an equal principal amount at maturity of Definitive Securities of other authorized denominations, the 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 registration of 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, duly executed by the Holder thereof or his attorney duly authorized in writing; and (ii) in the case of Transfer Restricted Securities that are Definitive Securities, shall be accompanied by the following additional information and documents, as applicable: (A) if such Transfer Restricted Security is 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 (in substantially the form set forth on the reverse of the Security); or (B) if such Transfer Restricted Security is being transferred to a "qualified institutional buyer" (within the meaning of Rule 144A promulgated under the Securities Act) that is aware that any sale of Securities to it will be made in reliance on Rule 144A under the Securities Act and that is acquiring such Transfer Restricted Security for its own account or for the account of another such "qualified institutional buyer," a certification from such Holder to that effect (in substantially the form set forth on the reverse of the Security); or (C) if such Transfer Restricted Security is being transferred pursuant to an exemption from registration in accordance with Rule 144, or outside the United States in an offshore transaction in compliance with Rule 904 under the Securities Act, or pursuant to an effective registration statement under the Securities Act, a certification from such Holder to that effect (in substantially the form set forth on the reverse of the Security); or (D) if such Transfer Restricted Security is being transferred in reliance on another exemption from the registration requirements of the Securities Act and with all applicable securities laws of the States of the United States, a certification from such Holder to that effect (in substantially the form set forth on the reverse of the Security) and an Opinion of Counsel reasonably acceptable to the Company and to the Registrar to the effect that such transfer is in compliance with the Securities Act. 31 (b) RESTRICTIONS ON TRANSFER OF A DEFINITIVE SECURITY FOR A BENEFICIAL INTEREST IN A GLOBAL SECURITY. A Definitive Security may not be exchanged for a beneficial interest in a Global Security except upon satisfaction of the requirements set forth below. Upon receipt by the Trustee of a Definitive Security, duly endorsed or accompanied by appropriate instruments of transfer, in form satisfactory to the Trustee, together with: (i) if such Definitive Security is a Transfer Restricted Security, certification, substantially in the form set forth on the reverse of the Security, that such Definitive Security is being transferred to a "qualified institutional buyer" (as defined in Rule 144A under the Securities Act) in accordance with Rule 144A under the Securities Act; and (ii) whether or not such Definitive Security is a Transfer Restricted Security, written instructions directing the Trustee to make, or to direct the Securities Custodian to make, an endorsement on the Global Security to reflect an increase in the aggregate principal amount of the Securities represented by the Global Security, then the Trustee shall cancel such Definitive Security and cause, or direct the Securities Custodian to cause, in accordance with the standing instructions and procedures existing between the Depositary and the Securities Custodian, the aggregate principal amount at maturity of Securities represented by the Global Security to be increased accordingly. If no Global Securities are then outstanding, the Company shall issue and the Trustee shall authenticate a new Global Security in the appropriate principal amount at maturity. (c) TRANSFER AND EXCHANGE OF GLOBAL SECURITIES. The transfer and exchange of Global Securities or beneficial interests therein shall be effected through the Depositary, in accordance with this Indenture (including applicable restrictions on transfer set forth herein, if any) and the procedures of the Depositary therefor. (d) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL SECURITY FOR A DEFINITIVE SECURITY. 32 (i) Any Person having a beneficial interest in a Global Security may upon request exchange such beneficial interest for a Definitive Security. Upon receipt by the Trustee of written instructions or such other form of instructions as is customary for the Depositary, from the Depositary or its nominee on behalf of any Person having a beneficial interest in a Global Security, and upon receipt by the Trustee of a written instruction or such other form of instructions as is customary for the Depositary or the Person designated by the Depositary as having such a beneficial interest in a Transfer Restricted Security only, the following additional information and documents (all of which may be submitted by facsimile): (A) if such beneficial interest is being transferred to the Person designated by the Depositary as being the beneficial owner, a certification from the transferor to that effect (in substantially the form set forth on the reverse of the Security); or (B) if such beneficial interest is being transferred to a "qualified institutional buyer" (within the meaning of Rule 144A promulgated under the Securities Act), that is aware that any sale of Securities to it will be made in reliance on Rule 144A under the Securities Act and that is acquiring such beneficial interest in the Transfer Restricted Security for its own account or the account of another such "qualified institutional buyer", a certification to that effect from the transferor (in substantially the form set forth on the reverse of the Security); or (C) if such beneficial interest is being transferred pursuant to an exemption from registration in accordance with Rule 144, or outside the United States in an offshore transaction in compliance with Rule 904 under the Securities Act, or pursuant to an effective registration statement under the Securities Act, a certification from the transferor to that effect (in substantially the form set forth on the reverse of the Security); or (D) if such beneficial interest is being transferred in reliance on another exemption from the registration requirements of the Securities Act and in accordance with all applicable securities laws of the States of the United States, a certification to that effect from the transferor (in substantially the form set forth on the reverse of the Security) and an Opinion of Counsel from the transferee or 33 transferor reasonably acceptable to the Issuers and to the Registrar to the effect that such transfer is in compliance with the Securities Act, then the Trustee or the Securities Custodian, at the direction of the Trustee, will cause, in accordance with the standing instructions and procedures existing between the Depositary and the Securities Custodian, the aggregate principal amount of the Global Security to be reduced and, following such reduction, the Issuers will execute and, upon receipt of an authentication order in the form of an Officers' Certificate, the Trustee's authenticating agent will authenticate and deliver to the transferee a Definitive Security in the appropriate principal amount. (ii) Definitive Securities issued in exchange for a beneficial interest in a Global Security pursuant to this Section 2.6(d) shall be registered in such names and in such authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Definitive Securities to the persons in whose names such Securities are so registered. (e) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL SECURITIES. Notwithstanding any other provisions of this Indenture (other than the provisions set forth in subsection (f) of this Section 2.6), a Global Security may not be transferred as a whole except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. (f) AUTHENTICATION OF DEFINITIVE SECURITIES IN ABSENCE OF DEPOSI TARY. If at any time: (i) the Depositary for the Securities noti fies the Company that the Depositary is unwilling or unable to continue as Depositary for the Global Securities and a successor Depositary for the Global Securities is not appointed by the Company within ninety days after delivery of such notice; or (ii) the Company, in its sole discretion, notifies the Trustee in writing that it elects to cause the issuance of Definitive Securities under this Indenture, then the Company will execute, and the Trustee, upon receipt of an Officers' Certificate requesting the authentication and delivery of Definitive Securities, 34 will, or its authenticating agent will, authenticate and deliver Definitive Securities, in an aggregate principal amount at maturity equal to the principal amount at maturity of the Global Securities, in exchange for such Global Securities. (g) LEGENDS. (i) Except as permitted by the following paragraphs (ii) and (iii) each Security certificate evidencing the Global Securities and the Definitive Securities (and all Securities issued in exchange therefor or substitution thereof) shall bear a legend in substantially the following form: "THIS SENIOR NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE SECOND SENTENCE HEREOF. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT IS ACQUIRING THIS SENIOR NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT OR, (C) AFTER THE COMPANY HAS RECEIVED A "PURCHASER RESALE NOTICE" (AS DEFINED IN THE INDENTURE) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "IAI"), (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OF THE SECURITIES ACT, (D) AFTER THE COMPANY HAS RECEIVED A "PURCHASER RESALE NOTICE", IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E) AFTER THE COMPANY HAS RECEIVED A "PURCHASER 35 RESALE NOTICE", TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE WITH A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS SENIOR NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE ACCRETED VALUE OF SENIOR NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (F) AFTER THE COMPANY HAS RECEIVED A "PURCHASER RESALE NOTICE" IN ACCORDANCE WITH ANOTHE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND IF REQUESTED BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SENIOR NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS SENIOR NOTE IN VIOLATION OF THE FOREGOING." (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 Act or an effective registration statement 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 legend set forth above and rescind any restriction on the transfer of such Transfer Restricted Security; and 36 (B) any such Transfer Restricted Security represented by a Global Security shall not be subject to the provisions set forth in (i) above (such sales or transfers being subject only to the provisions of Section 2.6(c) hereof); provided, however, that with respect to any request for an exchange of a Transfer Restricted Security that is represented by a Global Security for a Definitive Security that does not bear a legend, which request is made in reliance upon Rule 144, the Holder thereof shall certify in writing to the Registrar that such request is being made pursuant to Rule 144 (such certification to be substantially in the form set forth on the reverse of the Security). (iii) Any Exchange Securities issued in connection with the Exchange Offer shall not bear the legend set forth in (i) above and the Trustee shall rescind any restriction on the transfer of such Exchange Securities. (h) CANCELLATION AND/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 cancelled, such Global Security shall be returned to or retained and cancelled by the Trustee. At any time prior to such cancellation, if any beneficial interest in a Global Security is exchanged for Definitive Securities, redeemed, repurchased or cancelled, the principal amount at maturity of Securities represented by such Global Security shall be reduced and an endorsement shall be made on such Global Security, by the Trustee or the Securities Custodian, at the direction of the Trustee, to reflect such reduction. (i) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF DEFINITIVE SECURITIES. (i) To permit registrations of transfers and exchanges, the Company shall execute and the Trustee or any authenticating agent of the Trustee shall authenticate Definitive Securities and Global Securities at the Registrar's request. (ii) No service charge shall be made to a Holder for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax, assessments, or similar governmental charge payable in connection therewith (other than any such transfer taxes, assessments, or similar governmental charge 37 payable upon exchanges or transfers pursuant to Section 2.2 (fourth paragraph), 2.10, 4.10, 4.18 paragraph, 8.5, or 9.1 hereof). (iii) The Registrar shall not be required to register the transfer of or exchange of (a) any Definitive Security selected for redemption in whole or in part pursuant to Section 3.5, except the unredeemed portion of any Definitive Security being redeemed in part, or (b) any Security for a period beginning 15 Business Days before the mailing of a notice of an offer to repurchase pursuant to Section 4.10 or Section 4.18 hereof or redemption of Securities pursuant to Section 3.5 hereof and ending at the close of business on the day of such mailing. (iv) 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 Depositary participants or beneficial owners of interests 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 thereof. (j) Prior to due presentment for the registration of a transfer of any Security, the Trustee, any Agent and the Company may deem and treat the Person in whose name any Security is registered as the absolute owner of such Security for all purposes, and none of the Trustee, any Agent or the Company shall be affected by notice to the contrary. Section 2.7 REPLACEMENT SECURITIES. If any mutilated Security is surrendered to the Trustee or the Company and the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Security, the Company shall issue and the Trustee, upon the written order of the Company signed by two Officers of the Company, shall authenticate a replacement Security if the Trustee's requirements for replacements of Securities are met. If required by the Trustee or the Company, an indemnity bond must be supplied by the Holder that is sufficient in the 38 judgment of the Trustee and the Company to protect the Company, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Security is replaced. The Company may charge for its expenses in replacing a Security. Every replacement Security is an additional obligation of the Company and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Securities duly issued hereunder. Section 2.8 OUTSTANDING SECURITIES. The Securities outstanding at any time are all the Securities authenticated by the Trustee (including any Security represented by a Global Security), except for those canceled by it, those delivered to it for cancellation and those described in this Section 2.8 as not outstanding. Except as set forth in Section 2.9 hereof, 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 2.7 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Security is held by a bona fide purchaser. If the principal amount of any Security is considered paid under Section 4.1 hereof, it ceases to be outstanding and it ceases to accrete. Section 2.9 TREASURY SECURITIES. In determining whether the Holders of the required principal amount at maturity of Securities have concurred in any direction, waiver or consent, Securities owned by the Company, any Subsidiary of the Company or any Affiliate of the Company shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities that a Trustee knows are so owned shall be so disregarded. Notwithstanding the foregoing, Securities that are to be acquired by the Company, any Subsidiary of the Company or any Affiliate of the Company pursuant to an exchange offer, tender offer or other agreement shall not be deemed to be owned by the Company, a Subsidiary of the Company or an Affiliate of the Company until legal title to such Securities pass to the Company, such Subsidiary or such Affiliate, as the case may be. 39 Section 2.10 TEMPORARY SECURITIES. Until Definitive Securities are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Securities upon a written order of the Company signed by two Officers of the Company. Temporary Securities shall be substantially in the form of Definitive Securities but may have variations that the Company considers appropriate for temporary Securities and as shall be reasonably acceptable to the Trustee. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate Definitive Securities in exchange for temporary Securities. Holders of temporary Securities shall be entitled to all of the benefits of this Indenture. Section 2.11 CANCELLATION. The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar and 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 all Securities surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall destroy canceled Securities (subject to the record retention requirement of the Exchange Act). Certification of the destruction of all canceled Securities shall be delivered to the Company. The Company may not issue new Securities to replace Securities that it has paid or that have been delivered to the Trustee for cancellation. Section 2.12 RECORD DATE. The record date for purposes of determining the identity of Holders of the Securities entitled to vote or consent to any action by vote or consent authorized or permitted under this Indenture shall be determined as provided for in TIA ss. 316(c). Section 2.13 CUSIP NUMBER. The Company in issuing the Securities may use a "CUSIP" number and, if it does so, the Trustee shall use the CUSIP number in notices of redemption or exchange as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness or accuracy of the CUSIP number printed in the notice or on the Securities and that reliance may be placed only on the other identification numbers printed on the Securities. The Company will promptly notify the Trustee of any change in the CUSIP number. 40 ARTICLE III REDEMPTION AND REPURCHASE Section 3.1 OFFER TO REPURCHASE. In the event that, pursuant to Sections 4.10 or 4.18 hereof, the Company shall be required to commence an Asset Sale Offer or a Change of Control Offer (either, a "Repurchase Offer"), it shall follow the procedures specified below. The Company shall send, by first class mail, a notice of such Repurchase Offer to the Trustee and each of the Holders at the following times: (i) upon the commencement of an Asset Sale Offer or (ii) within 15 days following any Change of Control, as applicable. The notice of Repurchase Offer, which shall be sent to all Holders shall contain all instructions and materials necessary to enable such Holders to tender Securities pursuant to such Repurchase Offer. The notice of Repurchase Offer, which shall govern the terms of the Repurchase Offer, shall state: (a) that the Repurchase Offer is being made pursuant to this Section 3.1 and Section 4.10 or 4.18 hereof, as applicable, and the length of time that such Repurchase Offer shall remain open; (b) in the case of an Asset Sale Offer, the Asset Sale Offer Price and the Asset Sale Offer Period and the relevant repurchase date; (c) in the case of a Change of Control Offer, the Change of Control Purchase Price and the Change of Control Purchase Date; (d) that any Security not tendered or accepted for payment shall continue to accrete and accrue interest, as applicable; (e) that, unless the Company defaults in making such payment, any Security accepted for payment pursuant to a Repurchase Offer shall cease to accrete after the repurchase date; 41 (f) that Holders electing to have a Security purchased pursuant to any Repurchase Offer shall be required to surrender the Security, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Security completed, to the Company, the depositary or a Paying Agent at the address specified in the notice at least three days before the repurchase date; (g) that Holders shall be entitled to withdraw their election if the Company, the Depositary or the Paying Agent, as the case may be, receives, not later than the expiration of the Asset Sale Offer Period (with respect to an Asset Sale Offer) or not later than the close of business on the second Business Day preceding the applicable Change of Control Offer repurchase date (with respect to a Change of Control Offer), a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount at maturity of Securities the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Securities purchased; (g) that Holders whose Securities were purchased only in part shall be issued new Securities equal in principal amount at maturity to the unpurchased portion of the Securities surrendered, which unpurchased portion must be equal to $1,000 in principal amount at maturity (or such greater amount as a result solely of an increase in the Accretion Rate) or an integral multiple thereof; and (h) that no representation is made as to the correctness or accu racy of the CUSIP number, if any, listed in such notice or printed on the Securities. At the Company's request, the Trustee shall give the notice of a Repurchase Offer in the Company's name and at its expense; provided, however, that the Com pany shall have delivered to the Trustee, at least 45 days prior to the repurchase date, an Officer's Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph. The Company shall comply with the requirements of Rule l4e-l under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Securities in connection with a Repurchase Offer. Section 3.2 DEPOSIT OF REPURCHASE PRICE. One Business Day prior to or on any repurchase date set in connection with a Repurchase Offer, the Company shall deposit with the Trustee or with the Paying Agent money sufficient to pay the repurchase price required by this 42 Indenture for all Securities to be repurchased on that date. The Trustee or the Paying Agent shall promptly return to the Company any money deposited with the Trustee or the Paying Agent by the Company in excess of the amounts necessary to pay the repurchase price of all Securities repurchased. If the Company complies with the provisions of the preceding paragraph, on and after such repurchase date, the Securities or the portions of Securities to be repurchased in accordance with the provisions of this Indenture shall cease to accrete and interest will cease to accrue, as applicable. Section 3.3 DELIVERY OF SECURITIES AND PAYMENT OF PURCHASE PRICE. One Business Day prior to or on any repurchase date set in connection with a Repurchase Offer, the Company shall deliver or cause to be delivered to the Trustee the Securities so accepted together with an Officers' Certificate stating the aggregate principal amount at maturity of Securities or portions thereof being purchased by the Company and that such securities were accepted for repurchase by the Company in accordance with the terms of Section 3.1 hereof. The Company or the Paying Agent, as the case may be, shall promptly (but in any case not later than five days after the repurchase date) mail or deliver to each tendering Holder an amount equal to the purchase price of the Securities tendered by such Holder and accepted by the Company for purchase, and the Company shall promptly issue a new Security, and the Trustee, upon written request from the Company shall authenticate and mail or deliver such new Security to such Holder, in a principal amount at maturity equal to any unpurchased portion of the Security surrendered, if any, provided, that each such new Security shall be in a principal amount at maturity of $1,000 (or such greater amount as a result solely of an increase in the Accretion Rate) or an integral multiple thereof. Any Security not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. The Company shall publicly announce the results of the Repurchase Offer on or as soon as practicable after the repurchase date. Section 3.4 SECURITIES REPURCHASED IN PART. Upon surrender of a Security that is repurchased in part in connection with a Repurchase Offer, the Company shall issue and, upon the Company's written request, the Trustee shall authenticate for the Holder at the expense of the Company a new Security equal in principal amount at maturity to the unpurchased portion of the Security surrendered. 43 Section 3.5 RIGHT OF REDEMPTION. The Company shall have the right to redeem Securities as set forth in paragraph 4 of the Securities and as set forth herein. Redemption of Securities at the Company's option shall be made only in accordance with this Section 3.5 and such paragraph 4. At its election, the Company may redeem the Securities in whole or in part, at the times and at the Redemption Prices specified in the form of Security attached as EXHIBIT A hereto, plus accrued and unpaid interest and Liquidated Damages, if any, to the applicable Redemption Date. Except as provided in this paragraph and paragraph 4 of the Securities, the Securities may not otherwise be redeemed at the option of the Company. If the Company elects to redeem Securities pursuant to this Section 3.5 and paragraph 4 of the Securities, the Company shall notify the Trustee in writing of the date on which the applicable Securities are to be redeemed (a "Redemption Date") and the principal amount at maturity thereof to be redeemed and whether it wants the Trustee to give notice of redemption to the Holders. The Company shall give each notice to the Trustee provided for in this Section 3.5 at least 30 days before the Redemption Date (unless a shorter notice shall be required by applicable law). Any such notice may be cancelled at any time prior to notice of such redemption being mailed to any Holder and shall thereby be void and of no effect. If fewer than all of the Securities are to be redeemed pursuant to Paragraph 4 thereof, the Trustee shall, if applicable, select from among such Securities to be redeemed pro rata or by lot or by such other method as the Trustee shall determine to be fair and appropriate and in such manner as complies with any applicable Depositary, legal and stock exchange requirements. The Trustee shall make the selection from the Securities outstanding and not previously called for redemption and shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Security selected for partial redemption, the principal amount at maturity thereof to be redeemed. Securities in denominations of $1,000 (or such greater amount that results solely from an increase in the Accretion Rate) may be redeemed only in whole. The Trustee may select for redemption portions (equal to $1,000 (or such greater amount that results solely from an increase in the Accretion Rate) denominations or any integral multiple thereof) of the principal amount at maturity of Securities that have denominations larger than $1,000 (or 44 such greater amount that results solely from an increase in the Accretion Rate). Provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption. At least 30 days but not more than 60 days before each Redemption Date (unless another notice period shall be required by applicable law), the Company shall mail a notice of redemption by first class mail, postage prepaid, to each Holder whose Securities are to be redeemed (unless a shorter notice period shall be required by applicable law) to such Holder's last address as then shown upon the register of the Registrar. At the Company's request, the Trustee shall give the notice of redemption in the Company's name and at the Company's expense. Each notice for redemption shall identify the Securities to be redeemed and shall state: (1) the Redemption Date; (2) the Redemption Price, plus the amount of accrued and unpaid interest and Liquidated Damages, if any, to be paid upon such redemption; (3) the name, address and telephone number of the Paying Agent; (4) that Securities called for redemption must be surrendered to the Paying Agent at the address specified in such notice to collect the Redemption Price; (5) that, unless (a) the Company defaults in its obligation to deposit cash with the Paying Agent in accordance with this Section 3.5 or (b) such redemption payment is prevented for any reason, interest and accretion of Accreted Value on Securities called for redemption ceases accrual of on and after the Redemption Date and the only remaining right of the Holders of such Securities is to receive payment of the Redemption Price, plus accrued and unpaid interest and Liquidated Damages, if any, to the Redemption Date, upon surrender to the Paying Agent of the Securities called for redemption and to be redeemed; (6) if any Security is being redeemed in part, the portion of the principal amount at maturity, equal to $1,000 (or such greater amount that results solely from an increase in the Accretion Rate) or any integral multiple thereof, of such Security to be redeemed and that, after the Redemption Date, and upon surrender of such Security, a new Security or Securities in aggregate principal amount at maturity equal to the unredeemed portion thereof will be issued; 45 (7) if less than all the Securities are to be redeemed, the identifica tion of the particular Securities (or portion thereof) to be redeemed, as well as the aggregate principal amount at maturity of such Securities to be redeemed; (8) the CUSIP number of the Securities to be redeemed; and (9) that the notice is being sent pursuant to this Section 3.5 and pursuant to the redemption provisions of Paragraph 4 of the Securities. Once notice of redemption is mailed in accordance with this Section 3.5, Securities called for redemption become due and payable on the Redemption Date and at the Redemption Price, plus accrued and unpaid interest (and Liquidated Damages, if any) to the Redemption Date. Upon surrender to the Trustee or Paying Agent, such Securities called for redemption shall be paid at the Redemption Price, plus accrued and unpaid interest (and Liquidated Damages, if any) to the Redemption Date; provided that if the Redemption Date is after a regular Record Date and on or prior to the corresponding Interest Payment Date, the accrued interest constituting part of the Redemption Price shall be payable to the Holder of the redeemed Securities registered on the relevant Record Date; and provided, further, that if a Redemp tion Date is a Legal Holiday, payment shall be made on the next succeeding Business Day and no interest shall accrue for the period from such Redemption Date to such succeeding Business Day. On or before the Redemption Date, the Company shall deposit with the Paying Agent (other than the Company or an Affiliate of the Company), cash sufficient to pay the Redemption Price, plus accrued and unpaid interest and Liquidated Damages, if any, to the Redemption Date, of all Securities to be redeemed on such Redemption Date (other than Securities or portions thereof called for redemption on that date that have been delivered by the Company to the Trustee for cancellation). The Paying Agent shall promptly return to the Company any cash so deposited which is not required for that purpose upon the written request of the Company. If the Company complies with the preceding paragraph and the other provisions of this Section 3.5 and payment of the Securities called for redemption is not prevented for any reason, interest on the Securities to be redeemed will cease to accrue on the applicable Redemption Date, whether or not such Securities are presented for payment. Notwithstanding anything in this Section 3.5 to the contrary, if any Security surrendered for redemption in the manner provided in the Securities shall not be so paid upon surrender for redemption because of the failure of the Company to comply with the preceding 46 paragraph and the other provisions of this Section 3.5, interest shall continue to accrue and Accreted Value to increase and be paid from and including the Redemption Date until such payment is made on the unpaid principal, and, to the extent lawful, on any interest not paid on such unpaid principal, in each case at the rate and in the manner provided in this Indenture and the Securities. Upon surrender of a Security that is to be redeemed in part, the Company shall execute and the Trustee shall authenticate and deliver to the Holder, without service charge, a new Security or Securities equal in principal amount at maturity to the unredeemed portion of the Security surrendered. ARTICLE IV COVENANTS Section 4.1 PAYMENT OF SECURITIES. The Company shall pay or cause to be paid the principal of and premium, if any, on the Securities on the dates and in the manner provided in the Securities. Principal, and premium, if any, shall be considered paid on the date due if the Paying Agent, if other than the Company, holds as of 10:00 a.m. Eastern Time on the due date money deposited by the Company in immediately available funds and designated for and sufficient to pay all principal, and premium, if any, then due. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal, Accreted Value, interest and premium, if any, at the rate equal to l% per annum in excess of the then applicable interest rate (or rate of accretion, as applicable) on the Securities to the extent lawful. Section 4.2 MAINTENANCE OF OFFICE OR AGENCY. The Company shall maintain in the Borough of Manhattan, the City of New York, an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Securities may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. The Company shall give prompt written notice to the Trustee of the location and 47 any change in the location of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee. The Company may also from time to time designate one or more other offices or agencies where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, the City of New York for such purposes. The Company shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. The Company hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Company in accordance with Section 2.3. Section 4.3 REPORTS. (a) Whether or not the Company is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, so long as any of the Senior Notes remain outstanding, the Company shall deliver to the Trustee and to each Holder, and to prospective purchasers of Senior Notes identified to the Company by Holders (i) within 15 days after it is or would have been (if it were subject to such reporting obligations) required to file such with the Commission, annual and quarterly financial statements substantially equivalent to financial statements that would have been included in reports filed with the Commission, if the Company were subject to the requirements of Section 13 or 15(d) of the Exchange Act, including, with respect to annual information only, a report thereon by the Company's certified independent public accountants as such would be required in such reports to the Commission, and, in each case, together with a management's discussion and analysis of financial condition and results of operations which would be so required and, unless the Commission will not accept such copies, file with the Commission the annual, quarterly and other reports which it is or would have been required to file with the Commission and (ii) any other information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. The Company shall also comply with the provisions of TIA ss. 314(a). 48 (b) The Company shall provide the Trustee with a sufficient number of copies of all reports and other documents and information that the Trustee may be required to deliver to the Holders of the Senior Notes under this Section 4.3. Section 4.4 COMPLIANCE CERTIFICATE. (a) The Company shall deliver to the Trustee, within 90 days alter the end of each fiscal year, an Officers' Certificate stating that a review of the activities of the Company and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions of this Indenture (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Company is taking or proposes to take with respect thereto) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the Securities is prohibited or if such event has occurred, a description of the event and what action the Company is taking or proposes to take with respect thereto. (b) So long as not contrary to the then current recommendations of the American Institute of Certified Public Accountants the year-end financial statements delivered pursuant to Section 4.3(a) above shall be accompanied by a written statement of the Company's independent public accountants (who shall be a firm of established national reputation) that in making the examination necessary for certification of such financial statements, nothing has come to their attention that would lead them to believe that the Company has violated any provisions of Article Four or Article Five hereof or, if any such violation has occurred, specifying the nature and period of existence thereof, it being understood that such accountants shall not be liable directly or indirectly to any Person for any failure to obtain knowledge of any such violation. (c) The Company shall, so long as any of the Securities are outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware of any Default or Event of Default, an Officers Certificate specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto. 49 Section 4.5 TAXES. The Company shall pay, and shall cause each of its Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and governmental levies except such as are contested in good faith, and by appropriate proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders of the Securities. Section 4.6 STAY, EXTENSION AND USURY LAWS. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law has been enacted. Section 4.7 LIMITATION ON RESTRICTED PAYMENTS. The Company will not, and will not permit any of its Subsidiaries or Restricted Affiliates to, directly or indirectly, make any Restricted Payment if, after giving effect to such Restricted Payment on a pro forma basis, (1) a Default or an Event of Default shall have occurred and be continuing, (2) the Company is not permitted to incur at least $1.00 of additional Indebtedness pursuant to the Debt Incurrence Ratio in clause (i) of Section 4.9 or (3) the aggregate amount of all Restricted Payments made by the Company and its Subsidiaries and Restricted Affiliates, including after giving effect to such proposed Restricted Payment, from and after the Issue Date, would exceed the sum of (a) 50% of the aggregate Consolidated Net Income of the Company for the period (taken as one accounting period), commencing on the Issue Date, to and including the last day of the fiscal quarter ended immediately prior to the date of each such calculation for which internal financial statements are available (or, in the event Consolidated Net Income for such period is a deficit, then minus 100% of such deficit), plus (b) the aggregate Net Cash Proceeds received by the Company from the sale of its Qualified Capital Stock (other than (i) to a Subsidiary or Restricted Affiliate of the Company and (ii) to the extent applied in connection with a Qualified Exchange), after the Issue Date, less (c) any 50 amounts applied to the uses set forth in clause (e) of the definition of "Permitted Investment." The foregoing clauses (2) and (3) of the immediately preceding paragraph, however, will not prohibit (u) any dividend, distribution or payment of interest on Disqualified Capital Stock permitted by Section 4.9 (v) open market repurchases of publicly traded shares of the Company's common stock from Persons other than officers, employees, directors or Affiliates of the Company, and repurchases (whether or not in the open market) of such stock from the estate of any Principal or from a Related Party of such Principal, in either case upon the death of such Principal, in an aggregate amount not to exceed $15 million on and after the Issue Date, (w) the retirement of the shares of the Series A Convertible Preferred Stock and Series B Convertible Preferred Stock outstanding on the Issue Date on its final redemption date and in accordance with its terms as of the Issue Date, (x) any dividend, distribution, or other payment (other than a repurchase) by any Subsidiary or Restricted Affiliate of the Company on its Equity Interests that is paid pro rata to all holders of such Equity Interests, and any repurchase for Fair Market Value as determined by the Board of Directors by any Subsidiary or Restricted Affiliate of the Company of any of such Subsidiary's or Restricted Affiliate's Equity Interests, (y) a Qualified Exchange, or (z) the payment of any dividend on Qualified Capital Stock within 60 days after the date of its declaration if such dividend could have been made on the date of such declaration in compliance with the foregoing provisions. The full amount of any Restricted Payment made pursuant to the foregoing clauses (v), (w) and (z) (but not pursuant to clauses (u), (x) or (y)) of the immediately preceding sentence, however, will be deducted in the calculation of the aggregate amount of Restricted Payments available to be made referred to in clause (3) of the immediately preceding paragraph. For purposes of this covenant, the amount of any Restricted Payment, if other than in cash, shall be the Fair Market Value thereof, as determined in good faith by the Board of Directors of the Company. Additionally, on the date of each Restricted Payment, the Company shall deliver an Officers' Certificate to the Trustee describing in reasonable detail the nature of such Restricted Payment, stating the amount of such Restricted Payment, stating in reasonable detail the provisions of the Indenture pursuant to which such Restricted Payment was made and certifying that such Restricted Payment was made in compliance with the terms of the Indenture. 51 Section 4.8 LIMITATION ON DIVIDENDS AND OTHER PAYMENT RE STRICTIONS AFFECTING SUBSIDIARIES. The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, create, assume or suffer to exist any consensual restriction on the ability of any Subsidiary of the Company to pay dividends or make other distributions to or on behalf of, or to pay any obligation to or on behalf of, or otherwise to transfer assets or property to or on behalf of, or make or pay loans or advances to or on behalf of, the Company or any Subsidiary of the Company, except (a) restrictions imposed by the Senior Notes or the Indenture or by other Indebtedness of the Company ranking pari passu with the Senior Notes, provided such restrictions are no more restrictive than those imposed by the Indenture, (b) restrictions imposed by applicable law, (c) existing restrictions under Indebtedness outstanding on the Issue Date, (d) restrictions under any Acquired Indebtedness not incurred in violation of the Indenture or any agreement relating to any property, asset, or business acquired by the Company or any of its Subsidiaries, which restrictions in each case existed at the time of acquisition, were not put in place in connection with or in anticipation of such acquisition and are not applicable to the Company or any of its Subsidiaries, or Restricted Affiliates, other than the Person or Persons acquired, or to any property, asset or business, other than the property, asset or business so acquired, (e) any such restriction or requirement imposed by Indebtedness or Disqualified Capital Stock incurred under Section 4.9, provided such restriction or requirement is no more restrictive than that imposed by the Indenture or any other instrument (including with respect to such Indebtedness) entered into by the Company or a Subsidiary governing the terms of a bona fide borrowing by the Company or a Subsidiary from a third party commercial lender for valid business purposes, (f) restrictions with respect solely to a Subsidiary of the Company imposed pursuant to a binding agreement which has been entered into for the sale or disposition of all or substantially all of the Equity Interests or assets of such Subsidiary, provided such restric tions apply solely to the Equity Interests or assets of such Subsidiary which are being sold, and (g) in connection with and pursuant to permitted Refinancings, replacements of restrictions imposed pursuant to clauses (a), (c) or (d) of this Section 4.8 that are not more restrictive than those being replaced and do not apply to the Company or any of its Subsidiaries, or Restricted Affiliates or assets other than those that would have been covered by the restrictions in the Indebtedness so refinanced. Notwithstanding the foregoing, neither (a) customary provisions restricting subletting or assignment of any lease entered into in the ordinary course of business, consistent with industry practice, nor (b) Liens permitted under the terms of the Indenture shall in and of themselves be considered a restriction on the ability of the applicable Subsidiary to transfer such agreement or assets, as the case may be. 52 Section 4.9 LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTED NESS AND DISQUALIFIED CAPITAL STOCK. The Company will not, and will not permit any of its Subsidiaries or Restricted Affiliates to, directly or indirectly, issue, assume, guaranty, incur, become directly or indirectly liable with respect to (including as a result of an Acquisition), or otherwise become responsible for, contingently or otherwise (individually and collectively, to "incur" or, as appropriate, an "incurrence"), any Indebtedness or any Disqualified Capital Stock (including Acquired Indebtedness), other than Permitted Indebtedness. Notwithstanding the foregoing, if no Default or Event of Default shall have occurred and be continuing at the time of, or would occur after giving effect on a pro forma basis to, such incurrence of Indebtedness or Disqualified Capital Stock, then (i) if on the date of such incurrence (the "Incurrence date"), the Consolidated Cash Flow Ratio of the Company for the Reference Period immediately preceding the Incurrence Date, after giving effect on a pro forma basis to such incurrence of such Indebtedness or Disqualified Capital Stock and, to the extent set forth in the definition of Consolidated Cash Flow Ratio, the use of proceeds thereof, would be no more than 6.5 to 1.0 (the "Debt Incurrence Ratio"), then the Company may incur Indebtedness or Disqualified Capital Stock, provided such Indebtedness or Disquali fied Capital Stock matures after, and has no payment of cash or property (other than payments in Qualified Capital Stock or in such Indebtedness or Disqualified Capital Stock) scheduled on or prior to, May 1, 2004, and (ii) if on the Incurrence Date either (1) the Consolidated Cash Flow Ratio of a Subsidiary or Restricted Affiliate of the Company for the Reference Period immediately preceding the Incurrence Date, after giving effect on a pro forma basis to such incurrence of such Indebtedness or Disqualified Capital Stock and to the extent set forth in the definition of Consolidated Cash Flow Ratio, the use of proceeds thereof, would be no more than 7.0 to 1.0, or (2) the Consolidated Coverage Ratio of such Subsidiary or Restricted Affiliate for the Reference Period immediately preceding the Incurrence Date, after giving effect on a pro forma basis to such incurrence of such Indebtedness or Disqualified Capital Stock and, to the extent set forth in the definition of Consolidated Coverage Ratio, the use of proceeds thereof, would be no less than 1.75 to 1.00, or (3) after giving effect on a pro forma basis to such incurrence of such Indebtedness or Disqualified Capital Stock, and, to the extent used to retire other Indebtedness or Disqualified Capital Stock, the use of proceeds therefrom, the amount of Indebtedness or Disqualified Capital Stock outstanding of such Subsidiary or Restricted Affiliate would not exceed 225% of the Consolidated Invested Equity Capital of such Subsidiary or Restricted Affiliate, then, other than UIPI or UIHE, such Subsidiary or Restricted Affiliate may incur such Indebtedness or Disqualified Capital Stock, provided in the case of each of clauses (ii)(1), (2) and (3), (A) the net proceeds therefrom are used in a 53 Related Business of the Company or any affiliated company of the Company and (B) the amount of any Indebtedness or Disqualified Capital Stock of such Subsidiary or Restricted Affiliate that has been repaid, redeemed, defeased, refunded, refinanced, discharged or retired by or with the proceeds of any Refinancing Indebtedness incurred by the Company shall be deemed to have remained outstanding for the purposes of calculating the pro forma amounts to be determined pursuant to such clauses, and, for the purposes of this clause (ii), other than UIPI or UIHE, a Subsidiary or Restricted Affiliate may be a co-obligor or guarantor on such Indebtedness or Disqualified Capital Stock of another Subsidiary or Restricted Affiliate of the Company (A) if such Subsidiary or Restricted Affiliate owns, either directly or indirectly through one or more Subsidiaries or Restricted Affiliates of the Company, all or a portion of the Equity Interests of the Subsidiary or Restricted Affiliate of the Company, other than UIPI or UIHE, that incurred such Indebtedness or Disqualified Capital Stock, (B) if all or a portion of the Equity Interests of such Subsidiary or Restricted Affiliate is owned either directly or indirectly through one or more Subsidiaries or Restricted Affiliates of the Company by the Subsidiary or Restricted Affiliate, other than UIPI and UIHE, that incurred such Indebtedness or Disqualified Capital Stock or (C) if such Subsidiary or Restricted Affiliate owns, either directly or indirectly through one or more Subsidiaries or Restricted Affiliates of the Company, all or a portion of the business that will use the proceeds of such Indebtedness. In addition, the foregoing limitations will not apply to: (a) the incurrence by the Company or, except for UIPI and UIHE, its Subsidiaries and Restricted Affiliates of Indebtedness, provided that the aggregate amount of such Indebtedness outstanding at any time pursuant to this paragraph (a) (including any Indebtedness issued to refinance, replace or refund such Indebtedness) shall not exceed $25 million; (b) [INTENTIONALLY OMITTED]; and (c) if no Event of Default shall have occurred and be continuing, the incurrence by Subsidiaries or Restricted Affiliates of the Company of Indebtedness pursuant to the Existing Agreements up to, but not in excess of the maximum applicable amounts of Indebtedness available for borrowing pursuant to the terms of each such Existing Agreement as in effect on the date of the Indenture; provided that, in determining the maximum applicable amounts available it shall be assumed that the Company satisfies any applicable conditions to borrowing. 54 Indebtedness or Disqualified Capital Stock of any Person which is outstanding at the time such Person becomes a Subsidiary or Restricted Affiliate of the Company (including upon designation of any subsidiary or other Person as a Subsidiary or Restricted Affiliate) or is merged with or into or consolidated with the Company or a Subsidiary or Restricted Affiliate of the Company shall be deemed to have been incurred at the time such Person becomes such a Subsidiary or Restricted Affiliate of the Company or is merged with or into or consolidated with the Company or a Subsidiary or Restricted Affiliate of the Company, as applicable. Notwithstanding anything in the Indenture to the contrary, the Company shall not be permitted to incur Indebtedness that is subordinated in right of payment to any other Indebtedness of the Company, unless such Indebtedness to be incurred is also subordinated in right of payment to the Senior Notes at least as to the same extent and neither UIPI nor UIHE shall incur any Indebtedness other than permitted intercompany Indebtedness to the Company. Section 4.10 LIMITATION ON SALE OF ASSETS AND SUBSIDIARY STOCK. The Company will not, and will not permit any of its Subsidiaries to, in one or a series of related transactions, convey, sell, transfer, assign or otherwise dispose of, directly or indirectly, any of its property, business or assets (other than cash or Cash Equivalents), including by merger or consolidation (in the case of a Subsidiary of the Company), and including any sale or other transfer or issuance of any Equity Interests of any Subsidiary of the Company, whether by the Company or a Subsidiary of either or through the issuance, sale or transfer of Equity Interests by a Subsidiary of the Company, and including any sale and leaseback transaction (any of the foregoing, an "Asset Sale"), unless (1)(a) within 360 days after the date of such Asset Sale, the Net Cash Proceeds therefrom (the "Asset Sale Offer Amount") are applied (i) to the optional redemption of the Senior Notes in accordance with the terms of the Indenture and other Indebtedness of the Company ranking on a parity with the Senior Notes with similar provisions requiring the Company to make an offer to purchase or to redeem such Indebtedness with the proceeds of such Asset Sale, pro rata in proportion to the respective Accreted Value (or principal amount and accrued interest in the case of Indebtedness without an original issue discount) of the Senior Notes and such other Indebtedness then outstanding, (ii) to the repurchase of the Senior Notes and such other Indebtedness ranking on a parity with the Senior Notes and having similar provisions requiring the Company to make an offer to purchase or to redeem such Indebtedness with the proceeds of such asset sale pursuant to an irrevocable, unconditional cash offer (pro rata in proportion to the respective Accreted Value (or principal amount and accrued interest in the case of Indebtedness without an original issue discount) of the Senior Notes and such other Indebtedness then outstanding) to repurchase the 55 Senior Notes and such other Indebtedness (the "Asset Sale Offer") at a purchase price of 100% of Accreted Value (the "Asset Sale Offer Price"), together with accrued interest and Liquidated Damages, if any, to the date of payment, made within 360 days of such Asset Sale, or (iii) to the repayment of Indebtedness issued by a Subsidiary of the Company (in respect of which Indebtedness the Company is not a direct or contingent obligor) if required by the terms of such Indebtedness, or (b) within 360 days following such Asset Sale, the Asset Sale Offer Amount is invested in fixed assets and property which in the good faith reasonable judgment of the Board of Directors of the Company will be an asset of, and constitute or be a part of a Related Business of, the Company or such Subsidiary (if it continues to be a Subsidiary) immediately following such transaction or is used to make Permitted Investments (other than Cash Equivalents, Senior Notes or the Existing Notes), (2) at least 85% of the consideration for such Asset Sale or series of related Asset Sales consists of Cash or Cash Equivalents, and (3) the Board of Directors of the Company determines, in good faith, that the Company or such Subsidiary, as applicable, receives fair market value for such Asset Sale. An Asset Sale Offer may be deferred until the accumulated Net Cash Proceeds from Asset Sales not applied to the uses set forth in any of clauses (1)(a)(i), 1(a)(iii) and 1(b) above (the "Excess Proceeds") exceeds $20 million, provided that, in the case of an Asset Sale by a Subsidiary that is not a Wholly Owned Subsidiary, only the Company's pro rata portion of such Net Cash Proceeds shall constitute Net Cash Proceeds subject to the provisions of this Section 4.10. Each Asset Sale Offer shall remain open for 20 Business Days following its commencement (the "Asset Sale Offer Period"). Upon expiration of the Asset Sale Offer Period, the Company shall apply the Asset Sale Offer Amount, plus an amount equal to accrued interest and Liquidated Damages, if any, to the purchase of all Senior Notes and, if applicable, such other Indebtedness ranking on a parity with the Senior Notes and with provisions requiring the Company to make an offer to purchase or redeem such Indebtedness with the proceeds of such Asset Sale properly tendered (on a pro rata basis if the Asset Sale Offer Amount is insufficient to purchase all Senior Notes so tendered) at the Asset Sale Offer Price (together with accrued interest and Liquidated Damages, if any). To the extent that the aggregate amount of Senior Notes tendered pursuant to an Asset Sale Offer is less than the Asset Sale Offer Amount, the Company may use any remaining Net Cash Proceeds for general corporate purposes as otherwise permitted by the Indenture and following each Asset Sale Offer the Excess Proceeds amount shall be reset to zero. For purposes of clause (2) above, total consideration received means the total consideration received for such Asset Sales, minus the amount of (a) Indebtedness (other than Subordinated 56 Indebtedness) assumed by a transferee of such Asset Sale, (b) Purchase Money Indebtedness secured solely by the assets sold and repaid upon such Asset Sale or assumed by a transferee of such Asset Sale and (c) property that within 30 days of such Asset Sale is converted into Cash or Cash Equivalents (to the extent of such cash or Cash Equivalents received), provided that, with respect to this clause (c), such cash or Cash Equivalents so received shall be deemed to have been received on the date of such Asset Sale and shall be applied in the manner and within the time specified by Section 4.10 pertaining to the proceeds from such Asset Sale. Notwithstanding, and without complying with, the foregoing provisions of the other paragraphs of Section 4.10: (i) the Company and its Subsidiaries may, in the ordinary course of business, (A) convey, sell, transfer, assign or otherwise dispose of inventory acquired and held for resale in the ordinary course of business and (B) liquidate Cash Equivalents; (ii) the Company and its Subsidiaries may convey, sell, transfer, assign or otherwise dispose of assets pursuant to and in accordance with Section 5.1; (iii) the Company and its Subsidiaries may sell or dispose of damaged, worn out or other obsolete personal property in the ordinary course of business so long as such property is no longer necessary for the proper conduct of the business of the Company or such Subsidiary, as applicable; (iv) the Company and its Subsidiaries may convey, sell, transfer, assign or otherwise dispose of assets to the Company or any of its Subsidiaries or Restricted Affiliates; (v) the Company and its Subsidiaries may surrender or waive contract rights or settle, release or surrender of contract, tort or other claims of any kind or grant Liens not prohibited by the Indenture; (vi) the Company and its Subsidiaries may exchange all or a portion of its property, businesses or assets for Permitted Investments (other than Senior Notes and Existing Notes) or for property, businesses or assets of a type used in a Related Business, or a combination of any such Permitted Investments, property, businesses or assets; provided that any Cash or Cash Equivalents received pursuant to any such exchange shall be applied in the manner applicable to Net Cash Proceeds from an Asset Sale as set forth pursuant to the provisions of the immediately preceding provisions of this Section 4.10; and provided, further, that in the case of a transaction exceeding $15 million of consideration to any party thereto, the Company shall have obtained a favorable written opinion by an independent financial advisor of national reputation as to 57 the fairness from a financial point of view to the Company or such Subsidiary of the proposed transaction. All Net Cash Proceeds from an Event of Loss shall be invested or used to repurchase Senior Notes, all within the period and as otherwise provided above in clause (1) of the first paragraph of this Section 4.10. Any Asset Sale Offer shall be made in compliance with all applicable laws, rules, and regulations, including, if applicable, Regulation 14E of the Exchange Act and the rules and regulations thereunder and all other applicable Federal and state securities laws. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.10, compliance by the Company or any of its Subsidiaries with such laws and regulations shall not in and of itself cause a breach of its obligations under this Section 4.10. Section 4.11 LIMITATION ON TRANSACTIONS WITH AFFILIATES. The Company will not, and will not permit any of its Subsidiaries on or after the Issue Date to enter into any contract, agreement, arrangement or transaction with any Affiliate of the Company (an "Affiliate Transaction"), or any series of related Affiliate Transactions, other than Exempted Affiliate Transactions, (i) unless it is determined by the Board of Directors as evidenced by a Board Resolution, that the terms of such Affiliate Transaction are fair and reasonable to the Company, and no less favorable to the Company, than could have been obtained in an arm's length transaction with a non-Affiliate, (ii) if involving consideration to either party in excess of $1 million, unless such Affiliate Transaction(s) is evidenced by an Officers' Certificate addressed and delivered to the Trustee certifying that such Affiliate Transaction(s) has been approved by a majority of the members of the Board of Directors that are disinterested in such transaction and (iii) if involving consideration to either party in excess of $10 million, unless, in addition, the Company, prior to the consummation thereof, obtains a written favorable opinion as to the fairness of such transaction to the Company from a financial point of view from an independent investment banking firm of national reputation in the United States or, if pertaining to a matter for which such investment banking firms do not customarily render such opinions, an appraisal or valuation firm of national reputation in the United States. 58 Section 4.12 LIMITATION ON LIENS. The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, grant, incur or suffer to exist, other than Permitted Liens, any Lien upon any of the property or assets of UIPI or UIHE, whether now owned or hereafter acquired upon any income profits therefrom. Section 4.13 LINES OF BUSINESS. The Company will not, and will not permit any of its Subsidiaries or Restricted Affiliates to, directly or indirectly engage to any substantial extent in any line or lines of business activity other than that which, in the reasonable good faith judgment of the Board of Directors of the Company, is a Related Business. Section 4.14 CORPORATE EXISTENCE. Subject to Article 5 hereof, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect (i) its corporate existence, and the corporate, partnership or other existence of each of its Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Company or any such Subsidiary and (ii) the rights (charter and statutory), licenses and franchises of the Company and its Subsidiaries; provided, however, that the Company shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any of its Subsidiaries, if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any material respect to the Holders of the Securities. Section 4.15 LIMITATIONS ON SUBSIDIARY STRUCTURE. Notwithstanding anything in this Indenture to the contrary, the Company shall not make any Investment in any Person, directly or indirectly, other than through UIPI or UIHE, which together shall be required to hold, directly or indirectly, all Investments made by the Company or any of its Restricted Subsidiaries after the date of this Indenture. In addition, (i) except as permitted by clause (v) of this Section 4.15, each of UIPI and UIHE shall at all times continue to be a direct Wholly Owned Subsidiary of the Company and the Company will not have any other direct subsidiaries other than the Retained Assets, (ii) neither UIPI nor UIHE shall (although their Subsidiaries and Restricted Affiliates may, to the extent permitted by Section 4.09 hereof) incur any Indebtedness, except intercompany Indebtedness from UIPI or UIHE to the Company or issue any preferred stock, (iii) that UIHE (or, if UIHE is merged into UIPI as permitted by clause (v) of this Section 4.15, UIPI) will be the direct beneficial and record owner or all of the Company's direct and indirect interests in UPC other than those interests held or reserved to be held (as of the Issue Date) through the foundation administering UPC's employee equity 59 incentive plan, (iv) that neither UIPI nor UIHE will incur or suffer to exist any Lien, other than Permitted Liens, on any of its assets or property, and (v) neither UIHE nor UIPI shall consolidate or merger with or into any other Person (other than each other) prior to the date that none of the Company's Senior Secured Discount Notes due 1999 are outstanding. Section 4.16 LIMITATION ON STATUS AS INVESTMENT COMPANY. The Company shall not, and shall not permit any of its Subsidiaries and Restricted Affiliates to conduct its business in a fashion that would cause it to be required to register as an "investment company" (as this term is defined in the Investment Company Act of 1940, as amended), or from otherwise becoming subject to regulation under the Investment Company Act of 1940. Section 4.17 RULE 144A INFORMATION REQUIREMENT. The Company shall furnish to the Holders of the Securities and prospective purchasers of Securities designated by the Holders of Transfer Restricted Securities, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act until such time as either the Company has concluded an offer to exchange the Exchange Securities for the Initial Securities or a registration statement relating to resales of the Securities has become effective under the Securities Act. The Company shall also furnish such information during the pendency of any suspension of effectiveness of such resale registration statement. Section 4.18 REPURCHASE OF SENIOR NOTES AT THE OPTION OF THE HOLDER UPON A CHANGE OF CONTROL In the event that a Change of Control has occurred, each holder of Senior Notes will have the right, at such holder's option, pursuant to an irrevocable and unconditional offer by the Company (the "Change of Control Offer"), to require the Company to repurchase all or any part of such holder's Senior Notes (provided that the principal amount at maturity of such Senior Notes must be $1,000 (or such greater amount that results solely from an increase in the Accretion Rate) or an integral multiple thereof) on a date (the "Change of Control Purchase Date") that is no later than 40 Business Days after 60 the occurrence of such Change of Control, at a cash price equal to 101% of the Accreted Value thereof at the Change of Control Purchase Date (the "Change of Control Purchase Price"), together with accrued interest and Liquidated Damages, if any, to the Change of Control Purchase Date. The Change of Control Offer shall be made within 15 Business Days following a Change of Control and shall remain open for 20 Business Days following its commencement (the "Change of Control Offer Period"). ARTICLE V SUCCESSORS Section 5.1 LIMITATION ON MERGER, SALE OR CONSOLIDATION The Company shall not consolidate with or merge with or into another Person or, directly or indirectly, sell, lease, convey or transfer all or substantially all of its assets (computed on a consolidated basis), whether in a single transaction or a series of related transactions, to another Person or group of affiliated Persons or adopt a Plan of Liquidation, unless (i) either (a) the Company is the continuing entity or (b) the resulting, surviving or transferee entity or, in the case of a Plan of Liquidation, the entity which receives the greatest value from such Plan of Liquidation is a corporation organized under the laws of the United States, any state thereof or the District of Columbia and expressly assumes by supplemental indenture all of the obligations of the Company in connection with the Senior Notes and the Indenture; (ii) no Default or Event of Default shall exist or shall occur immediately after giving effect on a pro forma basis to such transaction, and (iii) immediately after giving effect to such transaction on a pro forma basis, the consolidated resulting, surviving or transferee entity or, in the case of a Plan of Liquidation, the entity which receives the greatest value from such Plan of Liquidation would immediately thereafter have a Debt Incurrence Ratio (as though such entity were the Company) no greater than the Company's Debt Incurrence Ratio immediately prior to such transaction. Section 5.2 SUCCESSOR CORPORATION SUBSTITUTED. Upon any consolidation or merger or any transfer of all or substantially all of the assets of the Company or consummation of a Plan of Liquidation in accordance with the foregoing, the successor corporation formed by such consolidation or into which the Company is merged or to which such transfer is made or, in the case of a Plan of Liquidation, the entity which 61 receives the greatest value from such Plan of Liquidation shall succeed to, and be (except in the case of a lease) substituted for, and may exercise every right and power of, the Company under the Indenture with the same effect as if such successor corporation had been named therein as the Company, and (except in the case of a lease) the Company shall be released from the obligations under the Senior Notes and the Indenture except with respect to any obligations that arise from, or are related to, such transaction. For purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise) of all or substantially all of the properties and assets of one or more Subsidiaries or Restricted Affiliates, the Company's interest in which constitutes all or substantially all of the properties and assets of the Company shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company. ARTICLE VI DEFAULTS AND REMEDIES Section 6.1 EVENTS OF DEFAULT. An "Event of Default" occurs if: (a) the Company defaults in the payment of any installment of interest when due and the continuance of such default for 30 days; (b) the Company defaults in the payment when due of the principal, or Accreted Value (as applicable), or premium of the Securities, at maturity, upon acceleration, repurchase or otherwise; (c) the Company fails to comply with any of the provisions of Section 4.7, 4.9, 4.10, 4.15, 4.18. or 5.1 hereof; (d) the Company fails to observe or perform any other covenant, representation, warranty or other agreement in this Indenture or the Securities for 60 days after notice to the Company by the Trustee or notice to the Company and the Trustee by the Holders of at least 25% in principal amount at maturity of the Securities then outstanding; (e) a default occurs under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Subsidiaries (or 62 the payment of which is guaranteed by the Company or any of its Subsidiaries), whether such Indebtedness or guarantee now exists, or is created after the date of this Indenture, which default (i) is caused by a failure to pay principal of or premium, if any, or interest on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a "Payment Default") or (ii) results in the acceleration of such Indebtedness prior to its express maturity and, in each case, the principal amount of such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated aggregates $10 million or more; (f) a final judgment or final judgments for the payment of money are entered by a court or courts of competent jurisdiction against the Company or any of its Subsidiaries and such judgment or judgments are not paid, discharged or stayed for a period of 60 days, provided that the aggregate of all such undischarged judgments exceeds $10 million; (g) the Company or any of its Significant Subsidiaries or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary pursuant to or within the meaning of Bankruptcy Law: (i) commences a voluntary case, (ii) consents to the entry of an order for relief against it in an involuntary case, (iii) consents to the appointment of a Custo dian of it or for all or substantially all of its property, (iv) makes a general assignment for the benefit of its creditors, or (v) generally is not paying its debts as they become due; or (h) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: 63 (i) is for relief against the Company or any of its Significant Subsidiaries or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary in an involuntary case; (ii) appoints a Custodian of the Company or any of its Significant Subsidiaries or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary for all or substantially all of the property of the Company or any of its Significant Subsidiaries or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary; or (iii) orders the liquidation of the Company or any of its Significant Subsidiaries or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary; and the order or decree remains unstayed and in effect for 60 consecutive days. Section 6.2 ACCELERATION. If any Event of Default (other than an Event of Default specified in clause (g) or (h) of Section 6.1 hereof with respect to the Company, any Significant Subsidiary or any group of Significant Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary) occurs and is continuing, unless the principal of all of the Senior Notes shall have already become due and payable, the Trustee or the Holders of at least 25% in principal amount at maturity of the then outstanding Securities by notice in writing to the Company (and to the Trustee if given by Holders) (an "Acceleration Notice") may declare all Accreted Value, accrued interest and Liquidated Damages, if any, thereon the Securities to be due and payable immediately. Upon any such declaration, the Accreted Value of the Securities shall become due and payable immediately. Notwithstanding the foregoing, if an Event of Default specified in clause (g) or (h) of Section 6.1 hereof occurs with respect to the Company, any of its Significant Subsidiaries or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary all Accreted Value, accrued interest and Liquidated Damages, if any, thereon shall be due and payable immediately without further action or notice. The Holders of a majority in aggregate principal amount at maturity of the then outstanding Securities by written notice to the Trustee may on behalf of all of the Holders rescind an 64 acceleration and its consequences if the rescission would conflict with any judgment or decree and if all existing Events of Default (except nonpayment of principal, interest, or premium or Liquidated Damages, if any, that has become due solely because of the acceleration and except on default with respect to any provision requiring a super-majority approval to amend, which default may only be waived by such a super-majority) have been cured or waived. Except as provided below in the following paragraph, in the event of any such acceleration of Securities, the Company will become obligated to pay the Accreted Value, plus all applicable premiums, accrued interest and Liquidated Damages, of the Senior Notes immediately. The Holders of a majority in aggregate principal amount at maturity of the Senior Notes at any time outstanding may waive on behalf of all the Holders any default, except a default with respect to any provision requiring a super-majority approval to amend, which default may only be waived by such a super-majority, and except a default in the payment of principal of, Accreted Value, or interest or Liquidated Damages on any Senior Note not yet cured or a default with respect to any covenant or provision which cannot be modified or amended without the consent of the Holder of each outstanding Senior Note affected. Subject to Article 7, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request, order or direction of any of the Holders, unless such Holders have offered to the Trustee reasonable security or indemnity. Subject to all provisions of the Indenture and applicable law, the Holders of a majority in aggregate principal amount of the Senior Notes at the time 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. Section 6.3 OTHER REMEDIES. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, Accreted Value, and premium, and accrued interest and Liquidated Damages, if any, 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 Holder of a Security in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law. 65 Section 6.4 WAIVER OF PAST DEFAULTS. Holders of not less than a majority in aggregate principal amount at maturity of the then outstanding Securities by notice to the Trustee may on behalf of the Holders of all of the Securities waive an existing Default or Event of Default and its consequences hereunder, except a continuing Default or Event of Default in the payment of the principal of, Accreted Value, or premium, and accrued interest and Liquidated Damages, if any, on the Securities (which is required to be unanimous), and except in connection with a Repurchase Offer (which requires at least 66.67% in principal amount at maturity of the then outstanding Securities). Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon. Section 6.5 CONTROL BY MAJORITY. Holders of a majority in principal amount at maturity of the then outstanding Securities may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture that the Trustee determines may be unduly prejudicial to the rights of other Holders of Securities or that may involve the Trustee in personal liability. Section 6.6 LIMITATION ON SUITS. A Holder of a Security may pursue a remedy with respect to this Indenture or the Securities only if: (a) the Holder of a Security gives to the Trustee written notice of a continuing Event of Default; (b) the Holders of at least 25% in principal amount at maturity of the then outstanding Securities make a written request to the Trustee to pursue the remedy; (c) such Holder of a Security or Holders of Securities offer and, if requested, provide to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense; 66 (d) the Trustee does not comply with the request within 60 days after receipt of the request and the offer and, if requested, the provision of indemnity; and (e) during such 60-day period the Holders of a majority in principal amount at maturity of the then outstanding Securities do not give the Trustee a direction inconsistent with the request. Section 6.7 RIGHTS OF HOLDERS OF SECURITIES TO RECEIVE PAYMENT. Notwithstanding any other provision of this Indenture, the right of any Holder of a Security to receive payment of principal, Accreted Value, and premium, and interest and Liquidated Damages, if any, on the Security, on or after the respective due dates expressed in the Security (including in connection with a Repurchase Offer or in respect of the redemption thereof), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder. Section 6.8 COLLECTION SUIT BY TRUSTEE. If an Event of Default specified in Section 6.1 occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal of, and premium, if any, remaining unpaid on the Securities and interest on overdue principal and such other amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. Section 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Securities allowed in any judicial proceedings relative to the Company (or any other obligor upon the Securities), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to 67 make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.7 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.7 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. Section 6.10 PRIORITIES. If the Trustee collects any money pursuant to this Article, it shall pay out the money in the following order: First: to the Trustee, its agents and attorneys for amounts due under Section 7.7 hereof, including payment of all compensation, expense and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection; Second: to Holders of Securities for amounts due and unpaid on the Securities for principal, Accreted Value, and premium, and interest and Liquidated Damages, if any, ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for principal, Accreted Value, and premium, and interest and Liquidated Damages, if any, respectively; and Third: to the Company or to such party as a court of competent jurisdiction shall direct. 68 The Trustee may fix a record date and payment date for any payment to Holders of Securities pursuant to this Section 6.10. Section 6.11 UNDERTAKING FOR COSTS. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder of a Security pursuant to Section 6.7 hereof, or a suit by Holders of more than 10% in principal amount at maturity of the then outstanding Securities. ARTICLE VII TRUSTEE Section 7.1 DUTIES OF TRUSTEE. (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (b) Except during the continuance of an Event of Default: (i) the duties of the Trustee shall be deter mined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture. 69 (c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (i) this paragraph does not limit the effect of paragraph (b) of this Section 7.1; (ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.5 hereof. (d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b),and (c) of this Section 7.1. (e) No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee shall be under no obligation to exercise any of its rights and powers under this Indenture at the request of any Holders, unless such Holders shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense. (f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. (g) Except with respect to Sections 4.1 and 4.4 hereof, the Trustee shall have no duty to inquire as to the performance of the Company's covenants in Article 4 hereof. In addition, the Trustee shall not be deemed to have knowledge of any Default or Event of Default except (i) any Event of Default occurring pursuant to Sections 4.1, 4.4 and 6.1 hereof or (ii) any Default or Event of Default of which the Trustee shall have received written notification or obtained actual knowledge. 70 Section 7.2 RIGHTS OF TRUSTEE. (a) The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document. (b) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. (c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture. (e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the Company. (f) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction. Section 7.3 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 any Affiliate of the Company with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as trustee or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof. 71 Section 7.4 TRUSTEE'S DISCLAIMER. The Trustee shall not be responsible for and makes no representations to the validity or adequacy of this Indenture or the Securities, it shall not be accountable for the Company's use of the proceeds from the Securities or any money paid to the Company or upon the Company's direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Securities or any other document in connection with the sale of the Securities or pursuant to this Indenture other than its certificate of authentication. Section 7.5 NOTICE OF DEFAULTS. The Trustee shall mail to Holders of Securities a notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of Default in payment of principal of, or premium, if any, on any Security, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders of the Securities. Section 7.6 REPORTS BY TRUSTEE TO HOLDERS OF THE SECURITIES. Within 60 days after each May 15 beginning with the May 15 following the date of this Indenture, and for so long as Securities remain outstanding, the Trustee shall mail to the Holders of the Securities a brief report dated as of such reporting date that complies with TIA ss. 313(a) (but if no event described in TIA ss. 313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA ss. 313(b)(2). The Trustee shall also transmit by mail all reports as required by TIA ss. 313(c). A copy of each report at the time of its mailing to the Holders of Securities shall be mailed to the Company and filed with the SEC and each stock exchange on which the Securities are listed in accordance with TIA ss. 313(d). The Company shall promptly notify the Trustee when the Securities are listed on any stock exchange. 72 Section 7.7 COMPENSATION AND INDEMNITY. The Company shall pay to the Trustee from time to time reasonable compensation for its acceptance of this Indenture and services hereunder. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee's agents and counsel. The Company shall indemnify the Trustee against any and all losses, liabilities or expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Company (including this Section 7.7) and defending itself against any claim (whether asserted by the Company or any Holder or any other person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability or expense may be attributable to its negligence or bad faith. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee so to notify the Company shall not relieve the Company of its obligations hereunder. The Company shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and, the Company shall pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld. The obligations of the Company under this Section 7.7 shall survive the satisfaction and discharge of this Indenture. To secure the Company's payment obligations in this Section 7.7, the Trustee shall have a Lien prior to the Securities on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Securities. Such Lien shall survive the satisfaction and discharge of this Indenture. When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.1(g) or (h) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law. 73 The Trustee shall comply with the provisions of TIA ss. 313(b)(2) to the extent applicable. Section 7.8 REPLACEMENT OF TRUSTEE. A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section 7.8. The Trustee may resign in writing at any time and be discharged from the trust hereby created by so noticing the Company. The Holders of Securities of a majority in principal amount at maturity of the then outstanding Securities may remove the Trustee by so notifying the Trustee and the Company in writing. The Company may remove the Trustee if: (a) the Trustee fails to comply with Section 7.10 hereof; (b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law; (c) a Custodian or public officer takes charge of the Trustee or its property; or (d) the Trustee becomes incapable of acting. If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount at maturity of the then outstanding Securities may appoint a successor Trustee to replace the successor Trustee appointed by the Company. If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company, or the Holders of Securities of at least 10% in principal amount at maturity of the then outstanding Securities may petition any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee, after written request by any Holder of a Senior Note who has been a Holder of a Senior Note for at least six months, fails to comply with Section 7.10, such Holder of a Senior Note may petition any court of 74 competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders of the Securities. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.7 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.8, the Company's obligations under Section 7.7 hereof shall continue for the benefit of the retiring Trustee. Section 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC. If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor, corporation if otherwise eligible hereunder without any further act shall be the successor Trustee. Section 7.10 ELIGIBILITY; DISQUALIFICATION. There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $100 million as set forth in its most recent published annual report of condition. This Indenture shall always have a Trustee who satisfies the requirements of TIA ss. 310(a)( l), (2) and (5). The Trustee is subject to TIA ss.310(b). Section 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COM PANY. The Trustee is subject to 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 therein. 75 ARTICLE VIII LEGAL DEFEASANCE AND COVENANT DEFEASANCE Section 8.1 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE. The Company may, at the option of its Board of Directors evidenced by a resolution set forth in an Officers' Certificate, at any time prior to the Stated Maturity, elect to have either Section 8.2 or 8.3 hereof be applied to all outstanding Securities upon compliance with the conditions set forth below in this Article Eight. Section 8.2 LEGAL DEFEASANCE AND DISCHARGE. Upon the Company's exercise under Section 8.1 hereof of the option applicable to this Section 8.2, the Company shall, subject to the satisfaction of the conditions set forth in Section 8.4 hereof, be deemed to have been discharged from its obligations with respect to all outstanding Securities on the date the conditions set forth below are satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means that the Company shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Securities, which shall thereafter be deemed to be "outstanding" only for the purposes of Section 8.5 hereof and the other Sections of this Indenture referred to in (a) and (b) below, and to have satisfied all its other obligations under such Securities and this Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder: (a) the rights of Holders of outstanding Securities to receive solely from the trust fund described in Section 8.4 hereof, and as more fully set forth in such Section, payments in respect of the principal of, and premium, and interest and Liquidated Damages, if any, on such Securities when such payments are due from the funds held by the Trustee in the trust, (b) the Company's obligations with respect to such Securities under Article 2 and Section 4.2 hereof, (c) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Company's obligations in connection therewith and (d) this Article Eight. Subject to compliance with this Article Eight, the Company may exercise its option under this Section 8.2 notwithstanding the prior exercise of its option under Section 8.3 hereof. 76 Section 8.3 COVENANT DEFEASANCE. Upon the Company's exercise under Section 8.1 hereof of the option applicable to this Section 8.3, the Company shall, subject to the satisfaction of the conditions set forth in Section 8.4 hereof, be released from its obligations under the covenants contained in Sections 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17 and 4.18 hereof with respect to the outstanding Securities on and after the date the conditions set forth below are satisfied (hereinafter, "Covenant Defeasance"), and the Securities shall thereafter be deemed not "outstanding" for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed "outstanding" for all other purposes hereunder. For this purpose, Covenant Defeasance means that, with respect to the outstanding Securities, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.1 hereof, but, except as specified above, the remainder of this Indenture and such Securities shall be unaffected thereby. In addition, upon the Company's exercise under Section 8.1 hereof of the option applicable to this Section 8.3 hereof, subject to the satisfaction of the conditions set forth in Section 8.4 hereof, Sections 6.1(c) through 6.1(f) hereof shall not constitute Events of Default. Section 8.4 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE. The following shall be the conditions to the application of either Section 8.2 or 8.3 hereof to the outstanding Securities: In order to exercise either Legal Defeasance or Covenant Defeasance the Company shall have received a Purchaser Resale Notice and: (a) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, U.S. legal tender, U.S. Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest on such Senior Notes on the stated date for payment thereof or on the redemption date of such principal or installment of principal of, premium, if any, or interest on such Senior Notes, and the holders of Senior Notes must have a valid, perfected, exclusive security interest in such trust; 77 (b) in the case of an election under Section 8.2 hereof, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the 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 Holders of the outstanding Securities will not recognize income, gain or loss for Federal income tax purposes as a result of such Legal Defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same time as would have been the case if such Legal Defeasance had not occurred; (c) in the case of an election under Section 8.3 hereof, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that the Holders of the outstanding Securities 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; (d) no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the incurrence of Indebtedness all or a portion of the proceeds of which will be used to defease the Securities pursuant to this Article Eight concurrently with such incurrence) or insofar as Sections 6.1(g) or 6.1(h) hereof is concerned, at any time in the period ending on the 91st day after the date of deposit; (e) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any material agreement or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound; (f) the Company shall have delivered to the Trustee an Officers' Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders over any other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company; and (g) the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for in, in the case of the Officers' Certificate, (a) through 78 (d) and, in the case of an Opinion of Counsel, clauses (a) (with respect to the validity and perfection of the security interest), (b), (c) and (e) of this paragraph have been complied with. Section 8.5 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS. Subject to Section 8.6 hereof, all money and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.5, the "Trustee") pursuant to Section 8.4 hereof in respect of the outstanding Securities shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Holders of such Securities of all sums due and to become due thereon in respect of principal, premium, if any, and interest and Liquidated Damages, but such money need not be segregated from other funds except to the extent required by law. The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities deposited pursuant to Section 8.4 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Securities. Anything in this Article Eight to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon the request of the Company any money or non-callable Government Securities held by it as provided in Section 8.4 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.4(a) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance. Section 8.6 REPAYMENT TO COMPANY. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, or premium, if any, on any Security and remaining unclaimed for two years after such principal, and premium, if any, has become due and payable shall be paid to the Company on its request or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as a secured creditor, 79 look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment may at the expense of the Company cause to be published once, in the New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Company. Section 8.7 REINSTATEMENT. If the Trustee or Paying Agent is unable to apply any United States dollars or non-callable Government Securities in accordance with Section 8.2 or 8.3 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company's obligations under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.2 or 8.3 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.2 or 8.3 hereof, as the case may be; provided, however, that, if the Company makes any payment of principal of, premium, if any, or interest on any Security following 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 held by the Trustee or Paying Agent. ARTICLE IX AMENDMENT, SUPPLEMENT AND WAIVER Section 9.1 WITHOUT CONSENT OF HOLDERS OF SECURITIES. Notwithstanding Section 9.2 of this Indenture, the Company and the Trustee may amend or supplement this Indenture or the Securities without the consent of any Holder of a Security: (a) to cure any ambiguity, defect or inconsistency; 80 (b) to provide for uncertificated Securities in addition to or in place of certificated Securities; (c) to provide for the assumption of the Company's obligations to the Holders of the Securities in the case of a merger, consolidation or sale of all or substantially all of the Company's assets pursuant to Article Five hereof; (d) to make any change that would provide any additional rights or benefits to the Holders of the Securities or that does not adversely affect the legal rights hereunder of any Holder of the Securities; (e) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA; (f) to change the name of the Securities. Upon the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental Indenture, and upon receipt by the Trustee of the documents described in Section 7.2 hereof, the Trustee shall join with the Company in the execution of any amended or supplemental Indenture authorized or permitted by the terms of this Indenture and to make any further appropriate Agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into such amended or supplemental Indenture that affects its own rights, duties or immunities under this Indenture or otherwise. Section 9.2 WITH CONSENT OF HOLDERS OF SECURITIES. Except as provided below in this Section 9.2, the Company and the Trustee may amend or supplement this Indenture and the Securities may be amended or supplemented with the consent of the Holders of at least a majority in principal amount at maturity of the Securities then outstanding (including consents obtained in connection with a tender offer or exchange offer for the Securities), and, subject to Sections 6.4 and 6.7 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, Accreted Value, or premium, interest or Liquidated Damages, if any, on the Securities, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture or the Securities may be waived with the consent of the Holders of a majority in principal amount at maturity of the then outstanding Securities (including consents obtained in connection with a tender offer or exchange offer for the 81 Securities). Notwithstanding the foregoing, without the consent of at least 66-2/3% in principal amount at maturity of the Securities then outstanding (including consents obtained in connection with a tender offer or exchange offer for such Securities), no waiver or amendment to this Indenture may make any change in the provisions of Section 4.18 hereof (including by way of an amendment to any of the definitions used in any such provisions) that adversely affects the rights of any Holder of Securities. Upon the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental Indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Securities as aforesaid, and upon receipt by the Trustee of the documents described in Section 7.2 hereof, the Trustee shall join with the Company in the execution of such amended or supplemental Indenture unless such amended or supplemental Indenture affects the Trustee's own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental Indenture. It shall not be necessary for the consent of the Holders of Securities under this Section 9.2 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof. After an amendment, supplement or waiver under this Section becomes effective, the Company shall mail to the Holders of Securities affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental Indenture or waiver. Subject to Sections 6.4 and 6.7 hereof, the Holders of a majority in aggregate principal amount at maturity of the Securities then outstanding may waive compliance in a particular instance by the Company with any provision of this Indenture or the Securities. However, without the consent of each Holder affected, an amendment or waiver may not (with respect to any Securities held by a non-consenting Holder): (a) reduce the principal amount at maturity of Securities whose Holders must consent to an amendment, supplement or waiver; (b) reduce the principal of, or premium, or change the fixed maturity of any Security or alter or waive any of the provisions with respect to the 82 repurchase of the Securities, except as provided above with respect to Sections 4.18 hereof; (c) reduce the rate of accretion of Accreted Value or interest on any Security, or the Asset Sale Offer Price or the Change of Control Purchase Price, or extend the time for payment of any interest; (d) waive a Default or Event of Default in the payment of principal of, Accreted value, interest, Liquidated Damages or premium, if any, on the Securities; (e) make any Security payable in money other than that stated in the Securities, or change the place of payment where any Senior Note or any premium or the interest, if any, thereon is payable; (f) make any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of Holders of Securities to receive payments of principal of, Accreted Value, interest, Liquidated Damages or premium, if any, on the Securities; (g) make any change in Section 6.4 or 6.7 hereof or in the foregoing amendment and waiver provisions; (h) cause the Senior Notes to become subordinated in right of payment to any other Indebtedness. Section 9.3 COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment or supplement to this Indenture or the Securities shall be set forth in an amended or supplemental Indenture that complies with the TIA as then in effect. Section 9.4 REVOCATION AND EFFECT OF CONSENTS. Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Security is a continuing consent by the Holder of a Security and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent is not made on any Security. However, any such Holder of a Security or subsequent Holder of a Security may revoke the consent as to its Security if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver 83 becomes effective in accordance with its terms and thereafter binds every Holder. Section 9.5 NOTATION ON OR EXCHANGE OF SECURITIES. The Trustee may plan an appropriate notation about amendment, supplement or waiver on any Security thereafter authenticated. The Company in exchange for all Securities may issue and the Trustee shall authenticate new Securities that reflect the amendment, supplement or waiver. Failure to make the appropriate notation or issue a new Security shall not affect the validity and effect of such amendment, supplement or waiver. Section 9.6 TRUSTEE TO SIGN AMENDMENTS, ETC. The Trustee shall sign any amended or supplemental Indenture authorized pursuant to this Article Nine if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Company may not sign an amendment or supplemental Indenture until the Board of Directors approves it. In executing any amended or supplemental indenture, the Trustee shall be entitled to receive and (subject to Section 7.1) shall be fully protected in relying upon, an Officer's Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture and that all conditions precedent have been complied with. ARTICLE X MISCELLANEOUS Section 10.1 TRUST INDENTURE ACT CONTROLS. If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA ss.318(c), the imposed duties shall control. Section 10.2 NOTICES. Any notice or communication by the Company or the Trustee to the others is duly given if in writing and delivered in Person or mailed by first class 84 mail (registered or certified, return receipt requested), telex, telecopier or overnight air courier guaranteeing next day delivery, to the others' address: If to the Company: United International Holdings, Inc. 4643 South Ulster Street Denver, Colorado 80237 Telecopier No.: (303) 770-4207 Attention: Chief Financial Officer With a copy to: Holme Roberts & Owen LLP 1700 Lincoln, Suite 4100 Denver, Colorado 80203 Telecopier No.: (303) 866-0200 Attention: Garth B. Jensen, Esq. If to the Trustee: Firstar Bank of Minnesota, N.A. 101 East 5th Street St. Paul, Minnesota 55101 Telecopier No.: (651) 229-6415 Attention: Corporate Trust Department The Company or the Trustee, by notice to the others may designate additional or different addresses for subsequent notices or communications. All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if telecopied; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. Any notice or communication to a Holder shall be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guarantee ing next day delivery to its address shown on the register 85 kept by the Registrar. Any notice or communication shall also be so mailed to any Person described in TIA ss. 313(c), to the extent required by the TIA. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it. If the Company mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time. Section 10.3 COMMUNICATION BY HOLDERS OF SECURITIES WITH OTHER HOLDERS OF SECURITIES. Holders may communicate pursuant to TIA ss. 312(b) with other Holders 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 10.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee: (a) an Officers' Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 10.5 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and (b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 10.5 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied. 86 Section 10.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA ss.314(a)(4)) shall comply with the provisions of TIA ss. 314(e) and shall include: (a) a statement that the Person making such certificate or opinion has read such covenant or condition; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of such Person, he or she has 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 satisfied; and (d) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied. Section 10.6 RULES BY TRUSTEE AND AGENTS. The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions. Section 10.7 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS. No past, present or future director, officer, employee or direct or indirect stockholder of the Company, as such, shall 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. Each Holder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for issuance of securities. Section 10.8 GOVERNING LAW. THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING WITHOUT LIMITATION SECTION 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND NEW YORK CIVIL PRACTICE LAWS AND RULES 327(b), AS APPLIED TO CONTRACTS MADE AND PERFORMED 87 WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE COMPANY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE AND THE SECURITIES, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. THE COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT THEY MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE TRUSTEE OR ANY HOLDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY IN ANY OTHER JURISDICTION. Section 10.9 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture. Section 10.10 SUCCESSORS. All Agreements of the Company in this Indenture and the Securities shall bind its successors. All Agreements of the Trustee in this Indenture shall bind its successors. 88 Section 10.11 SEVERABILITY. In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 10.12 COUNTERPART ORIGINALS. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. Section 10.13 HEADINGS, ETC. The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof. Section 10.14 REGISTRATION RIGHTS Certain Holders of the Securities may be entitled to certain registration rights with respect to the Securities pursuant to, and subject to the terms of, the Registration Rights Agreement. 89 Dated as of April 29, 1999 UNITED INTERNATIONAL HOLDINGS, INC. By: /s/ Michael T. Fries ------------------------------------ Name: Michael T. Fries Title: President Attest: /s/ Michelle L. Keist - ------------------------------- (SEAL) Dated as of April 29, 1999 FIRSTAR BANK OF MINNESOTA N.A. By: /s/ Frank Leslie III ------------------------------------ Name: Frank Leslie III Title: Vice President Attest: - -------------------------------- (SEAL) 90 EXHIBIT A (Form of Senior Note) Series A Senior Discount Note due 2009 No.____________________ $__________________________ CUSIP No. _____________ ISIN No. ______________ UNITED INTERNATIONAL HOLDINGS, INC. promises to pay to or its registered assigns, the principal sum of ____________ Dollars ($ ), which amount, except as described below, includes amortization of original issue discount, on May 1, 2009. Interest Payment Dates: May 1 and November 1 Record Dates: May 1 and November 1 Dated: ______________________________ UNITED INTERNATIONAL HOLDINGS, INC. By:__________________________________ Name: Title: By:__________________________________ Name: Title: (SEAL) [Insert legend required by Section 1.1275-3 of the Treasury Regulations] [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION] This is one of the Securities described in the within-mentioned Indenture. FIRSTAR BANK OF MINNESOTA N.A. as Trustee By:___________________________________ Authorized Signatory Reference is made to the further provisions of this Security on the reverse side, which will, for all purposes, have the same effect as if set forth at this place. UNITED INTERNATIONAL HOLDINGS, INC. Series A Senior Discount Note due 2009 "THIS SENIOR NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE SECOND SENTENCE HEREOF. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, OR (C) AFTER THE COMPANY HAS RECEIVED A "PURCHASE RESALE NOTICE" (AS DEFINED IN THE INDENTURE) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "IAI"), (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE, EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OF THE SECURITIES ACT, (D) AFTER THE COMPANY HAS RECEIVED A "PURCHASE RESALE NOTICE," IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E) AFTER THE COMPANY HAS RECEIVED A "PURCHASE RESALE NOTICE," TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE WITH A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS SENIOR NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE ACCRETED VALUE OF SENIOR NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (F) AFTER THE COMPANY HAS RECEIVED A "PURCHASE RESALE NOTICE," IN ACCORDANCE WITH ANOTHER EXEMPTIN FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SENIOR NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS SENIOR NOTE IN VIOLATION OF THE FOREGOING."(1) Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below, unless otherwise indicated. 1. METHOD OF PAYMENT. The initial Accreted Value will increase at the rate of 10.875% per annum, compounded semi-annually, on the Senior Notes. From and after the Market Spread Date, if any, the Accreted Value of the Notes will increase at the Accretion Rate, compounded semi-annually, until the final maturity thereof. PAYMENT OF THE PRINCIPAL OF, OR PREMIUM, IF ANY, ON THE SENIOR NOTES OR SUCH OTHER AMOUNT PAYABLE UPON THE ACCELERATION OF THE MATURITY OF THE SENIOR NOTES WILL INCLUDE ACCRUED AMORTIZATION OF ORIGINAL ISSUE DISCOUNT, AND, THEREFORE, THE PRINCIPAL AMOUNT (INCLUDING AMORTIZATION OF ORIGINAL ISSUE DISCOUNT) DUE ON THIS NOTE COULD EXCEED THE AMOUNT STATED IN THE FIRST PARAGRAPH HEREOF. Interest payable in cash will commence to accrue on May 1, 2004, and will be payable on each May 1 and November 1 thereafter until maturity commencing November 1, 2004, to Holders of record on each immediately preceding April 15 and October 15 (each, a "Record Date"). Interest will be paid upon overdue principal and premium, and interest, if any, compounded semi-annually from the due date at a rate equal to the then current Accretion Rate applicable to the Notes to the extent such payment is lawful. All such interest will be computed on the basis of a 360-day year of twelve 30-day months. The Accretion Rate may vary as specified below, but shall be fixed at the time the Senior Notes are first resold by the Initial Purchasers pursuant to the terms of the Note Purchase Agreement. DLJSC on behalf of the Initial Purchasers shall fix the Accretion Rate by written notice prior to or on the Market Spread Date to the Company and the Trustee (the "Market Spread Notice"). - ------------- (1) This paragraph should only be added for the Transfer Restricted Securities. In no event shall the Accretion Rate on the Notes be greater than the Accretion Rate as so fixed. Until the Accretion Rate is so fixed by the giving of such notice, the initial Accretion Rate of the Senior Notes from the Issue Date until the Market Spread Date shall be 10.875% per annum. The Accretion Rate from and after the Market Spread Date shall be equal to the sum of (a) the Treasury Rates (as defined below), plus (b) the spread over such treasury bond rate then applicable to the Company's 10.75% Senior Secured Discount Notes due 2008 (the "Reference Notes"), plus (c) 125 basis points, plus (d) the Additional Rate. The Additional Rate shall initially be equal to zero (0) basis points and shall increase by an additional 100 basis points on the last day of each six month anniversary of the Issue Date (each such anniversary, or "Accretion Date"). The Accretion Date on or next following the date that a Market Spread Notice shall have been delivered shall be, the "Market Spread Date"). In the event that the Reference Notes are not outstanding on the trading date immediately preceding the Market Spread Date, or if for any other reason it shall be impossible to calculate the Accretion Rate, the Accretion Rate shall be 18%. In no event shall the Accretion Rate be greater than 18%. "TREASURY RATE" means on any Market Spread Date the yield on a hypothetical United States Treasury security with a Treasury constant maturity matching the then remaining average life to maturity of the Senior Notes. The hypothetical Treasury security is to be derived by referring to the Federal Reserve Board's Statistical Release H.15 (519) (or its successor publication) most recently available next preceding (by not more than 10 nor less than 5 Business Days) such Market Spread Date. If there is a Treasury constant maturity listed in said Federal Reserve Release H.15 (519) with a maturity equal to the then remaining average life to maturity of the Senior Notes then the yield on such Treasury security shall be the Treasury Rate. If no such Treasury constant maturity exists, then the yield on such Treasury security shall be linearly interpolated from the yields on (a) the Treasury security with a constant maturity closest to and greater than the then remaining average life to maturity of the Senior Notes and (b) the Treasury security with a constant maturity closest to and less than the then remaining average life to maturity of the Senior Notes. If there shall be no Treasury security with a constant maturity less than the then remaining average life to maturity of the Senior Notes, then Treasury Rate shall mean the yield on the Treasury security with the shortest Treasury constant maturity. If said Federal Reserve Release H.15 (519) or a successor publication refers to no applicable yield on Treasury securities, then the Treasury Rate shall be the Prime Rate in effect on the applicable Market Spread Date. The Holder must surrender this Senior Note to a Paying Agent to collect payments other than cash interest. The principal of, Accreted Value, interest and premium, if any, on the Senior Notes will be payable at the office or agency of the Company maintained for such purpose within the City and State of New York or, at the option of the Company, payment may be made by check mailed to the Holders of the Senior Notes at their respective addresses set forth in the register of Holders of Senior Notes. Until otherwise designated by the Company, the Company's office or agency in New York will be the office of the Trustee maintained for such purpose. All payments shall be in coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. 2. PAYING AGENT AND REGISTRAR. Initially, the Trustee will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar or co-registrar without prior notice to any Holder. The Company may act in any such capacity, except as set forth in the Indenture. 3. INDENTURE. The Company issued the Senior Notes under an Indenture dated as of April 29, 1999 (the "Indenture") between the Company and the Trustee. The terms of the Indenture include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code ss.ss. 77aaa-77bbbb). The Senior Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. The terms of the Indenture shall govern any inconsistencies between the Indenture and the Senior Notes. The Senior Notes are unsecured obligations of the Company, except to the extent provided in the Indenture, limited to $355,000,000 in aggregate principal amount at maturity. 4. OPTIONAL REDEMPTION. Optional Redemption after the resale of all of the Senior Notes by the Initial Purchasers. The Company will not have the right to redeem any Senior Notes following the first resale of the Senior Notes by the Initial Purchasers and prior to May 1, 2004, other than out of the Net Cash Proceeds from (a) a Public Equity Offering or (b) an Asset Sale, as described in the two immediately following paragraphs. The Senior Notes will be redeemable for cash at the option of the Company, in whole or in part, at any time on or after May 1, 2004, upon not less than 30 days nor more than 60 days notice to each Holder of Senior Notes, at the redemption prices set forth below (expressed as percentages of the then Accreted Value thereof) if redeemed during the 12-month period commencing May 1, of the years indicated below, together with, if applicable, accrued and unpaid interest and Liquidated Damages, if any, thereon to the Redemption Date. If applicable, the redemption prices set forth below shall be adjusted proportionately to reflect the difference between 10.875% and the Accretion Rate at the time of redemption by multiplying the redemption premium set forth below (I.E., the values by which the percentages set forth below exceed 100%) by a fraction the numerator of which is the Accretion Rate then in effect and the denominator of which is 10.875%. YEAR PERCENTAGE ---- ---------- 2004.......................... 105.438% 2005.......................... 103.625% 2006.......................... 101.813% 2007 and thereafter........... 100.000% Until May 1, 2002, upon a Public Equity Offering, up to 35% of the maximum aggregate principal amount at maturity of the Senior Notes issued at any time on or after the Issue Date pursuant to the Indenture may be redeemed at the option of the Company within 90 days of such Public Equity Offering, on not less than 30 days, but not more than 60 days, notice to each Holder of the Senior Notes to be redeemed, with cash from the Net Cash Proceeds of such Public Equity Offering, at a Redemption Price equal to the Accretion Rate plus 100% (initially 110.875%) of the then Accreted Value thereof, together with accrued and unpaid Liquidated Damages, if any, to the Redemption Date; provided, however, that immediately following such redemption not less than 65% of the maximum aggregate principal amount at maturity of the Senior Notes issued at any time on or after the Issue Date pursuant to the Indenture remains outstanding. In addition, until May 1, 2002, upon an Asset Sale, up to 35% of the maximum aggregate principal amount at maturity of the Senior Notes issued at any time on or after the Issue Date pursuant to the Indenture may be redeemed at the option of the Company within 90 days of such Asset Sale, on not less than 30 days, but not nor more than 60 days, notice to each Holder of the Senior Notes to be redeemed, with the Net Cash Proceeds from such Asset Sale, at a Redemption Price equal to the Accretion Rate plus 100% (initially 110.875%) of the then Accreted Value thereof, together with accrued and unpaid Liquidated Damages, if provided, however, that immediately following such redemption not less than 65% of the maximum aggregate principal amount at maturity of the Senior Notes issued at any time on or after the Issue Date pursuant to the Indenture remains outstanding. In the case of a partial redemption, the Trustee shall select the Senior Notes or portions thereof for redemption on a pro rata basis, by lot or in such other manner it deems appropriate and fair. The Senior Notes may be redeemed in part in multiples of $1,000 principal amount at maturity only (or such higher principal amount at maturity resulting from any increase in the Accretion Rate. The Senior Notes will not have the benefit of any sinking fund. Notice of any redemption will be sent, by first class mail, at least 30 days and not more than 60 days prior to the date fixed for redemption to the Holder of each Senior Note to be redeemed to such Holder's last address as then shown upon the registry books of the Registrar. Any notice which relates to a Senior Note to be redeemed in part only must state the portion of the principal amount at maturity equal to the unredeemed portion thereof and must state that on and after the date of redemption, upon surrender of such Senior Note, a new Senior Note or Senior Notes in a principal amount at maturity equal to the unredeemed portion thereof will be issued. On and after the Redemption Date, the Accreted Value will cease to increase and, if applicable, interest will cease to accrue, with respect to the Senior Notes, or portions thereof, called for redemption, unless the Company defaults in the payment thereof. 5. MANDATORY REDEMPTION. The Company is not required to make mandatory redemption payments with respect to the Senior Notes. 6. REPURCHASES AT OPTION OF HOLDER. (a) If there is a Change of Control, the Company will be required to make an offer (a "Change of Control Offer") to repurchase all or any part (equal to $1,000 in principal amount at maturity or an integral multiple thereof) of each Holder's Senior Notes at a purchase price in cash equal to 101% of the Accreted Value thereof on the date of purchase plus, if applicable, accrued and unpaid interest and Liquidated Damages. Within 10 days following any Change of Control, the Company will mail a notice to each Holder setting forth the procedures governing the Change of Control Offer as required by the Indenture. Holders may elect to have all or a portion of their Senior Notes purchase by completing the form entitled "Option of Holder to Elect Purchase" appearing below. (b) If the Company or a Subsidiary consummates any Asset Sale, when the aggregate amount of Excess Proceeds exceeds $20 million, the Company will be required to make an offer to all Holders of Senior Notes (an "Asset Sale Offer") to purchase the maximum amount of Senior Notes and other pari passu Indebtedness that may be purchased out of the Excess Proceeds, at an offer price in cash equal to the Accreted Value thereof as of the date of purchase, plus, if applicable, accrued and unpaid interest and Liquidated Damages in accordance with the procedures set forth in the Indenture. Holders of Senior Notes that are the subject of such an offer to purchase will receive an Asset Sale Offer from the Company prior to any related purchase date and may elect to have all or a portion of their Senior Notes purchased by completing the form entitled "Option of Holder to Elect Purchase" appearing below. 7. DENOMINATIONS, TRANSFER, EXCHANGE. The Senior Notes are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000 (or such higher amount required by any increase in the Accretion Rate). The transfer of Senior Notes may be registered and Senior Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. 8. PERSONS DEEMED OWNERS. The registered Holder of a Senior Note may be treated as its owner for all purposes. 9. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the Indenture or the Senior Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount at maturity of the then outstanding Senior Notes, and any existing default or compliance with any provision of the Indenture or the Senior Notes may be waived with the consent of the Holders of a majority in principal amount at maturity of the then outstanding Senior Notes. Without the consent of any Holder of a Senior Note, the Indenture or the Senior Notes may be amended or supplemented to cure any ambiguity, defect or inconsistency, to provide for uncertificated Senior Notes in addition to or in place of certificated Senior Notes, to provide for the assumption of the Company's obligations to Holders of the Senior Notes in case of a merger, consolidation or sale of all or substantially all of the Company's assets, to make any change that would provide any additional rights or benefits to the Holders of the Senior Notes or that does not adversely affect the legal rights under the Indenture of any such Holder, or to comply with the requirements of the Commission in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act. 10. DEFAULTS AND REMEDIES. Events of Default include: (i) default in payment when due of principal or Accreted Value (as applicable) of the Senior Notes when the same becomes due and payable at maturity upon acceleration, repurchase or otherwise, (ii) failure by the Company to comply with any of the provisions of Sections 4.7, 4.9, 4.10, 4.15, 4.18 or 5.1 of the Indenture; (iii) failure by the Company for 60 days after notice to the Company by the Trustee or the Holders of at least 25% in principal amount at maturity of the Senior Notes then outstanding to comply with certain other Agreements in the Indenture or the Senior Notes; (iv) default under certain other Agreements relating to Indebtedness of the Company which default results in the acceleration of such Indebtedness prior to its express maturity; (v) certain final judgments for the payment of money that remain undischarged for a period of 60 days; and (vi) certain events of bankruptcy or insolvency with respect to the Company or any of its Significant Subsidiaries. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount at maturity of the then outstanding Senior Notes may declare all the Senior Notes to be due and payable. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Senior Notes will become due and payable without further action or notice. Holders may not enforce the Indenture or the Senior Notes, except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount at maturity of the then outstanding Senior Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Senior Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal, Accreted Value, interest, or premium) if it determines that withholding notice is in their interest. The Holder of a majority in aggregate principal amount at maturity of the Senior Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Senior Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of principal of, Accreted Value, interest or premium, if any, on the Senior Notes and except in connection with a Repurchase Offer or other redemption. The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Company is required upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default. 11. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee. 12. NO RECOURSE AGAINST OTHERS. A director, officer, employee or direct or indirect stockholder of the Company, as such, shall not have any liability for any obligations of the Company under the Senior Notes or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Senior Note waives and releases such persons from all such liability. 13. AUTHENTICATION. This Senior Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 14. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=Uniform Gifts to Minors Act). 15. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company will cause CUSIP numbers to be printed on the Senior Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Senior Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. 16. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES.(2) In addition to the rights provided to holders of Securities under the Indenture, Holders of Securities shall have all the rights set forth in the Registration Rights Agreement. The Company will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to: United International Holdings, Inc. 4643 South Ulster Street Denver, Colorado 80237 Attention: Chief Financial Officer - ----------------- (2) This paragraph should be included only for the initial securities. ASSIGNMENT FORM To assign this Senior Note, fill in the form below: (I) or (we) assign and transfer this Senior Note to - -------------------------------------------------------------------------------- (Insert assignee's soc. sec. or tax I.D. no.) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Print or type assignee's name, address and zip code) and irrevocably appoint ___________________________________ to transfer this Senior Note on the books of the Company. The agent may substitute another to act for him. Date: __________________ Your Signature: ---------------------------------------------------------------- (Sign exactly as your name appears on the face of this Declaration) Signature Guarantee: NOTICE: The Signature must be guaranteed by an Institution which is a member of one of the following recognized signature Guarantee Programs: (i) The Securities Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MNSP); (iii) The Stock Exchange Medallion Program (SEMP); or (iv) in such other guarantee program acceptable to the Trustee. OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this Senior Note purchased by the Company pursuant to Section 4.10 or 4.18 of the Indenture, check the box below: [ ] Section 4.10 [ ] Section 4.18 If you want to elect to have only part of the Senior Note purchased by the Company pursuant to Section 4.10 or Section 4.18 of the Indenture, state the amount you elect to have purchased: $____________ Date: ____________ Your Signature: ______________________________________ (Sign exactly as your name appears on the Declaration) Tax Identification No.: ____________ Signature Guarantee: NOTICE: The Signature must be guaranteed by an Institution which is a member of one of the following recognized signature Guarantee Programs: (i) The Securities Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MNSP); (iii) The Stock Exchange Medallion Program (SEMP); or (iv) in such other guarantee program acceptable to the Trustee. CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF TRANSFER RESTRICTED SECURITIES(3) Re: SERIES A SENIOR DISCOUNT NOTES DUE 2009 OF UNITED INTERNATIONAL HOLDINGS, INC. This Certificate relates to $______ principal amount at maturity (except as provided in paragraph 1 of the Note) of Securities held in (check applicable space) _____ book-entry or ______ definitive form by _________________ (the "Transferor"). The Transferor (check applicable box): [ ] has requested the Trustee by written order to deliver in exchange for its beneficial interest in the Global Security held by the Depositary a Security or Securities in definitive, registered form of authorized denominations and an aggregate principal amount at maturity equal to its beneficial interest in such Global Security (or the portion thereof indicated above); or [ ] has requested the Trustee by written order to exchange or register the transfer of a Security or Securities. In connection with such request and in respect of each such Security, the Transferor does hereby certify that Transferor is familiar with the Indenture relating to the above-captioned Securities and as provided in Section 2.6 of such Indenture, the transfer of this Security does not require registration under the Securities Act (as defined below) because: [ ] Such Security is being acquired for the Transferor's own account, without transfer (in satisfaction of Section 2.6(a)(ii)(A) or Section 2.6(d)(i)(A) of the Indenture). [ ] Such Security is being transferred to a "qualified institutional buyer" (within the meaning of Rule 144A promulgated under the Securities Act), that is aware that any sale of Securities to it will be made in reliance on Rule 144A under the Securities Act and that is acquiring such Transfer Restricted Security for its own account, or for the account of another such "qualified - ------------------ (3) This Certificate shall be included only for Initial Securities. institutional buyer" (in satisfaction of Section 2.06(a)(ii)(B) or Section 2.06(d)(i)(B) of the Indenture). [ ] Such Security is being transferred pursuant to an exemption from registration in accordance with Rule 144, or outside the United States in an Offshore Transaction in compliance with Rule 904 under the Securities Act, or pursuant to an effective registration statement under the Securities Act (in satisfaction of Section 2.6(a)(ii)(C) or Section 2.6(d)(i)(C) of the Indenture). [ ] Such Security is being transferred in reliance on and in compliance with an exemption from the registration requirements of the Securities Act and in accordance with applicable securities laws of the states of the United States, other than as provided in the immediately preceding paragraph. An Opinion of Counsel to the effect that such transfer does not require registration under the Securities Act accompanies this Certificate (in satisfaction of Section 2.6(a)(ii)(D) or Section 2.6(d)(i)(D) of the Indenture). [INSERT NAME OF TRANSFEROR] By: Date: CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF SECURITIES(4) Re: SERIES B Senior Discount Notes DUE 2009 OF UNITED INTERNATIONAL HOLDINGS, INC. This Certificate relates to $______ principal amount at maturity of Securities held in (check applicable box) _____ book-entry or ______ definitive form by _____ (the "Transferor"). The Transferor (check applicable box): [ ] has requested the Trustee by written order to deliver in exchange for its beneficial interest in the Global Security held by the Depositary a Security or Securities in definitive, registered form of authorized denominations and an aggregate principal amount at maturity equal to its beneficial interest in such Global Security (or the portion thereof indicated above); or [ ] has requested the Registrar by written order to exchange or register the transfer of a Security or Securities. - ---------------- (4) This certificate shall be included only for the Exchange Securities. EX-10 5 EXHIBIT 10.4 UNITED INTERNATIONAL HOLDINGS, INC. $208,938,800 10.875% Senior Discount Notes due 2009 NOTE PURCHASE AGREEMENT ----------------------- April 29, 1999 Donaldson, Lufkin & Jenrette Securities Corporation UIH Funding Corp. Salomon Smith Barney Inc. Chase Securities Inc. TD Securities (USA) Inc. c/o Donaldson, Lufkin & Jenrette Securities Corporation 277 Park Avenue New York, New York 10172 Ladies and Gentlemen: United International Holdings, Inc., a Delaware corporation (the "Company"), proposes to issue and sell to UIH Funding Corp. ("UIH Funding"), an affiliate of Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"), Salomon Smith Barney, Inc. ("Salomon"), Chase Securities Inc. ("Chase") and TD Securities (USA) Inc. ("TD Securities") (together (not including DLJ), the "Purchasers") an aggregate of $208,938,800 in accreted value of its 10.875% Senior Discount Notes due 2009 (the "Senior Notes"), subject to the terms and conditions set forth in this agreement (the "Agreement"). The Senior Notes are to be issued pursuant to the provisions of an indenture (the "Indenture") to be dated as of April 29, 1999 between the Company and Firstar Bank of Minnesota, N.A., as trustee (the "Trustee"). Capitalized terms used herein and not otherwise defined are used herein as defined in the Initial Offering Memorandum (as defined below). 1. OFFERING MEMORANDUM. The Senior Notes will be offered and sold to the Purchasers pursuant to one or more exemptions from the registration requirements under the Securities Act of 1933, as amended (the "ACT"). The Company has prepared an initial offering memorandum, attached hereto as Exhibit A, relating to the Senior Notes (including the documents incorporated by reference therein, the "Initial Offering Memorandum"). The Company understands that the Senior Notes purchased hereunder by the Purchasers will be resold (the "Exempt Resales") pursuant to one or more exemptions from the registration requirements under the Act. DLJ will act as lead manager in connection with the Exempt Resales. Each Purchaser will either act as a co-manager or designate one of its affiliates so to act with respect to the Senior Notes owned by it. The Company agrees to prepare a preliminary offering memorandum (including the documents incorporated by reference therein, a "Preliminary Offering Memorandum") and a final offering memorandum (including the documents incorporated by reference therein, an "Offering Memorandum") relating to the Senior Notes i n connection with each Exempt Resale, if requested by DLJ. DLJ agrees to notify the Company at such time as all of the Senior Notes have been resold by such Purchasers and the Company will thereupon so notify the Trustee (the "Purchaser Resale Notice"). Upon original issuance thereof, and until such time as the same is no longer required under the applicable requirements of the Act, the Senior Notes (and all securities issued in exchange therefor or in substitution thereof) shall bear the following legend: "THIS SENIOR NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE SECOND SENTENCE HEREOF. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)(A "QIB"), (B) IT IS ACQUIRING THIS SENIOR NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, OR (C) AFTER THE COMPANY HAS RECEIVED A "PURCHASER RESALE NOTICE" (AS DEFINED IN THE INDENTURE), IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),(3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN "IAI")), (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS SENIOR NOTE EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE SECURITIES ACT, (D) AFTER THE COMPANY HAS RECEIVED A "PURCHASER RESALE NOTICE" IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E) AFTER THE COMPANY HAS RECEIVED A "PURCHASER RESALE NOTICE" TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS SENIOR NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE ACCRETED VALUE OF SENIOR NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (F) AFTER THE COMPANY HAS RECEIVED A "PURCHASER RESALE NOTICE" IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND IF REQUESTED BASED 2 UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SENIOR NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS SENIOR NOTE IN VIOLATION OF THE FOREGOING." The Company understands that the Exempt Resales will be made solely to persons who are reasonably believed to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBs") and to persons permitted to purchase the Senior Notes in offshore transactions in reliance upon Regulation S under the Act (each a "Regulation S Purchaser"). The QIBs and Regulation S Purchasers who purchase the Senior Notes in the initial placement thereof are referred to herein as the "Eligible Purchasers." Holders (including subsequent transferees) of the Senior Notes will have the registration rights set forth in the registration rights agreement (the "Registration Rights Agreement"), to be dated as of April 29, 1999, in substantially the form of Exhibit B hereto, for so long as any such Senior Notes constitute "Transfer Restricted Notes" (as defined in the Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Company will agree to file with the Securities and Exchange Commission (the "Commission"), under the circumstances and on the terms set forth therein, (i) a registration statement under the Act (the "Exchange Offer Registration Statement") relating to the Company's Senior Discount Notes due 2009 (the "Exchange Notes" and together with the Senior Notes, the "Notes"), to be offered in exchange for the Senior Notes (the "Exchange Offer") and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "Shelf Registration Statement" and, together with the Exchange Offer Registration Statement, the "Registration Statements") relating to the resale by certain holders of the Senior Notes, and to use its best efforts to cause such Registration Statements to be declared effective. This Agreement, the fee agreement dated April 29, 1999 among the Company, DLJ and the Purchasers (the "Fee Agreement"), the Indenture, the Senior Notes and the Registration Rights Agreement are hereinafter referred to collectively as the "Transaction Documents." 2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the representations and warranties contained in this Agreement, and subject to its terms and conditions, the Company agrees to issue and sell to the Purchasers, and the Purchasers agree severally and not jointly to purchase from the Company the principal amount at maturity of Senior Notes set forth opposite their names on 3 Exhibit C hereto at a purchase price equal to 58.856% of the principal amount at maturity thereof (the "Purchase Price"). 3. DELIVERY AND PAYMENT. Delivery to the Purchasers, and payment for, the Senior Notes shall be made at 9:00 a.m. New York City time, on April 29, 1999 (the "Closing Date"), at the offices of DLJ, or such other time or place as you and the Company shall designate. The Senior Notes in global or definitive form shall be registered in such names and issued in such denominations as you shall request. Each of Salomon, Chase and TD Securities hereby appoints as attorney-in-fact to act on their behalf UIH Funding and authorizes UIH Funding to purchase the Senior Notes from the Company on their behalf in accordance with this paragraph pro rata in accordance with Schedule C attached hereto. Upon receipt of the Purchase Price plus an amount equal to the accrual of original issue discount on the Notes from the Issue Date to and including the date of reimbursement, if any, from each of Salomon, Chase and TD Securities, UIH Funding will deliver the Senior Notes that it purchased on behalf of each of Salomon, Chase and TD Securities respectively to separate respective accounts at DLJ in their respective names. If UIH Funding has not received the Purchase Price from any such Purchaser by 2:00 p.m. New York Time on April 30, 1999, the Senior Notes to which such Purchaser would otherwise be entitled pursuant to this Agreement shall revert to UIH Funding without, notwithstanding any other provision contained herein or in the Fee Letter, any liability or continuing obligation pursuant to this Agreement or the Fee Letter on the part of such Purchaser to any other party to this Agreement or the Fee Letter. The Senior Notes shall be delivered to UIH Funding, who shall hold such Senior Notes on behalf of the Purchasers as custodian, on the Closing Date with any transfer taxes payable upon initial issuance thereof duly paid by the Company, against payment of the Purchase Price by wire-transfer. Each of the Purchasers agrees that all Exempt Resales undertaken by each Purchaser will be conducted by their respective or their respective affiliate's sales departments, but that all Exempt Resales shall only take place on the terms as set forth in the Fee Letter. 4. AGREEMENTS OF THE COMPANY. In connection with the sale of the Notes to the Purchasers and each Exempt Resale of the Notes, the Company agrees with DLJ and the Purchasers as follows: a. To advise DLJ and the Purchasers promptly and, if requested by the Purchas ers, confirm such advice in writing, (i) of the issuance by any state securities commission of any stop order suspending the qualification or exemption from qualification of any Senior Notes for offering or sale in any jurisdiction, or the initiation of any proceeding for such purpose by any state securities commission or other regulatory authority and (ii) of any change in the Company's condition (financial or otherwise), business, proposals, properties, net worth or results of operations or the happening of any event that makes any statement of a material fact made in the Initial Offering Memorandum, any Preliminary Offering Memorandum or any Offering Memorandum untrue or that requires the making of any additions to or changes in the Initial Offering Memorandum, any Preliminary Offering Memorandum or any Offering Memorandum in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Company shall use its best efforts to prevent the issuance of any stop order or order suspending the qualification or exemption of any Senior Notes under any state securities or 4 Blue Sky laws and, if at any time any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption of any Senior Notes under any state securities or Blue Sky laws, the Company shall use its best efforts to obtain the withdrawal or lifting of such order at the earliest possible time. b. To prepare each Preliminary Offering Memorandum and each Offering Memorandum on a timely basis in connection with the Exempt Resales, if requested to do so by DLJ. c. To furnish DLJ and the Purchasers, without charge, with as many copies of the Initial Offering Memorandum, each Preliminary Offering Memorandum and each Offering Memorandum, and any amendments or supplements thereto, as DLJ and the Purchasers may reasonably request. The Company consents to the use of the Initial Offering Memorandum, each Preliminary Offering Memorandum and each Offering Memorandum, and any amendments and supplements thereto, by DLJ and the Purchasers in connection with offers or sales of the Senior Notes and agrees to cooperate with DLJ and the Purchasers in good faith in the marketing and sale of such Senior Notes, including, without limitation, participation on a customary basis in road show presentations, not to exceed ten business days, reasonably advisable in the opinion of DLJ in connection with such marketing and sale. d. Not to amend or supplement the Initial Offering Memorandum, any applicable Preliminary Offering Memorandum or any applicable Offering Memorandum prior to the final closing date of the applicable Exempt Resales as specified by DLJ (each date an Exempt Resale takes place, an "Exempt Resales Closing Date"), unless DLJ shall previously have been advised thereof and shall not have objected thereto after being furnished a copy thereof. The Company shall promptly prepare, upon your request, any amendment or supplement to the Initial Offering Memorandum, any Preliminary Offering Memorandum or any Offering Memorandum that may be necessary or advisable in connection with Exempt Resales. e. If, after the date hereof, any event shall occur as a result of which, in the reasonable judgment of the Company or in the reasonable judgment of DLJ or its counsel, it becomes necessary to amend or supplement, any Preliminary Offering Memorandum or any Offering Memorandum, as applicable, in order to make the statements therein, in the light of the circumstances when, any Preliminary Offering Memorandum or any Offering Memorandum, as applicable, is delivered to an Eligible Purchaser, not misleading, or if it is necessary to amend or supplement, any Preliminary Offering Memorandum or any Offering Memorandum, as applicable, to comply with applicable law, forthwith to prepare an appropriate amendment or supplement to, any Preliminary Offering Memorandum or any Offering Memorandum so that the statements therein as so amended or supplemented will not, in the light of the circumstances when it is so delivered, be misleading, or so that, any Preliminary Offering Memorandum and any Offering Memorandum, as applicable, will comply with applicable law. f. To cooperate with you and your counsel in connection with the qualification of the Senior Notes under the securities or Blue Sky laws of such jurisdictions as you may request and to continue such qualification in effect for as long as may be necessary to complete the Exempt Resales; provided, however, that the Company shall not be required in connection therewith to 5 register or qualify as a foreign corporation where it is not now so qualified or to take any action that would subject it to the service of process in suits or taxation, other than as to matters and transactions relating to the Exempt Resales, in any jurisdiction where it is not now so subject. g. Whether or not the transactions contemplated by this Agreement are consum mated or this Agreement becomes effective or is terminated, to pay all costs, expenses, fees and taxes incident to and in connection with: (i) the printing, processing, filing, distribution and delivery of the Initial Offering Memorandum, each Preliminary Offering Memorandum and each Offering Memorandum (including, without limitation, financial statements and exhibits) and all amendments and supplements thereto, (ii) the printing, processing, execution, distribution and delivery of this Agreement, the other Transaction Documents, any memoranda describing state securities or Blue Sky laws and all other agreements, memoranda, correspondence and other documents printed, distributed and delivered in connection herewith and with the offer or sale of the Senior Notes, (iii) the issuance and delivery by the Company of the Senior Notes, (iv) the qualification of the Senior Notes for offer and sale under the securities or Blue Sky laws of the several states (including, without limitation, the fees and disbursements of your counsel relating to such registration or qualification and memoranda relating thereto and any filing fees in connection therewith), (v) furnishing such copies of each Preliminary Offering Memorandum and each Offering Memorandum, and all amendments and supplements thereto, as may be reasonably requested for use in connection with Exempt Resales, (vi) the preparation of certificates for the Senior Notes (including, without limitation, printing and engraving thereof), (vii) the fees, disbursements and expenses of the Company's counsel and accountants, all expenses and listing fees in connection with the application for quotation of the Senior Notes in the National Association of Securities Dealers, Inc. ("NASD") Automated Quotation System - PORTAL ("PORTAL"), (ix) all fees and expenses (including fees and expenses of counsel) of the Company in connection with approval of the Senior Notes by The Depository Trust Company ("DTC") for "book-entry" transfer, (x) the performance by the Company of its other obligations under this Agreement and the other Transaction Documents and (xi) the rating of the Senior Notes by investment rating agencies. h. To use the proceeds from the sale of the Senior Notes in the manner described in the Initial Offering Memorandum under the caption "Use of Proceeds." i. Not to claim voluntarily, and to resist actively any attempts to claim, the benefit of any usury laws against the holders of any Senior Notes. j. To do and perform all things required to be done and performed under this Agreement by it on, prior to, and after the Closing Date and to use its best efforts to satisfy all conditions precedent on its part to the delivery of the Senior Notes. k. Not to sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in the Act), other than the Senior Notes, in a manner that would require the registration under the Act of the sale to the Purchasers or of any of the Exempt Resales of the Senior Notes. 6 l. For so long as any of the Senior Notes remain outstanding and during any period in which the Company is not subject to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), to make available to any holder and any prospective purchaser of such Senior Notes from such holder, the information required by Rule l 44A(d)(4) under the Act. m. Except as otherwise permitted under the Act, it will not, and will not authorize or permit any person acting on its behalf to, solicit any offer to buy or offer to sell the Senior Notes by means of any form of general solicitation or general advertising (as such terms are used in Regulation D under the Act) or in any manner involving a public offering within the meaning of Section 4(2) of the Act. n. Neither the Company nor any of its affiliates will engage in any directed selling efforts within the meaning of Regulation S under the Act with respect to the Senior Notes in violation of the Act. o. To use its best efforts to cause the Exchange Offer to be made on the appropri ate form to permit registration of the Exchange Notes to be offered in exchange for the Senior Notes and to comply with all applicable federal and state securities laws in connection with the Exchange Offer. p. To comply with all of its agreements set forth in the Transaction Documents, and all agreements set forth in the representation letter, as applicable, of the Company to DTC relating to the approval of the Senior Notes by DTC for "book-entry" transfer. q. To use its best efforts to effect the inclusion of the Senior Notes in PORTAL, when so requested by the Purchasers. r. During a period of five years following the date of this Agreement, to deliver to each of you promptly upon their becoming available, copies of all current, regular and periodic reports filed by the Company with the Commission or any securities exchange or with any governmental authority succeeding to any of the Commission's functions. s. If this Agreement shall terminate or shall be terminated after execution pursuant to any provisions hereof (otherwise than pursuant to Section 9 hereof) or if this Agreement shall be terminated by DLJ or the Purchasers because of any failure or refusal on the part of the Company to comply with the terms or fulfill any of the conditions of this Agreement, the Company agrees to reimburse DLJ and the Purchasers for all out-of-pocket expenses (including fees and expenses of counsel) for those reasonably incurred by the Purchasers in connection with the matters covered by this Agreement. t. To reaffirm, as of each of the Exempt Resales Closing Dates, in the form of an Officers' Certificate, the representations and warranties made to DLJ and the Purchasers pursuant to Section 5 of this Agreement. 7 u. To satisfy for purposes of the Exempt Resales, on or prior to each of the Exempt Resales Closing Dates, the conditions set forth in Section 7 of this Agreement. v. Until such time as all the Notes have been resold by the Purchasers, the Company shall not list any securities of the Company of the same class (within the meaning of Rule 144A under the Act) as the Senior Notes on a national securities exchange. w. To deliver to the Purchasers on or prior to each of the Exempt Resales Closing Dates a current list of "significant subsidiaries" (as such term is defined in Rule 1-D2 (w) of Regulation S-X). 5. REPRESENTATIONS AND WARRANTIES. (a) The Company represents and warrants to DLJ and the Purchasers, as of the date hereof as follows. The references below to the Preliminary Offering Memorandum and the Offering Memorandum shall only apply to the representations and warranties made as of each Exempt Resales Closing Date. a. The Initial Offering Memorandum, each Preliminary Offering Memorandum and each Offering Memorandum have been prepared in connection with and in contemplation of the sale to the Purchasers of the Senior Notes and, at the option of DLJ, Exempt Resales. The Initial Offering Memorandum does not and each Preliminary Offering Memorandum and each Offering Memorandum do not, and any supplement or amendment thereto prepared by the Company will not, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except that the representations and warranties contained in this paragraph (i) shall not apply to statements in or omissions from the Initial Offering Memorandum, each Preliminary Offering Memorandum and each Offering Memorandum (or any supplement or amendment thereto) made in reliance upon and in conformity with information relating to you furnished to the Company in writing by you expressly for use therein. The Company acknowledges for all purposes under this Agreement that the statements set forth in the first paragraph appearing on page i, the third full paragraph, the eighth paragraph, the eleventh paragraph, the twelfth paragraph, the thirteenth paragraph and the fourteenth paragraph appearing under the caption "Plan of Distribution" in the Initial Offering Memorandum constitutes the only written information furnished to the Company by you expressly for use in the Initial Offering Memorandum, each Preliminary Offering Memorandum and each Offering Memorandum (or any amendment or supplement thereto). No stop order preventing the use of the Initial Offering Memorandum, the applicable Preliminary Offering Memorandum and the applicable Offering Memorandum, or any amendment or supplement thereto, or any order asserting that any of the transactions contemplated by this Agreement are subject to the registration requirements of the Act or the applicable laws of any other jurisdiction, has been issued. b. When the Senior Notes are issued and delivered pursuant to this Agreement, none of the Senior Notes will be of the same class (within the meaning of Rule 144A under the Act) as securities of the Company that are listed 8 on a national securities exchange registered pursuant to the Exchange Act or that are quoted in a United States automated inter dealer quotation system. c. All the outstanding shares of capital stock of the Company have been duly authorized and validly issued, are fully paid and nonassessable and are free of any preemptive or similar rights; the capital stock of the Company conforms in all material respects to the description thereof in the Initial Offering Memorandum, and will so confirm with respect to each Preliminary Offering Memorandum and each Offering Memorandum; and the Company's ownership interest with respect to each of the corporations and partnerships (including its Restricted Affiliates) in which the Company has a direct or indirect investment (each a "Subsidiary" and, collectively, the "Subsidiaries") is in all material respects as described in the Initial Offering Memorandum, and will so conform with respect to each Preliminary Offering Memorandum and each Offering Memorandum and the descriptions of contracts and agreements set forth therein are and will be, as applicable accurate and complete in all material respects. d. The Company has all necessary corporate power and authority to execute and deliver this Agreement and the other Transaction Documents and to perform its obligations under this Agreement and the other Transaction Documents and to authorize, issue, sell and deliver the Senior Notes as contemplated by this Agreement and to perform its obligations thereunder, as applicable. e. The Indenture has been duly authorized by the Company and, when executed and delivered at the Closing, will be a valid and legally binding agreement of the Company, enforceable against the Company in accordance with its terms. The Indenture, when executed and delivered, will conform to the description thereof in the Initial Offering Memorandum, each Preliminary Offering Memorandum and each Offering Memorandum. f. The Senior Notes have been duly authorized by the Company and, on the Closing Date, will have been duly executed by the Company and will conform in all materials respects to the descriptions thereof in the Initial Offering Memorandum, each Preliminary Offering Memorandum and each Offering Memorandum. When the Senior Notes are issued, authenticated and delivered in accordance with the Indenture and paid for in accordance with the terms of this Agreement, the Senior Notes will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms and entitled to the benefits of the Indenture. g. The Exchange Notes have been duly and validly authorized for issuance by the Company, and when issued and authenticated in accordance with the terms of the Indenture and the Registration Rights Agreement will be valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms and entitled to the benefits of the Indenture. h. The Registration Rights Agreement has been duly and validly authorized by the Company and, when duly executed and delivered by the Company, will be the valid and legally binding obligation of the Company enforceable against the Company in accordance with its terms. The Registration Rights Agreement, when executed and delivered, will conform to the description thereof 9 in the Initial Offering Memorandum, each Preliminary Offering Memorandum and each Offering Memorandum. i. The Company is a corporation duly organized and validly existing in good standing under the laws of the State of Delaware with full corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Initial Offering Memorandum, and, if applicable, as will be described in each Preliminary Offering Memorandum and each Offering Memorandum, and is duly registered and qualified to conduct its business and is in good standing in each jurisdiction or place where the nature of its properties or the conduct of its business requires such registration or qualification, except where the failure to so register or qualify does not have a material adverse effect on the condition (financial or other), business, properties, prospects, net worth or results of operations of the Company and the Subsidiaries taken as a whole. Such an effect, either singly or in the aggregate, is referred to in this Agreement as a "Material Adverse Effect" and the word "material" shall have a corresponding meaning. j. The Subsidiaries that were "significant subsidiaries" (as such term is defined in Rule 1-02(w) of Regulation S-X) as of December 31, 1998 are listed in the list of subsidiaries and affiliates included as Annexes A and B to the Initial Offering Memorandum. Each Subsidiary is a corporation or other legal entity duly organized, validly existing and in good standing in the jurisdiction of its formation, with full power and authority to own, lease and operate its properties and to conduct its business as described in the Initial Offering Memorandum, and, if applicable, as will be described in the applicable Preliminary Offering Memorandum and Offering Memorandum, and is duly registered and qualified to conduct its business and is in good standing in each jurisdiction or place where the nature of its properties or the conduct of its business requires such registration or qualification, except where the failure so to register or qualify does not have a Material Adverse Effect; except as set forth in the Initial Offering Memorandum, or the applicable Preliminary Offering Memorandum or Offering Memorandum, all the outstanding shares of capital stock or other equity interests of each of the Subsidiaries have been duly authorized and validly issued, are fully paid and nonassessable, and are owned by the Company directly or indirectly through one of the other Subsidiaries, free and clear of any material lien, adverse claim, security interest, equity or other encumbrance. k. There is (A) no legal, regulatory or governmental action, suit or proceeding before or by any court, arbitrator or governmental agency, body or official, domestic or foreign, now pending or, to the knowledge of the Company, threatened or contemplated to which the Company or any of the Subsidiaries is a party or to which the business or property of the Company or any of the Subsidiaries is subject, (B) no statute, rule, regulation or order that has been enacted, adopted or issued by any governmental agency or that has been proposed by any governmental body, (C) no injunction, restraining order or order of any nature by a federal or state court or foreign court of competent jurisdiction to which the Company or any of the Subsidiaries is subject issued that, in the case of clauses (A), (B) and (C) above, (x) might, singly or in the aggregate, result in a Material Adverse Effect, (y) would interfere with or adversely affect the issuance or Exempt Resale of the Notes (materially, solely in the case of an Exempt Resale) or (z) in any manner draw (materially, solely in the case of an Exempt Resale) into question the validity of this Agreement or the other Transaction Documents. 10 l. Neither the Company nor any of the Subsidiaries is in violation of its certificate or articles of incorporation or by-laws or other organizational documents, or in material violation of any law, ordinance, administrative or governmental rule or regulation applicable to the Company or any of the Subsidiaries or of any decree of any court or governmental agency or body having jurisdiction over the Company or any of the Subsidiaries, or in default in any material respect in the performance of any obligation, agreement or condition contained in any bond, debenture, note or any other evidence of indebtedness or in any material agreement, indenture, lease or other instrument to which the Company or any of the Subsidiaries is a party or by which any of them or any of their respective properties may be bound. m. Neither the issuance and sale of the Senior Notes, the execution and delivery by the Company of the Transaction Documents, the performance of this Agreement, the Fee Agreement, Indenture and the Registration Rights Agreement by the Company, nor the consummation by the Company of the transactions contemplated hereby and thereby (i) requires any consent, approval, authorization or other order of or registration or filing with, any court, regulatory body, administrative agency or other governmental body, agency or official except such as have been obtained and made (or, in the case of the Registration Rights Agreement, will be obtained and made under the Act, the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and United States state securities or Blue Sky laws and regulations or such as may be required by the NASD), (ii) conflicts or will conflict with or constitutes or will constitute a breach of, or a default under, the certificate or articles of incorporation or bylaws, or other organizational documents, of the Company or any of the Subsidiaries, (iii) conflicts or will conflict with or constitutes or will constitute a breach of, or a default under, any agreement, indenture, lease or other instrument to which the Company or any of the Subsidiaries is a party or by which any of them or any of their respective properties may be bound or (iv) violates or will violate any statute, law, regulation or filing or judgment, injunction, order or decree applicable to the Company or any of the Subsidiaries or any of their respective properties, or will result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company (other than in favor of the holders of the Senior Notes) or any of the Subsidiaries pursuant to the terms of any agreement or instrument to which any of them is a party or by which any of them may be bound or to which any of the property or assets of any of them is subject, except in each case where failure to obtain such consents, approvals, authorizations or orders or make such registrations or filings or where such conflicts or violations will not individually or in the aggregate have a Material Adverse Effect. n. The accountants, Arthur Andersen LLP, KPMG Accountants N.V., and Price Waterhouse each of which has audited certain of the financial statements that are or will be (as applicable) included, incorporated by reference or summarized in the Initial Offering Memorandum, each Preliminary Offering Memorandum and each Offering Memorandum, are independent certified public accountants with respect to the Company and its Subsidiaries under Rule 101 of the AICPA's Code of Professional Conduct and its interpretations and rulings. The financial statements, together with related schedules and notes, included or incorporated by reference in the Initial Offering Memorandum, and that will be so included or incorporated in each Preliminary Offering Memorandum 11 and each Offering Memorandum (and any amendment or supplement thereto) present fairly the respective financial positions, results of operations and changes in financial positions of the Company and each Subsidiary, in each case, for which such financial statements are or will be so included or incorporated by reference, on the basis stated in the Initial Offering Memorandum, the applicable Preliminary Offering Memorandum and the applicable Offering Memorandum at the respective dates or for the respective periods to which they apply; such financial statements and related schedules and notes have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved, except as disclosed therein; and the other financial and statistical information and data included and to be included, as applicable, in the Initial Offering Memorandum, each Preliminary Offering Memorandum and each Offering Memorandum (and any amendment or supplement thereto) are accurately presented in all material respects and prepared on a basis consistent with such financial statements and the books and records of the Company and the Subsidiaries. o. The financial statements, included or incorporated by reference in the Initial Offering Memorandum, each Preliminary Offering Memorandum and each Offering Memorandum (and any amendment or supplement thereto), present and, as applicable, will present fairly the respective financial positions, results of operations and changes in financial positions of (i) the Company and (ii) each Subsidiary, in each case, for which such financial statements are so included or incorporated by reference, on the basis stated in the Initial Offering Memorandum, each Preliminary Offering Memorandum and each Offering Memorandum at the respective dates or for the respective periods to which they apply; such financial statements and related schedules and notes have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved, except as disclosed therein; the other financial and statistical information and data included in the Initial Offering Memorandum, each Preliminary Offering Memorandum and each Offering Memorandum (and any amendment or supplement thereto) are accurately presented and, as applicable, will be accurately presented in all material respects and prepared on a basis consistent with such financial statements and the books and records of the Company and the Subsidiaries; and the pro forma financial statements and "as adjusted" financial information and the related notes thereto included or incorporated by reference in the Initial Offering Memorandum, each Preliminary Offering Memorandum and each Offering Memorandum have been or, as applicable, will be prepared in accordance with the applicable requirements of the Act (as though each Preliminary Offering Memorandum and each Offering Memorandum were a prospectus included in a registration statement filed pursuant to the Act) and on the bases described therein and, in the opinion of the Company, the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein. p. The execution and delivery of, and the performance by the Company of its obligations under, this Agreement and the Fee Agreement have been duly and validly authorized by the Company, and this Agreement and the Fee Agreement have been duly executed and delivered by the Company and constitutes the valid and legally binding agreement of the Company, enforceable against the Company in accordance with its terms, except as rights to indemnity and contribution hereunder or thereunder may be limited by federal or state securities laws. 12 q. Except as disclosed in the Initial Offering Memorandum, each Preliminary Offering Memorandum and each Offering Memorandum (or any amendment or supplement thereto), as applicable, subsequent to the respective dates as of which such information is given in the applicable Initial Offering Memorandum, Preliminary Offering Memorandum or Offering Memorandum (or any amendment or supplement thereto), neither the Company nor any of the Subsidiaries has incurred any liability or obligation, direct or contingent or entered into any transaction, not in the ordinary course of business, that is material to the Company on a consolidated basis, and there has not been any change in the capital stock or material increase in the short-term debt or long-term debt of the Company, any of the Subsidiaries, or any change or any development that has, or that may reasonably be expected to have, a Material Adverse Effect, or any discovery of any change or development that may be reasonably expected to have any such Material Adverse Effect. r. Except as is not material, each of the Company and each Subsidiary has good and marketable title to all property (real and personal) described and, as applicable, to be described, in the Initial Offering Memorandum, each Preliminary Offering Memorandum and each Offering Memorandum as being owned by it, free and clear of all liens, claims, security interests or other encumbrances (except such as are described, as applicable, in the Initial Offering Memorandum, Preliminary Offering Memorandum or Offering Memorandum and all the property described therein as being held under lease by each of the Company and the Subsidiaries is held by it under valid, subsisting and enforceable leases). s. Each of the Company and each Subsidiary has such material permits, licenses, franchises and authorizations of governmental or regulatory authorities ("permits") as are and, as applicable, will be necessary to own its respective properties and to conduct its respective business in the manner described in the Initial Offering Memorandum, each Preliminary Offering Memorandum and each Offering Memorandum, subject to such qualifications as may be set forth, as applicable, in the Initial Offering Memorandum, each Preliminary Offering Memorandum and each Offering Memorandum; each of the Company and each Subsidiary has fulfilled and performed all its material obligations with respect to such permits and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or result in any other material impairment of the rights of the holder of any such permit, subject in each case to such qualification as may be set forth in the Initial Offering Memorandum, each Preliminary Offering Memorandum and each Offering Memorandum as applicable; and, except as described in the Initial Offering Memorandum, each Preliminary Offering Memorandum and each Offering Memorandum, as applicable, none of such permits contains any restriction that is materially burdensome to the Company or any of the Subsidiaries. The descriptions contained and, as applicable, to be contained in the Initial Offering Memorandum, each Preliminary Offering Memorandum and each Offering Memorandum of statutes, rules, regulations and other laws applicable to the Company and the Subsidiaries are and will be as of their respective dates accurate and complete in all material respects. t. The Company maintains a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management's general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to 13 maintain accountability for assets; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. u. No action has been taken and no statute, rule or regulation or order has been enacted, adopted or issued by any governmental agency that prevents the issuance of the Senior Notes or the Exempt Resales; no injunction, restraining order or order of any nature by a federal or state court of competent jurisdiction has been issued that prevents the issuance of the Senior Notes or suspends the sale of the Senior Notes or the Exempt Resales in any jurisdiction referred to in Section 4(f) hereof, and no action, suit or proceeding is pending affecting or, to the knowledge of the Company, threatened against the Company or any of the Subsidiaries before any court or arbitrator or any governmental body, agency or official which, if adversely determined, would prohibit, interfere (materially, solely in the case of Exempt Resales) with or (materially, solely in the case of Exempt Resales) adversely affect the issuance or marketability of the Senior Notes, including any Exempt Resale, or in any (material, solely in the case of Exempt Resales) manner draw into question the validity of any of the Transaction Documents; and every request of the Company by any securities authority or agency of any jurisdiction for additional information has been and will be complied with in all material respects. v. To the Company's knowledge, neither the Company nor any of its Subsidiaries nor any employee, agent, co-investor or partner of the Company or any Subsidiary has made any payment of funds of the Company or any Subsidiary or received or retained any funds in violation of any law, rule or regulation, which payment, receipt or retention of funds is of a character required to be disclosed in the Initial Offering Memorandum, each Preliminary Offering Memorandum or each Offering Memorandum, as applicable. w. No registration under the Act of the Senior Notes is required for the sale of the Senior Notes to the Purchasers as contemplated hereby or for Exempt Resales to Eligible Purchasers, assuming (A) that the persons who buy the Senior Notes in the Exempt Resales are Eligible Purchasers and (B) the accuracy of representations of DLJ and the Purchasers regarding the absence of general solicitation in connection with Exempt Resales described herein. No form of general solicitation or general advertising was used by the Company or any of its representatives in connection with the offer and sale of any of the Senior Notes or in connection with Exempt Resales, including, but not limited to, articles, notices or other communications published in any newspaper, magazine, or similar medium or broadcast over television or radio, or any seminar or meeting whose attendees have been invited by any general solicitation or general advertising. No securities of the same class as the Senior Notes have been issued and sold by the Company or any of the subsidiaries within the six-month period immediately prior to the date hereof or will be sold prior to the Exempt Resale Closing Date. x. The Initial Offering Memorandum, each Preliminary Offering Memorandum and each Offering Memorandum, as of its respective date, and each amendment or supplement thereto, as applicable, as of its date, contains or will contain, as applicable, including the information incorporated by reference therein, all the information specified in, and meets the requirements of, Rule 144A(d)(4) under the Act. 14 y. Each of the Company and each Subsidiary has filed all material tax returns required to be filed, which returns are complete and correct in all material respects, and neither the Company nor any Subsidiary is in default in the payment of any taxes which were payable pursuant to said returns or any assessments with respect thereto. z. The Company and the Subsidiaries own or possess all material patents, trademarks, trademark registrations, service marks, service mark registrations, trade names, copyrights, licenses, inventions, trade secrets and rights described, and, as applicable, to be described in the Initial Offering Memorandum, each Preliminary Offering Memorandum and each Offering Memorandum, as applicable, as being owned by them or any of them or necessary for the conduct of their respective businesses, and the Company is not aware of any claim to the contrary or any challenge by any other person to the rights of the Company and the Subsidiaries with respect to the foregoing. aa. The Company is not, and after the sale of the Senior Notes to be sold by it hereunder and the application of the proceeds from such sale as described in the Initial Offering Memorandum, each Preliminary Offering Memorandum and each Offering Memorandum, as applicable under the caption "Use of Proceeds" will not be, an "investment company" within the meaning of the Investment Company Act of 1940, as amended. bb. The Company has complied with all provisions of Florida H.B. 1771 codified as Section 517.075 of the Florida statutes, and all regulations promulgated thereunder, relating to issuers doing business with the Government of Cuba or with any person or any affiliate located in Cuba. cc. Except as described in the Initial Offering Memorandum, or the applicable Offering Memorandum, there are no outstanding options, warrants or other rights calling for the issuance of, or any commitment, plan or arrangement to issue, any shares of capital stock of the Company or any security convertible into or exchangeable or exercisable for capital stock of the Company. dd. Except as described in the Initial Offering Memorandum or the applicable Offering Memorandum, there is no holder of any security of the Company or any other person who has the right, contractual or otherwise, to cause the Company to sell or otherwise issue to them, or to permit them to underwrite the sale of, the Notes or the right to have any other securities of the Company included in the registration statement or the right to require registration under the Act of any securities of the Company because of the execution by the Company of this Agreement or consummation of the transactions contemplated by this Agreement or otherwise. ee. Except as set forth in the Initial Offering Memorandum or the applicable Offering Memorandum, the Company has no commitments to fund entities that do not constitute Subsidiaries. 15 ff. None of the Company, any Subsidiary or any agent thereof acting on the behalf of either of them has taken, and none of them will take, any action that might cause this Agreement or the issuance or sale of the Notes pursuant to the terms of this Agreement to violate Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of Governors of the Federal Reserve System, in each case as in effect now or as the same may hereafter be in effect on the Closing Date. gg. No "nationally recognized statistical rating organization" as such term is defined for purposes of Rule 436(g)(2) under the Act (i) has imposed (or has informed the Company that it is considering imposing) any condition (financial or otherwise) on retaining any rating assigned to the Company or any securities of the Company, or (ii) has indicated to the Company that it is considering (1) the downgrading, suspension, or withdrawal of, or any review for a possible change that does not indicate the direction of the possible change in, any rating so assigned or (2) any change in the outlook for any rating of the Company or any securities of the Company; hh. Each certificate signed by any officer of the Company and delivered to DLJ and the Purchasers or the counsel of DLJ and the Purchasers pursuant hereto shall be deemed to be a representation and warranty by the Company to the Purchasers as to the matters covered thereby; The Company acknowledges that DLJ and the Purchasers and, for purposes of the opinions to be delivered to DLJ and the Purchasers pursuant to Section 7 hereof, counsel to the Company and counsel to DLJ and the Purchasers, will rely upon the accuracy and truth of the foregoing representations and hereby consents to such reliance. (b) The Purchasers, and in the case of clause 5(b)c. And 5(b)d., DLJ each represent and warrant to the Company and agree, as of the Date hereof and as of the Exempt Resales Closing Date, that: a. Such Purchaser is a QIB, with such knowledge and experience in financial and business matters as are necessary in order to evaluate the merits and risks of an investment in the Senior Notes. b. Such Purchaser is not acquiring the Senior Notes with a view to any distribu tion thereof that would violate the Act or the securities laws of any state of the United States or any other applicable jurisdiction. c. No form of general solicitation or general advertising has been or will be used by DLJ or the Purchasers or any of its representatives in connection with the offer and sale of any of the Senior Notes, which would render unavailable to the Company reliance upon the exemption from the registration requirements of the Act afforded by Section 4(2) thereof, including, but not limited to, articles, notices or other communications published in any newspaper, magazine, or similar medium or broadcast over television or radio, or any seminar or meeting whose attendees have been invited by any general solicitation or general advertising. 16 d. DLJ and the Purchasers also understand that the Company and, for purposes of the opinions to be delivered to DLJ and the Purchasers pursuant to Section 7 hereof, counsel to the Company and counsel to the DLJ and the Purchasers will rely upon the accuracy and truth of the foregoing representations and hereby consents to such reliance. 6. INDEMNIFICATION AND CONTRIBUTION. a. The Company agrees to indemnify and hold harmless (i) DLJ and the Purchasers, (ii) each person, if any, who controls DLJ or any of the Purchasers within the meaning of Section 15 of the Act or Section 20 of the Exchange Act and (iii) the respective officers, directors, partners, employees, representatives and agents of DLJ and the Purchasers or any controlling person of any of them (any person referred to in clause (i), (ii) or (iii) may hereinafter be referred to as an "Indemnified Person") from and against any and all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation) arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in the Initial Offering Memorandum, any Preliminary Offering Memorandum or any Offering Memorandum or in any amendment or supplement thereto, as applicable, or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages, liabilities or expenses arise out of or are based upon any untrue statement or omission or alleged untrue statement or omission which has been made therein or omitted therefrom in reliance upon and in conformity with information relating to DLJ and the Purchasers furnished to the Company in writing by or on behalf of DLJ and the Purchasers expressly for use in connection therewith. The foregoing indemnity agreement shall apply to all actions taken by DLJ and the Purchasers pursuant hereto and pursuant to the Fee Letter and shall be in addition to any liability which the Company may otherwise have. b. If any action, suit or proceeding shall be brought against any Indemnified Person with respect to which indemnity may be sought against the Company, such Indemnified Person shall promptly notify the Company, and the Company shall assume the defense thereof, including the employment of counsel and payment of all fees and expenses. Any Indemnified Person shall have the right to employ separate counsel in any such action, suit or proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person, unless (i) the Company has agreed in writing to pay such fees and expenses, (ii) the Company has failed to assume the defense and employ counsel, or (iii) the named parties to any such action, suit or proceeding (including any impleaded parties) include both such Indemnified Person and the Company and such Indemnified Person shall have been advised by its counsel that representation of such Indemnified Person and the Company by the same counsel would be inappropriate under applicable standards of professional conduct (whether or not such representation by the same counsel has been proposed) due to actual or potential differing interests between them (in which case the Company shall not have the right to assume the defense of such action, suit or proceeding on behalf of such Indemnified Person). It is understood, however, that the Company shall, in connection with any one such action, suit or proceeding or separate but substantially similar or related actions, suits or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of only one separate firm of attorneys (in addition to any local 17 counsel) at any time for such Indemnified Person not having actual or potential differing interests with such Indemnified Person or among themselves, which firm shall be designated in writing by such Indemnified Person, and that all such fees and expenses shall be reimbursed as they are incurred. The Company shall not be liable for any settlement of any such action, suit or proceeding effected without its written consent, but if settled with such written consent, or if there be a final judgment for the plaintiff in any such action, suit or proceeding, the Company agrees to indemnify and hold harmless any Indemnified Person, to the extent provided in the preceding paragraph, from and against any loss, claim, damage, liability or expense by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse such indemnified party for fees and expenses of counsel as incurred, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 business days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement. The indemnifying party shall not, without the prior written consent of each indemnified party, settle or compromise or consent to the entry of judgment in or otherwise seek to terminate any pending or threatened action, claim, litigation or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not any indemnified party is a party thereto), unless such settlement, compromise, consent or termination includes an unconditional release of each indemnified party from all liability arising out of such action, claim, litigation or proceeding. c. DLJ and the Purchasers agree to indemnify and hold harmless the Company, its directors, its officers and any person who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, to the same extent as the foregoing indemnity from the Company to each Indemnified Person, but only with respect to information relating to such Indemnified Person furnished in writing by or on behalf of such Indemnified Person through you expressly for use in the Initial Offering Memorandum, the applicable Preliminary Offering Memorandum and the applicable Offering Memorandum, or any amendment or supplement thereto, as applicable. If any action, suit or proceeding shall be brought against the Company, any of its directors, any such officer, or any such controlling person based on the Initial Offering Memorandum, any Preliminary Offering Memorandum or any Offering Memorandum, or any amendment or supplement thereto, as applicable, and in respect of which indemnity may be sought against DLJ and the Purchasers pursuant to this paragraph c., DLJ and the Purchasers shall have the rights and duties given to the Company by paragraph b. above (except that if the Company shall have assumed the defense thereof DLJ and the Purchasers shall not be required to do so, but may employ separate counsel therein and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of DLJ and the Purchasers), and the Company, its directors, any such officer, and any such controlling person shall have the rights and duties given to DLJ and the Purchasers by paragraph b. above. The foregoing indemnity agreement shall be in addition to any liability which DLJ and the Purchasers may otherwise have. d. If the indemnification provided for in this Section 6 is unavailable to an indemnified party under paragraphs a. or c. hereof in respect of any losses, claims, damages, liabilities or expenses referred to therein, then an indemnifying party, in lieu of indemnifying such indemnified party, 18 shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and DLJ and the Purchasers on the other hand from the offering of the Senior Notes, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and DLJ and the Purchasers on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and DLJ and the Purchasers on the other hand shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total fees received and retained by DLJ and the Purchasers pursuant to the Fee Agreement. The relative fault of the Company on the one hand and DLJ and the Purchasers on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or by DLJ and the Purchasers on the other hand and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. e. The Company, DLJ and the Purchasers agree that it would not be just and equitable if contribution pursuant to this Section 6 were determined by a pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph d. above. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities and expenses referred to in paragraph d. above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating any claim or defending any such action, suit or proceeding. Notwithstanding the provisions of this Section 6, DLJ and the Purchasers shall not be required to contribute any amount in excess of the amount by which the total fees received by DLJ and the Purchasers pursuant to the Fee Agreement exceeds the amount of any damages which DLJ and the Purchasers have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. 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. f. Any losses, claims, damages, liabilities or expenses for which an indemnified party is entitled to indemnification or contribution under this Section 6 shall be paid by the indemnifying party to the indemnified party as such losses, claims, damages, liabilities or expenses are incurred. The indemnity and contribution agreements contained in this Section 6 and the representations and warranties of the Company and of DLJ and the Purchasers set forth in this Agreement shall remain operative and in full force and effect, regardless of (i) any investigation made by or on behalf of DLJ and the Purchasers or any person controlling DLJ and the Purchasers, the Company, its directors or officers, or any person controlling the Company, (ii) acceptance of any Senior Notes and payment therefor hereunder, and (iii) any termination of this Agreement. A successor to DLJ or the Purchasers or any person controlling DLJ or the Purchasers, or to the Company, its directors or officers, or any person controlling the Company, shall be entitled to benefits of the indemnity, contribution, and reimbursement agreements contained in this Section 6. 19 g. The statements set forth in the first paragraph appearing on page i, the third full paragraph, the eighth paragraph, the eleventh paragraph, the twelfth paragraph, the thirteenth paragraph and the fourteenth paragraph appearing under the caption "Plan of Distribution" in the Initial Offering Memorandum constitute the only information relating to DLJ and the Purchasers furnished to the Company in writing by or on behalf of the Purchasers as such information is referred to herein, including in Sections 5 and 6 hereof. 7. CONDITIONS OF PURCHASERS' OBLIGATIONS. The obligation of the Purchasers to purchase Senior Notes hereunder is subject to the following conditions: a. All of the representations and warranties of the Company contained in this Agreement shall be true and correct on the date hereof, the Closing Date, and on each Exempt Resales Closing Date, as applicable, with the same force and effect as if made on and as of the date hereof. The Company shall have performed or complied with all of the agreements herein contained and required to be performed or complied with by it at or prior to the Closing Date and each Exempt Resales Closing Date, as applicable. b. The Initial Offering Memorandum shall have been printed and copies distributed to DLJ and the Purchasers not later than 10:00 p.m. New York City time on April 28, 1999. c. With respect solely to each Resale Closing Date, the Offering Memorandum shall have been printed and copies distributed to DLJ and the Purchasers not later than as required to effect Exempt Resales as reasonably specified by you after the Date of this Agreement or at such later date and time as to which you may agree, and no stop order suspending the qualification or exemption from qualification of any of the Senior Notes in any jurisdiction shall have been issued and no proceeding for that purpose shall have been commenced or shall be pending or threatened. d. No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any governmental agency which would, as of the Closing Date, or Exempt Sales Closing Date, as applicable, prevent the issuance or sale of any of the Senior Notes; no action, suit or proceeding shall be pending against or affecting or, to the knowledge of the Company, threatened against, the Company or any of the Subsidiaries before any court or arbitrator or any governmental body, agency or official that, if adversely determined, would prohibit, interfere with or adversely affect the issuance or sale of the Senior Notes or would have a Material Adverse Effect or in any manner draw into question the validity of any of the Transaction Documents; and no stop order, injunction, restraining order, or order of any nature preventing the use of the Initial Offering Memorandum, any Preliminary Offering Memorandum or any Offering Memorandum, as applicable, or any amendment or supplement thereto, or any order asserting that any of the transactions contemplated by this Agreement are subject to the registration requirements of the Act shall have been issued. 20 e. Subsequent to the effective date of this Agreement and prior to the applicable Exempt Resale, there shall not have occurred (i) any change, or any development involving a prospective change, in or affecting the condition (financial or other), business, properties, net worth, or results of operations of the Company or the Subsidiaries not contemplated by the Initial Offering Memorandum, or the applicable Offering Memorandum which, would materially adversely affect the market for the Senior Notes or (ii) any event or development relating to or involving the Company or any officer or director of the Company which makes any statement made in the Initial Offering Memorandum or the applicable Offering Memorandum untrue in any material respect which, in the opinion of the Company and its counsel or DLJ and the Purchasers and their counsel, requires the making of any addition to or change in the Initial Offering Memorandum or the applicable Offering Memorandum in order to make the statements therein not misleading, if amending or supplementing the Initial Offering Memorandum to reflect such event or development would in the opinion of DLJ and the Purchasers, materially adversely affect the market for the Senior Notes. f. DLJ and the Purchasers shall have received on the Closing Date and each Exempt Resales Closing Date, an opinion of Holme Roberts & Owen LLP, counsel for the Company, dated the Closing Date and each Exempt Resales Closing Date and addressed to you, to the effect that: i. The Company is a corporation duly incorporated and validly existing in good standing under the laws of the State of Delaware with full corporate power and authority to own lease and operate its properties and to conduct its business as described in the Initial Offering Memorandum (and any amendment or supplement thereto) and, as applicable, the Offering Memorandum, and, based solely on certificates from and correspondence with public officials, is qualified to do business and is in good standing in the states Colorado and Delaware; ii. Each of UIPI and UIHE (collectively, the "Designated Subsidiaries") and each of the corporate Subsidiaries incorporated in the United States (the "U.S. Subsidiaries") is a corporation duly organized and validly existing in good standing under the laws of the jurisdiction of its incorporation, with full power and authority to own, lease, and operate its properties and to conduct its business as described in the Initial Offering Memorandum (and any amendment or supplement thereto) and, as applicable, the Offering Memorandum; and all the outstanding shares of capital stock of each of the Designated Subsidiaries have been duly authorized and validly issued, are fully paid and nonassessable and, except as set forth in the Initial Offering Memorandum, are owned by the Company directly free and clear, to the best knowledge of such counsel after reasonable inquiry, of any security interest, lien, adverse claim, equity or other encumbrance; iii. All the outstanding shares of capital stock or other equity interest of each of the U.S. Subsidiaries have been duly authorized and validly issued, are fully paid and nonassessable and were not issued in violation of any preemptive or similar rights (whether provided pursuant to Transaction Documents or, to the best knowledge of such counsel, after due inquiry, contractually), and, except as set forth in the Initial Offering Memorandum, and, as applicable, the Offering Memorandum, are owned by the Company directly, or indirectly through one of the U.S. Subsidiaries, free and clear, to the best knowledge of such counsel after due inquiry, of any security interest, lien, adverse claim, equity or other encumbrance; 21 iv. The authorized and outstanding capital stock of the Company is as set forth under the caption "Capitalization" in the Initial Offering Memorandum or the applicable Offering Memorandum; and the Company's ownership interest with respect to each of the Designated Subsidiaries is as described in the Initial Offering Memorandum or the applicable Offering Memorandum; v. All of the outstanding shares of capital stock of the Company have been duly authorized and validly issued, and are fully paid and nonassessable; vi. The Company has all requisite corporate power and authority to execute, deliver and perform its obligations under each of the Transaction Documents and to consummate the transactions contemplated thereby, including, without limitation, with the corporate power and authority to issue, sell and deliver the Senior Notes as contemplated by this Agreement and to perform its obligations hereunder and thereunder; vii. The Company has the corporate power and authority to enter into this Agreement and the Fee Agreement, and to issue, sell and deliver the Senior Notes to the Purchasers as provided herein, and each of this Agreement and the Fee Agreement, been duly authorized, executed and delivered by the Company and is a valid, legal and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as enforcement of rights to indemnity and contribution hereunder and thereunder may be limited by federal or state securities laws or principles of public policy and subject to the qualification that the enforceability of the Company's obligations hereunder and thereunder may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium, and other laws relating to or affecting creditors' rights generally and by general principles of equity, regardless of whether enforcement is sought in a proceeding at law or in equity; viii. The Company has the corporate power and authority to execute, deliver and perform its respective obligations under the Senior Notes; ix. The Senior Notes and the Indenture have been duly authorized, executed and delivered by the Company; x. The Company has duly and validly authorized, executed and delivered the Indenture and (assuming the due authorization, execution and delivery thereof by the Trustee) the Indenture is a valid and legally binding obligation of the Company, enforceable against the Company in accordance with their terms, except (A) as such enforcement may be limited by (y) bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium or similar laws affecting creditors' rights and remedies generally, or (z) general principles of equity, regardless of whether enforcement is sought in a proceeding at law or in equity, and (B) to the extent that a waiver of rights under any usury laws may be unenforceable. The Indenture conforms as to legal matters in all material respects to the summary description thereof in the Initial Offering Memorandum and, as applicable, the Offering Memorandum; 22 xi. The Senior Notes have been duly and validly authorized for issuance and sale to the Purchasers by the Company pursuant to this Agreement and, when issued and authenticated in accordance with the terms of the Indenture and delivered against payment therefor in accordance with the terms hereof, will be the valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms and entitled to the benefits of the Indenture, except (A) as such enforcement may be limited by (y) bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium or similar laws affecting creditors' rights and remedies generally, or (z) general principles of equity, regardless of whether enforcement is sought in a proceeding at law or in equity, and (B) to the extent that a waiver of rights under any usury laws may be unenforceable. The Senior Notes, when issued, authenticated and delivered, will conform as to legal matters in all material respects to the summary description thereof in the Initial Offering Memorandum and, as applicable, the Offering Memorandum; xii. The Exchange Notes have been duly and validly authorized for issuance by the Company and, when issued and authenticated in accordance with the terms of the Indenture and the Registration Rights Agreement, will be valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms and entitled to the benefits of the Indenture, except (A) as such enforcement may be limited by (y) bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium or similar laws affecting creditors' rights and remedies generally, or (z) general principles of equity, regardless of whether enforcement is sought in a proceeding at law or in equity, and (B) to the extent that a waiver of rights under any usury laws may be unenforceable; xiii. The Registration Rights Agreement has been duly and validly authorized, executed and delivered by the Company, and is a valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms, except (A) as such enforcement may be limited by (y) bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium or similar laws affecting creditors' rights and remedies generally and (z) general principles of equity, regardless of whether enforcement is sought in a proceeding at law or in equity and (B) such counsel need express no opinion as to the enforceability of the indemnification or contribution provisions contained in Section 7 of the Registration Rights Agreement. The Registration Rights Agreement conforms, as to legal matters, in all material respects to the summary description thereof in the Initial Offering Memorandum and, as applicable, in the Offering Memorandum; xiv. When the Senior Notes are issued and delivered pursuant to this Agreement and at each applicable Exempt Resale Closing Date, none of the Senior Notes will be of the same class (within the meaning of Rule 144A under the Act) as securities of the Company that are listed on a national securities exchange registered under Section 6 of the Exchange Act or that are quoted in a United States automated inter-dealer quotation system; xv. Neither the Company nor any of the Designated Subsidiaries nor any U.S. Subsidiary is in violation of its respective certificate or articles of incorporation or bylaws, or other organization documents, or to the best knowledge of such counsel after reasonable inquiry, is in material default in the performance of any obligation, agreement or condition contained in any permit or any bond, debenture, note or other evidence of indebtedness, except as 23 may be disclosed in the Initial Offering Memorandum and, as applicable, in the Offering Memorandum; xvi. Registration of the Senior Notes under the Act or qualification of the Indenture under the Trust Indenture Act of 1939, as amended, is not required in connection with the offer, sale and delivery of the Senior Notes to the Purchasers or the resale of the Senior Notes pursuant to the terms of this Agreement, including pursuant to the applicable Exempt Resale, it being understood that in rendering this opinion such counsel may assume the accuracy of the representations of the Purchasers and the Company contained herein and that the offer, sale and delivery of the Senior Notes have been made as contemplated by this Agreement and the Initial Offering Memorandum and the applicable Offering Memorandum; xvii. The execution, delivery and performance by the Company of each of the Transaction Documents, the issuance and sale of the Senior Notes, and the consummation of the transactions contemplated hereby and thereby, including the use of proceeds and the Exempt Resales, will not violate, conflict with or constitute a breach of any of the terms or provisions of, or a default (or an event that with notice or the lapse of time, or both, would constitute a default) under, or require consent under, or result in the imposition of a lien or encumbrance on any assets or properties of the Company or any of its subsidiaries, or an acceleration of indebtedness pursuant to, (A) the organizational documents of the Company or any of its subsidiaries, (B) any bond, debenture, note, indenture, mortgage, deed of trust, license or other agreement or instrument, known to such counsel after reasonable inquiry, to which the Company or any of its subsidiaries is a party or by which any of them or their property is or may be bound, (C) any U.S. law, statute, rule or regulation applicable to the Company, any of the U.S. Subsidiaries or any of their assets or properties, or (D) any judgment, order or decree of any U.S. court or governmental agency or U.S. authority, known to such counsel after reasonable inquiry, having jurisdiction over the Company, any of the U.S. Subsidiaries or their assets or properties, except such conflicts or violations as would not individually or in the aggregate be reasonably expected to have a Material Adverse Effect. No consent, approval, authorization or order of, or filing, registration, qualification, license or permit of or with, any court or governmental agency, body or administrative agency in the United States is required for the execution, delivery and performance of this Agreement or the other Transaction Documents, except (subject to clause (xvi) above) such as have been obtained prior to the Date hereof (or, in the case of the Registration Rights Agreement, are planned to be obtained or made under the Act, the Trust Indenture Act and state securities or Blue Sky laws and regulations or such as may be required by the NASD). In rendering the opinions required in this clause (xvii), such counsel may rely on the accuracy of the representations of the Purchasers and the Company contained in this Agreement. No consents or waivers from any other person are required for the execution, delivery and performance of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby, other than such consents and waivers as have been obtained, or except where the failure to obtain such consents or waivers would not individually or in the aggregate be reasonably expected to have a Material Adverse Effect; xviii. To the best knowledge of such counsel, after reasonable inquiry, no action has been taken and no statute, rule or regulation or order has been enacted, adopted or issued by any governmental agency that prevents the 24 issuance of the Senior Notes or the Exempt Resales, no injunction, restraining order or order of any nature by a United States federal or state court of competent jurisdiction has been issued that prevents the issuance of the Senior Notes and no action, suit or proceeding is pending against or affecting or threatened against the Company or the Exempt Resales or any of the U.S. Subsidiaries before any court or arbitrator or any governmental body, agency or official which, if adversely determined, would prohibit, interfere with or adversely affect the issuance or marketability of the Senior Notes or the Exempt Resales or in any manner draw into question the validity of any Transaction Document; xix. To the best knowledge of such counsel after reasonable inquiry, neither the Company nor any of the U.S. Subsidiaries is in violation of any law, ordinance, administrative or other governmental rule or regulation applicable to the Company or any of the U.S. Subsidiaries or any of the U.S. Subsidiaries or of any decree of any court or governmental agency or body having jurisdiction over the Company or any of the U.S. Subsidiaries or any of the U.S. Subsidiaries, except for such violations as would not individually or in the aggregate be reasonably likely to have a Material Adverse Effect; xx. The statements in the Initial Offering Memorandum and, as applicable, the Offering Memorandum, insofar as they are descriptions of contracts, agreements or other legal documents, or refer to statements of law or legal conclusions, are accurate and complete in all material respects and present fairly the information required to be shown, to the extent governed by the laws of jurisdictions on which such counsel expresses an opinion; xxi. Each of the Company and each Designated Subsidiary and each U.S. Subsidiary has all necessary governmental authorizations, approvals, orders, licenses, certificates, franchises and permits of and from all governmental regulatory officials and bodies (except where the failure so to have any such authorizations, approvals, orders, licenses, certificates, franchises or permits, individually or in the aggregate, would not have a Material Adverse Effect), to own its properties and to conduct its businesses as now being conducted, as described in the Initial Offering Memorandum and, as applicable, the Offering Memorandum; xxii. Neither the Company nor any of its subsidiaries is, nor, after the sale of Senior Notes to be sold by it hereunder and the application of the proceeds from such sales as described in the Initial Offering Memorandum, under the caption "Use of Proceeds," will they be (i) an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act, or (ii) a "holding company" or a "subsidiary company" or an "affiliate" of a holding company within the meaning of the Public Utility Holding Company Act of 1935, as amended; xxiii. There is (A) to the knowledge of such counsel, after reasonable inquiry, no legal, regulatory or governmental action, suit or proceeding before or by any court, arbitrator or governmental agency, body or official, domestic or foreign, now pending or, to the knowledge of such counsel, threatened or contemplated to which the Company or any of the U.S. Subsidiaries 25 is a party or to which the business or property of the Company or any of the U.S. Subsidiaries is subject, (B) no law, statute, rule, regulation or order that has been enacted, adopted or issued by any governmental agency or that has been proposed by any governmental body, to the extent governed by the laws of jurisdictions on which such counsel expresses an opinion, (C) to the knowledge of such counsel, after reasonable inquiry, no injunction, restraining order or order of any nature by a federal or state court of competent jurisdiction to which the Company or any of the U.S. Subsidiaries is subject issued that, in the case of clauses (A), (B) and (C) above, (x) might, singly or in the aggregate, result in a Material Adverse Effect, (y) would interfere with or adversely affect the issuance of the Senior Notes or the Exempt Resales or (z) in any manner draw into question the validity of this Agreement, the Fee Agreement or the other Transaction Documents; xxiv. To the best knowledge of such counsel, there are no holders of debt securities of the Company who, by reason of the execution by the Company of this Agreement or any other Transaction Document or the consummation of the transactions contemplated hereby or thereby, have the right to request or demand that the Company register debt securities of the Company under the Act or analogous foreign laws and regulations securities held by them; xxv. The Initial Offering Memorandum, as of its date, and each amendment or supplement thereto, if any, as of its date and, as applicable, the Offering Memorandum (except for the financial statements, including the notes thereto, and supporting schedules and other financial, statistical, and accounting data included therein or omitted therefrom, as to which no opinion need be expressed), contains all the information specified in, and meeting all the requirements of, Rule l44A(d)(4) under the Act; xxvi. To the best knowledge of such counsel after reasonable inquiry, except as described in the Initial Offering Memorandum or the applicable Offering Memorandum, there are no outstanding options, warrants or other rights calling for the issuance of, and such counsel does not know of any commitment, plan or arrangements to issue, any shares of capital stock of the Company or any security convertible into or exchangeable or exercisable for capital stock of the Company; xxvii. To the best knowledge of such counsel after reasonable inquiry, except as described in, or incorporated by reference into, the Initial Offering Memorandum or the applicable Offering Memorandum, there is no holder of any security of the Company or any other person (other than the Purchasers) who has the right, contractual or otherwise, to cause the Company to sell or otherwise issue to them, or to permit them to underwrite the sale of, the Senior Notes or the right to have any other securities of the Company included in the Initial Offering Memorandum, or the Offering Memorandum or the right, to require registration under the Act of any securities of the Company; xxviii. The issuance and sale of the Senior Notes pursuant to the terms of this Agreement will not violate Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of Governors of the Federal Reserve System; and xxix. The statements in the Initial Offering Memorandum under "Risk Factors -We may be limited in claiming foreign tax credits; we do business in countries that do not have tax treaties with the United States," and "- You will generally be required to include original issue discount on the senior 26 notes in gross income before you receive any cash payment on the senior notes" insofar as they constitute statements of law or legal conclusions are accurate in all material respects. In addition, such counsel shall state that it has generally reviewed and discussed with certain officers and other representatives of the Company, representatives of the independent public accountants for the Company, your representatives and your counsel the preparation of the Initial Offering Memorandum and the applicable Offering Memorandum and the statements contained therein and, although such counsel has not independently verified the accuracy, completeness or fairness of such statements (except as indicated above), such counsel advises you that, on the basis of the foregoing, no facts came to its attention that caused it to believe that the Initial Offering Memorandum (as amended or supplemented, if applicable) as of the date of the Initial Offering Memorandum or at the Closing Date or the Offering Memorandum as of any Exempt Resales Closing Date, if applicable, contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Without limiting the foregoing, such counsel may further state that they assume no responsibility for, and have not independently verified, the accuracy, completeness or fairness of, and express no view as to, the financial statements, notes and schedules and other financial or statistical data included in the Initial Offering Memorandum or, as applicable, the Offering Memorandum. Such opinion may be limited to the federal laws of the United States and the internal laws of the State of Colorado and the General Corporation Law of the State of Delaware. In rendering their opinion as aforesaid, counsel may rely upon an opinion or opinions, each dated the Closing Date, of other counsel retained by them or the Company as to laws of any jurisdiction other than the United States or the State of Colorado, provided that (1) each such local counsel is acceptable to DLJ and the Purchasers, (2) such reliance is expressly authorized by each opinion so relied upon and a copy of each such opinion is delivered to DLJ and the Purchasers and is in form and substance satisfactory to it and its counsel, and (3) counsel shall state in their opinion that they believe that they, DLJ and the Purchasers are justified in relying thereon. g. DLJ and the Purchasers shall have received on the Closing Date and each Exempt Resales Closing Date, as applicable, the opinions of Houthoff Advocaten & Notarissen (with respect to UPC, UTH, A2000, and the laws of The Netherlands), Bruckhaus Westrick Heller Lober (with regard to the Telekabel Group and the laws of Austria), Stibbe Simont Monahan Davhot (with regard to Radio Public S.A. and the laws of Belgium,) Advokatfirmaet Steenstrup (with regard to Janco Multicom AS. and the laws of Norway), Yigal Arnon & Co. (with regard to Tevel and the laws of Israel), Freehill Hollingdale & Page (with regard to Austar and the laws of Australia), and Carey Abogados y Cia Ltda. (with regard to VTR Hipercable, and the laws of Chile), each dated the Closing Date and each Exempt Resales Closing Date, as applicable, and addressed to DLJ and the Purchasers, substantially to the effect that: i. The statements included or incorporated by reference in the Initial Offering Memorandum, and the Offering Memorandum, as applicable, insofar as they are descriptions of contracts, agreements or other legal documents, or refer to statements of law or legal conclusions, are accurate and complete in 27 all material respects and present fairly the information purported to be shown, and the descriptions of the applicable government regulations in each of such countries are accurate and complete in all material respects; ii. Each of UPC, UTH, the Telekabel Group companies, Radio Public S.A., Janco Multicom S.A., A2000, Tevel, Austar, CTV Pty. Ltd. and STV Pty. Ltd ("CTV/STV"), and VTR Hipercable (collectively, the "Foreign Subsidiaries") is a corporation or other legal entity duly organized and validly existing in good standing under the laws of the jurisdiction of its formation, with full power and authority to own, lease, and operate its properties and to conduct its business as described in or incorporated by reference into the Initial Offering Memorandum and, as applicable, the Offering Memorandum (and any amendment or supplement thereto); and all the outstanding shares of capital stock or other equity interest of each of the Foreign Subsidiaries have been duly authorized and validly issued, are fully paid and nonassessable and, except as set forth in or incorporated by reference into the Initial Offering Memorandum, and, as applicable the Offering Memorandum, are owned by the Company directly, or indirectly through one of the Subsidiaries, free and clear, to the best knowledge of such counsel after reasonable inquiry, of any security interest, lien, adverse claim, equity or other encumbrance; iii. The Company's ownership interest with respect to each of the Foreign Subsidiaries is as described in or incorporated by reference into the Initial Offering Memorandum and, as applicable, the Offering Memorandum; iv. None of the Foreign Subsidiaries is in violation of its respective certificate or articles of incorporation or bylaws, or other organizational documents; to the best knowledge of such counsel after reasonable inquiry, neither the Company nor any of the Foreign Subsidiaries is in material default in the performance of any obligation, agreement or condition contained in any permit or any bond, debenture, note or other evidence of indebtedness, except as may be disclosed in or incorporated by reference into the Initial Offering Memorandum and, as applicable the Offering Memorandum; v. Neither the offer, sale or delivery of the Notes, the execution, delivery or performance of this Agreement, compliance by the Company with the provisions hereof and consummation by the Company of the transactions contemplated hereby and by the Transaction Documents, including the use of proceeds, and the Exempt Resales, conflicts or will conflict with or constitutes or will constitute a breach of, or a default under, the certificate or articles of incorporation or bylaws, or other organizational documents, of any of the Foreign Subsidiaries or any agreement indenture, lease or other instrument to which the Company or any of the Foreign Subsidiaries is a party or by which any of them or any of their respective properties is bound that is known to such counsel after reasonable inquiry, or, to the best knowledge of such counsel after reasonable inquiry, will result in the creation or imposition of any material lien charge or encumbrance upon any property or assets of the Company or any of the Foreign Subsidiaries nor will any such action result in any violation of any existing law, regulation, ruling (assuming compliance with all applicable state securities and Blue Sky laws), judgment, injunction, order or decree known to such counsel after reasonable inquiry, applicable to the Company or the Foreign Subsidiaries or any of their respective properties, except where such violation would not have a Material Adverse Effect; 28 vi. No consent, approval, authorization or other order of, or registration or filing with, any court, regulatory body, administrative agency or other governmental body, agency, or official is required on the part of the Company or any Foreign Subsidiary (except as may be required under state securities or Blue Sky law governing the purchase and distribution of the Notes) in connection with the consummation by the Company of the transactions contemplated hereby and by the Transaction Documents, including the use of proceeds, and the Exempt Resales for the valid issuance and sale of the Senior Notes to the Purchasers or pursuant to the Exempt Resales as contemplated by this Agreement; vii. To the best knowledge of such counsel after reasonable inquiry, neither the Company nor any of the Foreign Subsidiaries is in violation of any law, ordinance administrative or governmental rule or regulation applicable to the Company or any of the Foreign Subsidiaries of any decree of any court or governmental agency or body having jurisdiction over the Company or any of the Foreign Subsidiaries, except where such violation would not have a Material Adverse Effect; viii. Each of the Company and each Foreign Subsidiary has all necessary governmental authorizations, approvals, orders, licenses, certificates, franchises and permits of and from all governmental regulatory officials and bodies (except where the failure so to have any such authorizations, approvals, orders, licenses, certificates, franchises or permits, individually or in the aggregate, would not have a Material Adverse Effect) to own its properties and to conduct its businesses as now being conducted, as described in or incorporated by reference into the Initial Offering Memorandum and, as applicable, the Offering Memorandum; and ix. Each of the Company and each Foreign Subsidiary owns all licenses and rights described in the Initial Offering Memorandum and, as applicable, the Offering Memorandum as being owned by the Company or the Foreign Subsidiaries and necessary for the conduct of its businesses, and such counsel is not aware of any claim to the contrary or any challenge by any other person to the rights of the Company or any Foreign Subsidiary with respect to the foregoing. h. The Purchasers and DLJ shall have received on the Closing Date and each Exempt Resales Closing Date, an opinion of Skadden, Arps, Slate, Meagher & Flom LLP, dated the applicable Exempt Resales Closing Date, and addressed to you, in form and substance reasonably satisfactory to DLJ. i. DLJ and the Purchasers shall have received letters on the Closing Date and on each Exempt Resales Closing Date, addressed to DLJ and the Purchasers, and dated the date hereof and thereof, as applicable, from Arthur Andersen LLP and Price Waterhouse, and others (as determined by DLJ) all of which are independent public accountants, substantially in the forms reasonably approved and requested by DLJ and the Purchasers. j. (i) There shall not have been any change in the capital stock of the Company (other than as a result of the issuance of shares of Class A Common Stock of the Company upon the exercise of outstanding warrants or stock 29 options or upon conversion of shares of Class B Common Stock of the Company or the Company's preferred stock) nor any material increase in the short-term or long-term debt of the Company (other than in the ordinary course of business) from that set forth or contemplated in the Initial Offering Memorandum, each Preliminary Offering Memorandum or each Offering Memorandum (or any amendment or supplement thereto), as applicable; (ii) there shall not have been, since the respective dates as of which information is given in the Initial Offering Memorandum, each Preliminary Offering Memorandum or each Offering Memorandum (or any amendment or supplement thereto), as applicable, except as may otherwise be stated in the Initial Offering Memorandum (or any amendment or supplement thereto), any material adverse change in the condition (financial or other), business, prospects, properties, net worth or results of operations of the Company and the Subsidiaries taken as a whole; (iii) the Company and the Subsidiaries shall not have any liabilities or obligations, direct or contingent (whether or not in the ordinary course of business), that are material to the Company and the Subsidiaries taken as a whole, other than those reflected in the Initial Offering Memorandum, each Preliminary Offering Memorandum or each Offering Memorandum (or any amendment or supplement thereto), as applicable; and (iv) all the representations and warranties of the Company contained in this Agreement shall be true and correct on and as of the date hereof and on and as of the Closing Date and on and as of each Exempt Resales Closing Date if any as if made on and as of such dates, and you shall have received a certificate, dated the Closing Date and each Exempt Resales Closing Date, if any and signed by the chief executive officer and the chief financial officer of the Company (or such other officers as are acceptable to you), to the effect set forth in this Section 7(i). k. The Company shall not have failed at or prior to the Closing Date and each Exempt Resales Closing Date, if any, to have performed or complied with any of its agreements herein contained and required to be performed or complied with by it hereunder at or prior to the Closing Date and each Exempt Resales Closing Date, if any. l. The Company shall have furnished or caused to be furnished to DLJ and the Purchasers such further certificates and documents as you shall have requested. m. On or after the date hereof and prior to the applicable Exempt Resales Closing Date, (i) there shall not have occurred any downgrading, suspension or withdrawal of, nor shall any notice have been given of any potential or intended downgrading, suspension or withdrawal of, or of any review (or of any potential or intended review) for a possible change that does not indicate the direction of the possible change in, any rating of the Company or any securities of the Company (including, without limitation, the placing of any of the foregoing ratings on credit watch with negative or developing implications or under review with an uncertain direction) by any "nationally recognized statistical rating organization" as such term is defined for purposes of Rule 436(g)(2) under the Act , and there shall not have occurred any change, nor shall any notice have been given of any potential or intended change, in the outlook for any rating of the Company or any securities of the Company by any such rating organization; n. The net proceeds to the Company of the Senior Notes shall be applied in the manner set forth under the caption "Use of Proceeds" in the Initial Offering Memorandum on the Closing Date. 30 o. All transactions and conditions, including any Chilean governmental and foreign exchange approvals, that are required or contemplated by the VTR Acquisition, as defined in the Initial Offering Memorandum, to have been consummated or satisfied at or prior to the Closing Date shall have been consummated or satisfied prior to or simultaneously with the consummation of the purchase and sale of the Senior Notes hereunder, including, but not limited to the approval by all relevant Chilean authorities as required and the contemplated bank financing. All such opinions, certificates, letters and other documents will be in compliance with the provisions hereof only if they are reasonably satisfactory in form and substance to DLJ and the Purchasers and your counsel. Any certificate or document signed by any officer of the Company and delivered to DLJ, the Purchasers, or counsel for DLJ or the Purchasers, shall be deemed a representation and warranty by the Company to DLJ and the Purchasers as to the statements made therein. 8. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become effective upon the execution hereof. 9. TERMINATION OF AGREEMENT. This Agreement shall be subject to termination in the absolute discretion of DLJ and the Purchasers, without liability on the part of the Purchasers to the Company, by notice to the Company, if prior the Closing Date, (i) trading in securities generally on the New York Stock Exchange, American Stock Exchange or Nasdaq National Market shall have been suspended or materially limited, (ii) general moratorium on commercial banking activities in New York or Colorado shall have been declared by either federal or state authorities, or (iii) there shall have occurred any outbreak or escalation of hostile or other international or domestic calamity, crisis or change in political, financial or economic condition the effect of which on the financial markets of the United States is such as to make it, in the judgement of DLJ or the Purchasers impracticable or inadvisable to commence or continue the offering of the Senior Notes pursuant to Exempt Resales or to enforce contracts for the resale of the Senior Notes by DLJ and the Purchasers. Notice of such termination may be given to the Company by telegram, telecopy telephone and shall be subsequently confirmed by letter. 10. MISCELLANEOUS. Except as otherwise provided in Sections 4 and 9 hereof, notice given pursuant to any provision of this Agreement shall be in writing and shall be delivered (i) if to Company, at the office of the Company at 4643 South Ulster Street, Denver, Colorado 80237, Attention: Chief Financial Officer; or (ii) if to the Purchasers, separately and in each case care of Donaldson, Lufkin & Jenrette Securities Corporation and UIH Funding, 277 Park Avenue, New York, New York 10172. This Agreement has been and is made solely for the benefit of DLJ and the Purchasers, the Company, its directors and officers, and the other controlling persons referred to in Section 6 hereof and the respective successors and assigns, to the extent provided herein, and no other person shall acquire or have any right under or by virtue of this Agreement. Neither the term 31 "successor" nor the term "successors and assigns" as used in this Agreement shall include a purchaser from the Purchasers of any of the Senior Notes in his status as such purchaser. 11. APPLICABLE LAW: COUNTERPARTS. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK, INCLUDING, WITHOUT LIMITATION SECTION 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND NEW YORK CIVIL PRACTICE LAWS AND RULES 327(b) BUT EXCLUDING (TO THE GREATEST EXTENT PERMISSIBLE BY LAW) ANY RULE OF LAW THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK. THE COMPANY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING RELATED TO THIS AGREEMENT OR ANY OF THE MATTERS CONTEMPLATED HEREBY, IRREVOCABLY WAIVES ANY DEFENSE OF LACK OF PERSONAL JURISDICTION AND IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. THE COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. This Agreement may be signed in various counterparts which together constitute one and the same instrument. If signed in counterparts, this Agreement shall not become effective unless at least one counterpart hereof shall have been executed and delivered on behalf of each party hereto. 32 Please confirm that the foregoing correctly sets forth the agreement between the Company and the Purchasers. Very truly yours, UNITED INTERNATIONAL HOLDINGS, INC. By: /s/ Michael T. Fries -------------------------------- Name: Michael T. Fries Title: President The foregoing Note Purchase Agreement is hereby confirmed and accepted as of the Date first above mentioned. DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION BY: /s/ Paul Thompson III ---------------------------------- Name: Paul Thompson III Title: UIH FUNDING CORP. BY: /s/ Paul Thompson III ---------------------------------- SALOMON SMITH BARNEY INC. By: /s/ Robert D. Miller ---------------------------------- Name: Robert D. Miller Title: Vice President CHASE SECURITIES INC. By: /s/ R. Ranocchia ---------------------------------- Name: R. Ranocchia Title: Managing Director TD SECURITIES (USA), INC. By: /s/ Thomas W. Regan ---------------------------------- Name: Thomas W. Regan Title: Managing Director EXHIBIT A The Initial Offering Memorandum [EXHIBIT OMITTED] EXHIBIT B Registration Rights Agreement [FILED SEPERATELY] EXHIBIT C INITIAL PURCHASER PRINCIPAL AMOUNT AT MATURITY - ----------------- ---------------------------- UIH Funding Corp. $177,500,000 Salomon Smith Barney $ 59,167,000 TD Securities (USA) Inc. $ 59,167,000 Chase Securities Inc. $ 59,166,000 EX-10 6 EXHIBIT 10.5 ================================================================================ 10.875% SENIOR DISCOUNT NOTES DUE 2009 REGISTRATION RIGHTS AGREEMENT Dated April 29, 1999 by and among UNITED INTERNATIONAL HOLDINGS, INC. and THE INITIAL PURCHASERS NAMED HEREIN ================================================================================ REGISTRATION RIGHTS AGREEMENT This Registration Rights Agreement is made and entered into this 29th day of April, 1999, among United International Holdings, Inc., a Delaware corporation (the "Company"), and UIH Funding Corp., Salomon Smith Barney Inc., Chase Securities Inc. and TD Securities (USA) Inc. (the "Initial Purchasers"). This Agreement is made pursuant to the Note Purchase Agreement, dated April 29, 1999, among the Company, Donaldson Lufkin & Jenrette Securities Corporation and the Initial Purchasers (the "Purchase Agreement"). In connection with the transactions contemplated by the Purchase Agreement, the Company has agreed to provide the registration rights provided for in this Agreement to the Initial Purchasers and its direct and indirect transferees. The execution of this Agreement is a condition to the closing of the transactions contemplated by the Purchase Agreement. The parties hereby agree as follows: 1. DEFINITIONS ----------- As used in this Agreement, the following terms shall have the following meanings: ADVICE: As defined in the last paragraph of Section 5 hereof. Affiliate: With respect to any specified person, "Affiliate" shall mean any other person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified person. 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 "affiliated," "controlling" and "controlled" have meanings correlative to the foregoing. AGREEMENT: This Registration Rights Agreement, as the same may be amended, supplemented or modified from time to time in accordance with the terms hereof. BUSINESS DAY: Any day except a Saturday, a Sunday or a day on which banking institutions in the State of New York generally are authorized or required by law or other government action to be closed. COMPANY: As defined in the preamble hereof. CONSUMMATE OR CONSUMMATE: When used to qualify the term "Exchange Offer" shall mean validly and lawfully to issue and deliver the Exchange Notes pursuant to the Exchange Offer for all Transfer Restricted Notes validly tendered and not validly withdrawn pursuant thereto in accordance with the terms of this Agreement. CONSUMMATION DATE: The date that is 30 days immediately following the date that a Registration Statement relative to an Exchange Offer, commenced pursuant to this Agreement, shall have been declared effective by the SEC. EFFECTIVENESS PERIOD: As defined in Section 3 hereof. EVENT DATE: As defined in Section 4(a) hereof. EXCHANGE ACT: The Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated by the SEC pursuant thereto. EXCHANGE DATE: As defined in Section 2(d) hereof. Exchange Offer: An offer to issue, in exchange for any and all of the Transfer Restricted Notes, a like aggregate principal amount at maturity of Exchange Notes, which offer shall be made by the Company pursuant to Section 2 hereof. EXCHANGE NOTES: The 10.875% Senior Discount Notes due 2009 of the Company that are identical to the Notes in all material respects, except that the provisions regarding restrictions on transfer shall be modified, as appropriate, and the issuance thereof pursuant to the Exchange Offer shall have been registered pursuant to an effective Registration Statement in compliance with the Securities Act. EXCHANGE REGISTRATION STATEMENT: As defined in Section 2(a) hereof. HOLDER: Each registered holder of any Transfer Restricted Notes. INDEMNIFIED PERSON: As defined in Section 7(a) hereof. INDENTURE: The Indenture, dated as of April 29, 1999, between the Company and Firstar Bank of Minnesota, N.A., as trustee thereunder, pursuant to which the Notes are being issued, as amended or supplemented from time to time in accordance with the terms thereof. INITIAL PURCHASERS: As defined in the preamble hereof. INITIAL RESALE DATE: The date that the Initial Purchasers first resell any Notes. LIQUIDATED DAMAGES: As defined in Section 4(a) hereof. NOTES: The 10.875% Senior Discount Notes due 2009 of the Company issued pursuant to the Indenture. PARTICIPATING BROKER-DEALER: As defined in Section 2(e) hereof. PAYING AGENT: As defined in the Indenture. PERSON: An individual, partnership, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof. Private Exchange: As defined in Section 2(c) hereof. Private Exchange Notes: As defined in Section 2(c) hereof. 2 PROCEEDING: An action, claim, suit or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition),whether commenced or threatened. PROSPECTUS: The prospectus included in any Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated pursuant to the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Transfer Restricted Notes or the Exchange Notes covered by such Registration Statement, and all other amendments and supplements to any such prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference, if any, in such prospectus. REGISTRATION STATEMENT: Any registration statement of the Company that covers any of the Notes or the Exchange Notes pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference, if any, in such registration statement. RULE 144: Rule 144 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC as a replacement thereto having substantially the same effect as such Rule. RULE 144A: Rule 144A promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC as a replacement thereto having substantially the same effect as such Rule. RULE 158: Rule 158 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC as a replacement thereto having substantially the same effect as such Rule. RULE 174: Rule 174 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC as a replacement thereto having substantially the same effect as such Rule. RULE 415: Rule 415 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC as a replacement thereto having substantially the same effect as such Rule. RULE 424: Rule 424 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC as a replacement thereto having substantially the same effect as such Rule. SEC: The Securities and Exchange Commission. SECURITIES ACT: The Securities Act of 1933, as amended, and the rules and regulations promulgated by the SEC thereunder. SHELF FILING EVENT: As defined in Section 3 hereof. 3 SHELF REGISTRATION: As defined in Section 3 hereof. SHELF REGISTRATION STATEMENT: As defined in Section 3 hereof. SPECIAL COUNSEL: Any special counsel to the Holders, the expenses of which Holders will be reimbursed for, pursuant to Section 6. TIA: The Trust Indenture Act of 1939, as amended. TRANSFER RESTRICTED NOTES: The Notes, upon original issuance thereof, and at all times subsequent thereto, each Exchange Note as to which Section 3(a)(iii)(B) hereof is applicable upon original issuance and at all times subsequent thereto and each Private Exchange Note upon original issuance thereof and at all times subsequent thereto, until in the case of any such Note, Exchange Note or Private Exchange Note, as the case may be, the earliest to occur of (i) the date on which such Note has been exchanged by a person other than a broker-dealer for an Exchange Note pursuant to the Exchange Offer, (ii) a Registration Statement (other than, with respect to any Exchange Note as to which Section 3(a)(iii)(B) hereof is applicable, the Exchange Registration Statement) covering such Note, Exchange Note or such Private Exchange Note has been declared effective by the SEC and such Note or such Private Exchange Note, as the case may be, has been disposed of in accordance with such effective Registration Statement, (iii) the date on which such Note, Exchange Note or Private Exchange Note, as the case may be, is distributed to the public pursuant to Rule 144 (or any similar provisions then in effect) or is saleable pursuant to Rule 144(k) promulgated by the SEC pursuant to the Securities Act, or (iv) the date on which such Note, Exchange Note or Private Exchange Note, as the case may be, ceases to be outstanding for purposes of the Indenture. TRUSTEE: The trustee under the Indenture and if existent, the trustee under any indenture governing the Exchange Notes and Private Exchange Notes (if any). UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING: A registration in connection with which securities of the Company are sold to an underwriter for reoffering to the public pursuant to an effective Registration Statement. 2. EXCHANGE OFFER -------------- (a) To the extent not prohibited by any applicable law or applicable interpretation of the staff of the SEC, the Company shall (A) prepare and, on or prior to 60 days after the Initial Resale Date, file with the SEC a Registration Statement relating to the Exchange Offer under the Securities Act with respect to an offer by the Company to the Holders to issue and deliver to such Holders, in exchange for Transfer Restricted Notes (other than Private Exchange Notes, if any), a like principal amount of corresponding Exchange Notes, (B) use its best efforts to cause the Registration Statement relating to the Exchange Offer to be declared effective by the SEC under the Securities Act on or prior to 150 days after the Initial Resale Date, and (C) unless the Exchange Offer would not then be permitted by a policy of the SEC, commence the applicable Exchange Offer and use its best efforts to issue, on or prior to the Consummation Date, the Exchange Notes. The offer and sale of the Exchange Notes pursuant to the Exchange Offer shall be registered pursuant to the Securities Act on the appropriate form (the "Exchange Registration Statement") and duly registered or qualified under all applicable state securities or Blue Sky laws and will comply with all applicable tender offer rules and regulations of the Exchange Act and state securities or Blue Sky laws. The Exchange Offer and the Private Exchange shall not be subject to any condition, other than that the Exchange Offer and the Private Exchange, as the case may be, does not violate any applicable law or 4 interpretation of the staff of the SEC. Upon consummation of the Exchange Offer in accordance with this Section 2, the provisions of this Agreement shall continue to apply, mutatis mutandis, solely with respect to Transfer Restricted Notes that are Private Exchange Notes and Exchange Notes held by Participating Broker-Dealers, and the Company shall have no further obligation to register Transfer Restricted Notes (other than Private Exchange Notes and other than in respect of any Exchange Notes as to which clause 3(a)(iii)(B) hereof applies) pursuant to Section 3 hereof. No securities shall be included in the Registration Statement covering the Exchange Offer other than the Exchange Notes. (b) The Company may require each Holder as a condition to its participation in the Exchange Offer to represent to the Company and its counsel in writing (which may be contained in the applicable letter of transmittal) that at the time of the consummation of the Exchange Offer (i) any Exchange Notes received by such Holder will be acquired in the ordinary course of its business, (ii) such Holder will have no arrangement or understanding with any person to participate in the distribution of the Notes or the Exchange Notes within the meaning of the Securities Act and (iii) such Holder is not an Affiliate of the Company, or if it is an Affiliate of the Company, it will comply with the registration and prospectus delivery requirements of the Securities Act, to the extent applicable. (c) If, prior to consummation of the Exchange Offer, the Initial Purchasers hold any Notes acquired by them and having, or which are reasonably likely to be determined to have, the status of an unsold allotment in the initial distribution, or any other Holder is not entitled to participate in the Exchange Offer, the Company upon the request of either the Initial Purchasers or any such Holder shall, simultaneously with the delivery of the Exchange Notes in the Exchange Offer, issue and deliver to the Initial Purchasers and any such Holder, in exchange (the "Private Exchange") for such Notes held by the Initial Purchasers and any such Holder, a like principal amount at maturity of debt securities of the Company that are identical in all material respects to the Exchange Notes (the "Private Exchange Notes") (and which, subject to section 2(h), are issued pursuant to the same indenture as the Exchange Notes). The Private Exchange Notes, to the extent possible, shall bear the same CUSIP number as the Exchange Notes. (d) Unless the Exchange Offer would not be permitted by any applicable law or interpretation of the staff of the SEC, the Company shall commence the Exchange Offer (within the time periods set forth herein) by mailing the related exchange offer prospectus and appropriate accompanying documents, including appropriate letters of transmittal, to each Holder providing, in addition to such other disclosures as are required by applicable law: (i) that the Exchange Offer is being made pursuant to this Agreement and that all Notes validly tendered will be accepted for exchange; (ii) the dates of acceptance for exchange (the "Exchange Date"), which date shall in no event be later than the Consummation Date (unless otherwise required by applicable law); (iii) that Holders electing to have a Note exchanged pursuant to the Exchange Offer will be required to surrender such Note or $1,000 integral multiple portion thereof, together with the enclosed letters of transmittal, to the institution and at the address (located in the Borough of Manhattan, The City of New York) specified in the notice prior to the close of business on the Exchange Date; and 5 (iv) that (subject to a notification pursuant to Section 3(a)) Holders that do not tender all such securities pursuant to the Exchange Offer will no longer have any registration rights hereunder with respect to securities not tendered (other than with respect to "Private Exchange Notes"). Promptly after the Exchange Date, the Company shall: (i) accept for exchange all Notes or portions thereof validly tendered and not validly withdrawn pursuant to the Exchange Offer or the Private Exchange; and (ii) deliver, or cause to be delivered, to the Trustee for cancellation all Notes or portions thereof so accepted for exchange by the Company, and issue, or cause the Trustee under the Indenture to authenticate and mail to each Holder, an Exchange Note or Private Exchange Note, as the case may be, equal in principal amount at maturity to the principal amount at maturity of the Notes surrendered by such Holder. (e) The Company and the Initial Purchasers acknowledge that the staff of the SEC has taken the position that any broker-dealer that owns Exchange Notes that were received by such broker-dealer for its own account in the Exchange Offer (a "Participating Broker-Dealer") may be deemed to be an "underwriter" within the meaning of the Securities Act and must deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Notes (other than a resale of an unsold allotment resulting from the original offering of the Notes). The Company and the Initial Purchasers also acknowledge that it is the SEC staff's position that if the Prospectus contained in the Registration Statement includes a plan of distribution containing a statement to the above effect and the means by which Participating Broker-Dealers may resell the Exchange Notes, without naming the Participating Broker-Dealers or specifying the amount of Exchange Notes owned by them, such Prospectus may be delivered by Participating Broker-Dealers to satisfy their prospectus delivery obligations under the Securities Act in connection with resales of Exchange Notes for their own accounts, so long as the Prospectus otherwise meets the requirements of the Securities Act. In light of the above, notwithstanding the other provisions of this Agreement, the Company agrees that the provisions of this Agreement as they relate to a Shelf Registration Statement shall also apply to an Exchange Offer to the extent, and with such modifications thereto as may be reasonably requested by the Initial Purchasers or by one or more Participating Broker-Dealers, in each case as provided in clause (ii) below, as appropriate to expedite or facilitate the disposition of any Exchange Notes by Participating Broker-Dealers consistent with the positions of the SEC recited in this Section 2(e); provided that: (i) the Company shall not be required to amend or supplement the Prospectus contained in the Registration Statement, as would otherwise be contemplated by this Agreement, for a period exceeding one year after the Consummation Date (as such period may be extended pursuant to the terms of this Agreement relating to a Shelf Registration) and Participating Broker-Dealers shall not be authorized by the Company to deliver and shall not deliver such Prospectus after such period in connection with the resales contemplated by this Section 2(e); and 6 (ii) the application of the Shelf Registration procedures set forth in Section 5 of this Agreement to an Exchange Offer, to the extent not otherwise required by the positions of the staff of the SEC or the Securities Act, will be in conformity with the reasonable request to the Company by any Initial Purchaser or by anyone that certifies to the Company in writing that such person anticipates that it will be a Participating Broker-Dealer; and provided, further, that in connection with such application of the Shelf Registration procedures set forth in Section 5 of this Agreement to an Exchange Offer, the Company shall be obliged (x) to deal only with one entity representing the Participating Broker-Dealers, which shall be DLJ unless it elects not to act as such representative, (y) to pay the fees and expenses of only one counsel representing the Participating Broker-Dealers and (z) to cause to be delivered, if requested, customary "cold comfort" letters from the Company's independent accountants with respect to the Prospectus in the form existing on the Exchange Date and with respect to any subsequent amendment or supplement, if any, effected during the period specified in clause (i) above. (f) The Initial Purchasers shall have no liability to any person with respect to any request made pursuant to Section 2(e). (g) Interest on the Exchange Notes and the Private Exchange Notes will accrue (by which it is meant that the Accreted Value thereof shall continue to increase) from the date of the original issuance of the Notes. (h) The Exchange Notes and the Private Exchange Notes may be issued under (i) the Indenture or (ii) if necessary, an indenture identical in all material respects to the Indenture, which in either event shall provide that the Exchange Notes shall not be subject to the transfer restrictions set forth in the Indenture. The Indenture or such indenture shall provide that the Exchange Notes, the Private Exchange Notes and the Notes shall vote and consent together on all matters as one class and that neither the Exchange Notes, the Private Exchange Notes nor the Notes will have the right to vote or consent as a separate class on any matter. 3. SHELF REGISTRATION ------------------ (a) If (i) the Company is advised in writing by the staff of the SEC that it is not permitted to consummate the Exchange Offer because the Exchange Offer is not permitted by applicable law or SEC policy or (ii) the Company has not consummated the Exchange Offer within 180 days of the Initial Resale Date or (iii) any Holder notifies the Company within 135 days after the Initial Resale Date that (A) due to a change in law or policy it is not entitled to participate in the Exchange Offer, (B) due to a change in law or policy it may not resell the Exchange Notes acquired by it in the Exchange Offer to the public without delivering a prospectus and the prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales by such Holder or (C) it is a broker-dealer that owns Notes (including any Initial Purchaser who hold Notes as part of an unsold allotment from the original offering of the Notes) acquired directly from the Company or an Affiliate of the Company or (iv) any holder of Private Exchange Notes so requests within 135 days after the consummation of the Private Exchange (each such event referred to in clauses (i) through (iv), a "Shelf Filing Event"), the Company shall cause to be filed with the SEC pursuant to Rule 415 a shelf registration statement (the "Shelf Registration Statement") prior to the later of (a) 180 days after the Initial Resale Date or (b) 30 days after the occurrence of such Shelf Filing Event, relating to all such Transfer Restricted Notes (the "Shelf Registration") 7 the Holders of which have provided the information required pursuant to Section 3(b) hereof; provided that if the Company has not consummated the Exchange Offer within 180 days of the Initial Resale Date, then the Company will file the Shelf Registration Statement on or prior to the 181st day after the Initial Resale Date, and shall use its best efforts to have such Registration Statement declared effective by the SEC as promptly as practicable, but in no event later than on or prior to 60 days after such Shelf Registration Statement is required to be filed. In such circumstances, the Company shall use its best efforts to keep the Shelf Registration continuously effective under the Securities Act, until (A) 12 months following the Initial Resale Date (subject to extension pursuant to the last paragraph of Section 5 hereof) or (B) if sooner, the date immediately following the date that all Transfer Restricted Notes covered by the Shelf Registration have been sold pursuant thereto (the "Effectiveness Period"); provided that the Effectiveness Period shall be extended to the extent required to permit dealers to comply with the applicable prospectus delivery requirements of Rule 174 and as otherwise provided herein. (b) No Holder may include any of its Transfer Restricted Notes in any Shelf Registration Statement pursuant to this Agreement unless and until such Holder furnishes to the Company in writing, within 20 Business Days after receipt of a request therefor, such information as the Company may reasonably request for use in connection with any Shelf Registration Statement or Prospectus or preliminary prospectus included therein. No Holder shall be entitled to Liquidated Damages pursuant to Section 4 hereof unless and until such Holder shall have provided all such reasonably requested information. Each Holder as to which any Shelf Registration Statement is being effected agrees to furnish promptly to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such Holder not materially misleading. 4. LIQUIDATED DAMAGES ------------------ (a) The parties hereto agree that the Holders will suffer damages if the Company fails to fulfill its obligations pursuant to Section 2 or Section 3, as applicable, and that it would not be feasible to ascertain the extent of such damages. Accordingly, in the event that (i) the applicable Registration Statement is not filed with the SEC on or prior to the 60th day following the Initial Resale Date, (ii) the applicable Registration Statement has not been declared effective by the SEC on or prior to the 150th day after the Initial Resale Date, (iii) the Exchange Offer has become effective but has not been consummated within 30 days after the date on which the Registration Statement relating to the Exchange Offer was declared effective or (iv) the applicable Registration Statement is filed and declared effective but shall thereafter cease to be effective without being succeeded immediately by any additional Registration Statement covering either the Notes or the Exchange Notes, as the case may be, which has been filed and declared effective (each such event referred to in clauses (i) through (iv), an "Event Date"), the Company agrees to pay, as liquidated damages, and not as a penalty, to each Holder, an additional amount (the "Liquidated Damages") equal to (A) during the first 90-day period beginning on, and including, the Event Date, an amount equal to 0.5% per annum of the Accreted Value (as defined in the Indenture) of Transfer Restricted Notes held by such Holder and (B) during each subsequent 90-day period immediately following the final day of the prior 90-day period, a percentage of the Accreted Value of Transfer Restricted Notes held by such Holder calculated at the rate per annum applicable in the immediately preceding 90-day period plus 0.5%, provided that, the rate at which Liquidated Damages are calculated shall not exceed 2.5% per annum, and, in all cases, ending on, but excluding (w) in the case of clause (i) above, the date on which the applicable Registration Statement is filed, (x) in the case of clause (ii) above, the date on which the applicable Registration Statement is declared effective, (y) in the case of 8 clause (iii) above, the date on which the Exchange Offer is consummated or (z) in the case of clause (iv) above, the date on which the applicable Registration Statement again becomes effective, as the case may be. (b) The Company shall notify the Trustee and Paying Agent under the Indenture immediately upon the happening of each and every Event Date. The Company shall pay the Liquidated Damages due on the Transfer Restricted Notes by depositing with the Paying Agent (which shall not be the Company for these purposes), in trust, for the benefit of the Holders thereof, at least one Business Day prior to the applicable payment date specified in the following sentence, sums sufficient to pay the Liquidated Damages then due. The Liquidated Damages due shall be payable on each [May 15] and [November 15] to Holders of record of Transfer Restricted Notes on the [May 1] or [November l], respectively, next preceding such payment date. Each obligation to pay Liquidated Damages shall be deemed to accrue from and including the applicable Event Date. (c) The parties hereto agree that the Liquidated Damages provided for in this Section 4 constitute a reasonable estimate of the damages that will be suffered by Holders by reason of the happening of any event described in clauses (i) through (iv) of Section 4(a). 5. REGISTRATION PROCEDURES ----------------------- In connection with the Company's registration obligations hereunder, the Company shall effect such registrations on the appropriate form available for the sale of the Transfer Restricted Notes or Exchange Notes, as applicable, to (i) permit the sale of Exchange Notes and (ii) in the case of a Shelf Registration, permit the sale of Transfer Restricted Notes in accordance with the method or methods of disposition thereof specified by the Holders of a majority in aggregate principal amount at maturity of Transfer Restricted Notes to be included in the Registration Statement, and pursuant thereto the Company shall as expeditiously as possible: (a) In the case of a Shelf Registration, no fewer than five Business Days prior to the initial filing of a Registration Statement or Prospectus and no fewer than two Business Days prior to the filing of any amendment or supplement thereto (including any document that would be incorporated or deemed to be incorporated therein by reference), furnish to the Holders, their Special Counsel and the managing underwriters, if any, copies of all such documents proposed to be filed, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the review of such Holders, their Special Counsel and such underwriters, if any, and cause the officers and directors of the Company, counsel to the Company and independent certified public accountants to the Company to respond to such inquiries as shall be necessary, in the opinion of respective counsel to such Holders and such underwriters, to conduct a reasonable investigation within the meaning of the Securities Act; provided, however, that the Company shall not be deemed to have kept a Registration Statement effective during the applicable period if it voluntarily takes or fails to take any action that results in selling Holders of the Transfer Restricted Notes covered thereby not being able to sell such Transfer Restricted Notes pursuant to Federal securities laws during that period (and the time period during which such Registration Statement is required to remain effective hereunder shall be extended by the number of days during which such selling Holders are not able to sell Transfer Restricted Notes). The Company shall not file any such Shelf Registration Statement or related Prospectus or any amendments or supplements thereto which the Holders of a majority of the Transfer Restricted Notes, their Special Counsel, or the managing underwriters, if any, shall reasonably object on a timely basis; 9 (b) Prepare and file with the SEC such amendments, including post-effective amendments, to each Registration Statement as may be necessary to keep such Registration Statement continuously effective for the applicable time period; cause the related Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act; and comply with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all securities covered by such Registration Statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such Registration Statement as so amended or in such Prospectus as so supplemented; (c) Notify the Holders of Transfer Restricted Notes to be sold or, in the case of an Exchange Offer, tendered for, their Special Counsel and the managing underwriters, if any, promptly (and in the case of an event specified by clause (i)(A) of this paragraph in no event fewer than two Business Days prior to such filing), and (if requested by any such Person), confirm such notice in writing, (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment is proposed to be filed, and, (B) with respect to a Registration Statement or any post-effective amendment, when the same has become effective, (ii) in the case of a Shelf Registration, of any request by the SEC or any other Federal or state governmental authority for amendments or supplements to a Registration Statement or related Prospectus or for additional information, (iii) of the issuance by the SEC, any state securities commission, any other governmental agency or any court of any stop order, order or injunction suspending or enjoining the use or the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose, (iv) if at any time any of the representations and warranties of the Company contained in any agreement (including any underwriting agreement) contemplated hereby cease to be true and correct in all material respects, (v) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Transfer Restricted Notes or Exchange Notes for sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose, and (vi) of the happening of any event or information becoming known that makes any statement made in such Shelf Registration Statement or related Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in such Shelf Registration Statement, Prospectus or documents so that, in the case of the Shelf Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (d) Use its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of any order enjoining or suspending the use or effectiveness of a Registration Statement or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Transfer Restricted Notes or Exchange Notes for sale in any jurisdiction, at the earliest practicable moment; (e) If a Shelf Registration is filed pursuant to Section 3 hereof and if requested by the managing underwriters, if any, or the Holders of a majority in aggregate principal amount at maturity of the Transfer Restricted Notes being sold in connection with such offering, (i) promptly incorporate in a Prospectus supplement or post-effective amendment such information as the managing underwriters, if any, and such Holders agree should be included therein, and (ii) make all required filings of such Prospectus supplement or such post-effective amendment as soon as practicable after the Company has received notification of the matters to be incorporated in such Prospectus supplement or post-effective amendment; provided, however, that the Company shall not be 10 required to take any action pursuant to this Section 5(e) that would, in the opinion of counsel for the Company, violate applicable law; (f) Furnish to each Holder, their Special Counsel and each managing underwriter, if any, without charge, at least one conformed copy of each Registration Statement and each amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference, and all exhibits to the extent requested by each Holder (including those previously furnished or incorporated by reference) as soon as practicable after the filing of such documents with the SEC; (g) Deliver to each Holder, their Special Counsel, and the underwriters, if any, without charge, as many copies of the Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such Persons reasonably request; and the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders and the underwriters, if any, in connection with the offering and sale of the Transfer Restricted Notes covered by such Prospectus and any amendment or supplement thereto; (h) Prior to any public offering of Transfer Restricted Notes and prior to the consummation of the Exchange Offer, use its best efforts to register or qualify or cooperate with the Holders of Transfer Restricted Notes to be sold or tendered for, the underwriters, if any, and their respective counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Transfer Restricted Notes or Exchange Notes for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any Holder or underwriter reasonably requests in writing; keep each such registration or qualification (or exemption therefrom) effective during the period such Registration Statement is required to be kept effective and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Transfer Restricted Notes or Exchange Notes covered by the applicable Registration Statement; (i) In connection with any sale or transfer of Transfer Restricted Notes that will result in such securities no longer being Transfer Restricted Notes, cooperate with the Holders and the managing underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Transfer Restricted Notes or Exchange Notes to be sold, which certificates shall not bear any restrictive legends and shall be in a form eligible for deposit with The Depository Trust Company and to enable such Transfer Restricted Notes or Exchange Notes to be in such denominations and registered in such names as the managing underwriters, if any, or Holders may request at least two Business Days prior to any sale of Transfer Restricted Notes or Exchange Notes; (j) Use its best efforts to cause the offering of the Transfer Restricted Notes and Exchange Notes covered by the Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof or the underwriters, if any, to consummate the disposition of such Transfer Restricted Notes and Exchange Notes, except as may be required solely as a consequence of the nature of such selling Holder's business, in which case the Company will cooperate in all reasonable respects with the filing of such Registration Statement and the granting of such approvals; (k) Upon the occurrence of any event contemplated by Paragraph 5(c)(vi), as promptly as practicable, prepare a supplement or amendment, 11 including, if appropriate, a post-effective amendment, to each Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, such Prospectus will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (l) Prior to the effective date of the first Registration Statement relating to the Transfer Restricted Notes or Exchange Notes, as applicable, to provide a CUSIP number for the Transfer Restricted Notes and Exchange Notes, as applicable; (m) If a Shelf Registration is filed pursuant to Section 3 hereof, enter into such agreements (including an underwriting agreement in form, scope and substance as is customary in underwritten offerings) and take all such other reasonable actions in connection therewith (including those reasonably requested by the managing underwriters, if any, or the Holders of a majority in aggregate principal amount at maturity of the Transfer Restricted Notes being sold) in order to expedite or facilitate the disposition of such Transfer Restricted Notes, and in such connection, whether or not an underwriting agreement is entered into and whether or not the registration is an underwritten registration, (i) make such representations and warranties to the Holders of such Transfer Restricted Notes and the underwriters, if any, with respect to the business of the Company and its subsidiaries (including with respect to businesses or assets acquired or to be acquired by any of them), and the Registration Statement, Prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in each case, in form, substance and scope as are reasonable and customarily made by issuers to underwriters in underwritten offerings, and confirm the same if and when requested; (ii) obtain an opinion of counsel to the Company and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the managing underwriters, if any, and Special Counsel to the Holders) addressed to each selling Holder and each of the underwriters, if any, covering the matters customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by such Special Counsel and underwriters; (iii) use its best efforts to obtain customary "cold comfort" letters and updates thereof from the independent certified public accountants of the Company (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements and financial data is, or is required to be, included in the Registration Statement), addressed (where reasonably possible) to each selling Holder and each of the underwriters, if any, such letters to be in customary form and covering matters of the type customarily covered in "cold comfort" letters in connection with underwritten offerings; (iv) if an underwriting agreement is entered into, the same shall contain indemnification provisions and procedures no less favorable to the selling Holders and the underwriters, if any, than those set forth in Section 8 hereof (or such other provisions and procedures acceptable to Holders of a majority in aggregate principal amount of the Transfer Restricted Notes covered by such Registration Statement and the managing underwriters, if any); and (v) deliver such documents and certificates as may be reasonably requested by the Holders of a majority in aggregate principal amount at maturity of the Transfer Restricted Notes being sold, their Special Counsel and the managing underwriters, if any, to evidence the continued validity of the representations and warranties made pursuant to clause (i) above and to evidence compliance with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company; (n) In the case of a Shelf Registration, make available for inspection by a representative of the Holders of Transfer Restricted Notes being sold, any underwriter participating in any such disposition of Transfer Restricted Notes, if any, and any attorney, consultant or accountant retained by such selling 12 Holders or underwriter, at the offices where normally kept, during reasonable business hours, all financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries (including with respect to business and assets acquired or to be acquired to the extent that such information is available to the Company), and cause the officers, directors, agents and employees of the Company and its subsidiaries (including with respect to business and assets acquired or to be acquired to the extent that such information is available to the Company) to supply all information in each case reasonably requested by any such representative, underwriter, attorney, consultant or accountant in connection with such Shelf Registration; provided, however, that such Persons shall first agree in writing with the Company that any information that is reasonably and in good faith designated by the Company in writing as confidential at the time of delivery of such information shall be kept confidential by such Persons, unless (i) disclosure of such information is required by court or administrative order or is necessary to respond to inquiries of regulatory authorities, (ii) disclosure of such information is required by law (including any disclosure requirements pursuant to Federal securities laws in connection with the filing of any Registration Statement or the use of any prospectus referred to in this Agreement), (iii) such information becomes generally available to the public other than as a result of a disclosure or failure to safeguard by such Person or (iv) such information becomes available to such Person from a source other than the Company and such source is not bound by a confidentiality agreement; (o) Provide an indenture trustee for the Transfer Restricted Notes and the Exchange Notes, as the case may be, and cause the Indenture to be qualified under the TIA not later than the effective date of the first Registration Statement relating to the Transfer Restricted Notes or the Exchange Notes, as applicable; and in connection therewith, cooperate with the trustee under the Indenture and the Holders, to effect such changes to the Indenture as may be required for such Indenture to be so qualified in accordance with the terms of the TIA; and execute, and use its best efforts to cause such trustee to execute, all customary documents as may be required to effect such changes, and all other forms and documents required to be filed with the SEC to enable the Indenture to be so qualified in a timely manner; (p) Comply with all applicable rules and regulations of the SEC and make generally available to their security holders earning statements satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act), no later than 45 days after the end of any 12-month period (or 90 days after the end of any 12-month period if such period is a fiscal year) (i) commencing at the end of any fiscal quarter in which Transfer Restricted Notes are sold to underwriters in a firm commitment or reasonable efforts underwritten offering and (ii) if not sold to underwriters in such an offering, commencing on the first day of the first fiscal quarter after the effective date of a Registration Statement, which statement shall cover said period, consistent with the requirements of Rule 158; (q) In the case of a Shelf Registration, use its best efforts to cause the Transfer Restricted Notes to be rated with the appropriate rating agencies, if so requested by the managing underwriters, if any, or the Holders of a majority in aggregate principal amount at maturity of the Transfer Restricted Notes; (r) Cooperate with each seller of Transfer Restricted Notes covered by any Registration Statement and each underwriter, if any, participating in the disposition of such Transfer Restricted Notes and their respective counsel in connection with any filings required to be made with the National Association of Securities Dealers, Inc.; 13 (s) Use its best efforts to take all other steps necessary or advisable to effect the registration of the Exchange Notes and/or Transfer Restricted Notes covered by a Registration Statement contemplated hereby; and (t) If an Exchange Offer is to be consummated, upon delivery of the Transfer Restricted Notes by such Holders to the Company in exchange for the Exchange Notes, the Company shall mark, or caused to be marked, on such Transfer Restricted Notes that such Transfer Restricted Notes are being cancelled in exchange for the Exchange Notes; in no event shall such Transfer Restricted Notes be marked as paid or otherwise satisfied. The Company may require such seller of Transfer Restricted Notes as to which any registration is being effected to furnish to the Company such information regarding the distribution of such Transfer Restricted Notes as is required by law to be disclosed in the applicable Registration Statement and the Company may exclude from such registration the Transfer Restricted Notes of any seller who fails to furnish such information within a reasonable time after receiving such request. If any such Registration Statement refers to any Holder by name or otherwise as the holder of any securities of the Company, then such Holder shall have the right to require (i) the insertion therein of language, in form and substance reasonably satisfactory to such Holder, to the effect that the holding by such Holder of such securities is not to be construed as a recommendation by such Holder of the investment quality of the Company's securities covered thereby and that such holding does not imply that such Holder will assist in meeting any future financial requirements of the Company, or (ii) in the event that such reference to such Holder by name or otherwise is not required by the Securities Act or any similar Federal statute then in force, the deletion of the reference to such Holder in any amendment or supplement to the Registration Statement filed or prepared subsequent to the time that such reference ceases to be required. In the case of a Shelf Registration pursuant to Section 3 hereof, each Holder agrees by acquisition of such Transfer Restricted Notes that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 5(c)(ii), 5(c)(iii), 5(c)(v) or 5(c)(vi) hereof, such Holder will forthwith discontinue disposition of such Transfer Restricted Notes covered by such Registration Statement or Prospectus until such Holder's receipt of the copies of the supplemented or amended Prospectus contemplated by Section 5(k) hereof, or until it is advised in writing (the "Advice") by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus. If the Company shall give any such notice, the Effectiveness Period shall be extended by the number of days during such period from and including the date of the giving of such notice to and including the date when each seller of Transfer Restricted Notes covered by such Registration Statement shall have received (x) the copies of the supplemented or amended Prospectus contemplated by Section 5(k) hereof or (y) the Advice, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus. 6. REGISTRATION EXPENSES --------------------- (a) All fees and expenses incident to the performance of or compliance with this Agreement by the Company shall be borne by the Company whether or not any Registration Statement is filed or becomes effective and whether or not any securities are issued or sold pursuant to any Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, 14 fees and expenses (A) with respect to filings required to be made with the National Association of Securities Dealers, Inc. and (B) in compliance with securities or Blue Sky laws (including, without limitation and in addition to that provided for in (b) below, fees and disbursements of counsel for the underwriters or Holders or holders of Exchange Notes in connection with Blue Sky qualifications and determination of the eligibility of the Transfer Restricted Notes or Exchange Notes for investment under the laws of such jurisdictions as the managing underwriters, if any, or Holders of a majority in aggregate principal amount at maturity of Transfer Restricted Notes may designate), (ii) printing expenses (including, without limitation, expenses of printing certificates for Transfer Restricted Notes or Exchange Notes in a form eligible for deposit with The Depository Trust Company and of printing Prospectuses if the printing of Prospectuses is required by the managing underwriters, if any, or by the Holders of a majority in principal amount at maturity of the Transfer Restricted Notes included in or tendered for in connection with any Registration Statement), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company and Special Counsel for the Holders (plus any local counsel, deemed appropriate by the Holders of a majority in aggregate principal amount at maturity of the Transfer Restricted Notes), in accordance with the provisions of Section 6(b) hereof, (v) fees and disbursements of all independent certified public accountants referred to in Section 5(m)(iii) hereof (including, without limitation, the expenses of any special audit and "cold comfort" letters required by or incident to such performance), (vi) if required, the fees and expenses of any "qualified independent underwriter" and its counsel, (vii) Securities Act liability insurance, if the Company desires such insurance, and (viii) fees and expenses of all other persons retained by the Company. In addition, the Company shall pay their internal expenses (including, without limitation, all salaries and expenses of their officers and employees performing legal or accounting duties), the expense of any annual audit, and the fees and expenses incurred in connection with the listing of the securities to be registered on any securities exchange. (b) In connection with any registration hereunder, the Company shall reimburse the Holders of the Transfer Restricted Notes being registered or tendered for in such registration for the reasonable fees and disbursements of not more than one firm of attorneys representing the selling Holders (in addition to any local counsel) chosen by the Holders of a majority in aggregate principal amount at maturity of the Transfer Restricted Notes. 7. INDEMNIFICATION --------------- (a) The Company agrees to indemnify and hold harmless (i) each Initial Purchaser, each Holder, each holder of Exchange Notes and each Participating Broker-Dealer, (ii) each person, if any, who controls (within the meaning of Section 15 of the Act or Section 20 of the Exchange Act) any of the foregoing (any of the persons referred to in this clause (ii) being hereinafter referred to as a "controlling person"), and (iii) the respective officers, directors, partners, employees, representatives and agents of the Initial Purchaser, each Holder, each holder of Exchange Notes, each Participating Broker-Dealer or any controlling person (any person referred to in clause (i), (ii) or (iii) may hereinafter be referred to as an "Indemnified Person"), from and against any and all losses, claims, damages, liabilities and judgments caused by any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement, Prospectus or form of Prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of Prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, except insofar as such losses, claims, damages, liabilities or judgments are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information relating to any Indemnified Person furnished in writing to the 15 Company by such Indemnified Person expressly for use therein; provided that the foregoing indemnity with respect to any preliminary prospectus shall not inure to the benefit of any Indemnified Person from whom the person asserting such losses, claims, damages, liabilities and judgments purchased securities if such untrue statement or omission or alleged untrue statement or omission made in such preliminary prospectus is eliminated or remedied in the Prospectus and a copy of the Prospectus shall not have been furnished to such person in a timely manner due to the wrongful action or wrongful inaction of such Indemnified Person. (b) In case any action shall be brought against any Indemnified Person, based upon any Registration Statement or any such Prospectus or any amendment or supplement thereto and with respect to which indemnity may be sought against the Company, such Indemnified Person shall promptly notify the Company in writing and the Company shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Person and payment of all fees and expenses. Any Indemnified Person shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person, unless (i) the employment of such counsel shall have been specifically authorized in writing by the Company, (ii) the Company shall have failed to assume the defense and employ counsel or (iii) the named parties to any such action (including any impleaded parties) include both such Indemnified Person and the Company and such Indemnified Person shall have been advised by counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the Company (in which case the Company shall not have the right to assume the defense of such action on behalf of such Indemnified Person, it being understood, however, that the Company shall not, in connection with any one such action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) for all such Indemnified Persons, which firm shall be designated in writing by such Indemnified Persons, and that all such fees and expenses shall be reimbursed as they are incurred). The Company shall not be liable for any settlement of any such action effected without its written consent but if settled with its written consent, the Company agrees to indemnify and hold harmless any Indemnified Person from and against any loss or liability by reason of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. (c) In connection with any Registration Statement in which a Holder is participating, such Holder agrees, severally and not jointly, to indemnify and hold harmless the Company, its directors, its officers and any person controlling the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, to the same extent as the foregoing indemnity from the Company to each Indemnified Person but only with respect to information relating to such Indemnified Person furnished in writing by or on behalf of such Indemnified Person expressly for use in such Registration Statement. In any such case in which any action shall be brought against the Company, any of its directors, any such officer or any person controlling the Company based on such Registration Statement and in respect of which indemnity may be sought against any Indemnified Person, the Indemnified Person shall have the rights and duties given to the Company (except that if the Company shall have assumed the defense thereof, such Indemnified Person shall not be required to do so, but may employ separate counsel therein and participate in the defense thereof but the fees and expenses of such counsel shall be at the expense of such Indemnified Person), and the Company, its directors, any such officers and any person controlling the Company shall have the rights and duties given to the Indemnified Person, by Section 7(b) hereof. 16 (d) If the indemnification provided for in this Section 7 is unavailable to an indemnified party in respect of any losses, claims, damages, liabilities or judgments referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities and judgments (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and each Indemnified Person on the other hand from the offering of the Notes or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and each such Indemnified Person on the other hand in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or judgments, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and each such Indemnified Person on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the Company or such Indemnified Person and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Initial Purchaser agree that it would not be just and equitable if contribution pursuant to this Section 7(d) were determined by pro rata allocation (even if the Indemnified Person were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or judgments referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 7, no Indemnified Person shall be required to contribute any amount in excess of the amount by which the net profit received by it in connection with the sale of the Notes contemplated by this Agreement exceeds the amount of any damages which such Indemnified Person has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section II (f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Indemnified Persons' obligations to contribute pursuant to this Section 7(d) are several in proportion to the respective amount of Notes included in any such Registration Statement by each Indemnified Person and not joint. 8. RULES 144 AND 144A ------------------ The Company shall use its best efforts to file the reports required to be filed by it under the Securities Act and the Exchange Act in a timely manner and, if at any time it is not required to file such reports but in the past had been required to or did file such reports, it will, upon the request of any Holder, make available other information as required by, and so long as necessary to permit, sales of its Transfer Restricted Notes pursuant to Rule 144A. Notwithstanding the foregoing, nothing in this Section 8 shall be deemed to require the Company to register any of its securities pursuant to the Exchange Act. 9. UNDERWRITTEN REGISTRATIONS -------------------------- If any of the Transfer Restricted Notes covered by any Shelf Registration are to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will administer the offering 17 will be selected by the Holders of a majority in aggregate principal amount at maturity of such Transfer Restricted Notes included in such offering, subject to the consent of the Company (which will not be unreasonably withheld or delayed). No person may participate in any underwritten registration hereunder unless such person (i) agrees to sell such Transfer Restricted Notes on the basis reasonably provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements. 10. MISCELLANEOUS ------------- (a) REMEDIES. In the event of a breach by the Company or by a Holder of any of their obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. Subject to Section 4 hereof, the Company and each Holder agree that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate. (b) NO INCONSISTENT AGREEMENTS. The Company will not enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. The Company has not previously entered into any agreement, which is now effective, granting any registration rights with respect to any of its debt securities to any person. Without limiting the generality of the foregoing, without the written consent of the Holders of a majority in aggregate principal amount at maturity of the then outstanding Transfer Restricted Notes, the Company shall not grant to any person the right to request the Company to register any of their debt securities under the Securities Act unless the rights so granted are subject in all respects to the prior rights of the Holders set forth herein, and are not otherwise in conflict or inconsistent with the provisions of this Agreement. (c) NO PIGGYBACK ON REGISTRATIONS. The Company shall not grant to any of its security holders (other than the Holders in such capacity) the right to include any securities of the Company in any Shelf Registration or Exchange Offer other than Transfer Restricted Notes. (d) AMENDMENTS AND WAIVERS. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, otherwise than with the prior written consent of the Holders of not less than a majority of the then outstanding aggregate principal amount at maturity of Transfer Restricted Notes; provided, however, that, for the purposes of this Agreement, Transfer Restricted Notes that are owned, directly or indirectly, by the Company or an Affiliate of the Company are deemed not outstanding. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders whose securities are being sold pursuant to a Registration Statement and that does not directly or indirectly affect the rights of other Holders may be given by Holders of a majority in aggregate principal amount at maturity of the Transfer Restricted Notes being sold by such Holders pursuant to such 18 Registration Statement; provided, however, that the provisions of this sentence may not be amended, modified or supplemented except in accordance with the provisions of the immediately preceding sentence. (e) NOTICES. All notices and other communications provided for herein shall be made in writing by hand-delivery, next-day air courier, certified first-class mail, return receipt requested, telex or facsimile: (i) if to the Company, as provided in the Purchase Agreement, (ii) if to the Initial Purchasers, as provided in the Purchase Agreement, or (iii) if to any other person who is then a registered Holder, to the address of such Holder as it appears in the Note register of the Company. Except as otherwise provided in this Agreement, all such communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; one business day after being timely delivered to a next-day air courier; five business days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; and when receipt is acknowledged by the recipient's telecopier machine, if telecopied. (f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. The Company may not assign its rights or obligations hereunder without the prior written consent of each Holder. Notwithstanding the foregoing, no transferee shall have any of the rights granted under this Agreement until such transferee shall acknowledge its rights and obligations hereunder by a signed written statement of such transferee's acceptance of such rights and obligations. (g) COUNTERPARTS. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement. (h) APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK INCLUDING, WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND NEW YORK CIVIL PRACTICE LAWS AND RULES 327(b) AS APPLIED TO CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK, EXCLUDING (TO THE GREATEST EXTENT PERMISSIBLE BY LAW) ANY RULE OF LAW THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK. THE COMPANY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING RELATED TO THIS AGREEMENT OR ANY OF THE MATTERS CONTEMPLATED HEREBY, IRREVOCABLY WAIVES ANY DEFENSE OF LACK OF PERSONAL JURISDICTION AND IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUIT, 19 ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. THE COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. (i) SEVERABILITY. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. If any term, provision, covenant or restriction of this is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable. (j) HEADINGS. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. All references made in this Agreement to "Section" and "paragraph" refer to such Section or paragraph of this Agreement, unless expressly stated otherwise. (k) ATTORNEYS' FEES. In any action or proceeding brought to enforce any provisions of this Agreement, or where any provision hereof or thereof is validly asserted as a defense, the prevailing party, as determined by the court, shall be entitled to recover reasonable attorneys' fees in addition to any other available remedy. 20 IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be duly executed as of the date first written above. UNITED INTERNATIONAL HOLDINGS, INC. By: /s/ Michael T. Fries ----------------------------------- Name: Michael T. Fries Title: President UIH FUNDING CORP. By: /s/ Paul Thompson III ----------------------------------- Name: Paul Thompson III Title: Managing Director SALOMON SMITH BARNEY INC. By: /s/ Robert D. Miller ----------------------------------- Name: Robert D. Miller Title: Vice President TD SECURITIES (USA), INC. By: /s/ Thomas W. Regan ----------------------------------- Name: Thomas W. Regan Title: Managing Director CHASE SECURITIES INC. By: /s/ R. Ranocchia ----------------------------------- Name: R. Ranocchia Title: Managing Director -----END PRIVACY-ENHANCED MESSAGE-----