-----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, E8ctT2AT0KCnykeUwdoTux5VE0fvmloOiJ+P0SgfHzU2HZyPT1aA/OIFdcurBZF9 d2Rjl8MW2kdmipz4zGDrlA== 0001014909-99-000158.txt : 19990723 0001014909-99-000158.hdr.sgml : 19990723 ACCESSION NUMBER: 0001014909-99-000158 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19990706 ITEM INFORMATION: FILED AS OF DATE: 19990722 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: 99668462 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 7/6/99 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: July 6, 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 July 6, 1999, UnitedGlobalCom, d/b/a United International Holdings, Inc., (the "Company") closed an unregistered offering of 425,000 shares of its 7% Series C Senior Cumulative Convertible Preferred Stock (the "Series C Stock"), in the form of 8,500,000 Depositary Shares. Each Depositary Share represents 1/20th of a share of Series C Stock. The Series C Stock is convertible at any time in whole or in part into shares of the Company's Class A Common Stock. The Depositary Shares are convertible into shares of Class A Common Stock at an initial conversion price of $84.30, subject to certain adjustments. The net proceeds to the Company were $382.5 million. In addition, the purchasers deposited $29.75 million into a securities account pursuant to which the purchasers will be entitled to quarterly payments in an amount equal to $0.8750 per Depositary Share commencing September 30, 1999 through June 30, 2000. The other terms of the Series C Stock are set forth in the Company's Certificate of Designations, a copy of which is attached hereto as an exhibit. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits 4.1 Certificate of Designations of the Series C Stock 10.1 Deposit Agreement, dated as of July 6, 1999, among the Company, Firstar Bank of Minnesota, N.A. ("Firstar"), as Depositary, and the holder from time to time of the Receipts. 10.2 Securities Account Agreement, dated as of July 6, 1999, between the Company and Firstar. 2 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 by the undersigned thereunto duly authorized. UNITED INTERNATIONAL HOLDINGS, INC. Date: July 22, 1999 By: /S/ Valerie L. Cover ------------------------------- Valerie L. Cover Vice President and Controller (a Duly Authorized Officer and Principal Financial Officer) 3 EX-4 2 EXHIBIT 4.1-CERTIFICATE OF DESIGNATIONS UNITED INTERNATIONAL HOLDINGS, INC. CERTIFICATE OF DESIGNATION establishing the Voting Powers, Designations, Preferences, Limitations, Restrictions, and Relative Rights of 7% SERIES C SENIOR CUMULATIVE CONVERTIBLE PREFERRED STOCK ------------------------------------------------- Pursuant to Section 151 of the General Corporation Law of the State of Delaware ------------------------------------------------- UNITED INTERNATIONAL HOLDINGS, INC., a corporation organized and existing under the General Corporation Law of the State of Delaware (the "Issuer"), does hereby certify that (i) pursuant to authority conferred upon the Board of Directors of the Issuer by its Second Amended and Restated Certificate of Incorporation, as amended to date, and pursuant to the provisions of Section 151 of the General Corporation Law of the State of Delaware, the Board of Directors authorized the creation and issuance of the Issuer's 7% Series C Senior Cumulative Convertible Preferred Stock (the "Preferred Stock") and appointed a committee (the "Preferred Stock Committee") to fix the designations, preferences and rights of such Preferred Stock, and (ii) the following resolution fixing the designations, preferences and rights of such Preferred Stock, which was duly adopted by the Preferred Stock Committee of the Board of Directors, on July 1, 1999, which resolution remains in full force and effect. Certain capitalized terms used herein are defined in Article 9. RESOLVED, that pursuant to the authority expressly granted to and vested in the Board of Directors of the Issuer by the provisions of Second Amended and Restated Certificate of Incorporation, as amended from time to time (the "Certificate of Incorporation"), and pursuant to Section 151(g) of the General Corporation Laws of the State of Delaware, there be from the 3,000,000 shares of Preferred Stock, $0.01 par value, of the Issuer, authorized to be issued pursuant to the Certificate of Incorporation, a series of Preferred Stock, consisting of 425,000 shares of 7 % Series C Senior Cumulative Convertible Preferred Stock (referred to herein as the "Preferred Stock"), having the number of shares and, to the extent that the designations, powers, preferences and relative and other special rights and the qualifications, limitations and restrictions of such Preferred Stock are not stated and expressed in the Certificate of Incorporation, the powers, preferences and relative and other special rights and the qualifications, limitations and restrictions thereof, as follows: 1. DESIGNATION AND NUMBER OF SHARES 1.1 The series will be known as the 7 % Series C Senior Cumulative Convertible Preferred Stock. 1.2 The Preferred Stock will be a series consisting of 425,000 shares of the authorized but unissued preferred stock of the Issuer. 2. DIVIDENDS 2.1 Holders of Preferred Stock will be entitled to receive, when, as and if declared by the Board of Directors, out of funds legally available therefor, dividends on each outstanding share of Preferred Stock, payable quarterly in arrears at a rate per annum equal to 7% of the liquidation preference per share. (a) All dividends will be cumulative, whether or not earned or declared, on a quarterly basis on March 31, June 30, September 30 and December 31 of each year (each such date being referred to herein as a "Dividend Payment Date"), commencing July 1, 2000. Dividends will accumulate on a day to day basis from July 1, 2000. Each distribution in the form of a dividend shall be payable in arrears to Holders of record as they appear on the stock books of the Issuer on each record date as established by the Board of Directors of the Issuer (the "Dividend Payment Record Date") not more than 60 nor less than ten days preceding a Dividend Payment Date. 2 (i) Dividends payable on the Preferred Stock for each full dividend period will be computed by dividing the annual dividend rate by four. Dividends payable on the Preferred Stock for any period less than a full dividend period will be computed on the basis of a 360-day year consisting of twelve 30-day months. (ii) The Preferred Stock will not be entitled to any dividend whether payable in cash, property or securities, in excess of the full cumulative dividends. (iii) No interest, or sum of money in lieu of interest, will be payable in respect of any accumulated and unpaid dividends which may be in arrears. (b) Dividends, to the extent declared by the Issuer's Board of Directors may, at the option of the Issuer, be paid in cash, by delivery of fully paid and nonassessable shares of Common Stock, or a combination thereof. If the Issuer elects to pay dividends in shares of Common Stock, the number of shares of Common Stock to be distributed will be calculated by dividing such payment by the Market Value Amount as of the Dividend Payment Record Date. 2.2 No dividends or other distributions (other than a dividend or distribution in Junior Securities) may be declared, made or paid or funds set apart for payment on the Junior Securities or Parity Securities, and no Junior Securities or any Parity Securities, including the Preferred Stock, may be repurchased, redeemed or otherwise acquired for any consideration (or any money paid to or made available for a sinking fund for the redemption of any shares of any such stock) by the Issuer (except by conversion into or exchange for Junior Securities and in the case that monies for such dividends, distributions, redemptions, purchases, or other acquisitions are derived from the proceeds of a substantially concurrent offering of such securities), unless full cumulative dividends shall have been or contemporaneously are paid or declared and a sum sufficient for the payment thereof is set apart for such payment on all outstanding shares of Preferred Stock for all Dividend Payment Dates on or prior to such declaration, payment, redemption, purchase or acquisition. (a) Notwithstanding the foregoing, if full dividends have not been declared and paid or set apart on the Preferred Stock and any other Parity Securities, dividends may be declared and paid on the Preferred Stock and such other Parity Securities so long as the dividends are declared and paid pro rata 3 so that the amounts of dividends declared per share on the Preferred Stock and such other Parity Securities will in all cases bear to each other the same ratio that accrued and unpaid dividends per share on the shares of the Preferred Stock and such other Parity Securities bear to each other; provided, that if such dividends are paid in cash on the other Parity Securities, dividends will also be paid in cash on the Preferred Stock. (b) (i) The Holders of shares of the Preferred Stock at the close of business on a Dividend Payment Record Date will be entitled to receive the dividend payment on those shares (except that Holders of shares called for redemption or conversion on a Redemption Date or Conversion Date between the record date and a date which is two days after the Dividend Payment Date will be entitled to receive such dividend on such Redemption Date as indicated in Section 5.1 hereof or such Conversion Date as indicated in Section 4 hereof, as applicable) on the corresponding Dividend Payment Date notwithstanding the subsequent conversion thereof or the Issuer's default in payment of the dividend due on that Dividend Payment Date. (ii) Except as provided in clause (i) of this Section 2.2(c) and in Section 4.3, the Issuer shall make no payment or allowance for unpaid dividends, whether or not in arrears, on converted shares or for dividends on the shares of Common Stock issued upon conversion. 3. RANKING 3.1 The Preferred Stock will, with respect to dividend distributions and distributions upon the liquidation, winding up or dissolution of the Issuer, rank: (a) senior to all classes of Common Stock and each other class of Capital Stock or series of preferred stock issued by the Issuer, which is established after the date of this Certificate of Designation, the terms of which do not expressly provide that such class or series will rank senior to or on a parity with the Preferred Stock as to dividend distributions and distributions upon the liquidation, winding up or dissolution of the Issuer (collectively, with the Common Stock, referred to as the "Junior Securities"); (b) on a parity with the Convertible Preferred Stock, Series A, par value $0.01 per share, and the Convertible Preferred Stock, Series B, par value $0.01 per share and any class of Capital Stock or series of preferred stock issued by the Issuer, which is established after the date of this Certificate of Designation by the Board of Directors, the terms of which expressly provide that such class or series will rank on a parity with the Preferred Stock as to 4 dividend distributions and distributions upon the liquidation, winding up or dissolution of the Issuer (collectively referred to as "Parity Securities"); and (c) subject to approval from holders of at least 66 2/3% of the outstanding shares of Preferred Stock, junior to each class of Capital Stock or series of preferred stock issued by the Issuer, which is established after the date of this Certificate of Designation by the Board of Directors, the terms of which expressly provide that such class or series will rank senior to the Preferred Stock as to dividend distributions and distributions upon liquidation, winding-up or dissolution of the Issuer (collectively referred to as "Senior Securities"). 3.2 Except as otherwise provided herein (including, without limitation, Section 8.3 hereof), the Issuer is entitled to amend its Certificate of Incorporation to authorize one or more additional series of preferred stock, file certificates of designation, and issue without restriction from time to time, any series of Junior Securities, Parity Securities, or Senior Securities. 4. CONVERSION 4.1 (a) Each Holder of Preferred Stock shall have the right, at its option, at any time and from time to time to convert, subject to the terms and provisions of this Article 4, any or all of such Holder's shares of Preferred Stock. In such case, the shares of Preferred Stock shall be converted into such whole number of fully paid and nonassessable shares of Common Stock as is equal, subject to Section 4.6, to: the product of the number of shares of Preferred Stock being so converted multiplied by the quotient of (i) the Liquidation Preference divided by (ii) the Conversion Price then in effect, except that with respect to any share which shall be called for redemption such right shall terminate at the close of business on the second Business Day prior to the Redemption Date unless the Issuer shall default in making the payment due upon redemption thereof. (b) The conversion right of a Holder of Preferred Stock shall be exercised by the Holder by the surrender of the certificate representing shares 5 to be converted to the Issuer or to the Transfer Agent accompanied by the Conversion Notice. (i) Immediately prior to the close of business on the Conversion Date, each converting Holder of Preferred Stock shall be deemed to be the Holder of record of Common Stock issuable upon conversion of such Holder's Preferred Stock notwithstanding that the share register of the Issuer shall then be closed or that certificates representing such Common Stock shall not then be actually delivered to such person. (ii) Upon notice from the Issuer, each Holder of Preferred Stock so converted shall promptly surrender to the Issuer or the Transfer Agent certificates representing the shares so converted (if not previously delivered), duly endorsed in blank or accompanied by proper instruments of transfer. (iii) On any Conversion Date, all rights with respect to the shares of Preferred Stock so converted, including the rights, if any, to receive notices, will terminate, except the rights of Holders thereof to: (1) receive certificates for the number of shares of Common Stock into which such shares of Preferred Stock have been converted; (2) receive the payment in cash or shares of Common Stock of any accumulated and unpaid dividends accrued thereon pursuant to Section 4.3 hereof; and (3) exercise the rights to which they are entitled as Holders of Common Stock. (c) If the Conversion Date shall not be a Business Day, then such conversion right shall be deemed exercised on the next Business Day. (d) When shares of Preferred Stock are converted pursuant to this Section 4.1, all accumulated and unpaid dividends, including dividends payable on the Conversion Date pursuant to Section 2.2(c)(i), or liquidated damages (whether or not in arrears or currently payable) on the Preferred Stock so converted to (and not including) the Conversion Date shall immediately be due and payable, at the Issuer's option: (i) in cash; (ii) in the whole number of fully paid and nonassessable shares of Common Stock equal to the quotient of (i) the amount of accumulated 6 and unpaid dividends payable to the Holders of Preferred Stock hereunder, divided by (ii) the Market Value Amount for the period ending on the Conversion Date, plus cash for any fractional shares subject to Section 12.3 hereof; or (iii) a combination thereof. 4.2 (a) The Company shall have the right, at its option, to convert all (but not less than all) of the shares of Preferred Stock into shares of Common Stock at the then Conversion Price, together with payment equal to the sum of all accumulated but unpaid dividends or liquidated damages, if any, through the conversion date, if, on or after, June 30, 2002, the Closing Price of the Common Stock has equaled or exceeded 130% of the Conversion Price for at least 20 Trading Days within any 30 consecutive Trading Days. The Company may effect such payment, at its option, in cash or by delivery of fully paid nonassessable shares of Common Stock by issuing that whole number of shares of Common Stock equal to the amount of such payment divided by the Market Value Amount, as of the conversion date or by any combination thereof. (b) The Company shall also have the right, at its option, to convert all (but not less than all) of such shares of Preferred Stock into shares of Common Stock at the then Conversion Price, plus accumulated and unpaid dividends or liquidated damages, if any, whether or not declared, to the conversion date (the "Provisional Conversion Date"), on or after December 31, 2000 (the "Provisional Conversion"), if the closing price of the Common Stock has equaled or exceeded 150% of the Conversion Price for at least 20 Trading Days within any 30 consecutive Trading Day period. In the event that the Company undertakes a Provisional Conversion, holders of Preferred Stock to whom the Company shall give notice of such Provisional Conversion, will, in addition to the shares of Common Stock which such holders will receive pursuant to the preceding sentence, also receive a payment (the "Additional Payment") in an amount equal to the present value of the aggregate amount of the dividends that would thereafter have been payable on the Preferred Stock (whether or not declared) from the Provisional Conversion Date to June 30, 2002 (the "Additional Period"). The present value shall be calculated using as the discount rate the bond equivalent yield on U.S. Treasury notes or bills having a term nearest in length to that of the Additional Period, calculated as of the day immediately preceding the date on which a notice of Provisional Conversion is mailed. The Company may effect the payment of accumulated and unpaid dividends, liquidated damages or Additional Amounts, at its option, in cash or delivery of fully paid 7 nonassessble shares of Common Stock by issuing that whole number of shares of Common equal to the amount of such payment divided by the Market Value Amount as of the conversion date or by any combination thereof. (c) Notwithstanding the foregoing, the Company may not effect these conversions into Common Stock at any time unless (i) such shares of Common Stock are eligible for resale pursuant to Rule 144(k) under the Act, or (ii) a registration statement relating to the resale of the shares of Common Stock issuable upon such conversions is effective. 4.3 The Conversion Price shall be subject to adjustment if any Conversion Price Adjustment Event described in Section 4.3(a) occurs. The adjustment will be accomplished from time to time as described in Section 4.3(b). (a) In case the Issuer shall at any time or from time to time: (i) make any payment of a dividend (or other distribution) payable in shares of Common Stock to all Holders of any class of Capital Stock of the Issuer (other than the issuance of shares of Common Stock in connection with the payment of dividends on, redemption of or the conversion of the Preferred Stock or any preferred stock pari passu to the Preferred Stock); (ii) make any issuance to all Holders of shares of Common Stock of rights, options or warrants entitling them to subscribe for or purchase shares of Common Stock or securities convertible into or exchangeable for shares of Common Stock at less than Market Value as of the date of conversion or exchange; provided, however, that no adjustment shall be made with respect to such a distribution if the Holder of shares of Preferred Stock would be entitled to receive such rights, options or warrants upon conversion at any time of shares of Preferred Stock into Common Stock, and provided further, that if such rights, options or warrants are only exercisable upon the occurrence of certain triggering events, then the Conversion Price will not be adjusted until such triggering events occur; (iii) make any subdivision, combination or reclassification of any class of Common Stock; (iv) make any distribution consisting exclusively of cash (excluding any cash distribution upon a merger or consolidation to 8 which Section 4.6 applies) to all Holders of shares of any class of Common Stock (which distribution is not also being made to the holders of the Preferred Stock based on the number of shares of Common Stock into which the Preferred Stock is then convertible) in an aggregate amount that, combined together with (1) all other such all-cash distributions made within the then-preceding 12-months in respect of which no adjustment has been made and (2) any cash and the fair market value of other consideration paid or payable in respect of any tender offer by the Issuer or any of its Subsidiaries for shares of Common Stock concluded within the then-preceding 12-months in respect of which no adjustment has been made, exceeds 12.5% of the Issuer's Market Capitalization on the record date of such distribution; (v) completes a tender or exchange offer made by the Issuer or any of its Subsidiaries for shares of any class of Common Stock that involves an aggregate consideration that, together with (1) any cash and other consideration payable in a tender or exchange offer by the Issuer or any of its Subsidiaries for shares of any class of Common Stock expiring within the then-preceding 12-months in respect of which no adjustment has been made and (2) the aggregate amount of any such all-cash distributions referred to in (iv) above to all Holders of shares of any class of Common Stock within the then-preceding 12-months in respect of which no adjustment has been made, exceeds 12.5% of the Issuer's Market Capitalization just prior to the expiration of such tender offer; or (vi) makes a distribution to all Holders of Common Stock (which distribution is not also being made to the holders of the Preferred Stock based on the number of shares of Common Stock into which the Preferred Stock is then convertible unless the Common Stock does not share pro rata in such distribution) consisting of evidences of indebtedness, shares of Capital Stock other than Common Stock of the Issuer or assets (including securities, but excluding those dividends, rights, options, warrants and distributions referred to above). (b) If any Conversion Price Adjustment Event occurs, the Issuer will calculate the adjustment to the Conversion Price as follows for each specific event. In the following descriptions, the variables have the following definitions: 9 C equals the total number of shares of Preferred Stock outstanding at the time of the Conversion Price Adjustment Event; U equals the number of shares of Common Stock underlying rights, options, or warrants issued entitling the holders to subscribe for or purchase shares of Common Stock or securities convertible into or exchangeable for shares of Common Stock issued in the Conversion Price Adjustment Event; X equals the total number of shares of Common Stock outstanding immediately prior to the Conversion Price Adjustment Event (not including unexercised options, warrants, or rights); Y equals the total number of shares of Common Stock outstanding immediately after the Conversion Price Adjustment Event (not including unexercised options, warrants, or rights); Z equals the total number of shares of Common Stock outstanding at the time of the Conversion Price Adjustment Event; Cash equals any distribution consisting exclusively of cash (excluding any cash distributed upon a merger or consolidation to which Section 4.6 applies) to all Holders of shares of Common Stock in an aggregate amount that, combined together with (1) all other such all-cash distributions made within the then-preceding 12-months in respect of which no adjustment has been made and (2) any cash and the fair market value of other consideration paid or payable in respect of any tender offer by the Issuer or any of its Subsidiaries for shares of Common Stock concluded within the then-preceding 12 months in respect of which no adjustment has been made pursuant to Section 4.3(a)(iv); ExP equals the exercise or other consideration to be paid by the Holder upon the exercise of or conversion of "U"; MC equals Market Capitalization; MV equals Market Value per share of the Common Stock as of the date of conversion or exchange of "U"; 10 #Sh equals the number of shares of Common Stock receiving the distribution contemplated in Section 4.3(a)(vi) or subject to the tender offer contemplated in Section 4.3(a)(v); TOff equals the aggregate consideration that, together with (1) any cash and other consideration payable in a tender or exchange offer by the Issuer or any of its Subsidiaries for shares of Common Stock expiring within the then-preceding 12-months in respect of which no adjustment has been made and (2) the aggregate amount of any such all-cash distributions referred to in Section 4.3(a)(iv) to all Holders of shares of Common Stock within the then-preceding 12-months in respect of which no adjustment has been made; TOff/S equals the tender offer price, per share; TPur equals the number of shares purchased in the tender offer; Value equals the aggregate fair market value of the distribution described in Section 4.3(a)(vi), as determined in good faith by the Board of Directors of the Issuer; CP equals the Conversion Price immediately prior to the Conversion Price Adjustment Event; ACP equals the Conversion Price immediately after the Conversion Price Adjustment Event; (i) In the case of an event described in Sections 4.3(a)(i) or 4.3(a)(iii), the Conversion Price in effect immediately before such event shall be adjusted pursuant to the following formula: X/Y multiplied by CP=ACP.1 (ii) In the case of an event described in section 4.3(a)(ii), the Conversion Price in effect immediately before such event shall be adjusted pursuant to the following formula: X/(X+U ((MV-ExP)/MV)) - ------------------------ 1 For example, where X=12 million shares, and 500,000 shares are being issued in the Conversion Price Adjustment Event (Y=12,500,000), and CP is $32.00, the Adjusted Conversion Price (ACP) is $30.72. 11 multiplied by CP=ACP.2 If any options, warrants, convertible securities, or other rights of the nature described in Section 4.3(a)(ii) ("Rights") expire without exercise or conversion, the Conversion Price will be readjusted to the Conversion Price which would otherwise be in effect had the adjustment made upon the issuance of such Rights had been made on the basis of delivery of only the number of shares of Common Stock actually delivered upon the exercise or conversion of such Rights. (iii) In the case of an event described in Section 4.3(a)(iv), the Conversion Price in effect immediately before such event shall be adjusted pursuant to the following formula: CP-((Cash-12.5% MC)/C)=ACP.3 There will be no adjustment to the Conversion Price pursuant to Section 4.4(a)(iv) if (Cash-12.5% MC) is less than or equal to zero. - ----------------------- 2 For example, where X=12 million shares, and U=500,000 shares, MV is $40, ExP is $35, and CP is $32.00, the Adjusted Conversion Price (ACP) is $31.83. If ExP is $0, the Adjusted Conversion Price (ACP) is $30.72. 3 For example, where Cash distributed equals $20,000,000, Market Capitalization equals $100,000,000 (12.5% MC=$12,500,000), CP equals $32.00 and there are 2,000,000 shares of Preferred Stock outstanding (C), the Adjusted Conversion Price (ACP) is $28.25. 12 (iv) In the case of an event described in Section 4.4(a)(v), and if the tender offer price or exchange offer price per share is greater than Market Value, the Conversion Price in effect immediately before such event shall be adjusted pursuant to the following formula: CP-((TPur multiplied by (TOff/S-MV))/(#Sh-TPur))=ACP.4 There will be no adjustment to the Conversion Price pursuant to Clause 4.4(a)(v) if TOff/S is less than or equal to Market Value or if TPur multiplied by TOff/S is less than 12.5% of MC. (v) In the case of an event described in Section 4.4(a)(vi), the Conversion Price in effect immediately before such event shall be adjusted pursuant to the following formula: CP-(Value/#Sh)=ACP.5 An adjustment made pursuant to this Section 4.4 shall become effective retroactively: (x) in the case of a Conversion Price Adjustment Event described in Section 4.4(a)(i), (ii), (iv), or (vi), immediately following the close of business on the record date for the determination of Holders of Common Stock entitled to participate in such event; or (y) in the case of a Conversion Price Adjustment Event described in Section 4.4(a)(ii), the close of business on the day upon which such corporate action becomes effective; or (z) in the case of a Conversion Price Adjustment Event described in Section 4.4(a)(v), the close of business on the day of the completion of such tender offer or exchange offer. - ---------------------- 4 For example, where TOff/S is $45.00 at a time when MV is $35, CP equals $32.00, 1,000,000 shares were purchased in the tender offer (TPur), and there were 12,000,000 shares of the class outstanding (#SH), the Adjusted Conversion Price (ACP) is $31.09. 5 For example, where CP is $32.00, Value equals $1,500,000, and there were 12,000,000 shares of the class outstanding (#SH), ACP is $31.88. 13 (c) Notwithstanding anything herein to the contrary, no adjustment under this Section 4.4 need be made to the Conversion Price unless such adjustment would require an increase or decrease of at least 1% of the Conversion Price then in effect. Any lesser adjustment shall be carried forward and shall be made at the time, if ever, of and together with the next subsequent adjustment, which, together with any adjustment or adjustments so carried forward, shall amount to an increase or decrease of at least 1% of such Conversion Price. (d) Notwithstanding anything to the contrary contained in this Certificate of Designation, no Conversion Price adjustment will be made as a result of the issuance of Common Stock on conversion of the Preferred Stock. (e) Each event requiring adjustment to the Conversion Price shall require only a single adjustment even though more than one of the adjustment clauses set forth in Section 4.4(a), Section 4.5 or Section 4.6, may be applicable to such Conversion Price Adjustment Event. (f) If the Issuer shall fix a record date for the Holders of any class of its Capital Stock for the purpose of entitling them to receive a dividend or other distribution which would otherwise constitute a Conversion Price Adjustment Event, and shall thereafter and before the distribution to stockholders thereof legally abandon its plan to pay or deliver such dividend or distribution, then thereafter no adjustment in the Conversion Price then in effect shall be required by reason of the fixing of such record date. (g) Upon any increase or decrease in the Conversion Price, then, and in each such case, the Issuer promptly shall deliver to each registered Holder of Preferred Stock a certificate signed by an authorized officer of the Issuer, setting forth in reasonable detail the event requiring the adjustment and the method by which such adjustment was calculated and specifying the increased or decreased Conversion Price then in effect following such adjustment. (h) The Issuer reserves the right to make such reductions in the Conversion Price in addition to those required in the foregoing provisions as it considers to be advisable in order that any event treated for Federal income tax purposes as a dividend of stock or stock rights will not be taxable to the recipients. In the event the Issuer elects to make such a reduction in the Conversion Price, the Issuer will comply with the requirements of Rule 14e-1 14 under the 1934 Act, and any other securities laws and regulations thereunder if and to the extent that such laws and regulations are applicable in connection with the reduction of the Conversion Price. 4.4 In the event the Issuer distributes rights or warrants (other than those referred to in Section 4.4(a)(ii)) pro rata to all Holders of shares of Common Stock, so long as any such rights or warrants have not expired or been redeemed by the Issuer, the Holders of any Preferred Stock surrendered for conversion will, in the discretion of the Issuer and subject to the last paragraph of this Section 4.5, be entitled to receive upon such conversion, in addition to the shares of Common Stock then issuable upon such conversion (the "Conversion Shares"), a number of rights or warrants to be determined as follows: (a) if such conversion occurs on or prior to the date for the distribution to Holders of rights or warrants of separate certificates evidencing such rights or warrants (the "Distribution Date"), the same number of rights or warrants to which a Holder of a number of shares of Common Stock equal to the number of Conversion Shares is entitled at the time of such conversion in accordance with the terms and provisions applicable to the rights or warrants, and (b) if such conversion occurs after such Distribution Date, the same number of rights or warrants to which a Holder of the number of shares of Common Stock of the Issuer into which such Preferred Stock was convertible immediately prior to such Distribution Date would have been entitled on such Distribution Date in accordance with the terms and provisions of and applicable to the rights or warrants. In the event the Holders of the Preferred Stock are not entitled to receive such rights or warrants pursuant to Section 4.4(a) or 4.4(b), the Conversion Price will be subject to adjustment upon any declaration or distribution of such rights or warrants pursuant to Section 4.4, above. 4.5 (a) In case of: (i) any capital reorganization or reclassification or other change of outstanding shares of Common Stock (other than a change in par value, or from par value to no par value, or from no par value to par value), or 15 (ii) any consolidation or merger of the Issuer with or into another Person (other than a consolidation or merger in which the Issuer is the resulting or surviving Person and which does not result in any reclassification or change of outstanding Common Stock), or (iii) any sale, transfer or other conveyance to another Person of all or substantially all of the assets of the Issuer computed on a consolidated basis (other than the sale, transfer, assignment or distribution of shares of Capital Stock or assets to a Subsidiary) (any of the events described in Section 4.6(a) being referred to in this Section 4.6 as a "Transaction"), then the adjustment described in Section 4.5(b) will be made. (b) Each share of Preferred Stock then outstanding shall, without the consent of any Holder of Preferred Stock, become convertible only into the kind and amount of shares of stock or other securities (of the Issuer or another issuer) or property or cash receivable upon such Transaction by a Holder of the number of shares of Common Stock into which such share of Preferred Stock could have been converted immediately prior to such Transaction after giving effect to any adjustment event, provided, however that the adjustments described in Section 4.6 may apply upon the occurrence of a Change of Control. (c) The provisions of this Section 4.5 and any equivalent thereof in any such certificate similarly shall apply to successive Transactions. The provisions of this Section 4.5 shall be the sole right of Holders of Preferred Stock in connection with any Transaction and such Holders shall have no separate vote thereon. 4.6 (a) Upon a Change of Control, if the Market Value at such time is less than the Conversion Price, then the Conversion Price will be subject to a temporary adjustment for a period of 60 days such that the Conversion Price will be equal to the greater of: (i) the Market Value on the date on which a Change of Control event occurs, and (ii) 66.67% of the Market Value as of June 29, 1999. 16 (b) In lieu of issuing the shares of Common Stock issuable upon conversion in the event of a Change of Control, the Issuer may, at its option, make a cash payment equal to the greater 4.6(a)(i) and (ii) above, or any combination thereof. (c) In the event of a Change of Control, notice of such Change of Control shall be given, within five Business Days of the Change of Control Date, by the Issuer by first-class mail to each record Holder of shares of Preferred Stock, at such Holder's address as the same appears on the books of the Issuer. Each such notice shall state: (i) that a Change of Control has occurred; (ii) the last day on which the Change of Control Option may be exercised (the "Expiration Date"); (iii) the name and address of the paying agent; and (iv) the procedures that Holders must follow to exercise the Change of Control Option. (d) On or before the Expiration Date, each Holder of shares of Preferred Stock wishing to exercise the Change of Control option shall surrender the certificate or certificates representing the shares of Preferred Stock to be converted, in the manner and at the place designated in the notice described in Section 4.6(c), and on such date the cash or shares of Common Stock due to such Holder shall be delivered to the person whose name appears on such certificate or certificates as the owner thereof and each surrendered certificate shall be returned to authorized but unissued shares. Upon surrender (in accordance with the notice described in Section 4.6(c) of the certificate or certificates representing any shares to be so converted (properly endorsed or assigned for transfer, if the Issuer shall so require and the notice shall so state), such shares shall be converted by the Issuer at the Conversion Price as adjusted. (e) The foregoing provisions are not waivable by the Issuer. 4.7 In the case of any distribution by the Issuer to its stockholders of substantially all of its assets, each Holder of Preferred Stock will participate pro rata in such distribution based on the number of shares of Common Stock into which such Holders' shares of Preferred Stock would have been convertible immediately prior to such distribution, unless the amount of such distribution would result in a payment less than the Liquidation Preference, in which case the Liquidation Preference shall be paid. 4.8 If, as a result of any Conversion Price Adjustment Event, a Holder of the Preferred Stock becomes entitled to receive upon conversion shares of two or more classes of Capital Stock, the Issuer shall determine the reasonable allocation of the adjusted Conversion Price between the classes of Capital Stock. After such allocation, the Conversion Price of each class of Capital 17 Stock shall thereafter be subject to adjustment on terms applicable to the Preferred Stock in this Article 4. 1.1 4.9 The Issuer shall at all times reserve and keep available for issuance upon the conversion of the Preferred Stock, such number of its authorized but unissued shares of Common Stock as will from time to time be sufficient to permit the conversion of all outstanding shares of Preferred Stock, and shall take all action required to increase the authorized number of shares of Common Stock if at any time there shall be insufficient authorized unissued shares of Common Stock to permit such reservation or to permit the conversion of all outstanding shares of Preferred Stock. 4.10 The issuance or delivery of certificates for Common Stock upon the conversion of shares of Preferred Stock shall be made without charge to the converting Holder of shares of Preferred Stock for such certificates or for any tax in respect of the issuance or delivery of such certificates or the securities represented thereby, and such certificates shall be issued or delivered in the respective names of, or in such names as may be directed by, the Holders of the shares of Preferred Stock converted; provided, however, that the Issuer shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any such certificate in a name other than that of the Holder of the shares of Preferred Stock converted, and the Issuer shall not be required to issue or deliver such certificate unless or until the Person or Persons requesting the issuance or delivery thereof shall have paid to the Issuer the amount of such tax or shall have established to the reasonable satisfaction of the Issuer that such tax has been paid. 5. OPTIONAL REDEMPTION OF PREFERRED STOCK 5.1 (a) Shares of the Preferred Stock will not be redeemable prior to June 30, 2002. (b) On or after June 30, 2002, the Preferred Stock may be redeemed, in whole or in part, at the option of the Issuer, in cash, by delivery of fully paid and nonassessable shares of Common Stock or a combination thereof, upon Redemption Notice given not less than 20 days' notice nor more than 60 days' prior to the Redemption Date, during the 12-month periods commencing on June 30 of the years indicated below, at the following Redemption Prices per share, plus in each case all accumulated and unpaid dividends to the Redemption Date: 18 Redemption Year Price Per Share ---- --------------- 2002 ......................................... $52.00 2003 ......................................... $51.50 2004 ......................................... $51.00 2005 ......................................... $50.50 2006 and thereafter .......................... $50.00 (c) In the event that fewer than all the outstanding shares of the Preferred Stock are to be redeemed, the shares to be redeemed will be determined pro rata or by lot. (d) If the Issuer elects to pay the Redemption Price in shares of Common Stock, the number of shares of Common Stock to be distributed will be calculated by dividing the aggregate Redemption Price payable to any Holder by the Market Value Amount as of the Redemption Notice Date. (e) From and after the applicable Redemption Date (unless the Issuer shall be in default of payment of the Redemption Price), dividends on the shares of the Preferred Stock to be redeemed on such Redemption Date shall cease to accumulate, such shares shall no longer be deemed to be outstanding, and all rights of the Holders thereof as stockholders of the Issuer (except the right to receive the Redemption Price and accumulated dividend amounts and liquidation penalties, if any through the Redemption Date) will cease. 5.2 If any dividends on the Preferred Stock are in arrears, no shares of the Preferred Stock will be redeemed unless all dividends in arrears are paid or all outstanding shares of the Preferred Stock are simultaneously redeemed. 5.3 In the event the Issuer shall elect to redeem shares of the Preferred Stock pursuant to Section 5.1 hereof, the Issuer must provide the Holders with the Redemption Notice as described in Section 5.1(b), and (a) (i) On or before any Redemption Date, each Holder of shares of Preferred Stock to be redeemed shall surrender the certificate or certificates representing such shares of Preferred Stock (properly endorsed or assigned, or transferred, if the Issuer shall so require and the Redemption Notice shall so state) to the Issuer or the Redemption Agent (if appointed) in the manner and at the place designated in the Redemption Notice. 19 (ii) On the Redemption Date, the Issuer or the Redemption Agent, as applicable, shall pay or deliver to the Holder whose name appears on such certificate or certificates as the owner thereof, the full Redemption Price due such Holder in cash, in fully paid and nonassessable shares of Common Stock or in a combination thereof. (iii) The shares represented by each certificate to be surrendered shall be automatically (and without any further action of the Issuer or the Holder) canceled as of the Redemption Date whether or not certificates for such shares are returned to the Issuer and returned to authorized but unissued shares of preferred stock of no series. (iv) If fewer than all the shares represented by any such certificate are to be redeemed, a new certificate shall be issued representing the unredeemed shares, without cost to the Holder, together with the amount of cash, if any, in lieu of fractional shares. (b) If a Redemption Notice shall have been given as provided in Section 5.1, all rights of the Holders thereof as stockholders of the Issuer with respect to shares so called for redemption (except for the right to receive from the Issuer the Redemption Price) shall cease either (i) from and after the Redemption Date (unless the Issuer shall default in the payment of the Redemption Price, in which case such rights shall not terminate at the Redemption Date) or (ii) if the Issuer shall so elect and state in the Redemption Notice, from and after the time and date (which date shall be the Redemption Date or an earlier date not less than 20 days after the date of mailing of the Redemption Notice) on which the Issuer shall irrevocably deposit in trust for the Holders of the shares to be redeemed with a designated Redemption Agent as paying agent sufficient to pay at the office of such paying agent, on the Redemption Date, the Redemption Price. Any money or shares of Common Stock so deposited with such Redemption Agent which shall not be required for such redemption shall be returned to the Issuer forthwith. Subject to applicable escheat laws, any moneys or shares of Common Stock so set aside by the Issuer and unclaimed at the end of one year from the Redemption Date shall revert to the general funds of the Issuer, after which reversion the Holders of such shares so called for redemption shall look only to the general funds of the Issuer for the payment of the Redemption Price without interest. Any interest accrued on funds held by the Redemption Agent shall be paid to the Issuer from time to time. 20 (c) In the event that fewer than all the outstanding shares of the Preferred Stock are to be redeemed, the shares to be redeemed shall be determined pro rata or by lot, as determined by the Issuer, except that the Issuer may redeem such shares held by any Holder of fewer than 100 shares (or shares held by Holders who would hold fewer than 100 shares as a result of such redemption), as may be determined by the Issuer. 6. LIQUIDATION PREFERENCE 6.1 Upon any voluntary or involuntary liquidation, dissolution or winding up of the Issuer, Holders of the Preferred Stock will be entitled to be paid, out of assets of the Issuer available for distribution the Liquidation Preference per share plus an amount in cash equal to all accumulated and unpaid dividends thereon to the date fixed for liquidation, dissolution or winding up (including an amount equal to a prorated dividend for the period from the last dividend payment date to the date fixed for liquidation, dissolution or winding up), before any distribution is made on any Junior Securities, including, without limitation, the Common Stock. 6.2 If, upon any voluntary liquidation, dissolution or winding-up of the Issuer, the amounts payable with respect to the liquidation performance of the Preferred Stock and all other Parity Securities are not paid in full, the Holders of the Preferred Stock and the Parity Securities will share pro rata in proportion to the full distribution to which each is entitled. 6.3 After payment of the full amount of the Liquidation Preference to which they are entitled, the Holders of shares of the Preferred Stock will have no right or claim to any of the remaining assets of the Issuer. 6.4 Neither the sale, conveyance, exchange or transfer (for cash, shares of stock, securities or other consideration) of all or substantially all of the property or business of the Issuer (other than in connection with the winding up of its business), nor the merger or consolidation of the Issuer with or into any other corporation, will be deemed to be a dissolution, liquidation, or winding up, voluntary or involuntary, of the Issuer. 7. VOTING RIGHTS 7.1 Holders of the Preferred Stock have no voting rights with respect to general corporate matters except as provided by law or as set forth herein. 21 7.2 (a) If dividends or Quarterly Return Amounts (as defined in the Securities Account Agreement) payable on the Preferred Stock are in arrears and unpaid for six quarterly periods, the Holders of the Preferred Stock voting separately as a class with the shares of any other preferred stock or preference securities having similar voting rights (the "Voting Rights Class") will be entitled at the next regular or special meeting of stockholders of the Issuer to elect two directors of the Issuer to fill newly created directorships. (b) Such voting rights may be exercised at a special meeting of the holders of the shares of the Voting Rights Class, called as hereinafter provided, or at any annual meeting of stockholders held for the purpose of electing directors, and thereafter at each such annual meeting until such time as all dividends in arrears on the shares of Preferred Stock shall have been paid in full, at which time or times such voting rights and the term of the directors elected pursuant to Section 7.2(a) shall terminate. (c) At any time when such voting rights shall have vested in holders of shares of the Voting Rights Class described in Section 7.2(a), a proper officer of the Issuer may call, and, upon the written request of the record holders of shares representing twenty-five percent (25%) of the voting power of the shares then outstanding of the Voting Rights Class, addressed to the Secretary of the Issuer, shall call a special meeting of the holders of shares of the Voting Rights Class. Such meeting shall be held at the earliest practicable date upon the notice required for annual meetings of stockholders at the place for holding annual meetings of stockholders of the Issuer, or, if none, at a place designated by the Board of Directors. Notwithstanding the provisions of this Section 7.2(c), no such special meeting shall be called during a period within the 60 days immediately preceding the date fixed for the next annual meeting of stockholders, in which such case the election of directors pursuant to Section 7.2(a) shall be held at such annual meeting of stockholders. (d) At any meeting held for the purpose of electing directors at which the holders of the Voting Rights Class shall have the right to elect directors as provided herein, the presence in person or by proxy of the holders of shares representing more than fifty percent (50%) in voting power of the then outstanding shares of the Voting Rights Class shall be required and shall be sufficient to constitute a quorum of such class for the election of directors by such class. (e) Any director elected pursuant to the voting rights created under this Section 7.2 shall hold office until the next annual meeting of stockholders (unless such term has previously terminated pursuant to Section 7.2(b)) and any 22 vacancy in respect of any such director shall be filled only by vote of the remaining director so elected by holders of the Voting Rights Class, or if there be no such remaining director, by the holders of shares of the Voting Rights Class at a special meeting called in accordance with the procedures set forth in this Section 7.2, or, if no such special meeting is called, at the next annual meeting of stockholders. Upon any termination of such voting rights, the term of office of all directors elected pursuant to this Section 7 shall terminate. 7.3 The affirmative vote or consent of the Holders of at least 66-2/3% of the outstanding Preferred Stock will be required for: (a) the issuance of any class of Senior Securities (or security convertible into Senior Securities or evidencing a right to purchase any shares or any class or series of Senior Securities), and (b) amendments to the Issuer's Certificate of Incorporation that would affect adversely the rights of Holders of the Preferred Stock, including, without limitation, (i) any increase in the authorized number of shares of all series of preferred stock in excess of 3,000,000 shares and (ii) the issuance of any shares of Preferred Stock in excess of the number of shares of such stock authorized in this Certificate of Designation as of the date of the original issuance of the Preferred Stock. (c) In all such cases each share of Preferred Stock shall be entitled to one vote. 7.4 Except as set forth in this Certificate of Designation, the creation, authorization or issuance of any shares of Junior Securities or Parity Securities or an increase or decrease in the amount of authorized Capital Stock of any class, including any preferred stock, shall not require the consent of the Holders of the Preferred Stock and shall not be deemed to affect adversely the rights, preferences, privileges or voting rights of Holders of shares of the Preferred Stock. 23 8. AMENDMENT, SUPPLEMENT AND WAIVER 8.1 Without the consent of any Holder of the Preferred Stock, subject to the requirements of the Delaware General Corporation Law, the Issuer may amend or supplement this Certificate of Designation to cure any ambiguity, defect or inconsistency, to provide for uncertificated Preferred Stock in addition to or in place of certificated Preferred Stock, to provide for the assumption of the Issuer's obligations to Holders of the Preferred Stock in the case of a merger or consolidation, to make any change that would provide any additional rights or benefits to the Holders of the Preferred Stock or that does not adversely affect the legal rights under this Certificate of Designation of any such Holder. 9. CERTAIN DEFINITIONS Set forth below are certain defined terms used in this Certificate of Designation. 9.1 "Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations thereunder. 9.2 "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with"), as used with respect to any person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such person, whether through the ownership of voting securities, by agreement of or otherwise. 9.3 "Business Day" means any day other than a Legal Holiday. 9.4 "Capital Stock" means any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock or partnership or membership interests, whether common or preferred. 9.5 "Closing Price" for each day shall be the last sales price or in case no such reported sales take place on such day, the average of the last reported bid and asked price, in either case on the principal U.S. national securities exchange on which the shares of Common Stock are admitted to trading or listed, or if not listed or admitted to trading on such exchange, the representative closing bid price as reported by the Nasdaq National Market, or if the Nasdaq 24 National Market is no longer reporting such information, or if not so available, the fair market price as determined, in good faith, by our Board of Directors. 9.6 "Change of Control" means: (a) the sale, lease, transfer, conveyance or other disposition of all or substantially all of the assets of the Issuer to any "person" or "group" (within the meaning of Sections 13(d)(3) and 14(d)(2) of the Exchange Act or any successor provision to either of the foregoing, including any group acting for the purpose of acquiring, holding or disposing of securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act) other than Existing Shareholders (except in connection with a liquidation or dissolution of the Issuer that does not constitute a Change of Control under clause (b) below), (b) the approval by the requisite shareholders of the Issuer of a plan of liquidation or statutory dissolution (which shall not be construed to include a plan or merger or consolidation) of the Issuer, unless Existing Shareholders "beneficially own" (as defined in Rule 13d-3 under the Exchange Act) at least the same percentage of voting power after the consummation of such plan as before or otherwise retain the right or ability, by voting power, to control the Person that acquire the proceeds of such liquidation or dissolution, (c) any "person" or "group" (within a meaning of Sections 13(d)(3) and 14(d)(2) of the Exchange Act or any successor provision to either of the foregoing, including any group acting for the purpose of acquiring, holding or disposing of securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than Existing Shareholders, becomes the "beneficial owner" (as so defined) of more than thirty-five percent (35%) of the total voting power of all classes of the Voting Stock of the Issuer or a successor and/or warrants or options to acquire such Voting Stock, calculated on a fully diluted basis, provided that Existing Shareholders "beneficially own" (as so defined) in the aggregate a percentage of such Voting Stock or warrants having a lesser percentage of voting power than such other "person" or "group" and do not have the right or ability by voting power, contract or otherwise to elect or designate for election a majority of the Issuer's Board of Directors, or (d) during any period of two consecutive years, individuals who at the beginning of such period constituted the Issuer's Board of Directors (together with any new directors whose nomination for election or appointment by such board or whose election by the stockholders of the Issuer was approved by a vote of the Existing Shareholders or 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 Issuer's Board of Directors then in office. Notwithstanding clause (c) above, (i) the acquisition by a Qualified Investor of forty-nine percent (49%) or less of the Voting Stock of the Issuer shall not constitute a Change of Control, and (ii) a merger or consolidation that would otherwise constitute a Change of 25 Control hereunder shall not constitute a Change of Control if at least ninety percent (90%) of the consideration consists of common stock that is, or upon issuance, will be traded on a United States national securities exchange or quoted on the Nasdaq National Market. 9.7 "Common Stock" means the Issuer's authorized $.01 par value Class A Common Stock. 9.8 The "Conversion Date" shall be the date the Issuer or the Transfer Agent receives the Conversion Notice. 9.9 The "Conversion Notice" is written notice from the Holder to the Issuer stating that the Holder elects to convert all or a portion of the shares of Preferred Stock represented by certificates delivered to the Issuer or the Transfer Agent contemporaneously. The Conversion Notice will specify or include: (i) The number of shares of Preferred Stock being converted by the Holder, (ii) The name or names (with address and taxpayer identification number) in which a certificate or certificates for shares of Common Stock are to be issued, (iii) A written instrument or instruments of transfer in form reasonably satisfactory to the Issuer or the Transfer Agent, duly executed by the Holder or its duly authorized legal representative, or in blank, and (iv) Transfer tax stamps or funds thereof, if required pursuant to Section 4.9. 9.10 The "Conversion Price" shall initially be $84.30, subject to adjustments as set forth in Section 4.3. 9.11 "Conversion Price Adjustment Events" are any of those events specified in Section 4.3(a). 9.12 "Dividend Payment Date" is as defined in Section 2.1, above. 9.13 "Dividend Payment Record Date" is as defined in Section 2.1, above. 26 9.14 "Equity Interests" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock). 9.15 "Exchange Act" means the Securities Exchange Act of 1934, as amended. 9.16 "Existing Shareholders" means Albert M. Carollo, Lawrence F. DeGeorge, 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, Apollo Cable Partners, L.P. and Apollo Advisors L.P. (collectively, the "Principals") and 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, (1) family partnerships, corporations or other entities holding our equity interests, the transferee(s) or the surviving entities or entities solely for the benefit of such Principal or any of the Persons listed in (2) through (5) below, (2) such Principal's spouse, (3) such Principal's children, grandchildren, stepchildren, step grandchildren and their spouses, (4) heirs, legatees and divisees, and (5) trusts primarily 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). 9.17 "Holder" means a Person in whose name shares of Capital Stock is registered. 9.18 "Issuer" means United International Holdings, Inc., a Delaware corporation. 9.19 "Junior Security" is as defined in Section 3.1. 9.20 "Legal Holiday" means a Saturday, a Sunday or a day on which banking institutions in the City of New York or at a place payment is to be received are 27 authorized by law, regulation or executive order to remain closed. If a payment date is 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. 9.21 "Liquidation Preference" means $1,000 per share of Preferred Stock. 9.22 "Market Capitalization" means the product of the then-current market price times the total number of shares of Common Stock then outstanding. 9.23 "Market Value" means, as of any date, the average of the daily Closing Price for the five consecutive Trading Days ending on such date. 9.24 "Market Value Amount" means (i) 97% of the Market Value of the Common Stock, if a shelf registration statement registering the resale of such shares is effective or the shares of Common Stock are eligible for resale pursuant to Rule 144(k) under the Act, or (ii) 93% of the Market Value of the Common Stock, in each case determined as of the date of such notice. 9.25 "Notice Date" means the tenth day prior to a Deposit Payment Date. 9.26 "Parity Security" is as defined in Section 3.1. 9.27 "Person" means any individual, corporation, partnership, joint venture, association, joint-stock issuer, interest, trust or unincorporated organization (including any subdivision or ongoing business of any such entity or substantially all of the assets of any such entity, subdivision or business). 9.28 "Preferred Stock" means the Preferred Stock authorized in this Certificate of Designation. 9.29 "Qualified Investor" means an investor approved by the Board of Directors of the Company, which has debt securities rated by a nationally recognized statistical rating organization in one of its four highest generic rating categories and either (i) is in the telecommunications industry or (ii) engages in a business which will benefit from strategic synergies from an investment in the Company. 28 9.30 "Redemption Agent" means that Person, if any, appointed by the Issuer to hold funds deposited by the Issuer in trust to pay to the Holders of shares to be redeemed. 9.31 "Redemption Date" means that certain date set forth in the Redemption Notice on which date the redemption of the Preferred Stock is completed. 9.32 "Redemption Notice" means that notice to be given by the Issuer to the Holders notifying the Holders as to the redemption, in whole or in part, of the Preferred Stock pursuant to Article 5 hereof. The Redemption Notice shall include the following information: (i) the Redemption Date and the time of day on such date; (ii) the total number of shares of Preferred Stock to be redeemed and, if fewer than all the shares held by such Holder are to be redeemed, the number of such shares to be redeemed from such Holder; (iii) the Redemption Price (whether to be paid in cash or shares of Common Stock); (iv) the place or places where certificates for such shares are to be surrendered for payment of the Redemption Price and delivery of certificates representing shares of Common Stock (if the Issuer so chooses); (v) that dividends on the shares to be redeemed will cease to accrue on such Redemption Date unless the Issuer defaults in the payment of the Redemption Price; and (vi) the name of any bank or trust company, if any, performing the duties of Redemption Agent. Redemption Notice shall be given by first-class mail to each record Holder of the shares to be redeemed, at such holder's address as the same appears on the books of the Company. 9.33 "Redemption Notice Date" means the date the Redemption Notice is first mailed or delivered to any Holder. 9.34 "Redemption Price" means that price established for redemption of the Preferred Stock established in Section 5.1(b) hereof. 9.35 "Securities Account" means the account created pursuant to the Securities Account Agreement. 9.36 "Securities Account Agreement" means the Securities Account Agreement dated July 6, 1999 between the Company and Firstar Bank of Minnesota, N.A., as deposit agent. 9.37 "Senior Securities" is as defined in Section 3.1. 9.38 "Subsidiary" means, with respect to any person, any corporation, association or other business entity of which more than 50% of the total voting 29 power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such person or one or more of the other Subsidiaries of such person or a combination thereof. 9.39 The "Transfer Agent" shall be as established pursuant to Article 11 hereof. 9.40 "Trading Day" shall mean any business day on which the Nasdaq national Market (or any U.S. national securities exchange or quotation system on which the Common Stock is then listed) is open for the transaction of business. 9.41 "Voting Stock" means with respect to any Person, Capital Stock of any class or kind ordinarily having the power to vote for the election of directors, managers or other voting members of the governing body of such Person. 10. TRANSFER AGENT AND REGISTRAR The duly appointed Transfer Agent and registrar for the Preferred Stock shall be Firstar Bank of Minnesota, N.A.. The Issuer may, in its sole discretion, remove the Transfer Agent in accordance with the agreement between the Issuer and the Transfer Agent; provided that the Issuer shall appoint a successor transfer agent who shall accept such appointment prior to the effectiveness of such removal. 11. OTHER PROVISIONS 11.1 With respect to any notice to a Holder of shares of the Preferred Stock required to be provided hereunder, neither failure to mail such notice, nor any defect therein or in the mailing thereof, to any particular Holder shall affect the sufficiency of the notice or the validity of the proceedings referred to in such notice with respect to the other Holders or affect the legality or validity of any distribution, rights, warrant, reclassification, consolidation, merger, conveyance, transfer, dissolution, liquidation or winding up, or the vote upon any such action. Any notice which was mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the Holder receives the notice. 11.2 Shares of Preferred Stock issued and reacquired will be retired and canceled promptly after reacquisition thereof and, upon compliance with the applicable requirements of Delaware law, have the status of authorized but unissued shares of preferred stock of the Issuer undesignated as to series and may with any and all other authorized but unissued shares of preferred stock of 30 the Issuer be designated or redesignated and issued or reissued, as the case may be, as part of any series of preferred stock of the Issuer except that any issuance or reissuance of shares of Preferred Stock must be in compliance with this Certificate of Designation. 11.3 In the Issuer's discretion, no fractional shares of Common Stock or securities representing fractional shares of Common Stock will be issued upon conversion, redemption, or as dividends payable in the Preferred Stock. Any fractional interest in a share of Common Stock resulting from conversion, redemption, or dividend payment will be paid in cash based on the last reported sale price of the Common Stock on the Nasdaq National Market (or any national securities exchange or authorized quotation system on which the Common Stock is then listed) at the close of business on the trading day next preceding the date of conversion or such later time as the Issuer is legally and contractually able to pay for such fractional shares. 11.4 The shares of Preferred Stock shall be issuable in whole shares. 11.5 All notices periods referred to herein shall commence on the date of the mailing of the applicable notice. 11.6 Until registered under the Securities Act of 1933, as amended, or the expiration of the holding period with respect to such shares of Preferred Stock set forth in clause (k) of Rule 144 promulgated under the Securities Act, each stock certificate for the Preferred Stock shall bear the legend in substantially the following form (unless otherwise agreed to by the Company and the holder thereof): THIS SECURITY (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, EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER: (1) REPRESENTS THAT, IN CONNECTION WITH EXEMPT RESALES OF THE DEPOSITARY SHARES BY DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION, GOLDMAN, SACHS & CO., CREDIT SUISSE FIRST BOSTON CORPORATION AND SALOMON SMITH BARNEY, INC. (THE "INITIAL PURCHASERS"), IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"); 31 (2) AGREES THAT, IN CONNECTION WITH RESALES AND TRANSFERS OF THIS SECURITY OTHER THAN EXEMPT RESALES OF THE DEPOSITARY SHARES BY THE INITIAL PURCHASERS, IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (C) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY), OR (D) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN ADDITION, IN THE CASE OF RESALES OF DEPOSITARY SHARES OR PREFERRED STOCK, (A) 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 OR (B) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIES ACT 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 SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERM "OFFSHORE TRANSACTION" HAS THE MEANING GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. 32 IN WITNESS WHEREOF, United International Holdings, Inc. caused this Certificate to be signed and attested by this 2nd day of July, 1999. UNITED INTERNATIONAL HOLDINGS, INC. By: /s/ Ellen P. Spangler --------------------------------------------- Name: Ellen P. Spangler Title: Senior Vice President and Secretary Attest: /s/ Tina Wildes - ----------------------------- Name: Tina Wildes Title: Senior Vice President 33 EX-10 3 EXHIBIT 10.1-DEPOSIT AGREEMENT UNITED INTERNATIONAL HOLDINGS, INC. Firstar Bank of Minnesota, N.A., as Depositary AND THE HOLDERS FROM TIME TO TIME OF THE DEPOSITARY RECEIPTS DESCRIBED HEREIN DEPOSIT AGREEMENT FOR 7% SERIES C SENIOR CUMULATIVE CONVERTIBLE PREFERRED STOCK Dated as of July 6, 1999
TABLE OF CONTENTS Page ARTICLE I Definitions......................................................................... 1 ARTICLE II Book-Entry, Form of Receipts, Deposit of Preferred Stock, Execution and Delivery, Transfer, Surrender and Redemption of Receipts ..................................... 3 Section 2.1 Book-Entry Form; Form and Transfer of Receipts....................... 3 Section 2.2 Deposit of Preferred Stock; Execution and Delivery of Receipts in Respect Thereof.......................................... 5 Section 2.3 Redemption and Conversion of Preferred Stock......................... 7 Section 2.4 Registration of Transfer of Receipts................................. 11 Section 2.5 Surrender of Receipts and Withdrawal of Preferred Stock.............. 11 Section 2.6 Limitations on Execution and Delivery, Transfer, Surrender and Exchange of Receipts................................... 13 Section 2.7 Lost Receipts, etc................................................... 13 Section 2.8 Cancellation and Destruction of Surrendered Receipts............................................................. 13 Section 2.9 Interchangeability of Book-Entry Receipts and Receipts in Physical, Certificated Form.............................. 14 ARTICLE III Certain Obligations of Holders of Receipts and the Company.......................... 14 Section 3.1 Filing Proofs, Certificates and Other Information.................... 14 Section 3.2 Payment of Taxes or Other Governmental Charges....................... 15 Section 3.3 Warranty as to Preferred Stock....................................... 15 ARTICLE IV The Deposited Securities; Notices................................................... 15 Section 4.1 Cash and Common Stock Distributions.................................. 15 Section 4.2 Distributions Other than Cash, Rights, Preferences or Privileges........................................................ 16 Section 4.3 Subscription Rights, Preferences or Privileges....................... 17 Section 4.4 Notice of Dividends, etc.; Fixing of Record Date for Holders of Receipts.............................................. 18 Section 4.5 Voting Rights........................................................ 18 Section 4.6 Inspection of Reports................................................ 19 Section 4.7 Lists of Receipt Holders............................................. 19 Section 4.8 Tax and Regulatory Compliance........................................ 19 Section 4.9 Withholding.......................................................... 19 i ARTICLE V The Depositary, the Depositary's Agents, the Registrar and the Company..................................................................... 20 Section 5.1 Maintenance of Offices, Agencies and Transfer Books by the Depositary; Registrar......................................... 20 Section 5.2 Prevention of or Delay in Performance by the Depositary, the Depositary's Agents, the Registrar or the Company.................... 21 Section 5.3 Obligations of the Depositary, the Depositary's Agents, the Registrar and the Company................................ 21 Section 5.4 Resignation and Removal of the Depositary; Appointment of Successor Depositary.................................. 23 Section 5.5 Corporate Notices and Reports........................................ 24 Section 5.6 Indemnification by the Company....................................... 24 Section 5.7 Charges and Expenses................................................. 24 ARTICLE VI Amendment and Termination........................................................... 25 Section 6.1 Amendment............................................................ 25 Section 6.2 Termination.......................................................... 25 ARTICLE VII Miscellaneous....................................................................... 26 Section 7.1 Counterparts......................................................... 26 Section 7.2 Exclusive Benefit of Parties......................................... 27 Section 7.3 Invalidity of Provisions............................................. 27 Section 7.4 Notices.............................................................. 27 Section 7.5 Depositary's Agents.................................................. 28 Section 7.6 Holders of Receipts are Parties...................................... 28 Section 7.7 Governing Law........................................................ 28 Section 7.8 Inspection of Deposit Agreement...................................... 28 Section 7.9 Headings............................................................. 28
ii DEPOSIT AGREEMENT DEPOSIT AGREEMENT dated as of July 6, 1999, among United International Holdings, Inc., a Delaware corporation doing business as UnitedGlobalCom (the "Company"), Firstar Bank of Minnesota, N.A., as Depositary, and the holders from time to time of the Receipts (as hereinafter defined) issued hereunder. WHEREAS, it is desired to provide, as hereinafter set forth in this Deposit Agreement, for the deposit of shares of the Preferred Stock (as hereinafter defined) of the Company with the Depositary for the purposes set forth in this Deposit Agreement and for the issuance hereunder of Receipts evidencing Depositary Shares (as hereinafter defined) in respect of the Preferred Stock so deposited; and WHEREAS, the Receipts are to be substantially in the form of Exhibit A annexed hereto, with appropriate insertions, modifications and omissions, as hereinafter provided in this Deposit Agreement. NOW, THEREFORE, in consideration of the premises contained herein, the parties hereto agree as follows: ARTICLE I Definitions The following definitions shall for all purposes, unless otherwise indicated, apply to the respective terms used in this Deposit Agreement. Terms not otherwise defined herein shall be given the meaning assigned to such terms in the Certificate. "Beneficial Owner" shall have the meaning set forth in Section 2.1 hereof. "Certificate" shall mean the Certificate of Designation filed with the Secretary of State of the State of Delaware establishing the Preferred Stock as a series of preferred stock of the Company designated as 7% Series C Senior Cumulative Convertible Preferred Stock." "Common Stock" shall mean the Company's Class A Common Stock, par value $0.01 per share, or any security into which such Common Stock may be converted. "Company" shall mean United International Holdings, Inc., a Delaware corporation, and its successors. "Deposit Agreement" shall mean this Deposit Agreement, as amended, modified or supplemented from time to time. "Depositary" shall mean Firstar Bank of Minnesota, N.A., and any successor as Depositary hereunder. "Depositary Shares" shall mean Depositary Shares, each representing ownership of one-twentieth of a share of the Preferred Stock deposited with the Depositary under this Deposit Agreement, all as evidenced by a Receipt. Subject to the terms of this Deposit Agreement, each owner of a Depositary Share is entitled, in proportion to the applicable fraction of a share of Preferred Stock represented by such Depositary Share, to all the rights, preferences and privileges of the Preferred Stock represented by such Depositary Share, including dividend, voting, redemption, conversion and liquidation rights and subject, proportionately, to all of the limitations of the Preferred Stock represented thereby, contained in the Certificate, and to the benefits of all obligations of the Company under the Certificate. "Depositary's Agent" shall mean any agent appointed by the Depositary pursuant to Section 7.5. "Depositary's Office" shall mean the corporate trust office of the Depositary in New York, New York, at which at any particular time its depositary receipt business shall be administered. "DTC" shall have the meaning set forth in Section 2.1. "DTC Receipt" shall have the meaning set forth in Section 2.1. "Officer's Certificate" shall mean a certificate signed by the Chairman of the Board, the President or any Vice President of the Company and delivered to the Depositary. "Preferred Stock" shall mean the Company's 7% Series C Senior Cumulative Convertible Preferred Stock, par value $0.01 per share. "Receipt" shall mean one of the Depositary Receipts issued hereunder by the Depositary, whether in definitive or temporary form, evidencing interests held in Depositary Shares, in substantially the form set forth in Exhibit A hereto. 2 Wherein the context requires, the term "Receipt" shall be deemed to include the DTC Receipt. "Record Holder" as applied to a Receipt shall mean the person in whose name a Receipt is registered on the books of the Depositary maintained for such purpose. "Redemption Date" shall have the meaning specified in Section 2.3(a). "Securities Act" shall mean the Securities Act of 1933, as amended. ARTICLE II Book-Entry, Form of Receipts, Deposit of Preferred Stock, Execution and Delivery, Transfer, Surrender and Redemption of Receipts Section 2.1 BOOK-ENTRY FORM; FORM AND TRANSFER OF RECEIPTS. The Company and the Depositary shall make application to The Depository Trust Company ("DTC") for acceptance of all or a portion of the Receipts for its book-entry settlement system. The Company hereby appoints the Depositary acting through any authorized officer thereof as its attorney-in-fact, with full power to delegate, for purposes of executing any agreements, certifications or other instruments or documents necessary or desirable in order to effect the acceptance of such Receipts for DTC eligibility, including, but not limited to, a letter of representations, in form satisfactory to the Company, the Depositary and DTC. So long as the Receipts are eligible for book-entry settlement with DTC, except as provided for in Section 2.9 of this Deposit Agreement, or unless otherwise required by law, all Depositary Shares to be issued and sold in reliance on Rule 144A are expected to be eligible for trading in the Private Offerings, Resales and Trading Through Automated Linkages ("PORTAL") market of the National Association of Securities Dealers, Inc. with book-entry settlement through DTC, shall be represented by a single receipt (the "DTC Receipt") which shall be deposited with DTC (or its custodian) evidencing all such Depositary Shares and registered in the name of the nominee of DTC (initially expected to be Cede & Co.). Firstar Bank of Minnesota, N.A. or such other entity as is agreed to by DTC may hold the DTC Receipt as custodian for DTC. During any period in which any Depositary Shares are evidenced by the DTC Receipts, except as expressly provided for in the following paragraph and in Section 2.9 of this Deposit Agreement, Beneficial Owners acquiring Depositary Shares, issued and sold in reliance on Rule 144A with book-entry settlement through DTC, shall not receive or be entitled to receive physical delivery of the Receipts representing their ownership interest in such Depositary Shares. Ownership of beneficial interests 3 in the DTC Receipt ("Beneficial Owners") shall be shown on, and the transfer of such ownership shall be effected through, records maintained by (i) DTC or its nominee for such DTC Receipt, or (ii) institutions that have accounts with DTC. If DTC subsequently ceases to make its book-entry settlement system available for the Receipts, the Company may instruct the Depositary regarding making other arrangements for book-entry settlement. In the event that the Receipts are not eligible for, or it is no longer necessary to have the Receipts available in book-entry form, the Depositary shall provide written instructions to DTC to deliver to the Depositary for cancellation the DTC Receipt, and the Company shall instruct the Depositary to deliver to the Beneficial Owners of the Depositary Shares previously evidenced by the DTC Receipt definitive Receipts in physical form evidencing such Depositary Shares. Such definitive Receipts shall be in the form annexed hereto as Exhibit A with appropriate insertions, modifications and omissions, as hereafter provided. The Receipts shall be typewritten, in the case of the DTC Receipt, and otherwise shall, upon notice by the Company to the Depositary, be definitive Receipts which shall be engraved or printed or lithographed on steel-engraved borders and shall be substantially in the form set forth as Exhibit A annexed to this Deposit Agreement, with appropriate insertions, modifications and omissions, as hereinafter provided. The DTC Receipt shall bear such legend or legends as may be required by DTC in order for it to accept the Depositary Shares for its book-entry settlement system. Until such time as the Receipts are so engraved or printed or lithographed in accordance with the preceding sentence, the Depositary, upon the written order of the Company or any holder of Preferred Stock, as the case may be, delivered in compliance with Section 2.2, shall execute and deliver temporary Receipts which are printed, lithographed, typewritten, mimeographed or otherwise substantially identical to (and entitling the Record Holders thereof to all the rights pertaining to) the definitive Receipts in lieu of which they are issued, and with such appropriate insertions, omissions, substitutions and other variations as the persons executing such Receipts may determine, as evidenced by their execution of such Receipts. After the preparation of definitive Receipts, the temporary Receipts shall be exchangeable for definitive Receipts upon surrender of the temporary Receipts at the Depositary's Office, without charge to the Record Holder. Upon surrender for cancellation of any one or more temporary Receipts, the Depositary shall execute and deliver in exchange therefor definitive Receipts representing the same number of Depositary Shares as represented by the surrendered temporary Receipt or Receipts. Such exchange shall be made at the Company's expense and without any charge therefor to the Record Holder of the Receipts. Until so exchanged, the temporary Receipts shall in all respects be entitled to the same benefits under this Deposit Agreement, and with respect to the Preferred Stock, as definitive Receipts. 4 Receipts shall be executed by the Depositary by the manual signature of a duly authorized signatory of the Depositary; provided, that such signature may be a facsimile if a registrar for the Receipts (other than the Depositary) shall have been appointed by the Depositary and such Receipts are countersigned by manual signature of a duly authorized signatory of such registrar. No Receipt shall be entitled to any benefits under this Deposit Agreement or be valid or obligatory for any purpose unless it shall have been executed manually by a duly authorized signatory of the Depositary or, if a registrar for the Receipts (other than the Depositary) shall have been appointed, by manual or facsimile signature of a duly authorized signatory of the Depositary and countersigned manually by a duly authorized signatory of such registrar. The Depositary shall record on its books each Receipt so signed and delivered as hereinafter provided. Receipts shall be in denominations of any number of whole Depositary Shares. Receipts may be endorsed with or have incorporated in the text thereof such legends or recitals or changes not inconsistent with the provisions of this Deposit Agreement (in each case as set forth in an Officer's Certificate delivered to the Depositary) as may be required by the Company or the Depositary or required to comply with any applicable law or any regulation or with the rules and regulations of any securities exchange upon which the Preferred Stock, the Depositary Shares or the Receipts may be listed or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Receipts are subject. Subject to any limitations set forth in a Receipt or in this Deposit Agreement, title to Depositary Shares evidenced by a Receipt which is properly endorsed or accompanied by a properly executed instrument of transfer, shall be transferable by delivery with the same effect as in the case of a negotiable instrument; provided, however, that until transfer of a Receipt shall be registered on the books of the Depositary as provided in Section 2.4, the Depositary may, notwithstanding any notice to the contrary, treat the Record Holder thereof at such time as the absolute owner thereof for the purpose of determining the person entitled to distributions of dividends or other distributions, the exchange of Depositary Shares for Preferred Stock, the right to exchange Receipts pursuant to Section 2.9 or to any notice provided for in this Deposit Agreement and for all other purposes. Section 2.2 DEPOSIT OF PREFERRED STOCK; EXECUTION AND DELIVERY OF RECEIPTS IN RESPECT THEREOF. Concurrently with the execution of this Deposit Agreement, the Company is delivering to the Depositary a certificate or certificates, 5 registered in the name of the Depositary and evidencing 425,000 shares of Preferred Stock, properly endorsed or accompanied, if required by the Depositary, by a duly executed instrument of transfer or endorsement, in form satisfactory to the Depositary. Subject to the terms and conditions of this Deposit Agreement, the Company or any holder of Preferred Stock may from time to time deposit shares of the Preferred Stock under this Deposit Agreement by delivery to the Depositary of a certificate or certificates for the Preferred Stock to be deposited, properly endorsed or accompanied, if required by law or the Depositary, by a duly executed instrument of transfer or endorsement, in form satisfactory to the Depositary. Concurrently with each delivery of certificates, the Company or the holder, as the case may be, is delivering or shall deliver, as the case may be, to the Depositary (i) all such certifications as may be required by the Depositary in accordance with the provisions of this Deposit Agreement and (ii) a written order of the Company directing the Depositary to execute and deliver to, or upon the written or oral order of, the person or persons stated in such order a Receipt or Receipts for the Depositary Shares representing such deposited Preferred Stock. The Depositary acknowledges receipt of the deposited Preferred Stock delivered on the date of this Deposit Agreement, together with all related documentation, and agrees to hold such deposited Preferred Stock in an account to be established by the Depositary at the Corporate Office or at such other office as the Depositary shall determine. The Company hereby appoints the Depositary as the registrar, transfer agent and paying agent for the Preferred Stock and the Depositary hereby accepts such appointment and, as such, will reflect changes in the number of shares (including any fractional shares) of deposited Preferred Stock held by notation, book-entry or other appropriate method. Upon receipt by the Depositary of a certificate or certificates for Preferred Stock deposited in accordance with the provisions of this Section, together with the other documents required as above specified, and upon recordation of the Preferred Stock on the books of the Company in the name of the Depositary or its nominee, the Depositary, subject to the terms and conditions of this Deposit Agreement, shall execute and deliver, to or upon the order of the Company or a holder of Preferred Stock depositing shares of Preferred Stock in accordance with the first paragraph of this Section, a Receipt or Receipts for the number of whole Depositary Shares representing the Preferred Stock so deposited and registered in such name or names as may be requested by the Company or such holder. The Depositary shall execute and deliver such Receipt or Receipts at the Depositary's Office or such other offices, if any, as the Depositary may designate. Delivery at other offices shall be at the risk and expense of the person requesting such delivery. The DTC Receipt shall provide that it shall evidence the aggregate number of Depositary Shares from time to time indicated in the records of the Depositary and that the 6 aggregate number of Depositary Shares evidenced thereby may from time to time be increased or decreased by making adjustments on such records of the Depositary. Other than in the case of splits, combinations or other reclassifications affecting the Preferred Stock, or in the case of dividends or other distributions of Preferred Stock, if any, there shall be deposited hereunder not more than the number of shares constituting the Preferred Stock as set forth in the Certificate, as such may be amended from time to time. Section 2.3 REDEMPTION AND CONVERSION OF PREFERRED STOCK. (a) OPTIONAL REDEMPTION AND CONVERSION AT THE OPTION OF THE COMPANY. Whenever the Company shall elect to redeem or convert deposited shares of Preferred Stock in accordance with the provisions of the Certificate, it shall (unless otherwise agreed to in writing with the Depositary) give the Depositary not less than five (unless a shorter period shall be acceptable to the Depositary) nor more than 10 days' prior written notice of the proposed date of the mailing of a notice of redemption or conversion of Depositary Shares to Record Holders of Receipts in connection with a redemption or conversion of Preferred Stock of the number of such shares of Preferred Stock held by the Depositary to be so redeemed or converted as hereinafter provided and such other information as shall be required by the Depository to furnish the notice of redemption or conversion required by the next succeeding paragraph. Any such notice shall be accompanied by an Officer's Certificate from the Company stating that such redemption or conversion of Preferred Stock is in accordance with the provisions of the Certificate. Such notice to the Depositary, if given more than 60 days prior to the redemption date or conversion date, shall be in addition to the notice required to be given for redemption or conversion pursuant to the Certificate. On the date of any such redemption or such conversion, provided that the Company shall then have deposited with the Depositary the shares of Common Stock as required by the Certificate, the Depositary shall redeem or convert (using the shares of Common Stock and funds, if any, deposited with it) the number of Depositary Shares representing such redeemed or converted Preferred Stock. The Depositary shall mail notice of redemption of Preferred Stock and the number of Depositary Shares representing the Preferred Stock to be redeemed by first-class mail, postage prepaid, not less than 20 and not more than 60 days prior to the date fixed for redemption of such Preferred Stock and Depositary Shares (the "Redemption Date"). Such notice shall be mailed to Record Holders of the Receipts evidencing the Depositary Shares to be so redeemed, at the addresses of such Record Holders as they appear on the Receipt register of the Depositary; but neither failure to mail any such notice to one or more such 7 Record Holders nor any defect in any notice to one or more such Record Holders shall affect the sufficiency of the proceedings for redemption as to other Record Holders. Each such notice shall state the record date for such redemption; the Redemption Date that all outstanding Depositary Shares are to be redeemed, in the case of a redemption of fewer than all outstanding Depositary Shares in connection with a partial redemption of Preferred Stock, the number of such Depositary Shares held by such Record Holder to be so redeemed; the Redemption Price for the Depositary Shares, the number of shares of Common Stock deliverable upon redemption of each Depositary Share to be redeemed; the amount of cash, if any, that the Company is paying in lieu of fractional shares of Common Stock and the Market Value (as defined in the Certificate) to be used to calculate the number of shares of Common Stock to be delivered; the place or places where Receipts evidencing Depositary Shares to be redeemed are to be surrendered for redemption; and that dividends in respect of the Preferred Stock represented by the Depositary Shares to be redeemed will cease to accumulate on such Redemption Date. In case less than all the outstanding Depositary Shares are to be redeemed, the Depositary Shares to be so redeemed shall be selected by lot or pro rata (as nearly as practicable without creating fractional shares) or by any other equitable method determined by the Depositary, except that the Depositary may redeem Depositary Shares held by any Record Holder of fewer than 100 Depositary Shares (or Depositary Shares held by Record Holders of Preferred Stock who would hold fewer than 100 Depositary Shares as a result of such redemption). The Depositary shall mail notice of conversion of Preferred Stock and the number of Depositary Shares representing the Preferred Stock to be converted by first-class mail, postage prepaid, at any time within 10 days after the occurrence of the event giving rise to the right of conversion in accordance with the provisions of the Certificate or for so long as such conditions giving rise to such right of conversion are continuing. Such notice shall be mailed to Record Holders of the Receipts evidencing the Depositary Shares to be so converted, at the addresses of such Record Holders as they appear on the Receipt register of the Depositary; but neither failure to mail any such notice to one or more such Record Holders nor any defect in any notice to one or more such Record Holders shall affect the sufficiency of the proceedings for conversion as to other Record Holders. Such notice shall state the date for such conversion (which date shall be the date of such notice); the closing price of the Common Stock as of the date of such notice; a statement that the Company is exercising its right to cause the mandatory conversion and a brief description of the provsions of the Preferred Stock conferring such right upon the Company; a brief summary of any transfer restrictions on the shares of Common Stock issuable upon conversion; the amount of cash, if any, that the Company is paying in lieu of fractional shares of Common Stock and the Market Value (as defined in the Certificate) to be used to calculate the number of shares of Common Stock to be 8 delivered; the approximate date and manner upon which shares of Common Stock will be made available; the Conversion Price as of the date of the notice; the amount of accumulated but unpaid dividends, liquidated damages and Quarterly Return Amounts, if any; and a statement that unless the Company defaults in delivery of the shares of Common Stock into which such Preferred Stock has been converted, the rights as holders of Preferred Stock shall cease as of the date of such notice and holders shall thereafter have all rights as other holders of Common Stock. Notice having been mailed by the Depositary as aforesaid with respect to redemptions or conversions described in the preceding paragraphs, from and after the Redemption Date or Conversion Date (unless the Company shall have failed to redeem or convert the shares of Preferred Stock to be redeemed or converted as set forth in the Company's notice provided for in the preceding paragraphs), all dividends in respect of the shares of Preferred Stock so called for redemption or conversion shall cease to accumulate, the Depositary Shares called for redemption or conversion shall be deemed no longer to be outstanding, and all rights of the Record Holders of Receipts evidencing such Depositary Shares (except the right to receive shares of Common Stock and, if applicable, cash upon redemption or conversion) shall, to the extent of such Depositary Shares, cease and terminate. The foregoing shall be subject further to the terms and conditions of the Certificate. Anything herein to the contrary notwithstanding, the holders of record of Receipts evidencing Depositary Shares representing Preferred Stock at the close of business on a record date for the payment of dividends on the Preferred Stock will be entitled to receive the dividend payable with respect to the Preferred Stock represented by the Depositary Shares evidenced by such Receipts (except that holders of Depositary Shares called for redemption on a redemption date between the record date and a date which is two days after payment of the dividend payment dated will be entitled to receive such dividend on such redemption date) on the corresponding dividend payment date for the Preferred Stock notwithstanding the subsequent conversion of such Preferred Stock or Depositary Shares after such record date and on or prior to such dividend payment date or the Company's default in the payment of the dividend due on such dividend payment date, in which case the amount payable upon conversion of such Depositary Shares will not include any amount in respect of such dividend (and the full amount of the dividend payable for the applicable dividend period shall instead be paid on such dividend payment date to the holders of record of such Receipts on such record date as aforesaid). 9 If less than all the Depositary Shares evidenced by a Receipt are called for redemption, the Depositary will deliver to the Record Holder of such Receipt, upon surrender of such Receipt to the Depositary, a new Receipt evidencing the Depositary Shares evidenced by such prior Receipt and not called for redemption, together with certificates representing the shares of Common Stock issuable upon redemption of the Depositary Shares called for redemption. (b) CONVERSION AT OPTION OF HOLDER. Whenever a Record Holder of Receipts shall elect to convert shares of Preferred Stock underlying the Depositary Shares evidenced by such Receipts in accordance with the provisions of the Certificate, it shall deliver Receipts evidencing the Depositary Shares relating to the shares of Preferred Stock to be converted, together with written notice of conversion and a proper assignment of the Receipts to the Company or in blank to the Depositary or its agent. Each optional conversion of shares of Preferred Stock underlying Depositary Shares shall be deemed to have been effected immediately prior to the close of business on the date of which the foregoing requirements have been satisfied. From and after the relevant date fixed for conversions (the "Conversion Date")(unless the Company shall have failed to convert the shares of Preferred Stock to be converted by it), all dividends or Quarterly Return Amounts in respect of the shares of Preferred Stock so called for conversion shall cease to accumulate, the shares of Preferred Stock and Depositary Shares so converted shall be deemed no longer to be outstanding, and all rights of the Record Holders of Receipts evidencing such Depositary Shares (except the right to receive shares of Common Stock and, if applicable, cash upon conversion) shall, to the extent of such Depositary Shares, cease and terminate. Upon any surrender for conversion of the Receipts evidencing any such Depositary Shares (properly endorsed or assigned for transfer, if the Depositary shall so require), shares of Preferred Stock underlying such Depositary Shares shall be converted by the Company (as nearly as may be practicable without creating fractional shares) into shares of Common Stock at a conversion rate equal to one-twentieth of the number of shares of Common Stock received upon conversion of each share of Preferred Stock pursuant to the Certificate. The foregoing shall be subject further to the terms and conditions of the Certificate. (c) FRACTIONAL INTERESTS. To the extent that shares of Preferred Stock underlying Depositary Shares are redeemed for or converted into shares of Common Stock and all of such shares of Common Stock cannot be distributed to the Record Holders of Receipts without creating fractional interests in such shares, the Company shall cause the Depositary to distribute cash to Record Holders in lieu of fractional shares. The amount distributed in the foregoing case will be reduced by any amount required to be withheld by the Company or the Depositary 10 on account of taxes or otherwise required pursuant to law, regulation or court process. In the Company's discretion, no fractional shares of Common Stock or securities respresenting fractional shares of Common Stock will be issued upon conversion, redemption, change of control or in connection with dividend payments. Any fractional interest in a share of Common Stock will be paid in cash based on the closing price of the Common Stock on the trading day next preceding the date of conversion or such later time as the Company is legally and contractually able to purchase such fractional shares. (d) LIMITATIONS ON DEPOSITARY REQUIREMENTS FOR TRANSFER AND EXCHANGE. The Depositary shall not be required (a) to issue, register the transfer of or exchange any Receipts for a period beginning at the opening of business 10 days next preceding any selection of Depositary Shares to be redeemed and ending at the close of business on the day of the mailing of notice of redemption of Depositary Shares or (b) to register the transfer of or exchange for another Receipt any Receipt evidencing Depositary Shares called or being called for redemption in whole or in part. Section 2.4 REGISTRATION OF TRANSFER OF RECEIPTS. Subject to the terms and conditions of this Deposit Agreement, the Depositary shall register on its books from time to time transfers of Receipts upon any surrender thereof by the Record Holder in person or by such Record Holder's duly authorized attorney, properly endorsed or accompanied by a properly executed instrument of transfer. No service charge will be made for any registration of transfer or exchange of Receipts, but the Company or the Depositary may require payment of any transfer tax or similar governmental charge payable in connection therewith. Upon such surrender, the Depositary shall execute a new Receipt or Receipts evidencing the same aggregate number of Depositary Shares as those evidenced by the Receipt or Receipts surrendered and deliver such new Receipt or Receipts to or upon the order of the person entitled thereto. Section 2.5 SURRENDER OF RECEIPTS AND WITHDRAWAL OF PREFERRED STOCK. Any Record Holder of a Receipt or Receipts representing any number of whole shares of Preferred Stock (or such Record Holder's duly authorized attorney), unless the related Depositary Shares have been previously called for redemption, may withdraw the Preferred Stock and all money and other property, if any, represented thereby by surrendering such Receipt or Receipts at the Depositary's Office or at such other offices as the Depositary may designate for such withdrawals. If such Record Holder's Depositary Shares are being held by DTC or its nominee pursuant to Section 2.1, such Record Holder shall request, in accordance with Section 2.9, withdrawal from the book-entry system of the number of Depositary Shares specified in the preceding sentence. Thereafter, without unreasonable delay, the Depositary shall deliver to Record Holder, or to the 11 person or persons designated by such Record Holder as hereinafter provided, the number of whole shares of Preferred Stock and all money and other property, if any, represented by the Receipt or Receipts so surrendered for withdrawal, but holders of such whole shares of Preferred Stock will not thereafter be entitled to receive Depositary Shares in exchange therefor except in compliance with Section 2.2 hereof. If a Receipt delivered by the Record Holder to the Depositary in connection with such withdrawal shall evidence a number of Depositary Shares in excess of the number of Depositary Shares representing the number of whole shares of Preferred Stock to be so withdrawn, the Depositary shall at the same time, in addition to such number of whole shares of Preferred Stock and such money and other property, if any, to be so withdrawn, deliver to such Record Holder, or (subject to Section 2.4) upon his order, a new Receipt evidencing such excess number of Depositary Shares. Delivery of the Preferred Stock and money and other property being withdrawn may be made by the delivery of such certificates, documents of title and other instruments as the Depositary may deem appropriate. Preferred Stock delivered pursuant to the preceding paragraph may be endorsed with or have incorporated in the text thereof such legends or recitals or changes not inconsistent with the provisions of this Deposit Agreement as may be required by the Company or required to comply with any applicable law or any regulation thereunder or with the rules and regulations of any securities exchange upon which the Preferred Stock may be listed or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular shares of Preferred Stock are subject. If the Preferred Stock and the money and other property being withdrawn are to be delivered to a person or persons other than the Record Holder of the Receipt or Receipts being surrendered for withdrawal of Preferred Stock, such Record Holder shall execute and deliver to the Depositary a written order so directing the Depositary and the Depositary may require that the Receipt or Receipts surrendered by such Record Holder for withdrawal of such shares of Preferred Stock be properly endorsed in blank or accompanied by a properly executed instrument of transfer in blank. Delivery of the Preferred Stock and the money and other property, if any, represented by Receipts surrendered for withdrawal shall be made by the Depositary at the Depositary's Office, except that, at the request, risk and expense of the Record Holder surrendering such Receipt or Receipts and for the account of the Record Holder thereof, such delivery may be made at such other place as may be designated by such Record Holder. 12 Section 2.6 LIMITATIONS ON EXECUTION AND DELIVERY, TRANSFER, SURRENDER AND EXCHANGE OF RECEIPTS. As a condition precedent to the execution and delivery, registration of transfer, split-up, combination surrender or exchange of any Receipt, the Depositary, any of the Depositary's Agents or the Company may require any or all of the following: (i) payment to it of a sum sufficient for the payment (or, in the event that the Depositary or the Company shall have made such payment, the reimbursement to it) of any charges or expenses payable by the Record Holder of a Receipt pursuant to Section 5.7 (or evidence reasonably satisfactory to the Company that such charges and expenses have been paid), (ii) the production of evidence satisfactory to it as to the identity and genuineness of any signature and (iii) compliance with such regulations, if any, as the Depositary or the Company may establish not inconsistent with the provisions of this Deposit Agreement. The deposit of Preferred Stock may be refused, the delivery of Receipts against Preferred Stock may be suspended, the registration of transfer of Receipts may be refused and the registration of transfer, split-up, combination surrender or exchange of outstanding Receipts may be suspended (i) during any period when the register of Stockholders of the Company is closed or (ii) if any such action is deemed necessary or advisable by the Depositary or the Company any of the Depositary's Agents or the Company at any time or from time to time because of any requirement of law or of any government or governmental body or commission or under any provision of this Deposit Agreement. Section 2.7 LOST RECEIPTS, ETC. In case any Receipt shall be mutilated, destroyed, lost or stolen, the Depositary in its discretion may execute and deliver a Receipt of like form and tenor in exchange and substitution for such mutilated Receipt, or in lieu of and in substitution for such destroyed, lost or stolen Receipt, upon (i) the filing by the Record Holder thereof with the Depositary of evidence satisfactory to the Depositary of such destruction or loss or theft of such Receipt, of the authenticity thereof and of his or her ownership thereof and (ii) the furnishing to the Depositary of indemnification satisfactory to it. Section 2.8 CANCELLATION AND DESTRUCTION OF SURRENDERED RECEIPTS . All Receipts surrendered to the Depositary or any Depositary's Agent shall be cancelled by the Depositary. Except as prohibited by applicable law or regulation, the Depositary is authorized to destroy all Receipts so cancelled. Any Receipt evidenced in book-entry form shall be deemed cancelled when the Depositary has caused the amount of Depositary Shares evidenced by the DTC Receipt to be reduced in proportion to the number of Depositary Shares evidenced by the surrendered Receipt. 13 Section 2.9 INTERCHANGEABILITY OF BOOK-ENTRY RECEIPTS AND RECEIPTS IN PHYSICAL, CERTIFICATED FORM. Subject to the terms and conditions of this Deposit Agreement, upon receipt by the Depositary of written instructions from DTC on behalf of any Beneficial Owner for the purpose of directing the Depositary to execute and deliver a Receipt in physical, certificated form evidencing such Depositary Shares, the Depositary shall follow the customary procedures established by DTC for the purpose of reducing the number of Depositary Shares evidenced by the DTC Receipt and, following such reduction, shall execute and deliver to or upon the order of the person or persons named in such order a Receipt or Receipts registered in the name or names requested by such person and evidencing in the aggregate the number of Depositary Shares equal to the reduction in the number evidenced by the DTC Receipt. The Company may require in such written instructions any certification or representation as it shall deem necessary to comply with applicable law. Subject to the terms and conditions of this Deposit Agreement, upon receipt by the Depositary of a Receipt or Receipts in physical, certificated form, duly endorsed or accompanied by appropriate instruments of transfer, in form satisfactory to the Depositary, including any required certifications, and together with written instructions directing the Depositary to adjust its records to reflect an increase in the aggregate amount of Depositary Shares evidenced by the DTC Receipt (including, without limitation, information regarding the DTC participant account to be credited with such increase), and upon payment of the fees and expenses of the Depositary, the Depositary shall cancel such Receipt or Receipts in physical, certificated form and shall follow the customary procedures established by DTC for the purpose of reflecting such increase in the number of Depositary Shares evidenced by the DTC Receipt. ARTICLE III Certain Obligations of Holders of Receipts and the Company Section 3.1 FILING PROOFS, CERTIFICATES AND OTHER INFORMATION. Any Record Holder of a Receipt may be required from time to time to file such proof of residence, or other information, to execute such certificates and to make such representations and warranties as the Depositary or the Company may reasonably deem necessary or proper. The Depositary or the Company may withhold the delivery, or delay the registration of transfer, redemption or exchange, of any Receipt or the withdrawal of the Preferred Stock represented by the Depositary Shares evidenced by any Receipt or the distribution of any dividend or other 14 distribution or the sale of any rights or of the proceeds thereof until such proof or other information is filed or such certificates are executed or such representations and warranties are made. Section 3.2 PAYMENT OF TAXES OR OTHER GOVERNMENTAL CHARGES. Record Holders of Receipts shall be obligated to make payments to the Depositary of certain charges and expenses as provided in Section 5.7, or provide reasonably satisfactory evidence to the Depositary that such charges and expenses have been paid. Registration of transfer of any Receipt or any withdrawal of Preferred Stock and all money or other property, if any, represented by the Depositary Shares evidenced by such Receipt may be refused until any such payment due is made, and any dividends, interest payments or other distributions may be withheld or any part of or all the Preferred Stock or other property represented by the Depositary Shares evidenced by such Receipt and not theretofore sold may be sold for the account of the Record Holder thereof (after attempting by reasonable means to notify such Record Holder prior to such sale), and such dividends, interest payments or other distributions or the proceeds of any such sale may be applied to any payment of such charges or expenses, the Record Holder of such Receipt remaining liable for any deficiency. The Depositary shall at the direction of the Company withhold any payments, distributions and exchanges made with respect to the Depositary Shares and Receipts, and the Preferred Stock, Common Stock or other securities or assets represented thereby (collectively, the "Securities"). In the event the Depositary is required to pay any such amounts, the Company shall reimburse the Depositary for payment thereof upon the request of the Depositary and the Depositary shall, upon the Company's request and as instructed by the Company, pursue its rights against such Record Holder at the Company's expense. Section 3.3 WARRANTY AS TO PREFERRED STOCK. The Company hereby represents and warrants that the Receipts, when issued, will evidence legal and valid interests in the Depositary Shares and each Depositary Share will represent a legal and valid one-twentieth fractional interest in a deposited share of Preferred Stock and that the Preferred Stock, when issued, will be validly issued, fully paid and nonassessable. Such representation and warranty shall survive the deposit of the Preferred Stock and the issuance of the Receipts. ARTICLE IV The Deposited Securities; Notices Section 4.1 CASH AND COMMON STOCK DISTRIBUTIONS. Whenever the Depositary shall receive any cash dividend or other cash distribution on Preferred Stock (including Liquidated Damages and Quarterly Return Amounts, each as defined in 15 the Offering Memorandum pursuant to which the Preferred Stock was originally issued) or distribution of Common Stock, the Depositary shall, subject to Sections 3.1 and 3.2, distribute to Record Holders of Receipts on the record date fixed pursuant to Section 4.4 such amounts of such dividend or distribution as are, as nearly as practicable, in proportion to the respective numbers of Depositary Shares evidenced by the Receipts held by such Record Holders; to the extent that dividends are paid in shares of Common Stock and all of such shares of Common Stock cannot be distributed to the Record Holders of Receipts without creating fractional interests in such shares, the Company shall cause the Depositary to distribute cash to Record Holders in lieu of fractional shares, subject to Section 2.3(c) hereof; provided, however, that in case the Company or the Depositary shall be required to withhold and shall withhold from any cash dividend or other cash distribution in respect of the Preferred Stock an amount on account of taxes, the amount made available for distribution or distributed in respect of Depositary Shares shall be reduced accordingly. The Depositary shall distribute or make available for distribution, as the case may be, only such amount, however, as can be distributed without attributing any Record Holder of Depositary Shares a fraction of one cent, and any balance not so distributable shall be held by the Depositary (without liability for interest thereon) and shall be added to and be treated as part of the next sum received by the Depositary for distribution to Record Holders of Receipts then outstanding. Section 4.2 DISTRIBUTIONS OTHER THAN CASH, RIGHTS, PREFERENCES OR PRIVILEGES. Whenever the Depositary shall receive any distribution other than cash, rights, preferences or privileges upon Preferred Stock, the Depositary shall, subject to Sections 3.1 and 3.2, distribute to Record Holders of Receipts on the record date fixed pursuant to Section 4.4 such amounts of the securities or property received by it as are, as nearly as practicable, in proportion to the respective numbers of Depositary Shares evidenced by the Receipts held by such Record Holders, in any manner that the Depositary may deem equitable and practicable for accomplishing such distribution. If, in the opinion of the Depositary such distribution cannot be made proportionately among such Record Holders, or if for any other reason (including any requirement that the Company or the Depositary withhold an amount on account of taxes) the Depositary deems, after consultation with the Company, such distribution not to be feasible, the Depositary may, with the approval of the Company, adopt such method as it deems equitable and practicable for the purpose of effecting such distribution, including the sale (at public or private sale) of the securities or property thus received, or any part thereof, at such place or places and upon such terms as it may deem proper. The net proceeds of any such sale shall, subject to Sections 3.1 and 3.2, be distributed or made available for distribution, as the case may be, by the Depositary to Record Holders of Receipts as provided by Section 4.1 in the case of a distribution received in cash. The Company shall 16 not make any distribution of such securities unless the Company shall have provided an opinion of counsel stating that such securities have been registered under the Securities Act or that the offering and sale of such securities by the Company are exempt from registration under the Securities Act. Section 4.3 SUBSCRIPTION RIGHTS, PREFERENCES OR PRIVILEGES. If the Company shall at any time offer or cause to be offered to the persons in whose names Preferred Stock is recorded on the books of the Company any rights, preferences or privileges to subscribe for or to purchase any securities or any rights, preferences or privileges of any other nature, such rights, preferences or privileges shall in each such instance be made available by the Depositary to the Record Holders of Receipts in such manner as the Company may determine, either by the issue to such Record Holders of warrants representing such rights, preferences or privileges or by such other method as may be determined by the Company in its discretion with the approval of the Depositary; provided, however, that (i) if at the time of issue or offer of any such rights, preferences or privileges the Company determines that it is not lawful or (after consultation with the Depositary) not feasible to make such rights, preferences or privileges available to Record Holders of Receipts by the issue of warrants or otherwise or (ii) if and to the extent so instructed by Record Holders of Receipts who do not desire to exercise such rights, preferences or privileges, then the Company, in its discretion, may, if applicable laws or the terms of such rights, preferences or privileges permit such transfer, sell such rights, preferences or privileges at public or private sale, at such place or places and upon such terms as it may deem proper. The net proceeds of any such sale shall, subject to Sections 3.1 and 3.2, be distributed by the Depositary to the Record Holders of Receipts entitled thereto as provided by Section 4.1 in the case of a distribution received in cash. The Company shall not make any distribution of any such rights, preferences or privileges unless the Company shall have provided an opinion of counsel stating that such rights, preferences or privileges have been registered under the Securities Act or that the offering and sale of such rights, preferences or privileges are exempt from registration under the Securities Act. If registration under the Securities Act of the securities to which any rights, preferences or privileges relate is required in order for Record Holders of Receipts to be offered or sold the securities to which such rights, preferences or privileges relate, the Company agrees with the Depositary that it will promptly file a registration statement pursuant to the Securities Act with respect to such rights, preferences or privileges and securities and use its best efforts and take all steps available to it to cause such registration statement to become effective sufficiently in advance of the expiration of such rights, preferences or privileges to enable such Record Holders to exercise such rights, preferences or privileges. In no event shall the Depositary make 17 available to the Record Holders of Receipts any right, preference or privilege to subscribe for or to purchase any securities unless and until such registration statement shall have become effective, or unless the offering and sale of such securities to such Record Holders are exempt from registration under the provisions of the Securities Act. If any other action under the laws of any jurisdiction or any governmental or administrative authorization, consent or permit is required in order for such rights, preferences or privileges to be made available to Record Holders of Receipts, the Company agrees with the Depositary that the Company will use its best efforts to take such action or obtain such authorization, consent or permit sufficiently in advance of the expiration of such rights, preferences or privileges to enable such Record Holders to exercise such rights, preferences or privileges. Section 4.4 NOTICE OF DIVIDENDS, ETC.; FIXING OF RECORD DATE FOR HOLDERS OF RECEIPTS. Whenever (i) any cash dividend or other cash distribution shall become payable, any distribution other than cash shall be made, or any rights, preferences or privileges shall at any time be offered, with respect to Preferred Stock, or (ii) the Depositary shall receive notice of any meeting at which holders of Preferred Stock are entitled to vote or of which holders of Preferred Stock are entitled to notice or any solicitation of consents in respect of the Preferred Stock, or any call of any shares of Preferred Stock or at any time the Depositary and the Company shall decide it is appropriate, the Depositary shall in each such instance fix a record date (which shall be the same date as the record date fixed by the Company with respect to the Preferred Stock) for the determination of the Record Holders of Receipts who shall be entitled to (a) receive such dividend, distribution, rights, preferences or privileges or the net proceeds of the sale thereof, (b) receive notice of, and give instructions for the exercise of voting rights at, any such meeting or (c) receive notice of any such call, subject to the provisions hereof. Section 4.5 VOTING RIGHTS. Upon receipt of notice of any meeting at which the holders of Preferred Stock are entitled to vote or any solicitation of consents in respect of Preferred Stock, the Depositary shall, as soon as practicable thereafter, mail to the Record Holders of Receipts a notice which shall contain (i) such information as is contained in such notice of meeting or consent solicitation and (ii) a statement that the Record Holders may, subject to any applicable restrictions, instruct the Depositary as to the exercise of the voting rights pertaining to the amount of Preferred Stock represented by their respective Depositary Shares and a brief statement as to the manner in which such instructions may be given. Upon the written request of a Record Holder of a Receipt on the relevant record date, the Depositary shall use its best efforts insofar as practicable to vote or cause to be voted or deliver a 18 consent with respect to the amount of Preferred Stock represented by the Depositary Shares evidenced by such Receipt, in accordance with the instructions set forth in such request. The Company hereby agrees to take all reasonable action which may be deemed necessary by the Depositary in order to enable the Depositary to vote such Preferred Stock or cause such Preferred Stock to be voted. In the absence of specific instructions from the Record Holder of a Receipt, the Depositary will abstain from voting to the extent of the Preferred Stock represented by the Depositary Shares evidenced by such Receipt. Record Holders of Receipts shall also be entitled to vote on certain amendments to this Deposit Agreement pursuant to Section 6.1 hereof. Section 4.6 INSPECTION OF REPORTS. The Depository shall make available for inspection by Record Holders of Receipts at the Depositary's Office during normal business hours, and at such other places as it may from time to time deem advisable, any reports and communications received from the Company which are received by the Depositary as the holder of Preferred Stock. Section 4.7 LISTS OF RECEIPT HOLDERS. Promptly upon request from time to time by the Company, the Depositary shall furnish to it a list, as of recent date, of the names, addresses and holdings of Depositary Shares of all persons in whose names Receipts are registered on the books of the Depositary. Section 4.8 TAX AND REGULATORY COMPLIANCE. The Depositary shall be responsible for (i) preparation and mailing of Internal Revenue Service Forms 1099 for all open and closed accounts, (ii) foreign tax withholding, (iii) back-up withholding (or any withholding as may be required at the then applicable rate) on dividends paid and other distributions made to eligible holders of Receipts, (iv) mailing Internal Revenue Service Forms W-9 to new holders of Receipts without a certified taxpayer identification number, (v) processing certified Internal Revenue Service Forms W-9, (vi) preparation and filing of state information returns and (vii) escheatment services. Section 4.9 WITHHOLDING. Notwithstanding any other provision of this Deposit Agreement, in the event that the Depositary determines that any distribution in property is subject to any tax which the Depositary is obligated by law to withhold, the Depositary may dispose of all or a portion of such property in such amounts and in such manner as the Depositary deems necessary and practicable to pay such taxes, by public or private sale, and the Depositary shall distribute the net proceeds of any such sale or the balance of any such property after deduction of such taxes to the holders of Receipts entitled 19 thereto in proportion to the number of Depositary Shares held by them respectively. ARTICLE V The Depositary, the Depositary's Agents, the Registrar and the Company Section 5.1 MAINTENANCE OF OFFICES, AGENCIES AND TRANSFER BOOKS BY THE DEPOSITARY; REGISTRAR. Upon execution of this Deposit Agreement, the Depositary shall maintain at the Depositary's Office facilities for the execution and delivery, registration and registration of transfer, surrender and exchange of Receipts, all in accordance with the provisions of this Deposit Agreement. The Depositary shall keep books at the Depositary's Office for the registration and registration of transfer of Receipts, and to reflect potential split-ups and combinations of Depositary Shares, which books at all reasonable times shall be open for inspection by the Record Holders of Receipts; provided, that any such Record Holder requesting to exercise such right shall certify to the Depositary that such inspection shall be for a proper purpose reasonably related to such person's interest as an owner of Depositary Shares evidenced by the Receipts. The Depositary may close each such books only when the Depositary's Office is not open for business, the register of stockholders of the Company is closed or as otherwise required by law. If the Receipts or the Depositary Shares evidenced thereby or the Preferred Stock represented by such Depositary Shares shall be listed on a national securities exchange or the Nasdaq National Market, the Depositary may appoint a registrar (acceptable to the Company) for registration of such Receipts or Depositary Shares in accordance with any requirements of such exchange or quotation system. Such registrar (which may be the Depositary if so permitted by the requirements of such exchange or quotation system may be removed and a substitute registrar appointed by the Depositary upon the request or with the approval of the Company. If the Receipts, such Depositary Shares or such Preferred Stock are listed on one or more other stock exchanges or quotation system, the Depositary will, at the request of the Company, arrange such facilities for the delivery, registration, registration of transfer, surrender and exchange of such Receipts, such Depositary Shares or such Preferred Stock as may be required by law or applicable stock exchange or quotation system regulation. 20 Section 5.2 PREVENTION OF OR DELAY IN PERFORMANCE BY THE DEPOSITARY, THE DEPOSITARY'S AGENTS, THE REGISTRAR OR THE COMPANY. None of the Depositary, any Depositary's Agent or the Company shall incur any liability to any Record Holder of any Receipt if by reason of any provision of any present or future law, or regulation thereunder, of the United States of America or of any other governmental authority or, in the case of the Depositary or any Depositary's Agent, by reason of any provision, present or future, of the Company's Amended and Restated Certificate of Incorporation, as amended (including the Certificate) or by reason of any act of God or war or other circumstance beyond the control of the relevant party, the Depositary, any Depositary's Agent, or the Company shall be prevented or forbidden from, or subjected to any penalty on account of, doing or performing any act or thing which the terms of this Deposit Agreement provide shall be done or performed; nor shall the Depositary, any Depositary's Agent or the Company incur any liability to any Record Holder of a Receipt (i) by reason of any nonperformance or delay, caused as aforesaid, in the performance of any act or thing which the terms of this Deposit Agreement provide shall or may be done or performed, or (ii) by reason of any exercise of, or failure to exercise, any discretion provided for in this Deposit Agreement except, in the case of any such exercise or failure to exercise discretion not caused as aforesaid, if caused by the negligence, willful misconduct or bad faith of the party charged with such exercise or failure to exercise. Section 5.3 OBLIGATIONS OF THE DEPOSITARY, THE DEPOSITARY'S AGENTS, THE REGISTRAR AND THE COMPANY. None of the Depositary, any Depositary's Agent or the Company assumes any obligation or shall be subject to any liability under this Deposit Agreement to Record Holders of Receipts other than for its negligence, willful misconduct or bad faith. None of the Depositary, any Depositary's Agent or the Company shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of the Preferred Stock, the Common Stock, the Depositary Shares or the Receipts which in its opinion may involve it in expense or liability unless indemnity satisfactory to it against all expense and liability be furnished as often as may be required. None of the Depositary, any Depositary's Agent or the Company shall be liable for any action or any failure to act by it in reliance upon the written advice of legal counsel or accountants, or information from any person presenting Preferred Stock for deposit, any Record Holder of a Receipt or any other person believed by it in good faith to be competent to give such information. The Depositary, any Depositary's Agent, any Registrar and the Company may each rely and shall each be protected in acting upon any written 21 notice, request, direction or other document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Depositary shall not be responsible for any failure to carry out any instruction to vote any of the shares of Preferred Stock or for the manner or effect of any such vote made, as long as any such action or non-action is in good faith or in accordance with the Deposit Agreement. The Depositary undertakes, and any Registrar shall be required to undertake, to perform such duties and only such duties as are specifically set forth in this Deposit Agreement, and no implied covenants or obligations shall be read into this Deposit Agreement against the Depositary or any Registrar. The Depositary and the Depositary's Agents may own and deal in any class of securities of the Company and its affiliates and in Receipts. The Depositary may also act as transfer agent or registrar of any of the securities of the Company and its affiliates. It is intended that neither the Depositary nor any Depositary's Agent shall be deemed to be an "issuer" of the securities under the federal securities laws or applicable state securities laws, it being expressly understood and agreed that the Depositary and any Depositary's Agent are acting only in a ministerial capacity as depositary for the Preferred Stock. None of the Depositary (or its officers, directors, employees or agents), any Depositary's Agent or the Registrar makes any representation or has any responsibility as to the validity of the shelf registration statement pursuant to which the Depositary Shares will be registered under the Securities Act, the Preferred Stock, the Depositary Shares or the Receipts (except its countersignature thereon), or any instruments referred to therein or herein, or as to the correctness of any statement made therein or herein; provided, however, that the Depositary is responsible for its representations in this Deposit Agreement. The Depositary assumes no responsibility for the correctness of the description that appears in the Receipts, which can be taken as a statement of the Company summarizing certain provisions of this Deposit Agreement. Notwithstanding any other provision herein or in the Receipts, the Depositary makes no warranties or representations as to the validity, genuineness or sufficiency of any Preferred Stock at any time deposited with the Depositary hereunder or of the Depositary Shares or the Receipts, as to the validity or sufficiency of this Deposit Agreement, as to the value of the Depositary Shares or as to any right, title or interest of the Record Holders of Receipts in and to the Depositary Shares, except that the Depositary hereby represents and warrants as follows: (i) the Depositary has been duly organized and is validly existing and in good standing under the laws of the United States, with full power, authority and legal right under such law to execute, deliver and carry 22 out the terms of this Deposit Agreement; (ii) this Deposit Agreement has been duly authorized, executed and delivered by the Depositary; and (iii) this Deposit Agreement constitutes a valid and binding obligation of the Depositary, enforceable against the Depositary in accordance with its terms. Section 5.4 RESIGNATION AND REMOVAL OF THE DEPOSITARY; APPOINTMENT OF SUCCESSOR DEPOSITARY. The Depositary may at any time resign as Depositary hereunder by notice of its election so to do delivered to the Company, such resignation to take effect upon the appointment of a successor Depositary and its acceptance of such appointment as hereinafter provided. The Depositary may at any time be removed by the Company by notice of such removal delivered to the Depositary, such removal to take effect upon the appointment of a successor Depositary and its acceptance of such appointment as hereinafter provided. In case at any time the Depositary acting hereunder shall resign or be removed, the Company shall, within 45 days after the delivery of the notice of resignation or removal, as the case may be, appoint a successor Depositary, which shall be a bank or trust company having its principal office in the United States of America and having a combined capital and surplus of at least $50,000,000. If no successor Depositary shall have been so appointed and have accepted appointment within 45 days after delivery of such notice, the resigning or removed Depositary may petition any court of competent jurisdiction for the appointment of a successor Depositary. Every successor Depositary shall execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor Depositary, without any further act or deed, shall become fully vested with all the rights, powers, duties and obligations of its predecessor and for all purposes shall be the Depositary under this Deposit Agreement, and such predecessor, upon payment of all sums due it and on the written request of the Company, shall execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder, shall duly assign, transfer and deliver all right, title and interest in the Preferred Stock and any moneys or property held hereunder to such successor, and shall deliver to such successor a list of the Record Holders of all outstanding Receipts. Any successor Depositary shall promptly mail notice of its appointment to the Record Holders of Receipts. Any corporation into or with which the Depositary may be merged, consolidated or converted, or any corporation succeeding to all or substantially 23 all of the corporate trust business of the Depositary, shall be the successor of such Depositary without the execution or filing of any document or any further act, and notice thereof shall not be required hereunder. Such successor Depositary may authenticate the Receipts in the name of the predecessor Depositary or in the name of the successor Depositary. Section 5.5 CORPORATE NOTICES AND REPORTS. The Company agrees that it will forward to the Depositary, and the Depositary shall in turn transmit to the Record Holders of Receipts, in each case at the addresses furnished to it pursuant to Section 4.8, all notices and reports (including without limitation financial statements) required by law, by the rules of any national securities exchange or quotation system upon which the Preferred Stock, the Depositary Shares or the Receipts are listed or quoted by the Company's Second Amended and Restated Certificate of Incorporation, as amended (including the Certificate), to be furnished by the Company to holders of Preferred Stock. Such transmission will be at the Company's expense. Section 5.6 INDEMNIFICATION BY THE COMPANY. The Company shall indemnify the Depositary and any Depositary's Agent against, and hold each of them harmless from, any loss, liability or expense (including the costs and expenses of defending itself) which may arise out of (a) acts performed or omitted in connection with this Deposit Agreement and the Receipts (i) by the Depositary or any of its agents (including any Depositary's Agent), except for any liability arising out of negligence, wilful misconduct or bad faith on the respective parts of any such person or persons, or (ii) by the Company or any of its agents, or (b) the offer, sale or registration of the Receipts, the Common Stock or the Preferred Stock pursuant to the provisions hereof. The obligations of the Company set forth in this Section 5.6 shall survive any resignation or removal of any Depositary or Depositary's Agent and the termination of this Deposit Agreement. Section 5.7 CHARGES AND EXPENSES. The Company shall pay all transfer and other taxes and governmental charges arising solely from the existence of the depositary arrangements. The Company shall pay all charges of the Depositary in connection with the initial deposit of the Preferred Stock, the initial issuance of the Depositary Shares and any redemption or conversion of the Preferred Stock and all withdrawals of shares of the Preferred Stock by owners of Depositary Shares. All other transfer and other taxes and governmental charges shall be at the expense of Record Holders of Depositary Shares. The Depositary may refuse to effect any registration of transfer of a Receipt or any withdrawal of Preferred Stock evidenced thereby until all such taxes and charges with respect to such Receipt or Preferred Stock are paid by the holder thereof. If a Record Holder of Receipts requests the Depositary to perform duties not required under this 24 Deposit Agreement, the Depositary shall notify the Record Holder of the approximate cost of the performance of such duties. If such duties are subsequently performed at the request of such Record Holder, such Record Holder will be liable for such charges and expenses. All other charges and expenses of the Depositary and any Depositary's Agent hereunder (including, in each case, fees and expenses of counsel) incident to the performance of their respective obligations hereunder will be paid pursuant to the terms of the fee letter previously provided to the Company. ARTICLE VI Amendment and Termination Section 6.1 AMENDMENT. The form of Receipt evidencing the Depositary Shares and any provision of this Deposit Agreement may at any time be amended by agreement between the Company and the Depositary. However, any amendment to such documents which materially and adversely alters the rights of the holders of Receipts or of the Depositary Shares evidenced thereby (or, which relates to or affects rights to receive dividends or distributions, or voting or redemption rights) will not be effective unless such amendment has been approved by the Record Holders of at least 66b% of the Depositary Shares then outstanding. In no event may any amendment impair the right of any Record Holders of Receipts, subject to the conditions specified in this Deposit Agreement, upon such surrender of the Receipts evidencing such Depositary Shares, to receive Preferred Stock or upon conversion of the Preferred Stock represented by the Depositary Receipts, to receive shares of Common Stock, and in each case any money or other property represented thereby, including any accumulated dividends and return of Liquidation Preference, except in order to comply with mandatory provisions of applicable law. Every Record Holder of Receipts at the time any such amendment becomes effective shall be deemed to consent and agree to such amendment and to be bound by this Deposit Agreement. Section 6.2 TERMINATION. This Deposit Agreement may be terminated by the Company or the Depositary only if (i) all outstanding Depositary Shares have been redeemed or converted, (ii) there has been a final distribution in respect of the Preferred Stock in connection with any liquidation, dissolution or winding up of the Company and such distribution has been distributed to the Record Holders of Receipts or (iii) upon the consent of Record Holders of Receipts representing not less than 66b% of the Depositary Shares then outstanding. 25 Whenever this Deposit Agreement has been terminated pursuant to clause (iii) of the preceding paragraph the Depositary will mail notice of such termination to the Record Holders of all Receipts then outstanding at least 30 days prior to the date fixed in such notice for such termination. The Depositary may likewise terminate this Deposit Agreement if at any time 90 days shall have expired after the Depositary shall have delivered to the Company a written notice of its election to resign and a successor depositary shall not have been appointed and accepted its appointment. If any Receipts remain outstanding after the date of termination, the Depositary thereafter will discontinue the transfer of Receipts, will suspend the distribution of dividends to the Record Holders thereof, and will not give any further notices (other than notices of such termination) or perform any further acts under this Deposit Agreement except as provided below and except that the Depositary will continue to (i) collect dividends on the Preferred Stock and any distributions with respect thereto and (ii) deliver the Preferred Stock together with such dividends and distributions and the net proceeds of any sales of rights, preferences, privileges or other property, without liability for interest thereon, in exchange for Receipts surrendered. At any time after the expiration of three years from the date of termination, the Depositary may sell the Preferred Stock then held by it at public or private sales, at such place or places and upon such terms as it deems proper and may thereafter hold the net proceeds of any such sale, together with any money and other property then held by it, without liability or interest thereon, for the pro rata benefit of the Record Holders of Receipts which have not been surrendered. Subject to applicable escheat laws, any monies set aside by the Company in respect of any payment with respect to the Preferred Stock represented by the Depositary Shares, or dividends thereon, and unclaimed at the end of three years from the date upon which such payment is due and payable shall revert to the general funds of the Company, after which time the Record Holders of such Depositary Shares shall look only to the general funds of the Company for the payment thereof. Upon the termination of this Deposit Agreement, the Company shall be discharged from all obligations under this Deposit Agreement except for its obligations to the Depositary and any Depositary's Agent under Sections 5.6 and 5.7. ARTICLE VII Miscellaneous Section 7.1 COUNTERPARTS. This Deposit Agreement may be executed in any number of counterparts, and by each of the parties hereto on separate counterparts, each of which counterparts, when so executed and delivered, shall 26 be deemed an original, but all such counterparts taken together shall constitute one and the same instrument. Section 7.2 EXCLUSIVE BENEFIT OF PARTIES. This Deposit Agreement is for the exclusive benefit of the parties hereto, including the holders of the Receipts, and their respective successors hereunder, and shall not be deemed to give any legal or equitable right, remedy or claim to any other person whatsoever. Section 7.3 INVALIDITY OF PROVISIONS. In case any one or more of the provisions contained in this Deposit Agreement or in the Receipts should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall in no way be affected, prejudiced or disturbed thereby. Section 7.4 NOTICES. Any and all notices to be given to the Company hereunder or under the Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail, telegram, telex or facsimile confirmed by letter, addressed to the Company at 4643 South Ulster Street, Denver, Colorado 80237, to the attention of Stan DiCieco, the Chief Financial Officer, facsimile number (303) 770-4207, or at any other address of which the Company shall have notified the Depositary in writing. Any and all notices to be given to the Depositary hereunder or under the Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail, telegram or facsimile confirmed by letter, addressed to the Depositary at the Depositary's Office at 101 East Fifth Street St. Paul, Minnesota 55101-1860 to the attention of the Corporate Trust Department, facsimile (612) 229-6415or at any other address of which the Depositary shall have notified the Company in writing. Any and all notices to be given to any Record Holder of a Receipt hereunder or under the Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail or by telegram or telex confirmed by letter, addressed to such Record Holder at the address of such Record Holder as it appears on the Receipt register of the Depositary, or if such Record Holder shall have filed with the Depositary a written request that notices intended for such Record Holder be mailed to some other address, at the address designated in such request. Delivery of a notice sent by mail, by telegram, telex or facsimile shall be deemed to be effective at the time when a duly addressed letter containing the same (or a confirmation thereof in the case of a telegram or telex message) is deposited, postage prepaid, in a post office letter box. The Depositary or the 27 Company may, however, act upon any telegram, telex or facsimile message received by it from the other or from any Record Holder of a Receipt, notwithstanding that such telegram, telex or facsimile message shall not subsequently be confirmed by letter or as aforesaid. Section 7.5 DEPOSITARY'S AGENTS. The Depositary may from time to time appoint one or more agents (each, a "Depository's Agent") to act in any respect for the Depositary for the purposes of this Deposit Agreement and may at any time appoint additional Depositary's Agents and vary or terminate the appointment of such Depositary's Agents. The Depositary will notify the Company of any such action. Section 7.6 HOLDERS OF RECEIPTS ARE PARTIES. The Record Holders of Receipts from time to time shall be parties to this Deposit Agreement and shall be bound by and entitled to the benefits of all of the terms and conditions hereof and of the Receipts by acceptance of delivery thereof. Section 7.7 GOVERNING LAW. This Deposit Agreement and the Receipts and all rights hereunder and thereunder and provisions hereof and thereof shall be governed by, and construed in accordance with, the laws of the State of Colorado without giving effect to principles of conflict of laws. Section 7.8 INSPECTION OF DEPOSIT AGREEMENT. Copies of this Deposit Agreement shall be filed with the Depositary and the Depositary's Agents and shall be open to inspection during business hours at the Depositary's Office and the respective offices of the Depositary's Agents, if any, by any Record Holder of a Receipt. Section 7.9 HEADINGS. The headings of articles and sections in this Deposit Agreement and in the form of Receipt set forth in Exhibit A hereto have been inserted for convenience only and are not to be regarded as a part of this Deposit Agreement or the Receipts or to have any bearing upon the meaning or interpretation of any provision contained herein or in the Receipts. 28 IN WITNESS WHEREOF, the Company and the Depositary have duly executed this Deposit Agreement as of the day and year first above set forth, and all holders of Receipts shall become parties hereto by and upon acceptance by them of delivery of Receipts issued in accordance with the terms hereof. UNITED INTERNATIONAL HOLDINGS, INC. By: /s/ Ellen P. Spangler ---------------------------------------- Name: Ellen P. Spangler Title: Senior Vice President and Secretary FIRSTAR BANK OF MINNESOTA, N.A., as Depositary By: /s/ Frank P. Leslie III ---------------------------------------- Name: Frank P. Leslie III Title: Vice President 29 ANNEX A FORM OF DEPOSITARY RECEIPT THIS SECURITY (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, EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER: (1) REPRESENTS THAT, IN CONNECTION WITH EXEMPT RESALES OF THE DEPOSITARY SHARES BY DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION, GOLDMAN, SACHS & CO., CREDIT SUISSE FIRST BOSTON CORPORATION AND SALOMON SMITH BARNEY INC. (THE "INITIAL PURCHASERS"), IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"); (2) AGREES THAT, IN CONNECTION WITH RESALES AND TRANSFERS OF THIS SECURITY OTHER THAN EXEMPT RESALES OF THE DEPOSITARY SHARES BY THE INITIAL PURCHASERS, IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (C) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY), OR (D) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN ADDITION, IN THE CASE OF RESALES OF DEPOSITARY SHARES OR PREFERRED STOCK, (A) 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 OR (B) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIES ACT 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 SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERM "OFFSHORE TRANSACTION," HAS THE MEANING GIVEN TO IT BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE AGENT AUTHORIZED BY THE ISSUER FOR THE REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. A-1 Number 001 8,500,000 DEPOSITARY SHARES (each representing 1/20th of one share 7% Series C Senior Cumulative Convertible Preferred Stock) DEPOSITARY RECEIPT FOR DEPOSITARY SHARES REPRESENTING 7% SERIES C SENIOR CUMULATIVE CONVERTIBLE PREFERRED STOCK OF UNITED INTERNATIONAL HOLDINGS, INC. 913247 10 2 INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE SEE REVERSE FOR CERTAIN DEFINITIONS AND INFORMATION Firstar Bank of Minnesota, N.A., as Depositary (the "Depositary"), hereby certifies that Cede & Co. is the registered owner of EIGHT MILLION FIVE HUNDRED THOUSAND SHARES, ("Depositary Shares"), each Depositary Share representing one twentieth of one share of 7% Series C Senior Cumulative Convertible Preferred Stock, par value $0.01, of United International Holdings, Inc., a Delaware corporation (the "Corporation"), on deposit with the Depositary, subject to the terms and entitled to the benefits of the Deposit Agreement dated as of July 6, 1999 (the "Deposit Agreement"), between the Corporation and the Depositary. By accepting this Depositary Receipt the holder hereof becomes a party to and agrees to be bound by all the terms and conditions of the Deposit Agreement. This Depositary Receipt shall not be valid or obligatory for any purpose or entitled to any benefits under the Deposit Agreement unless it shall have been executed by the Depositary by the manual signature of a duly authorized officer or, if executed in facsimile by the Depositary, countersigned by a Registrar in respect of the Depositary Receipts by the manual signature of a duly authorized officer thereof. All Depositary Shares evidenced by this Depositary Receipt and all increases and decreases of the number of Depositary Shares and the respective dates thereof shall be endorsed by the holder or any appointed custodian hereof on the schedule attached hereto and made a part hereof, or on a continuation thereof which shall be attached hereto and made a part hereof. Dated: July 6, 1999 Firstar Bank of Minnesota, N.A. ------------------------------- Name: Frank P. Leslie, III Title: Vice President THE ADDRESS OF THE PRINCIPAL CORPORATE TRUST OFFICE OF THE DEPOSITARY IS 101 EAST FIFTH STREET ST. PAUL, MINNESOTA 55101-1860 A-2 UNITED INTERNATIONAL HOLDINGS, INC. UNITED INTERNATIONAL HOLDINGS, INC. WILL FURNISH WITHOUT CHARGE TO EACH RECEIPTHOLDER WHO SO REQUESTS A COPY OF THE DEPOSIT AGREEMENT AND A STATEMENT OR SUMMARY OF THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OR STOCK OR SERIES THEREOF WHICH THE CORPORATION IS AUTHORIZED TO ISSUE AND OF THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS. ANY SUCH REQUEST IS TO BE ADDRESSED TO THE DEPOSITARY NAMED AND AT THE ADDRESS SET FORTH ON THE FACE OF THIS RECEIPT. ------------------------------ The following abbreviations when used in the instructions on the face of this receipt shall be construed as though they were written out in full according to applicable laws or regulations. TEN COM - as tenant in common UNIF GIFT MIN ACT - _____ Custodian ______ (Cust) (Minor) TEN ENT - as tenants by the entireties Under Uniform Gifts to Minors Act JT TEN - as joint tenants with right of survivorship and not as ------------------------------- tenants in comon (State) Additional abbreviations may also be used though not in the above list. For value received, hereby sell(s), assign(s) and transfer(s) unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE ________________________________________________________________________________ ________________________________________________________________________________ PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE Depositary Shares represented by the within Receipt, and do hereby irrevocably constitute and appoint ___________________________ Attorney to transfer the said Depositary Shares on the books of the within named Depositary with full power of substitution in the premises. Dated: _________________ Signed:_______________________ NOTICE: The signature to the assignment must correspond with the name as written upon the face of this Receipt in every particular, without alteration or enlargement or any change whatever. Signature(s) Guaranteed: __________________________________________________________________________ THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKHOLDERS, SAVING AND LOAN ASSOCIATIONS AND CREDIT UNIONS) WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM PURSUANT TO S.E.C. RULE 17Ad-15. A-3 NOTICE OF CONVERSION The undersigned holder of this Receipt hereby irrevocably exercises the option to convert ____ shares of 7% Series C Senior Cumulative Convertible Preferred Stock represented by this Receipt into shares of Class A Common Stock (par value $.01 per share (the "Common Stock") and any other applicable securities or property) of the Company. In accordance with the terms of and conditions of the 7% Series C Senior Cumulative Convertible Preferred Stock and further as provided in the Deposit Agreement, and directs that the shares of Common Stock deliverable upon such conversion be registered in the name of and delivered, together with a check in payment for any fractional share and any other property deliverable upon such conversion, to the undersigned unless a different name has been indicated below. If securities are to be registered in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto. If the number of shares of 7% Series C Senior Cumulative Convertible Preferred Stock indicated above is less than the number of shares of 7% Series C Senior Cumulative Convertible Preferred Stock on deposit in respect of this Receipt the undersigned directs that the Depositary issue to the undersigned, unless a different name is indicated below, a new Receipt evidencing the 7% Series C Senior Cumulative Convertible Preferred Stock for the balance of the shares of 7% Series C Senior Cumulative Convertible Preferred Stock not to be converted. Dated: ___________________ Signature: __________________________________ NOTE: The above signature should correspond exactly with the name on the face of this Receipt or with the name of the assignee appearing in the assignment form (Please print name and address of registered holder) Name:___________________________________________________________________________ Address_________________________________________________________________________ (Please indicate other delivery instructions, if applicable) Name:___________________________________________________________________________ Address:________________________________________________________________________ A-4 SCHEDULE OF EXCHANGES/CONVERSIONS OF DEPOSITARY SHARES The following exchanges or conversions of a part of this Depositary Receipt have been made:
- ------------------------------ -------------------- --------------------- -------------------- ----------------------- Number of Depositary Shares Exchanged for 7% Series C Number of Senior Cumulative Depositary Shares Number of Signature of Date of Convertible Converted to Depositary Shares Authorized Signatory Exchange/Conversion Preferred Stock Class A Common Stock Remaining of Custodian - ------------------------------ -------------------- --------------------- -------------------- ----------------------- - ------------------------------ -------------------- --------------------- -------------------- ----------------------- - ------------------------------ -------------------- --------------------- -------------------- ----------------------- - ------------------------------ -------------------- --------------------- -------------------- -----------------------
A-5 EX-10 4 EXHIBIT 10.2-SECURITIES ACCOUNT AGREEMENT UNITED INTERNATIONAL HOLDINGS, INC. SECURITIES ACCOUNT AGREEMENT This Securities Account Agreement (the "Agreement"), dated as of the 6th day of July, 1999, by and between United International Holdings, Inc., a Delaware corporation doing business as UnitedGlobalCom (the "Company"), and Firstar Bank of Minnesota, N.A. (the "Deposit Agent"), for the benefit of the holders (individually a "Holder" and collectively the "Holders") of the depositary shares (the "Depositary Shares"), each of which is equivalent to 1/20 of a share of 7% Series C Senior Cumulative Convertible Preferred Stock (the "Preferred Stock"). This Agreement is made to induce all present and future Holders to purchase the Depositary Shares by establishing for their exclusive benefit a securities account (the "Securities Account") to provide for a quarterly cash payment to the Holders in an amount equal to $0.875 per Depositary Share (the "Quarterly Return Amount") in the manner hereinafter provided. Notwithstanding any other provision of this document to the contrary, pending release of the Deposit Funds (as defined) in the manner specified herein, the parties hereto consider the Deposit Funds and any other assets in the Securities Account (as defined) to be assets of the Holders of Depositary Shares and not the Company. NOW THEREFORE, the parties hereto agree as follows: 1. DEFINITIONS. (a) "Common Stock" means the common stock of the Company, par value $0.01 per share. (b) "Certificate" means the Certificate of Designation filed with the Delaware Secretary of State establishing the Preferred Stock as a series of preferred stock of the Company designated as "7% Series C Senior Cumulative Convertible Preferred Stock." (c) "Closing Price" means, for each Trading Day, the last sales price or, in case no such reported sale takes place on such day, the average of the last reported bid and asked price, in either case on the principal national U.S. securities exchange on which the shares of Common Stock are admitted to trading or listed, or if not listed or admitted to trading on such exchange, the representative closing bid price as reported by the Nasdaq National Market, or if the Nasdaq National Market is no longer reporting such information, or if not so available, the fair market price as determined, in good faith, by the Board of Directors of the Company. (d) "Deposit Fund" means $29,750,000. (e) "Deposit Expiration Date" means June 30, 2000. (f) "Deposit Payment Date" means March 31, June 30, September 30 and December 31 of each year commencing September 30, 1999 and continuing through and including Deposit Expiration Date. (g) "Depositary" means Firstar Bank of Minnesota, N.A. (h) "Depositary Receipt" means a written receipt evidencing ownership of Depositary Shares. (i) "Direction Notice" means a notice from the Company, delivered to the Deposit Agent on or prior to the Notice Date, directing the Deposit Agent to purchase from the Company, for transfer to each Holder, in lieu of all or a portion of the Quarterly Return Amount on the next Deposit Payment Date, that number of whole shares of Common Stock determined by dividing such Quarterly Return Amount by the Market Value Amount as of the date of such notice. (j) "Market Value" means, as of any date, the average of the daily Closing Price for the five consecutive Trading Days ending on such date. The Deposit Agent shall have no duty or responsibility for the calculation of the Market Value. (k) "Market Value Amount" means (i) 97% of the Market Value of the Common Stock, if a shelf registration statement registering the resale of such shares is effective or the shares of Common Stock are eligible for resale pursuant to Rule 144(k) under the Securities Act of 1933, as amended or (ii) 93% of the Market Value of the Common Stock, in each case determined as of the date of such notice. (l) "Notice Date" means the tenth day prior to any Deposit Payment Date. (m) "Offering" means the offering of Depositary Shares described in the Company's Offering Memorandum dated June 29, 1999. 2 (n) "Preferred Stock" has the meaning given it in the opening paragraph of this Agreement. (o) "Record Date" means the tenth business day prior to the Deposit Payment Date. (p) "Trading Day" means any business day on which the Nasdaq National Market (or any U.S. national securities exchange or quotation system on which the Common Stock is then listed) is open for the transaction of business. (q) Any capitalized terms not otherwise defined herein shall have the meaning attributed to them in the Offering Memorandum. 2. ESTABLISHMENT OF SECURITIES ACCOUNT. (a) The Company hereby agrees that the Securities Account shall be established in connection with the Offering and shall be held subject to the terms and conditions of this Agreement. (b) Simultaneously with the closing of the Offering or any over-allotment closing of the Offering, the Initial Holders shall deliver the Deposit Fund to the Deposit Agent against the Deposit Agent's written acknowledgment and receipt of the Deposit Fund, in the form attached hereto as Exhibit A, which amount the Deposit Agent will deposit into or credit to the Securities Account and hold on behalf of and for the benefit of the Holders pursuant to the terms of this Agreement. Any amounts held by the Deposit Agent in the Securities Account shall be invested in any United States treasury securities or any money market fund, sponsored by any registered broker dealer or mutual fund distributor, investing solely in direct obligations of the United States of America or any agency thereof or obligations fully and unconditionally guaranteed by the United States of America or any agency thereof. All interest accruing on moneys held in the Securities Account and any earnings realized from investments permitted hereunder shall be credited to the Securities Account and any loss resulting from investments permitted hereunder shall be similarly charged. The Deposit Agent shall have no responsibility for determining whether funds held in the Securities Account shall have been invested in such a manner so as to comply with the requirements of this Section 2(b). 3 3. DISTRIBUTION, REDUCTION AND TERMINATION OF SECURITIES ACCOUNT. (a) Unless on or prior to a Notice Date the Company shall have delivered to the Deposit Agent a Direction Notice, the Deposit Agent shall deliver to each Holder the Quarterly Return Amount on each Deposit Payment Date. If the Company shall have delivered a Direction Notice, substantially in the form attached hereto as Exhibit B, to the Deposit Agent on or prior to the Notice Date, the Deposit Agent shall, as instructed by the Company in such Direction Notice, purchase from the Company, for transfer to each Holder in lieu of all or a portion of the Quarterly Return Amount on the next Deposit Payment Date, that number of whole shares of Common Stock determined by dividing the Quarterly Return Amount (or portion thereof to be paid in shares of Common Stock) by the Market Value Amount as of the Notice Date. In consideration for the issuance of such shares the Deposit Agent shall pay to the Company all or that portion (as the case may be) of the Quarterly Return Amount for such period. (b) Immediately after any conversion of the Depositary Shares, the Company shall be paid by the Deposit Agent any funds remaining in the Securities Account allocable to the Depositary Shares so converted. Such allocation shall be made pro rata based upon the number of Depositary Shares so converted. (c) On the Deposit Expiration Date, after distributing all Quarterly Return Amounts, the Deposit Agent shall deliver to the Company any cash remaining in the Securities Account as of such date and terminate the Securities Account. (d) Delivery of a Direction Notice directing the Deposit Agent to purchase Common Stock for the accounts of Holders shall also authorize the Company to issue and deliver such shares to the Holders immediately upon receipt by the Company of the purchase price for them. (e) This Agreement shall remain in full force and effect until all amounts held hereunder by the Deposit Agent have been finally distributed in accordance herewith. (f) Any fractional interest in a share of Common Stock resulting from payment of the Quarterly Return Amount in Common Stock will be paid in cash based on the last reported sale price of the Common Stock on the Nasdaq National Market (or any national securities exchange or authorized quotation system on which the Common Stock is then listed) at the close of business on the trading day next preceding the date of conversion or such later time as the Company is legally and contractually able to pay for such fractional shares. 4 4. RECORD DATE. The Quarterly Return Amount or, if a Direction Notice has been delivered by the Company, Common Stock, shall be paid or delivered to the Holders of record of the Depositary Shares, as they appear on the Company's stock register 10 business days prior to each Deposit Payment Date. 5. RIGHTS, DUTIES AND IMMUNITIES OF THE DEPOSIT AGENT. In order to induce the Deposit Agent to act as Deposit Agent hereunder, the Company hereby covenants and agrees with the Deposit Agent as follow: (a) The Deposit Agent shall not in any way be bound or affected by any amendment, modification or cancellation of this Securities Account Agreement, unless the same shall have been agreed to in writing by the Deposit Agent. (b) The Deposit Agent shall be entitled to rely, and shall be fully protected in acting in reliance upon, any Direction Notice or other instructions or directions furnished to the Deposit Agent in writing by the proper party under this Securities Account Agreement and shall be entitled to treat as genuine, and as the document it purports to be, any letter, instruction or other document or instrument delivered to the Deposit Agent hereunder and believed by the Deposit Agent to be genuine and to have been presented by the proper party or parties, without being required to determine the authenticity or correctness of any fact stated therein, the propriety or validity thereof, or the authority or authorization of the party or parties making and/or delivering the same to do so. (c) This Agreement sets forth exclusively the duties and obligations of the Deposit Agent with respect to any and all matters pertinent to its acting as Deposit Agent hereunder. (d) The Deposit Agent undertakes to perform only such duties as are expressly set forth in this Securities Account Agreement, and no other duty, obligation or covenant shall be implied or enforceable against the Deposit Agent by any person. Without limiting the effect of this Section 5(d), the Deposit Agent shall have no liability or obligation to the Company, any Holder or any person claiming by or through any of them: (i) to review or examine any instrument, agreement or document other than this Agreement and any notice provided for herein; (ii) to determine whether any conditions precedent to a disbursement of funds from the Securities Account, other than the receipt of written notices provided for in Section 3 hereof, have been or will be satisfied or otherwise to investigate any notice received by the Deposit Agent hereunder; (iii) to evaluate or determine the validity, legality or veracity of any action or omission by any person; (iv) to communicate with any person other than as expressly provided for in this Agreement; (v) to make any payment hereunder from 5 any source other than funds in the Securities Account; (vi) for the issuance of, delivery to or receipt by a Holder of Common Stock purchased by the Deposit Agent hereunder; (vii) for any action or omission of the Deposit Agent taken or made upon the written instructions of the Company, whether or not the persons giving such instructions were in fact authorized to do so; (viii) for any other action or omission of, or for errors in judgment by, the Deposit Agent under or in connection with this Agreement taken or made in good faith and without negligence or willful misconduct; (ix) for any action or omission of any third party, including the Company or any Holder; (x) for any change in the value of any asset held in the Securities Account or for any loss on disposition of any investment of the Deposit funds; and (xi) for incidental, consequential or punitive damages in any event. (e) The Company covenants and agrees to indemnify and hold the Deposit Agent and each of its directors, officers, employees and agents (the Deposit Agent and any such person or entity seeking indemnification hereunder being hereinafter referred to as an "Indemnified Party") harmless from and against, and upon demand reimburse each indemnified party for, any and all losses, claims, damages, liabilities, costs and expenses (including expenses of its legal counsel) (collectively, "Indemnified Losses") which may be paid, incurred or suffered by such Indemnified Party or to which such Indemnified Party may become subject by reason of or in connection with the administration of the Deposit Agent's duties as Deposit Agent hereunder (including, but not limited to, any action taken or omitted by the Deposit Agent in connection with this Agreement or any action allegedly so taken or omitted) or by reason of, or as a result of, the Deposit Agent's compliance with the instructions set forth herein or with any instructions delivered to the Deposit Agent pursuant hereto, except with respect to Indemnified Losses which shall be the result of negligence or willful misconduct on the part of such Indemnified Party. (f) In the event of any controversy or dispute hereunder, or with respect to any question as to the construction of this Agreement or any action so taken by it hereunder, the Deposit Agent may, in its discretion, obtain the advice of counsel and shall incur no liability for any action taken, suffered or omitted by it hereunder in good faith and in accordance with the advice or opinion of such counsel. (g) If any part of the Deposit Fund is at any time attached, garnished or levied upon or under any court order, or in case the payment, assignment, transfer, conveyance or delivery of any of the Deposit Fund shall be stayed or enjoined by any court order, or in case any order, writ, judgment or decree shall be made or entered by any court affecting the Deposit Fund or any part thereof, then and in any of such events, the Deposit Agent is authorized, in its 6 sole discretion, to rely upon and comply with any such order, writ, judgment or decree. The Deposit Agent shall not be liable to any of the parties hereto, to any Holder or to any other person, firm or corporation by reason of such compliance even though such order, writ, judgment or decree may be subsequently reversed, modified, annulled, set aside, vacated, found to have been entered without jurisdiction, or found to be in violation of or beyond the scope of a constitution or a law. (h) Notwithstanding anything to the contrary contained therein, if the Deposit Agent shall be uncertain as to its duties or rights hereunder, shall receive any notice, advice, direction, or other document from the Company with respect to the Deposit Fund which, in its opinion, is in conflict with any of the provisions of this Agreement, or should be advised that a dispute has arisen with respect to the payment, ownership, or right of possession of the Deposit Fund or any part thereof (or as to the delivery, non-delivery, or content of any notice, advice, direction, or other document), the Deposit Agent shall be entitled (but not obligated), without liability to anyone, under any circumstance to refrain from taking any action other than to use its best efforts to keep safely the Deposit Fund until the Deposit Agent shall be directed otherwise in writing by the Company and a majority of the Holders or by an order, decree or judgment of a court of competent jurisdiction which has been finally affirmed on appeal or which by lapse of time or otherwise is no longer subject to appeal, but the Deposit Agent shall be under no duty to institute or defend any proceeding, although it may do so. (i) The Company shall have the right to cause the Deposit Agent to be relieved of its duties hereunder and to select a substitute Deposit Agent, upon the expiration of thirty (30) days following delivery of written notice of substitution to the Deposit Agent. Upon selection of such substitute Deposit Agent, such substitute Deposit Agent and the Company shall enter into an agreement substantially identical to this Agreement and, thereafter, the replaced Deposit Agent shall be relieved of its duties and obligations to perform hereunder, except that the replaced Deposit Agent shall transfer to the substitute Deposit Agent upon request therefor the Securities Account and copies of all books, records, plans and other documents in the replaced Deposit Agent's possession relating to such funds or this Agreement. (j) Upon not less than 30 days' written notice to the Company and the Holders of its intention to resign under this Agreement, the Deposit Agent may resign as Deposit Agent hereunder by selecting, as a successor Deposit Agent, any other Deposit Agent as directed or approved by the Company (which approval shall not be unreasonably withheld). Such resignation shall take effect upon 7 delivery by the resigning Deposit Agent of the Securities Account to such successor Deposit Agent: the resigning Deposit Agent shall thereupon be discharged of all its duties and obligations hereunder. In addition, the Deposit Agent shall be discharged of all of its duties and obligations hereunder upon its deposit of the Securities Account with a court of competent jurisdiction. The Company and the Holders each hereby irrevocably consents and submits to the jurisdiction of such court in any such action and waives all rights to contest the jurisdiction of such court. (k) The Company hereby authorizes the Deposit Agent, if the Deposit Agent is threatened with litigation or is sued, to interplead all interested parties in any court of competent jurisdiction and to deposit the Securities Account with the clerk of that court. (l) The Deposit Agent's duties, obligations and liabilities hereunder, except as a result of the Deposit Agent's negligence or willful misconduct, will terminate upon its delivery of all the Securities Account under any provision of this Agreement. The provisions of Section 5(e) and of this Section 5(l) shall survive any such termination. 6. EXPENSES. The Deposit Agent shall be entitled to customary fees and expenses for performing its duties hereunder, as may be agreed from time to time by the Company and the Deposit Agent. The Deposit Agent shall be entitled to prompt reimbursement of all reasonable expenses incurred by the Deposit Agent in carrying out its duties hereunder, including, without limitation, travel and other out-of-pocket expenses. 7. NOTICES. All notices, requests, demands and other communications hereunder shall be deemed to have been duly given if delivered by hand or mailed, certified or registered mail, return receipt requested, with postage prepaid: (a) if to the Holders, to their address as set forth in the stock transfer records of the Company: (b) if to the Company, to UnitedGlobalCom, 4643 South Ulster, Suite 1300, Denver, Colorado, 80237, Attn: President, or to such person or address as the Company shall designate in writing, with a copy to Holme Roberts & Owen LLP, 1700 Lincoln Street, Suite 4100, Denver, Colorado 80203, Attn: Garth B. Jensen. 8 (c) if to Deposit Agent, to Firstar Bank of Minnesota, N.A., 101 East Fifth Street, St. Paul, Minnesota 55101-1860, Attn: Frank Leslie. Any party may change the address (or the person to whose attention such notice is directed) by notice given to the other parties hereto as aforesaid. 8. MISCELLANEOUS. (a) BINDING EFFECT. This Agreement shall be binding upon the parties hereto and their respective heirs, personal representatives, executors, successors and assigns. (b) COUNTERPARTS. This Agreement may be executed in any number of counterparts all of which, taken together shall constitute one fully executed agreement. (c) NO AMENDMENTS. This Agreement may not be modified or amended, nor any provision hereof be waived, except by a writing duly executed by the Deposit Agent, the Company and by a majority of the Holders. (d) GOVERNING LAW. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Colorado, without reference to or application of rules or principles of conflicts of law. (e) HEADINGS. Headings, sections and subsections contained in this Agreement are for convenience or reference purposes only and shall not affect the meaning or interpretation of this Agreement. (f) SPECIFIC PERFORMANCE. In the event of the failure by a party hereto to give any notice required under the terms of this Agreement, the other parties hereto shall be entitled to specific performance by such non-performing party. (g) SEVERABILITY. If any provisions of this Agreement shall be declared by any court of competent jurisdiction illegal, void or unenforceable, the other provisions shall not be affected, but shall remain in full force and effect. 9 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and the year first above written. UNITED INTERNATIONAL HOLDINGS, INC. By: /s/ Ellen P.Spangler ---------------------------------------- Name: Ellen P. Spangler Title: Senior Vice President and Secretary FIRSTAR BANK OF MINNESOTA, N.A., as Depositary By: /s/ Frank P. Leslie III ---------------------------------------- Name: Frank P. Leslie III Title: Vice President 10 EXHIBIT A DEPOSIT RECEIPT THE UNDERSIGNED hereby acknowledges receipt from the Initial Purchasers (as defined in the Offering Memorandum dated June 29, 1999) of Treasury Securities with a value of $ representing a portion of the sales proceeds from that certain private placement of 8,500,000 Depositary Shares (each such Depositary Share is equivalent to 1/20 of a share of 7 % Series C Senior Cumulative Convertible Preferred Stock, par value $0.01 per share) of the Company. The undersigned, as Deposit Agent for the Company (the "Deposit Agent") has, in accordance with that certain Securities Account Agreement, dated July 6, 1999 by and between the Company and the Deposit Agent, as deposit agent (the "Securities Account Agreement"), deposited the Deposit Fund in the Securities Account (as such term is defined in the Securities Account Agreement). FIRSTAR BANK OF MINNESOTA, N.A. By: Name: Title: Date: _____, 1999 EXHIBIT B FORM OF DIRECTION NOTICE [LETTERHEAD OF THE COMPANY] [DATE] [DEPOSITARY] Re: Direction Notice No. [_______________] Ladies and Gentlemen: We refer to the Securities Account Agreement dated as of the 6th day of July, 1999 between you, as Deposit Agent, and United International Holdings, Inc., a Delaware corporation (the "Company"). Unless otherwise specified, capitalized terms used herein shall have the meaning given in the Securities Account Agreement. This letter constitutes a Direction Notice under the Securities Account Agreement. The undersigned hereby notifies you that you are directed, pursuant to Paragraph 3(a) of the Securities Account Agreement, to purchase from the Company, for delivery to each holder of Depositary Shares in lieu of the Quarterly Return Amount on the next Deposit Payment Date, shares of Common Stock for $ of Quarterly Return Amount. In connection with the requested disbursement, the undersigned hereby notifies you that; the Company will issue and deliver, for and on your behalf, the shares of Common Stock acquired by you directly to the holders of the Depositary Shares. The Deposit Agent is entitled to rely on the foregoing in disbursing funds related to this Direction Notice. UNITED INTERNATIONAL HOLDINGS, INC. By: Name: Title: -----END PRIVACY-ENHANCED MESSAGE-----