EXHIBIT 4.2
DIVA SYSTEMS CORPORATION
12 5/8% Senior Discount Note Due 2008
CUSIP _______
No. N-____ $___________
DIVA SYSTEMS CORPORATION, a Delaware corporation (the "Company", which term
includes any successor under the Indenture hereinafter referred to), for value
received, promises to pay to CEDE & CO., or its registered assigns, the
principal sum of _____________________ ($______________) on March 1, 2008.
Interest Payment Dates: March 1 and September 1, commencing September 1,
2003.
Regular Record Dates: February 15 and August 15.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed manually
or by facsimile by its duly authorized officers.
DIVA SYSTEMS CORPORATION
By:
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Name: Xxxx X. Xxxx
Title: Chief Executive Officer
By:
-------------------------------------
Name: Xxxx X. Xxxxxxx
Title: President, Chief Operating
Officer, Chief Financial Officer
and Secretary
Trustee's Certificate of Authentication
This is one of the 12 5/8% Senior Discount Notes due 2008 described in the
within-mentioned Indenture.
Date: January __, 1999
THE BANK OF NEW YORK,
as Trustee
By:
-------------------------------------
Authorized Signatory
DIVA SYSTEMS CORPORATION
12 5/8% Senior Discount Note due 2008
1. Principal and Interest.
----------------------
The Company will pay the principal of this Note on March 1, 2008.
The Company promises to pay interest on the principal amount of this Note on
each Interest Payment Date, as set forth below, at the rate per annum shown
above.
Interest will be payable semi-annually (to the holders of record of the
Notes at the close of business on the February 15 or August 15 immediately
preceding the Interest Payment Date) on each Interest Payment Date, commencing
September 1, 2003; provided that no interest shall accrue on the principal
amount of this Note prior to March 1, 2003 and no interest shall be paid on this
Note prior to September 1, 2003, except as provided in the next paragraph.
If an exchange offer (the "Exchange Offer") registered under the Securities
Act is not consummated, and a shelf registration statement (the "Shelf
Registration Statement") under the Securities Act with respect to resales of the
Notes is not declared effective by the Commission, on or before February 19,
1999 in accordance with the terms of the Registration Rights Agreement dated
February 19, 1998 among the Company and Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated, Chase Securities Inc. and Xxxxxx Xxxxxxx &
Co. Incorporated, interest (in addition to the accrual of original discount
during the period ending March 1, 2003 and in addition to the interest otherwise
due on the Notes after such date) will accrue, at an annual rate of 0.5% of the
Accreted Value on the preceding Semi-Annual Accrual Date, from February 19,
1999, payable in cash semiannually, in arrears, on each Interest Payment Date,
commencing September 1, 1999 until the Exchange Offer is consummated or the
Shelf Registration Statement is declared effective. The Holder of this Note is
entitled to the benefits of such Registration Rights Agreement.
From and after March 1, 2003, interest on the Notes will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from March 1, 2003; provided that, if there is no existing default in the
payment of interest and this Note is authenticated between a Regular Record Date
referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such Interest Payment Date. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal and premium, if any, and
interest on overdue installments of interest, to the extent lawful, at a rate
per annum that is 2% in excess of the rate otherwise payable.
2. Method of Payment.
-----------------
The Company will pay principal as provided above and interest (except
defaulted interest) on the principal amount of the Notes as provided above on
each March 1 and September 1, commencing September 1, 2003, to the persons who
are Holders (as reflected in the Security Register at the close of business on
such February 15 and August 15 immediately preceding the Interest Payment Date),
in each case, even if the Note is cancelled on registration of transfer or
registration of exchange after such record date; provided that, with respect to
the payment of principal, the Company will make payment to the Holder that
surrenders this Note to a Paying Agent on or after March 1, 2008.
The Company will pay principal, premium, if any, and as provided above,
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. However, the Company may pay
principal, premium, if any, and interest by its check payable in such money. It
may mail an interest check to a Holder's registered address (as reflected in the
Security Register). If a payment date is a date other than a Business Day at a
place of payment, payment may be made at that place on the next succeeding day
that is a Business Day and no interest shall accrue for the intervening period.
3. Paying Agent and Registrar.
--------------------------
Initially, the Trustee will act as authenticating agent, Paying Agent and
Registrar. The Company may change any authenticating agent, Paying Agent or
Registrar without notice. The Company, any Subsidiary or any Affiliate of any
of them may act as Paying Agent, Registrar or co-Registrar.
4. Indenture; Limitations.
----------------------
The Company issued the Notes under an Indenture dated February 19, 1998 (the
"Indenture"), between the Company and The Bank of New York, trustee (the
"Trustee"). Capitalized terms herein are used as defined in the Indenture
unless otherwise indicated. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act. The Notes are subject to all such terms, and Holders are
referred to the Indenture and the Trust Indenture Act for a statement of all
such terms. To the extent permitted by applicable law, in the event of any
inconsistency between the terms of this Note and the terms of the Indenture, the
terms of the Indenture shall control.
The Notes are general unsecured obligations of the Company.
5. Redemption.
----------
The Notes will be redeemable, at the Company's option, in whole or in part,
at any time or from time to time, on or after March 1, 2003 and prior to
maturity, upon not less than 30 nor more than 60 days' prior notice mailed by
first class mail to each Holder's last address, as it appears in the Security
Register, at the following Redemption Prices (expressed in percentages of
principal amount at maturity),
plus accrued and unpaid interest to the Redemption Date (subject to the right of
Holders of record on the relevant Regular Record Date that is prior to the
Redemption Date to receive interest due on an Interest Payment Date), if
redeemed during the 12-month period commencing March 1 of the years set forth
below:
Year Redemption Price
-------- -------------------
2003................. 106.31%
2004................. 104.20%
2005................. 102.10%
2006 and thereafter.. 100.00%
At any time prior to March 1, 2001, the Company may redeem up to 35% of the
Accreted Value of the Notes with the proceeds of one or more sales of Capital
Stock (other than Disqualified Stock) of the Company, at any time or from time
to time in part, at a Redemption Price (expressed as a percentage of Accreted
Value on the Redemption Date) of 112.625%, plus accrued and unpaid interest to
the Redemption Date (subject to the rights of Holders of record on the relevant
Regular Record Date that is prior to the Redemption Date to receive interest due
on an Interest Payment Date); provided that Notes representing at least
$300,950,000 aggregate principal amount at maturity remain outstanding after
each such redemption.
Notes in original denominations larger than $1,000 may be redeemed in part.
On and after the Redemption Date, interest ceases to accrue on Notes or portions
of Notes called for redemption, unless the Company defaults in the payment of
the Redemption Price.
6. Repurchase upon Change of Control.
---------------------------------
Upon the occurrence of any Change of Control, each Holder shall have the
right to require the repurchase of its Notes by the Company in cash pursuant to
the offer described in the Indenture at a purchase price equal to 101% of the
Accreted Value thereof on the relevant Payment Date, plus accrued and unpaid
interest, if any, to the date of purchase (the "Payment Date").
A notice of such Change of Control will be mailed within 30 days after any
Change of Control occurs to each Holder at its last address as it appears in the
Security Register. Notes in original denominations larger than $1,000 may be
sold to the Company in part. On and after the Payment Date, interest ceases to
accrue on Notes or portions of Notes surrendered for purchase by the Company,
unless the Company defaults in the payment of the purchase price.
7. Denominations; Transfer; Exchange.
---------------------------------
The Notes are in registered form without coupons in denominations of $1,000
of principal amount at maturity and integral multiples of $1,000 in excess
thereof. A Holder may register the transfer or exchange of Notes in accordance
with the Indenture. The Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and to
pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not register the transfer or exchange of any Notes selected for
redemption. Also, it need not register the transfer or exchange of any Notes for
a period of 15 days before the day of mailing of a notice of redemption of Notes
selected for redemption.
8. Persons Deemed Owners.
---------------------
A Holder shall be treated as the owner of a Note for all purposes.
9. Unclaimed Money.
---------------
If money for the payment of principal, premium, if any, or interest remains
unclaimed for two years, the Trustee and the Paying Agent will pay the money
back to the Company. After that, Holders entitled to the money must look to the
Company for payment, unless an abandoned property law designates another Person,
and all liability of the Trustee and such Paying Agent with respect to such
money shall cease.
10. Discharge Prior to Redemption or Maturity.
-----------------------------------------
If the Company deposits with the Trustee money or U.S. Government
Obligations sufficient to pay the then outstanding principal of, premium, if
any, and accrued interest, if any, on the Notes (a) to redemption or maturity,
the Company will be discharged from the Indenture and the Notes, except in
certain circumstances for certain sections thereof, and (b) to the Stated
Maturity, the Company will be discharged from certain covenants set forth in the
Indenture.
11. Amendment; Supplement; Waiver.
-----------------------------
Subject to certain exceptions set forth in the Indenture, the Indenture or
the Notes may be amended or supplemented with the consent of the Holders of at
least a majority in principal amount at maturity of the Notes then outstanding,
and any existing default or compliance with any provision may be waived with the
consent of the Holders of at least a majority in principal amount at maturity of
the Notes then outstanding. Without notice to or the consent of any Holder, the
parties thereto may amend or supplement the Indenture or the Notes to, among
other things, cure any ambiguity, defect or inconsistency and make any change
that does not materially and adversely affect the rights of any Holder.
12. Restrictive Covenants.
---------------------
The Indenture imposes certain limitations on the ability of the Company and
its Restricted Subsidiaries, among other things, to Incur additional
Indebtedness, make Restricted Payments, use the proceeds from Asset Sales,
engage in transactions with Affiliates or merge, consolidate or transfer
substantially all of its assets. Within 90 days after the end of each fiscal
year, the Company must report to the Trustee on compliance with such
limitations.
13. Successor Persons.
-----------------
When a successor Person or other entity assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor Person, subject to certain exceptions, will be
released from those obligations.
14. Defaults and Remedies.
---------------------
The following events constitute "Events of Default" under the Indenture:
(a) the Company defaults in the payment of the principal of (or premium, if any,
on) any Note when the same becomes due and payable at maturity, upon
acceleration, redemption or otherwise; (b) the Company defaults in the payment
of interest on any Note when the same becomes due and payable, and such default
continues for a period of 30 days; (c) the Company defaults in the performance
of, or breaches the provisions of, Article Five or fails to make or consummate
an Offer to Purchase in accordance with Section 4.10 or 4.17; (d) the Company
defaults in the performance of or breaches any covenant or agreement of the
Company in the Indenture or under the Notes (other than a default specified in
clause (a), (b) or (c) above), and such default or breach continues for a period
of 30 consecutive days after written notice by the Trustee or the Holders of at
least 25% in aggregate principal amount at maturity of the Notes then
outstanding; (e) there occurs with respect to any issue or issues of
Indebtedness of the Company or any Significant Subsidiary having an outstanding
principal amount of $10 million or more in the aggregate for all such issues of
all such Persons, whether such Indebtedness now exists or shall hereafter be
created, (I) an event of default that has caused the holder thereof to declare
such Indebtedness to be due and payable prior to its Stated Maturity and such
Indebtedness has not been discharged in full or such acceleration has not been
rescinded or annulled within 30 days of such acceleration and/or (II) the
failure to make a principal payment at the final (but not any interim) fixed
maturity and such defaulted payment shall not have been made, waived or extended
within 30 days of such payment default; (f) any final judgment or order (not
covered by insurance) for the payment of money in excess of $10 million in the
aggregate for all such final judgments or orders against the Company or any
Significant Subsidiary (treating any deductibles, self-insurance or retention as
not so covered) shall be rendered against the Company or any Significant
Subsidiary and shall not be paid or discharged, and there shall be any period of
30 consecutive days following entry of the final judgment or order that causes
the aggregate amount for all such final judgments or orders outstanding and not
paid or discharged against all such Persons to exceed $10 million during which a
stay of enforcement of such final judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; (g) a court having jurisdiction in
the premises enters a decree or order for (A) relief in respect of the Company
or any Significant Subsidiary in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, (B)
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or any Significant Subsidiary or
for all or substantially all of the property and assets of the Company or any
Significant Subsidiary or (C) the winding up or liquidation of the affairs of
the Company or any Significant Subsidiary and, in each case, such decree or
order shall remain unstayed
and in effect for a period of 60 consecutive days; or (h) the Company or any
Significant Subsidiary (A) commences a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
consents to the entry of an order for relief in an involuntary case under any
such law, (B) consents to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official of
the Company or any Significant Subsidiary or for all or substantially all of the
property and assets of the Company or any Significant Subsidiary or (C) effects
any general assignment for the benefit of creditors.
If an Event of Default, as defined in the Indenture, occurs and is
continuing, the Trustee may, and at the direction of the Holders of at least 25%
in aggregate principal amount at maturity of the Notes then outstanding shall,
declare all the Notes to be due and payable. If a bankruptcy or insolvency
default with respect to the Company occurs and is continuing, the Notes
automatically become due and payable. Holders may not enforce the Indenture or
the Notes except as provided in the Indenture. The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the Notes.
Subject to certain limitations, Holders of at least a majority in principal
amount at maturity of the Notes then outstanding may direct the Trustee in its
exercise of any trust or power.
15. Trustee Dealings with Company.
-----------------------------
The Trustee under the Indenture, in its individual or any other capacity,
may make loans to, accept deposits from and perform services for the Company or
its Affiliates and may otherwise deal with the Company or its Affiliates as if
it were not the Trustee.
16. No Recourse Against Others.
--------------------------
No incorporator or any past, present or future partner, stockholder, other
equity holder, officer, director, employee or controlling person as such, of the
Company or of any successor Person shall have any liability for any obligations
of the Company under the Notes or the Indenture or for any claim based on, in
respect of or by reason of, such obligations or their creation. Each Holder by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for the issuance of the Notes.
17. Authentication.
--------------
This Note shall not be valid until the Trustee or authenticating agent
manually signs the certificate of authentication on the other side of this Note.
18. Abbreviations.
-------------
Customary abbreviations may be used in the name of a Holder or an assignee,
such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties),
JT TEN (= joint tenants with right of survivorship and not as tenants in
common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors Act).
The Company will furnish a copy of the Indenture to any Holder upon written
request and without charge. Requests may be made to DIVA Systems Corporation,
000 Xxxxxxxxxx Xxxxx, Building 000, Xxxxx Xxxx, XX 00000; Attention: Xxxxx
Xxxxxxx, Treasurer.
TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
----------------------------------
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Please print or typewrite name and address including zip code of assignee
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the within Note and all rights thereunder, hereby irrevocably constituting and
appointing ___________________________________________________________________
attorney to transfer said Note on the books of the Company with full power of
substitution in the premises.
In connection with any transfer of this Note occurring prior to the date
which is the earlier of (i) the date the Shelf Registration Statement is
declared effective or (ii) the end of the period referred to in Rule 144(k)
under the Securities Act, the undersigned confirms that without utilizing any
general solicitation or general advertising that:
[Check One]
---------
[_] (a) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933 provided by Rule 144A
thereunder.
or
--
[_] (b) this Note is being transferred other than in accordance with (a) above
and documents are being furnished which comply with the conditions of
transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Note in the name of any Person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.08 of the Indenture shall have
been satisfied.
Date:
______________ ________________________________________
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within-mentioned
instrument in every particular, without
alteration or any change whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note for
its own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act of 1933 and is aware
that the sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Company as the undersigned has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:
_____________ ________________________________________
NOTICE: To be executed by an executive
officer
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to Section
4.10 or 4.17 of the Indenture, check the Box:
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 4.10 or 4.17 of the Indenture, state the amount:
$___________________.
Date: _________________
Your Signature:
(Sign exactly as your name appears on the other side
of this Note)
Signature Guarantee:
____________________________________________________________
Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Trustee, which
requirements include membership or participation in the
Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by
the Trustee in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934,
as amended.
