Document:

Exhibit 4.2

 

MULTICANAL S.A.,

the Company,

 

LAW DEBENTURE TRUST COMPANY OF NEW YORK,

Trustee, Co-Registrar,

Principal Paying Agent and Bank,

 

and

 

HSBC Bank Argentina, S.A.,

Registrar and Paying Agent

 

 

FIRST SUPPLEMENTAL INDENTURE

Dated as of

 

to INDENTURE

Dated as of

 

Relating to

 

Step-Up 10-Year Notes

 

 

 

TABLE OF CONTENTS

 

	
  ARTICLE ONE

  	
   

  
	
   

  	
   

  
	
  DEFINITIONS

  	
   

  
	
   

  	
   

  
	
  SECTION 1.1 Definitions

  	
   

  
	
  SECTION 1.2 Certain Conventions

  	
   

  
	
   

  	
   

  
	
  ARTICLE TWO

  	
   

  
	
   

  	
   

  
	
  NOTE FORMS

  	
   

  
	
   

  	
   

  
	
  SECTION 2.1 Form of Step-Up Notes

  	
   

  
	
  SECTION 2.2
  Denominations

  	
   

  
	
  ARTICLE THREE

  	
   

  
	
   

  	
   

  
	
  THE STEP-UP NOTES

  	
   

  
	
   

  	
   

  
	
  SECTION 3.1 Maximum
  Aggregate Principal Amount, Title and Terms

  	
   

  
	
  SECTION 3.2 Global
  Notes in Registered Form

  	
   

  
	
  SECTION 3.3 Exchanges

  	
   

  
	
  SECTION 3.4 Further
  Issues of Step-Up Notes

  	
   

  
	
  SECTION 3.5 Waiver
  and Release

  	
   

  
	
   

  	
   

  
	
  ARTICLE FOUR

  	
   

  
	
   

  	
   

  
	
  COVENANTS

  	
   

  
	
   

  	
   

  
	
  SECTION 4.1 Payment
  of Principal, Premium, if any, and Interest

  	
   

  
	
  SECTION 4.2
  Limitation on Transactions with Shareholders and Affiliates

  	
   

  
	
  SECTION 4.3
  Limitation on Asset Sales

  	
   

  
	
  SECTION 4.4
  Consolidation, Merger and Sale of Assets

  	
   

  
	
   

  	
   

  
	
  ARTICLE FIVE

  	
   

  
	
   

  	
   

  
	
  10-YEAR NOTES RESERVE ACCOUNT

  	
   

  
	
   

  	
   

  
	
  SECTION 5.1 Grant of
  Security Interest

  	
   

  
	
  SECTION 5.2 Terms of
  10-Year Notes Reserve Account

  	
   

  
	
  SECTION 5.3 Release
  of Monies from 10-Year Notes Reserve Account

  	
   

  
	
  SECTION 5.4
  Representation, Warranties and Covenants Specific to 10-Year Notes Reserve
  Account

  	
   

  
	
   

  	
   

  
	
  ARTICLE SIX

  	
   

  
	
   

  	
   

  
	
  OTHER AMENDMENTS

  	
   

  

 

i

 

	
  SECTION 6.1
  Acceleration of Maturity; Rescission and Annulment

  	
   

  
	
  SECTION 6.2 Meetings
  of Holders; Modification and Waiver

  	
   

  
	
   

  	
   

  
	
  ARTICLE SEVEN

  	
   

  
	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  SECTION 7.1 Supplemental
  Indenture

  	
   

  
	
  SECTION 7.2
  Responsibility of the Trustee

  	
   

  
	
  SECTION 7.3
  Compensation and Indemnification of Trustee and Its Prior Claim

  	
   

  
	
  SECTION 7.4 Governing
  Law

  	
   

  
	
  SECTION 7.5
  Separability

  	
   

  
	
  SECTION 7.6
  Counterparts

  	
   

  
	
   

  	
   

  
	
  EXHIBITS

  	
   

  
	
   

  	
   

  
	
  Exhibit A Form of Unrestricted Global Note

  	
   

  
	
   

  	
   

  
	
  Exhibit B
  Form of Restricted Global Note

  	
   

  

 

ii

 

THIS FIRST SUPPLEMENTAL INDENTURE, dated as of                        (this
“First Supplemental Indenture”), is among Multicanal S.A., a sociedad anónima organized, existing and incorporated in the
City of Buenos Aires, Republic of Argentina (“Argentina”) under the laws
of Argentina on July 26, 1991, with a term of duration expiring on July 27,
2090, and registered with the Public Registry of Commerce on July 26,
1991, under number 5225, Book 109 of Volume “A” of corporations, having its
principal executive offices at Avalos 2057, (C1431DPM) Buenos Aires, Argentina
(the “Company”), Law Debenture Trust Company of New York, a New York
banking corporation, as Trustee for the benefit of the Holders (the “Trustee”),
Co-Registrar (the “Co-Registrar”) and Principal Paying Agent (the “Principal
Paying Agent”) and in its individual capacity for the purposes of Article Five
hereto (the “Bank”), and HSBC Bank Argentina S.A., a sociedad anónima duly organized and existing under the laws
of Argentina, as Registrar (the “Registrar”) and Paying Agent (the “Paying
Agent”), under the Indenture, dated as of                        ,
among the Company, the Trustee, the Co-Registrar, the Principal Paying Agent,
the Registrar and the Paying Agent (the “Indenture,” as supplemented and
amended by this First Supplemental Indenture, the “10-Year Notes Indenture”).  All terms not defined herein shall have the
meanings assigned to them in the Indenture.

 

WHEREAS, the Company executed and delivered the
Indenture to the Trustee to provide for the issuance of the Company’s Debt
Securities to be issued from time to time in one or more series as might be
determined by the Company under the Indenture, up to U.S.$300,000,000 aggregate
principal amount, or its equivalent in another currency or composite currency,
of Debt Securities that constituted Public Debt Securities and without
limitation on the aggregate principal amount of Debt Securities that constitute
Private Notes, which may be authenticated and delivered as provided in the
Indenture;

 

WHEREAS, Section 3.1 of the
Indenture provides for the issuance from time to time of Public Debt Securities
of the Company, issuable for the purpose and subject to the limitations
contained in the Indenture.  The Company
has duly authorized the creation of a series of its Public Debt Securities,
with an aggregate principal amount of up to U.S.$               ,
to be known as its Step-Up 10-Year Notes (the “Step-Up Notes”).  The Step-Up Notes shall be issued with the
form and substance, and the terms, provisions and conditions thereof to be set
forth as provided in the Indenture and this First Supplemental Indenture;

 

WHEREAS, the Company has requested that the Trustee
execute and deliver this First Supplemental Indenture; all requirements
necessary to make this First Supplemental Indenture a valid instrument in
accordance with its terms, and to make the Step-Up Notes, when executed by the
Company and authenticated and delivered by the Trustee, the valid obligations
of the Company, have been performed; and the execution and delivery of this
First Supplemental Indenture has been duly authorized in all respects;

 

NOW THEREFORE, WITNESSETH that, for and in
consideration of the premises and the purchase and acceptance of the Step-Up
Notes by the Holders thereof, and for the purpose of setting forth, as provided
in the Indenture, the form and substance of the Step-Up Notes and the terms,
provisions and conditions thereof, it is mutually covenanted and agreed, for
the benefit of all Holders from time to time of the Step-Up Notes, as follows:

 

 

ARTICLE ONE

 

DEFINITIONS

 

SECTION 1.1  Definitions.  For all purposes of this First
Supplemental Indenture, except as otherwise expressly
provided or unless the context otherwise requires:

 

“7-Year Notes Indenture” means the Indenture, as supplemented
and amended by the Second Supplemental Indenture, dated as of                        , among the Company, Law Debenture Trust Company of New
York, as the Trustee, Co-Registrar and Principal Paying Agent thereunder, and HSBC
Bank Argentina S.A., as Registrar and Paying Agent
thereunder.

 

“7-Year Notes” means both the series of Debt Securities known as
the Company’s 7-Year Fixed Rate Notes and the series of Debt Securities known
as the Company’s 7-Year Floating Rate Notes, all of which were (or to be)
issued pursuant to the 7-Year Notes Indenture.

 

“10-Year Notes Indenture” has the meaning set forth in the first
paragraph of this First Supplemental Indenture.

 

“10-Year Notes Reserve Account” has the meaning set forth in Section 5.1.

 

“APE” means an acuerdo preventivo extrajudicial, or Argentine pre-packaged
reorganization plan.

 

“Bank” has the
meaning set forth in the first paragraph of this First Supplemental Indenture.

 

“Company” has the meaning set forth in the first paragraph of
this First Supplemental Indenture.

 

“Global Notes” has the meaning set forth in Section 3.2(b).

 

“Interest Payment Date”
means in the case of the first interest payment [the date these Notes are
delivered or made available to holders pursuant to the Company’s APE], in the
case of the second interest payment, [the date
that is six months after the Company accepts Eligible Notes upon expiration of
the Election Offers, if the Company consummates the transactions contemplated
in the APE before such date] and for each
interest payment thereafter, [             ]
and [             ]
of each year, commencing on                        .

 

“Investment” means, with respect to any Person,
any direct or indirect advance, loan, account receivable (other than an account
receivable arising in the ordinary course of business), or other extension of
credit (including, without limitation, by means of any Guarantee or similar
arrangement) or any capital contribution to (by means of transfers of property
to others, payments for property or services for the account or use of others,
or otherwise), or any purchase or ownership of any stocks, bonds, notes,
debentures or other securities of, any other Person (excluding Subsidiaries but
not any Person that becomes a Subsidiary after giving effect to the
Investment).  Notwithstanding the
foregoing, in no event shall any issuance of Capital

 

2

 

Stock (other than Disqualified Stock) of the Company in exchange for
Capital Stock, property or assets of another Person constitute an Investment by
the Company in such other Person.

 

“Issue Date” means the date of original issuance of the Step-Up
Notes.

 

“Permitted Lien”
means (i) Liens on the 10-Year Notes Reserve Account and on the reserve
account established on or about the date hereof for the benefit of the holders
of 7-Year Notes; (ii) Liens existing on the Issue Date; (iii) Liens
(including extensions and renewals thereof) upon real or personal property
acquired after the Issue Date; provided that
(a) such Lien is created solely for the purpose of securing Indebtedness
Incurred in accordance with the Section 4.6 of the Indenture, (1) to
finance the cost (including the cost of design, development, construction,
improvement, installation or integration) of the item of property or assets
subject thereto and such Lien is created prior to, at the time of or within six
months after the later of the acquisition, the completion of construction or
the commencement of full operation of such property or (2) to refinance
any Indebtedness previously so secured, (b) the principal amount of the
Indebtedness secured by such Lien does not exceed 100% of such cost and (c) any
such Lien shall not extend to or cover any property or assets other than such
item of property or assets and any improvements on such item; (iv) any
interest or title of a lessor in the property subject to any Capitalized Lease
or operating lease; (v) Liens on property of, or on shares of stock or
Indebtedness of, any Person existing at the time such Person becomes a
Subsidiary of the Company, or is merged into or consolidated with the Company
or any Subsidiary of the Company; provided that
such Liens were not granted in contemplation of such acquisition, merger or
consolidation and do not extend to or cover any property or assets of the
Company or any Subsidiary of the Company other than the property or assets
acquired; (vi) Liens in favor of the Company or any Subsidiary of the Company;
(vii) Liens securing reimbursement obligations with respect to letters of
credit that encumber documents and other property relating to such letters of
credit and the products and proceeds thereof; (viii) Liens securing
Indebtedness of the Company permitted pursuant to clause (g) of the
definition of “Permitted Indebtedness” or clause (c) of the definition of “Permitted
Subsidiary Indebtedness”, provided that
any such Indebtedness being refinanced was previously secured by a Permitted
Lien and any such Lien shall not extend to or cover any property or assets
other than those encumbered by the Lien securing the Indebtedness being
refinanced; and (ix) Liens incurred in the ordinary course of business
securing Indebtedness under Interest Rate Protection Obligations and Currency
Agreements.

 

“PORTAL” means The
PortalSM Market, a subsidiary of The Nasdaq Stock Market, Inc.

 

“Regular Record Date”
means the close of business in New York on the fifteenth (15th) day (whether or
not a Business Day) immediately preceding each Interest Payment Date.

 

“Restricted Global Notes” has the meaning set forth in Section 3.2(b).

 

“Step-Up Notes” has the meaning set forth in
the recitals to this First Supplemental Indenture.

 

“UCC” means the Uniform Commercial Code in
effect from time to time in the State of New York.

 

3

 

“Unrestricted Global Notes” has the meaning set forth in Section 3.2(a).

 

SECTION 1.2  Certain Conventions.  Unless
the context otherwise requires:

 

(a)           unless
defined herein, a term defined in the Indenture has the same meaning when used
in this First Supplemental Indenture;

 

(b)           a
term defined anywhere in this First Supplemental Indenture has the same meaning
throughout;

 

(c)           the singular includes the plural and
vice versa;

 

(d)           a
reference to a Section or Article is to a Section or Article of
this First Supplemental Indenture; and

 

(e)           headings
are for convenience of reference only and do not affect interpretation.

 

ARTICLE TWO

 

NOTE FORMS

 

SECTION 2.1  Form of Step-Up
Notes.  Each Step-Up Note shall be substantially in the form set forth in Exhibit A
or Exhibit B hereto, as applicable, and contain the terms and provisions
provided for therein and incorporated by reference herein which shall for all
purposes relevant to the Step-Up Notes issued hereunder replace in its entirety
the form of Debt Security set forth in Exhibit A to the Indenture.  If any provision of the Indenture or of this
First Supplemental Indenture limits, qualifies, or conflicts with any term or
provision of the Step-Up Notes, such provision in the Step-Up Notes shall
control.

 

SECTION 2.2  Denominations.  The Step-Up Notes shall be issued only in
fully registered form, without coupons, in denominations of U.S.$1.00 or
multiples of U.S.$1.00 in excess thereof.

 

ARTICLE THREE

 

THE STEP-UP NOTES

 

SECTION 3.1  Maximum Aggregate
Principal Amount, Title and Terms.  (a)  The
Step-Up Notes shall constitute a series of Debt Securities that are Public Debt
Securities of the Company, having an initial aggregate principal amount of up
to U.S.$                  .  Upon receipt of a written order of the
Company for the authentication and delivery of the Step-Up Notes and
satisfaction of the requirements of Section 3.2 of the Indenture, the
Trustee shall authenticate Step-Up Notes for original issuance in an aggregate
principal amount not to exceed U.S.$              .

 

(b)  The
Step-Up Notes shall bear interest on the outstanding principal amount from (1) in
the case of the first Interest Payment Date, December 10, 2003 until [the date the
Company accepts Eligible Notes upon expiration of the Election Offers] (2) in the case of the

 

4

 

second Interest Payment Date, from [the date the
Company accepts Eligible Notes upon expiration of the Election Offers] until a date that is six months thereafter, or (3) in
the case of each Interest Payment Date thereafter, from the most recent
Interest Payment Date for which interest has been paid or duly provided for, at
an interest rate of 2.5% per annum from December 10, 2003 to (but
excluding) [the fourth anniversary of [the date the Company accepts Eligible Notes
upon expiration of the Election Offers]], 3.5% per annum from [the fourth anniversary of [the date the
Company accepts Eligible Notes upon expiration of the Election Offers]] to (but excluding) [the eighth anniversary of
[the
date the Company accepts Eligible Notes upon expiration of the Election Offers]] and 4.5% per annum from [the eighth
anniversary of [the date the Company accepts Eligible Notes upon
expiration of the Election Offers]]
to (but excluding) [the maturity date]. 
Interest on the Step-Up Notes will be payable semi-annually in arrears
on [          ] and
[          ] of each year,
commencing                        [on the date these Notes are delivered or made
available to holders pursuant to the Company’s APE] to the person in whose name
such Step-Up Note (or any predecessor Step-Up Note) is registered at the close
of business in The City of New York on the immediately preceding Regular Record
Date.

 

(c)  Each
Step-Up Note and the Trustee’s certificates of authentication thereon shall be
substantially in the forms set forth in Exhibit A or Exhibit B
hereto, as applicable, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this First Supplemental Indenture and the Indenture, and may have such letters,
numbers or other marks of identification and such legends or endorsements
placed thereon, not inconsistent with this First Supplemental Indenture or the
Indenture, as may be required to comply with any applicable law or rule or
regulation, this First Supplemental Indenture, the Indenture, any rule of
any securities exchange on which the Step-Up Notes may be listed, or of any
Governmental Agency or any depositary thereof, and subject to the prior
approval of the CNV where applicable, or as may, consistently herewith, be
determined by the officers of the Company executing such Step-Up Notes, as
evidenced by their execution of the Step-Up Notes.

 

SECTION 3.2  Global Notes in
Registered Form.  (a)  Step-Up
Notes offered and sold in offshore transactions in reliance on Regulation S
under the Securities Act, in reliance on any exemption available under Section 3
of the Securities Act, or pursuant to an effective registration statement shall
be issued initially in the form of one or more permanent global Step-Up Notes
in fully registered form without interest coupons substantially in the form of Exhibit A
hereto, with such applicable legends as are provided in Exhibit A hereto,
except as otherwise permitted herein (the “Unrestricted Global Notes”),
which shall be deposited on the Issue Date on behalf of the Holders therefor
with the Trustee at its New York City office as custodian for DTC and
registered in the name of a nominee of DTC.

 

(b)  Step-Up Notes offered and sold in
reliance on Rule 144A under the Securities Act shall be issued initially
in the form of one or more permanent global Step-Up Notes in fully registered
form without interest coupons substantially in the form of Exhibit B
hereto (the “Restricted Global Notes,” and together with the
Unrestricted Global Notes, the “Global Notes”), and shall be deposited
on the Issue Date on behalf of the Holders therefor with the Trustee at its New
York City office as custodian for DTC and registered in the name of a nominee
of DTC.  The Restricted Global Notes (and
any certificated Step-Up Notes issued in exchange therefor) will be subject to
certain restrictions on transfer set forth therein and in the Indenture and
shall

 

5

 

bear the legend regarding such restrictions set forth in Exhibit B.  Application shall be made to make the
Restricted Global Notes eligible for trading in PORTAL.

 

(c)  As described in the Indenture, owners
of beneficial interests in an Unrestricted Global Note or a Restricted Global
Note may receive physical delivery of certificated Step-Up Notes only in the
limited circumstances described therein. 
The Step-Up Notes are not issuable in bearer form.

 

SECTION 3.3  Exchanges.  (a)  In the event that a Global
Note is exchanged for certificated Step-Up Notes pursuant to Section 3.6(b) of
the Indenture, such Step-Up Notes may be exchanged only in accordance with such
procedures as are substantially consistent with the provisions of clauses (ii) through
(vii) of Section 3.9(b) of the Indenture (including the
certification requirements intended to ensure that such transfers comply with Rule 144A
or Regulation S under the Securities Act, as the case may be) and such other
procedures as may from time to time be adopted by the Company.

 

(b)  If
Step-Up Notes are issued upon the registration of, transfer, exchange or
replacement of Step-Up Notes bearing the restricted securities legend set forth
in Exhibit A or Exhibit B hereto, or if a request is made to remove
such restricted securities legend on the Step-Up Notes, the Step-Up Notes so
issued shall bear the restricted securities legend, or the restricted
securities legend shall not be removed, as the case may be, unless there is
delivered to the Company such satisfactory evidence, which may include an
opinion of counsel licensed to practice law in the State of New York, as may be
reasonably required by the Company, that neither the legend nor the
restrictions on transfer set forth therein are required to ensure that
transfers thereof will not violate the registration and prospectus delivery
requirements of the Securities Act.  Upon
provision of such satisfactory evidence, the Trustee, at the direction of the
Company, shall authenticate and deliver Step-Up Notes that do not bear the
legend.

 

SECTION 3.4  Further
Issues of Step-Up Notes.  The Company
may from time to time without the consent of the Holders create and issue
further notes, bonds or debentures having the same terms and conditions as the
Step-Up Notes in all respects (or in all respects except for payment of
interest scheduled and paid prior to such time), so that such further issue may
be consolidated and form a single series with the outstanding Step-Up Notes.

 

SECTION 3.5  Waiver
and Release.  As part of the
consideration for issuance of the Step-Up Notes, each Holder of Step-Up Notes,
by accepting the Step-Up Notes, waives any rights that it may have pursuant to
Argentine law to claw back (acción
revocatoria) or bring action against any director of the Company (acción de responsabilidad), and releases
such director from any liability, arising out of payments made by the Company
as a result of the consummation of the cash option under the Company’s APE.

 

ARTICLE FOUR

 

COVENANTS

 

SECTION 4.1  Payment
of Principal, Premium, if any, and Interest.  Principal of, premium,
if any, and interest on the Step-Up Notes will be payable, and the transfer of
Step-Up Notes will be registrable, at the office of the Paying Agent maintained
for such purpose in the

 

6

 

Borough of Manhattan, The City of New York, which will initially be the
office of the Trustee, and at the office of each Paying Agent or Transfer
Agent, as applicable.

 

SECTION 4.2  Limitation
on Transactions with Shareholders and Affiliates.  For purposes of this
First Supplemental Indenture and the Step-Up Notes, Section 4.10 of the
Indenture is hereby amended to read in its entirety as follows:

 

“SECTION 4.10  Limitation
on Transactions with Shareholders and Affiliates.  Under the terms of the 10-Year Notes
Indenture, the Company will not, and will not permit any Subsidiary to,
directly or indirectly, conduct any business, enter into, renew or extend any
transaction (including, without limitation, the purchase, sale, lease, exchange
or transfer of property or assets, the rendering of any service, or the making
of any payment, loan, advance or guarantee) with, or for the benefit of, any
holder (or any Affiliate of such holder) of 10% or more of the Capital Stock of
the Company or with any Affiliate of the Company or of any Subsidiary
(together, “Related Persons” and each, a “Related Person”),
unless the terms to the Company or such Subsidiary (i) are at least as
favorable to the Company or such Subsidiary as those that could be obtained at
the time of such transaction in arm’s length dealings with a Person who is not
a Related Person, and (ii) in the case of any transaction (or series of
transactions) with a Related Person involving aggregate payments made on or
after the Issue Date in excess of U.S.$10 million in any fiscal year, shall be
approved by a majority of the disinterested members of the Board of Directors
of the Company, or if no such disinterested directors exist with respect to
such transaction (or series of transactions), shall be confirmed by an opinion
of an Independent Financial Advisor to be fair, from a financial point of view,
to the Company or such Subsidiary.

 

The
foregoing limitation does not limit, and shall not apply to (i) any
transaction between the Company and any of its Subsidiaries or between
Subsidiaries, (ii) payment of reasonable and customary compensation and
fees to directors of the Company and the Subsidiaries who are not employees of
the Company or any Subsidiary, or (iii) the grant of stock options or
similar rights to acquire Capital Stock (other than Disqualified Stock) to
employees and directors of the Company pursuant to plans approved by the Board
of Directors provided that, in the aggregate, the shares of Capital Stock
underlying such options or similar rights issued since the Issue Date
(exclusive of any shares of Capital Stock or similar rights required to be issued
by law) shall not exceed 2.5% of the outstanding Common Stock of the Company on
a fully diluted basis at the date of determination.”

 

SECTION 4.3  Limitation
on Asset Sales. 
For purposes of this First Supplemental Indenture and the Step-Up Notes,
Section 4.13 of the Indenture is hereby amended to read in its entirety as
follows:

 

“SECTION 4.13  Limitation
on Asset Sales.  Under the terms of
the 10-Year Notes Indenture, the Company will not, and will not permit any of
its Subsidiaries to make any Asset Sale that would result in a Material Adverse
Effect occurring and, in the case of Asset Sales involving consideration of
U.S.$10 million or more, unless an

 

7

 

Independent Financial Advisor shall have delivered a valuation of the
property or asset being sold to the Board of Directors and at a price
consistent with such valuation.”

 

SECTION 4.4  Consolidation,
Merger and Sale of Assets.  For purposes of this First Supplemental
Indenture and the Step-Up Notes, Section 4.17 of the Indenture is hereby
amended to read in its entirety as follows:

 

“SECTION 4.17  Consolidation,
Merger and Sale of Assets.  Under the
terms of the 10-Year Notes Indenture, the Company shall not consolidate with,
merge with or into, or sell, convey, transfer, lease or otherwise dispose of
all or substantially all of its property and assets (as an entirety or
substantially an entirety in one transaction or a series of related
transactions) to, any Person (other than a consolidation or merger with or into
a Wholly-Owned Subsidiary which, at the time of such consolidation or merger,
is a Significant Subsidiary with a positive net worth; provided that, in connection with any such
merger or consolidation, no consideration (other than Common Stock in the
surviving Person or the Company) shall be issued or distributed to the
stockholders of the Company) or permit any Person to merge with or into the
Company unless:  (i) the Company
shall be the continuing Person, or the Person (if other than the Company)
formed by such consolidation or into which the Company is merged or that
acquired or leased such property and assets of the Company shall expressly
assume, by a supplemental indenture, executed and delivered to a Responsible
Officer of the Trustee, all of the obligations of the Company under the 10-Year
Notes Indenture; (ii) immediately after giving effect to such transaction,
no Default or Event of Default shall have occurred and be continuing; (iii) (A) the
transaction will involve a Person principally engaged in the Company’s line of
business or in a business or activities ancillary to the Company’s line of
business, or reasonably related therewith (including, but not limited to
programming, multi-channel multi-point distribution system (“MMDS”), broadband,
pay television and the provision of access service to, content for or ancillary
services such as web-hosting, network security and monitoring, digital
certificates or equipment installation or maintenance, for the Internet, but
excluding non-pay television services, AM or FM radio broadcasting, telephone
or cellular communications and publication of newspapers), (B) immediately
after giving effect to such transaction on a pro forma basis, the Company, or
any surviving Person will have Consolidated Net Worth equal to or greater than
the Consolidated Net Worth of the Company immediately preceding the transaction
(provided that this requirement will not apply where such transaction involves
another Person engaged in substantially the Company’s line of business in
Argentina), and (C) (1) the weighted average life of the Company’s
(or the surviving Person’s) consolidated Indebtedness after giving effect to
the transaction would exceed the lesser of (x) five years and (y) the weighted
average life of the Company’s consolidated Indebtedness immediately prior to
the transaction and (2) after giving effect to such transaction the
Company (or the surviving Person) would either be permitted to Incur at least
U.S.$1.00 of additional Indebtedness pursuant to the “Limitation on
Indebtedness” covenant, if such Incurrence was not permitted prior to giving
effect to such transaction or, if such Incurrence was permitted, have a lower
ratio of Total Consolidated Indebtedness to Annualized Pro Forma Consolidated
Operating Cash Flow than that of the Company prior to giving effect to such
transaction; and (iv) the Company delivers to the Trustee an Officers’
Certificate (attaching the arithmetic

 

8

 

computations to demonstrate compliance with clause (iii)) and an
opinion of reputable Argentine counsel, in each case stating that such
consolidation, merger or transfer and such supplemental indenture complies with
clause (i) of this provision and that all conditions precedent provided
for herein relating to such transaction have been complied with.”

 

ARTICLE FIVE

 

10-YEAR NOTES RESERVE
ACCOUNT

 

SECTION 5.1  Grant of Security
Interest.  (a)  As collateral
security for the full and prompt payment or performance when due of all of the
interest obligations of the Company on each Interest Payment Date for the
Step-Up Notes, the Company will establish with the Bank an account (the “10-Year
Notes Reserve Account”) and hereby grants to the Trustee a continuing
first-priority Lien (which constitutes a Permitted Lien) upon and security
interest in, and pledges and assigns to the Trustee all of the right, title and
interest in and to the 10-Year Notes Reserve Account and all proceeds, income,
and profits thereof.  Until satisfaction
and discharge of the 10-Year Notes Indenture with respect to the Step-Up Notes
pursuant to Article 11 of the Indenture, the 10-Year Notes Reserve Account
shall be maintained with and managed by the Bank, and the Bank shall act with
respect thereto only in accordance with this First Supplemental Indenture.

 

SECTION 5.2  Terms of 10-Year Notes
Reserve Account.  (a)  Until
satisfaction and discharge of the 10-Year Notes Indenture with respect to the
Step-Up Notes pursuant to Article 11 of the Indenture, the 10-Year Notes
Reserve Account established by the Company with the Bank shall be held in the
name “Multicanal S.A.,  subject to the
lien and security interest in favor of Law Debenture Trust Company of New York,
as “Trustee” for the Step-Up Notes” (or in the event a successor Trustee is
appointed under the 10-Year Notes Indenture, a similar account shall be
established consistently showing the name of such Trustee), which account shall
be under the sole control of the Trustee in accordance with this First
Supplemental Indenture.  The Bank shall
at all times listen to instructions (within the meaning of 9-104 of the UCC) or
entitlement orders (within the meaning of 8-106 of the UCC) without further
consent of the Company.

 

(b)           The
Company shall have no right under the terms of the 10-Year Notes Reserve
Account, so long as any Step-Up Note is Outstanding, to withdraw or instruct
any Person to withdraw on its behalf any money from the 10-Year Notes Reserve
Account.  No passbook, certificate of
deposit or other similar instrument evidencing the 10-Year Notes Reserve
Account shall be issued, and the Trustee shall retain all contracts, receipts
and other papers governing or evidencing the 10-Year Notes Reserve
Account.  All right, title and interest
in and to any proceeds, income and profits of the 10-Year Notes Reserve Account
shall vest in the Trustee and shall constitute part of the 10-Year Notes
Reserve Account.  The Company shall take
such actions at its sole expense as shall be required to ensure that the
Trustee has from the date of any deposit as aforesaid a first-priority Lien
(subject to Permitted Liens) on such deposit for the benefit of the Trustee.

 

9

 

(c)           The
Bank shall not exercise any right of set-off or recoupment or similar right
that it may otherwise have against the 10-Year Notes Reserve Account to satisfy
obligations of the Company to the Trustee.

 

(d)           The
Bank shall hold monies deposited in the 10-Year Notes Reserve Account in trust
for the Trustee and shall not commingle such amounts with any other amounts
held on behalf of any other Person.

 

(e)           The
Bank agrees that the 10-Year Notes Reserve Account shall be a
non-interest-bearing trust account of the type customarily maintained by the
Bank for institutional customers.  Such
funds shall be invested at the written direction of the Company in Cash
Equivalents.  The Trustee shall not have
any responsibility to the Company or the Holders of Step-Up Notes for any
losses arising in respect of such investments of the amounts on deposit in the
10-Year Notes Reserve Account, except to the extent that such loss or liability
arises from the Trustee’s negligence or willful misconduct.

 

SECTION 5.3  Release of Monies from
10-Year Notes Reserve Account.  (a) 
To the extent that monies in the 10-Year Notes Reserve Account exceed an amount
equal to the next 12 months of interest payments on the Step-Up Notes and so
long as no Event of Default has occurred and is continuing, the Trustee shall
release such monies to the Company in accordance with the Company’s
instructions to the Trustee specified in an Officers’ Certificate.

 

(b)           To
the extent that any monies in the 10-Year Notes Reserve Account remain
following the satisfaction and discharge of the 10-Year Notes Indenture with
respect to the Step-Up Notes, the Trustee shall release such monies to the
Company in accordance with the Company’s instructions to the Trustee specified
in an Officers’ Certificate.

 

(c)           In
the event the Company fails to make an interest payment (in part or in full) on
the Step-Up Notes as required herein, the Trustee shall apply any monies held
by it in the 10-Year Notes Reserve Account to the satisfaction of such unpaid
interest obligations.  Such application
by the Trustee will not give rise to an Event of Default under the Step-Up
Notes.

 

(d)           If
an Event of Default has occurred and is continuing under the 10-Year Notes
Indenture or the Step-Up Notes, the Trustee shall apply any monies held by it
in the 10-Year Notes Reserve Account to the satisfaction of any unpaid interest
obligations of the Company under the Step-Up Notes.

 

SECTION 5.4  Representation,
Warranties and Covenants Specific to 10-Year Notes Reserve Account.  The Company represents, warrants and
covenants that the Lien on the 10-Year Notes Reserve Account granted pursuant
to Section 5.1 will be a valid, binding and enforceable Lien and security
interest, securing the Company’s interest obligations on each Interest Payment
Date for the Step-Up Notes, ranking prior and superior to all other Liens thereon
(other than Permitted Liens), and covenants that it shall take all necessary
action to cause and maintain a perfected first-priority Lien (subject to
Permitted Liens) in the 10-Year Notes Reserve Account, and to allow the Trustee
to exercise its rights, remedies, power and privileges to or with respect to
the 10-Year Notes Reserve Account.  The
Company represents and warrants that as of the date of the establishment of the
10-Year Notes Reserve Account, all filings and

 

10

 

other actions necessary or desirable for the purpose of registering
notice of, perfecting and establishing the first-priority of such Lien (subject
to Permitted Liens) and security interest have been duly made or taken.  The Company agrees that at any time upon the
reasonable request of the Trustee, the Company will, at the Company’s sole
expense, execute, acknowledge, deliver, record and/or file such documents or
instruments in form reasonably satisfactory to the Trustee, and do such acts
and things as may be reasonably necessary, desirable or proper to carry out
more effectively the purposes of such Lien and security interest or to further
assure, evidence, preserve or protect the perfection, ranking or other benefits
thereof.

 

ARTICLE SIX

 

OTHER AMENDMENTS

 

SECTION 6.1  Acceleration of
Maturity; Rescission and Annulment. 
For purposes of this First Supplemental Indenture and the Step-Up Notes,
Section 6.2 of the Indenture is hereby amended to read in its entirety as
follows:

 

“SECTION 6.2  Acceleration of Maturity; Rescission and
Annulment.  If an Event of Default
(other than an Event of Default specified in paragraph (i) or
paragraph (j) in Section 6.1 of the Indenture that occurs with
respect to the Company) occurs and is continuing, then and in every such case
the Trustee or the Holders of at least 25% in aggregate principal amount of the
Step-Up Notes at the time Outstanding may, and the Trustee at the request of
such Holders shall, declare the Step-Up Notes to be immediately due and
payable, by a notice in writing to the Company (and to the Trustee if given by
the Holders (the “Acceleration Notice”)), and upon any such declaration
100% of the principal amount thereof and any accrued and unpaid interest
thereon shall become immediately due and payable.  In the event of a declaration of acceleration
because an Event of Default set forth in paragraph (e) in Section 6.1
of the Indenture has occurred and is continuing, such declaration of
acceleration shall be automatically rescinded and annulled if the event of
default triggering such Event of Default pursuant to paragraph (e) in
Section 6.1 of the Indenture shall be remedied or cured by the Company
and/or the relevant Subsidiaries or waived by the holders of the relevant
Indebtedness within 30 days after the declaration of acceleration with
respect thereto.  If an Event of Default
specified in paragraphs (i) or (j) in Section 6.1 of the
Indenture occurs with respect to the Company, the Step-Up Notes then
Outstanding shall ipso facto become and be immediately due and payable at 100%
of the outstanding principal amount thereof, plus premium, if any, thereon and
accrued and unpaid interest thereon to the date of such Event of Default, in
each case without any declaration or other act on the part of the Trustee or
any Holder.

 

At any time after a declaration of acceleration with
respect to Step-Up Notes has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in
this Section 6.2 of the Indenture provided, a decision made by the
affirmative vote of the Holders of at least a majority in aggregate principal
amount of the Step-Up Notes at the time Outstanding may, by written notice to
the Company and to the Trustee, rescind and annul such declaration and its
consequences if:

 

11

 

(a)           the
Company has paid or deposited with the Trustee a sum sufficient to pay:

 

(i)            all
overdue interest on all Outstanding 10-Year Notes,

 

(ii)           the
principal of, premium, if any, on or Additional Amounts, if any, on any 10-Year
Notes which have become due otherwise than by such declaration of acceleration
and, to the extent that payment of such interest is lawful, interest thereon at
the rate provided by such 10-Year Notes,

 

(iii)          interest
upon overdue interest at the rate provided by such 10-Year Notes, and

 

(iv)          all
sums paid or advanced by the Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel;
and

 

(b)           all
existing Events of Default with respect to Step-Up Notes, other than the
non-payment of the principal of or premium, if any, interest and Additional
Amounts, if any, on Step-Up Notes which have become due solely by such
declaration of acceleration, have been cured or waived as provided in Section 6.10
of the Indenture; and

 

(c)           the
rescission would not conflict with any judgment, decree or order of a court of
competent jurisdiction.

 

No such rescission shall affect any subsequent default or impair any
right consequent thereon.

 

The Holders of at least a majority in aggregate
principal amount of the outstanding Step-Up Notes, by written notice to the
Trustee, may waive an existing Default or Event of Default and the consequences
under the 10-Year Notes Indenture, except a Default in the payment of principal
of, premium, if any, on or interest on the Step-Up Notes or in respect of a
covenant or provision of the 10-Year Notes Indenture that cannot be modified or
amended without the consent of the Holder of each outstanding Step-Up Note
affected.

 

The foregoing provisions shall be without prejudice to
the rights of each individual Holder to initiate an action against the Company
for the payment of any principal, premium, if any, Additional Amounts and/or
interest past due on any Step-Up Note, as the case may be.  The right of any individual Holder to
initiate such action against the Company in connection with any Step-Up Note
that is a Public Debt Security complies with Article 29 of the Negotiable
Obligations Law.”

 

SECTION 6.2  Meetings
of Holders; Modification and Waiver. 
For purposes of this First Supplemental Indenture and the Step-Up Notes,
Section 9.7 of the Indenture is hereby amended to in its entirety as
follows:

 

12

 

“SECTION 9.7  Meetings of Holders; Modification and
Waiver.  (a)  The Trustee
or the Company shall, upon the request of the Holders of at least five percent
in aggregate principal amount of the Step-Up Notes at the time Outstanding, or
the Company or the Trustee at its discretion, may, call a meeting of the
Holders at any time and from time to time, to make, give or take any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by the Step-Up Notes to be made, given or taken by such Holders.  With respect to all matters not contemplated
in the 10-Year Notes Indenture, meetings of Holders will be held in Buenos
Aires in accordance with the Negotiable Obligations Law; provided,
however, that the Company or the Trustee may determine to hold any
such meetings simultaneously in Buenos Aires and in The City of New York by any
means of telecommunication.  Meetings
shall be held at such time and at such place as the Company or the Trustee
shall determine in such cities.  If a
meeting is being held pursuant to a request of Holders, the agenda for the
meeting shall be as determined in the request and such meeting shall be
convened within 40 days from the date such request is received by the Trustee or
the Company, as the case may be.  Notice
of any meeting of Holders (which shall include the date, place and time of the
meeting, the agenda therefor and the requirements to attend) shall be published
not less than ten days nor more than 30 days prior to the date fixed for the
meeting in the Boletín Oficial de la República
(the Official Gazette of Argentina) and, while there are Holders domiciled in
Argentina, in a newspaper having major circulation in Argentina and any
publication of such notice shall be for five consecutive Business Days in each
place of publication.

 

(b)           Any Holder may attend the meeting in
person or by proxy.  Directors, officers,
managers, members of the Supervisory Committee and employees of the Company may
not be appointed as proxies.  Holders of
Step-Up Notes who intend to attend a meeting of Holders must notify the
Registrar of their intention to do so at least three days prior to the date of
such meeting.  The Company shall, prior to any vote, deliver to the Trustee a notice
signed by the CFO or the chief accounting officer certifying, to the best of
the Company’s knowledge, as to the Notes held by any Affiliate of the Company.

 

(c)           Except as specified in Section 6.2
hereof, decisions shall be made by the affirmative vote of the Holders of at
least 51% in aggregate principal amount of the Step-Up Notes at the time
outstanding present or represented at a meeting of such Holders at which a
quorum is present; provided, however,
that the affirmative vote of the Holders of the applicable percentage in
aggregate principal amount of the Step-Up Notes at the time Outstanding
specified under “Events of Default” shall be required to take the actions
specified under such heading; provided further, however,
that the unanimous affirmative vote of the Holders of Step-Up Notes shall be
required to adopt a valid decision on:

 

(i)            changing the Stated
Maturity of, or failing to pay, the principal of, premium, if any, on or any
installment of interest on any Step-Up Note, or reducing the principal amount
thereof, premium, if any, thereon or the rate of interest thereon or changing
the requirement to pay Additional Amounts thereon, or releasing any amounts
held in the Reserve Accounts;

 

13

 

(ii)           changing the place
of payment where, or the coin or currency in which, the principal of, premium,
if any, on or interest or Additional Amounts (if any) on any Step-Up Note is
payable;

 

(iii)          impairing the right
to institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date);

 

(iv)          reducing the
percentage in principal amount of the outstanding Step-Up Notes, the consent of
the Holders of which is required for the adoption of a resolution or the quorum
required to constitute a meeting of Holders at which a resolution is adopted or
the percentage in principal amount of outstanding Step-Up Notes the Holders of
which are entitled to request the calling of a meeting of Holders; or

 

(v)           modifying the
percentage in principal amount of the Step-Up Notes, the consent of Holders
which is required to waive a past Default or Event of Default.

 

Except as provided above, any modifications, amendments or waivers to
the terms and conditions of the Step-Up Notes will be conclusive and binding on
all Holders of Step-Up Notes, whether or not they were present at any meeting,
and whether or not notation of such modifications, amendments or waivers is
made upon the Step-Up Notes, provided that
any such modification, amendment or waiver was duly passed at a meeting
convened and held in accordance with the provisions of the Negotiable
Obligations Law.

 

(d)           Meetings of the Holders of Step-Up
Notes shall be either “first call” meetings (“primera
convocatoria”) or “second call” meetings (“segunda
convocatoria”).  All meetings
of the Holders of Step-Up Notes shall be deemed to be a first call meeting; provided, however, that
any reconvened meeting adjourned for lack of a requisite quorum shall be deemed
a second call meeting.  The quorum
applicable at a meeting of the Holders of Step-Up Notes of any series shall be
as follows:

 

(i)            the quorum for meetings called to
adopt a resolution by which Holders of Step-Up Notes shall make any request,
demand or direction or give any notice (other than a resolution specified in
paragraph (ii) below) shall, (A) in the case of first call meetings,
be such Persons holding or representing a majority in aggregate principal
amount of the Step-Up Notes at the time outstanding and (B) in the case of
second call meetings, be such Persons present at such meeting holding or
representing Step-Up Notes at the time outstanding; and

 

(ii)           the quorum for meetings called to
adopt a resolution by which Holders of Step-Up Notes consent to any waiver
under the Step-Up Notes or the 10-Year Notes Indenture, agree to any amendment
to the 10-Year Notes Indenture or the terms and conditions of the Step-Up
Notes, or specify the time, method and place of conducting any proceeding for
any remedy available to the Trustee or exercising any trust or power conferred
upon the Trustee with respect to the Step-Up Notes by the 10-Year Notes

 

14

 

Indenture shall (A) in
the case of first call meetings, be Persons holding or representing at least
60% in aggregate principal amount of the Step-Up Notes at the time outstanding
and (B) in the case of second call meetings, be Persons holding or
representing at least 30% in aggregate principal amount of the Step-Up Notes at
the time outstanding.

 

(e)           Without the vote of any Holders of
Step-Up Notes, the Company, when authorized by a Board Resolution, and the
Trustee, at any time and from time to time, may enter into one or more
indentures supplemental to the 10-Year Notes Indenture in form satisfactory to
the Trustee, for any of the following purposes:

 

(i)            to evidence the succession of
another Person to the Company and the assumption by any such successor of the
covenants of the Company in the 10-Year Notes Indenture and in the Step-Up
Notes; or

 

(ii)           to add to the covenants of the
Company for the benefit of the Holders or to surrender any right or power
herein conferred upon the Company; or

 

(iii)          to secure the
Step-Up Notes; or

 

(iv)          to comply with any requirements of the
Commission in order to effect and maintain the qualification of the 10-Year
Notes Indenture under the Trust Indenture Act; or

 

(v)           to evidence and provide for
acceptance of appointment hereunder by a successor Trustee pursuant to the
provisions of the 10-Year Notes Indenture; or

 

(vi)          to evidence any further issue of notes
having terms and conditions the same as those of the Step-Up Notes (or the same
except for the payment of interest accruing prior to the issue date of such
additional notes or except for the first payment of interest following the
issue date of such additional notes), which additional notes may be
consolidated and form a single series with the Step-Up Notes; or

 

(vii)         to cure any ambiguity, to correct or
supplement any provision herein which may be inconsistent with any other
provision herein, or to make any other provisions with respect to matters or
questions arising under the 10-Year Notes Indenture which shall not be
inconsistent with the provisions of the 10-Year Notes Indenture, provided that such action pursuant to this clause (vii) shall
not adversely affect the interests of the Holders in any material respect; or

 

(viii)        to increase the aggregate principal
amount of Public Debt Securities at any time outstanding under the 10-Year
Notes Indenture.

 

No reference herein to the 10-Year Notes Indenture and
no provision of this Step-Up Note or of the 10-Year Notes Indenture shall alter
or impair the obligation of the Company, which is absolute and unconditional,
to pay the principal of, premium, if any, on and interest and Additional
Amounts, if any, on this Step-Up Note at the times, place and rate, and in the
coin or currency, herein prescribed.

 

15

 

ARTICLE SEVEN

 

MISCELLANEOUS 

 

SECTION 7.1  Supplemental Indenture.  Under this First Supplemental Indenture and
in accordance with the terms and provisions of the Step-Up Notes, the
Indenture, as supplemented by and, in the case of Sections 1.1, 2.1, 2.2, 3.1,
3.6(b), 3.9(b)(viii), 3.9(c), 4.1, 4.10, 4.13, 4.17, 6.2, 7.6 and 9.7 as
amended by Sections 1.1, 2.1, 2.2, 3.1, 3.2, 3.3(a), 3.3(b), 4.1, 4.2, 4.3,
4.4, 6.1, 7.3 and 6.2 respectively, of this First Supplemental Indenture, is in
all respects ratified and confirmed, and this First Supplemental Indenture
shall be deemed part of the Indenture in the manner and to the extent herein
and therein provided.

 

SECTION 7.2  Responsibility of the
Trustee.  The recitals herein
contained are made by the Company and not by the Trustee, and the Trustee assumes
no responsibility for the correctness thereof. 
The Trustee makes no representation as to the validity or sufficiency of
this First Supplemental Indenture.

 

SECTION 7.3  Compensation and
Indemnification of Trustee and Its Prior Claim.   For purposes of this First Supplemental
Indenture and the Step-Up Notes, Section 7.6 of the Indenture is hereby
amended to read in its entirety as follows:

 

“SECTION 7.6  Compensation and Indemnification of
Trustee and Its Prior Claim.  The
Company covenants and agrees to pay to the Trustee from time to time, and the
Trustee shall be entitled to, such compensation as shall be agreed to in
writing (which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) and the Company covenants and
agrees to pay or reimburse the Trustee and each predecessor Trustee upon its
request for all reasonable expenses, disbursements and advances incurred or
made by or on behalf of it in accordance with any of the provisions of this Indenture
(including the reasonable compensation, expenses and disbursements of its
counsel and of all agents and other persons not regularly in its employ) except
any such expense, disbursement or advance as may arise from its negligence or
bad faith.  The Company also covenants to
indemnify the Trustee, the Registrar, their agents, officers and directors, and
each predecessor Trustee for, and to hold them harmless against, any and all
loss, liability, damage, claim or expense, including taxes (other than taxes
based on the income of the Trustee) incurred without negligence or bad faith on
their part, arising out of or in connection with the acceptance or
administration of this Indenture or the trusts hereunder and its duties
hereunder and the costs and expenses of defending itself against or
investigating any claim of liability in the premises.  If the Trustee incurs expenses or renders
services after the occurrence of an Event of Default specified in Section 6.1(i) and
6.1(j) of the Indenture, the expenses and the compensation for the services
will be intended to constitute expenses of administration under any bankruptcy
law for the relief of debtors.  The
obligations of the Company under this Section to compensate and indemnify
the Trustee, the Registrar, their agents, officers and employees and each
predecessor Trustee and to pay or reimburse the Trustee, its agents, officers
and employees and each predecessor Trustee for expenses, disbursements and
advances with respect to any series of Debt Securities shall constitute
additional indebtedness hereunder and shall survive the satisfaction and

 

16

 

discharge of this Indenture and the resignation or removal of the
Trustee.  Such additional indebtedness
shall be a senior claim to that of the Debt Securities of any series upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the benefit of the holders of particular Debt Securities of such
series.”

 

SECTION 7.4  Governing Law.  The Negotiable Obligations Law governs the
requirements for the Step-Up Notes to qualify as Obligaciones
Negociables thereunder while such law, together with the Argentine
Business Companies Law No. 19,550, as amended, and other applicable
Argentine laws, govern the capacity and corporate authority of the Company to
execute and deliver the Step-Up Notes and the authorization of the public
offering of the Step-Up Notes by the CNV. 
All other matters in respect of the Step-Up Notes and the 10-Year Notes
Indenture, including but not limited to the statute of limitations applicable
thereto, are governed by and shall be construed in accordance with, the laws of
the State of New York, United States.

 

SECTION 7.5  Separability.  In case any one or more of the provisions
contained in this First Supplemental Indenture or in the Step-Up Notes shall
for any reason be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provisions of this First Supplemental Indenture or of the Step-Up Notes, but
this First Supplemental Indenture and the Step-Up Notes shall be construed as
if such invalid or illegal or unenforceable provision had never been contained
herein or therein.

 

SECTION 7.6 
Counterparts.  This First
Supplemental Indenture may be executed in any number of counterparts each of
which shall be an original; but such counterparts shall together constitute but
one and the same instrument, and all signatures need not appear on any one counterpart.

 

17

 

IN WITNESS WHEREOF, the parties hereto have caused
this First Supplemental Indenture to be duly executed, as of the day and year
first above written.

 

	
   

  	
   

  	
  MULTICANAL S.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LAW DEBENTURE TRUST
  COMPANY

  
	
   

  	
   

  	
   

  	
  OF NEW YORK,

  	
   

  
	
   

  	
   

  	
   

  	
  Trustee, Principal
  Paying Agent and

  
	
   

  	
   

  	
   

  	
  Co-Registrar

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HSBC Bank Argentina
  S.A.,

  	
   

  
	
   

  	
   

  	
   

  	
  Registrar and Paying
  Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  

 

18

 

EXHIBIT A

FORM OF UNRESTRICTED GLOBAL NOTE*

 

UNLESS THIS STEP-UP NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”),
EUROCLEAR BANK S.A./N.V. (“EUROCLEAR”) OR CLEARSTREAM BANKING, SOCIÉTÉ ANONYME
(“CLEARSTREAM, BANKING”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY STEP-UP NOTE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC, EUROCLEAR OR CLEARSTREAM, BANKING (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC, EUROCLEAR OR CLEARSTREAM, BANKING), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNERS HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.

 

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE 10-YEAR INDENTURE REFERRED TO ON THE REVERSE
HEREOF.

 

* Appropriate adjustments to be made if Note is issued in certificated
form.

 

A-1

 

MULTICANAL
S.A. (INCORPORATED IN BUENOS AIRES, ARGENTINA, WITH LIMITED LIABILITY (“SOCIEDAD
ANÓNIMA”) UNDER THE LAWS OF THE REPUBLIC OF ARGENTINA ON JULY 26, 1991,
WITH A TERM OF DURATION EXPIRING ON JULY 27, 2090, AND REGISTERED WITH THE
PUBLIC REGISTRY OF COMMERCE ON JULY 26, 1991 UNDER NUMBER 5225, BOOK 109
OF VOLUME “A” OF CORPORATIONS, AND WITH DOMICILE AT AVALOS 2057 (C1431DPM)
BUENOS AIRES, ARGENTINA)

 

STEP-UP 10-YEAR NOTES

 

	
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Multicanal S.A., a sociedad anónima
duly organized and existing under the laws of Argentina (the “Company”),
for value received, hereby promises to pay to [Cede & Co.]*, or
registered assigns, the principal sum indicated on Schedule A hereof on [                     ]
[2015] (or on such earlier date as the principal sum may become repayable in
accordance with the terms and conditions set forth in the 10-Year Notes
Indenture or on the reverse hereof), and to pay interest thereon from (1) in the case of the first Interest
Payment Date, from December 10, 2003 until [the date the
Company accepts Eligible Notes upon expiration of the Election Offers] (2) in the case of the second Interest
Payment Date, from [the date the Company accepts Eligible Notes upon
expiration of the Election Offers]
until a date that is six months thereafter, or (3) in the case of each
Interest Payment Date thereafter, from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semiannually in arrears on
[     ] and [    ] of each year at an interest rate of 2.5%
per annum from December 10, 2003 to (but excluding) [the fourth
anniversary of [the date the Company accepts Eligible Notes upon
expiration of the Election Offers]],
3.5% per annum from [the fourth anniversary of [the date the Company accepts Eligible Notes
upon expiration of the Election Offers]] to (but excluding) [the eighth anniversary of [the date the
Company accepts Eligible Notes upon expiration of the Election Offers]] and 4.5% per annum from [the eighth
anniversary of [the date the Company accepts Eligible Notes upon
expiration of the Election Offers]]
to (but excluding) [the maturity date], until the principal hereof is paid or
duly provided for, all subject to and in accordance with the 10-Year Notes
Indenture.  The interest so
payable and punctually paid or duly provided for on any Interest Payment Date
will, as provided in the 10-Year Notes Indenture, be paid to the Person in
whose name this Step-Up Note (or one or more Predecessor Step-Up Notes) is
registered at the close of business on the fifteenth (15th) day (whether or not
a Business Day), immediately preceding such Interest Payment Date.

 

* Appropriate adjustments to be made if Note is issued in certificated
form.

 

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Any such interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular
Record Date, and such defaulted interest, and (to the extent lawful) interest
on such defaulted interest at the rate borne by the Step-Up Notes, may be paid
to the Person in whose name this Step-Up Note (or one or more Predecessor
Step-Up Notes) is registered at the close of business on a Special Record Date
for the payment of such defaulted interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Step-Up Notes not less than fifteen (15)
days prior to such Special Record Date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any exchange on which
the Step-Up Notes may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in the 10-Year Notes Indenture.

 

The principal of, premium, if any, on and interest on
this Step-Up Note shall be payable, and the transfer of this Step-Up Note shall
be registrable, at the Corporate Trust Office of Law Debenture Trust Company of
New York, as Trustee, Co-Registrar and Principal Paying Agent, in The City of
New York, at the main office of HSBC Bank Argentina S.A., as Registrar and
Paying Agent, in Buenos Aires, Argentina or at the option of the Holder and
subject to any fiscal or other laws and regulations applicable thereto, at the
office of any other Paying Agent appointed by the Company.  The Company shall provide to the Principal
Paying Agent, in funds available on or prior to the Business Day prior to each
date on which a payment of principal of, premium, if any, or any interest on
the Step-Up Notes shall become due, as set forth herein, such amount in U.S.
Dollars as is necessary to make such payment, and the Company hereby authorizes
and directs the Principal Paying Agent from funds so provided to it to make or
cause to be made payment of the principal of and any interest, as the case may
be, on the Step-Up Notes as set forth herein and in the 10-Year Notes
Indenture; provided that payment with respect to
principal of and premium, if any, interest and Additional Amounts, if any, on
any Step-Up Note may, at the Company’s option, be made, subject to applicable
laws and regulations, by U.S. Dollar check drawn on a bank in The City of New
York mailed to the Holders of Step-Up Notes at their respective addresses set
forth in the register of Holders of Step-Up Notes; provided
further that all payments with respect to Global Notes the Holders
of which have given wire transfer instructions to the Company will be required
to be made by wire transfer of immediately available funds to the accounts
specified by the Holders thereof.  Unless
such designation is revoked, any such designation made by such Person with
respect to such Step-Up Note will remain in effect with respect to any future
payments with respect to such Step-Up Note payable to such Person.

 

Interest on the Step-Up Notes shall be computed on the
basis of a 360-day year consisting of 12 months of 30 days each and, in the
case of an incomplete month, the number of days actually elapsed.

 

All payments of principal and interest hereunder shall
be made exclusively in U.S. Dollars or in such coin or currency of the United
States as at the time of payment shall be legal tender for the payment of
public and private debts.

 

This Step-Up Note has been issued pursuant to
resolutions of an ordinary meeting of shareholders of the Company adopted on January 22,
2003 and resolutions of the Board of Directors of the Company adopted at its
meetings on [                         ].

 

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Reference is hereby made to the further provisions of
this Step-Up 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.

 

Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse hereof by manual
signature, this Step-Up Note shall not be valid or obligatory for any purpose.

 

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IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.

 

	
   

  	
   

  	
  MULTICANAL S.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
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A-5

 

[REVERSE OF STEP-UP NOTE]

 

STEP-UP 10-YEAR NOTES

 

This Step-Up Note is a negotiable obligation under the
Negotiable Obligations Law and is one of a duly authorized issue of a series of
Debt Securities of the Company designated as its Step-Up 10-Year Notes,
initially limited in aggregate principal amount to U.S.$[ ] (the “Step-Up
Notes” and each, a “Step-Up Note”), as may be set forth from time to
time, issued and to be issued under an indenture, dated as of
[         ], [2005] (the “Indenture”),
as supplemented and amended by a first supplemental indenture, dated as of
[           ], [2005]
(the “First Supplemental Indenture” and, together with the Indenture,
the “10-Year Notes Indenture”), each of the Indenture and the First
Supplemental Indenture among the Company, [•], as Trustee, Co-Registrar and
Principal Paying Agent, and HSBC Bank Argentina S.A., as Registrar and Paying
Agent thereunder.  Reference to the 10-Year
Notes Indenture and all indentures supplemental thereto is hereby made for a
statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of Step-Up
Notes and of the terms upon which the Step-Up Notes are, and are to be,
authenticated and delivered.  The terms
of the Step-Up Notes include those stated in the 10-Year Notes Indenture and
those made part of the 10-Year Notes Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb), as amended (the “Trust
Indenture Act”).  The Step-Up Notes
are subject to all such terms, and Holders are referred to the 10-Year Notes
Indenture and the Trust Indenture Act for a statement of those terms.

 

The Indebtedness evidenced by the Step-Up Notes will
constitute the direct, unsecured and unconditional unsubordinated Indebtedness
of the Company and will rank pari passu in
right of payment without any preference among themselves.  The payment obligations of the Company under
the Step-Up Notes will at all times rank at least
equally in priority of payment with all other present and future unsecured and
unsubordinated Indebtedness of the Company and senior in priority of payment
with all other present and future Subordinated Indebtedness of the Company from
time to time outstanding.

 

Form, Denomination and
Registration

 

The Step-Up Notes shall be issuable only in registered
form, without coupons, in denominations of U.S.$1.00 or multiples of U.S.$1.00
in excess thereof, including if issued other than as a Global Note and in
exchange for beneficial interests in a Restricted Global Note.  No service charge shall be made for any
registration of transfer or exchange of Step-Up Notes, but the Trustee may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.

 

Payment; Paying Agents
and Transfer Agent

 

The principal of, premium, if any, on and interest on
the Registered Step-Up Notes shall be payable, and the transfer of such
Registered Step-Up Notes will be registrable, at the corporate trust office of
the Trustee in the Borough of Manhattan, The City of New York, at

 

A-6

 

the main office of the Paying Agent in Argentina and, at the option of
the Holder of such Registered Step-Up Notes and subject to any fiscal or other
laws and regulations applicable thereto, at the office of any other Paying
Agents appointed by the Company. 
Payments with respect to principal of the Step-Up Notes will be made
only against surrender of such Step-Up Notes at the office of the Trustee in
The City of New York or at the main office of the Paying Agent in
Argentina.  Payment with respect to
principal, premium, if any, and interest with respect to any Step-Up Note may,
at the Company’s option, be made, subject to applicable laws and regulations,
by U.S. Dollar check drawn on a bank in The City of New York mailed to the
Holders of Step-Up Notes at their respective addresses set forth in the Step-Up
Note Register, provided that all payments with
respect to Global Notes the Holders of which have given wire transfer
instructions to the Company will be required to be made by wire transfer of
immediately available funds to the accounts specified by the Holders
thereof.  Unless such designation is
revoked, any such designation made by such Person with respect to such Step-Up
Note will remain in effect with respect to any future payments with respect to
such Step-Up Note payable to such Person.

 

Any money deposited with the Trustee or any Paying
Agent in trust for the payment of the principal of, or premium, if any,
interest or Additional Amounts, if any, on any Step-Up Note and remaining
unclaimed for two years after such principal, premium, if any, interest or
Additional Amounts, if any, has become due and payable shall be repaid to the
Company on Company Request; and the Holder of such Step-Up Note shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, (i) in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in The
City of New York, and (ii) in the Official Gazette of
Argentina and in a newspaper published in the Spanish language and
of general circulation in Argentina, notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such publication, any unclaimed balance of such money then
remaining shall be repaid to the Company.

 

If any payment on a Step-Up Note is due on a day that
is, at any place of payment, a day on which banking institutions are authorized
or obligated by law or executive order to close, then, at each such place of
payment, such payment need not be made on such day but may be made on the next
succeeding day that is not, at such place of payment, a day on which banking
institutions are authorized or obligated by law or executive order to close,
with the same force and effect as if made on the date for such payment, and no
interest will accrue for the period from and after such due date to such next
succeeding day that is not, at such place of payment, a day on which banking
institutions are authorized or obligated by law or executive order to close.

 

Payments of Additional
Amounts

 

All payments by the Company in respect of the Step-Up
Notes will be made free and clear of and without deduction or withholding for
or on account of any present or future

 

A-7

 

taxes, duties, levies, imposts, assessments or other charges (including
penalties, interest and other additions thereto) that are imposed by or on
behalf of any political subdivision or territory or possession of Argentina or
any authority or agency therein or thereof having power to tax (“Taxes”)
unless such withholding or deduction is required by law.  If the Company is required by law to make any
such withholding or deduction, the Company will pay to any Holder such
additional amounts (“Additional Amounts”) as may be necessary in order
that every net payment made by the Company on the Holder’s Step-Up Note after
deduction or withholding for or on account of any such present or future Taxes
will not be less than the amount then due and payable on such Step-Up
Note.  The foregoing obligation to pay
Additional Amounts, however, will not apply to (i) any Taxes that would
not have been imposed but for the existence of any present or former connection
between such Holder and Argentina other than the mere receipt of such payment
or the ownership or holding of such Step-Up Note; (ii) any Taxes that
would not have been imposed but for the presentation by the Holder of such
Step-Up Note for payment on a date more than 15 days after the date on which
such payment became due and payable or the date on which payment thereof is
duly provided for, whichever occurs later; (iii) if the beneficial owner
of such Step-Up Note had been the Holder of the Step-Up Note and would not be
entitled to the payment of Additional Amounts; (iv) any Taxes required to
be deducted or withheld by any paying agent from a payment on a Step-Up Note,
if such payment can be made without such deduction or withholding by any other
paying agent; or (v) any Taxes that would not have been imposed but for
the failure of the Holder to comply with any applicable certification, documentation,
information or other reporting requirement concerning the nationality,
residence, identity or connection with the taxing jurisdiction of the Holder or
beneficial owner of such Step-Up Note.

 

Any reference herein to principal and/or interest
shall be deemed also to refer to any Additional Amounts which may be payable
under the undertakings described in this paragraph, and express reference to
the payment of Additional Amounts (if applicable) in any provisions hereof
shall not be construed as excluding Additional Amounts in those provisions
hereof where such express reference is not made.

 

In addition, the Company agrees to pay any stamp,
issue, registration, documentary or other similar taxes and duties, including
interest and penalties that may be imposed by Argentina or the United States in
connection with the creation, issue and offering of this Step-Up Note.

 

Redemption for Tax
Reasons

 

If at any time subsequent to the issuance of the
Step-Up Notes, as a result of any change in or amendment to the laws,
regulations or governmental policy having the force of law or in the official
interpretation or application thereof of Argentina (or of any political
subdivision or taxing authority thereof or therein) or any execution of or
amendment to, any treaty or treaties affecting taxation to which Argentina (or
such political subdivision or taxing authority) is a party, which change or
amendment becomes effective after the date of the 10-Year Notes Indenture, the
Company is required, or would be required on the next succeeding interest
payment date, to pay Additional Amounts in respect of payments on the Step-Up
Notes and the payment of such Additional Amounts cannot be avoided by the use
of any reasonable measures

 

A-8

 

available to the Company (which shall not include any adverse
modification of the terms of the 10-Year Notes Indenture or the Step-Up Notes),
then the Step-Up Notes may be redeemed as a whole (but not in part), at the
option of the Company, at any time upon not less than 30 nor more than 90 days’
notice given to the Holders of Step-Up Notes at any time at an amount equal to
100% of their principal amount together with accrued and unpaid interest
thereon to the date fixed for redemption.

 

In order to effect a redemption of the Step-Up Notes
pursuant to the preceding paragraph, the Company shall deliver to the Trustee,
at least 45 days prior to the Redemption Date, (i) a certificate signed by
two directors of the Company stating that the obligation to pay such Additional
Amounts cannot be avoided by the Company taking reasonable measures available
to it and (ii) an opinion of independent legal counsel of recognized
standing to the effect that the Company has or will become obligated to pay
such Additional Amounts as a result of such change, amendment or executed or
amended treaty.  Such certificate, once
delivered by the Company to the Trustee, will be irrevocable and upon its
delivery the Company shall be obligated to make the payment or payments referred
to therein.  No notice of redemption may
be given earlier than 90 days prior to the earliest date on which the Company
would be obligated to pay such Additional Amounts were a payment in respect of
the Step-Up Notes then due.  The
certificate shall additionally specify the Redemption Date and all other
information necessary for the publication and mailing by the Trustee of notices
of such redemption.  The Trustee shall be
entitled to rely conclusively upon the information so furnished by the Company
in such certificate and shall be under no duty to check the accuracy or
completeness thereof.

 

Purchase by the Company

 

The Company may at any time purchase Step-Up Notes in
the open market or by tender or private agreement at any price.  All Step-Up Notes so purchased must be
delivered by the Company to the Trustee for cancellation.

 

Certain Covenants

 

1.             Limitation
on Indebtedness.

 

Under the terms of the 10-Year Notes Indenture, so
long as any of the Step-Up Notes are Outstanding, the Company will not, and will
not permit any of its Subsidiaries to directly or indirectly Incur any
Indebtedness (including Acquired Indebtedness); provided that the Company (but not any Subsidiary of the
Company) may Incur Indebtedness (including Acquired Indebtedness) and a Subsidiary
of the Company may Incur Acquired Indebtedness if, after giving effect to the
application of the Incurrence of any such Indebtedness and the receipt and
application of the proceeds therefrom, the ratio of Total Consolidated
Indebtedness to Annualized Pro Forma Consolidated Operating Cash Flow would be
less than or equal to 6.5 to 1.0.

 

The foregoing limitations on the Incurrence of
Indebtedness will not apply to:

 

(i)            the Incurrence by the Company of Permitted Indebtedness;

 

A-9

 

(ii)           the Incurrence by any Subsidiary of the Company of Permitted
Subsidiary Indebtedness;

 

(iii)          the
Incurrence of Indebtedness by the Company (but not any Subsidiary of the
Company) other than Indebtedness described in the foregoing clause (i), which
Indebtedness when added to the then outstanding Indebtedness previously
Incurred under this clause (iii) and the outstanding Indebtedness of
Subsidiaries of the Company previously Incurred under clause (iv) below,
does not exceed, as of the date of determination, U.S.$25
million in aggregate principal amount; and

 

(iv)          the
Incurrence of Indebtedness by Subsidiaries of the Company which Indebtedness, (A) when
added to the outstanding Indebtedness of Subsidiaries of the Company previously
Incurred under this clause (iv), does not exceed, as of the date of
determination, U.S.$10 million in aggregate principal amount, and (B) when
added to the outstanding Indebtedness of the Company previously Incurred under
clause (iii) above and the outstanding Indebtedness of Subsidiaries of the
Company previously Incurred under this clause (iv), does not exceed, as of the
date of determination, U.S.$25 million in aggregate principal amount.

 

2.             Limitation
on Dividends and Other Payment Restrictions Affecting Significant Subsidiaries

 

Under the terms of the 10-Year Notes Indenture, so
long as any of the Step-Up Notes are Outstanding, the Company will not, and
will not permit any Significant Subsidiary to, create or otherwise cause or
suffer to exist or become effective any consensual encumbrance or consensual
restriction of any kind on the ability of any Significant Subsidiary to (i) pay
dividends or make any other distributions permitted by applicable law to the
Company or any Significant Subsidiary on its Capital Stock or with respect to
any other interest or participation in, or measured by, its profits, (ii) pay
any Indebtedness or other obligation owed to the Company or any other
Significant Subsidiary, (iii) make loans or advances to the Company or any
other Significant Subsidiary or (iv) sell, lease or transfer any of its
property or assets to the Company or any other Significant Subsidiary.

 

The foregoing provisions shall not restrict (A) in
the case of clause (i), (ii), (iii) or (iv), any such encumbrance or
restriction (I) existing under the 10-Year Notes Indenture; (II) existing under
or by reason of applicable law; (III) existing under any instrument governing
Acquired Indebtedness or Capital Stock of any Person or the property or assets
of such Person acquired by the Company or any Significant Subsidiary and
existing at the time of such acquisition (except to the extent such Acquired
Indebtedness was Incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person
or the property or assets of any Person other than such Person or the property
or assets of such Person so acquired; (IV) existing under any agreement or
instrument that refinances an Indebtedness or replaces, renews or amends an
agreement or instrument containing an encumbrance or restriction that is
permitted by clauses (I) and (III) above, provided
that the terms and conditions of any such restrictions taken as a whole are not
less favorable to the Holders than those under or pursuant to the Indebtedness
being refinanced or the agreements or instruments being replaced, renewed or
amended; or (V) with respect to a Significant Subsidiary

 

A-10

 

and imposed pursuant to an agreement that has been entered into for the
sale or disposition of all or substantially all of the Capital Stock of, or
property and assets of, such Significant Subsidiary; or (B), in the case of
clause (iv) only, any such encumbrance or restriction (I) that restricts
in a customary manner the subletting, assignment or transfer of any property or
asset subject to a lease or license, or (II) existing by virtue of any transfer
of, agreement to transfer, option or right with respect to, or Lien on, any property
or assets of the Company or any Significant Subsidiary not otherwise prohibited
by the 10-Year Notes Indenture.  Nothing
contained in this paragraph shall prevent the Company or any Significant
Subsidiary from (1) creating, incurring, assuming or suffering to exist
any Liens otherwise permitted under the “Limitation on Liens” covenant or (2) restricting
the sale or other disposition of property or assets of the Company or any of
its Significant Subsidiaries that secure Indebtedness of the Company or any
Significant Subsidiary, subject to compliance with the “Limitation on Asset
Sales” covenant.

 

3.             Limitation
on the Issuance and Sale of Capital Stock of Significant Subsidiaries

 

Under the terms of the 10-Year Notes Indenture, the
Company will not sell, and will not permit any Significant Subsidiary, directly
or indirectly, to issue or sell, any shares of Capital Stock of a Significant
Subsidiary (including options, warrants or other rights to purchase shares of
such Capital Stock) except (i) to the Company or a Wholly-Owned Subsidiary
that, at the time of such sale, is a Significant Subsidiary, (ii) if,
immediately after giving effect to such issuance or sale, such Significant
Subsidiary would no longer constitute a Significant Subsidiary, (iii) in
the case of issuances of Capital Stock by a Significant Subsidiary if, after
giving effect to such issuance, the Company maintains its percentage ownership
of such Significant Subsidiary, (iv) the issuance to or ownership by
directors of directors’ qualifying shares or the issuance to or ownership by a
Person of Capital Stock of any Significant Subsidiary, to the extent mandated
by applicable law, or (v) the issuance or transfer of Capital Stock of a
Significant Subsidiary to the seller or transferor of a Cable/Telecommunications
Business, provided that after
giving effect to any such issuance or transfer, the Company holds at least 51%
of the Capital Stock (including 51% of the Voting Stock) of any such
Significant Subsidiary, and provided further
that in the case of clauses (ii), (iii) and (v) above, any
such issuance or sale shall comply with the “Limitation on Asset Sales”
covenant.

 

4.             Limitation
on Issuances of Guarantees by Subsidiaries

 

Under the terms of the 10-Year Notes Indenture, the
Company will not permit any Subsidiary of the Company, directly or indirectly,
to Guarantee any Indebtedness of the Company (“Guaranteed Indebtedness”),
unless (i) such Subsidiary simultaneously executes and delivers a
supplemental indenture to the 10-Year Notes Indenture providing for a Guarantee
by such Subsidiary (a “Subsidiary Guarantee”) of payment of the Step-Up
Notes and (ii) such Subsidiary waives and will not in any manner
whatsoever claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any other rights against the Company
or any other Subsidiary of the Company as a result of any payment by such
Subsidiary under its Subsidiary Guarantee; provided
that this paragraph shall not be applicable to any Guarantee of any Subsidiary
of the Company that (x) exists at the time such Person becomes a Subsidiary of
the Company and (y) was not Incurred in connection with, or in contemplation
of, such Person becoming a Subsidiary of the Company.  If the Guaranteed Indebtedness is pari

 

A-11

 

passu with the Step-Up Notes, then the
Guarantee of such Guaranteed Indebtedness shall be pari passu with, or subordinated to, the Subsidiary
Guarantee.  If the Guaranteed
Indebtedness is subordinated to the Step-Up Notes, then the Guarantee of such
Guaranteed Indebtedness shall be subordinated to the Subsidiary Guarantee at
least to the extent that the Guaranteed Indebtedness is subordinated to the
Step-Up Notes.

 

Notwithstanding the foregoing, any Subsidiary
Guarantee by a Subsidiary of the Company shall provide by its terms that it
shall be automatically and unconditionally released and discharged upon (i) any
sale, exchange or transfer, to any Person not an Affiliate of the Company, of
all of the Company’s and each of its Subsidiary’s Capital Stock in, or all or
substantially all the assets of, such Subsidiary (which sale, exchange or
transfer is not in contravention of the “Limitation on Asset Sales” covenant
and is not otherwise prohibited hereby) or (ii) the release or discharge
of the Guarantee which resulted in the creation of such Subsidiary Guarantee,
except a discharge or release by or as a result of payment under such
Guarantee.

 

5.             Limitation
on Transactions with Shareholders and Affiliates

 

Under the terms of the 10-Year Notes Indenture, the
Company will not, and will not permit any Subsidiary to, directly or
indirectly, conduct any business, enter into, renew or extend any transaction
(including, without limitation, the purchase, sale, lease, exchange or transfer
of property or assets, the rendering of any service, or the making of any
payment, loan, advance or guarantee) with, or for the benefit of, any holder
(or any Affiliate of such holder) of 10% or more of the Capital Stock of the
Company or with any Affiliate of the Company or of any Subsidiary (together, “Related
Persons” and each, a “Related Person”), unless the terms to the
Company or such Subsidiary (i) are at least as favorable to the Company or
such Subsidiary as those that could be obtained at the time of such transaction
in arm’s length dealings with a Person who is not a Related Person, and (ii) in
the case of any transaction (or series of transactions) with a Related Person
involving aggregate payments made on or after the Issue Date in excess of
U.S.$10 million in any fiscal year, shall be approved by a majority of the
disinterested members of the Board of Directors of the Company, or if no such
disinterested directors exist with respect to such transaction (or series of
transactions), shall be confirmed by an opinion of an Independent Financial
Advisor to be fair, from a financial point of view, to the Company or such
Subsidiary.

 

The foregoing limitation does not limit, and shall not
apply to (i) any transaction between the Company and any of its
Subsidiaries or between Subsidiaries, (ii) payment of reasonable and
customary compensation and fees to directors of the Company and the
Subsidiaries who are not employees of the Company or any Subsidiary, or (iii) the
grant of stock options or similar rights to acquire Capital Stock (other than
Disqualified Stock) to employees and directors of the Company pursuant to plans
approved by the Board of Directors provided that, in the aggregate, the shares
of Capital Stock underlying such options or similar rights issued since the
Issue Date (exclusive of any shares of Capital Stock or similar rights required
to be issued by law) shall not exceed 2.5% of the outstanding Common Stock of
the Company on a fully diluted basis at the date of determination.

 

A-12

 

6.             Limitation
on Liens

 

Under the terms of the 10-Year Notes Indenture, the
Company will not, and will not permit any Subsidiary of the Company to create,
incur, assume or suffer to exist any Liens of any kind (other than Permitted
Liens) against or upon any of its property or assets (including any shares of
Capital Stock), now owned or hereafter acquired, or any proceeds therefrom
securing any Indebtedness unless provision is made directly to secure the
Step-Up Notes equally and ratably by a Lien on such property, assets or
proceeds with (or, if the obligation or liability to be secured by such Lien is
Subordinated Indebtedness, prior to) the obligation or liability secured by
such Lien.

 

7.             Limitations
on Sale and Leaseback Transactions

 

Under the terms of the 10-Year Notes Indenture, the
Company will not, and will not permit any of its Subsidiaries to, directly or
indirectly, enter into, assume, guarantee or otherwise become liable with
respect to any Sale and Leaseback Transaction, unless:  (i) the net proceeds from such
transaction are at least equal to the Fair Market Value of the property being
transferred and (ii) such transaction shall comply with the “Limitation on
Asset Sales” covenant.

 

For purposes of the preceding paragraph, “Sale and
Leaseback Transaction” means, with respect to any Person, any direct or
indirect arrangement (excluding, however, any such arrangement between such
Person and a Wholly-Owned Subsidiary of such Person or between one or more
Wholly-Owned Subsidiaries of such Person) pursuant to which property is sold or
transferred by such Person or a Subsidiary of such Person and is thereafter
leased back from the purchaser or transferee thereof by such Person or one of
their Subsidiaries.

 

8.             Limitation
on Asset Sales

 

Under the terms of the 10-Year Notes Indenture, the
Company will not, and will not permit any of its Subsidiaries to make any Asset
Sale that would result in a Material Adverse Effect occurring and, in the case of
Asset Sales involving consideration of U.S.$10 million
or more, unless an Independent Financial Advisor shall have delivered a
valuation of the property or asset being sold to the Board of Directors and at
a price consistent with such valuation.

 

9.             Reports
to Holders

 

Under the terms of the 10-Year Notes Indenture, the
Company covenants to deliver to the Trustee:

 

(a)           (i) annual
consolidated financial statements with a report from a major internationally
recognized independent public accountant with respect to such year within 180
days after the end of the fiscal year and (ii) quarterly consolidated
financial statements within 60 days after the end of each of the first three
fiscal quarters;

 

(b)           such additional information as the Company has filed with any
regulatory authority with jurisdiction over the Company within ten business
days of the filing thereof;

 

A-13

 

(c)           written
notice of the occurrence of any Default or Event of Default within ten Business
Days of the Company becoming aware of any such Default or Event of Default,
which notice shall be signed by the CEO, CFO or the chief accounting officer of
the Company; and

 

(d)           written
certification, on or before a date not more than 90 days after the end of each
fiscal year, that a review has been conducted of the activities of the Company
and its Subsidiaries, and of the Company’s and its Subsidiaries’ performance
under the 10-Year Notes Indenture, and that the Company has, to the best of
their knowledge, fulfilled all obligations under the 10-Year Notes Indenture,
or, if there has been a default in the fulfillment of any such obligation,
specifying each such default and the nature and status thereof.

 

Delivery of such reports, information and documents to
the Trustee is for informational purposes only and the Trustee’s receipt of
such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Company’s compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers’ Certificates).

 

10.           Consolidation,
Merger and Sale of Assets

 

Under the terms of the 10-Year Notes Indenture, the
Company shall not consolidate with, merge with or into, or sell, convey,
transfer, lease or otherwise dispose of all or substantially all of its
property and assets (as an entirety or substantially an entirety in one
transaction or a series of related transactions) to, any Person (other than a
consolidation or merger with or into a Wholly-Owned Subsidiary which, at the
time of such consolidation or merger, is a Significant Subsidiary with a
positive net worth; provided
that, in connection with any such merger or consolidation, no consideration
(other than Common Stock in the surviving Person or the Company) shall be
issued or distributed to the stockholders of the Company) or permit any Person
to merge with or into the Company unless: 
(i) the Company shall be the continuing Person, or the Person (if other
than the Company) formed by such consolidation or into which the Company is
merged or that acquired or leased such property and assets of the Company shall
expressly assume, by a supplemental indenture, executed and delivered to a
Responsible Officer of the Trustee, all of the obligations of the Company under
the 10-Year Notes Indenture; (ii) immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing; (iii) (A) the transaction will involve a Person
principally engaged in the Company’s line of business or in a business or
activities ancillary to the Company’s line of business, or reasonably related
therewith (including, but not limited to programming, MMDS, broadband, pay
television and the provision of access service to, content for or ancillary
services such as web-hosting, network security and monitoring, digital
certificates or equipment installation or maintenance, for the Internet, but
excluding non-pay television services, AM or FM radio broadcasting, telephone
or cellular communications and publication of newspapers), (B) immediately
after giving effect to such transaction on a pro forma basis, the Company, or
any surviving Person will have Consolidated Net Worth equal to or greater than
the Consolidated Net Worth of the Company immediately preceding the transaction
(provided that this requirement will not apply where such transaction involves
another Person engaged in substantially the Company’s line of business in
Argentina), and (C) (1) the weighted average life of the Company’s
(or the surviving Person’s) consolidated

 

A-14

 

Indebtedness after giving effect to the transaction would exceed the
lesser of (x) five years and (y) the weighted average life of the Company’s
consolidated Indebtedness immediately prior to the transaction and (2) after
giving effect to such transaction the Company (or the surviving Person) would
either be permitted to Incur at least U.S.$1.00 of additional Indebtedness
pursuant to the “Limitation on Indebtedness” covenant, if such Incurrence was
not permitted prior to giving effect to such transaction or, if such Incurrence
was permitted, have a lower ratio of Total Consolidated Indebtedness to
Annualized Pro Forma Consolidated Operating Cash Flow than that of the Company
prior to giving effect to such transaction; and (iv) the Company delivers
to the Trustee an Officers’ Certificate (attaching the arithmetic computations
to demonstrate compliance with clause (iii)) and an opinion of reputable
Argentine counsel, in each case stating that such consolidation, merger or
transfer and such supplemental indenture complies with clause (i) of this
provision and that all conditions precedent provided for herein relating to such
transaction have been complied with.

 

Events of Default

 

The following events will
be each defined as an “Event of Default” for the 10-Year Notes
Indenture:

 

(a)           failure to pay principal of or
premium, if any, on any of the Step-Up Notes when the same shall become due and
payable at maturity, upon acceleration, redemption or otherwise;

 

(b)           failure to
pay interest, or Additional Amounts, if any, on any of the Step-Up Notes when
the same shall become due and payable, and such failure continues for a period
of 30 days;

 

(c)           failure to
perform or comply with the “Consolidation, Merger and Sale of Assets” covenant;

 

(d)           failure to perform or breach of any
other covenant or agreement in the 10-Year Notes Indenture or under the Step-Up
Notes (other than those referred to in clauses (a), (b) and (c) above)
and such failure or breach continues for a period of 30 consecutive days after
written notice shall have been given to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate principal
amount of the Step-Up Notes then outstanding;

 

(e)           the occurrence with respect to any
issue or issues of Indebtedness of the Company or any Significant Subsidiary
having an outstanding principal amount of U.S.$5 million or more (or its
equivalent in other currencies) in the aggregate for all such issues of all
such Persons, whether such Indebtedness now exists or shall hereafter be
created, of (I) an event of default that has caused such Indebtedness to
become, or the holders thereof to declare such Indebtedness to be, due and
payable prior to its Stated Maturity and/or (II) the failure to make a payment
of principal and in the case of the 7-Year Notes, interest when such payment is
due and payable;

 

A-15

 

(f)            one or more final judgments, orders
or binding arbitration awards, for the payment of money in excess of U.S.$5
million (or its equivalent in other currencies), either individually or in the
aggregate for all such final judgments, orders or binding arbitration awards,
shall be rendered against the Company or any Significant Subsidiary or any of
their respective properties and shall not be paid or discharged, and there
shall have been a period of 60 consecutive days following entry of the
final judgment, order or binding arbitration award that causes the aggregate
amount for all such final judgment, orders or binding arbitration awards
outstanding and not paid or discharged against all such Persons to exceed
U.S.$5 million (or its equivalent in other currencies) during which a stay of
enforcement of such final judgments, orders or binding arbitration awards, by
reason of a pending appeal or otherwise, shall not be in effect;

 

(g)           any government or governmental
authority shall have condemned, nationalized, seized, or otherwise expropriated
all or any substantial portion of the assets or property of the Company or any
Significant Subsidiary or the share capital of the Company or any Significant
Subsidiary, or shall have assumed custody or control of such assets or property
or of the business or operations of the Company or any Significant Subsidiary
or of the share capital of the Company or any Significant Subsidiary, or shall
have taken any action that would prevent the Company or any Significant
Subsidiary or its officers from carrying on its business or operations or a
substantial part thereof for a period of longer than 60 consecutive days and
the result of any such action shall materially prejudice the ability of the
Company to perform its obligations under the Step-Up Notes;

 

(h)           the
Argentine Government shall declare a general suspension of payment or a
moratorium on the payment of debt of the Company (which does not expressly
exclude the Step-Up Notes);

 

(i)            the Company or any Significant
Subsidiary (I) is declared by a court of competent jurisdiction to be insolvent
or bankrupt or unable to pay its debts, (II) commences or consents to the
commencement of a case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, (III) makes a general assignment or an
arrangement or composition with or for the benefit of creditors, or (IV) admits
in writing its inability to pay its debts generally as they become due, or (V)
takes corporate action in furtherance of any of the foregoing;

 

(j)            an order or decree is made or an
effective resolution passed for relief against the Company or a Significant
Subsidiary under any applicable bankruptcy law, or for the winding-up or
dissolution of the Company or any Significant Subsidiary or adjudging the
Company or any Significant Subsidiary bankrupt or insolvent under any
applicable bankruptcy law and in each case such order or decree remains
unstayed and in effect for a period of 60 consecutive days, or the Company or
any Significant Subsidiary ceases or threatens to cease to carry on all or a
material part of its business or operations, except for the purpose of and
followed by a reconstruction, amalgamation, reorganization (“concurso preventivo” or “concordato”), merger or consolidation in
the case of a Significant Subsidiary, whereby the undertaking and the assets of
such Subsidiary, or all of the undertaking and assets relating to the Company’s
direct or indirect shareholding in such Subsidiary, as the case may be, are
transferred

 

A-16

 

to or otherwise vested in the Company or any other
Significant Subsidiary or Subsidiary which as a result of such transfer would
become a Significant Subsidiary; or

 

(k)           it becomes unlawful for the Company
to perform or comply with any one or more of its obligations under any of the
Step-Up Notes or the 10-Year Notes Indenture, and such unlawfulness continues
for a period of 60 consecutive days after written notice shall have been given
to the Company by the Trustee or to the Company and the Trustee by the Holders
of at least 25% in aggregate principal amount of the Step-Up Notes then
outstanding.

 

Acceleration of Maturity;
Rescission and Annulment

 

If an Event of Default (other than an Event of Default
specified in clause (i) or (j) above that occurs with respect to the
Company) occurs and is continuing under the 10-Year Notes Indenture, the
Trustee thereunder or the Holders of at least 25% in aggregate principal amount
then outstanding of the Step-Up Notes, by written notice to the Company (and to
the Trustee if such notice is given by the Holders), may, and the Trustee at
the request of such Holders shall, declare the Step-Up Notes to be immediately
due and payable at 100% of the principal amount thereof, plus accrued and
unpaid interest thereon, if any, to the date of such declaration.  Upon a declaration of acceleration, such
principal, premium if any, and accrued interest shall be immediately due and
payable.  In the event of a declaration
of acceleration because an Event of Default set forth in clause (e) above
has occurred and is continuing, such declaration of acceleration shall be
automatically rescinded and annulled if the event of default triggering such
Event of Default pursuant to clause (e) shall be remedied or cured by the
Company and/or the relevant Subsidiaries or waived by the holders of the
relevant Indebtedness within 30 days after the declaration of acceleration with
respect thereto.  If an Event of Default
specified in clause (i) or (j) above occurs with respect to the Company,
the Step-Up Notes then outstanding shall ipso facto become and be immediately
due and payable at 100% of the outstanding principal amount thereof, plus
premium, if any, thereon and accrued and unpaid interest thereon in each case
without any declaration or other act on the part of the Trustee or any Holder.

 

The Holders of at least a majority in principal amount
of the outstanding Step-Up Notes, by written notice to the Company and to the
Trustee, may rescind and annul a declaration of acceleration and its
consequences if, in addition to certain other covenants, (i) all existing
Events of Default, other than the nonpayment of the principal of and premium,
if any, interest and Additional Amounts, if any, on such Step-Up Notes that
have become due solely by such declaration of acceleration, have been cured or
waived and (ii) the rescission would not conflict with any judgment,
decree or order of a court of competent jurisdiction.  The Holders of at least a majority in
aggregate principal amount of the outstanding Step-Up Notes, by written notice
to the Trustee, may waive an existing Default or Event of Default and the
consequences under the 10-Year Notes Indenture, except a Default in the payment
of principal of, premium, if any, on or interest on the Step-Up Notes or in
respect of a covenant or provision of the 10-Year Notes Indenture that cannot
be modified or amended without the consent of the Holder of each outstanding
Step-Up Note affected.

 

The Holders of at least a majority in aggregate
principal amount of the outstanding Step-Up Notes may on behalf of the Holders
of all of the Step-Up Notes, direct the

 

A-17

 

time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee with respect to the Step-Up Notes
by the 10-Year Notes Indenture.  However,
the Trustee under the 10-Year Notes Indenture may refuse to follow any
direction that conflicts with law or the 10-Year Notes Indenture, that may
involve the Trustee in personal liability, or that the Trustee determines in
good faith may be unduly prejudicial to the rights of Holders of Step-Up Notes
not joining in the giving of such direction and may take any other action it
deems proper that is not inconsistent with any such direction received from
Holders of Step-Up Notes.  A Holder may
not pursue any remedy with respect to the 10-Year Notes Indenture or this
Step-Up Note unless:  (i) the Holder
gives the Trustee written notice of a continuing Event of Default; (ii) the
Holders of at least 25% in aggregate principal amount at maturity of
outstanding Step-Up Notes make a written request to the Trustee to pursue the
remedy; (iii) such Holder or Holders offer the Trustee indemnity
satisfactory to the Trustee against any costs, liability or expense; (iv) the
Trustee does not comply with the request within 60 days after receipt of the
request and the offer of indemnity; and (v) during such 60-day period, the
Holders of a majority in aggregate principal amount of the outstanding Step-Up
Notes do not give the Trustee a direction that is inconsistent with the
request.  However, such limitations do
not apply to the right of any Holder of a Step-Up Note to receive payment of
the principal of, premium, if any, on or interest on such Step-Up Note or to
bring suit for the enforcement of any such payment, on or after the due date
expressed in the Step-Up Notes, which right shall not be impaired or affected
without the consent of such Holder.

 

Meetings of Holders;
Modification and Waiver

 

(a)           The
Trustee or the Company shall, upon the request of the Holders of at least five
percent in aggregate principal amount of the Step-Up Notes at the time Outstanding,
or the Company or the Trustee at its discretion, may, call a meeting of the
Holders at any time and from time to time, to make, give or take any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by the Step-Up Notes to be made, given or taken by such Holders.  With respect to all matters not contemplated
in the 10-Year Notes Indenture, meetings of Holders will be held in Buenos
Aires in accordance with the Negotiable Obligations Law; provided,
however, that the Company or the Trustee may determine to hold any
such meetings simultaneously in Buenos Aires and in The City of New York by any
means of telecommunication.  Meetings
shall be held at such time and at such place as the Company or the Trustee
shall determine in such cities.  If a
meeting is being held pursuant to a request of Holders, the agenda for the
meeting shall be as determined in the request and such meeting shall be
convened within 40 days from the date such request is received by the Trustee
or the Company, as the case may be. 
Notice of any meeting of Holders (which shall include the date, place
and time of the meeting, the agenda therefor and the requirements to attend)
shall be published not less than ten days nor more than 30 days prior to the date
fixed for the meeting in the Boletín Oficial de la
República (the Official Gazette of Argentina) and, while there are
Holders domiciled in Argentina, in a newspaper having major circulation in
Argentina and any publication of such notice shall be for five consecutive
Business Days in each place of publication.

 

(b)           Any
Holder may attend the meeting in person or by proxy.  Directors, officers, managers, members of the
Supervisory Committee and employees of the Company may

 

A-18

 

not be appointed as proxies.  Holders of Step Up
Notes who intend to attend a meeting of Holders must notify the Registrar of
their intention to do so at least three days prior to the date of such
meeting.  The Company shall, prior to any vote, deliver to the Trustee a notice
signed by the CFO or the chief accounting officer certifying, to the best of
the Company’s knowledge, as to the Notes held by any Affiliate of the Company.

 

(c)           Except
as specified in “Acceleration of Maturity; Rescission and Annulment,” decisions
shall be made by the affirmative vote of the Holders of at least 51% in
aggregate principal amount of the Step-Up Notes at the time outstanding present
or represented at a meeting of such Holders at which a quorum is present; provided, however, that the affirmative vote of the Holders
of the applicable percentage in aggregate principal amount of the Step-Up Notes
at the time Outstanding specified under “Events of Default” shall be required
to take the actions specified under such heading; provided
further, however, that the unanimous affirmative vote of the Holders
of Step-Up Notes shall be required to adopt a valid decision on:

 

(i)                                     changing
the Stated Maturity of, or failing to pay, the principal of, premium, if any,
on or any installment of interest on any Step-Up Note, or reducing the
principal amount thereof, premium, if any, thereon or the rate of interest
thereon or changing the requirement to pay Additional Amounts thereon, or
releasing any amounts held in the Reserve Accounts;

 

(ii)                                  changing the place of payment where, or the coin or currency
in which, the principal of, premium, if any, on or interest or Additional
Amounts (if any) on any Step-Up Note is payable;

 

(iii)                               impairing
the right to institute suit for the enforcement of any such payment on or after
the Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date);

 

(iv)                              reducing
the percentage in principal amount of the outstanding Step-Up Notes, the
consent of the Holders of which is required for the adoption of a resolution or
the quorum required to constitute a meeting of Holders at which a resolution is
adopted or the percentage in principal amount of outstanding Step Up Notes the
Holders of which are entitled to request the calling of a meeting of Holders;
or

 

(v)                                 modifying the percentage in principal amount of the Step-Up
Notes, the consent of Holders which is required to waive a past Default or
Event of Default.

 

Except as provided above,
any modifications, amendments or waivers to the terms and conditions of the
Step-Up Notes will be conclusive and binding on all Holders of Step-Up Notes,
whether or not they were present at any meeting, and whether or not notation of
such modifications, amendments or waivers is made upon the Step-Up Notes, provided that any such modification, amendment or waiver was
duly passed at a meeting convened and held in accordance with the provisions of
the Negotiable Obligations Law.

 

(d)           Meetings
of the Holders of Step-Up Notes shall be either “first call” meetings (“primera convocatoria”) or “second call” meetings (“segunda convocatoria”). 
All meetings of the Holders of Step-Up Notes shall be deemed to be a
first call meeting; provided,

 

A-19

 

however, that any
reconvened meeting adjourned for lack of a requisite quorum shall be deemed a
second call meeting.  The quorum
applicable at a meeting of the Holders of Step-Up Notes of any series shall be
as follows:

 

(i)            the
quorum for meetings called to adopt a resolution by which Holders of Step-Up
Notes shall make any request, demand or direction or give any notice (other
than a resolution specified in paragraph (ii) below) shall, (A) in
the case of first call meetings, be such Persons holding or representing a
majority in aggregate principal amount of the Step-Up Notes at the time
outstanding and (B) in the case of second call meetings, be such Persons
present at such meeting holding or representing Step-Up Notes at the time
outstanding; and

 

(ii)           the
quorum for meetings called to adopt a resolution by which Holders of Step-Up
Notes consent to any waiver under the Step-Up Notes or the 10-Year Notes
Indenture, agree to any amendment to the 10-Year Notes Indenture or the terms
and conditions of the Step-Up Notes, or specify the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred upon the Trustee with respect to the Step-Up Notes
by the 10-Year Notes Indenture shall (A) in the case of first call
meetings, be Persons holding or representing at least 60% in aggregate
principal amount of the Step-Up Notes at the time outstanding and (B) in
the case of second call meetings, be Persons holding or representing at least
30% in aggregate principal amount of the Step-Up Notes at the time outstanding.

 

(e)           Without
the vote of any Holders of Step-Up Notes, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental to the 10-Year Notes Indenture in form
satisfactory to the Trustee, for any of the following purposes:

 

(i)            to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants of the Company in the
10-Year Notes Indenture and in the Step-Up Notes; or

 

(ii)           to add to the covenants of the Company for the benefit of
the Holders or to surrender any right or power herein conferred upon the
Company; or

 

(iii)          to secure the Step-Up Notes; or

 

(iv)          to comply with any requirements of the Commission in order
to effect and maintain the qualification of the 10-Year Notes Indenture under
the Trust Indenture Act; or

 

(v)           to evidence and provide for acceptance of appointment
hereunder by a successor Trustee pursuant to the provisions of the 10-Year
Notes Indenture; or

 

(vi)          to evidence any further issue of notes having terms and
conditions the same as those of the Step-Up Notes (or the same except for the
payment of interest accruing prior to the issue date of such additional notes
or except for the first payment of

 

A-20

 

interest
following the issue date of such additional notes), which additional notes may
be consolidated and form a single series with the Step-Up Notes; or

 

(vii)         to
cure any ambiguity, to correct or supplement any provision herein which may be
inconsistent with any other provision herein, or to make any other provisions
with respect to matters or questions arising under the 10-Year Notes Indenture
which shall not be inconsistent with the provisions of the 10-Year Notes
Indenture, provided that such action pursuant to
this clause (vii) shall not adversely affect the interests of the Holders
in any material respect; or

 

(viii)        to increase the aggregate principal amount of Public Debt
Securities at any time outstanding under the 10-Year Notes Indenture.

 

No reference herein to the 10-Year Notes Indenture and
no provision of this Step-Up Note or of the 10-Year Notes Indenture shall alter
or impair the obligation of the Company, which is absolute and unconditional,
to pay the principal of, premium, if any, on and interest and Additional
Amounts, if any, on this Step-Up Note at the times, place and rate, and in the
coin or currency, herein prescribed.

 

Notices

 

Notices to Holders of Registered Step-Up Notes will be
mailed to them at their respective addresses as they appear in the register
maintained by the Registrar and shall be published as may be required by
applicable law or, to the extent there are Holders domiciled in Argentina (i) in
a leading newspaper having general circulation in Argentina, (ii) for so
long as any Step-Up Notes is listed on the Buenos Aires Stock Exchange, in the
Bulletin of the Buenos Aires Stock Exchange, and (iii) in the Official Gazette of Argentina.  Any notice so mailed shall be deemed to have
been given on the date of such mailing. 
In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders of Registered Step-Up Notes.  Any notice mailed to a Holder in the manner
herein prescribed shall be deemed to have been received by (i) a Holder
domiciled in Argentina when actually received and (ii) a Holder domiciled
outside of Argentina when so mailed.

 

Discharge and Defeasance

 

Under the terms of the 10-Year Notes Indenture, the
Company may at its option by a resolution of the Board of Directors, at any
time, upon the satisfaction of certain conditions described below, elect to be
discharged from its obligations with respect to outstanding Step-Up Notes (“defeasance”).  In general, upon a defeasance, the Company
shall be deemed to have paid and discharged the entire indebtedness represented
by the outstanding Step-Up Notes and to have satisfied all of its obligations
under such Step-Up Notes except for (i) the rights of Holders of such
Step-Up Notes and any related coupons to receive, solely from the trust fund
established for such purposes as described below, payments in respect of the
principal of, premium, if any, on and interest on such Step-Up Notes when such
payments are due, (ii) certain provisions relating to ownership,
registration and transfer of the Step-Up Notes, (iii) certain provisions
relating to

 

A-21

 

the mutilation, destruction, loss or theft of the Step-Up Notes, (iv) the
Company’s obligations to effect a registered exchange offer or a private
exchange offer, (v) the covenant relating to the maintenance of an office
or agency in Buenos Aires and The City of New York and (vi) certain
provisions relating to the rights, powers, trusts duties and immunities of the
Trustee.

 

In addition, the Company may at its option by Board
Resolution, at any time, upon the satisfaction of certain conditions described
below, elect to be released from certain covenants described in the 10-Year
Notes Indenture (“covenant defeasance”). 
Following such covenant defeasance, the occurrence of a breach or
violation of any such covenant will not be deemed to be an Event of Default
under the 10-Year Notes Indenture.

 

In order to cause a defeasance or covenant defeasance,
the Company will be required to satisfy, among other conditions, the following
conditions:

 

(a)           the
Company shall have irrevocably deposited or caused to be deposited with the
Trustee as funds in trust, money or U.S. Government Obligations, or a
combination thereof, sufficient, in the opinion of an internationally recognized
firm of independent public accountants, to pay and discharge the principal of,
premium, if any, on and each installment of interest on the outstanding Step-Up
Notes on the Stated Maturity or on the applicable Redemption Date, as the case
may be, of such principal, premium, if any, or installment of interest in
accordance with the terms of this Step-Up Note, and such amounts will be
applied for such purpose, and the Company must specify whether the Step-Up
Notes are being defeased to maturity or to a particular Redemption Date;

 

(b)           in
the case of an election fully to defease the Step-Up Notes, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (x) the
Company has received from, or there has been published by, the Internal Revenue
Service a ruling, or (y) since the date of the 10-Year Notes Indenture there
has been a change in the applicable federal income tax law or the
interpretation thereof, in either case to the effect that, and based thereon
such opinion shall confirm that, the Holders of the outstanding Step-Up Notes
will not recognize income, gain or loss for federal income tax purposes as a
result of such deposit, defeasance and discharge and will be subject to federal
income tax on the same amount, in the same manner and at the same time as would
have been the case if such deposit, defeasance and discharge had not occurred;

 

(c)           in
the case of a covenant defeasance, the Company shall have delivered to the
Trustee an Opinion of Counsel to the effect that the Holders of the outstanding
Step-Up Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit and covenant defeasance and will be
subject to federal income tax on the same amount, in the same manner and at the
same time as would have been the case if such deposit and covenant defeasance
had not occurred;

 

(d)           the
Company shall have delivered to the Trustee an Officers’ Certificate to the
effect that the Step-Up Notes, if then listed on any securities exchange, will not
be delisted as a result of such deposit;

 

A-22

 

(e)           no
Event of Default or event which with notice or lapse of time or both would
become an Event of Default shall have occurred and be continuing on the date of
such deposit (other than a Default or Event of Default resulting from the
borrowing of funds to be applied to such deposit) after giving effect thereto
or, with respect to a Default or Event of Default specified in clauses (i) or
(j) of the first paragraph of “Events of Default”, at any time during the
period ending on the 121st day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until the
expiration of such period);

 

(f)            such
defeasance or covenant defeasance shall not cause the Trustee to have a
conflicting interest as defined in the 10-Year Notes Indenture and for the
purposes of the Trust Indenture Act with respect to any securities of the
Company;

 

(g)           such
defeasance or covenant defeasance shall not result in a breach or violation of,
or constitute a default under, any other material agreement or instrument to
which the Company is a party or by which it is bound;

 

(h)           the
Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent relating to
either defeasance or covenant defeasance (as the case may be) have been
complied with; and

 

(i)            such defeasance or covenant defeasance shall not result in
the trust arising from such deposit constituting an investment company as
defined in the U.S. Investment Company Act of 1940, as amended, or such trust
shall be qualified under such act or exempt from regulation thereunder.

 

Trustee Dealings with the
Company

 

Subject to certain limitations imposed by the Trust
Indenture Act, the Trustee under the 10-Year Notes Indenture, in its individual
or any other capacity, may become the owner or pledgee of Step-Up Notes and may
otherwise deal with the Company and receive, collect, hold and retain
collections from the Company or its Affiliates with the same rights it would
have if it were not Trustee.  Any Paying
Agent, Registrar or Co-Registrar may do the same with like rights.

 

No Personal Liability of
Incorporators, Shareholders, Officers, Board of Directors Members or
Employees 

 

The 10-Year Notes Indenture provides that no recourse
for the payment of the principal of, premium, if any, on or interest on any of
the Step-Up Notes or for any claim based thereon or otherwise in respect
thereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in the 10-Year Notes Indenture or in this Step-Up Note or because
of the creation of any Indebtedness represented thereby, shall be had against
any incorporator, shareholder, officer, director, employee, Board of Directors
member or controlling person of the Company or of any successor Person
thereof.  Each Holder, by accepting the
Step-Up Notes, waives and releases all such liability.  The waiver and release are part of the
consideration for issuance of the Step-Up Notes.  Such waiver may not be effective to waive
liabilities under

 

A-23

 

Argentine or the U.S. federal securities laws and it is
the view of the Commission that such a waiver is against public policy.

 

Additional Waiver and
Release

 

As part of the consideration for issuance of the
Step-Up Notes, each Holder of Step-Up Notes, by accepting the Step-Up Notes,
waives any rights that it may have pursuant to Argentine law to claw back (acción revocatoria) or bring action
against any director of the Company (acción
de responsabilidad), and releases such director from any liability,
arising out of payments made by the Company a result of the consummation of the
of the cash option under
the Company’s APE.

 

Governing Law and
Enforceability

 

The Negotiable Obligations Law governs the
requirements for the Step-Up Notes to qualify as Obligaciones
Negociables thereunder, while such law, together with the Argentine
Business Companies Law No. 19,550, as amended, and other applicable
Argentine laws, govern the capacity and corporate authority of the Company to
execute and deliver the Step-Up Notes and the authorization of the public
offering of the Step-Up Notes by the CNV. 
All other matters in respect of the Step-Up Notes and the 10-Year Notes
Indenture, including but not limited to the statute of limitations applicable
thereto, are governed by and shall be construed in accordance with the laws of
the State of New York, United States.

 

The Company consents to the non-exclusive jurisdiction
of any court of the State of New York or any United States federal court
sitting in the Borough of Manhattan, The City of New York, New York, United
States, and any appellate court from any thereof, and waives any immunity from
the jurisdiction of such courts over any suit, action or proceeding that may be
brought in connection with the 10-Year Notes Indenture or this Step-Up
Note.  The Company irrevocably waives, to
the fullest extent permitted by law, any objection to any suit, action, or
proceeding that may be brought in connection with the 10-Year Notes Indenture
or this Step-Up Note in such courts whether on the grounds of venue, residence
or domicile or on the ground that any such suit, action or proceeding has been
brought in an inconvenient forum.  The
Company agrees that final judgment in any such suit, action or proceeding
brought in such court shall be conclusive and binding upon the Company and may
be enforced in any court to the jurisdiction of which the Company is subject by
a suit upon such judgment; provided that
service of process is effected upon the Company in the manner provided by the 10-Year
Notes Indenture.  Notwithstanding the
foregoing, any suit, action or proceeding brought in connection with the 10-Year
Notes Indenture or this Step-Up Note may be instituted in any competent court
in Argentina.

 

The Company agrees that service of all writs, process
and summonses in any suit, action or proceeding brought in connection with the
10-Year Notes Indenture or this Step-Up Note against the Company in any court
of the State of New York or any United States federal court sitting in the
Borough of Manhattan, The City of New York, New York, United States, may be
made upon CT Corporation System at 111 Eighth Avenue, New York, New York 10011,
whom the Company irrevocably appoints as its authorized agent for service of
process.  The

 

A-24

 

Company represents and warrants that CT Corporation System has agreed
to act as the Company’s agent for service of process.  The Company agrees that such appointment
shall be irrevocable so long as any of the Step-Up
Notes remain Outstanding or until the irrevocable appointment by the Company of
a successor in The City of New York as its authorized agent for such purpose
and the acceptance of such appointment by such successor.  The Company further agrees to take any and
all action, including the filing of any and all documents and instruments, that may be necessary to continue such
appointment in full force and effect as aforesaid.  If CT Corporation System shall cease to act
as the Company’s agent for service of process, the Company shall appoint
without delay another such agent and provide prompt written notice to the
Trustee of such appointment.  With
respect to any such action in any court of the State of New York or any United
States federal court in the Borough of Manhattan, The City of New York, New
York, United States, service of process upon CT Corporation System, as the
authorized agent of the Company for service of process, and written notice of
such service to the Company, shall be deemed, in every respect, effective
service of process upon the Company.

 

Currency Indemnity

 

The U.S. Dollar is the sole currency of account and
payment for all sums payable by the Company under or in connection with this
Step-Up Note.  Any amount received or
recovered in currency other than U.S. Dollars (whether as a result of, or of
the enforcement of, a judgment or order of a court of any jurisdiction, in the
winding up or dissolution of the Company or otherwise) by any Holder of Step-Up
Notes in respect of any sum expressed to be due to it from the Company shall
only constitute a discharge of the Company to the extent of the U.S. Dollar
amount which the recipient is able to purchase with the amount so received or
recovered in that other currency on the date of that receipt or recovery (or,
if it is not practicable to make that purchase on that date, on the first date
on which it is practicable to do so).  If
that U.S. Dollar amount is less than the U.S. Dollar amount expressed to be due
to the recipient under any Step-Up Note, the Company shall indemnify such
recipient against any loss sustained by it as a result.  In any event, the Company shall indemnify the
recipient against the cost of making any such purchase.  For the purposes of this paragraph, it will
be sufficient for the Holder to certify (indicating the sources of information
used) that it would have suffered a loss had an actual purchase of U.S. Dollars
been made with the amount so received in that other currency on the date of
receipt or recovery (or, if a purchase of U.S. Dollars on such date had not
been practicable, or the first date on which it would have been practicable).  These indemnities constitute a separate and
independent obligation from the Company’s other obligations, shall give rise to
a separate and independent cause of action, shall apply irrespective of any
waiver granted by any Holder of Step-Up Notes and shall continue in full force
and effect despite any other judgment, order, claim or proof for a liquidated
amount in respect of any sum due under any Step-Up Note or any other judgment
or order.

 

Defined Terms

 

“7-Year Notes Indenture” means the Indenture, as supplemented
and amended by the Second Supplemental Indenture, dated as of [        ],
[2005], among the Company, Law

 

A-25

 

Debenture Trust
Company of New York, as the Trustee, Co-Registrar and Principal Paying Agent
thereunder, and HSBC Bank Argentina S.A., as Registrar and Paying Agent thereunder.

 

“7-Year Notes” means both the series of Debt Securities known as
the Company’s 7-Year Fixed Rate Notes and the series of Debt Securities known
as the Company’s 7-Year Floating Rate Notes, all of which were (or to be)
issued pursuant to the 7-Year Notes Indenture.

 

“10-Year Notes Indenture” has the meaning set forth in the first
paragraph of the First Supplemental Indenture.

 

“10-Year Notes Reserve Account” has the meaning set forth in Section 5.1
of the First Supplemental Indenture.

 

“Acquired Indebtedness”
means Indebtedness of a Person existing at the time such Person became or was
designated a Subsidiary of the Company and not Incurred in connection with, or
in contemplation of, such Person becoming a Subsidiary of the Company.

 

“Affiliate” means, as applied to any Person,
any other Person directly or indirectly controlling, controlled by, or under
direct or indirect common control with, such Person.

 

“Annualized Pro Forma Consolidated Operating Cash
Flow” means Consolidated Operating Cash Flow for the latest fiscal quarter
for which consolidated financial statements of the Company are available
multiplied by four.  For purposes of
calculating “Consolidated Operating Cash Flow” for any fiscal quarter
for purposes of this definition, (i) any Subsidiary of the Company that is
a Subsidiary on the Transaction Date shall be deemed to have been a Subsidiary
at all times during such fiscal quarter and (ii) any Subsidiary of the
Company that is not a Subsidiary on the Transaction Date shall be deemed not to
have been a Subsidiary at any time during such fiscal quarter.  In addition to and without limitation of the
foregoing, for purposes of this definition, “Consolidated Operating Cash
Flow” shall be calculated after giving effect on a pro forma basis for the
applicable fiscal quarter to, without duplication, any Asset Sale or Asset
Acquisition (including, without limitation, any Asset Acquisition giving rise
to the need to make such calculation as a result of the Company or one of its
Subsidiaries (including any Person who becomes a Subsidiary as a result of the
Asset Acquisition) Incurring Acquired Indebtedness) occurring during the period
commencing on the first day of such fiscal quarter to and including the
Transaction Date (the “Reference Period”), as if such Asset Sale or
Asset Acquisition occurred on the first day of the Reference Period.

 

“Argentina” means
the Republic of Argentina.

 

“Argentine Government”
means the government of Argentina.

 

“Asset Acquisition” means (i) an
Investment or capital contribution (by means of transfers of cash or other
property to others or payments for property or services for the account or use
of others, or otherwise) by the Company or any of its Subsidiaries in any other
Person, or any acquisition or purchase of Capital Stock of another Person by
the Company or any of its Subsidiaries, in either case pursuant to which such
Person shall become a Subsidiary of the Company or shall be merged with or into
or consolidated with the Company or any Subsidiary of the Company or (ii) an
acquisition by the Company or any of its Subsidiaries of the property and

 

A-26

 

assets of any Person other than the Company or any of its Subsidiaries
which constitute substantially all of a division, operating unit or line of
business of such Person or which is otherwise outside the ordinary course of
business.

 

“Asset Sale” means any direct or indirect sale,
transfer, conveyance or lease (which has the effect of a disposition and is not
for security purposes) or other disposition (including by way of sale-leaseback
transactions) in one transaction or a series of related transactions by the
Company or any Subsidiary of the Company to any Person other than the Company
or any Subsidiary of the Company of (i) all or any of the Capital Stock of
any Subsidiary of the Company (other than directors’ qualifying shares or
shares owned by a Person, to the extent mandated by applicable law), (ii) any
material license or other authorization of the Company or any Subsidiary of the
Company pertaining to a Cable/Telecommunications Business, (iii) all or
substantially all of the property and assets of an operating unit or business
of the Company or any Subsidiary of the Company or (iv) any other property
and assets of the Company or any Subsidiary of the Company and, in each case,
that is not governed by the “Consolidation, Merger and Sale of Assets” covenant
hereof; provided, however that the term “Asset Sale”
shall in no case include any sale, transfer, conveyance, lease or other
disposition in one transaction or a series of related transactions (i) of
property or equipment that has become worn out, obsolete or damaged or otherwise
unsuitable for use in connection with the business of the Company or any
Subsidiary of the Company, as the case may be, (ii) involving assets with
a Fair Market Value not in excess of U.S.$500,000, (iii) of inventory in
the ordinary course of business, or (iv) involving the sale or other
disposition of cash or Cash Equivalents.

 

“Average Life” means, at any date of
determination with respect to any Indebtedness, the quotient obtained by
dividing (i) the sum of the products of (a) the number of years from
such date of determination to the dates of each successive scheduled principal
payment, redemption or similar payment with respect to such Indebtedness and (b) the
amount of such principal payment by (ii) the sum of all such principal
payments.

 

“Board of Directors”
means the board of directors of the Company.

 

“Board Resolution” means a copy of a resolution
certified by a director of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

 

“Business Day” means any day (other than a
Saturday or Sunday) on which DTC, Euroclear or Clearstream, Luxembourg and
banks in The City of New York and Buenos Aires are open for business.

 

“Cable/Telecommunications Business” means any
business operating a cable and/or telecommunications services and/or
communications services or programming business located in South America,
including, without limitation, any business conducted by the Company on the
Issue Date.

 

“Capital Stock” means, with respect to any
Person, any and all shares, interests, participations, rights in or other
equivalents (however designated, whether voting or non-voting) in equity of
such Person, whether outstanding at the Issue Date or issued thereafter,
including,

 

A-27

 

without limitation, all Common
Stock and Disqualified Stock, and any and all rights, warrants or options
exchangeable for or convertible into any thereof.

 

“Capitalized Lease” means, as applied to any
Person, any lease or license of, or other agreement conveying the right to use,
any property (whether real, personal or mixed, movable or immovable) of which
the present value of the obligations of such Person to pay rent or other amounts
is required, in conformity with GAAP, to be classified and accounted for as a
finance lease obligation; and “Capitalized Lease Obligation” is defined
to mean the capitalized present value of the obligations to pay rent or other
amounts under such lease or other agreement, determined in accordance with
GAAP.

 

“Cash Equivalents” means (i) any evidence
of Indebtedness with a maturity of 365 days or less issued or directly and
fully guaranteed or insured by Argentina or the United States or any agency or instrumentality
thereof (provided that the full faith and credit
of Argentina or the United States, as the case may be, is pledged in support
thereof or such Indebtedness constitutes a general obligation of such country);
(ii) deposits, certificates of deposit or acceptances with a maturity of
180 days or less of, or Indebtedness with a maturity of 365 days or less
directly and fully secured by an irrevocable standby letter of credit issued or
confirmed by, (x) any financial institution that is a member of the
Federal Reserve System, and has combined capital and surplus and undivided
profits (or any similar capital concept) of not less than U.S.$500 million or
(y) Credit Suisse First Boston Corporation, Fleet Bank, Banco Francés - BBVA,
Banco Río de la Plata S.A., Banco de Galicia y Buenos Aires S.A., Citibank,
N.A. and any of the five largest banks (based on assets as of the last December 31)
organized under the laws of Argentina, provided that
such bank is not under intervention, receivership or any similar arrangement at
the time of such deposit or the acquisition of such certificate of deposit or
acceptance; (iii) commercial paper with a maturity of 180 days or less
issued by a corporation (other than an Affiliate of the Company) organized
under the laws of Argentina or any part thereof or the United States or any
state thereof or the District of Columbia and rated at least “A-1” by Standard &
Poor’s Corporation or “P-1” by Moody’s Investors Service; (iv) repurchase
agreements and reverse repurchase agreements relating to marketable direct
obligations issued or unconditionally guaranteed by the government of Argentina
or the United States government (in the case of any Argentine or United States
government obligations), in each case maturing within one year from the date of
acquisition and (v) investments in money market funds all of the assets of
which consist of securities of the type described in the foregoing
clauses (i) through (iii).

 

“Clearstream, Luxembourg” means Clearstream
Banking, société anonyme (formerly known as Cedelbank), and its successors.

 

“CNV” means the
Argentine Comisión Nacional de Valores.

 

“Co-Registrar” means Law Debenture Trust
Company of New York, until a successor Co-Registrar shall have become such
pursuant to the applicable provisions of the 10-Year Notes Indenture, and,
thereafter, “Co-Registrar” shall mean such successor Co-Registrar.

 

“Commission” means the U.S. Securities and
Exchange Commission, as from time to time constituted, created under the
Exchange Act, or, if at any time after the execution of

 

A-28

 

this instrument such Commission
is not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.

 

“Common Stock” means with respect to any
Person, any and all shares, interests or other participations in, and other
equivalents (however designated and whether voting or non-voting) of such
Person’s common stock or ordinary shares, whether or not outstanding at the
Issue Date or issued thereafter, and includes, without limitation, all series
and classes of such common stock or ordinary shares.

 

“Company” means the Person named as the “Company”
in the first paragraph of this instrument until a successor Person shall have
become such pursuant to the applicable provisions of the 10-Year Notes
Indenture and thereafter “Company” shall mean such successor Person.

 

“Company Request” or “Company Order”
means a written request or order signed in the name of the Company by any of
its directors or alternate directors or its chief financial officer and a
director or alternate director and delivered to the Trustee.

 

“Consolidated Income Tax Expense” means, for
any period, the provision for local, foreign and all other income taxes of the
Company and its Subsidiaries for such period as determined in accordance with
GAAP.

 

“Consolidated Interest Expense” means, for any
period, the aggregate amount of interest expense in respect of Indebtedness
(including, without limitation, amortization of original issue discount on any
indebtedness and the interest portion of any deferred payment obligation, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers’ acceptance financing and the net costs associated with
Interest Rate Protection Obligations, but excluding, for the avoidance of
doubt, any taxes or other governmental charges) and all but the principal
component of rent or other amounts in respect of Capitalized Lease Obligations
paid, accrued or scheduled to be paid or to be accrued by the Company and its
Subsidiaries during such period, but excluding, any premiums, fees and expenses
(and any amortization thereof) payable in connection with the offering of any
Step-Up Notes or other Indebtedness, all as determined on a consolidated basis
in conformity with GAAP.

 

“Consolidated Net Income” means, for any
period, the consolidated net income (or loss) of the Company and its
Subsidiaries for such period determined in accordance with GAAP, adjusted, to
the extent included in calculating such consolidated net income, by excluding,
without duplication, (i) all extraordinary gains or losses of such Person
for such period, (ii) income of the Company and its Subsidiaries derived
from or in respect of all Investments in Persons other than any of its
Subsidiaries, (iii) the portion of net income (or loss) of such Person
allocable to minority interests in unconsolidated Persons for such period,
except to the extent actually received by the Company or any of its
Subsidiaries, (iv) net income (or loss) of any other Person combined with
such Person on a “pooling of interests” basis attributable to any period prior
to the date of combination, (v) any gain or loss, net of taxes, realized
by such Person upon the termination of any employee pension benefit plan during
such period, (vi) gains (but not losses) in respect of any Asset Sales
during such period and (vii) the net income of any Subsidiary of the
Company for such period to the extent that the declaration of

 

A-29

 

dividends or similar distributions by such Subsidiary of that income is
not at the time permitted, directly or indirectly, by operation of the terms of
its constitutional documents or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulations applicable to that
Significant Subsidiary or its stockholders.

 

“Consolidated Net Worth” means, with respect to
any Person as of any date, the total of the amounts shown on the balance sheet
of such Person and its consolidated subsidiaries, determined on a consolidated
basis in accordance with GAAP, as of the end of the most recent fiscal quarter
for which consolidated financial statements for such Person and its consolidated
subsidiaries have been prepared prior to the taking of any action for the
purpose of which the determination is being made, as (i) the par or stated
value of all outstanding Capital Stock of such Person plus (ii) paid-in
capital or capital surplus relating to such Capital Stock plus (iii) any
retained earnings or earned surplus less (iv) (A) any accumulated
deficit and (B) any amounts attributable to Disqualified Stock of such
Person not held by such Person or its Subsidiaries.

 

“Consolidated Operating Cash Flow” means, with
respect to any period, the Consolidated Net Income for such period increased by
the sum of (i) the Consolidated Income Tax Expense of the Company and its
Subsidiaries accrued according to GAAP for such period (only to the extent the
corresponding income was included in computing Consolidated Net Income for such
period and other than taxes attributable to extraordinary, unusual or
nonrecurring gains or losses); (ii) Consolidated Interest Expense of the
Company and its Subsidiaries for such period; (iii) consolidated
depreciation of the Company and its Subsidiaries for such period; (iv) consolidated
amortization of the Company and its Subsidiaries for such period, including,
without limitation, amortization of capitalized debt issuance costs for such
period; and (v) all other non-cash items of the Company and its
Subsidiaries reducing Consolidated Net Income (excluding any non-cash items to
the extent they represent an accrual of, or a reserve for, cash disbursements
for any subsequent period); and reduced by (vi) all non-cash items of the
Company and its Subsidiaries increasing Consolidated Net Income for such
period; in each case determined on a consolidated basis in accordance with
GAAP.

 

“control” (including, with correlative meanings,
the terms “controlling,” “controlled by” and “under common
control with”), as applied to any Person, means the possession by another
Person (whether directly or indirectly and whether by the ownership of share
capital, the possession of voting power, contract or otherwise) of the power to
appoint and/or remove the majority of the members of the board of directors or
other governing body of such Person or otherwise to direct or cause the
direction of the affairs and policies of such Person.

 

“Corporate Trust Office” means the office of
the Trustee located at 767 Third Avenue, 31st Floor, New York, New York 10017.

 

“Corporation” means a sociedad
anónima, sociedad de
responsibilidad limitada, corporation, association, company or
business trust.

 

“Currency Agreement” means any foreign exchange
contract, currency swap agreement or other similar agreement or arrangement
designed to protect the Company or any Significant Subsidiary against
fluctuations in currency values.

 

A-30

 

“Default” means any event that is, or after
notice or passage of time or both would be, an Event of Default.

 

“Depositary” means, DTC, its nominees, and
their respective successors or such other depositary as may be designated with
respect thereto.

 

“Disqualified Stock” means, with respect to any
Person, any Capital Stock of such Person which, by its terms (or by the terms
of any security into which it is convertible or for which it is exchangeable),
or upon the happening of any event, matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or is exchangeable for
Indebtedness, or is redeemable at the option of the holder thereof, in whole or
in part, on or prior to the final maturity date of the Step-Up Notes.

 

“DTC” means The
Depository Trust Company and its successors.

 

“Euroclear” means Euroclear Bank S.A./N.V., as
operator of the Euroclear System, and its successors.

 

“Event of Default” means any of the events
specified in “Events of Default”.

 

“Exchange Act” means the U.S. Securities
Exchange Act of 1934, as amended.

 

“Fair Market Value” means, with respect to any
asset or property, the price that could be negotiated in an arms-length free
market transaction, for cash, between a willing seller and a willing buyer,
neither of whom is under pressure or compulsion to complete the
transaction.  Unless otherwise specified
in the 10-Year Notes Indenture, Fair Market Value shall be determined by the
chief financial officer of the Company and shall be evidenced by an Officers’
Certificate delivered to the Trustee at its request.

 

“GAAP” means generally accepted accounting
principles in effect in Argentina as of the date of determination.

 

“Global Note” means a Step-Up Note in
definitive global form that is deposited with DTC or another Depositary, or a
nominee thereof, for credit to the respective accounts of the beneficial owners
of the Step-Up Notes represented thereby.

 

“Governmental Agency” means any public legal
entity or public agency of Argentina or the United States, whether created by
any competent authority, federal, state or local government, or any other legal
entity now existing or hereafter created, or now or hereafter owned or
controlled, directly or indirectly, by any public legal entity or public agency
of Argentina or the United States.

 

“Guarantee” means any obligation, contingent or
otherwise, of any Person directly or indirectly guaranteeing any Indebtedness
or other obligation of any other Person and, without limiting the generality of
the foregoing, any obligation, direct or indirect, contingent or otherwise, of
such Person (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation of such other
Person (whether arising by virtue of partnership arrangements, or by agreements
to keep-well, to purchase assets, goods,

 

A-31

 

securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for purposes of
assuring in any other manner the obligee of such Indebtedness or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided that
the term “Guarantee” shall not include endorsements for collection or
deposit in the ordinary course of business. 
The term “Guarantee” used as a verb has a corresponding meaning.

 

“Guarantor” means
any Person obligated under a Guarantee.

 

“Holder”, “Holder of Step-Up Notes” or
other similar terms means a Person in whose name a Step-Up Notes is registered
in the Step-Up Note Register.

 

“Incur” means, with respect to any
Indebtedness, to incur, create, issue, assume, Guarantee or otherwise,
contingently or otherwise, become liable, directly or indirectly, for or with
respect to, or become responsible for, the payment of such Indebtedness,
including an Incurrence of Acquired Indebtedness by reason of the acquisition
of more than 50% of the Capital Stock of any Person; provided
that neither the accrual of interest nor the accretion of original issue
discount shall be considered an Incurrence of Indebtedness.  The term “Incurrence” used as a noun has a
corresponding meaning.

 

“Indebtedness” means, with respect to any
Person at any date of determination (without duplication), (i) any
liability, contingent or otherwise, of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all obligations of such Person in respect of
letters of credit or other similar instruments (including reimbursement
obligations with respect thereto), (iv) all obligations of such Person to
pay the deferred and unpaid purchase price of property or services, including
purchase money obligations, which purchase price is due more than 180 days
after the date of placing such property in service or taking delivery and title
thereto or the completion of such services, except Trade Payables, (v) all
obligations of such Person as lessee under Capitalized Leases, (vi) all
Indebtedness of other Persons secured by a Lien on any asset of such Person,
whether or not such Indebtedness is assumed by or is otherwise the legal
liability of such Person; provided that
the amount of such Indebtedness shall be the lesser of (A) the Fair Market
Value of such asset at such date of determination and (B) the amount of
such Indebtedness, (vii) all Indebtedness of other Persons Guaranteed by
such Person or which is otherwise the legal liability of such Person, to the
extent such Indebtedness is Guaranteed by or is otherwise the legal liability
of such Person, (viii) to the extent not otherwise included in this
definition, obligations under Currency Agreements and Interest Rate Protection
Obligations, (ix) any and all deferrals, renewals, extensions and
refundings of, or amendments of or supplements to, any liability or obligation
of the kind described in this definition, and (x) Disqualified Stock.  The amount of Indebtedness of any Person at
any date shall be the outstanding balance at such date of all unconditional
obligations as described above and, with respect to contingent obligations, the
maximum liability upon the occurrence of the contingency giving rise to the
obligation, provided that the amount outstanding at
any time of any Indebtedness issued with original issue discount is the face
amount of such Indebtedness less the remaining unamortized portion of the
original issue discount of such Indebtedness at such time as determined in
conformity with GAAP.

 

A-32

 

“Independent Financial Advisor” means an
investment banking firm of international standing (i) which does not, and
whose shareholders, members, directors, officers or Affiliates do not, have a
material direct or indirect financial interest in the Company or one or more
Significant Subsidiaries, and (ii) which is otherwise independent and
qualified to perform the task for which it is to be engaged.

 

“Interest Payment Date” means in the case of the first interest payment [the date
these Notes are delivered or made available to holders pursuant to the Company’s
APE] in the case of the second interest payment, [the date
that is six months after the Company accepts Eligible Notes upon expiration of
the Election Offers, if the Company consummates the transactions contemplated
in the APE before such date]  and for each
interest payment thereafter, [             ]
and [             ]
of each year, commencing on [  ],
[2005].

 

“Interest Rate Protection Obligations” means
the obligations of any Person pursuant to any arrangement with any other Person
whereby, directly or indirectly, such Person is entitled to receive from time
to time periodic payments calculated by applying either a floating or a fixed
rate of interest on a stated notional amount and shall include, without
limitation, interest rate swaps, caps, floors, collars, forward interest rate
agreements and similar agreements.

 

“Investment” means, with respect to any Person,
any direct or indirect advance, loan, account receivable (other than an account
receivable arising in the ordinary course of business), or other extension of
credit (including, without limitation, by means of any Guarantee or similar
arrangement) or any capital contribution to (by means of transfers of property
to others, payments for property or services for the account or use of others,
or otherwise), or any purchase or ownership of any stocks, bonds, notes,
debentures or other securities of, any other Person (excluding Subsidiaries but
not any Person that becomes a Subsidiary after giving effect to the
Investment).  Notwithstanding the
foregoing, in no event shall any issuance of Capital Stock (other than
Disqualified Stock) of the Company in exchange for Capital Stock, property or
assets of another Person constitute an Investment by the Company in such other
Person.

 

“Issue Date” means the original date of
issuance and purchase of the Step-Up Notes as specified in or pursuant to the
relevant Board Resolution, Officers’ Certificate, or indenture supplemental
hereto with respect thereto.

 

“Lien” means any mortgage, charge, pledge,
security interest, encumbrance, lien (statutory or other), hypothecation,
assignment for security, claim, or preference or priority or other encumbrance
of any kind upon or with respect to any property (including, without
limitation, any conditional sale or other title retention agreement or lease in
the nature thereof, any sale with recourse against the seller or any Affiliate
of the seller, or any agreement to give any security interest).

 

“Material Adverse Effect” means any material
adverse effect whatsoever on the property, financial condition, business or
operations of the Company and its Subsidiaries, taken as a whole.

 

“Maturity”, when used with respect to any
Step-Up Note, means the date on which the principal of such Step-Up Note
becomes due and payable as therein or herein

 

A-33

 

provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise, as specified in or pursuant to
the relevant Board Resolution, Officers’ Certificate or the indenture
supplemental hereto with respect thereto.

 

“Negotiable
Obligations Law” means Argentine Law No. 23,576, as amended.

 

“Officer” means the chairman of the Board of
Directors, the chief executive officer, the chief financial officer, the
treasurer, the controller or any member of the Board of Directors of the
Company.

 

“Officers’ Certificate” means a certificate
signed by any two of the chief executive officer, chief operating officer and
chief financial officer of the Company.

 

“Opinion of Counsel” means a written opinion
from legal counsel who is reasonably acceptable to the Trustee, which may
include an individual employed as counsel to the Company or the Trustee.

 

“Outstanding” means, as of the date of
determination, all Step-Up Notes theretofore authenticated and delivered under
the 10-Year Notes Indenture, except:

 

(i)            Step-Up
Notes theretofore canceled by the Trustee or delivered to the Trustee for
cancellation;

 

(ii)           Step-Up
Notes, or portions thereof, for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any Paying
Agent (other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the Holders
of such Step-Up Notes; provided that,
if such Step-Up Notes are to be redeemed, notice of such redemption has been
duly given pursuant to the 10-Year Notes Indenture or provision therefor
satisfactory to the Trustee has been made;

 

(iii)          Step-Up
Notes which have been duly defeased or as to which the Company has effected
covenant defeasance pursuant to “Discharge and Defeasance” herein; and

 

(iv)          Step-Up
Notes which have been paid pursuant to the 10-Year Notes Indenture or in
exchange for or in lieu of which other Step-Up Notes have been authenticated
and delivered pursuant to the 10-Year Notes Indenture, other than any such
Step-Up Notes in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Step-Up Notes are held by a bona fide purchaser in whose hands such Step-Up Notes are
valid obligations of the Company; provided, however,
that in determining whether the Holders of the requisite principal amount of
the Outstanding Step-Up Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Step-Up Notes owned by the
Company or any other obligor upon such Step-Up Notes or any Subsidiary or
Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Step-Up Notes which a Responsible
Officer of the Trustee actually knows to be so owned shall be so
disregarded.  Step-Up Notes so owned
which have been pledged in good faith may be regarded as Outstanding if

 

A-34

 

the pledgee establishes to the satisfaction of the Trustee the pledgee’s
right so to act with respect to such Step-Up Notes and that the pledgee is not
the Company or any other obligor upon such Step-Up Notes or any Subsidiary or
Affiliate of the Company or of such other obligor.

 

“pari passu”
means, as applied to the ranking of any Indebtedness of a Person in relation to
other Indebtedness of such Person, that each such Indebtedness either (i) is
not subordinate in right of payments to any Indebtedness or (ii) is
subordinate in right of payment to the same Indebtedness as is the other, and
so subordinate to the same extent, and is not subordinate in right of payment
to each other or to any Indebtedness as to which the other is not so
subordinate.

 

“Participant” means, with respect to DTC,
Euroclear or Clearstream, Luxembourg, Persons who have accounts with DTC,
Euroclear or Clearstream, Luxembourg, respectively (and, with respect to DTC,
shall include Euroclear and Clearstream, Luxembourg).

 

“Paying Agent” means initially the Persons
named as Paying Agent in the first paragraph of the 10-Year Notes Indenture,
any successor thereof, and any Person authorized by the Company to pay the
principal of or interest on any Step-Up Notes on behalf of the Company,
including the Principal Paying Agent.

 

“Permitted Indebtedness” means the following
indebtedness (each of which shall be given independent effect) of the Company:

 

(a)  Indebtedness under the Step-Up Notes and the
10-Year Notes Indenture with respect to such Step-Up Notes;

 

(b)  Indebtedness of
the Company outstanding on the Issue Date;

 

(c)  Indebtedness of the Company owed to and held
by any Subsidiary of the Company; provided that
an Incurrence of Indebtedness shall be deemed to have occurred upon (x) any
sale or other disposition of any Indebtedness of the Company referred to in
this clause (c) to a Person other than the Company or a Subsidiary of
the Company, or (y) any sale or other disposition of Capital Stock of a
Subsidiary of the Company which holds Indebtedness of the Company to any person
other than the Company or another Subsidiary;

 

(d)  Interest Rate Protection Obligations of the
Company to the extent relating to Indebtedness of the Company, as the case may
be (which Indebtedness (x) bears interest at fluctuating interest rates
and (y) is otherwise permitted to be incurred under the “Limitation on
Indebtedness” covenant);

 

(e)  Indebtedness of the Company under Currency
Agreements to the extent relating to (i) Indebtedness of the Company
and/or (ii) obligations to purchase assets, properties or services
incurred in the ordinary course of business of the Company; provided that such Currency Agreements do not increase the
Indebtedness or other obligations of the Company and its Significant Subsidiaries
outstanding other than as a result of fluctuations in foreign currency exchange
rates or by reason of fees, indemnities or compensation payable thereunder;

 

A-35

 

(f)  Indebtedness of the Company in respect of
performance bonds of or surety or performance bonds provided by the Company
incurred in the ordinary course of business in connection with the construction
or operation of a Cable/Telecommunications Business; or

 

(g)  Indebtedness of the Company to the extent it
represents a replacement, renewal, refinancing, or extension of outstanding
Indebtedness of the Company incurred or outstanding pursuant to clause (a) or
(b) or this clause (g) of this definition or the proviso to the
first sentence of the “Limitation on Indebtedness” covenant; provided that (A) Indebtedness of the Company may not
be replaced, renewed, refinanced or extended under this clause (g) with
Indebtedness of any Subsidiary of the Company, (B) any such replacement,
renewal, refinancing or extension (x) shall not result in such
Indebtedness having a shorter Average Life as compared with the Indebtedness
being replaced, renewed, refinanced or extended and (y) shall not exceed
the sum of the principal amount (or, if such Indebtedness provides for a lesser
amount to be due and payable upon a declaration or acceleration thereof, an
amount no greater than such lesser amount) of the Indebtedness being replaced,
renewed, refinanced or extended plus the amount of accrued interest thereon and
the amount of any reasonably determined prepayment premium necessary to
accomplish such replacement, renewal, refinancing or extension and such
reasonable fees and expenses incurred in connection therewith, and (C) in
the case of any Indebtedness replacing, renewing, refinancing, or extending
Indebtedness which is pari passu to
the Step-Up Notes, any such replacing, renewing, refinancing or extending
Indebtedness is made pari passu to
the Step-Up Notes or subordinated to the Step-Up Notes, and, in the case of any
Indebtedness replacing, renewing, refinancing, or extending Subordinated
Indebtedness, any such replacing, renewing, refinancing or extending
Indebtedness is subordinated to the Step-Up Notes to the same extent as the
Indebtedness being replaced, renewed, refinanced or extended.

 

“Permitted Lien” means (i) Liens on the 10-Year
Notes Reserve Account and on the reserve account established on or about the
date hereof for the benefit of the holders of 7-Year
Notes; (ii) Liens existing on the Issue Date; (iii) Liens (including
extensions and renewals thereof) upon real or personal property acquired after
the Issue Date; provided that (a) such
Lien is created solely for the purpose of securing Indebtedness Incurred in
accordance with the “Limitation on Indebtedness” covenant, (1) to finance
the cost (including the cost of design, development, construction, improvement,
installation or integration) of the item of property or assets subject thereto
and such Lien is created prior to, at the time of or within six months after
the later of the acquisition, the completion of construction or the
commencement of full operation of such property or (2) to refinance any
Indebtedness previously so secured, (b) the principal amount of the
Indebtedness secured by such Lien does not exceed 100% of such cost and (c) any
such Lien shall not extend to or cover any property or assets other than such
item of property or assets and any improvements on such item; (iv) any
interest or title of a lessor in the property subject to any Capitalized Lease
or operating lease; (v) Liens on property of, or on shares of stock or
Indebtedness of, any Person existing at the time such Person becomes a
Subsidiary of the Company, or is merged into or consolidated with the Company
or any Subsidiary of the Company; provided that
such Liens were not granted in contemplation of such acquisition, merger or
consolidation and do not extend to or cover any property or assets of the
Company or any Subsidiary of the Company other than the property or assets acquired;
(vi) Liens in favor of the Company or any Subsidiary of the Company; (vii) Liens
securing reimbursement obligations with respect to letters of credit that
encumber documents and other property relating to such letters of credit and
the products and proceeds thereof; (viii) Liens

 

A-36

 

securing Indebtedness of the Company permitted pursuant to clause (g) of
the definition of “Permitted Indebtedness” or clause (c) of the definition
of “Permitted Subsidiary Indebtedness”, provided
that any such Indebtedness being refinanced was previously secured
by a Permitted Lien and any such Lien shall not extend to or cover any property
or assets other than those encumbered by the Lien securing the Indebtedness
being refinanced; and (ix) Liens incurred in the ordinary course of
business securing Indebtedness under Interest Rate Protection Obligations and
Currency Agreements.

 

“Permitted Subsidiary Indebtedness” means the
following Indebtedness (each of which shall be given independent effect) of a
Subsidiary of the Company:

 

(a)           Indebtedness
of any Subsidiary of the Company outstanding on the Issue Date;

 

(b)           Indebtedness
of any Subsidiary of the Company owed to and held by the Company or a
Subsidiary of the Company; provided
that an Incurrence of Indebtedness shall be deemed to have occurred upon (x)
any sale or other disposition of any Indebtedness of a Subsidiary of the
Company referred to in this clause (b) to a Person other than the Company
or a Subsidiary of the Company, or (y) any sale or other disposition of Capital
Stock of a Subsidiary of the Company which holds Indebtedness of another
Subsidiary of the Company except to the extent permitted under clause (v) of
the “Limitation on the Issuance and Sale of Capital Stock of Significant
Subsidiaries” covenant herein; and

 

(c)           Indebtedness
of any Subsidiary of the Company to the extent it represents a replacement,
renewal, refinancing, or extension of outstanding Indebtedness of such
Subsidiary incurred or outstanding pursuant to clause (a) or this clause (c) of
this definition; provided that (A) any
such replacement, renewal, refinancing or extension (x) shall not result in
such Indebtedness having a shorter Average Life as compared with the
Indebtedness being replaced, renewed, refinanced or extended and (y) shall not
exceed the sum of the principal amount (or, if such Indebtedness provides for a
lesser amount to be due and payable upon a declaration or acceleration thereof,
an amount no greater than such lesser amount) of the Indebtedness being
replaced, renewed, refinanced or extended plus the amount of accrued interest
thereon and the amount of any reasonably determined prepayment premium
necessary to accomplish such replacement, renewal, refinancing or extension and
such reasonable fees and expenses incurred in connection therewith.

 

“Person” means any individual, Corporation,
partnership, joint venture, trust, unincorporated organization or government or
any agency or political subdivision thereof.

 

“Predecessor Step-Up Note” of any particular
Step-Up Note means every previous Step-Up Note evidencing all or a portion of
the same debt as that evidenced by such particular Step-Up Note; and, for the
purposes of this definition, any Step-Up Note authenticated and delivered under
the 10-Year Notes Indenture in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Step-Up Note shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Step-Up Note.

 

A-37

 

“Redemption Date” means the fixed date, on
which a Step-Up Note is to be redeemed, in whole or in part, by the Company
pursuant to the terms of the Step-Up Note.

 

“Registered Step-Up Notes” means any Step-Up
Note registered in the Step-Up Note Register.

 

“Registrar” means HSBC Bank Argentina S.A.,
until a successor Registrar shall have become such pursuant to the applicable
provisions of the 10-Year Notes Indenture, and, thereafter “Registrar”
shall mean such successor Registrar.

 

“Regular Record Date”
means the close of business in New York on the fifteenth
(15th) day (whether or not a Business Day)
immediately preceding each Interest Payment Date.

 

 “Responsible
Officer” shall mean, when used with respect to the Trustee, any officer of
the Trustee who shall have direct responsibility for the administration of this
10-Year Notes Indenture, or to whom any corporate trust matter is referred
because of such person’s knowledge of and familiarity with the particular
subject.

 

“Securities Act” means
the U.S. Securities Act of 1933, as amended.

 

“Significant Subsidiary” means, at any date of
determination, any Subsidiary of the Company that, together with its
Subsidiaries, (i) for the most recent fiscal year of the Company,
accounted for more than 10% of the consolidated revenues of the Company and its
Subsidiaries or (ii) as of the end of such fiscal year, was the owner of
more than 10% of the consolidated assets of the Company and its Subsidiaries,
all as set forth on the most recently available consolidated financial
statements of the Company for such fiscal year.

 

“Stated Maturity” means (i) with respect
to any security, the date specified in such security as the fixed date on which
the final installment of principal of such security is due and payable and (ii) with
respect to any scheduled installment of principal of or interest on any
security, the date specified in such security as the fixed date on which such
installment is due and payable.

 

“Step-Up Note Register” means the books for the
exchange, registration and registration of transfer of Registered Step-Up
Notes.

 

“Subordinated Indebtedness” means any
Indebtedness of the Company which is expressly subordinated in right of payment
to the Step-Up Notes, including premium and accrued and unpaid interest.

 

“Subsidiary” means, with respect to any Person,
any Corporation, association or other business entity (i) of which
outstanding Capital Stock having at least a majority of the votes entitled to
be cast in the election of directors is owned, directly or indirectly, by such
Person and one or more other Subsidiaries of such Person, or (ii) of which
at least a majority of voting interest is owned, directly or indirectly, by
such Person and one or more other Subsidiaries of such Person.

 

A-38

 

“Total Consolidated Indebtedness” means, at the
time of determination, an amount equal to the aggregate amount of all
Indebtedness of the Company and its Subsidiaries outstanding (without
duplication) as of the date of determination.

 

“Trade Payables” means, with respect to any
Person, any accounts payable or any other Indebtedness or monetary obligation
to trade creditors created, assumed or Guaranteed by such Person or any of its
Subsidiaries arising in the ordinary course of business in connection with the
acquisition of goods or services.

 

“Transaction Date” means, with respect to the
Incurrence of any Indebtedness by the Company or any of its Subsidiaries, the
date such Indebtedness is to be Incurred.

 

“Transfer Agent” means any Person authorized by
the Company to effectuate the exchange or transfer of any Step-Up Note on
behalf of the Company hereunder.

 

“Trust Indenture Act” or “TIA” means the
U.S. Trust Indenture Act of 1939 as in force at the date as of which the 10-Year
Notes Indenture was executed; provided, however,
that in the event the U.S. Trust Indenture Act of 1939 is amended after such
date, “Trust Indenture Act” or “TIA” means, to the extent
required by any such amendment, the U.S. Trust Indenture Act of 1939 as so
amended.

 

“Trustee” means Law Debenture Trust Company of
New York, until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and, thereafter “Trustee” shall
mean such successor Trustee.

 

“U.S. Dollars”, “United States Dollars”,
“U.S.$” and the symbol “$” each mean dollars of the United
States.

 

“U.S. Government Obligations” means securities
that are (x) direct obligations of the United States for the payment of
which its full faith and credit is pledged or (y) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States the payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any such U.S.
Government Obligation held by such custodian for the account of the holder of
such depositary receipt, provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depositary receipt from
any amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal of or interest on the U.S.
Government Obligation evidenced by such depositary receipt.

 

“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 Board of Directors members, managing directors, managers or
other voting members of the governing body of such Person.

 

“Wholly-Owned” is defined to mean, with respect
to any Subsidiary of any Person, such Subsidiary if all the outstanding Capital
Stock in such Subsidiary (other than any

 

A-39

 

directors’ qualifying shares or shares held by a Person, to the extent
mandated by applicable law) is owned by such Person, or one or more
Wholly-Owned Subsidiaries of such Person.

 

Terms used herein and not defined herein shall have
the meanings assigned to them in the 10-Year Notes Indenture.

 

A-40

 

SCHEDULE A

 

SCHEDULE OF PRINCIPAL AMOUNT

 

The initial principal
amount at maturity of this Global Note shall be
U.S.$[            ].
The following increases or decreases in the principal amount at maturity
of this Global Note have been made:

 

	
  Date of

  Exchange

  	
   

  	
  Amount of

  decrease in

  Principal

  Amount at

  Maturity of this

  Global Note

  	
   

  	
  Amount of

  increase in

  Principal

  Amount at

  Maturity of this

  Global Note

  	
   

  	
  Principal

  Amount of this

  Global Note

  following such

  decrease or

  increase

  	
   

  	
  Signature of

  authorized

  officer of

  Trustee

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

A-41

 

Trustee’s Certificate of Authentication

 

This is one of the Step-Up Notes referred to in the
within-mentioned 10-Year Notes Indenture.

 

Dated:

 

	
   

  	
   

  	
  LAW DEBENTURE TRUST
  COMPANY

  
	
   

  	
   

  	
   

  	
  OF NEW YORK,

  
	
   

  	
   

  	
   

  	
  as Trustee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Authorized Signatory)

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

A-42

 

EXHIBIT B

FORM OF RESTRICTED GLOBAL NOTE*

 

UNLESS THIS STEP-UP NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”),
EUROCLEAR BANK S.A./N.V. (“EUROCLEAR”) OR CLEARSTREAM BANKING, SOCIÉTÉ ANONYME
(“CLEARSTREAM, LUXEMBOURG”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY STEP-UP NOTE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC, EUROCLEAR OR CLEARSTREAM, LUXEMBOURG (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC, EUROCLEAR OR CLEARSTREAM, LUXEMBOURG),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.

 

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE 10-YEAR INDENTURE REFERRED TO ON THE REVERSE
HEREOF.

 

THIS STEP-UP NOTE HAS NOT
BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (1) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (2) INSIDE
THE UNITED STATES, TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT (“RULE 144A”) PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (3) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT, (4) PURSUANT TO AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (5) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH
CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER JURISDICTION.

 

BY ACCEPTANCE OF THIS STEP-UP NOTE BEARING THE ABOVE
LEGEND, WHETHER UPON ORIGINAL ISSUANCE OR SUBSEQUENT TRANSFER, EACH HOLDER OF
THIS STEP-UP NOTE ACKNOWLEDGES THE RESTRICTIONS ON

 

* Appropriate adjustments to be made if Note is issued in certificated
form.

 

B-1

 

THE TRANSFER OF THIS STEP-UP NOTE SET FORTH ABOVE AND AGREES THAT IT
SHALL TRANSFER THIS STEP-UP NOTE ONLY AS PROVIDED HEREIN AND IN THE 10-YEAR
INDENTURE REFERRED TO ON THE REVERSE HEREOF.

 

THE FOREGOING LEGEND MAY BE REMOVED FROM THIS
STEP-UP NOTE ON SATISFACTION OF THE CONDITIONS SPECIFIED IN THE 10-YEAR
INDENTURE REFERRED TO ON THE REVERSE HEREOF.

 

B-2

 

MULTICANAL S.A. (INCORPORATED IN BUENOS AIRES, ARGENTINA, WITH LIMITED
LIABILITY (“SOCIEDAD ANÓNIMA”) UNDER THE LAWS OF THE REPUBLIC OF ARGENTINA ON JULY 26,
1991, WITH A TERM OF DURATION EXPIRING ON JULY 27, 2090, AND REGISTERED
WITH THE PUBLIC REGISTRY OF COMMERCE ON JULY 26, l991 UNDER NUMBER 5225,
BOOK 109 OF VOLUME “A” OF CORPORATIONS, AND WITH DOMICILE AT AVALOS 2057 (C1431 DPM) BUENOS AIRES, ARGENTINA)

 

STEP-UP NOTES DUE [2015]

 

	
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Multicanal S.A., a sociedad anónima
duly organized and existing under the laws of Argentina (the “Company”),
for value received, hereby promises to pay to [Cede & Co.]*, or
registered assigns, the principal sum indicated on Schedule A hereof on [                     ]
[2015] (or on such earlier date as the principal sum may become repayable in
accordance with the terms and conditions set forth in the 10-Year Notes
Indenture or on the reverse hereof), and to pay interest thereon from (1) in the case of the first Interest
Payment Date, from December 10, 2003 until [the date the
Company accepts Eligible Notes upon expiration of the Election Offers] (2) in the case of the second Interest
Payment Date, from [the date the Company accepts Eligible Notes upon
expiration of the Election Offers]
until a date that is six months thereafter, or (3) in the case of each
Interest Payment Date thereafter, from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semiannually in arrears on [          ]
and [         ] of each year at an
interest rate of 2.5% per annum from December 10, 2003 to (but excluding)
[the fourth anniversary of [the date the Company accepts Eligible Notes upon
expiration of the Election Offers]],
3.5% per annum from [the fourth anniversary of [the date the Company accepts Eligible Notes
upon expiration of the Election Offers]] to (but excluding) [the eighth anniversary of [the date the
Company accepts Eligible Notes upon expiration of the Election Offers]] and 4.5% per annum from [the eighth
anniversary of [the date the Company accepts Eligible Notes upon
expiration of the Election Offers]]
to (but excluding) [the maturity date], until the principal hereof is paid or
duly provided for, all subject to and in accordance with the 10-Year Notes
Indenture.  The interest so
payable and punctually paid or duly provided for on any Interest Payment Date
will, as provided in the 10-Year Notes Indenture, be paid to the Person in
whose name this Step-Up Note (or one or more Predecessor Step-Up Notes) is
registered at the close of business on the fifteenth (15th) day (whether or not
a Business Day), immediately preceding such Interest Payment Date.

 

* Appropriate adjustments to be made if Note is issued in certificated
form.

 

B-3

 

Any such interest not so punctually paid or duly provided
for shall forthwith cease to be payable to the Holder on such Regular Record
Date, and such defaulted interest, and (to the extent lawful) interest on such
defaulted interest at the rate borne by the Step-Up Notes, may be paid to the
Person in whose name this Step-Up Note (or one or more Predecessor Step-Up
Notes) is registered at the close of business on a Special Record Date for the
payment of such defaulted interest to be fixed by the Trustee, notice whereof
shall be given to Holders of Step-Up Notes not less than fifteen (15) days
prior to such Special Record Date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any exchange on which
the Step-Up Notes may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in the 10-Year Notes Indenture.

 

The principal of, premium, if any, on and interest on
this Step-Up Note shall be payable, and the transfer of this Step-Up Note shall
be registrable, at the Corporate Trust Office of Law Debenture Trust Company of
New York, as Trustee, Co-Registrar and Principal Paying Agent, in The City of
New York, at the main office of HSBC Bank Argentina S.A., as Registrar and
Paying Agent, in Buenos Aires, Argentina or at the option of the Holder and
subject to any fiscal or other laws and regulations applicable thereto, at the
office of any other Paying Agent appointed by the Company.  The Company shall provide to the Principal
Paying Agent, in funds available on or prior to the Business Day prior to each
date on which a payment of principal of, premium, if any, or any interest on
the Step-Up Notes shall become due, as set forth herein, such amount in U.S.
Dollars as is necessary to make such payment, and the Company hereby authorizes
and directs the Principal Paying Agent from funds so provided to it to make or
cause to be made payment of the principal of and any interest, as the case may
be, on the Step-Up Notes as set forth herein and in the 10-Year Notes
Indenture; provided that payment with respect to
principal of and premium, if any, interest and Additional Amounts, if any, on
any Step-Up Note may, at the Company’s option, be made, subject to applicable
laws and regulations, by U.S. Dollar check drawn on a bank in The City of New
York mailed to the Holders of Step-Up Notes at their respective addresses set
forth in the register of Holders of Step-Up Notes; provided
further that all payments with respect to Global Notes the Holders
of which have given wire transfer instructions to the Company will be required
to be made by wire transfer of immediately available funds to the accounts
specified by the Holders thereof.  Unless
such designation is revoked, any such designation made by such Person with respect
to such Step-Up Note will remain in effect with respect to any future payments
with respect to such Step-Up Note payable to such Person.

 

Interest on the Step-Up Notes shall be computed on the
basis of a 360-day year consisting of 12 months of 30 days each and, in the
case of an incomplete month, the number of days actually elapsed.

 

All payments of principal and interest hereunder shall
be made exclusively in U.S. Dollars or in such coin or currency of the United
States as at the time of payment shall be legal tender for the payment of public
and private debts.

 

This Step-Up Note has been issued pursuant to
resolutions of an ordinary meeting of shareholders of the Company adopted on January 22,
2003 and resolutions of the Board of Directors of the Company adopted at its
meetings on [                          ].

 

B-4

 

Reference is hereby made to the further provisions of
this Step-Up 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.

 

Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse hereof by manual
signature, this Step-Up Note shall not be valid or obligatory for any purpose.

 

B-5

 

IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.

 

	
   

  	
   

  	
  MULTICANAL S.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
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B-6

 

[REVERSE OF STEP-UP NOTE]

 

STEP-UP 10-YEAR NOTES

 

This Step-Up Note is a negotiable obligation under the
Negotiable Obligations Law and is one of a duly authorized issue of a series of
Debt Securities of the Company designated as its Step-Up 10-Year Notes,
initially limited in aggregate principal amount to U.S.$[ ] (the “Step-Up
Notes” and each, a “Step-Up Note”), as may be set forth from time to
time, issued and to be issued under an indenture, dated as of
[         ], [2005] (the “Indenture”),
as supplemented and amended by a first supplemental indenture, dated as of
[           ], [2005]
(the “First Supplemental Indenture” and, together with the Indenture,
the “10-Year Notes Indenture”), each of the Indenture and the First
Supplemental Indenture among the Company, Law Debenture Trust Company of New
York, as Trustee, Co-Registrar and Principal Paying Agent, and HSBC Bank
Argentina S.A., as Registrar and Paying Agent thereunder.  Reference to the 10-Year Notes Indenture and
all indentures supplemental thereto is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of Step-Up Notes and of the terms upon
which the Step-Up Notes are, and are to be, authenticated and delivered.  The terms of the Step-Up Notes include those
stated in the 10-Year Notes Indenture and those made part of the 10-Year Notes
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb),
as amended (the “Trust Indenture Act”). 
The Step-Up Notes are subject to all such terms, and Holders are
referred to the 10-Year Notes Indenture and the Trust Indenture Act for a
statement of those terms.

 

The Indebtedness evidenced by the Step-Up Notes will
constitute the direct, unsecured and unconditional unsubordinated Indebtedness
of the Company and will rank pari passu in
right of payment without any preference among themselves.  The payment obligations of the Company under
the Step-Up Notes will at all times rank at least equally in priority of
payment with all other present and future unsecured and unsubordinated
Indebtedness of the Company and senior in priority of payment with all other
present and future Subordinated Indebtedness of the Company from time to time outstanding.

 

Form, Denomination and
Registration

 

The Step-Up Notes shall be issuable only in registered
form, without coupons, in denominations of U.S.$1.00 or multiples of U.S.$1.00
in excess thereof, including if issued other than as a Global Note and in exchange
for beneficial interests in a Restricted Global Note.  No service charge shall be made for any
registration of transfer or exchange of Step-Up Notes, but the Trustee may
require payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.

 

Payment; Paying Agents
and Transfer Agent

 

The principal of, premium, if any, on and interest on
the Registered Step-Up Notes shall be payable, and the transfer of such
Registered Step-Up Notes will be registrable, at the corporate trust office of
the Trustee in the Borough of Manhattan, The City of New York, at

 

B-7

 

the main office of the Paying Agent in Argentina and, at the option of
the Holder of such Registered Step-Up Notes and subject to any fiscal or other
laws and regulations applicable thereto, at the office of any other Paying
Agents appointed by the Company. 
Payments with respect to principal of the Step-Up Notes will be made
only against surrender of such Step-Up Notes at the office of the Trustee in
The City of New York or at the main office of the Paying Agent in
Argentina.  Payment with respect to
principal, premium, if any, and interest with respect to any Step-Up Note may,
at the Company’s option, be made, subject to applicable laws and regulations,
by U.S. Dollar check drawn on a bank in The City of New York mailed to the
Holders of Step-Up Notes at their respective addresses set forth in the Step-Up
Note Register, provided that all payments with
respect to Global Notes the Holders of which have given wire transfer
instructions to the Company will be required to be made by wire transfer of
immediately available funds to the accounts specified by the Holders
thereof.  Unless such designation is
revoked, any such designation made by such Person with respect to such Step-Up
Note will remain in effect with respect to any future payments with respect to
such Step-Up Note payable to such Person.

 

Any money deposited with the Trustee or any Paying
Agent in trust for the payment of the principal of, or premium, if any,
interest or Additional Amounts, if any, on any Step-Up Note and remaining
unclaimed for two years after such principal, premium, if any, interest or
Additional Amounts, if any, has become due and payable shall be repaid to the
Company on Company Request; and the Holder of such Step-Up Note shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, (i) in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in The
City of New York, and (ii) in the Official Gazette of
Argentina and in a newspaper published in the Spanish language and
of general circulation in Argentina, notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such publication, any unclaimed balance of such money then
remaining shall be repaid to the Company.

 

If any payment on a Step-Up Note is due on a day that
is, at any place of payment, a day on which banking institutions are authorized
or obligated by law or executive order to close, then, at each such place of
payment, such payment need not be made on such day but may be made on the next
succeeding day that is not, at such place of payment, a day on which banking
institutions are authorized or obligated by law or executive order to close,
with the same force and effect as if made on the date for such payment, and no
interest will accrue for the period from and after such due date to such next
succeeding day that is not, at such place of payment, a day on which banking
institutions are authorized or obligated by law or executive order to close.

 

Payments of Additional
Amounts

 

All payments by the Company in respect of the Step-Up
Notes will be made free and clear of and without deduction or withholding for
or on account of any present or future

 

B-8

 

taxes, duties, levies, imposts, assessments or other charges (including
penalties, interest and other additions thereto) that are imposed by or on
behalf of any political subdivision or territory or possession of Argentina or
any authority or agency therein or thereof having power to tax (“Taxes”)
unless such withholding or deduction is required by law.  If the Company is required by law to make any
such withholding or deduction, the Company will pay to any Holder such
additional amounts (“Additional Amounts”) as may be necessary in order
that every net payment made by the Company on the Holder’s Step-Up Note after
deduction or withholding for or on account of any such present or future Taxes
will not be less than the amount then due and payable on such Step-Up
Note.  The foregoing obligation to pay
Additional Amounts, however, will not apply to (i) any Taxes that would
not have been imposed but for the existence of any present or former connection
between such Holder and Argentina other than the mere receipt of such payment
or the ownership or holding of such Step-Up Note; (ii) any Taxes that
would not have been imposed but for the presentation by the Holder of such
Step-Up Note for payment on a date more than 15 days after the date on which
such payment became due and payable or the date on which payment thereof is
duly provided for, whichever occurs later; (iii) if the beneficial owner
of such Step-Up Note had been the Holder of the Step-Up Note and would not be
entitled to the payment of Additional Amounts; (iv) any Taxes required to
be deducted or withheld by any paying agent from a payment on a Step-Up Note,
if such payment can be made without such deduction or withholding by any other
paying agent; or (v) any Taxes that would not have been imposed but for
the failure of the Holder to comply with any applicable certification,
documentation, information or other reporting requirement concerning the
nationality, residence, identity or connection with the taxing jurisdiction of
the Holder or beneficial owner of such Step-Up Note.

 

Any reference herein to principal and/or interest
shall be deemed also to refer to any Additional Amounts which may be payable
under the undertakings described in this paragraph, and express reference to
the payment of Additional Amounts (if applicable) in any provisions hereof
shall not be construed as excluding Additional Amounts in those provisions
hereof where such express reference is not made.

 

In addition, the Company agrees to pay any stamp,
issue, registration, documentary or other similar taxes and duties, including
interest and penalties that may be imposed by Argentina or the United States in
connection with the creation, issue and offering of this Step-Up Note.

 

Redemption for Tax
Reasons

 

If at any time subsequent to the issuance of the
Step-Up Notes, as a result of any change in or amendment to the laws,
regulations or governmental policy having the force of law or in the official
interpretation or application thereof of Argentina (or of any political
subdivision or taxing authority thereof or therein) or any execution of or
amendment to, any treaty or treaties affecting taxation to which Argentina (or
such political subdivision or taxing authority) is a party, which change or
amendment becomes effective after the date of the 10-Year Notes Indenture, the
Company is required, or would be required on the next succeeding interest
payment date, to pay Additional Amounts in respect of payments on the Step-Up
Notes and the payment of such Additional Amounts cannot be avoided by the use
of any reasonable measures

 

B-9

 

available to the Company (which shall not include any adverse
modification of the terms of the 10-Year Notes Indenture or the Step-Up Notes),
then the Step-Up Notes may be redeemed as a whole (but not in part), at the
option of the Company, at any time upon not less than 30 nor more than 90 days’
notice given to the Holders of Step-Up Notes at any time at an amount equal to
100% of their principal amount together with accrued and unpaid interest
thereon to the date fixed for redemption.

 

In order to effect a redemption of the Step-Up Notes
pursuant to the preceding paragraph, the Company shall deliver to the Trustee,
at least 45 days prior to the Redemption Date, (i) a certificate signed by
two directors of the Company stating that the obligation to pay such Additional
Amounts cannot be avoided by the Company taking reasonable measures available
to it and (ii) an opinion of independent legal counsel of recognized
standing to the effect that the Company has or will become obligated to pay
such Additional Amounts as a result of such change, amendment or executed or
amended treaty.  Such certificate, once
delivered by the Company to the Trustee, will be irrevocable and upon its
delivery the Company shall be obligated to make the payment or payments
referred to therein.  No notice of
redemption may be given earlier than 90 days prior to the earliest date on
which the Company would be obligated to pay such Additional Amounts were a
payment in respect of the Step-Up Notes then due.  The certificate shall additionally specify
the Redemption Date and all other information necessary for the publication and
mailing by the Trustee of notices of such redemption.  The Trustee shall be entitled to rely
conclusively upon the information so furnished by the Company in such
certificate and shall be under no duty to check the accuracy or completeness
thereof.

 

Purchase by the Company

 

The Company may at any time purchase Step-Up Notes in
the open market or by tender or private agreement at any price.  All Step-Up Notes so purchased must be
delivered by the Company to the Trustee for cancellation.

 

Certain Covenants

 

1.             Limitation
on Indebtedness.

 

Under the terms of the 10-Year Notes Indenture, so
long as any of the Step-Up Notes are Outstanding, the Company will not, and
will not permit any of its Subsidiaries to directly or indirectly Incur any
Indebtedness (including Acquired Indebtedness); provided that the Company (but not any Subsidiary of the
Company) may Incur Indebtedness (including Acquired Indebtedness) and a
Subsidiary of the Company may Incur Acquired Indebtedness if, after giving
effect to the application of the Incurrence of any such Indebtedness and the
receipt and application of the proceeds therefrom, the ratio of Total
Consolidated Indebtedness to Annualized Pro Forma Consolidated Operating Cash
Flow would be less than or equal to 6.5 to 1.0.

 

The foregoing limitations on the Incurrence of
Indebtedness will not apply to:

 

(i)            the
Incurrence by the Company of Permitted Indebtedness;

 

B-10

 

(ii)           the
Incurrence by any Subsidiary of the Company of Permitted Subsidiary
Indebtedness;

 

(iii)          the
Incurrence of Indebtedness by the Company (but not any Subsidiary of the
Company) other than Indebtedness described in the foregoing clause (i), which
Indebtedness when added to the then outstanding Indebtedness previously
Incurred under this clause (iii) and the outstanding Indebtedness of
Subsidiaries of the Company previously Incurred under clause (iv) below,
does not exceed, as of the date of determination, U.S.$25 million in aggregate
principal amount; and

 

(iv)          the
Incurrence of Indebtedness by Subsidiaries of the Company which Indebtedness, (A) when
added to the outstanding Indebtedness of Subsidiaries of the Company previously
Incurred under this clause (iv), does not exceed, as of the date of
determination, U.S.$10 million in aggregate principal amount, and (B) when
added to the outstanding Indebtedness of the Company previously Incurred under
clause (iii) above and the outstanding Indebtedness of Subsidiaries of the
Company previously Incurred under this clause (iv), does not exceed, as of the
date of determination, U.S.$25 million in aggregate principal amount.

 

2.             Limitation
on Dividends and Other Payment Restrictions Affecting Significant Subsidiaries

 

Under the terms of the 10-Year Notes Indenture, so
long as any of the Step-Up Notes are Outstanding, the Company will not, and
will not permit any Significant Subsidiary to, create or otherwise cause or
suffer to exist or become effective any consensual encumbrance or consensual
restriction of any kind on the ability of any Significant Subsidiary to (i) pay
dividends or make any other distributions permitted by applicable law to the
Company or any Significant Subsidiary on its Capital Stock or with respect to
any other interest or participation in, or measured by, its profits, (ii) pay
any Indebtedness or other obligation owed to the Company or any other
Significant Subsidiary, (iii) make loans or advances to the Company or any
other Significant Subsidiary or (iv) sell, lease or transfer any of its
property or assets to the Company or any other Significant Subsidiary.

 

The foregoing provisions shall not restrict (A) in
the case of clause (i), (ii), (iii) or (iv), any such encumbrance or
restriction (I) existing under the 10-Year Notes Indenture; (II) existing under
or by reason of applicable law; (III) existing under any instrument governing
Acquired Indebtedness or Capital Stock of any Person or the property or assets
of such Person acquired by the Company or any Significant Subsidiary and
existing at the time of such acquisition (except to the extent such Acquired
Indebtedness was Incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person
or the property or assets of any Person other than such Person or the property
or assets of such Person so acquired; (IV) existing under any agreement or
instrument that refinances an Indebtedness or replaces, renews or amends an
agreement or instrument containing an encumbrance or restriction that is
permitted by clauses (I) and (III) above, provided
that the terms and conditions of any such restrictions taken as a whole are not
less favorable to the Holders than those under or pursuant to the Indebtedness
being refinanced or the agreements or instruments being replaced, renewed or
amended; or (V) with respect to a Significant Subsidiary

 

B-11

 

and imposed pursuant to an agreement that has been entered into for the
sale or disposition of all or substantially all of the Capital Stock of, or
property and assets of, such Significant Subsidiary; or (B), in the case of
clause (iv) only, any such encumbrance or restriction (I) that restricts
in a customary manner the subletting, assignment or transfer of any property or
asset subject to a lease or license, or (II) existing by virtue of any transfer
of, agreement to transfer, option or right with respect to, or Lien on, any
property or assets of the Company or any Significant Subsidiary not otherwise
prohibited by the 10-Year Notes Indenture. 
Nothing contained in this paragraph shall prevent the Company or any
Significant Subsidiary from (1) creating, incurring, assuming or suffering
to exist any Liens otherwise permitted under the “Limitation on Liens” covenant
or (2) restricting the sale or other disposition of property or assets of
the Company or any of its Significant Subsidiaries that secure Indebtedness of
the Company or any Significant Subsidiary, subject to compliance with the “Limitation
on Asset Sales” covenant.

 

3.             Limitation
on the Issuance and Sale of Capital Stock of Significant Subsidiaries

 

Under the terms of the 10-Year Notes Indenture, the
Company will not sell, and will not permit any Significant Subsidiary, directly
or indirectly, to issue or sell, any shares of Capital Stock of a Significant
Subsidiary (including options, warrants or other rights to purchase shares of such
Capital Stock) except (i) to the Company or a Wholly-Owned Subsidiary
that, at the time of such sale, is a Significant Subsidiary, (ii) if,
immediately after giving effect to such issuance or sale, such Significant
Subsidiary would no longer constitute a Significant Subsidiary, (iii) in
the case of issuances of Capital Stock by a Significant Subsidiary if, after
giving effect to such issuance, the Company maintains its percentage ownership
of such Significant Subsidiary, (iv) the issuance to or ownership by
directors of directors’ qualifying shares or the issuance to or ownership by a
Person of Capital Stock of any Significant Subsidiary, to the extent mandated
by applicable law, or (v) the issuance or transfer of Capital Stock of a
Significant Subsidiary to the seller or transferor of a
Cable/Telecommunications Business, provided that
after giving effect to any such issuance or transfer, the Company holds at
least 51% of the Capital Stock (including 51% of the Voting Stock) of any such
Significant Subsidiary, and provided further
that in the case of clauses (ii), (iii) and (v) above, any
such issuance or sale shall comply with the “Limitation on Asset Sales”
covenant.

 

4.             Limitation
on Issuances of Guarantees by Subsidiaries

 

Under the terms of the 10-Year Notes Indenture, the
Company will not permit any Subsidiary of the Company, directly or indirectly,
to Guarantee any Indebtedness of the Company (“Guaranteed Indebtedness”),
unless (i) such Subsidiary simultaneously executes and delivers a
supplemental indenture to the 10-Year Notes Indenture providing for a Guarantee
by such Subsidiary (a “Subsidiary Guarantee”) of payment of the Step-Up
Notes and (ii) such Subsidiary waives and will not in any manner
whatsoever claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any other rights against the Company
or any other Subsidiary of the Company as a result of any payment by such
Subsidiary under its Subsidiary Guarantee; provided
that this paragraph shall not be applicable to any Guarantee of any Subsidiary
of the Company that (x) exists at the time such Person becomes a Subsidiary of
the Company and (y) was not Incurred in connection with, or in contemplation
of, such Person becoming a Subsidiary of the Company.  If the Guaranteed Indebtedness is pari

 

B-12

 

passu with the Step-Up Notes, then
the Guarantee of such Guaranteed Indebtedness shall be pari passu with, or subordinated to, the
Subsidiary Guarantee.  If the Guaranteed
Indebtedness is subordinated to the Step-Up Notes, then the Guarantee of such
Guaranteed Indebtedness shall be subordinated to the Subsidiary Guarantee at
least to the extent that the Guaranteed Indebtedness is subordinated to the
Step-Up Notes.

 

Notwithstanding the foregoing, any Subsidiary
Guarantee by a Subsidiary of the Company shall provide by its terms that it
shall be automatically and unconditionally released and discharged upon (i) any
sale, exchange or transfer, to any Person not an Affiliate of the Company, of
all of the Company’s and each of its Subsidiary’s Capital Stock in, or all or
substantially all the assets of, such Subsidiary (which sale, exchange or
transfer is not in contravention of the “Limitation on Asset Sales” covenant
and is not otherwise prohibited hereby) or (ii) the release or discharge
of the Guarantee which resulted in the creation of such Subsidiary Guarantee,
except a discharge or release by or as a result of payment under such
Guarantee.

 

5.             Limitation
on Transactions with Shareholders and Affiliates

 

Under the terms of the 10-Year Notes Indenture, the
Company will not, and will not permit any Subsidiary to, directly or
indirectly, conduct any business, enter into, renew or extend any transaction
(including, without limitation, the purchase, sale, lease, exchange or transfer
of property or assets, the rendering of any service, or the making of any
payment, loan, advance or guarantee) with, or for the benefit of, any holder
(or any Affiliate of such holder) of 10% or more of the Capital Stock of the
Company or with any Affiliate of the Company or of any Subsidiary (together, “Related
Persons” and each, a “Related Person”), unless the terms to the
Company or such Subsidiary (i) are at least as favorable to the Company or
such Subsidiary as those that could be obtained at the time of such transaction
in arm’s length dealings with a Person who is not a Related Person, and (ii) in
the case of any transaction (or series of transactions) with a Related Person
involving aggregate payments made on or after the Issue Date in excess of
U.S.$10 million in any fiscal year, shall be approved by a majority of the
disinterested members of the Board of Directors of the Company, or if no such
disinterested directors exist with respect to such transaction (or series of
transactions), shall be confirmed by an opinion of an Independent Financial
Advisor to be fair, from a financial point of view, to the Company or such
Subsidiary.

 

The foregoing limitation does not limit, and shall not
apply to (i) any transaction between the Company and any of its
Subsidiaries or between Subsidiaries, (ii) payment of reasonable and
customary compensation and fees to directors of the Company and the
Subsidiaries who are not employees of the Company or any Subsidiary, or (iii) the
grant of stock options or similar rights to acquire Capital Stock (other than
Disqualified Stock) to employees and directors of the Company pursuant to plans
approved by the Board of Directors provided that, in the aggregate, the shares
of Capital Stock underlying such options or similar rights issued since the
Issue Date (exclusive of any shares of Capital Stock or similar rights required
to be issued by law) shall not exceed 2.5% of the outstanding Common Stock of
the Company on a fully diluted basis at the date of determination.

 

B-13

 

6.             Limitation
on Liens

 

Under the terms of the 10-Year Notes Indenture, the
Company will not, and will not permit any Subsidiary of the Company to create,
incur, assume or suffer to exist any Liens of any kind (other than Permitted
Liens) against or upon any of its property or assets (including any shares of
Capital Stock), now owned or hereafter acquired, or any proceeds therefrom
securing any Indebtedness unless provision is made directly to secure the
Step-Up Notes equally and ratably by a Lien on such property, assets or
proceeds with (or, if the obligation or liability to be secured by such Lien is
Subordinated Indebtedness, prior to) the obligation or liability secured by
such Lien.

 

7.             Limitations
on Sale and Leaseback Transactions

 

Under the terms of the 10-Year Notes Indenture, the
Company will not, and will not permit any of its Subsidiaries to, directly or
indirectly, enter into, assume, guarantee or otherwise become liable with
respect to any Sale and Leaseback Transaction, unless:  (i) the net proceeds from such
transaction are at least equal to the Fair Market Value of the property being
transferred and (ii) such transaction shall comply with the “Limitation on
Asset Sales” covenant.

 

For purposes of the preceding paragraph, “Sale and
Leaseback Transaction” means, with respect to any Person, any direct or
indirect arrangement (excluding, however, any such arrangement between such
Person and a Wholly-Owned Subsidiary of such Person or between one or more
Wholly-Owned Subsidiaries of such Person) pursuant to which property is sold or
transferred by such Person or a Subsidiary of such Person and is thereafter
leased back from the purchaser or transferee thereof by such Person or one of
their Subsidiaries.

 

8.             Limitation
on Asset Sales

 

Under the terms of the 10-Year Notes Indenture, the
Company will not, and will not permit any of its Subsidiaries to make any Asset
Sale that would result in a Material Adverse Effect occurring and, in the case
of Asset Sales involving consideration of U.S.$10 million or more, unless an
Independent Financial Advisor shall have delivered a valuation of the property
or asset being sold to the Board of Directors and at a price consistent with
such valuation.

 

9.             Reports
to Holders

 

Under the terms of the 10-Year Notes Indenture, the
Company covenants to deliver to the Trustee:

 

(a)           (i) annual
consolidated financial statements with a report from a major internationally
recognized independent public accountant with respect to such year within 180
days after the end of the fiscal year and (ii) quarterly consolidated
financial statements within 60 days after the end of each of the first three
fiscal quarters;

 

(b)           such
additional information as the Company has filed with any regulatory authority
with jurisdiction over the Company within ten business days of the filing
thereof;

 

B-14

 

(c)           written
notice of the occurrence of any Default or Event of Default within ten Business
Days of the Company becoming aware of any such Default or Event of Default,
which notice shall be signed by the CEO, CFO or the chief accounting officer of
the Company; and

 

(d)           written
certification, on or before a date not more than 90 days after the end of each
fiscal year, that a review has been conducted of the activities of the Company
and its Subsidiaries, and of the Company’s and its Subsidiaries’ performance
under the 10-Year Notes Indenture, and that the Company has, to the best of
their knowledge, fulfilled all obligations under the 10-Year Notes Indenture,
or, if there has been a default in the fulfillment of any such obligation,
specifying each such default and the nature and status thereof.

 

Delivery of such reports, information and documents to
the Trustee is for informational purposes only and the Trustee’s receipt of
such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Company’s compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers’ Certificates).

 

10.           Consolidation,
Merger and Sale of Assets

 

Under the terms of the 10-Year Notes Indenture, the
Company shall not consolidate with, merge with or into, or sell, convey,
transfer, lease or otherwise dispose of all or substantially all of its
property and assets (as an entirety or substantially an entirety in one
transaction or a series of related transactions) to, any Person (other than a
consolidation or merger with or into a Wholly-Owned Subsidiary which, at the
time of such consolidation or merger, is a Significant Subsidiary with a
positive net worth; provided
that, in connection with any such merger or consolidation, no consideration
(other than Common Stock in the surviving Person or the Company) shall be
issued or distributed to the stockholders of the Company) or permit any Person
to merge with or into the Company unless: 
(i) the Company shall be the continuing Person, or the Person (if
other than the Company) formed by such consolidation or into which the Company
is merged or that acquired or leased such property and assets of the Company
shall expressly assume, by a supplemental indenture, executed and delivered to
a Responsible Officer of the Trustee, all of the obligations of the Company under
the 10-Year Notes Indenture; (ii) immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing; (iii) (A) the transaction will involve a Person
principally engaged in the Company’s line of business or in a business or
activities ancillary to the Company’s line of business, or reasonably related
therewith (including, but not limited to programming, MMDS, broadband, pay
television and the provision of access service to, content for or ancillary
services such as web-hosting, network security and monitoring, digital
certificates or equipment installation or maintenance, for the Internet, but
excluding non-pay television services, AM or FM radio broadcasting, telephone
or cellular communications and publication of newspapers), (B) immediately
after giving effect to such transaction on a pro forma basis, the Company, or
any surviving Person will have Consolidated Net Worth equal to or greater than
the Consolidated Net Worth of the Company immediately preceding the transaction
(provided that this requirement will not apply where such transaction involves
another Person engaged in substantially the Company’s line of business in
Argentina), and (C) (1) the weighted average life of the Company’s
(or the surviving Person’s) consolidated

 

B-15

 

Indebtedness after giving
effect to the transaction would exceed the lesser of (x) five years and (y) the
weighted average life of the Company’s consolidated Indebtedness immediately
prior to the transaction and (2) after giving effect to such transaction
the Company (or the surviving Person) would either be permitted to Incur at
least U.S.$1.00 of additional Indebtedness pursuant to the “Limitation on
Indebtedness” covenant, if such Incurrence was not permitted prior to giving
effect to such transaction or, if such Incurrence was permitted, have a lower
ratio of Total Consolidated Indebtedness to Annualized Pro Forma Consolidated
Operating Cash Flow than that of the Company prior to giving effect to such
transaction; and (iv) the Company delivers to the Trustee an Officers’
Certificate (attaching the arithmetic computations to demonstrate compliance
with clause (iii)) and an opinion of reputable Argentine counsel, in each case
stating that such consolidation, merger or transfer and such supplemental
indenture complies with clause (i) of this provision and that all
conditions precedent provided for herein relating to such transaction have been
complied with.

 

Events of Default

 

The following events will
be each defined as an “Event of Default” for the 10-Year Notes
Indenture:

 

(a)           failure
to pay principal of or premium, if any, on any of the Step-Up Notes when the
same shall become due and payable at maturity, upon acceleration, redemption or
otherwise;

 

(b)           failure
to pay interest, or Additional Amounts, if any, on any of the Step-Up Notes
when the same shall become due and payable, and such failure continues for a
period of 30 days;

 

(c)           failure
to perform or comply with the “Consolidation, Merger and Sale of Assets”
covenant;

 

(d)           failure
to perform or breach of any other covenant or agreement in the 10-Year Notes
Indenture or under the Step-Up Notes (other than those referred to in clauses
(a), (b) and (c) above) and such failure or breach continues for a
period of 30 consecutive days after written notice shall have been given to the
Company by the Trustee or to the Company and the Trustee by the Holders of at
least 25% in aggregate principal amount of the Step-Up Notes then outstanding;

 

(e)           the
occurrence with respect to any issue or issues of Indebtedness of the Company
or any Significant Subsidiary having an outstanding principal amount of U.S.$5
million or more (or its equivalent in other currencies) in the aggregate for
all such issues of all such Persons, whether such Indebtedness now exists or
shall hereafter be created, of (I) an event of default that has caused such
Indebtedness to become, or the holders thereof to declare such Indebtedness to
be, due and payable prior to its Stated Maturity and/or (II) the failure to
make a payment of principal and in the case of the 7-Year Notes, interest when
such payment is due and payable;

 

B-16

 

(f)            one
or more final judgments, orders or binding arbitration awards, for the payment
of money in excess of U.S.$5 million (or its equivalent in other currencies),
either individually or in the aggregate for all such final judgments, orders or
binding arbitration awards, shall be rendered against the Company or any
Significant Subsidiary or any of their respective properties and shall not be
paid or discharged, and there shall have been a period of 60 consecutive
days following entry of the final judgment, order or binding arbitration award that
causes the aggregate amount for all such final judgment, orders or binding
arbitration awards outstanding and not paid or discharged against all such
Persons to exceed U.S.$5 million (or its equivalent in other currencies) during
which a stay of enforcement of such final judgments, orders or binding
arbitration awards, by reason of a pending appeal or otherwise, shall not be in
effect;

 

(g)           any
government or governmental authority shall have condemned, nationalized,
seized, or otherwise expropriated all or any substantial portion of the assets
or property of the Company or any Significant Subsidiary or the share capital
of the Company or any Significant Subsidiary, or shall have assumed custody or
control of such assets or property or of the business or operations of the
Company or any Significant Subsidiary or of the share capital of the Company or
any Significant Subsidiary, or shall have taken any action that would prevent
the Company or any Significant Subsidiary or its officers from carrying on its business
or operations or a substantial part thereof for a period of longer than 60
consecutive days and the result of any such action shall materially prejudice
the ability of the Company to perform its obligations under the Step-Up Notes;

 

(h)           the
Argentine Government shall declare a general suspension of payment or a
moratorium on the payment of debt of the Company (which does not expressly
exclude the Step-Up Notes);

 

(i)            the
Company or any Significant Subsidiary (I) is declared by a court of competent jurisdiction
to be insolvent or bankrupt or unable to pay its debts, (II) commences or
consents to the commencement of a case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, (III) makes a
general assignment or an arrangement or composition with or for the benefit of
creditors, or (IV) admits in writing its inability to pay its debts generally
as they become due, or (V) takes corporate action in furtherance of any of the
foregoing;

 

(j)            an
order or decree is made or an effective resolution passed for relief against
the Company or a Significant Subsidiary under any applicable bankruptcy law, or
for the winding-up or dissolution of the Company or any Significant Subsidiary
or adjudging the Company or any Significant Subsidiary bankrupt or insolvent
under any applicable bankruptcy law and in each case such order or decree
remains unstayed and in effect for a period of 60 consecutive days, or the
Company or any Significant Subsidiary ceases or threatens to cease to carry on
all or a material part of its business or operations, except for the purpose of
and followed by a reconstruction, amalgamation, reorganization (“concurso preventivo” or “concordato”), merger or consolidation in
the case of a Significant Subsidiary, whereby the undertaking and the assets of
such Subsidiary, or all of the undertaking and assets relating to the Company’s
direct or indirect shareholding in such Subsidiary, as the case may be, are
transferred

 

B-17

 

to or otherwise
vested in the Company or any other Significant Subsidiary or Subsidiary which
as a result of such transfer would become a Significant Subsidiary; or

 

(k)           it
becomes unlawful for the Company to perform or comply with any one or more of
its obligations under any of the Step-Up Notes or the 10-Year Notes Indenture,
and such unlawfulness continues for a period of 60 consecutive days after
written notice shall have been given to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate principal
amount of the Step-Up Notes then outstanding.

 

Acceleration of
Maturity; Rescission and Annulment

 

If an Event of Default (other than an Event of Default
specified in clause (i) or (j) above that occurs with respect to the
Company) occurs and is continuing under the 10-Year Notes Indenture, the
Trustee thereunder or the Holders of at least 25% in aggregate principal amount
then outstanding of the Step-Up Notes, by written notice to the Company (and to
the Trustee if such notice is given by the Holders), may, and the Trustee at
the request of such Holders shall, declare the Step-Up Notes to be immediately
due and payable at 100% of the principal amount thereof, plus accrued and
unpaid interest thereon, if any, to the date of such declaration.  Upon a declaration of acceleration, such
principal, premium if any, and accrued interest shall be immediately due and
payable.  In the event of a declaration
of acceleration because an Event of Default set forth in clause (e) above
has occurred and is continuing, such declaration of acceleration shall be
automatically rescinded and annulled if the event of default triggering such
Event of Default pursuant to clause (e) shall be remedied or cured by the
Company and/or the relevant Subsidiaries or waived by the holders of the
relevant Indebtedness within 30 days after the declaration of acceleration with
respect thereto.  If an Event of Default
specified in clause (i) or (j) above occurs with respect to the Company,
the Step-Up Notes then outstanding shall ipso facto become and be immediately
due and payable at 100% of the outstanding principal amount thereof, plus
premium, if any, thereon and accrued and unpaid interest thereon in each case
without any declaration or other act on the part of the Trustee or any Holder.

 

The Holders of at least a majority in principal amount
of the outstanding Step-Up Notes, by written notice to the Company and to the
Trustee, may rescind and annul a declaration of acceleration and its consequences
if, in addition to certain other covenants, (i) all existing Events of
Default, other than the nonpayment of the principal of and premium, if any,
interest and Additional Amounts, if any, on such Step-Up Notes that have become
due solely by such declaration of acceleration, have been cured or waived and (ii) the
rescission would not conflict with any judgment, decree or order of a court of
competent jurisdiction.  The Holders of
at least a majority in aggregate principal amount of the outstanding Step-Up
Notes, by written notice to the Trustee, may waive an existing Default or Event
of Default and the consequences under the 10-Year Notes Indenture, except a
Default in the payment of principal of, premium, if any, on or interest on the
Step-Up Notes or in respect of a covenant or provision of the 10-Year Notes
Indenture that cannot be modified or amended without the consent of the Holder
of each outstanding Step-Up Note affected.

 

The Holders of at least a majority in aggregate
principal amount of the outstanding Step-Up Notes may on behalf of the Holders
of all of the Step-Up Notes, direct the

 

B-18

 

time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee with respect to the Step-Up Notes
by the 10-Year Notes Indenture.  However,
the Trustee under the 10-Year Notes Indenture may refuse to follow any
direction that conflicts with law or the 10-Year Notes Indenture, that may
involve the Trustee in personal liability, or that the Trustee determines in
good faith may be unduly prejudicial to the rights of Holders of Step-Up Notes
not joining in the giving of such direction and may take any other action it
deems proper that is not inconsistent with any such direction received from
Holders of Step-Up Notes.  A Holder may
not pursue any remedy with respect to the 10-Year Notes Indenture or this
Step-Up Note unless:  (i) the Holder
gives the Trustee written notice of a continuing Event of Default; (ii) the
Holders of at least 25% in aggregate principal amount at maturity of
outstanding Step-Up Notes make a written request to the Trustee to pursue the
remedy; (iii) such Holder or Holders offer the Trustee indemnity
satisfactory to the Trustee against any costs, liability or expense; (iv) the
Trustee does not comply with the request within 60 days after receipt of the
request and the offer of indemnity; and (v) during such 60-day period, the
Holders of a majority in aggregate principal amount of the outstanding Step-Up
Notes do not give the Trustee a direction that is inconsistent with the
request.  However, such limitations do
not apply to the right of any Holder of a Step-Up Note to receive payment of
the principal of, premium, if any, on or interest on such Step-Up Note or to
bring suit for the enforcement of any such payment, on or after the due date
expressed in the Step-Up Notes, which right shall not be impaired or affected
without the consent of such Holder.

 

Meetings of Holders;
Modification and Waiver

 

(a)           The
Trustee or the Company shall, upon the request of the Holders of at least five
percent in aggregate principal amount of the Step-Up Notes at the time
Outstanding, or the Company or the Trustee at its discretion, may, call a
meeting of the Holders at any time and from time to time, to make, give or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided by the Step-Up Notes to be made, given or taken by such
Holders.  With respect to all matters not
contemplated in the 10-Year Notes Indenture, meetings of Holders will be held
in Buenos Aires in accordance with the Negotiable Obligations Law; provided, however, that the Company or the Trustee may
determine to hold any such meetings simultaneously in Buenos Aires and in The
City of New York by any means of telecommunication.  Meetings shall be held at such time and at
such place as the Company or the Trustee shall determine in such cities.  If a meeting is being held pursuant to a
request of Holders, the agenda for the meeting shall be as determined in the
request and such meeting shall be convened within 40 days from the date such
request is received by the Trustee or the Company, as the case may be.  Notice of any meeting of Holders (which shall
include the date, place and time of the meeting, the agenda therefor and the
requirements to attend) shall be published not less than ten days nor more than
30 days prior to the date fixed for the meeting in the Boletín
Oficial de la República (the Official Gazette of Argentina) and,
while there are Holders domiciled in Argentina, in a newspaper having major
circulation in Argentina and any publication of such notice shall be for five
consecutive Business Days in each place of publication.

 

(b)           Any Holder
may attend the meeting in person or by proxy. 
Directors, officers, managers, members of the Supervisory Committee and
employees of the Company may

 

B-19

 

not be appointed as
proxies.  Holders of Step Up Notes who
intend to attend a meeting of Holders must notify the Registrar of their
intention to do so at least three days prior to the date of such meeting.  The
Company shall, prior to any vote, deliver to the Trustee a notice signed by the
CFO or the chief accounting officer certifying, to the best of the Company’s
knowledge, as to the Notes held by any Affiliate of the Company.

 

(c)           Except as
specified in “Acceleration of Maturity; Rescission and Annulment,” decisions
shall be made by the affirmative vote of the Holders of at least 51% in
aggregate principal amount of the Step-Up Notes at the time outstanding present
or represented at a meeting of such Holders at which a quorum is present; provided, however, that the affirmative vote of the Holders
of the applicable percentage in aggregate principal amount of the Step-Up Notes
at the time Outstanding specified under “Events of Default” shall be required
to take the actions specified under such heading; provided
further, however, that the unanimous affirmative vote of the Holders
of Step-Up Notes shall be required to adopt a valid decision on:

 

(i)            changing
the Stated Maturity of, or failing to pay, the principal of, premium, if any,
on or any installment of interest on any Step-Up Note, or reducing the
principal amount thereof, premium, if any, thereon or the rate of interest
thereon or changing the requirement to pay Additional Amounts thereon, or
releasing any amounts held in the Reserve Accounts;

 

(ii)           changing
the place of payment where, or the coin or currency in which, the principal of,
premium, if any, on or interest or Additional Amounts (if any) on any Step-Up
Note is payable;

 

(iii)          impairing
the right to institute suit for the enforcement of any such payment on or after
the Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date);

 

(iv)          reducing
the percentage in principal amount of the outstanding Step-Up Notes, the
consent of the Holders of which is required for the adoption of a resolution or
the quorum required to constitute a meeting of Holders at which a resolution is
adopted or the percentage in principal amount of outstanding Step Up Notes the
Holders of which are entitled to request the calling of a meeting of Holders;
or

 

(v)           modifying
the percentage in principal amount of the Step-Up Notes, the consent of Holders
which is required to waive a past Default or Event of Default.

 

Except as provided above,
any modifications, amendments or waivers to the terms and conditions of the
Step-Up Notes will be conclusive and binding on all Holders of Step-Up Notes,
whether or not they were present at any meeting, and whether or not notation of
such modifications, amendments or waivers is made upon the Step-Up Notes, provided that any such modification, amendment or waiver was
duly passed at a meeting convened and held in accordance with the provisions of
the Negotiable Obligations Law.

 

(d)           Meetings
of the Holders of Step-Up Notes shall be either “first call” meetings (“primera convocatoria”) or “second call” meetings (“segunda convocatoria”). 
All meetings of the Holders of Step-Up Notes shall be deemed to be a
first call meeting; provided,

 

B-20

 

however, that
any reconvened meeting adjourned for lack of a requisite quorum shall be deemed
a second call meeting.  The quorum
applicable at a meeting of the Holders of Step-Up Notes of any series shall be
as follows:

 

(i)            the
quorum for meetings called to adopt a resolution by which Holders of Step-Up
Notes shall make any request, demand or direction or give any notice (other
than a resolution specified in paragraph (ii) below) shall, (A) in
the case of first call meetings, be such Persons holding or representing a
majority in aggregate principal amount of the Step-Up Notes at the time
outstanding and (B) in the case of second call meetings, be such Persons
present at such meeting holding or representing Step-Up Notes at the time
outstanding; and

 

(ii)           the quorum
for meetings called to adopt a resolution by which Holders of Step-Up Notes
consent to any waiver under the Step-Up Notes or the 10-Year Notes Indenture,
agree to any amendment to the 10-Year Notes Indenture or the terms and
conditions of the Step-Up Notes, or specify the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred upon the Trustee with respect to the Step-Up Notes
by the 10-Year Notes Indenture shall (A) in the case of first call
meetings, be Persons holding or representing at least 60% in aggregate
principal amount of the Step-Up Notes at the time outstanding and (B) in
the case of second call meetings, be Persons holding or representing at least
30% in aggregate principal amount of the Step-Up Notes at the time outstanding.

 

(e)           Without
the vote of any Holders of Step-Up Notes, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental to the 10-Year Notes Indenture in form
satisfactory to the Trustee, for any of the following purposes:

 

(i)            to
evidence the succession of another Person to the Company and the assumption by
any such successor of the covenants of the Company in the 10-Year Notes
Indenture and in the Step-Up Notes; or

 

(ii)           to add to
the covenants of the Company for the benefit of the Holders or to surrender any
right or power herein conferred upon the Company; or

 

(iii)          to
secure the Step-Up Notes; or

 

(iv)          to comply
with any requirements of the Commission in order to effect and maintain the
qualification of the 10-Year Notes Indenture under the Trust Indenture Act; or

 

(v)           to
evidence and provide for acceptance of appointment hereunder by a successor
Trustee pursuant to the provisions of the 10-Year Notes Indenture; or

 

(vi)          to evidence
any further issue of notes having terms and conditions the same as those of the
Step-Up Notes (or the same except for the payment of interest accruing prior to
the issue date of such additional notes or except for the first payment of

 

B-21

 

interest following the
issue date of such additional notes), which additional notes may be
consolidated and form a single series with the Step-Up Notes; or

 

(vii)         to
cure any ambiguity, to correct or supplement any provision herein which may be
inconsistent with any other provision herein, or to make any other provisions
with respect to matters or questions arising under the 10-Year Notes Indenture
which shall not be inconsistent with the provisions of the 10-Year Notes
Indenture, provided that such action pursuant to
this clause (vii) shall not adversely affect the interests of the Holders
in any material respect; or

 

(viii)        to
increase the aggregate principal amount of Public Debt Securities at any time
outstanding under the 10-Year Notes Indenture.

 

No reference herein to the 10-Year Notes Indenture and
no provision of this Step-Up Note or of the 10-Year Notes Indenture shall alter
or impair the obligation of the Company, which is absolute and unconditional,
to pay the principal of, premium, if any, on and interest and Additional
Amounts, if any, on this Step-Up Note at the times, place and rate, and in the
coin or currency, herein prescribed.

 

Notices

 

Notices to Holders of Registered Step-Up Notes will be
mailed to them at their respective addresses as they appear in the register
maintained by the Registrar and shall be published as may be required by
applicable law or, to the extent there are Holders domiciled in Argentina (i) in
a leading newspaper having general circulation in Argentina, (ii) for so
long as any Step-Up Notes is listed on the Buenos Aires Stock Exchange, in the
Bulletin of the Buenos Aires Stock Exchange, and (iii) in the Official Gazette of Argentina.  Any notice so mailed shall be deemed to have
been given on the date of such mailing. 
In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders of Registered Step-Up Notes. 
Any notice mailed to a Holder in the manner herein prescribed shall be
deemed to have been received by (i) a Holder domiciled in Argentina when
actually received and (ii) a Holder domiciled outside of Argentina when so
mailed.

 

Discharge and Defeasance

 

Under the terms of the 10-Year Notes Indenture, the
Company may at its option by a resolution of the Board of Directors, at any
time, upon the satisfaction of certain conditions described below, elect to be
discharged from its obligations with respect to outstanding Step-Up Notes (“defeasance”).  In general, upon a defeasance, the Company
shall be deemed to have paid and discharged the entire indebtedness represented
by the outstanding Step-Up Notes and to have satisfied all of its obligations
under such Step-Up Notes except for (i) the rights of Holders of such
Step-Up Notes and any related coupons to receive, solely from the trust fund
established for such purposes as described below, payments in respect of the
principal of, premium, if any, on and interest on such Step-Up Notes when such
payments are due, (ii) certain provisions relating to ownership,
registration and transfer of the Step-Up Notes, (iii) certain provisions
relating to

 

B-22

 

the mutilation,
destruction, loss or theft of the Step-Up Notes, (iv) the Company’s
obligations to effect a registered exchange offer or a private exchange offer, (v) the
covenant relating to the maintenance of an office or agency in Buenos Aires and
The City of New York and (vi) certain provisions relating to the rights,
powers, trusts duties and immunities of the Trustee.

 

In addition, the Company may at its option by Board
Resolution, at any time, upon the satisfaction of certain conditions described
below, elect to be released from certain covenants described in the 10-Year
Notes Indenture (“covenant defeasance”). 
Following such covenant defeasance, the occurrence of a breach or
violation of any such covenant will not be deemed to be an Event of Default
under the 10-Year Notes Indenture.

 

In order to cause a defeasance or covenant defeasance,
the Company will be required to satisfy, among other conditions, the following
conditions:

 

(a)           the
Company shall have irrevocably deposited or caused to be deposited with the
Trustee as funds in trust, money or U.S. Government Obligations, or a
combination thereof, sufficient, in the opinion of an internationally
recognized firm of independent public accountants, to pay and discharge the
principal of, premium, if any, on and each installment of interest on the
outstanding Step-Up Notes on the Stated Maturity or on the applicable
Redemption Date, as the case may be, of such principal, premium, if any, or
installment of interest in accordance with the terms of this Step-Up Note, and
such amounts will be applied for such purpose, and the Company must specify
whether the Step-Up Notes are being defeased to maturity or to a particular
Redemption Date;

 

(b)           in the
case of an election fully to defease the Step-Up Notes, the Company shall have
delivered to the Trustee an Opinion of Counsel stating that (x) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling, or (y) since the date of the 10-Year Notes Indenture there has been a
change in the applicable federal income tax law or the interpretation thereof,
in either case to the effect that, and based thereon such opinion shall confirm
that, the Holders of the outstanding Step-Up Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such deposit,
defeasance and discharge and will be subject to federal income tax on the same
amount, in the same manner and at the same time as would have been the case if
such deposit, defeasance and discharge had not occurred;

 

(c)           in the
case of a covenant defeasance, the Company shall have delivered to the Trustee
an Opinion of Counsel to the effect that the Holders of the outstanding Step-Up
Notes will not recognize income, gain or loss for federal income tax purposes
as a result of such deposit and covenant defeasance and will be subject to
federal income tax on the same amount, in the same manner and at the same time
as would have been the case if such deposit and covenant defeasance had not
occurred;

 

(d)           the
Company shall have delivered to the Trustee an Officers’ Certificate to the
effect that the Step-Up Notes, if then listed on any securities exchange, will
not be delisted as a result of such deposit;

 

B-23

 

(e)           no Event
of Default or event which with notice or lapse of time or both would become an
Event of Default shall have occurred and be continuing on the date of such
deposit (other than a Default or Event of Default resulting from the borrowing
of funds to be applied to such deposit) after giving effect thereto or, with
respect to a Default or Event of Default specified in clauses (i) or (j)
of the first paragraph of “Events of Default”, at any time during the period
ending on the 121st day after the date of such deposit (it being understood
that this condition shall not be deemed satisfied until the expiration of such
period);

 

(f)            such
defeasance or covenant defeasance shall not cause the Trustee to have a conflicting
interest as defined in the 10-Year Notes Indenture and for the purposes of the
Trust Indenture Act with respect to any securities of the Company;

 

(g)           such
defeasance or covenant defeasance shall not result in a breach or violation of,
or constitute a default under, any other material agreement or instrument to
which the Company is a party or by which it is bound;

 

(h)           the
Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent relating to
either defeasance or covenant defeasance (as the case may be) have been
complied with; and

 

(i)            such
defeasance or covenant defeasance shall not result in the trust arising from
such deposit constituting an investment company as defined in the U.S.
Investment Company Act of 1940, as amended, or such trust shall be qualified
under such act or exempt from regulation thereunder.

 

Trustee Dealings with the
Company

 

Subject to certain limitations imposed by the Trust
Indenture Act, the Trustee under the 10-Year Notes Indenture, in its individual
or any other capacity, may become the owner or pledgee of Step-Up Notes and may
otherwise deal with the Company and receive, collect, hold and retain
collections from the Company or its Affiliates with the same rights it would
have if it were not Trustee.  Any Paying
Agent, Registrar or Co-Registrar may do the same with like rights.

 

No Personal Liability of
Incorporators, Shareholders, Officers, Board of Directors Members or Employees

 

The 10-Year Notes Indenture provides that no recourse
for the payment of the principal of, premium, if any, on or interest on any of
the Step-Up Notes or for any claim based thereon or otherwise in respect
thereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in the 10-Year Notes Indenture or in this Step-Up Note or because
of the creation of any Indebtedness represented thereby, shall be had against
any incorporator, shareholder, officer, director, employee, Board of Directors
member or controlling person of the Company or of any successor Person
thereof.  Each Holder, by accepting the
Step-Up Notes, waives and releases all such liability.  The waiver and release are part of the
consideration for issuance of the Step-Up Notes.  Such waiver may not be effective to waive
liabilities under

 

B-24

 

Argentine or the U.S.
federal securities laws and it is the view of the Commission that such a waiver
is against public policy.

 

Additional Waiver and
Release

 

As part of the consideration for issuance of the
Step-Up Notes, each Holder of Step-Up Notes, by accepting the Step-Up Notes,
waives any rights that it may have pursuant to Argentine law to claw back (acción revocatoria) or bring action against
any director of the Company (acción de
responsabilidad), and releases such director from any liability,
arising out of payments made by the Company as a result of the consummation of the cash option under the Company’s APE.

 

Governing Law and
Enforceability

 

The Negotiable Obligations Law governs the
requirements for the Step-Up Notes to qualify as Obligaciones
Negociables thereunder, while such law, together with the Argentine
Business Companies Law No. 19,550, as amended, and other applicable
Argentine laws, govern the capacity and corporate authority of the Company to
execute and deliver the Step-Up Notes and the authorization of the public
offering of the Step-Up Notes by the CNV. 
All other matters in respect of the Step-Up Notes and the 10-Year Notes
Indenture, including but not limited to the statute of limitations applicable
thereto, are governed by and shall be construed in accordance with the laws of
the State of New York, United States.

 

The Company consents to the non-exclusive jurisdiction
of any court of the State of New York or any United States federal court
sitting in the Borough of Manhattan, The City of New York, New York, United
States, and any appellate court from any thereof, and waives any immunity from
the jurisdiction of such courts over any suit, action or proceeding that may be
brought in connection with the 10-Year Notes Indenture or this Step-Up
Note.  The Company irrevocably waives, to
the fullest extent permitted by law, any objection to any suit, action, or
proceeding that may be brought in connection with the 10-Year Notes Indenture
or this Step-Up Note in such courts whether on the grounds of venue, residence
or domicile or on the ground that any such suit, action or proceeding has been
brought in an inconvenient forum.  The Company
agrees that final judgment in any such suit, action or proceeding brought in
such court shall be conclusive and binding upon the Company and may be enforced
in any court to the jurisdiction of which the Company is subject by a suit upon
such judgment; provided that service of process
is effected upon the Company in the manner provided by the 10-Year Notes
Indenture.  Notwithstanding the
foregoing, any suit, action or proceeding brought in connection with the 10-Year
Notes Indenture or this Step-Up Note may be instituted in any competent court
in Argentina.

 

The Company agrees that service of all writs, process
and summonses in any suit, action or proceeding brought in connection with the
10-Year Notes Indenture or this Step-Up Note against the Company in any court
of the State of New York or any United States federal court sitting in the
Borough of Manhattan, The City of New York, New York, United States, may be
made upon CT Corporation System at 111 Eighth Avenue, New York, New York 10011,
whom the Company irrevocably appoints as its authorized agent for service of
process.  The

 

B-25

 

Company represents and
warrants that CT Corporation System has agreed to act as the Company’s agent
for service of process.  The Company
agrees that such appointment shall be irrevocable so long as any of the Step-Up
Notes remain Outstanding or until the irrevocable appointment by the Company of
a successor in The City of New York as its authorized agent for such purpose and
the acceptance of such appointment by such successor.  The Company further agrees to take any and
all action, including the filing of any and all documents and instruments, that
may be necessary to continue such appointment in full force and effect as aforesaid.  If CT Corporation System shall cease to act
as the Company’s agent for service of process, the Company shall appoint
without delay another such agent and provide prompt written notice to the
Trustee of such appointment.  With
respect to any such action in any court of the State of New York or any United
States federal court in the Borough of Manhattan, The City of New York, New
York, United States, service of process upon CT Corporation System, as the
authorized agent of the Company for service of process, and written notice of
such service to the Company, shall be deemed, in every respect, effective
service of process upon the Company.

 

Currency Indemnity

 

The U.S. Dollar is the sole currency of account and
payment for all sums payable by the Company under or in connection with this
Step-Up Note.  Any amount received or
recovered in currency other than U.S. Dollars (whether as a result of, or of
the enforcement of, a judgment or order of a court of any jurisdiction, in the
winding up or dissolution of the Company or otherwise) by any Holder of Step-Up
Notes in respect of any sum expressed to be due to it from the Company shall
only constitute a discharge of the Company to the extent of the U.S. Dollar
amount which the recipient is able to purchase with the amount so received or
recovered in that other currency on the date of that receipt or recovery (or,
if it is not practicable to make that purchase on that date, on the first date
on which it is practicable to do so).  If
that U.S. Dollar amount is less than the U.S. Dollar amount expressed to be due
to the recipient under any Step-Up Note, the Company shall indemnify such
recipient against any loss sustained by it as a result.  In any event, the Company shall indemnify the
recipient against the cost of making any such purchase.  For the purposes of this paragraph, it will
be sufficient for the Holder to certify (indicating the sources of information
used) that it would have suffered a loss had an actual purchase of U.S. Dollars
been made with the amount so received in that other currency on the date of
receipt or recovery (or, if a purchase of U.S. Dollars on such date had not
been practicable, or the first date on which it would have been
practicable).  These indemnities
constitute a separate and independent obligation from the Company’s other
obligations, shall give rise to a separate and independent cause of action,
shall apply irrespective of any waiver granted by any Holder of Step-Up Notes
and shall continue in full force and effect despite any other judgment, order,
claim or proof for a liquidated amount in respect of any sum due under any
Step-Up Note or any other judgment or order.

 

Defined Terms

 

“7-Year Notes Indenture” means the Indenture, as supplemented
and amended by the Second Supplemental Indenture, dated as of [    ], [2005], among the Company, Law

 

B-26

 

Debenture Trust
Company of New York, as the Trustee, Co-Registrar and
Principal Paying Agent thereunder, and HSBC Bank Argentina S.A., as Registrar and Paying Agent thereunder.

 

“7-Year Notes” means both the series of Debt Securities known as
the Company’s 7-Year Fixed Rate Notes and the series of Debt Securities known
as the Company’s 7-Year Floating Rate Notes, all of which were (or to be)
issued pursuant to the 7-Year Notes Indenture.

 

“10-Year Notes Indenture” has the meaning set forth in the first
paragraph of the First Supplemental Indenture.

 

“10-Year Notes Reserve Account” has the meaning set forth in Section 5.1
of the First Supplemental Indenture.

 

“Acquired Indebtedness”
means Indebtedness of a Person existing at the time such Person became or was
designated a Subsidiary of the Company and not Incurred in connection with, or
in contemplation of, such Person becoming a Subsidiary of the Company.

 

“Affiliate” means, as applied to any Person,
any other Person directly or indirectly controlling, controlled by, or under
direct or indirect common control with, such Person.

 

“Annualized Pro Forma Consolidated Operating Cash
Flow” means Consolidated Operating Cash Flow for the latest fiscal quarter
for which consolidated financial statements of the Company are available
multiplied by four.  For purposes of
calculating “Consolidated Operating Cash Flow” for any fiscal quarter
for purposes of this definition, (i) any Subsidiary of the Company that is
a Subsidiary on the Transaction Date shall be deemed to have been a Subsidiary
at all times during such fiscal quarter and (ii) any Subsidiary of the
Company that is not a Subsidiary on the Transaction Date shall be deemed not to
have been a Subsidiary at any time during such fiscal quarter.  In addition to and without limitation of the
foregoing, for purposes of this definition, “Consolidated Operating Cash
Flow” shall be calculated after giving effect on a pro forma basis for the
applicable fiscal quarter to, without duplication, any Asset Sale or Asset
Acquisition (including, without limitation, any Asset Acquisition giving rise
to the need to make such calculation as a result of the Company or one of its
Subsidiaries (including any Person who becomes a Subsidiary as a result of the
Asset Acquisition) Incurring Acquired Indebtedness) occurring during the period
commencing on the first day of such fiscal quarter to and including the
Transaction Date (the “Reference Period”), as if such Asset Sale or
Asset Acquisition occurred on the first day of the Reference Period.

 

“Argentina” means
the Republic of Argentina.

 

“Argentine Government”
means the government of Argentina.

 

“Asset Acquisition” means (i) an
Investment or capital contribution (by means of transfers of cash or other
property to others or payments for property or services for the account or use
of others, or otherwise) by the Company or any of its Subsidiaries in any other
Person, or any acquisition or purchase of Capital Stock of another Person by
the Company or any of its Subsidiaries, in either case pursuant to which such
Person shall become a Subsidiary of the Company or shall be merged with or into
or consolidated with the Company or any Subsidiary of the Company or (ii) an
acquisition by the Company or any of its Subsidiaries of the property and

 

B-27

 

assets of any Person
other than the Company or any of its Subsidiaries which constitute substantially
all of a division, operating unit or line of business of such Person or which
is otherwise outside the ordinary course of business.

 

“Asset Sale” means any direct or indirect sale,
transfer, conveyance or lease (which has the effect of a disposition and is not
for security purposes) or other disposition (including by way of sale-leaseback
transactions) in one transaction or a series of related transactions by the
Company or any Subsidiary of the Company to any Person other than the Company or
any Subsidiary of the Company of (i) all or any of the Capital Stock of
any Subsidiary of the Company (other than directors’ qualifying shares or
shares owned by a Person, to the extent mandated by applicable law), (ii) any
material license or other authorization of the Company or any Subsidiary of the
Company pertaining to a Cable/Telecommunications Business, (iii) all or
substantially all of the property and assets of an operating unit or business
of the Company or any Subsidiary of the Company or (iv) any other property
and assets of the Company or any Subsidiary of the Company and, in each case,
that is not governed by the “Consolidation, Merger and Sale of Assets” covenant
hereof; provided, however that the term “Asset Sale”
shall in no case include any sale, transfer, conveyance, lease or other
disposition in one transaction or a series of related transactions (i) of
property or equipment that has become worn out, obsolete or damaged or
otherwise unsuitable for use in connection with the business of the Company or
any Subsidiary of the Company, as the case may be, (ii) involving assets
with a Fair Market Value not in excess of U.S.$500,000, (iii) of inventory
in the ordinary course of business, or (iv) involving the sale or other
disposition of cash or Cash Equivalents.

 

“Average Life” means, at any date of
determination with respect to any Indebtedness, the quotient obtained by
dividing (i) the sum of the products of (a) the number of years from
such date of determination to the dates of each successive scheduled principal
payment, redemption or similar payment with respect to such Indebtedness and (b) the
amount of such principal payment by (ii) the sum of all such principal
payments.

 

“Board of Directors”
means the board of directors of the Company.

 

“Board Resolution” means a copy of a resolution
certified by a director of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

 

“Business Day” means any day (other than a
Saturday or Sunday) on which DTC, Euroclear or Clearstream, Luxembourg and
banks in The City of New York and Buenos Aires are open for business.

 

“Cable/Telecommunications Business” means any
business operating a cable and/or telecommunications services and/or
communications services or programming business located in South America,
including, without limitation, any business conducted by the Company on the
Issue Date.

 

“Capital Stock” means, with respect to any
Person, any and all shares, interests, participations, rights in or other
equivalents (however designated, whether voting or non-voting) in equity of
such Person, whether outstanding at the Issue Date or issued thereafter,
including,

 

B-28

 

without limitation, all
Common Stock and Disqualified Stock, and any and all rights, warrants or
options exchangeable for or convertible into any thereof.

 

“Capitalized Lease” means, as applied to any
Person, any lease or license of, or other agreement conveying the right to use,
any property (whether real, personal or mixed, movable or immovable) of which
the present value of the obligations of such Person to pay rent or other
amounts is required, in conformity with GAAP, to be classified and accounted
for as a finance lease obligation; and “Capitalized Lease Obligation” is
defined to mean the capitalized present value of the obligations to pay rent or
other amounts under such lease or other agreement, determined in accordance
with GAAP.

 

“Cash Equivalents” means (i) any evidence
of Indebtedness with a maturity of 365 days or less issued or directly and
fully guaranteed or insured by Argentina or the United States or any agency or
instrumentality thereof (provided that
the full faith and credit of Argentina or the United States, as the case may
be, is pledged in support thereof or such Indebtedness constitutes a general
obligation of such country); (ii) deposits, certificates of deposit or
acceptances with a maturity of 180 days or less of, or Indebtedness with a
maturity of 365 days or less directly and fully secured by an irrevocable
standby letter of credit issued or confirmed by, (x) any financial
institution that is a member of the Federal Reserve System, and has combined
capital and surplus and undivided profits (or any similar capital concept) of
not less than U.S.$500 million or (y) Credit Suisse First Boston Corporation,
Fleet Bank, Banco Francés - BBVA, Banco Río de la Plata S.A., Banco de Galicia
y Buenos Aires S.A., Citibank, N.A. and any of the five largest banks (based on
assets as of the last December 31) organized under the laws of Argentina, provided that such bank is not under intervention,
receivership or any similar arrangement at the time of such deposit or the
acquisition of such certificate of deposit or acceptance; (iii) commercial
paper with a maturity of 180 days or less issued by a corporation (other than
an Affiliate of the Company) organized under the laws of Argentina or any part
thereof or the United States or any state thereof or the District of Columbia
and rated at least “A-1” by Standard & Poor’s Corporation or “P-1” by
Moody’s Investors Service; (iv) repurchase agreements and reverse
repurchase agreements relating to marketable direct obligations issued or
unconditionally guaranteed by the government of Argentina or the United States
government (in the case of any Argentine or United States government
obligations), in each case maturing within one year from the date of
acquisition and (v) investments in money market funds all of the assets of
which consist of securities of the type described in the foregoing
clauses (i) through (iii).

 

“Clearstream, Luxembourg” means Clearstream
Banking, société anonyme (formerly known as Cedelbank), and its successors.

 

“CNV” means the
Argentine Comisión Nacional de Valores.

 

“Co-Registrar” means Law Debenture Trust
Company of New York, until a successor Co-Registrar shall have become such
pursuant to the applicable provisions of the 10-Year Notes Indenture, and,
thereafter, “Co-Registrar” shall mean such successor Co-Registrar.

 

“Commission” means the U.S. Securities and
Exchange Commission, as from time to time constituted, created under the
Exchange Act, or, if at any time after the execution of

 

B-29

 

this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.

 

“Common Stock” means with respect to any
Person, any and all shares, interests or other participations in, and other
equivalents (however designated and whether voting or non-voting) of such
Person’s common stock or ordinary shares, whether or not outstanding at the
Issue Date or issued thereafter, and includes, without limitation, all series
and classes of such common stock or ordinary shares.

 

“Company” means the Person named as the “Company”
in the first paragraph of this instrument until a successor Person shall have
become such pursuant to the applicable provisions of the 10-Year Notes
Indenture and thereafter “Company” shall mean such successor Person.

 

“Company Request” or “Company Order”
means a written request or order signed in the name of the Company by any of
its directors or alternate directors or its chief financial officer and a
director or alternate director and delivered to the Trustee.

 

“Consolidated Income Tax Expense” means, for
any period, the provision for local, foreign and all other income taxes of the
Company and its Subsidiaries for such period as determined in accordance with
GAAP.

 

“Consolidated Interest Expense” means, for any
period, the aggregate amount of interest expense in respect of Indebtedness
(including, without limitation, amortization of original issue discount on any
indebtedness and the interest portion of any deferred payment obligation, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers’ acceptance financing and the net costs associated with
Interest Rate Protection Obligations, but excluding, for the avoidance of
doubt, any taxes or other governmental charges) and all but the principal
component of rent or other amounts in respect of Capitalized Lease Obligations
paid, accrued or scheduled to be paid or to be accrued by the Company and its
Subsidiaries during such period, but excluding, any premiums, fees and expenses
(and any amortization thereof) payable in connection with the offering of any
Step-Up Notes or other Indebtedness, all as determined on a consolidated basis
in conformity with GAAP.

 

“Consolidated Net Income” means, for any
period, the consolidated net income (or loss) of the Company and its
Subsidiaries for such period determined in accordance with GAAP, adjusted, to
the extent included in calculating such consolidated net income, by excluding,
without duplication, (i) all extraordinary gains or losses of such Person
for such period, (ii) income of the Company and its Subsidiaries derived
from or in respect of all Investments in Persons other than any of its Subsidiaries,
(iii) the portion of net income (or loss) of such Person allocable to
minority interests in unconsolidated Persons for such period, except to the
extent actually received by the Company or any of its Subsidiaries, (iv) net
income (or loss) of any other Person combined with such Person on a “pooling of
interests” basis attributable to any period prior to the date of combination, (v) any
gain or loss, net of taxes, realized by such Person upon the termination of any
employee pension benefit plan during such period, (vi) gains (but not
losses) in respect of any Asset Sales during such period and (vii) the net
income of any Subsidiary of the Company for such period to the extent that the
declaration of

 

B-30

 

dividends or similar
distributions by such Subsidiary of that income is not at the time permitted,
directly or indirectly, by operation of the terms of its constitutional
documents or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulations applicable to that Significant Subsidiary or its
stockholders.

 

“Consolidated Net Worth” means, with respect to
any Person as of any date, the total of the amounts shown on the balance sheet
of such Person and its consolidated subsidiaries, determined on a consolidated
basis in accordance with GAAP, as of the end of the most recent fiscal quarter
for which consolidated financial statements for such Person and its
consolidated subsidiaries have been prepared prior to the taking of any action
for the purpose of which the determination is being made, as (i) the par
or stated value of all outstanding Capital Stock of such Person plus (ii) paid-in
capital or capital surplus relating to such Capital Stock plus (iii) any
retained earnings or earned surplus less (iv) (A) any accumulated
deficit and (B) any amounts attributable to Disqualified Stock of such
Person not held by such Person or its Subsidiaries.

 

“Consolidated Operating Cash Flow” means, with
respect to any period, the Consolidated Net Income for such period increased by
the sum of (i) the Consolidated Income Tax Expense of the Company and its
Subsidiaries accrued according to GAAP for such period (only to the extent the
corresponding income was included in computing Consolidated Net Income for such
period and other than taxes attributable to extraordinary, unusual or
nonrecurring gains or losses); (ii) Consolidated Interest Expense of the
Company and its Subsidiaries for such period; (iii) consolidated
depreciation of the Company and its Subsidiaries for such period; (iv) consolidated
amortization of the Company and its Subsidiaries for such period, including,
without limitation, amortization of capitalized debt issuance costs for such
period; and (v) all other non-cash items of the Company and its
Subsidiaries reducing Consolidated Net Income (excluding any non-cash items to
the extent they represent an accrual of, or a reserve for, cash disbursements
for any subsequent period); and reduced by (vi) all non-cash items of the
Company and its Subsidiaries increasing Consolidated Net Income for such
period; in each case determined on a consolidated basis in accordance with
GAAP.

 

“control” (including, with correlative
meanings, the terms “controlling,” “controlled by” and “under
common control with”), as applied to any Person, means the possession by
another Person (whether directly or indirectly and whether by the ownership of
share capital, the possession of voting power, contract or otherwise) of the
power to appoint and/or remove the majority of the members of the board of
directors or other governing body of such Person or otherwise to direct or
cause the direction of the affairs and policies of such Person.

 

“Corporate Trust Office” means the office of
the Trustee located at 767 Third Avenue, 31st Floor, New York, New
York 10017.

 

“Corporation” means a sociedad
anónima, sociedad de
responsibilidad limitada, corporation, association, company or
business trust.

 

“Currency Agreement” means any foreign exchange
contract, currency swap agreement or other similar agreement or arrangement
designed to protect the Company or any Significant Subsidiary against
fluctuations in currency values.

 

B-31

 

“Default” means any event that is, or after
notice or passage of time or both would be, an Event of Default.

 

“Depositary” means, DTC, its nominees, and
their respective successors or such other depositary as may be designated with
respect thereto.

 

“Disqualified Stock” means, with respect to any
Person, any Capital Stock of such Person which, by its terms (or by the terms
of any security into which it is convertible or for which it is exchangeable),
or upon the happening of any event, matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or is exchangeable for
Indebtedness, or is redeemable at the option of the holder thereof, in whole or
in part, on or prior to the final maturity date of the Step-Up Notes.

 

“DTC” means The
Depository Trust Company and its successors.

 

“Euroclear” means Euroclear Bank S.A./N.V., as
operator of the Euroclear System, and its successors.

 

“Event of Default” means any of the events
specified in “Events of Default”.

 

“Exchange Act” means the U.S. Securities
Exchange Act of 1934, as amended.

 

“Fair Market Value” means, with respect to any
asset or property, the price that could be negotiated in an arms-length free
market transaction, for cash, between a willing seller and a willing buyer,
neither of whom is under pressure or compulsion to complete the
transaction.  Unless otherwise specified
in the 10-Year Notes Indenture, Fair Market Value shall be determined by the
chief financial officer of the Company and shall be evidenced by an Officers’
Certificate delivered to the Trustee at its request.

 

“GAAP” means generally accepted accounting
principles in effect in Argentina as of the date of determination.

 

“Global Note” means a Step-Up Note in
definitive global form that is deposited with DTC or another Depositary, or a
nominee thereof, for credit to the respective accounts of the beneficial owners
of the Step-Up Notes represented thereby.

 

“Governmental Agency” means any public legal
entity or public agency of Argentina or the United States, whether created by
any competent authority, federal, state or local government, or any other legal
entity now existing or hereafter created, or now or hereafter owned or
controlled, directly or indirectly, by any public legal entity or public agency
of Argentina or the United States.

 

“Guarantee” means any obligation, contingent or
otherwise, of any Person directly or indirectly guaranteeing any Indebtedness
or other obligation of any other Person and, without limiting the generality of
the foregoing, any obligation, direct or indirect, contingent or otherwise, of
such Person (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation of such other
Person (whether arising by virtue of partnership arrangements, or by agreements
to keep-well, to purchase assets, goods,

 

B-32

 

securities or services,
to take-or-pay, or to maintain financial statement conditions or otherwise) or (ii) entered
into for purposes of assuring in any other manner the obligee of such
Indebtedness or other obligation of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part); provided that the term “Guarantee” shall not include
endorsements for collection or deposit in the ordinary course of business.  The term “Guarantee” used as a verb
has a corresponding meaning.

 

“Guarantor” means
any Person obligated under a Guarantee.

 

“Holder”, “Holder of Step-Up Notes” or
other similar terms means a Person in whose name a Step-Up Notes is registered
in the Step-Up Note Register.

 

“Incur” means, with respect to any
Indebtedness, to incur, create, issue, assume, Guarantee or otherwise,
contingently or otherwise, become liable, directly or indirectly, for or with
respect to, or become responsible for, the payment of such Indebtedness,
including an Incurrence of Acquired Indebtedness by reason of the acquisition
of more than 50% of the Capital Stock of any Person; provided
that neither the accrual of interest nor the accretion of original issue
discount shall be considered an Incurrence of Indebtedness.  The term “Incurrence” used as a noun has a
corresponding meaning.

 

“Indebtedness” means, with respect to any
Person at any date of determination (without duplication), (i) any
liability, contingent or otherwise, of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all obligations of such Person in respect of
letters of credit or other similar instruments (including reimbursement
obligations with respect thereto), (iv) all obligations of such Person to
pay the deferred and unpaid purchase price of property or services, including
purchase money obligations, which purchase price is due more than 180 days
after the date of placing such property in service or taking delivery and title
thereto or the completion of such services, except Trade Payables, (v) all
obligations of such Person as lessee under Capitalized Leases, (vi) all
Indebtedness of other Persons secured by a Lien on any asset of such Person,
whether or not such Indebtedness is assumed by or is otherwise the legal
liability of such Person; provided that
the amount of such Indebtedness shall be the lesser of (A) the Fair Market
Value of such asset at such date of determination and (B) the amount of
such Indebtedness, (vii) all Indebtedness of other Persons Guaranteed by
such Person or which is otherwise the legal liability of such Person, to the
extent such Indebtedness is Guaranteed by or is otherwise the legal liability
of such Person, (viii) to the extent not otherwise included in this
definition, obligations under Currency Agreements and Interest Rate Protection
Obligations, (ix) any and all deferrals, renewals, extensions and
refundings of, or amendments of or supplements to, any liability or obligation
of the kind described in this definition, and (x) Disqualified Stock.  The amount of Indebtedness of any Person at
any date shall be the outstanding balance at such date of all unconditional
obligations as described above and, with respect to contingent obligations, the
maximum liability upon the occurrence of the contingency giving rise to the
obligation, provided that the amount outstanding at
any time of any Indebtedness issued with original issue discount is the face
amount of such Indebtedness less the remaining unamortized portion of the
original issue discount of such Indebtedness at such time as determined in
conformity with GAAP.

 

B-33

 

“Independent Financial Advisor” means an
investment banking firm of international standing (i) which does not, and
whose shareholders, members, directors, officers or Affiliates do not, have a
material direct or indirect financial interest in the Company or one or more
Significant Subsidiaries, and (ii) which is otherwise independent and
qualified to perform the task for which it is to be engaged.

 

“Interest Payment Date” means in the case of the first interest payment [the date
these Notes are delivered or made available to holders pursuant to the Company’s
APE], in the case of the second interest
payment, [the date that is six months after the Company accepts
Eligible Notes upon expiration of the Election Offers, if the Company
consummates the transactions contemplated in the APE before such date] and for each interest payment thereafter, [             ]
and [             ]
of each year, commencing on [  ],
[2005].

 

“Interest Rate Protection Obligations” means
the obligations of any Person pursuant to any arrangement with any other Person
whereby, directly or indirectly, such Person is entitled to receive from time
to time periodic payments calculated by applying either a floating or a fixed
rate of interest on a stated notional amount and shall include, without
limitation, interest rate swaps, caps, floors, collars, forward interest rate
agreements and similar agreements.

 

“Investment” means, with respect to any Person,
any direct or indirect advance, loan, account receivable (other than an account
receivable arising in the ordinary course of business), or other extension of
credit (including, without limitation, by means of any Guarantee or similar
arrangement) or any capital contribution to (by means of transfers of property
to others, payments for property or services for the account or use of others,
or otherwise), or any purchase or ownership of any stocks, bonds, notes,
debentures or other securities of, any other Person (excluding Subsidiaries but
not any Person that becomes a Subsidiary after giving effect to the Investment).  Notwithstanding the foregoing, in no event
shall any issuance of Capital Stock (other than Disqualified Stock) of the
Company in exchange for Capital Stock, property or assets of another Person
constitute an Investment by the Company in such other Person.

 

“Issue Date” means the original date of
issuance and purchase of the Step-Up Notes as specified in or pursuant to the
relevant Board Resolution, Officers’ Certificate, or indenture supplemental
hereto with respect thereto.

 

“Lien” means any mortgage, charge, pledge,
security interest, encumbrance, lien (statutory or other), hypothecation,
assignment for security, claim, or preference or priority or other encumbrance
of any kind upon or with respect to any property (including, without
limitation, any conditional sale or other title retention agreement or lease in
the nature thereof, any sale with recourse against the seller or any Affiliate
of the seller, or any agreement to give any security interest).

 

“Material Adverse Effect” means any material
adverse effect whatsoever on the property, financial condition, business or
operations of the Company and its Subsidiaries, taken as a whole.

 

“Maturity”, when used with respect to any
Step-Up Note, means the date on which the principal of such Step-Up Note becomes
due and payable as therein or herein

 

B-34

 

provided, whether at the
Stated Maturity or by declaration of acceleration, call for redemption or
otherwise, as specified in or pursuant to the relevant Board Resolution,
Officers’ Certificate or the indenture supplemental hereto with respect
thereto.

 

“Negotiable
Obligations Law” means Argentine Law No. 23,576, as amended.

 

“Officer” means the chairman of the Board of
Directors, the chief executive officer, the chief financial officer, the
treasurer, the controller or any member of the Board of Directors of the
Company.

 

“Officers’ Certificate” means a certificate
signed by any two of the chief executive officer, chief operating officer and
chief financial officer of the Company.

 

“Opinion of Counsel” means a written opinion
from legal counsel who is reasonably acceptable to the Trustee, which may
include an individual employed as counsel to the Company or the Trustee.

 

“Outstanding” means, as of the date of determination,
all Step-Up Notes theretofore authenticated and delivered under the 10-Year
Notes Indenture, except:

 

(i)            Step-Up
Notes theretofore canceled by the Trustee or delivered to the Trustee for
cancellation;

 

(ii)           Step-Up
Notes, or portions thereof, for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any Paying
Agent (other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the Holders
of such Step-Up Notes; provided that,
if such Step-Up Notes are to be redeemed, notice of such redemption has been
duly given pursuant to the 10-Year Notes Indenture or provision therefor
satisfactory to the Trustee has been made;

 

(iii)          Step-Up
Notes which have been duly defeased or as to which the Company has effected
covenant defeasance pursuant to “Discharge and Defeasance” herein; and

 

(iv)          Step-Up
Notes which have been paid pursuant to the 10-Year Notes Indenture or in
exchange for or in lieu of which other Step-Up Notes have been authenticated
and delivered pursuant to the 10-Year Notes Indenture, other than any such
Step-Up Notes in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Step-Up Notes are held by a bona fide purchaser in whose hands such Step-Up Notes are
valid obligations of the Company; provided, however,
that in determining whether the Holders of the requisite principal amount of
the Outstanding Step-Up Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Step-Up Notes owned by the
Company or any other obligor upon such Step-Up Notes or any Subsidiary or
Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Step-Up Notes which a Responsible
Officer of the Trustee actually knows to be so owned shall be so
disregarded.  Step-Up Notes so owned
which have been pledged in good faith may be regarded as Outstanding if

 

B-35

 

the pledgee establishes
to the satisfaction of the Trustee the pledgee’s right so to act with respect
to such Step-Up Notes and that the pledgee is not the Company or any other
obligor upon such Step-Up Notes or any Subsidiary or Affiliate of the Company
or of such other obligor.

 

“pari passu”
means, as applied to the ranking of any Indebtedness of a Person in relation to
other Indebtedness of such Person, that each such Indebtedness either (i) is
not subordinate in right of payments to any Indebtedness or (ii) is
subordinate in right of payment to the same Indebtedness as is the other, and
so subordinate to the same extent, and is not subordinate in right of payment
to each other or to any Indebtedness as to which the other is not so
subordinate.

 

“Participant” means, with respect to DTC,
Euroclear or Clearstream, Luxembourg, Persons who have accounts with DTC,
Euroclear or Clearstream, Luxembourg, respectively (and, with respect to DTC,
shall include Euroclear and Clearstream, Luxembourg).

 

“Paying Agent” means initially the Persons
named as Paying Agent in the first paragraph of the 10-Year Notes Indenture,
any successor thereof, and any Person authorized by the Company to pay the
principal of or interest on any Step-Up Notes on behalf of the Company,
including the Principal Paying Agent.

 

“Permitted Indebtedness” means the following
indebtedness (each of which shall be given independent effect) of the Company:

 

(a)  Indebtedness under the Step-Up Notes and the
10-Year Notes Indenture with respect to such Step-Up Notes;

 

(b)  Indebtedness of
the Company outstanding on the Issue Date;

 

(c)  Indebtedness of the Company owed to and held
by any Subsidiary of the Company; provided that
an Incurrence of Indebtedness shall be deemed to have occurred upon
(x) any sale or other disposition of any Indebtedness of the Company
referred to in this clause (c) to a Person other than the Company or
a Subsidiary of the Company, or (y) any sale or other disposition of
Capital Stock of a Subsidiary of the Company which holds Indebtedness of the
Company to any person other than the Company or another Subsidiary;

 

(d)  Interest Rate Protection Obligations of the
Company to the extent relating to Indebtedness of the Company, as the case may
be (which Indebtedness (x) bears interest at fluctuating interest rates
and (y) is otherwise permitted to be incurred under the “Limitation on
Indebtedness” covenant);

 

(e)  Indebtedness of the Company under Currency
Agreements to the extent relating to (i) Indebtedness of the Company
and/or (ii) obligations to purchase assets, properties or services
incurred in the ordinary course of business of the Company; provided that such Currency Agreements do not increase the
Indebtedness or other obligations of the Company and its Significant
Subsidiaries outstanding other than as a result of fluctuations in foreign
currency exchange rates or by reason of fees, indemnities or compensation
payable thereunder;

 

B-36

 

(f)  Indebtedness of the Company in respect of
performance bonds of or surety or performance bonds provided by the Company
incurred in the ordinary course of business in connection with the construction
or operation of a Cable/Telecommunications Business; or

 

(g)  Indebtedness of the Company to the extent it
represents a replacement, renewal, refinancing, or extension of outstanding
Indebtedness of the Company incurred or outstanding pursuant to clause (a) or
(b) or this clause (g) of this definition or the proviso to the
first sentence of the “Limitation on Indebtedness” covenant; provided that (A) Indebtedness of the Company may not
be replaced, renewed, refinanced or extended under this clause (g) with
Indebtedness of any Subsidiary of the Company, (B) any such replacement,
renewal, refinancing or extension (x) shall not result in such Indebtedness
having a shorter Average Life as compared with the Indebtedness being replaced,
renewed, refinanced or extended and (y) shall not exceed the sum of the
principal amount (or, if such Indebtedness provides for a lesser amount to be
due and payable upon a declaration or acceleration thereof, an amount no
greater than such lesser amount) of the Indebtedness being replaced, renewed,
refinanced or extended plus the amount of accrued interest thereon and the
amount of any reasonably determined prepayment premium necessary to accomplish
such replacement, renewal, refinancing or extension and such reasonable fees
and expenses incurred in connection therewith, and (C) in the case of any
Indebtedness replacing, renewing, refinancing, or extending Indebtedness which
is pari passu to the Step-Up Notes, any
such replacing, renewing, refinancing or extending Indebtedness is made pari passu to the Step-Up Notes or subordinated to the
Step-Up Notes, and, in the case of any Indebtedness replacing, renewing,
refinancing, or extending Subordinated Indebtedness, any such replacing,
renewing, refinancing or extending Indebtedness is subordinated to the Step-Up
Notes to the same extent as the Indebtedness being replaced, renewed,
refinanced or extended.

 

“Permitted Lien” means (i) Liens on the 10-Year
Notes Reserve Account and on the reserve account established on or about the
date hereof for the benefit of the holders of 7-Year Notes; (ii) Liens
existing on the Issue Date; (iii) Liens (including extensions and renewals
thereof) upon real or personal property acquired after the Issue Date; provided that (a) such Lien is
created solely for the purpose of securing Indebtedness Incurred in accordance
with the “Limitation on Indebtedness” covenant, (1) to finance the cost
(including the cost of design, development, construction, improvement,
installation or integration) of the item of property or assets subject thereto
and such Lien is created prior to, at the time of or within six months after
the later of the acquisition, the completion of construction or the
commencement of full operation of such property or (2) to refinance any
Indebtedness previously so secured, (b) the principal amount of the
Indebtedness secured by such Lien does not exceed 100% of such cost and (c) any
such Lien shall not extend to or cover any property or assets other than such
item of property or assets and any improvements on such item; (iv) any
interest or title of a lessor in the property subject to any Capitalized Lease
or operating lease; (v) Liens on property of, or on shares of stock or
Indebtedness of, any Person existing at the time such Person becomes a
Subsidiary of the Company, or is merged into or consolidated with the Company
or any Subsidiary of the Company; provided that
such Liens were not granted in contemplation of such acquisition, merger or
consolidation and do not extend to or cover any property or assets of the
Company or any Subsidiary of the Company other than the property or assets
acquired; (vi) Liens in favor of the Company or any Subsidiary of the
Company; (vii) Liens securing reimbursement obligations with respect to
letters of credit that encumber documents and other property relating to such
letters of credit and the products and proceeds thereof; (viii) Liens

 

B-37

 

securing Indebtedness of
the Company permitted pursuant to clause (g) of the definition of “Permitted
Indebtedness” or clause (c) of the definition of “Permitted Subsidiary
Indebtedness”, provided that any
such Indebtedness being refinanced was previously secured by a Permitted Lien
and any such Lien shall not extend to or cover any property or assets other
than those encumbered by the Lien securing the Indebtedness being refinanced;
and (ix) Liens incurred in the ordinary course of business securing
Indebtedness under Interest Rate Protection Obligations and Currency
Agreements.

 

“Permitted Subsidiary Indebtedness” means the
following Indebtedness (each of which shall be given independent effect) of a
Subsidiary of the Company:

 

(a)           Indebtedness
of any Subsidiary of the Company outstanding on the Issue Date;

 

(b)           Indebtedness
of any Subsidiary of the Company owed to and held by the Company or a
Subsidiary of the Company; provided
that an Incurrence of Indebtedness shall be deemed to have occurred upon (x)
any sale or other disposition of any Indebtedness of a Subsidiary of the
Company referred to in this clause (b) to a Person other than the Company
or a Subsidiary of the Company, or (y) any sale or other disposition of Capital
Stock of a Subsidiary of the Company which holds Indebtedness of another
Subsidiary of the Company except to the extent permitted under clause (v) of
the “Limitation on the Issuance and Sale of Capital Stock of Significant
Subsidiaries” covenant herein; and

 

(c)           Indebtedness
of any Subsidiary of the Company to the extent it represents a replacement,
renewal, refinancing, or extension of outstanding Indebtedness of such
Subsidiary incurred or outstanding pursuant to clause (a) or this clause (c) of
this definition; provided that (A) any
such replacement, renewal, refinancing or extension (x) shall not result in
such Indebtedness having a shorter Average Life as compared with the
Indebtedness being replaced, renewed, refinanced or extended and (y) shall not
exceed the sum of the principal amount (or, if such Indebtedness provides for a
lesser amount to be due and payable upon a declaration or acceleration thereof,
an amount no greater than such lesser amount) of the Indebtedness being
replaced, renewed, refinanced or extended plus the amount of accrued interest
thereon and the amount of any reasonably determined prepayment premium
necessary to accomplish such replacement, renewal, refinancing or extension and
such reasonable fees and expenses incurred in connection therewith.

 

“Person” means any individual, Corporation,
partnership, joint venture, trust, unincorporated organization or government or
any agency or political subdivision thereof.

 

“Predecessor Step-Up Note” of any particular
Step-Up Note means every previous Step-Up Note evidencing all or a portion of
the same debt as that evidenced by such particular Step-Up Note; and, for the
purposes of this definition, any Step-Up Note authenticated and delivered under
the 10-Year Notes Indenture in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Step-Up Note shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Step-Up Note.

 

B-38

 

“Redemption Date” means the fixed date, on
which a Step-Up Note is to be redeemed, in whole or in part, by the Company
pursuant to the terms of the Step-Up Note.

 

“Registered Step-Up Notes” means any Step-Up
Note registered in the Step-Up Note Register.

 

“Registrar” means HSBC Bank Argentina S.A.,
until a successor Registrar shall have become such pursuant to the applicable
provisions of the 10-Year Notes Indenture, and, thereafter “Registrar”
shall mean such successor Registrar.

 

“Regular Record Date”
means the close of business in New York on the fifteenth
(15th) day (whether or not a Business Day)
immediately preceding each Interest Payment Date.

 

“Responsible Officer” shall mean, when used
with respect to the Trustee, any officer of the Trustee who shall have direct
responsibility for the administration of this 10-Year Notes Indenture, or to
whom any corporate trust matter is referred because of such person’s knowledge
of and familiarity with the particular subject.

 

“Securities Act”
means the U.S. Securities Act of 1933, as amended.

 

“Significant Subsidiary” means, at any date of
determination, any Subsidiary of the Company that, together with its
Subsidiaries, (i) for the most recent fiscal year of the Company,
accounted for more than 10% of the consolidated revenues of the Company and its
Subsidiaries or (ii) as of the end of such fiscal year, was the owner of
more than 10% of the consolidated assets of the Company and its Subsidiaries,
all as set forth on the most recently available consolidated financial
statements of the Company for such fiscal year.

 

“Stated Maturity” means (i) with respect
to any security, the date specified in such security as the fixed date on which
the final installment of principal of such security is due and payable and (ii) with
respect to any scheduled installment of principal of or interest on any
security, the date specified in such security as the fixed date on which such
installment is due and payable.

 

“Step-Up Note Register” means the books for the
exchange, registration and registration of transfer of Registered Step-Up
Notes.

 

“Subordinated Indebtedness” means any
Indebtedness of the Company which is expressly subordinated in right of payment
to the Step-Up Notes, including premium and accrued and unpaid interest.

 

“Subsidiary” means, with respect to any Person,
any Corporation, association or other business entity (i) of which
outstanding Capital Stock having at least a majority of the votes entitled to
be cast in the election of directors is owned, directly or indirectly, by such
Person and one or more other Subsidiaries of such Person, or (ii) of which
at least a majority of voting interest is owned, directly or indirectly, by
such Person and one or more other Subsidiaries of such Person.

 

B-39

 

“Total Consolidated Indebtedness” means, at the
time of determination, an amount equal to the aggregate amount of all
Indebtedness of the Company and its Subsidiaries outstanding (without
duplication) as of the date of determination.

 

“Trade Payables” means, with respect to any
Person, any accounts payable or any other Indebtedness or monetary obligation
to trade creditors created, assumed or Guaranteed by such Person or any of its
Subsidiaries arising in the ordinary course of business in connection with the acquisition
of goods or services.

 

“Transaction Date” means, with respect to the
Incurrence of any Indebtedness by the Company or any of its Subsidiaries, the
date such Indebtedness is to be Incurred.

 

“Transfer Agent” means any Person authorized by
the Company to effectuate the exchange or transfer of any Step-Up Note on
behalf of the Company hereunder.

 

“Trust Indenture Act” or “TIA” means the
U.S. Trust Indenture Act of 1939 as in force at the date as of which the 10-Year
Notes Indenture was executed; provided, however,
that in the event the U.S. Trust Indenture Act of 1939 is amended after such
date, “Trust Indenture Act” or “TIA” means, to the extent
required by any such amendment, the U.S. Trust Indenture Act of 1939 as so
amended.

 

“Trustee” means Law Debenture Trust Company of
New York, until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and, thereafter “Trustee” shall
mean such successor Trustee.

 

“U.S. Dollars”, “United States Dollars”,
“U.S.$” and the symbol “$” each mean dollars of the United
States.

 

“U.S. Government Obligations” means securities
that are (x) direct obligations of the United States for the payment of
which its full faith and credit is pledged or (y) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States the payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any such U.S.
Government Obligation held by such custodian for the account of the holder of
such depositary receipt, provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depositary receipt from
any amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal of or interest on the U.S.
Government Obligation evidenced by such depositary receipt.

 

“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 Board of Directors members, managing directors, managers or
other voting members of the governing body of such Person.

 

“Wholly-Owned” is defined to mean, with respect
to any Subsidiary of any Person, such Subsidiary if all the outstanding Capital
Stock in such Subsidiary (other than any

 

B-40

 

directors’ qualifying
shares or shares held by a Person, to the extent mandated by applicable law) is
owned by such Person, or one or more Wholly-Owned Subsidiaries of such Person.

 

Terms used herein and not defined herein shall have
the meanings assigned to them in the 10-Year Notes Indenture.

 

B-41

 

SCHEDULE A

SCHEDULE OF PRINCIPAL AMOUNT

 

The initial principal
amount at maturity of this Global Note shall be
U.S.$[            ].
The following increases or decreases in the principal amount at maturity
of this Global Note have been made:

 

	
  Date of

  Exchange

  	
   

  	
  Amount of

  decrease in

  Principal

  Amount at

  Maturity of this

  Global Note

  	
   

  	
  Amount of

  increase in

  Principal

  Amount at

  Maturity of this

  Global Note

  	
   

  	
  Principal

  Amount of this

  Global Note

  following such

  decrease or

  increase

  	
   

  	
  Signature of

  authorized

  officer of

  Trustee

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

B-42

 

Trustee’s Certificate of Authentication

 

This is one of the Step-Up Notes referred to in the
within-mentioned First Supplemental Indenture.

 

Dated:

 

	
   

  	
   

  	
  LAW DEBENTURE TRUST
  COMPANY

  
	
   

  	
   

  	
   

  	
  OF NEW YORK,

  
	
   

  	
   

  	
   

  	
  as Trustee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Authorized Signatory)

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

B-43Exhibit 4.3

 

MULTICANAL S.A.,

the Company,

 

LAW DEBENTURE TRUST COMPANY OF NEW YORK,

Trustee, Co-Registrar,

Principal Paying Agent and Bank,

 

and

 

HSBC Bank Argentina S.A.,

Registrar and Paying Agent

 

 

SECOND SUPPLEMENTAL INDENTURE

Dated as of

 

to INDENTURE

Dated as of

 

Relating to

 

7-Year Fixed Rate Notes due [2012] and

7-Year Floating Rate Notes

 

 

 

TABLE OF CONTENTS

 

	
  ARTICLE ONE

  	
   

  
	
   

  	
   

  
	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.1

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.2

  	
  Certain
  Conventions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE TWO

  	
   

  
	
   

  	
   

  
	
  7-YEAR NOTE FORMS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.1

  	
  Form of
  7-Year Notes

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.2

  	
  Denominations

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE THREE

  	
   

  
	
   

  	
   

  
	
  THE 7-YEAR NOTESR

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.1

  	
  Maximum
  Aggregate Principal Amount (if any), Title and Terms

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.2

  	
  Global
  Notes in Registered Form

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.3

  	
  Exchanges

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.4

  	
  Further
  Issues of 7-Year Notes

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.5

  	
  Waiver
  and Release

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE FOUR

  	
   

  
	
   

  	
   

  
	
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.1

  	
  Payment
  of Principal, Premium, if any, and Interest

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.2

  	
  Reserve
  Accounts

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.3

  	
  Cash
  Sweep

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.4

  	
  Limitation
  on Capital Expenditures

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.5

  	
  Limitation
  on Interest Expense

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.6

  	
  Limitation
  on Repurchase of 7-Year Notes and 10-Year Notes

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.7

  	
  Maximum
  Total Consolidated Indebtedness

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.8

  	
  Limitation
  on Transactions with Shareholders and Affiliates

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.9

  	
  Limitation
  on Restricted Payments

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.10

  	
  Limitation
  on Asset Sales

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.11

  	
  Consolidation,
  Merger and Sale of Assets

  	
   

  

 

 

	
  ARTICLE FIVE

  	
   

  
	
   

  	
   

  
	
  7-YEAR NOTES
  RESERVE ACCOUNT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.1

  	
  Grant
  of Security Interest

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.2

  	
  Terms
  of 7-Year Notes Reserve Account

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.3

  	
  Release
  of Monies from 7-Year Notes Reserve Account

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.4

  	
  Representation,
  Warranties and Covenants Specific to 7-Year Notes Reserve Account

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE SIX

  	
   

  
	
   

  	
   

  
	
  EXCHANGE
  OF 7-YEAR FLOATING RATE NOTES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.1

  	
  Exchange
  Right

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.2

  	
  Exchange
  Procedures

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE SEVEN

  	
   

  
	
   

  	
   

  
	
  OTHER AMENDMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.1

  	
  Events
  of Default Defined; Acceleration of Maturity

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.2

  	
  Acceleration
  of Maturity; Rescission and Annulment

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.3

  	
  Limitation
  of Suits by Holders

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.4

  	
  Undertaking
  for Costs

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.5

  	
  Certain
  Rights of the Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.6

  	
  Supplemental
  Indentures with Vote of Holders

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.7

  	
  Meetings
  of Holders; Modification and Waiver

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE EIGHT

  	
   

  
	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.1

  	
  Supplemental
  Indenture

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.2

  	
  Responsibility
  of the Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.3

  	
  Compensation
  and Indemnification of Trustee and Its Prior Claim

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.4

  	
  Governing
  Law

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.5

  	
  Separability

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.6

  	
  Counterparts

  	
   

  

 

ii

 

	
  EXHIBITS

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A Form of Unrestricted
  Global Note (7-Year Fixed Rate Notes)

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit B Form of Restricted
  Global Note (7-Year Fixed Rate Notes)

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit C Form of Unrestricted
  Global Note (7-Year Floating Rate Notes)

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit D Form of Restricted
  Global Note (7-Year Floating Rate Notes)

  	
   

  

 

iii

 

THIS SECOND SUPPLEMENTAL INDENTURE, dated as of                        (this “Second
Supplemental Indenture”), is among Multicanal S.A., a sociedad
anónima organized, existing and incorporated in the City of Buenos
Aires, Republic of Argentina (“Argentina”) under the laws of Argentina
on July 26, 1991, with a term of duration expiring on July 27, 2090,
and registered with the Public Registry of Commerce on July 26, 1991,
under number 5225, Book 109 of Volume “A” of corporations, having its principal
executive offices at Avalos 2057, (C1431DPM) Buenos Aires, Argentina (the “Company”),
Law Debenture Trust Company of New York, a New York banking corporation, as
Trustee for the benefit of the Holders (the “Trustee”), Co-Registrar
(the “Co-Registrar”) and Principal Paying Agent (the “Principal Paying
Agent”) and in its individual capacity for the purposes of Article Five
hereto (the “Bank”), and HSBC Bank Argentina S.A., a sociedad anónima duly organized and existing under the laws
of Argentina, as Registrar (the “Registrar”) and Paying Agent (the “Paying
Agent”), under the Indenture, dated as of                        , among the Company,
the Trustee, the Co-Registrar, the Principal Paying Agent, the Registrar and
the Paying Agent (the “Indenture,” as supplemented and amended by this
Second Supplemental Indenture, the “7-Year Notes Indenture”).  All terms not defined herein shall have the
meanings assigned to them in the Indenture.

 

WHEREAS, the Company executed and delivered the
Indenture to the Trustee to provide for the issuance of the Company’s Debt
Securities to be issued from time to time in one or more series as might be
determined by the Company under the Indenture, up to U.S.$300,000,000 aggregate
principal amount, or its equivalent in another currency or composite currency,
of Debt Securities that constituted Public Debt Securities and without
limitation on the aggregate principal amount of Debt Securities that constitute
Private Notes, which may be authenticated and delivered as provided in the
Indenture;

 

WHEREAS, Section 3.1 of the
Indenture provides for the issuance from time to time of Debt Securities of the
Company, issuable for the purpose and subject to the limitations contained in
the Indenture.  The Company has duly
authorized the creation of two series of Debt Securities, consisting of (i) up
to U.S.$                 aggregate
principal amount of Public Debt Securities known as its 7-Year Fixed Rate Notes
due [2012] (the “7-Year Fixed Rate Notes”) and (ii) an unlimited
aggregate principal amount of Private Notes known as its 7-Year Floating Rate
Notes (the “7-Year Floating Rate Notes” and, together with the 7-Year
Fixed Rate Notes, the “7-Year Notes”). 
The 7-Year Notes shall be issued at
100% of their principal amount, the form and substance of each such issue of
the 7-Year Notes and the terms, provisions and conditions thereof to be set
forth as provided in the 7-Year Notes Indenture;

 

WHEREAS, the Company has requested that the Trustee
execute and deliver this Second Supplemental Indenture; all requirements
necessary to make this Second Supplemental Indenture a valid instrument in
accordance with its terms, and to make the 7-Year Notes, when executed by the
Company and authenticated and delivered by the Trustee, the valid obligations
of the Company, have been performed; and the execution and delivery of this
Second Supplemental Indenture has been duly authorized in all respects;

 

NOW THEREFORE, WITNESSETH that, for and in
consideration of the premises and the purchase and acceptance of the 7-Year
Notes by the Holders thereof, and for

 

 

the purpose of setting
forth, as provided in the 7-Year Notes Indenture, the form and substance of the
7-Year Notes and the terms, provisions and conditions thereof, it is mutually
covenanted and agreed, for the benefit of all Holders from time to time of the 7-Year
Notes, as follows:

 

ARTICLE ONE

DEFINITIONS

 

SECTION 1.1  Definitions.  For all purposes of this Second
Supplemental Indenture, except as otherwise expressly
provided or unless the context otherwise requires:

 

“7-Year Fixed Rate
Notes” has the meaning set forth in the second recital of this Second
Supplemental Indenture.

 

“7-Year Floating Rate
Notes” has the meaning set forth in the second recital of this Second
Supplemental Indenture.

 

“7-Year Notes” has
the meaning set forth in the second recital of this Second Supplemental
Indenture.

 

“7-Year Note Register”
means the books for the exchange, registration and registration of transfer of
Registered 7-Year Fixed Rate Notes.

 

“7-Year Notes Reserve
Account” has the meaning set forth in Section 5.1.

 

“10-Year Notes
Indenture” means the Indenture, as supplemented and amended by the First
Supplemental Indenture, dated as of                         , among the Company, Law
Debenture Trust Company of New York, as the Trustee,
Co-Registrar and Principal Paying Agent thereunder, and HSBC Bank Argentina
S.A., as Registrar and Paying Agent thereunder.

 

“10-Year Notes”
means the series of Debt Securities constituting the Step-Up 10-Year Notes
issued (or to be issued) pursuant to the 10-Year Notes Indenture.

 

“10-Year Notes Reserve
Account” has the meaning set forth in Section 4.2.

 

“APE” means an acuerdo preventivo
extrajudicial, or Argentine
pre-packaged reorganization plan.

 

“Asset Sale Proceeds
Reinvestment” means any Capital Expenditure made with the proceeds of any
Asset Sale within 180 days of such Asset Sale.

 

“Bank” has the
meaning set forth in the first paragraph of this Second Supplemental Indenture.

 

“Capital Expenditure” means with respect to any
Person for any period the sum of all Investments and, without duplication,
expenditures made directly or indirectly for equipment, fixed assets, real
property or improvement thereto or substitutions thereof that have been or
should be reflected as additions to property, plant or equipment on a consolidated balance sheet in accordance with GAAP.

 

2

 

“Consolidated Interest Expense” means, for any
period, the aggregate amount of interest expense in respect of Indebtedness
(including, without limitation, amortization of original issue discount on any
indebtedness and the interest portion of any deferred payment obligation, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers’ acceptance financing and the net costs associated with
Interest Rate Protection Obligations, but excluding, for the avoidance of
doubt, any taxes or other governmental charges) and all but the principal
component of rent or other amounts in respect of Capitalized Lease Obligations
paid, accrued or scheduled to be paid or to be accrued by the Company and its
Subsidiaries during such period, but excluding, any premiums, fees and expenses
(and any amortization thereof) payable in connection with the offering of any 7-Year
Notes or other Indebtedness, all as determined on a consolidated basis in
conformity with GAAP.

 

“Excess Cash”
means an amount equal to (x) in the case of the First Annual Transfer Date, the
sum of the Company’s consolidated cash and cash equivalents as of March 31st
of each calendar year (net of any balance held in the Reserve Accounts as of
such date) and in the case of the Second Annual Transfer Date, the sum of the
Company’s consolidated cash and cash equivalents as of September 30th of
such calendar year (net of any balance held in the Reserve Accounts as of such
date), in each case assuming the conversion into U.S. Dollars of cash and cash
equivalents that are not denominated in U.S. Dollars using the prevailing
exchange rate on the Buenos Aires business day immediately preceding such
Transfer Date.

 

“Exchange Agent”
means any Person authorized by the Company to accept the presentation of 7-Year
Floating Rate Notes by Holders thereof for exchange into 7-Year Fixed Rate
Notes.

 

“Exchange Date”
has the meaning set forth in Section 6.2(a).

 

“First Annual Transfer
Date” has the meaning set forth in Section 4.2.

 

“Global Notes” has
the meaning set forth in Section 3.2(b).

 

“Interest Payment Date”
means (i) in the case of the 7-Year Fixed Rate Notes, in the case of the
first interest payment [the date these Notes are delivered or made available to holders pursuant to the Company’s APE], in the case of
the second interest payment, [the date that is six months after the Company accepts
Eligible Notes upon expiration of the Election Offers, if the Company
consummates the transactions contemplated in the APE before such date] and for each interest payment thereafter, [             ]
and [             ]
of each year, commencing on and (ii) in
the case of the 7-Year Floating Rate Notes, each of the dates on which interest
is due on the 7-Year Floating Rate Notes as specified in “Interest” in Exhibit C
or Exhibit D hereto.

 

“Investment” means, with respect to any Person,
any direct or indirect advance, loan, account receivable (other than an account
receivable arising in the ordinary course of business), or other extension of
credit (including, without limitation, by means of any Guarantee or similar
arrangement) or any capital contribution to (by means of transfers of property
to others, payments for property or services for the account or use of others,
or otherwise), or any purchase or ownership of any stocks, bonds, notes,
debentures or other securities of, any other Person (excluding Subsidiaries but
not any Person that becomes a Subsidiary after giving effect

 

3

 

to the Investment).  Notwithstanding the foregoing, in no event
shall any issuance of Capital Stock (other than Disqualified Stock) of the
Company in exchange for Capital Stock, property or assets of another Person
constitute an Investment by the Company in such other Person.

 

“Issue Date” means
the date of original issuance of the 7-Year Fixed Rate Notes or the 7-Year
Floating Rate Notes, as the case may be.

 

“Macroeconomic Disruption Event” means for any
fiscal quarter a depreciation in the average Peso-U.S. dollar exchange rate (as
determined by reference to the rate for the purchase of U.S. dollars with
Argentine Pesos quoted by Reuters page ARSIB=offer prices as of 3:00 p.m.
Buenos Aires time for each day of such fiscal quarter) of 20% or more compared
to such average exchange rate for the prior fiscal quarter.

 

“Other Additional
Amounts” means those certain additional amounts that may be paid to Holders
of 7-Year Floating Rate Notes as specified in “Other Additional Amounts” in Exhibit C
or Exhibit D, hereto.

 

“Permitted Lien” means (i) Liens on the 7-Year
Notes Reserve Account for the benefit of the holders of 7-Year Notes and on the
reserve account established on or about the date hereof for the benefit of the
holders of the 10-Year Notes; (ii) Liens existing on the Issue Date; (iii) Liens
(including extensions and renewals thereof) upon real or personal property
acquired after the Issue Date; provided
that (a) such Lien is created solely for the purpose of securing
Indebtedness Incurred in accordance with the Section 4.7 of the Indenture,
(1) to finance the cost (including the cost of design, development,
construction, improvement, installation or integration) of the item of property
or assets subject thereto and such Lien is created prior to, at the time of or
within six months after the later of the acquisition, the completion of
construction or the commencement of full operation of such property or (2) to
refinance any Indebtedness previously so secured, (b) the principal amount
of the Indebtedness secured by such Lien does not exceed 100% of such cost and (c) any
such Lien shall not extend to or cover any property or assets other than such
item of property or assets and any improvements on such item; (iv) any
interest or title of a lessor in the property subject to any Capitalized Lease
or operating lease; (v) Liens on property of, or on shares of stock or
Indebtedness of, any Person existing at the time such Person becomes a Subsidiary
of the Company, or is merged into or consolidated with the Company or any
Subsidiary of the Company; provided
that such Liens were not granted in contemplation of such acquisition, merger
or consolidation and do not extend to or cover any property or assets of the
Company or any Subsidiary of the Company other than the property or assets
acquired; (vi) Liens in favor of the Company or any Subsidiary of the
Company; (vii) Liens securing reimbursement obligations with respect to
letters of credit that encumber documents and other property relating to such
letters of credit and the products and proceeds thereof; (viii) Liens
securing Indebtedness of the Company permitted pursuant to clause (g) of
the definition of “Permitted Indebtedness” or clause (c) of the definition
of “Permitted Subsidiary Indebtedness”, provided
that any such Indebtedness being refinanced was previously secured by a
Permitted Lien and any such Lien shall not extend to or cover any property or
assets other than those encumbered by the Lien securing the Indebtedness being
refinanced; and (ix) Liens incurred in the ordinary course of business
securing Indebtedness under Interest Rate Protection Obligations and Currency
Agreements,

 

4

 

provided
that such Lien is created solely upon Excess Cash not required to be applied in
accordance with the “Cash Sweep” covenant herein.

 

“PORTAL” means The
PortalSM Market, a subsidiary of The Nasdaq Stock Market, Inc.

 

“Pro Forma Consolidated Operating Cash Flow”
for any period means “Consolidated Operating Cash Flow” for such period after
giving effect on a pro forma basis for the applicable period to, without
duplication, any Asset Sale or Asset Acquisition (including, without
limitation, any Asset Acquisition giving rise to the need to make such
calculation as a result of our or one of our Subsidiaries (including any Person
who becomes a Subsidiary as a result of the Asset Acquisition) Incurring
Acquired Indebtedness) or any transaction permitted under clause (iii) of
the “Consolidation, Merger and Sale of Assets” covenant herein occurring during
the period commencing on the first day of such period to and including the
Transaction Date (the “Reference Period”), as if such Asset Sale or Asset
Acquisition occurred on the first day of the Reference Period.

 

“Regular Record Date”
means the close of business in New York on the fifteenth day (whether or not a
Business Day) immediately preceding each Interest Payment Date.

 

“Restricted Global
Notes” has the meaning set forth in Section 3.2(b).

 

“Second Annual Transfer Date” has the meaning set forth in Section 4.2.

 

“Transfer Dates” has the meaning set forth in Section 4.2.

 

“UCC” means the Uniform Commercial Code in
effect from time to time in the State of New York.

 

“Unapplied Net Asset Sale Proceeds” means the
net cash proceeds of any Asset Sale consummated at least 181 days prior to the
date of determination that do not constitute Asset Sale Proceeds Reinvestment.

 

“Unrestricted Global
Notes” has the meaning set forth in Section 3.2(a).

 

SECTION 1.2  Certain
Conventions.  Unless the context otherwise requires:

 

(a)           unless
defined herein, a term defined in the Indenture has the same meaning when used
in this Second Supplemental Indenture;

 

(b)           a
term defined anywhere in this Second Supplemental Indenture has the same
meaning throughout;

 

(c)           the
singular includes the plural and vice versa;

 

(d)           a
reference to a Section or Article is
to a Section or Article of this Second Supplemental Indenture; and

 

5

 

(e)           headings are for convenience of reference only and do not
affect interpretation.

 

ARTICLE TWO

7-YEAR NOTE FORMS

 

SECTION 2.1  Form of 7-Year
Notes.

 

(a)           Each 7-Year Fixed Rate Note shall be
substantially in the form set forth in Exhibit A or Exhibit B hereto,
as applicable, and contain the terms and provisions provided for therein and
incorporated by reference herein which shall for all purposes relevant to the 7-Year
Fixed Rate Notes issued hereunder replace in its entirety the form of Debt
Security set forth in Exhibit A to the Indenture.  If any provision of the 7-Year Notes
Indenture limits, qualifies or conflicts with any term or provision of the 7-Year
Fixed Rate Notes, such provision in the 7-Year Fixed Rate Notes shall control.

 

(b)           Each 7-Year Floating Rate Note shall be
substantially in the form set forth in Exhibit C or Exhibit D hereto,
as applicable, and contain the terms and provisions provided for therein and
incorporated by reference herein which shall for all purposes relevant to the 7-Year
Floating Rate Notes issued hereunder replace in its entirety the form of Debt
Security set forth in Exhibit A to the Indenture.  If any provision of the 7-Year Notes
Indenture limits, qualifies or conflicts with any term or provision of the 7-Year
Floating Rate Notes, such provision in the 7-Year Floating Rate Notes shall
control.

 

SECTION 2.2  Denominations.  Each of the 7-Year Notes shall be issued only
in fully registered form, without coupons, in denominations of U.S.$1.00 or
multiples of U.S.$1.00 in excess thereof.

 

ARTICLE THREE

THE 7-YEAR NOTES

 

SECTION 3.1  Maximum Aggregate Principal
Amount (if any), Title and Terms.  (a)  The
7-Year Fixed Rate Notes shall constitute a series of Debt Securities that are
Public Debt Securities of the Company, having an initial aggregate principal
amount of up to U.S.$               
..  Upon receipt of a written order
of the Company for the authentication and delivery of the 7-Year Fixed Rate
Notes and satisfaction of the requirements of Section 3.2 of the
Indenture, the Trustee shall authenticate 7-Year Fixed Rate Notes for original
issuance in an aggregate principal amount not to exceed U.S.$                     .

 

(b)           The
7-Year Floating Rate Notes shall constitute a series of Debt Securities that
are Private Notes of the Company, having an aggregate principal amount that is
not limited.  Upon receipt of a written
order of the Company for the authentication and delivery of the 7-Year Floating
Rate Notes and satisfaction of the requirements of Section 3.2 of the
Indenture, the Trustee shall authenticate 7-Year Floating Rate Notes for
original issuance in an aggregate principal amount set forth in such written
order.

 

(c)           The 7-Year Fixed Rate Notes shall bear interest
on the outstanding principal amount from (1) in the case of the first
Interest Payment Date, December 10, 2003 until

 

6

 

[the date the
Company accepts Eligible Notes upon expiration of the Election Offers], (2) in the case of the second Interest
Payment Date, from [the date the Company accepts Eligible Notes upon
expiration of the Election Offers]
until a date that is six months thereafter, or (3) in the case of each
Interest Payment Date thereafter, from the most recent Interest Payment Date
for which interest has been paid or duly provided for at an interest rate of
7.0% per annum.  Interest on the 7-Year
Fixed Rate Notes will be payable semi-annually in arrears on [           ] and [           ] of each year, commencing                           [on the date these
Notes are delivered or made available to holders pursuant to the Company’s APE]
to the person in whose name such 7-Year Note (or any predecessor 7-Year Note)
is registered at the close of business in The City of New York on the
immediately preceding Regular Record Date.

 

(d)           The
7-Year Floating Rate Notes shall bear interest on the outstanding principal
amount as provided under “Interest” in the forms of 7-Year Floating Rate Notes
set forth in Exhibit C or Exhibit D hereto, as applicable.  Interest on the 7-Year Floating Rate Notes
will be payable to the person whose name such 7-Year Floating Rate Note or (any
predecessor Floating Rate Note) is registered at the close of business in The
City of New York on the immediately preceding Regular Record Date.

 

(e)           Any
principal not prepaid (in whole or in part) on the 7-Year Fixed Rate Notes or
the 7-Year Floating Rate Notes, as the case may be shall be due and payable in
installments on the following Interest Payment Dates and in the following
percentages or amount:

 

	
   

  	
   

  	
   

  	
  Third

  Anniversary

  of [the date

  the Company

  accepts

  Eligible

  Notes upon

  expiration of

  the Election

  Offers],

  [2005]

  	
   

  	
   

  	
  Fourth

  Anniversary

  of [the date

  the Company

  accepts

  Eligible Notes

  upon

  expiration of

  the Election

  Offers],

  [2005]

  	
   

  	
   

  	
  Fifth

  Anniversary

  of the date

  the Company

  accepts

  Eligible

  Notes upon

  expiration of

  the Election

  Offers],

  [2005]

  	
   

  	
   

  	
  Sixth

  Anniversary

  of [the date

  the

  Company

  accepts

  Eligible

  Notes upon

  expiration of

  the Election

  Offers],

  [2005]

  	
   

  	
   

  	
  Maturity

  Date

  	
   

  
	
  Percentage/amount of
  outstanding principal amount payable as of such date

  	
   

  	
   

  	
  5%

  	
   

  	
   

  	
  10%

  	
   

  	
   

  	
  15%

  	
   

  	
   

  	
  20%

  	
   

  	
   

  	
  Remaining principal
  outstanding

  	
   

  

 

provided that the
amount of each such installment will be calculated for each U.S.$1.00 of the
face amount of such 7-Year Fixed Rate Notes or such 7-Year Floating Rate Notes,
as the case may be, and rounded to the nearest cent (half a cent being rounded
upwards); and provided further that
the last such installment will be in the amount necessary to repay in full the
outstanding principal amount of such 7-Year Fixed Rate Notes or such 7-Year
Floating Rate Notes, as the case may be.

 

7

 

(f)            Each 7-Year Note and the Trustee’s certificates of authentication thereon shall be
substantially in the forms set forth in Exhibit A, Exhibit B, Exhibit C
or Exhibit D hereto, as applicable, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Second Supplemental Indenture and the Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon, not inconsistent with this Second Supplemental
Indenture or the Indenture, as may be required to comply with any applicable
law or rule or regulation, this Second Supplemental Indenture, the
Indenture, any rule of any securities exchange on which the 7-Year Notes
may be listed, or of any Governmental Agency or any depositary thereof, and
subject to the prior approval of the CNV where applicable, or as may,
consistently herewith, be determined by the officers of the Company executing
such 7-Year Notes, as evidenced by their execution of the 7-Year Notes.

 

SECTION 3.2  Global Notes in
Registered Form.  (a)  7-Year
Fixed Rate Notes and 7-Year Floating Rate Notes offered and sold in offshore
transactions in reliance on Regulation S under the Securities Act, in reliance
on any exemption available under Section 3 of the Securities Act, or
pursuant to an effective registration statement shall be issued initially in
the form of one or more permanent global 7-Year Notes in fully registered form
without interest coupons substantially in the form of Exhibit A and Exhibit C
hereto, respectively, with such applicable legends as are provided in Exhibit A
or Exhibit C hereto, as the case may be (the “Unrestricted Global Notes”),
which shall be deposited on the Issue Date on behalf of the Holders therefor
with the Trustee at its New York City office as custodian for DTC and
registered in the name of a nominee of DTC.

 

(b)           7-Year
Fixed Rate Notes and 7-Year Floating Rate Notes sold in reliance on Rule 144A
under the Securities Act shall be issued initially in the form of one or more
permanent global 7-Year Notes in fully registered form without interest coupons
substantially in the form of Exhibit B and Exhibit D hereto,
respectively (the “Restricted Global Notes,” and together with the
Unrestricted Global Notes, the “Global Notes”), and will be deposited on
the Issue Date on behalf of the Holders therefor with the Trustee at its New
York City office as custodian for DTC and registered in the name of a nominee
of DTC.  The Restricted Global Notes (and
any certificated 7-Year Notes issued in exchange therefor) will be subject to
certain restrictions on transfer set forth therein and in the 7-Year Notes
Indenture and shall bear the legend regarding such restrictions set forth in Exhibit B
or Exhibit D, as the case may be. 
Application shall be made to make the Restricted Global Notes eligible
for trading in PORTAL.

 

(c)           As
described in the 7-Year Notes Indenture, owners of beneficial interests in an
Unrestricted Global Note or a Restricted Global Note may receive physical
delivery of certificated 7-Year Notes only in the limited circumstances
described therein.  The 7-Year Notes are
not issuable in bearer form.

 

SECTION 3.3  Exchanges.  (a)  In the event that a Global
Note is exchanged for certificated 7-Year Notes pursuant to Section 3.6(b) of
the Indenture, such 7-Year Notes may be exchanged only in accordance with such
procedures as are substantially consistent with the provisions of clauses (ii) through
(vii) of Section 3.9(b) of the Indenture (including the
certification requirements intended to ensure that such transfers comply with Rule 144A
or

 

8

 

Regulation S under the
Securities Act, as the case may be) and such other procedures as may from time
to time be adopted by the Company.

 

(b)           If 7-Year Notes are issued upon the registration of, transfer, exchange or replacement
of 7-Year Notes bearing the
restricted securities legend set forth in Exhibit A, Exhibit B, Exhibit C
or Exhibit D hereto, or if a request is made to remove such restricted
securities legend on the 7-Year Notes,
the 7-Year Notes so issued shall
bear the restricted securities legend, or the restricted securities legend
shall not be removed, as the case may be, unless there is delivered to the
Company such satisfactory evidence, which may include an opinion of counsel
licensed to practice law in the State of New York, as may be reasonably
required by the Company, that neither the legend nor the restrictions on
transfer set forth therein are required to ensure that transfers thereof will
not violate the registration and prospectus delivery requirements of the
Securities Act.  Upon provision of such
satisfactory evidence, the Trustee, at the direction of the Company, shall
authenticate and deliver 7-Year Notes that do not bear the legend.

 

SECTION 3.4  Further
Issues of 7-Year
Notes. 
The Company may from time to time without the consent of the Holders
create and issue further notes, bonds or debentures having the same terms and
conditions as the 7-Year Fixed Rate Notes or the 7-Year Floating Rate Notes in
all respects (or in all respects except for payment of interest scheduled and
paid prior to such time), so that such further issue may be consolidated and
form a single series with the outstanding 7-Year Fixed Rate Notes or 7-Year
Floating Rate Notes, as the case may be.

 

SECTION 3.5  Waiver and Release.  As part of the consideration for issuance of
the 7-Year Notes, each Holder of 7-Year Notes, by accepting the 7-Year Notes,
waives any rights that it may have pursuant to Argentine law to claw back (acción revocatoria) or bring action
against any director of the Company (acción
de responsabilidad), and releases such director from any liability,
arising out of payments made by the Company as a result of the consummation of
the cash option under the
Company’s APE.

 

ARTICLE FOUR

COVENANTS

 

SECTION 4.1  Payment
of Principal, Premium, if any, and Interest.  Principal of, premium, if any, and
interest on the 7-Year Fixed Rate Notes and on the 7-Year
Floating Rate Notes will be payable at such time as such payments are
due, and the transfer of 7-Year Notes will be
registrable, at the office of the Paying Agent maintained for such purpose in
the Borough of Manhattan, The City of New York, which will initially be the
office of the Trustee, and at the office of each Paying Agent or Transfer
Agent, as applicable.

 

SECTION 4.2  Reserve Accounts.  So long as any of the 7-Year Notes are
Outstanding, the Company will establish and maintain with a bank located
in New York two U.S. dollar-denominated reserve accounts (the “Reserve Accounts”) to which the Company will
transfer, on a ratable basis (by reference to the amounts of principal
and interest due (including additional amounts) within twelve months of the
date of determination under the 7-Year Notes,
in one case, and the 10-Year Notes, in the other case), on the first Interest
Payment Date following May 15th (the “First Annual Transfer
Date”) and November 15th (the “Second Annual

 

9

 

Transfer Date”
and, together with the First Annual Transfer Date, the “Transfer Dates”)
of any given year, any amount of Excess Cash calculated, in the case of the
First Annual Transfer Date, by reference to the Company’s unaudited interim
consolidated financial statements as of and for the three-month period ended March 31st
of the same calendar year, and for the Second Annual Transfer Date, by
reference to the Company’s unaudited interim consolidated financial statements
as of and for the three-month period ended September 30th of
the same calendar year, so that (A) the balance in one of the Reserve
Accounts (the “7-Year Notes Reserve Account”) shall not exceed the sum
of (x) 12 months of interest payments on the 7-Year Notes (assuming an interest
rate of 7% for any 7-Year Notes that are 7-Year Floating Rate Notes) and
Additional Amounts, if any, thereon and (y) any amount of principal of the 7-Year
Notes due within 12 months of such Transfer Date, and (B) the balance in
the other Reserve Account (the “10-Year Notes Reserve Account”) shall
not exceed 12 months of interest payments on the 10-Year Notes and Additional
Amounts, if any, thereon.  Amounts
required to be transferred in accordance herewith will be determined by
reference to the Peso amounts using the Company’s consolidated balance sheets
for the relevant dates and converting such amounts into U.S. Dollars at the
prevailing exchange rate on the Buenos Aires business day immediately preceding
the relevant Transfer Date.  In the event
that on any Transfer Date any restrictions or prohibition of access to the
Argentine foreign exchange market exists, the Company agrees to transfer all
amounts required to be transferred under this section either (i) by
purchasing, with Pesos, any series of “Bonos Externos de la República Argentina”
or any other securities or public or private bonds issued in Argentina and
denominated in U.S. Dollars, and transferring and selling such instruments
outside Argentina for U.S. dollars, or (ii) by means of any other legal
procedure existing in Argentina on any such Transfer Date.  All costs and taxes payable in connection
with the procedures referred to in (i) and (ii) above shall be borne
by the Company.  In the event that the
Company consummates the transactions contemplated in the APE on the date that
is after March 31 or September 30, as applicable, the amount of
Excess Cash required to be transferred on the first Transfer Date after the
issuance of the 7-Year Notes will be reduced by an amount equal to all cash
payments the Company is required to make in connection with or in contemplation
of that closing.

 

SECTION 4.3  Cash Sweep.  (a)  So long as any of the 7-Year
Notes shall remain Outstanding, if the amount of Excess Cash for any Transfer
Date (after complying with the obligation set forth in Section 4.2)
exceeds U.S.$3,000,000 (or the equivalent thereof in other currencies) the
Company will apply 70% of any such surplus Excess Cash (the determination of
such amount to be certified by the Company’s independent auditors) plus,
without duplication, 100% of the Unapplied Net Asset Sale Proceeds on such Transfer Date to the ratable pre-payment of
any outstanding 7-Year Notes.  Amounts
required to be prepaid in accordance herewith will be determined by reference
to the Peso amounts using the Company’s consolidated balance sheets for the
relevant dates and converting such amounts into U.S. Dollars at the prevailing
exchange rate on the date of the mandatory prepayment).  In the event that on any Transfer Date any
restriction or prohibition of access to the Argentine foreign exchange market
exists, the Company agrees to pay all amounts required to be paid under this section either
(i) by purchasing, with Pesos, any series of “Bonos Externos de la
República Argentina” or any other securities or public or private bonds issued
in Argentina and denominated in U.S. Dollars, and transferring and selling such
instruments outside Argentina for U.S. dollars, or (ii) by means of any
other legal procedure existing in Argentina on any such Transfer Date.  All costs and taxes

 

10

 

payable in connection
with the procedures referred to in (i) and (ii) above shall be borne
by the Company.

 

(b)           The
Company shall effectuate any pre-payment of the 7-Year Notes described in Section 4.3(a) by
providing not more than 30 nor less than five days’ irrevocable notice to
Holders of 7-Year Notes and redeeming Outstanding 7-Year Notes, on a pro rata
basis, at their remaining principal amount thereof, together with accrued
interest to the relevant Transfer Date.

 

SECTION 4.4  Limitation on Capital
Expenditures.  (a)  So long
as any of the 7-Year Notes shall remain Outstanding, except for Asset Sale
Proceed Reinvestments, the Company will not make or permit any Subsidiaries to
make any Capital Expenditure at any time, except
that the Company and its Subsidiaries may make such Capital Expenditures if
after giving effect to such Capital Expenditures, the aggregate amount of all
Capital Expenditures of the Company and its Subsidiaries in each of the
following periods would not exceed the sum of:

 

(A)          U.S.$15
million for every six months starting with the six-month period ending June 30,
2005 through the maturity date of the 7-Year Notes;

 

and

 

(B)           in
each of the periods, the unused portion of Capital Expenditures permitted under
clause (A) above for the prior period (after giving effect to the
application of this clause (B)).

 

(b)           For
the avoidance of doubt, nothing in this Section 4.4 is intended or shall
be read to prevent the Company or any of its Subsidiaries from merging with or
into any other Person provided that such merger satisfies the conditions set
forth in Section 4.17 of the Indenture.

 

SECTION 4.5  Limitation on Interest
Expense.  At any time after the
issuance of the 7-Year Notes, so long as any 7-Year Notes remain Outstanding,
the Company will not permit the ratio of Pro Forma Consolidated Operating Cash
Flow to Consolidated Interest Expense in each case for any period of four
consecutive fiscal quarters to be less than (A) 2.0 to 1.0 for any such
period ending on or prior to the [second anniversary of the Issue Date of the 7-Year
Notes], (B) 2.25 to 1.0 for any such period ending after the [second
anniversary] and on or prior to the [fifth anniversary] of the Issue Date of
the 7-Year Notes, and (C) 2.50 to 1.0 for any such period ending after the
[fifth anniversary] of the Issue Date of the 7-Year Notes; provided that the Company will not be
subject to the limitation set forth in this covenant in any fiscal quarter but
not more than two consecutive fiscal quarters if a Macroeconomic Disruption
Event has occurred during the prior fiscal quarter.

 

SECTION 4.6  Limitation on
Repurchase of 7-Year Notes and 10-Year Notes.  So long as any 7-Year Notes shall remain
Outstanding, the Company will not purchase any 7-Year Notes or 10-Year Notes in
the open market or by tender or private agreement until the first Transfer Date
following the issuance of the 7-Year Notes and thereafter the Company shall not
be permitted to purchase any 10-Year Notes in the open market or by tender or
private agreement by using an amount of Excess Cash during the period between
any two Transfer Dates that is

 

11

 

greater than any amount
of Excess Cash used by the Company to redeem any Outstanding 7-Year Notes on
the immediately preceding Transfer Date in accordance with the terms of the 7-Year
Notes Indenture.

 

SECTION 4.7  Maximum Total
Consolidated Indebtedness.  So long
as any 7-Year Notes remain Outstanding, the
Company will maintain a Total Consolidated Indebtedness of no greater than the
initial aggregate principal amount of the 7-Year Notes and the 10-Year Notes plus
U.S.$5 million of seller financing outstanding on the Issue Date plus
U.S.$10 million (or its equivalent in other currencies) minus 90% of the
aggregate principal amount of any 7-Year Notes or 10-Year Notes cancelled on or
prior to the date of determination, minus 90% of the aggregate principal
amount of any seller financing outstanding on the Issue Date plus the
aggregate amount of Indebtedness Incurred as a result of a transaction
permitted under clause (iii) of the “Consolidation, Merger and Sale of
Assets” covenant herein minus 90% of the aggregate principal amount of
any such Indebtedness discharged prior to the date of determination.

 

SECTION 4.8  Limitation on
Transactions with Shareholders and Affiliates. For purposes of this Second
Supplemental Indenture and the 7-Year Notes, Section 4.10 of the Indenture
is hereby amended to read in its entirety as follows:

 

“SECTION 4.10  Limitation
on Transactions with Shareholders and Affiliates. Under the terms of the 7-Year
Notes Indenture, the Company will not, and will not permit any Subsidiary to,
directly or indirectly, conduct any business, enter into, renew or extend any
transaction (including, without limitation, the purchase, sale, lease, exchange
or transfer of property or assets, the rendering of any service, or the making
of any payment, loan, advance or guarantee) with, or for the benefit of, any
holder (or any Affiliate of such holder) of 10% or more of the Capital Stock of
the Company or with any Affiliate of the Company or of any Subsidiary
(together, “Related Persons” and each, a “Related Person”),
unless the terms to the Company or such Subsidiary (i) are at least as
favorable to the Company or such Subsidiary as those that could be obtained at
the time of such transaction in arm’s length dealings with a Person who is not
a Related Person, and (ii) in the case of any transaction (or series of
transactions) with a Related Person involving aggregate payments made on or
after the Issue Date in excess of U.S.$10 million in any fiscal year, shall be
approved by a majority of the disinterested members of the Board of Directors
of the Company, or if no such disinterested directors exist with respect to
such transaction (or series of transactions), shall be confirmed by an opinion
of an Independent Financial Advisor to be fair, from a financial point of view,
to the Company or such Subsidiary.

 

The
foregoing limitation does not limit, and shall not apply to (i) any
transaction between the Company and any of its Subsidiaries or between
Subsidiaries, (ii) payment of reasonable and customary compensation and
fees to directors of the Company and the Subsidiaries who are not employees of
the Company or any Subsidiary, or (iii) the grant of stock options or
similar rights to acquire Capital Stock (other than Disqualified Stock) to
employees and directors of the Company pursuant to plans approved by the Board
of Directors provided that, in the aggregate, the shares of Capital Stock
underlying such options or similar rights issued since the Issue Date
(exclusive of

 

12

 

any shares of Capital Stock or similar rights required to be issued by
law) shall not exceed 2.5% of the outstanding Common Stock of the Company on a
fully diluted basis at the date of determination.”

 

SECTION 4.9  Limitation on
Restricted Payments.  So long as any 7-Year
Notes shall remain outstanding, the Company shall not redeem, repurchase,
retire or otherwise acquire any of its capital stock, or make a dividend or
distribution with respect to its capital stock or other ownership interest in
it (or options or warrants in respect thereto).

 

SECTION 4.10  Limitation on Asset
Sales.  For purposes of this Second
Supplemental Indenture and the 7-Year Notes, Section 4.13 of the Indenture
is hereby amended to read in its entirety as follows:

 

“SECTION 4.13  Limitation on Asset
Sales.  Under the terms of the 7-Year
Notes Indenture, the Company will not, and will not permit any of its
Subsidiaries to, make any Asset Sale that would result in a Material Adverse
Effect occurring and, in the case of Asset Sales involving consideration of
U.S.$10 million or more, unless an Independent Financial Advisor shall have
delivered a valuation of the property or asset being sold to the Board of
Directors and at a price consistent with such valuation.”

 

SECTION 4.11  Consolidation, Merger
and Sale of Assets.  For purposes of
this Second Supplemental Indenture and the 7-Year Notes, Section 4.17 of
the Indenture is hereby amended to read in its entirety as follows:

 

“Section 4.17  Consolidation, Merger
and Sale of Assets.  Under the terms
of the 7-Year Notes Indenture, the Company shall not consolidate with, merge
with or into, or sell, convey, transfer, lease or otherwise dispose of all or
substantially all of its property and assets (as an entirety or substantially
an entirety in one transaction or a series of related transactions) to, any
Person (other than a consolidation or merger with or into a Wholly-Owned
Subsidiary which, at the time of such consolidation or merger, is a Significant
Subsidiary with a positive net worth; provided
that, in connection with any such merger or consolidation, no consideration
(other than Common Stock in the surviving Person or the Company) shall be
issued or distributed to the stockholders of the Company) or permit any Person
to merge with or into the Company unless: 
(i) the Company shall be the continuing Person, or the Person (if
other than the Company) formed by such consolidation or into which the Company
is merged or that acquired or leased such property and assets of the Company
shall expressly assume, by a supplemental indenture, executed and delivered to
a Responsible Officer of the Trustee, all of the obligations of the Company
under the 7-Year Notes Indenture; (ii) immediately after giving effect to
such transaction, no Default or Event of Default shall have occurred and be
continuing; (iii) (A) the transaction will involve a Person
principally engaged in the Company’s line of business or in a business or
activities ancillary to the Company’s line of business, or reasonably related
therewith (including, but not limited to programming, multi-channel multi-point
distribution system (“MMDS”), broadband, pay television and the provision of
access service to, content for or ancillary services such as web-hosting,
network security and monitoring, digital certificates or equipment installation
or maintenance, for the Internet, but excluding non-pay television services,

 

13

 

AM or FM radio broadcasting, telephone or cellular communications and
publication of newspapers), (B) immediately after giving effect to such
transaction on a pro forma basis, the Company, or any surviving Person will
have Consolidated Net Worth equal to or greater than the Consolidated Net Worth
of the Company immediately preceding the transaction (provided that this
requirement will not apply where such transaction involves another Person
engaged in substantially the Company’s line of business in Argentina), and (C) (1) the
weighted average life of the Company’s (or the surviving Person’s) consolidated
Indebtedness after giving effect to the transaction would exceed the lesser of
(x) five years and (y) the weighted average life of the Company’s consolidated
Indebtedness immediately prior to the transaction and (2) after giving
effect to such transaction the Company (or the surviving Person) would either
be permitted to Incur at least U.S.$1.00 of additional Indebtedness pursuant to
the “Limitation on Indebtedness” covenant, if such Incurrence was not permitted
prior to giving effect to such transaction or, if such Incurrence was
permitted, have a lower ratio of Total Consolidated Indebtedness to Annualized
Pro Forma Consolidated Operating Cash Flow than that of the Company prior to
giving effect to such transaction; and (iv) the Company delivers to the
Trustee an Officers’ Certificate (attaching the arithmetic computations to
demonstrate compliance with clause (iii)) and an opinion of reputable Argentine
counsel, in each case stating that such consolidation, merger or transfer and
such supplemental indenture complies with clause (i) of this provision and
that all conditions precedent provided for herein relating to such transaction
have been complied with.”

 

ARTICLE FIVE

7-YEAR NOTES RESERVE ACCOUNT

 

SECTION 5.1  Grant of Security Interest.  (a)  As collateral security for the
full and prompt payment or performance when due of all of the interest and
principal obligations of the Company on each Interest Payment Date for the 7-Year
Notes, the Company will establish with the Bank an account (the “7-Year
Notes Reserve Account”) and hereby grants to the Trustee a continuing
first-priority Lien (which constitutes a Permitted Lien) upon and security
interest in, and pledges and assigns to the Trustee all of the right, title and
interest in and to the 7-Year Notes Reserve Account and all proceeds, income,
and profits thereof.  Until the
satisfaction and discharge of the 7-Year Notes Indenture with respect to the 7-Year
Notes pursuant to Article 11 of the Indenture, the 7-Year Notes Reserve
Account shall be maintained with and managed by the Bank, and the Bank shall
act with respect thereto only in accordance with this Second Supplemental
Indenture.

 

SECTION 5.2  Terms of 7-Year Notes
Reserve Account.  (a)  Until
satisfaction and discharge of the 7-Year Notes Indenture with respect to the 7-Year
Notes pursuant to Article 11 of the Indenture, a 7-Year Notes Reserve
Account established by the Company with the Bank shall be held in the name “Multicanal
S.A.”, subject to the lien and security interest in favor of Law Debenture
Trust Company of New York, as “Trustee” for the 7-Year Notes” (or in the event
a successor Trustee is appointed under the 7-Year Notes Indenture, a similar
account shall be established consistently showing the name of such Trustee),
which account shall be under the sole control of the Trustee in accordance with
this Second Supplemental Indenture.  The
Bank shall at all times listen to instructions (within the meaning of 9-104 of
the UCC) or entitlement orders (within the meaning of 8-106 of the UCC) without
further consent of the Company.

 

14

 

(b)           The
Company shall have no right under the terms of the 7-Year Notes Reserve
Account, so long as any 7-Year Note is Outstanding, to withdraw or instruct any
Person to withdraw on its behalf any money from the 7-Year Notes Reserve
Account.  No passbook, certificate of
deposit or other similar instrument evidencing the 7-Year Notes Reserve Account
shall be issued, and the Trustee shall retain all contracts, receipts and other
papers governing or evidencing the 7-Year Notes Reserve Account.  All right, title and interest in and to any
proceeds, income and profits of the 7-Year Notes Reserve Account shall vest in
the Trustee and shall constitute part of the Reserve Account.  The Company shall take such actions at its
sole expense as shall be required to ensure that the Trustee has from the date
of any deposit as aforesaid a first-priority Lien (subject to Permitted Liens)
on such deposit for the benefit of the Trustee. 
The Company shall have no obligation under the 10-Year Notes Indenture
to transfer or deposit any amounts into the 10-Year Notes Reserve Account.

 

(c)           The
Bank shall not exercise any right of set-off or recoupment or similar right
that it may otherwise have against the 7-Year Notes Reserve Account to satisfy
obligations of the Company to the Trustee.

 

(d)           The
Bank shall hold monies deposited in the 7-Year Notes Reserve Account in trust
for and shall not commingle such amounts with any other amounts held on behalf
of the Trustee or any other Person.

 

(e)           The
7-Year Notes Reserve Account shall be a non-interest-bearing trust account of
the type customarily maintained by the Bank for institutional customers.  Such funds shall be invested at the written
direction of the Company in Cash Equivalents. 
The Trustee shall not have any responsibility to the Company or the
Holders of the 7-Year Notes for any losses arising in respect of such
investments of the amounts on deposit in the 7-Year Notes Reserve Account,
except to the extent that such loss or liability arises from the Trustee’s
negligence or willful misconduct.

 

SECTION 5.3  Release of Monies from 7-Year
Notes Reserve Account.  (a)  To
the extent that monies in the 7-Year Notes Reserve Account exceed an amount
equal to the next 12 months of interest and principal payments on the 7-Year
Notes and so long as no Event of Default has occurred and is continuing, the
Trustee shall release such monies to the Company in accordance with the Company’s
instructions to the Trustee specified in an Officers’ Certificate.

 

(b)           To
the extent that any monies in the 7-Year Notes Reserve Account remain following
the satisfaction and discharge of the 7-Year Notes Indenture with respect to
the 7-Year Notes, the Trustee shall release such monies to the Company in
accordance with the Company’s instructions to the Trustee specified in an
Officers’ Certificate.

 

(c)           In
the event the Company fails to make an interest payment (in part or in full) on
the 7-Year Notes as required herein, the Trustee shall apply any monies held by
it in the 7-Year Notes Reserve Account to the satisfaction of such unpaid
interest obligations.  Such application
by the Trustee will not give rise to an Event of Default under the 7-Year
Notes.

 

(d)           If
an Event of Default has occurred and is continuing under the 7-Year Notes, the
Trustee shall apply any monies held by it in the 7-Year Notes Reserve Account
to the

 

15

 

satisfaction of any
unpaid interest and principal obligations of the Company under the 7-Year
Notes.

 

SECTION 5.4  Representation,
Warranties and Covenants Specific to 7-Year Notes Reserve Account.  The Company represents, warrants and
covenants that the Lien on the 7-Year Notes Reserve Account granted pursuant to
Section 5.1 will be a valid, binding and enforceable Lien and security
interest, securing the Company’s interest and principal obligations on each
Interest Payment Date for the 7-Year Notes, ranking prior and superior to all
other Liens thereon (other than Permitted Liens), and covenants that it shall
take all necessary action to cause and maintain a perfected first-priority Lien
(subject to Permitted Liens) in the 7-Year Notes Reserve Account, and to allow
the Trustee to exercise its rights, remedies, power and privileges to or with
respect to the 7-Year Notes Reserve Account. 
The Company represents and warrants that as of the date of the
establishment of the 7-Year Notes Reserve Account, all filings and other
actions necessary or desirable for the purpose of registering notice of,
perfecting and establishing the first-priority of such Lien (subject to
Permitted Liens) and security interest will have been duly made or taken.  The Company agrees that at any time upon the
reasonable request of the Trustee, the Company will, at the Company’s sole
expense, execute, acknowledge, deliver, record and/or file such documents or
instruments in form reasonably satisfactory to the Trustee, and do such acts
and things as may be reasonably necessary, desirable or proper to carry out
more effectively the purposes of such Lien and security interest or to further
assure, evidence, preserve or protect the perfection, ranking or other benefits
thereof.

 

ARTICLE SIX

EXCHANGE OF 7-YEAR
FLOATING RATE NOTES

 

SECTION 6.1  Exchange Right.  (a)  Each Holder of 7-Year Floating
Rate Notes shall be entitled on any Business Day (other than any day following
any Regular Record Date to and including the day immediately preceding the
related Interest Payment Date) to exchange such 7-Year Floating Rate Notes for
an equivalent principal amount in the 7-Year Fixed Rate Notes, provided that any expenses incurred as a
result of such exchange by either such Holder or the Company (other than any
registration fees with the CNV) shall be paid by such Holder, and provided further that the Company shall not
be required to pay any Other Additional Amounts (as defined in the 7-Year
Floating Rate Notes) incurred as a result of such exchange.

 

(b)           Upon
any exchange of 7-Year Floating Rate Notes for 7-Year Fixed Rate Notes, as
described in Section 6.1(a), the outstanding aggregate principal amount of
7-Year Floating Rate Notes shall be irrevocably reduced by the principal amount
of any 7-Year Floating Rate Notes so exchanged.

 

SECTION 6.2  Exchange Procedures.  (a)  To exchange a Floating Rate
Note, a Holder must (a) complete and manually sign an exchange notice in
substantially the form included in the form of 7-Year Floating Rate Notes set
forth in Exhibit C and Exhibit D, as the case may be, hereto and
deliver such notice to the Exchange Agent at its own expense, (b) surrender
the 7-Year Floating Rate Note to the Exchange Agent duly endorsed or assigned
to the Company or in blank, (c) furnish appropriate endorsements and
transfer documents (if any) required by the Registrar or the Exchange Agent,
and (d) pay any required transfer or similar tax

 

16

 

and make any other
required payment.  The date on which the
Holder satisfies all of those requirements is the “Exchange Date”.

 

(b)           Immediately
following the deposit of a 7-Year Floating Rate Note and exchange notice and
payment by the exchanging Holder of any required amount in accordance with Section 6.2,
the Exchange Agent shall (i) verify that the exchange notice has been duly
completed in accordance with its terms and purports to have been signed by or
on behalf of the Holder of such 7-Year Floating Rate Note named therein and (ii) set
out in the exchange notice the deposit date and the Exchange Date in respect of
the deposited Floating Rate Note.  The
Exchange Agent shall reject such deposited 7-Year Floating Rate Note if the
exchange notice in respect of which has not been duly completed in accordance
with its terms or does not purport to have been signed by or on behalf of the
Holder of such 7-Year Floating Rate Note named therein.  The Exchange Agent shall send by facsimile to
the Company a copy of the exchange notice as soon as practicable, but in any
event no later than two Business Days, following such verification, and shall
send by post, to the Company the original exchange notice as soon as
practicable following any such request by the Company in writing.  On deposit of a 7-Year Floating Rate Note and
an exchange notice (and payment by an exchanging Holder of any required amount
in accordance with Section 6.1), the 7-Year Floating Rate Note and the
exchange notice so deposited and any relevant amounts shall be deemed to be
held by the Exchange Agent as the agent of the Company.

 

(c)           The
Company shall issue and deliver the 7-Year Fixed Rate Notes arising from the
exchange of the 7-Year Floating Rate Notes in accordance with the instructions
as set out in the exchange notice as soon as practicable, and in any event not
later than 14 days, after the Exchange Date (or such longer period as may be
required to comply with any applicable laws or regulations).  The Registrar will register the Person
designated for the purpose in the Exchange Notice as Holder of the 7-Year Fixed
Rate Notes in the 7-Year Note Register, and such Person specified for that
purpose shall become Holders of such 7-Year Fixed Rate Notes with effect from
the date such Person is registered as such in the 7-Year Note Register (the “Registration
Date”).

 

(d)           If
the record date for the payment of any interest, principal or premium or
Additional Amounts, if any, in respect of the 7-Year Fixed Rate Notes is on or
after the Exchange Date in respect of the 7-Year Floating Rate Notes exchanged,
but before the Registration Date, the Company shall pay to the exchanging
Holder an amount equal to any such payment to which such Holder would have been
entitled had such Holder on that record date been such a holder of record of
such 7-Year Fixed Rate Notes issued upon exchange.

 

ARTICLE SEVEN

OTHER AMENDMENTS

 

SECTION 7.1  Events of Default
Defined; Acceleration of Maturity. 
For purposes of this Second Supplemental Indenture and the 7-Year Notes,
Section 6.1 of the Indenture is hereby amended to read in its entirety as
follows:

 

“SECTION 6.1 
Events of Default Defined; Acceleration of Maturity.  “Event of Default”, wherever used
herein with respect to the 7-Year Notes, means any

 

17

 

one of the following
events which shall have occurred and be continuing (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):

 

(a)           the
Company shall fail to pay the principal of or premium, if any, on any of the 7-Year
Notes when the same shall become due and payable at maturity, upon
acceleration, redemption or otherwise; or

 

(b)           the
Company shall fail to pay interest or Additional Amounts, if any, (or, with
respect to the 7-Year Floating Rate Notes, Other Additional Amounts, if any) on
any of the 7-Year Notes when the same shall become due and payable, and such
failure continues for a period of 30 days; or

 

(c)           the
Company shall fail to perform or comply with the provisions contained in
Sections 4.3 or 4.11 of the Second Supplemental Indenture, or for a period
of 30 consecutive days after the occurrence of such failure, Sections 4.5
or 4.7 of the Second Supplemental Indenture or Section 4.6 of the
Indenture; or

 

(d)           the
Company shall fail to perform or breach any other covenant or agreement in the 7-Year
Notes Indenture or under the 7-Year Notes (other than those referred to in
clauses (a), (b), and (c) above) and such failure or breach
continues for a period of 30 consecutive days after written notice shall
have been given to the Company by the Trustee or to the Company and the Trustee
by the Holders of at least 25% in aggregate principal amount of the 7-Year
Notes then Outstanding; or

 

(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 U.S.$5
million or more (or its equivalent in other currencies) in the aggregate for
all such issues of all such Persons, whether such Indebtedness now exists or
shall hereafter be created, of (I) an event of default that has caused
such Indebtedness to become, or the holders thereof to declare such
Indebtedness to be, due and payable prior to its Stated Maturity and/or
(II) the failure to make a payment of principal and in the case of the 10-Year
Notes, interest when such payment is due and payable; or

 

(f)            one or
more final judgments, orders or binding arbitration awards, for the payment of
money in excess of U.S.$5 million (or its equivalent in other currencies),
either individually or in the aggregate for all such final judgments, orders or
binding arbitration awards, shall be rendered against the Company or any
Significant Subsidiary or any of their respective properties and shall not be
paid or discharged, and there shall have been a period of 60 consecutive
days following entry of the final judgment, order or binding arbitration award
that causes the aggregate amount for all such final judgment, orders or binding
arbitration awards outstanding and not paid or discharged against all such
Persons to exceed U.S.$5 million (or its equivalent in other currencies) during
which a

 

18

 

stay of enforcement of such final judgments, orders or
binding arbitration awards, by reason of a pending appeal or otherwise, shall
not be in effect; or

 

(g)           any
government or governmental authority shall have condemned, nationalized,
seized, or otherwise expropriated all or any substantial portion of the assets
or property of the Company or any Significant Subsidiary or the share capital
of the Company or any Significant Subsidiary, or shall have assumed custody or
control of such assets or property or of the business or operations of the
Company or any Significant Subsidiary or of the share capital of the Company or
any Significant Subsidiary, or shall have taken any action that would prevent
the Company or any Significant Subsidiary or its officers from carrying on its
business or operations or a substantial part thereof for a period of longer
than 60 consecutive days and the result of any such action shall
materially prejudice the ability of the Company to perform its obligations
under any of the 7-Year Notes; or

 

(h)           the
Argentine Government shall declare a general suspension of payment or a
moratorium on the payment of debt of the Company (which does not expressly
exclude the 7-Year Notes); or

 

(i)            the
Company or any Significant Subsidiary (I) is declared by a court of
competent jurisdiction to be insolvent or bankrupt or unable to pay its debts,
(II) commences or consents to the commencement of a case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, (III) makes a general assignment or an arrangement or composition with
or for the benefit of creditors, (IV) admits in writing its inability to pay
its debt generally as they become due, or (V) takes corporate action in
furtherance of any of the foregoing; or

 

(j)            an order
or decree is made or an effective resolution passed for relief against the
Company or a Significant Subsidiary under any applicable bankruptcy law, or for
the winding-up or dissolution of the Company or any Significant Subsidiary or
adjudging the Company or any Significant Subsidiary bankrupt or insolvent under
any applicable bankruptcy law and in each case such order or decree remains
unstayed and in effect for a period of 60 consecutive days, or the Company or
any Significant Subsidiary ceases or threatens to cease to carry on all or a
material part of its business or operations, except for the purpose of and
followed by a reconstruction, amalgamation, reorganization (“concurso preventivo” or “concordato”), merger or consolidation in
the case of a Significant Subsidiary, whereby the undertaking and the assets of
such Significant Subsidiary, or all of the undertaking and assets relating to
the Company’s direct or indirect shareholding in such Significant Subsidiary,
as the case may be, are transferred to or otherwise vested in the Company or
any other Significant Subsidiary or Subsidiary which as a result of such
transfer would become a Significant Subsidiary; or

 

19

 

(k)           it becomes
unlawful for the Company to perform or comply with any one or more of its
obligations under any of the 7-Year Notes or the 7-Year Notes Indenture, and
such unlawfulness continues for a period of 60 consecutive days after
written notice shall have been given to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate principal
amount of the 7-Year Notes then Outstanding.”

 

SECTION 7.2  Acceleration of
Maturity; Rescission and Annulment. 
For purposes of this Second Supplemental Indenture and the 7-Year Notes,
Section 6.2 of the Indenture is hereby amended to read in its entirety as
follows:

 

“SECTION 6.2 
Acceleration of Maturity; Rescission and Annulment.  If an Event of Default (other than an Event
of Default specified in paragraph (i) or paragraph (j) in Section 6.1
of the Indenture that occurs with respect to the Company) occurs and is
continuing, then and in every such case the Trustee or the Holders of at least
25% in aggregate principal amount of the 7-Year Notes at the time Outstanding
may, and the Trustee at the request of such Holders shall, declare the 7-Year
Notes to be immediately due and payable, by a notice in writing to the Company
(and to the Trustee if given by the Holders (the “Acceleration Notice”)),
and upon any such declaration 100% of the principal amount thereof and any
accrued and unpaid interest thereon shall become immediately due and
payable.  In the event of a declaration
of acceleration because an Event of Default set forth in paragraph (e) in
Section 6.1 of the Indenture has occurred and is continuing, such
declaration of acceleration shall be automatically rescinded and annulled if
the event of default triggering such Event of Default pursuant to
paragraph (e) in Section 6.1 of the Indenture shall be remedied
or cured by the Company and/or the relevant Subsidiaries or waived by the
holders of the relevant Indebtedness within 30 days after the declaration
of acceleration with respect thereto.  If
an Event of Default specified in paragraphs (i) or (j) in Section 6.1
of the Indenture occurs with respect to the Company, the 7-Year Notes then
Outstanding shall ipso facto become and be immediately due and payable at 100%
of the outstanding principal amount thereof, plus premium, if any, thereon and
accrued and unpaid interest thereon to the date of such Event of Default, in
each case without any declaration or other act on the part of the Trustee or
any Holder.

 

At any time after a declaration of acceleration with
respect to 7-Year Notes has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in
this Section 6.2 of the Indenture provided, a decision made by the
affirmative vote of the Holders of at least a majority in aggregate principal
amount of the 7-Year Notes at the time Outstanding may, by written notice to
the Company and to the Trustee, rescind and annul such declaration and its
consequences if:

 

(a)           the
Company has paid or deposited with the Trustee a sum sufficient to pay:

 

(i)            all
overdue interest on all Outstanding 7-Year Notes,

 

20

 

(ii)           the
principal of, premium, if any, on or Additional Amounts, if any, on any 7-Year
Notes which have become due otherwise than by such declaration of acceleration
and, to the extent that payment of such interest is lawful, interest thereon at
the rate provided by such 7-Year Notes,

 

(iii)          interest
upon overdue interest at the rate provided by such 7-Year Notes, and

 

(iv)          all sums
paid or advanced by the Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel;
and

 

(b)           all
existing Events of Default with respect to 7-Year Notes, other than the
non-payment of the principal of or premium, if any, interest and Additional
Amounts, if any, (and, with respect to the 7-Year Floating Rate Notes, Other
Additional Amounts, if any) on 7-Year Notes which have become due solely by
such declaration of acceleration, have been cured or waived as provided in Section 6.10
of the Indenture; and

 

(c)           the
rescission would not conflict with any judgment, decree or order of a court of
competent jurisdiction.

 

No such rescission shall affect any subsequent default or impair any
right consequent thereon.

 

The
Holders of at least a majority in aggregate principal amount of the outstanding
7-Year Notes, by written notice to the Trustee, may waive an existing Default
or Event of Default and the consequences under the 7-Year Notes Indenture,
except a Default in the payment of principal of, premium, if any, on or
interest on the 7-Year Notes or in respect of a covenant or provision of the 7-Year
Notes Indenture that cannot be modified or amended without the consent of the
Holder of each outstanding 7-Year Note affected.

 

The foregoing provisions shall be without prejudice to
the rights of each individual Holder to initiate an action against the Company
for the payment of any principal, premium, if any, Additional Amounts and/or
interest past due on any 7-Year Note, the case may be.  The right of any individual Holder to
initiate such action against the Company in connection with any 7-Year Note
that is a Public Debt Security complies with Article 29 of the Negotiable
Obligations Law.”

 

SECTION 7.3  Limitation of Suits by
Holders.  For purposes of this Second
Supplemental Indenture and the 7-Year Notes, Section 6.6 of the Indenture
is hereby amended to read in its entirety as follows:

 

“SECTION 6.6 
Limitations on Suits by Holders. 
Except as provided in Section 6.2 of the Indenture, no Holder of
any 7-Year Note shall have any right to institute any proceeding, judicial or
otherwise, with respect to the 7-Year Notes

 

21

 

Indenture, or for the appointment of a receiver or
trustee, or for any other remedy hereunder, unless

 

(a)           such
Holder has previously given written notice to the Trustee of a continuing Event
of Default with respect to the 7-Year Notes;

 

(b)           the
Holders of at least 25% in aggregate principal amount at maturity of the 7-Year
Notes at the time Outstanding shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;

 

(c)           such
Holder or Holders have offered to the Trustee indemnity satisfactory to such
Trustee against the costs, expenses and liabilities to be incurred in
compliance with such request;

 

(d)           the
Trustee for 60 days after its receipt of such notice, request and offer of
indemnity has failed to institute any such proceeding; and

 

(e)           no
direction inconsistent with such written request has been given to the Trustee
during such 60-day period by the Holders of a majority in aggregate principal
amount of the 7-Year Notes at the time Outstanding;

 

it being understood and intended that no one or more
Holders shall have any right in any manner whatever by virtue of, or by
availing of, any provision of the 7-Year Notes Indenture to affect, disturb or
prejudice the rights of any other Holders of the 7-Year Notes, or to obtain or
to seek to obtain priority or preference over any other Holders of the 7-Year
Notes or to enforce any right under the 7-Year Notes Indenture, except in the
manner herein provided and for the equal and ratable benefit of all the Holders
of the 7-Year Notes.”

 

SECTION 7.4  Undertaking for Costs.  For purposes of this Second Supplemental Indenture
and the 7-Year Notes, Section 6.12 of the Indenture is hereby amended to
read in its entirety as follows:

 

“SECTION 6.12 
Undertaking for Costs.  All
parties to the 7-Year Notes Indenture agree, and each Holder of any 7-Year Note
by such Holder’s acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for
any action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys’ fees and expenses, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by such
party litigant; but the provisions of this Section 6.12 of the Indenture
shall not apply to any suit instituted by the Trustee, to any suit instituted
by any Holder, or group of Holders, holding in the aggregate more than 10% in
principal amount of the outstanding 7-Year Notes, or to any suit instituted by
any Holder for the enforcement of the payment of the principal of or premium,
if any, interest or Additional Amounts, if any, on any 7-Year Note on or after
its Stated Maturity.”

 

22

 

SECTION 7.5  Certain Rights of the
Trustee.  For purposes of this Second
Supplemental Indenture and the 7-Year Notes, Section 7.2(f) of the
Indenture is hereby amended to read in its entirety as follows:

 

“(f)          the Trustee
shall not be bound to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, appraisal, bond, debenture, note, coupon,
security, or other paper or document unless requested in writing so to do by
the Holders of not less than 51% in aggregate principal amount of the 7-Year
Notes at the time Outstanding present or represented at a meeting of such
Holders at which a quorum is present; provided that,
if the payment within a reasonable time to the Trustee of the costs, expenses
or liabilities likely to be incurred by it in the making of such investigation
is, in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may require
a reasonable cash indemnity against such expenses or liabilities as a condition
to proceeding; the reasonable expenses of every such investigation shall be
paid by the Company or, if paid by the Trustee or any predecessor trustee,
shall be repaid by the Company upon demand;”

 

SECTION 7.6  Supplemental Indentures
with Vote of Holders.  For purposes
of this Second Supplemental Indenture and the 7-Year Notes, Section 9.2 of
the Indenture is hereby amended to read in its entirety as follows:

 

“SECTION 9.2 
Supplemental Indentures with Vote of Holders.  With the affirmative vote of the Holders of
not less than 51% in aggregate principal amount of the Outstanding 7-Year Notes
present or represented at a meeting of such Holders at which a quorum is
present, the Company, when authorized by a Board Resolution, and the Trustee
may enter into an indenture or indentures supplemental hereto for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of the 7-Year Notes Indenture which affect the 7-Year Fixed Rate
Notes or the 7-Year Floating Rate Notes or of modifying in any manner the
rights of the Holders of the 7-Year Fixed Rate Notes or the 7-Year Floating
Rate Notes under the 7-Year Notes Indenture; provided,
however, that no such supplemental indenture shall, without the
unanimous affirmative vote of the Holders of the 7-Year Notes affected thereby:

 

(a)           change the
Stated Maturity of the principal of, or any installment of interest on, any 7-Year
Note, or reduce the principal amount thereof, premium, if any, thereon or the
rate of interest thereon or the requirement to pay Additional Amounts thereon
(or, with respect to the 7-Year Floating Rate Notes, changing the requirement
to pay Other Additional Amounts thereon);

 

(b)           change the
place of payment where, or the coin or currency in which, the principal of or
premium, if any, or interest or Additional Amounts (if any) on any 7-Year Note
(or Other Additional Amounts (if any) on any Floating Rate Note) is payable;

 

23

 

(c)           impair the
right to institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date);

 

(d)           reduce the
percentage in principal amount of the Outstanding 7-Year Notes, the consent of
the Holders of which is required for the adoption of a resolution or the quorum
required to constitute a meeting of Holders at which a resolution is adopted or
the percentage in principal amount of Outstanding 7-Year Notes, the Holders of
which are entitled to request the calling of a meeting of Holders; or

 

(e)           modifying
the percentage in principal amount of the Outstanding 7-Year Notes the consent
of the Holders of which is required to waive a past Default or Event of
Default.

 

A supplemental indenture which changes or eliminates
any covenant or other provision of the 7-Year Notes Indenture which has
expressly been included solely for the benefit of one or more particular series
of Debt Securities, or which modifies the rights of the Holders of Debt
Securities of such series with respect to such covenant or other provision,
shall be deemed not to affect the rights under the 7-Year Notes Indenture of
the Holders of Debt Securities of any other series.

 

It shall not be necessary for the Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Holders shall approve the substance thereof.”

 

SECTION 7.7  Meetings of Holders;
Modification and Waiver.  For
purposes of this Second Supplemental Indenture and the 7-Year Notes, Section 9.7
of the Indenture is hereby amended to read in its entirety as follows:

 

“SECTION 9.7 
Meetings of Holders; Modification and Waiver.  (a)  The Trustee or the Company
shall, upon the written request of the Holders of at least five percent in
aggregate principal amount of the 7-Year Notes at the time Outstanding, or the
Company or the Trustee at its discretion, may, call a meeting of the Holders of
the 7-Year Notes at any time and from time to time, to make, give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by the 7-Year Notes to be made, given or taken by such
Holders.  With respect to all matters not
contemplated in the 7-Year Notes Indenture, meetings of Holders will be held in
Buenos Aires in accordance with the Negotiable Obligations Law; provided, however, that the Company or the Trustee may
determine to hold any such meetings simultaneously in Buenos Aires and in The
City of New York by any means of telecommunication.  Meetings shall be held at such time and at
such place as the Company or the Trustee shall determine in such cities.  If a meeting is being held pursuant to a
request of Holders, the agenda for the meeting shall be as determined in the request
and such meeting shall be convened within 40 days from the date such
request is received by the Trustee or the Company, as the case may be.  Notice of any meeting of Holders (which shall
include the date, place and time of the meeting, the agenda therefor and the
requirements to attend)

 

24

 

shall be published not less than ten days nor more
than 30 days prior to the date fixed for the meeting in the Boletín Oficial de la República (the Official Gazette of
Argentina) and, while there are Holders domiciled in Argentina, in a newspaper
having major circulation in Argentina and in accordance with Section 12.4
of the Indenture and any publication of such notice shall be for five
consecutive Business Days in each place of publication.

 

(b)           Any Holder
may attend the meeting in person or by proxy. 
Directors, officers, managers, members of the Supervisory Committee and
employees of the Company may not be appointed as proxies.  Holders of 7-Year Notes who intend to attend
a meeting of Holders of 7-Year Notes must notify the Registrar of their
intention to do so at least three days prior to the date of such meeting.  The
Company shall, prior to any vote, deliver to the Trustee a notice signed by the
CFO or the chief accounting officer certifying, to the best of the Company’s
knowledge, as to the Notes held by any Affiliate of the Company.

 

(c)           Except as
specified in Section 6.2 hereof, decisions shall be made by the
affirmative vote of the Holders of at least 51% in aggregate principal amount
of the 7-Year Notes at the time Outstanding present or represented at a meeting
of such Holders at which a quorum is present; provided,
however, that the affirmative vote of the Holders of the applicable
percentage in aggregate principal amount of the 7-Year Notes at the time
Outstanding specified under Section 6.1 of the Indenture shall be required
to take the actions specified in such Section; provided
further, however, that the unanimous affirmative vote of the Holders
of 7-Year Notes shall be required to adopt a valid decision on:

 

(i)            changing
the Stated Maturity of the principal of, or any installment of interest on any 7-Year
Note, or reducing the principal amount thereof or premium, if any, or the rate
of interest thereon or changing the requirement to pay Additional Amounts
thereon (or, with respect to the 7-Year Floating Rate Notes, changing the
requirement to pay Other Additional Amounts thereon), or releasing any amounts
held in the Reserve Accounts;

 

(ii)           changing
the place of payment where, or the coin or currency in which, the principal of,
premium, if any, on or interest or Additional Amounts (if any) on any 7-Year
Note (or Other Additional Amounts (if any) on any 7-Year Floating Rate Note) is
payable;

 

(iii)          impairing
the right to institute suit for the enforcement of any such payment on or after
the Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date);

 

(iv)          reducing
the percentage in principal amount of the Outstanding 7-Year Notes, the consent
of the Holders of which is required for the adoption of a resolution or the
quorum required to constitute a meeting of Holders at which a resolution is
adopted or the percentage in principal amount of Outstanding 7-Year Notes the
Holders of which are entitled to request the calling of a meeting of Holders;
or

 

25

 

(v)           modifying
the percentage in principal amount of the Outstanding 7-Year Notes, the consent
of the Holders of which is required to waive a past Default or Event of Default.

 

Except as provided above, any modifications,
amendments or waivers to the terms and conditions of the 7-Year Notes will be
conclusive and binding on all Holders of 7-Year Notes, whether or not present
at any meeting, and whether or not notation of such modifications, amendments
or waivers is made upon the 7-Year Notes, provided that
any such modification, amendment or waiver was duly passed at a meeting
convened and held in accordance with the provisions of the Negotiable
Obligations Law.

 

(d)           Meetings
of the Holders of 7-Year Notes shall be either “first call” meetings (“primera convocatoria”) or “second call” meetings (“segunda convocatoria”). 
All meetings of the Holders of 7-Year Notes shall be deemed to be a
first call meeting; provided, however, that any reconvened meeting adjourned for lack of a
requisite quorum shall be deemed a second call meeting.  The quorum applicable at a meeting of the
Holders of 7-Year Notes shall be as follows:

 

(i)            the
quorum for meetings called to adopt a resolution by which Holders of 7-Year
Notes shall make any request, demand or direction or give any notice (other
than a resolution specified in paragraph (ii) below) shall, (A) in
the case of first call meetings, be such Persons holding or representing a
majority in aggregate principal amount of the 7-Year Notes at the time
Outstanding and (B) in the case of second call meetings, be such Persons
present at such meeting holding or representing 7-Year Notes at the time
Outstanding; and

 

(ii)           the quorum
for meetings called to adopt a resolution by which Holders consent to any
waiver under the 7-Year Notes or hereunder, agree to any amendment to the 7-Year
Notes Indenture or the terms and conditions of the 7-Year Notes, or specify the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee with
respect to the 7-Year Notes by the 7-Year Notes Indenture, shall (A) in
the case of first call meetings, be Persons holding or representing at least
60% in aggregate principal amount of the 7-Year Notes at the time Outstanding
and (B) in the case of second call meetings, be Persons holding or
representing at least 30% in aggregate principal amount of the 7-Year Notes at
the time Outstanding.

 

(e)           Without
the vote of any Holders of 7-Year Notes, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental to the 7-Year Notes Indenture in form
satisfactory to the Trustee, for any of the following purposes:

 

(i)            to
evidence the succession of another Person to the Company and the assumption by
any such successor of the covenants of the Company in the 7-Year Notes
Indenture and in the 7-Year Notes; or

 

26

 

(ii)           to
add to the covenants of the Company for the benefit of the Holders or to
surrender any right or power herein conferred upon the Company; or

 

(iii)          to
secure the 7-Year Notes; or

 

(iv)          to
comply with any requirements of the Commission in order to effect and maintain
the qualification of the 7-Year Notes Indenture under the Trust Indenture Act;
or

 

(v)           to
evidence and provide for acceptance of appointment hereunder by a successor
Trustee pursuant to the provisions of the 7-Year Notes Indenture; or

 

(vi)          to
evidence any further issue of notes having terms and conditions the same as
those of the 7-Year Notes (or the same except for the payment of interest
accruing prior to the issue date of such additional notes or except for the
first payment of interest following the issue date of such additional notes),
which additional notes may be consolidated and form a single series with the 7-Year
Notes; or

 

(vii)         to
cure any ambiguity, to correct or supplement any provision herein which may be
inconsistent with any other provision herein, or to make any other provisions
with respect to matters or questions arising under the 7-Year Notes Indenture
which shall not be inconsistent with the provisions of the 7-Year Notes
Indenture, provided that such action pursuant to
this clause (vii) shall not adversely affect the interests of the Holders
in any material respect; or

 

(viii)        to
increase the aggregate principal amount of Public Debt Securities at any time
outstanding under the 7-Year Notes Indenture.

 

No reference herein and no provision of any of the 7-Year
Notes or of the 7-Year Notes Indenture shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal of and
premium, if any, interest and Additional Amounts, if any, (and, with respect to
the 7-Year Floating Rate Notes, Other Additional Amounts thereon, if any) on
such 7-Year Note at the times, place and rate, and in the coin or currency,
herein prescribed.

 

ARTICLE EIGHT

MISCELLANEOUS

 

SECTION 8.1  Supplemental Indenture.  Under this Second Supplemental Indenture and
in accordance with the terms and provisions of the 7-Year Notes, the Indenture,
as supplemented by and, in the case of Sections 1.1, 2.1, 2.2, 3.1, 3.6(b),
3.9(b)(viii), 3.9(c), 4.1, 4.10, 4.13, 4.17, 6.1, 6.2, 6.6, 6.12, 7.2(f), 7.6,
9.2 and 9.7 of the Indenture, as amended by Sections 1.1, 2.1, 2.2, 3.1, 3.2,
3.3(a), 3.3(b), 4.1, 4.8, 4.10, 4.11, 7.1, 7.2, 7.3, 7.4, 7.5, 8.3, 7.6 and
7.7, respectively, of this Second Supplemental Indenture, is in all respects
ratified and

 

27

 

confirmed, and this
Second Supplemental Indenture shall be deemed part of the Indenture in the
manner and to the extent herein and therein provided.

 

SECTION 8.2  Responsibility of the
Trustee.  The recitals herein
contained are made by the Company and not by the Trustee, and the Trustee
assumes no responsibility for the correctness thereof.  The Trustee makes no representation as to the
validity or sufficiency of this Second Supplemental Indenture.

 

SECTION 8.3  Compensation and
Indemnification of Trustee and Its Prior Claim.  For purposes of this Second Supplemental
Indenture and the 7-Year Notes, Section 7.6 of the Indenture is hereby amended
to read in its entirety as follows:

 

“SECTION 7.6 
Compensation and Indemnification of Trustee and Its Prior Claim.  The Company covenants and agrees to pay to
the Trustee from time to time, and the Trustee shall be entitled to, such
compensation as shall be agreed to in writing (which shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust) and the Company covenants and agrees to pay or reimburse the Trustee and
each predecessor Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by or on behalf of it in accordance
with any of the provisions of this Indenture (including the reasonable
compensation, expenses and disbursements of its counsel and of all agents and
other persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or bad faith.  The Company also covenants to indemnify the
Trustee, the Registrar, their agents, officers and directors, and each
predecessor Trustee for, and to hold them harmless against, any and all loss,
liability, damage, claim or expense, including taxes (other than taxes based on
the income of the Trustee) incurred without negligence or bad faith on their
part, arising out of or in connection with the acceptance or administration of
this Indenture or the trusts hereunder and its duties hereunder and the costs
and expenses of defending itself against or investigating any claim of
liability in the premises.  If the
Trustee incurs expenses or renders services after the occurrence of an Event of
Default specified in Section 6.1(i) and 6.1(j) of the Indenture, the
expenses and the compensation for the services will be intended to constitute
expenses of administration under any bankruptcy law for the relief of
debtors.  The obligations of the Company
under this Section to compensate and indemnify the Trustee, the Registrar,
their agents, officers and employees and each predecessor Trustee and to pay or
reimburse the Trustee, its agents, officers and employees and each predecessor
Trustee for expenses, disbursements and advances with respect to any series of
Debt Securities shall constitute additional indebtedness hereunder and shall
survive the satisfaction and discharge of this Indenture and the resignation or
removal of the Trustee.  Such additional
indebtedness shall be a senior claim to that of the Debt Securities of any
series upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the benefit of the holders of particular Debt
Securities of such series.”

 

SECTION 8.4  Governing Law.  The Negotiable Obligations Law governs the
requirements for the 7-Year Notes to qualify as Obligaciones
Negociables thereunder while such law, together with the Argentine
Business Companies Law No. 19,550, as amended, and other applicable
Argentine laws, govern the capacity and corporate authority of the Company to

 

28

 

execute and deliver the 7-Year
Notes and the authorization of the public offering of the 7-Year Fixed Rate
Notes by the CNV.  All other matters in
respect of the 7-Year Notes and this Second Supplemental Indenture, including
but not limited to the statute of limitations applicable thereto, are governed
by and shall be construed in accordance with, the laws of the State of New
York, United States.

 

SECTION 8.5  Separability.  In case any one or more of the provisions
contained in this Second Supplemental Indenture or in the 7-Year Notes shall for
any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other
provisions of this Second Supplemental Indenture or of the 7-Year Notes, but
this Second Supplemental Indenture and the 7-Year Notes shall be construed as
if such invalid or illegal or unenforceable provision had never been contained
herein or therein.

 

SECTION 8.6  Counterparts.  This Second Supplemental Indenture may be
executed in any number of counterparts each of which shall be an original; but
such counterparts shall together constitute but one and the same instrument,
and all signatures need not appear on any one counterpart.

 

29

 

IN WITNESS WHEREOF, the parties hereto have caused
this Second Supplemental Indenture to be duly executed, as of the day and year
first above written.

 

	
   

  	
  MULTICANAL S.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LAW DEBENTURE TRUST
  COMPANY

  
	
   

  	
   

  	
  OF NEW YORK,

  
	
   

  	
   

  	
  Trustee, Principal Paying Agent and

  
	
   

  	
   

  	
  Co-Registrar

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HSBC Bank Argentina
  S.A.,

  
	
   

  	
   

  	
  Registrar and Paying Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

30

 

EXHIBIT A

FORM OF UNRESTRICTED GLOBAL NOTE (7-Year Fixed Rate Notes)*

 

UNLESS THIS 7% NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”),
EUROCLEAR BANK S.A./N.V. (“EUROCLEAR”) OR CLEARSTREAM BANKING, SOCIÉTÉ ANONYME
(“CLEARSTREAM, BANKING”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY 7% NOTE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC, EUROCLEAR OR CLEARSTREAM, BANKING (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC, EUROCLEAR OR CLEARSTREAM, BANKING), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNERS HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.

 

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE 7-YEAR NOTES INDENTURE REFERRED TO ON THE REVERSE
HEREOF.

 

* Appropriate adjustments
to be made if Note is issued in certificated form.

 

A-1

 

MULTICANAL S.A. (INCORPORATED IN BUENOS AIRES, ARGENTINA, WITH

LIMITED LIABILITY (“SOCIEDAD ANÓNIMA”) UNDER THE LAWS OF THE

REPUBLIC OF ARGENTINA ON JULY 26, 1991, WITH A TERM OF DURATION

EXPIRING ON JULY 27, 2090, AND REGISTERED WITH THE PUBLIC REGISTRY

OF COMMERCE ON JULY 26, 1991 UNDER NUMBER 5225, BOOK 109 OF

VOLUME “A” OF CORPORATIONS, AND WITH DOMICILE AT AVALOS 2057

(C1431DPM) BUENOS AIRES, ARGENTINA)

 

7-YEAR FIXED RATE NOTES

 

	
  No. S-  

  	
   

  	
  $  

  	
   

  
	
   

  	
   

  	
  CUSIP No.

  	
   

  
	
   

  	
   

  	
  ISIN No.

  	
   

  
	
   

  	
   

  	
  Common Code No.

  	
   

  

 

Multicanal S.A., a sociedad anónima
duly organized and existing under the laws of Argentina (the “Company”),
for value received, hereby promises to pay to [Cede & Co.]*, or
registered assigns, the principal sum indicated on Schedule A hereof in
installments on each of the [Interest Payment Dates] as set forth in “Principal”
on the reverse hereof (or on such earlier date as the principal sum may become
repayable in accordance with the terms and conditions set forth in the 7-Year
Notes Indenture or on the reverse hereof), and to pay interest thereon from (1) in the case of the first Interest
Payment Date, December 10, 2003 until [the date the Company accepts Eligible Notes
upon expiration of the Election Offers], (2) in the case of the second Interest Payment Date, from [the date the Company accepts Eligible Notes
upon expiration of the Election Offers] until a date that is six months thereafter, or (3) in the case of
each Interest Payment Date thereafter, from the most recent Interest Payment
Date to which interest has been paid or duly provided for, semiannually
in arrears on [    ] and [      ] of each year, commencing [               ], [2005] [on the date these
Notes are delivered or made available
to holders pursuant to the Company’s APE], at a rate of 7.0% per annum, until the principal hereof is paid or duly
provided for, all subject to and in accordance with the 7-Year Notes
Indenture.  The interest so payable
and punctually paid or duly provided for on any Interest Payment Date will, as
provided in the 7-Year Notes Indenture, be paid to the Person in whose name
this 7-Year Note (or one or more Predecessor 7-Year Fixed Rate Notes) is
registered at the close of business on the fifteenth day (whether or not a
Business Day), immediately preceding such Interest Payment Date.

 

Any such interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular
Record Date, and such defaulted interest, and (to the extent lawful) interest
on such defaulted interest at the rate borne by the 7-Year Fixed Rate Notes,
may be paid to the Person in whose name this 7-Year Note (or one or more
Predecessor 7-Year Fixed Rate Notes) is registered at the close of business on
a Special Record Date for the payment of such defaulted interest to be fixed by
the Trustee, notice whereof shall be given to

 

* Appropriate adjustments
to be made if Note is issued in certificated form.

 

A-2

 

Holders of 7-Year Fixed
Rate Notes not less than 15 days prior to such Special Record Date, or may be
paid at any time in any other lawful manner not inconsistent with the
requirements of any exchange on which the 7-Year Fixed Rate Notes may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in the 7-Year Notes Indenture.

 

The principal of, premium, if any, on and interest on
this 7-Year Note shall be payable, and the transfer of this 7-Year Note shall
be registrable, at the Corporate Trust Office of Law Debenture Trust Company of
New York, as Trustee, Co-Registrar and Principal Paying Agent, in The City of
New York, at the main office of HSBC Bank Argentina S.A., as Registrar and
Paying Agent, in Buenos Aires, Argentina or at the option of the Holder and
subject to any fiscal or other laws and regulations applicable thereto, at the
office of any other Paying Agent appointed by the Company.  The Company shall provide to the Principal
Paying Agent, in funds available on or prior to the Business Day prior to each
date on which a payment of principal of, premium, if any, or any interest on
the 7-Year Fixed Rate Notes shall become due, as set forth herein, such amount
in U.S. Dollars as is necessary to make such payment, and the Company hereby
authorizes and directs the Principal Paying Agent from funds so provided to it
to make or cause to be made payment of the principal of and any interest, as
the case may be, on the 7-Year Fixed Rate Notes as set forth herein and in the 7-Year
Notes Indenture; provided that payment with
respect to principal of and premium, if any, interest and Additional Amounts,
if any, on any 7-Year Note may, at the Company’s option, be made, subject to
applicable laws and regulations, by U.S. Dollar check drawn on a bank in The
City of New York mailed to the Holders of 7-Year Fixed Rate Notes at their
respective addresses set forth in the register of Holders of 7-Year Fixed Rate
Notes; provided further that all payments with
respect to Global Notes the Holders of which have given wire transfer
instructions to the Company will be required to be made by wire transfer of
immediately available funds to the accounts specified by the Holders thereof.  Unless such designation is revoked, any such
designation made by such Person with respect to such 7-Year Note will remain in
effect with respect to any future payments with respect to such 7-Year Note
payable to such Person.

 

Interest on the 7-Year Fixed Rate Notes shall be
computed on the basis of a 360-day year consisting of 12 months of 30 days each
and, in the case of an incomplete month, the number of days actually elapsed.

 

All payments of principal and interest hereunder shall
be made exclusively in U.S. Dollars or in such coin or currency of the United
States as at the time of payment shall be legal tender for the payment of
public and private debts.

 

This 7-Year Note has been issued pursuant to
resolutions of an ordinary meeting of shareholders of the Company adopted on January 22,
2003 and resolutions of the Board of Directors of the Company adopted at its
meetings on [               ].

 

Reference is hereby made to the further provisions of
this 7-Year 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.

 

A-3

 

Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse hereof by manual
signature, this 7-Year Note shall not be valid or obligatory for any purpose.

 

A-4

 

IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.

 

	
   

  	
  MULTICANAL S.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

A-5

 

[REVERSE OF 7-YEAR FIXED
RATE NOTE]

 

7-YEAR FIXED RATE NOTES

 

This 7-Year Note is a negotiable obligation under the
Negotiable Obligations Law and is one of a duly authorized issue of a series of
Debt Securities of the Company designated as its 7-Year Fixed Rate Notes due
[2012], initially limited in aggregate principal amount to U.S.$[ ] (the “7-Year
Fixed Rate Notes” and each, a “7-Year Note”), as may be set forth
from time to time, issued and to be issued under an indenture, dated as of
[         ], [2005] (the “Indenture”),
as supplemented and amended by a second supplemental indenture, dated as of
[              ], [2005] (the “Second
Supplemental Indenture” and, together with the Indenture, the “7-Year
Notes Indenture”), each of the Indenture and the Second Supplemental
Indenture among the Company, Law Debenture Trust Company of New York, as
Trustee, Co-Registrar and Principal Paying Agent, and HSBC Bank Argentina S.A.,
as Registrar and Paying Agent thereunder. 
Reference to the 7-Year Notes Indenture and all indentures supplemental
thereto is hereby made for a statement of the respective rights, limitations of
rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of 7-Year Fixed Rate Notes and of the terms upon which the 7-Year Fixed
Rate Notes are, and are to be, authenticated and delivered.  The terms of the 7-Year Fixed Rate Notes
include those stated in the 7-Year Notes Indenture and those made part of the 7-Year
Notes Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
§§ 77aaa-77bbbb), as amended (the “Trust Indenture Act”).  The 7-Year Fixed Rate Notes are subject to
all such terms, and Holders are referred to the 7-Year Notes Indenture and the
Trust Indenture Act for a statement of those terms.

 

The Indebtedness evidenced by the 7-Year Fixed Rate
Notes will constitute the direct, unsecured and unconditional unsubordinated
Indebtedness of the Company and will rank pari passu in
right of payment without any preference among themselves.  The payment obligations of the Company under
the 7-Year Fixed Rate Notes will at all times rank at least equally in priority
of payment with all other present and future unsecured and unsubordinated
Indebtedness of the Company and senior in priority of payment with all other
present and future Subordinated Indebtedness of the Company from time to time
outstanding.

 

Form, Denomination and
Registration

 

The 7-Year Fixed Rate Notes shall be issuable only in
registered form without coupons in denominations of U.S.$1.00 or multiples of
U.S.$1.00 in excess thereof, including if issued other than as a Global Note
and in exchange for beneficial interests in a Restricted Global Note.  No service charge shall be made for any
registration of transfer or exchange of 7-Year Fixed Rate Notes, but the
Trustee may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.

 

A-6

 

Principal

 

Any principal not prepaid (in whole or in part) on the
7-Year Fixed Rate Notes shall be due and payable in installments on the
following [Interest Payment Dates] and in the following percentages or amount:

 

	
   

  	
   

  	
   

  	
  Third

  Anniversary

  of [the
  date

  the Company

  accepts

  Eligible

  Notes upon

  expiration of

  the Election

  Offers],

  [2005]

  	
   

  	
   

  	
  Fourth

  Anniversary

  of [the
  date

  the Company

  accepts

  Eligible Notes

  upon

  expiration of

  the Election

  Offers],

  [2005]

  	
   

  	
   

  	
  Fifth

  Anniversary

  of [the
  date

  the Company

  accepts

  Eligible

  Notes upon

  expiration of

  the Election

  Offers],

  [2005]

  	
   

  	
   

  	
  Sixth

  Anniversary

  of [the date

  the

  Company

  accepts

  Eligible

  Notes upon

  expiration of

  the Election

  Offers],

  [2005]

  	
   

  	
   

  	
  Maturity

  Date

  	
   

  
	
  Percentage/amount
  of outstanding principal amount payable as of such date

  	
   

  	
   

  	
  5%

  	
   

  	
   

  	
  10%

  	
   

  	
   

  	
  15%

  	
   

  	
   

  	
  20%

  	
   

  	
   

  	
  Remaining principal outstanding

  	
   

  

 

provided that the
amount of each such installment will be calculated for each U.S.$1.00 of the
face amount of the 7-Year Fixed Rate Notes and rounded to the nearest cent
(half a cent being rounded upwards); and provided
further that the last such installment will be in the amount
necessary to repay in full the outstanding principal amount of the 7-Year Fixed
Rate Notes.

 

Payment; Paying Agents
and Transfer Agent

 

The principal of, premium, if any, on and interest on
the Registered 7-Year Fixed Rate Notes shall be payable, and the transfer of
such Registered 7-Year Fixed Rate Notes will be registrable, at the corporate
trust office of the Trustee in the Borough of Manhattan, The City of New York,
at the main office of the Paying Agent in Argentina and, at the option of the
Holder of such Registered 7-Year Fixed Rate Notes and subject to any fiscal or
other laws and regulations applicable thereto, at the office of any other
Paying Agents appointed by the Company. 
Payments with respect to principal of the 7-Year Fixed Rate Notes will
be made only against surrender of such 7-Year Fixed Rate Notes at the office of
the Trustee in The City of New York or at the main office of the Paying Agent
in Argentina.  Payment with respect to
principal, premium, if any, and interest with respect to any 7-Year Note may,
at the Company’s option, be made, subject to applicable laws and regulations,
by U.S. Dollar check drawn on a bank in The City of New York mailed to the
Holders of 7-Year Fixed Rate Notes at their respective addresses set forth in
the 7-Year Note Register, provided that
all payments with respect to Global Notes the Holders of which have given wire
transfer instructions to the Company will be required to be made by wire
transfer of immediately available funds to the accounts specified by the
Holders thereof.  Unless such designation
is revoked, any such

 

A-7

 

designation made by such
Person with respect to such 7-Year Note will remain in effect with respect to
any future payments with respect to such 7-Year Note payable to such Person.

 

Any money deposited with the Trustee or any Paying
Agent in trust for the payment of the principal of, or premium, if any,
interest or Additional Amounts, if any, on any 7-Year Note and remaining
unclaimed for two years after such principal, premium, if any, interest or
Additional Amounts, if any, has become due and payable shall be repaid to the
Company on Company Request; and the Holder of such 7-Year Note shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, (i) in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in The City of New
York, and (ii) in the Official Gazette of
Argentina and in a newspaper published in the Spanish language and
of general circulation in Argentina, notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such publication, any unclaimed balance of such money then
remaining shall be repaid to the Company.

 

If any payment on a 7-Year Note is due on a day that
is, at any place of payment, a day on which banking institutions are authorized
or obligated by law or executive order to close, then, at each such place of
payment, such payment need not be made on such day but may be made on the next
succeeding day that is not, at such place of payment, a day on which banking
institutions are authorized or obligated by law or executive order to close,
with the same force and effect as if made on the date for such payment, and no
interest will accrue for the period from and after such due date to such next
succeeding day that is not, at such place of payment, a day on which banking
institutions are authorized or obligated by law or executive order to close.

 

Payments of Additional
Amounts

 

All payments by the Company in respect of the 7-Year
Fixed Rate Notes will be made free and clear of and without deduction or
withholding for or on account of any present or future taxes, duties, levies,
imposts, assessments or other charges (including penalties, interest and other
additions thereto) that are imposed by or on behalf of any political
subdivision or territory or possession of Argentina or any authority or agency
therein or thereof having power to tax (“Taxes”) unless such withholding
or deduction is required by law.  If the
Company is required by law to make any such withholding or deduction, the
Company will pay to any Holder such additional amounts (“Additional Amounts”)
as may be necessary in order that every net payment made by the Company on the
Holder’s 7-Year Note after deduction or withholding for or on account of any
such present or future Taxes will not be less than the amount then due and
payable on such 7-Year Note.  The
foregoing obligation to pay Additional Amounts, however, will not apply to (i) any
Taxes that would not have been imposed but for the existence of any present or
former connection between such Holder and Argentina other than the mere receipt
of such payment or the ownership or holding of such 7-Year Note; (ii) any
Taxes that would not have been imposed but for the presentation by the Holder
of such 7-Year Note for payment on a

 

A-8

 

date more than 15 days
after the date on which such payment became due and payable or the date on
which payment thereof is duly provided for, whichever occurs later; (iii) if
the beneficial owner of such 7-Year Note had been the Holder of the 7-Year Note
and would not be entitled to the payment of Additional Amounts; (iv) any
Taxes required to be deducted or withheld by any paying agent from a payment on
a 7-Year Note, if such payment can be made without such deduction or
withholding by any other paying agent; or (v) any Taxes that would not
have been imposed but for the failure of the Holder to comply with any applicable
certification, documentation, information or other reporting requirement
concerning the nationality, residence, identity or connection with the taxing
jurisdiction of the Holder or beneficial owner of such 7-Year Note.

 

Any reference herein to principal and/or interest
shall be deemed also to refer to any Additional Amounts which may be payable
under the undertakings described in this paragraph, and express reference to
the payment of Additional Amounts (if applicable) in any provisions hereof shall
not be construed as excluding Additional Amounts in those provisions hereof
where such express reference is not made.

 

In addition, the Company agrees to pay any stamp,
issue, registration, documentary or other similar taxes and duties, including
interest and penalties that may be imposed by Argentina or the United States in
connection with the creation, issue and offering of this 7-Year Note.

 

Redemption for Tax
Reasons

 

If at any time subsequent to the issuance of the 7-Year
Fixed Rate Notes, as a result of any change in or amendment to the laws,
regulations or governmental policy having the force of law or in the official
interpretation or application thereof of Argentina (or of any political
subdivision or taxing authority thereof or therein) or any execution of or
amendment to, any treaty or treaties affecting taxation to which Argentina (or
such political subdivision or taxing authority) is a party, which change or
amendment becomes effective after the date of the Indenture, the Company is
required, or would be required on the next succeeding interest payment date, to
pay Additional Amounts in respect of payments on the 7-Year Fixed Rate Notes
and the payment of such Additional Amounts cannot be avoided by the use of any
reasonable measures available to the Company (which shall not include any
adverse modification of the terms of the 7-Year Notes Indenture or the 7-Year
Fixed Rate Notes), then the 7-Year Fixed Rate Notes may be redeemed as a whole
(but not in part), at the option of the Company, at any time upon not less than
30 nor more than 90 days’ notice given to the Holders of 7-Year Fixed Rate
Notes at any time at an amount equal to 100% of their principal amount together
with accrued and unpaid interest thereon to the date fixed for redemption.

 

In order to effect a redemption of the 7-Year Fixed
Rate Notes pursuant to the preceding paragraph, the Company shall deliver to
the Trustee, at least 45 days prior to the Redemption Date, (i) a
certificate signed by two directors of the Company stating that the obligation
to pay such Additional Amounts cannot be avoided by the Company taking
reasonable measures available to it and (ii) an opinion of independent
legal counsel of recognized standing to the effect that the Company has or will
become obligated to pay such Additional Amounts as a

 

A-9

 

result of such change,
amendment or executed or amended treaty. 
Such certificate, once delivered by the Company to the Trustee, will be
irrevocable and upon its delivery the Company shall be obligated to make the
payment or payments referred to therein. 
No notice of redemption may be given earlier than 90 days prior to
the earliest date on which the Company would be obligated to pay such
Additional Amounts were a payment in respect of the 7-Year Fixed Rate Notes
then due.  The certificate shall
additionally specify the Redemption Date and all other information necessary
for the publication and mailing by the Trustee of notices of such redemption.  The Trustee shall be entitled to rely
conclusively upon the information so furnished by the Company in such
certificate and shall be under no duty to check the accuracy or completeness
thereof.

 

Purchase by the Company

 

Subject to the “Limitation on Repurchase of 7-Year
Notes and 10-Year Notes” covenant, Company may at any time purchase 7-Year
Fixed Rate Notes in the open market or by tender or private agreement at any
price.  All 7-Year Fixed Rate Notes so
purchased must be delivered by the Company to the Trustee for cancellation.

 

Certain Covenants

 

1.                                       Limitation
on Indebtedness.

 

Under the terms of the 7-Year Notes Indenture, so long
as any of the 7-Year Notes are Outstanding, the Company will not, and will not
permit any of its Subsidiaries to directly or indirectly Incur any Indebtedness
(including Acquired Indebtedness); provided
that the Company (but not any Subsidiary of the Company) may Incur Indebtedness
(including Acquired Indebtedness) and a Subsidiary of the Company may Incur
Acquired Indebtedness if, after giving effect to the application of the
Incurrence of any such Indebtedness and the receipt and application of the
proceeds therefrom, the ratio of Total Consolidated Indebtedness to Annualized
Pro Forma Consolidated Operating Cash Flow would be less than or equal to 6.5
to 1.0.

 

The foregoing limitations on the Incurrence of
Indebtedness will not apply to:

 

(i)                                     the
Incurrence by the Company of Permitted Indebtedness;

 

(ii)                                  the
Incurrence by any Subsidiary of the Company of Permitted Subsidiary
Indebtedness;

 

(iii)                               the Incurrence of
Indebtedness by the Company (but not any Subsidiary of the Company) other than
Indebtedness described in the foregoing clause (i), which Indebtedness when
added to the then outstanding Indebtedness previously Incurred under this
clause (iii) and the outstanding Indebtedness of Subsidiaries of the
Company previously Incurred under clause (iv) below, does not exceed, as
of the date of determination, U.S.$25 million in aggregate principal amount;
and

 

A-10

 

(iv)                              the
Incurrence of Indebtedness by Subsidiaries of the Company which Indebtedness, (A) when
added to the outstanding Indebtedness of Subsidiaries of the Company previously
Incurred under this clause (iv), does not exceed, as of the date of
determination, U.S.$10 million in aggregate principal amount, and (B) when
added to the outstanding Indebtedness of the Company previously Incurred under
clause (iii) above and the outstanding Indebtedness of Subsidiaries of the
Company previously Incurred under this clause (iv), does not exceed, as of the
date of determination, U.S.$25 million in aggregate principal amount.

 

2.                                       Maximum
Total Consolidated Indebtedness.

 

So long as any 7-Year Notes remain Outstanding, the Company will maintain a Total Consolidated
Indebtedness of no greater than the initial aggregate principal amount of the 7-Year
Notes and the 10-Year Notes plus U.S.$5 million of seller financing
outstanding on the Issue Date plus U.S.$10 million (or its equivalent in
other currencies) minus 90% of the aggregate principal amount of any 7-Year
Notes or 10-Year Notes cancelled on or prior to the date of determination, minus
90% of the aggregate principal amount of any seller financing outstanding on
the Issue Date plus the aggregate amount of Indebtedness Incurred as a
result of a transaction permitted under clause (iii) of the “Consolidation,
Merger and Sale of Assets” covenant herein minus 90% of the aggregate
principal amount of any such Indebtedness discharged prior to the date of
determination.

 

3.                                       Limitation
on Dividends and Other Payment Restrictions Affecting Significant Subsidiaries

 

Under the terms of the 7-Year Notes Indenture, so long
as any of the 7-Year Notes are Outstanding, the Company will not, and will not
permit any Significant Subsidiary to, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or consensual restriction
of any kind on the ability of any Significant Subsidiary to (i) pay
dividends or make any other distributions permitted by applicable law to the
Company or any Significant Subsidiary on its Capital Stock or with respect to
any other interest or participation in, or measured by, its profits, (ii) pay
any Indebtedness or other obligation owed to the Company or any other Significant
Subsidiary, (iii) make loans or advances to the Company or any other
Significant Subsidiary or (iv) sell, lease or transfer any of its property
or assets to the Company or any other Significant Subsidiary.

 

The foregoing provisions shall not restrict (A) in
the case of clause (i), (ii), (iii) or (iv), any such encumbrance or
restriction (I) existing under the 7-Year Notes Indenture; (II) existing under
or by reason of applicable law; (III) existing under any instrument governing
Acquired Indebtedness or Capital Stock of any Person or the property or assets
of such Person acquired by the Company or any Significant Subsidiary and
existing at the time of such acquisition (except to the extent such Acquired
Indebtedness was Incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person
or the property or assets of any Person other than such Person or the property
or assets of such Person so acquired; (IV) existing under any agreement or
instrument that refinances an Indebtedness or replaces, renews or amends an
agreement or instrument containing an encumbrance or restriction that is
permitted by clauses (I) and (III) above, provided
that the

 

A-11

 

terms and conditions of
any such restrictions taken as a whole are not less favorable to the Holders
than those under or pursuant to the Indebtedness being refinanced or the
agreements or instruments being replaced, renewed or amended; or (V) with
respect to a Significant Subsidiary and imposed pursuant to an agreement that
has been entered into for the sale or disposition of all or substantially all
of the Capital Stock of, or property and assets of, such Significant
Subsidiary; or (B), in the case of clause (iv) only, any such encumbrance
or restriction (I) that restricts in a customary manner the subletting,
assignment or transfer of any property or asset subject to a lease or license,
or (II) existing by virtue of any transfer of, agreement to transfer, option or
right with respect to, or Lien on, any property or assets of the Company or any
Significant Subsidiary not otherwise prohibited by the 7-Year Notes
Indenture.  Nothing contained in this
paragraph shall prevent the Company or any Significant Subsidiary from (1) creating,
incurring, assuming or suffering to exist any Liens otherwise permitted under
the “Limitation on Liens” covenant or (2) restricting the sale or other
disposition of property or assets of the Company or any of its Significant
Subsidiaries that secure Indebtedness of the Company or any Significant
Subsidiary, subject to compliance with the “Limitation on Asset Sales”
covenant.

 

4.                                       Limitation
on the Issuance and Sale of Capital Stock of Significant Subsidiaries

 

Under the terms of the 7-Year Notes Indenture, the
Company will not sell, and will not permit any Significant Subsidiary, directly
or indirectly, to issue or sell, any shares of Capital Stock of a Significant
Subsidiary (including options, warrants or other rights to purchase shares of
such Capital Stock) except (i) to the Company or a Wholly-Owned Subsidiary
that, at the time of such sale, is a Significant Subsidiary, (ii) if,
immediately after giving effect to such issuance or sale, such Significant
Subsidiary would no longer constitute a Significant Subsidiary, (iii) in
the case of issuances of Capital Stock by a Significant Subsidiary if, after
giving effect to such issuance, the Company maintains its percentage ownership
of such Significant Subsidiary, (iv) the issuance to or ownership by
directors of directors’ qualifying shares or the issuance to or ownership by a
Person of Capital Stock of any Significant Subsidiary, to the extent mandated
by applicable law, or (v) the issuance or transfer of Capital Stock of a
Significant Subsidiary to the seller or transferor of a
Cable/Telecommunications Business, provided
that after giving effect to any such issuance or transfer, the Company holds at
least 51% of the Capital Stock (including 51% of the Voting Stock) of any such
Significant Subsidiary, and provided
further that in the case of
clauses (ii), (iii) and (v) above, any such issuance or sale shall
comply with the “Limitation on Asset Sales” covenant.

 

5.                                       Limitation
on Issuances of Guarantees by Subsidiaries

 

Under the terms of the 7-Year Notes Indenture, the
Company will not permit any Subsidiary of the Company, directly or indirectly,
to Guarantee any Indebtedness of the Company (“Guaranteed Indebtedness”),
unless (i) such Subsidiary simultaneously executes and delivers a
supplemental indenture to the 7-Year Notes Indenture providing for a Guarantee
by such Subsidiary (a “Subsidiary Guarantee”) of payment of the 7-Year
Notes and (ii) such Subsidiary waives and will not in any manner
whatsoever claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any other rights against the Company
or any other Subsidiary of the Company as a result of any payment by such
Subsidiary under its Subsidiary Guarantee; provided
that this paragraph shall not be applicable to any

 

A-12

 

Guarantee of any
Subsidiary of the Company that (x) exists at the time such Person becomes a
Subsidiary of the Company and (y) was not Incurred in connection with, or in
contemplation of, such Person becoming a Subsidiary of the Company.  If the Guaranteed Indebtedness is pari passu with the 7-Year Notes, then the
Guarantee of such Guaranteed Indebtedness shall be pari passu with, or subordinated to, the Subsidiary Guarantee.  If the Guaranteed Indebtedness is
subordinated to the 7-Year Notes, then the Guarantee of such Guaranteed
Indebtedness shall be subordinated to the Subsidiary Guarantee at least to the
extent that the Guaranteed Indebtedness is subordinated to the 7-Year Notes.

 

Notwithstanding the foregoing, any Subsidiary
Guarantee by a Subsidiary of the Company shall provide by its terms that it
shall be automatically and unconditionally released and discharged upon (i) any
sale, exchange or transfer, to any Person not an Affiliate of the Company, of
all of the Company’s and each of its Subsidiary’s Capital Stock in, or all or
substantially all the assets of, such Subsidiary (which sale, exchange or
transfer is not in contravention of the “Limitation on Asset Sales” covenant
and is not otherwise prohibited hereby) or (ii) the release or discharge
of the Guarantee which resulted in the creation of such Subsidiary Guarantee,
except a discharge or release by or as a result of payment under such
Guarantee.

 

6.                                       Limitation
on Transactions with Shareholders and Affiliates

 

Under the terms of the 7-Year Notes Indenture, the
Company will not, and will not permit any Subsidiary to, directly or
indirectly, conduct any business, enter into, renew or extend any transaction
(including, without limitation, the purchase, sale, lease, exchange or transfer
of property or assets, the rendering of any service, or the making of any
payment, loan, advance or guarantee) with, or for the benefit of, any holder
(or any Affiliate of such holder) of 10% or more of the Capital Stock of the
Company or with any Affiliate of the Company or of any Subsidiary (together, “Related
Persons” and each, a “Related Person”), unless the terms to the
Company or such Subsidiary (i) are at least as favorable to the Company or
such Subsidiary as those that could be obtained at the time of such transaction
in arm’s length dealings with a Person who is not a Related Person, and (ii) in
the case of any transaction (or series of transactions) with a Related Person
involving aggregate payments made on or after the Issue Date in excess of
U.S.$10 million in any fiscal year, shall be approved by a majority of the
disinterested members of the Board of Directors of the Company, or if no such
disinterested directors exist with respect to such transaction (or series of
transactions), shall be confirmed by an opinion of an Independent Financial
Advisor to be fair, from a financial point of view, to the Company or such
Subsidiary.

 

The foregoing limitation does not limit, and shall not
apply to (i) any transaction between the Company and any of its
Subsidiaries or between Subsidiaries, (ii) payment of reasonable and
customary compensation and fees to directors of the Company and the
Subsidiaries who are not employees of the Company or any Subsidiary, or (iii) the
grant of stock options or similar rights to acquire Capital Stock (other than
Disqualified Stock) to employees and directors of the Company pursuant to plans
approved by the Board of Directors provided that, in the aggregate, the shares
of Capital Stock underlying such options or similar rights issued since the
Issue Date (exclusive of any shares of Capital Stock or similar rights required
to be

 

A-13

 

issued by law) shall not
exceed 2.5% of the outstanding Common Stock of the Company on a fully diluted
basis at the date of determination.

 

7.                                       Limitation
on Liens

 

Under the terms of the 7-Year Notes Indenture, the
Company will not, and will not permit any Subsidiary of the Company to create,
incur, assume or suffer to exist any Liens of any kind (other than Permitted
Liens) against or upon any of its property or assets (including any shares of
Capital Stock), now owned or hereafter acquired, or any proceeds therefrom
securing any Indebtedness unless provision is made directly to secure the 7-Year
Notes equally and ratably by a Lien on such property, assets or proceeds with
(or, if the obligation or liability to be secured by such Lien is Subordinated
Indebtedness, prior to) the obligation or liability secured by such Lien.

 

8.                                       Limitations
on Sale and Leaseback Transactions

 

Under the terms of the 7-Year Notes Indenture, the
Company will not, and will not permit any of its Subsidiaries to, directly or
indirectly, enter into, assume, guarantee or otherwise become liable with
respect to any Sale and Leaseback Transaction, unless:  (i) the net proceeds from such
transaction are at least equal to the Fair Market Value of the property being
transferred and (ii) shall comply with the “Limitation on Asset Sales”
covenant.

 

For purposes of the preceding paragraph, “Sale and
Leaseback Transaction” means, with respect to any Person, any direct or
indirect arrangement (excluding, however, any such arrangement between such
Person and a Wholly-Owned Subsidiary of such Person or between one or more
Wholly-Owned Subsidiaries of such Person) pursuant to which property is sold or
transferred by such Person or a Subsidiary of such Person and is thereafter
leased back from the purchaser or transferee thereof by such Person or one of
their Subsidiaries.

 

9.                                       Limitation
on Asset Sales

 

Under the terms of the 7-Year Notes Indenture, the
Company will not, and will not permit any of its Subsidiaries to make any Asset
Sale that would result in a Material Adverse Effect occurring and, in the case
of Asset Sales involving consideration of U.S.$10 million or more, unless an
Independent Financial Advisor shall have delivered a valuation of the property
or asset being sold to the Board of Directors and at a price consistent with
such valuation.

 

10.                                 Reports
to Holders

 

Under the terms of the 7-Year Notes Indenture, the
Company covenants to deliver to the Trustee:

 

(a)                                  (i) annual
consolidated financial statements with a report from a major internationally
recognized independent public accountant with respect to such year within 180
days after the end of the fiscal year and (ii) quarterly consolidated
financial statements within 60 days after the end of each of the first three
fiscal quarters;

 

A-14

 

(b)                                 such
additional information as the Company has filed with any regulatory authority
with jurisdiction over the Company within ten business days of the filing
thereof;

 

(c)                                  written
notice of the occurrence of any Default or Event of Default within ten Business
Days of the Company becoming aware of any such Default or Event of Default,
which notice shall be signed by the CEO, CFO or the chief accounting officer of
the Company; and

 

(d)                                 written
certification, on or before a date not more than 90 days after the end of each
fiscal year, that a review has been conducted of the activities of the Company
and its Subsidiaries, and of the Company’s and its Subsidiaries’ performance
under the 7-Year Notes Indenture, and that the Company has, to the best of
their knowledge, fulfilled all obligations under the 7-Year Notes Indenture,
or, if there has been a default in the fulfillment of any such obligation,
specifying each such default and the nature and status thereof.

 

Delivery of such reports, information and documents to
the Trustee is for informational purposes only and the Trustee’s receipt of
such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Company’s compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers’ Certificates).

 

11.                                 Consolidation,
Merger and Sale of Assets

 

Under the terms of the 7-Year Notes Indenture, the
Company shall not consolidate with, merge with or into, or sell, convey,
transfer, lease or otherwise dispose of all or substantially all of its
property and assets (as an entirety or substantially an entirety in one
transaction or a series of related transactions) to, any Person (other than a
consolidation or merger with or into a Wholly-Owned Subsidiary which, at the
time of such consolidation or merger, is a Significant Subsidiary with a
positive net worth; provided
that, in connection with any such merger or consolidation, no consideration
(other than Common Stock in the surviving Person or the Company) shall be
issued or distributed to the stockholders of the Company) or permit any Person
to merge with or into the Company unless: 
(i) the Company shall be the continuing Person, or the Person (if
other than the Company) formed by such consolidation or into which the Company
is merged or that acquired or leased such property and assets of the Company
shall expressly assume, by a supplemental indenture, executed and delivered to
a Responsible Officer of the Trustee, all of the obligations of the Company
under the 7-Year Notes Indenture; (ii) immediately after giving effect to
such transaction, no Default or Event of Default shall have occurred and be
continuing; (iii) (A) the transaction will involve a Person
principally engaged in the Company’s line of business or in a business or
activities ancillary to the Company’s line of business, or reasonably related
therewith (including, but not limited to programming, MMDS, broadband, pay
television and the provision of access service to, content for or ancillary
services such as web-hosting, network security and monitoring, digital
certificates or equipment installation or maintenance, for the Internet, but
excluding non-pay television services, AM or FM radio broadcasting, telephone
or cellular communications and publication of newspapers), (B) immediately
after giving effect to such transaction on a pro forma basis, the Company, or
any surviving Person will have Consolidated Net Worth equal to or greater than
the Consolidated Net Worth of the Company immediately preceding the

 

A-15

 

transaction (provided
that this requirement will not apply where such transaction involves another
Person engaged in substantially the Company’s line of business in Argentina),
and (C) (1) the weighted average life of the Company’s (or the
surviving Person’s) consolidated Indebtedness after giving effect to the
transaction would exceed the lesser of (x) five years and (y) the weighted
average life of the Company’s consolidated Indebtedness immediately prior to
the transaction and (2) after giving effect to such transaction the
Company (or the surviving Person) would either be permitted to Incur at least
U.S.$1.00 of additional Indebtedness pursuant to the “Limitation on
Indebtedness” covenant, if such Incurrence was not permitted prior to giving
effect to such transaction or, if such Incurrence was permitted, have a lower
ratio of Total Consolidated Indebtedness to Annualized Pro Forma Consolidated
Operating Cash Flow than that of the Company prior to giving effect to such
transaction; and (iv) the Company delivers to the Trustee an Officers’
Certificate (attaching the arithmetic computations to demonstrate compliance
with clause (iii)) and an opinion of reputable Argentine counsel, in each case
stating that such consolidation, merger or transfer and such supplemental
indenture complies with clause (i) of this provision and that all
conditions precedent provided for herein relating to such transaction have been
complied with.

 

12.                                 Reserve
Accounts

 

Under
the terms of the 7-Year Notes Indenture, so long as any of the 7-Year Notes are
Outstanding, the Company will establish and maintain with a bank located in New
York two U.S. dollar-denominated reserve accounts (the “Reserve Accounts”)
to which the Company will transfer, on a ratable basis (by reference to the amounts
of principal and interest due (including additional amounts) within twelve
months of the date of determination under the 7-Year Notes, in one case, and
the 10-Year Notes, in the other case), on the first Interest Payment Date
following May 15th (the “First Annual Transfer Date”)
and November 15th (the “Second Annual Transfer Date”
and, together with the First Annual Transfer Date, the “Transfer Dates”)
of any given year, any amount of Excess Cash calculated, in the case of the
First Annual Transfer Date, by reference to the Company’s unaudited interim
consolidated financial statements as of and for the three-month period ended March 31st
of the same calendar year, and for the Second Annual Transfer Date, by
reference to the Company’s unaudited interim consolidated financial statements
as of and for the three-month period ended September 30th of the
same calendar year, so that (A) the balance in one of the Reserve Accounts
(the “7-Year Notes Reserve Account”) shall not exceed the sum of (x) 12
months of interest payments on the 7-Year Notes (assuming an interest rate of
7% for any 7-Year Notes that are 7-Year Floating Rate Notes) and Additional
Amounts, if any, thereon and (y) any amount of principal of the 7-Year Notes
due within 12 months of such Transfer Date, and (B) the balance in the
other Reserve Account (the “10-Year Notes Reserve Account”) shall not
exceed 12 months of interest payments on the 10-Year Notes and Additional
Amounts, if any, thereon.  Amounts
required to be transferred in accordance herewith will be determined by
reference to the Peso amounts using the Company’s consolidated balance sheets
for the relevant dates and converting such amounts into U.S. Dollars at the
prevailing exchange rate on the Buenos Aires business day immediately preceding
the relevant Transfer Date.  The 7-Year
Notes Reserve Account shall be subject to a first-priority security interest in
favor of the Trustee, as collateral agent for the Holders of 7-Year Notes.  In the event that on any Transfer Date any
restrictions or prohibition of access to the Argentine foreign exchange market
exists, the Company agrees to transfer all amounts required to be transferred
under this section either (i) by purchasing, with Pesos, any series
of “Bonos Externos de la

 

A-16

 

República Argentina” or
any other securities or public or private bonds issued in Argentina and
denominated in U.S. Dollars, and transferring and selling such instruments
outside Argentina for U.S. dollars, or (ii) by means of any other legal
procedure existing in Argentina on any such Transfer Date.  All costs and taxes payable in connection
with the procedures referred to in (i) and (ii) above shall be borne
by the Company.  In the event that the
Company consummates the transactions contemplated in the APE on the date that
is after March 31 or September 30, as applicable, the amount of
Excess Cash required to be transferred on the first Transfer Date after the
issuance of the 7-Year Notes will be reduced by an amount equal to all cash
payments the Company is required to make in connection with or in contemplation
of that closing.

 

13.                                 Cash
Sweep

 

Under the terms of the 7-Year Notes Indenture, so long
as any principal amount of 7-Year Notes shall remain outstanding, if the amount
of Excess Cash for any Transfer Date (after complying with the obligation set
forth in Clause 12) exceeds U.S.$3,000,000 (or the equivalent thereof in other
currencies), the Company will apply 70% of any such surplus Excess Cash (the
determination of such amount to be certified by the Company’s independent
auditors) plus, without duplication, 100% of the Unapplied Net Asset Sale
Proceeds on such Transfer Date to the ratable pre-payment of any outstanding 7-Year
Notes.  Amounts required to be prepaid in
accordance herewith will be determined by reference to the Peso amounts using
the Company’s consolidated balance sheets for the relevant dates and converting
such amounts into U.S. Dollars at the prevailing exchange rate on the date of
the mandatory prepayment).  In the event
that on any Transfer Date any restriction or prohibition of access to the
Argentine foreign exchange market exists, the Company agrees to pay all amounts
required to be paid under this section either (i) by purchasing, with
Pesos, any series of “Bonos Externos de la República Argentina” or any other
securities or public or private bonds issued in Argentina and denominated in
U.S. Dollars, and transferring and selling such instruments outside Argentina
for U.S. dollars, or (ii) by means of any other legal procedure existing
in Argentina on any such Transfer Date. 
All costs and taxes payable in connection with the procedures referred
to in (i) and (ii) above shall be borne by the Company.

 

The Company shall effectuate any pre-payment of the 7-Year
Notes described in Section 4.3(a) by providing not more than 30 nor
less than five days’ irrevocable notice to Holders of 7-Year Notes and
redeeming Outstanding 7-Year Notes, on a pro rata basis, at their remaining
principal amount thereof, together with accrued interest to the relevant
Transfer Date.

 

14.                                 Limitation
on Capital Expenditures

 

Under the terms of the 7-Year Notes Indenture, so long
as any 7-Year Notes shall remain Outstanding, except for Asset Sale Proceed
Reinvestments, the Company shall not make or permit any Subsidiaries to make
any Capital Expenditure at any time, except that the Company and its
Subsidiaries may make such Capital Expenditures if after giving effect to such
Capital Expenditures, the aggregate amount of all Capital Expenditures of the
Company and its Subsidiaries in each of the following periods would not exceed
the sum of:

 

(A) U.S.$15 million for every six months starting
with the six-month period ending June 30, 2005 through the maturity date
of the 7-Year Notes;

 

A-17

 

and

 

(B) in each of the periods, the unused portion of
Capital Expenditures permitted under clause (A) above for the prior period
(after giving effect to the application of this clause (B)).

 

15.                                 Limitation
on Interest Expense

 

At any time after the issuance of the 7-Year Notes, so
long as any 7-Year Notes remain Outstanding, the Company will not permit the
ratio of Pro Forma Consolidated Operating Cash Flow to Consolidated Interest
Expense in each case for any period of four consecutive fiscal quarters to be
less than (A) 2.0 to 1.0 for any such period ending on or prior to the
[second anniversary of the Issue Date of the 7-Year Notes], (B) 2.25 to
1.0 for any such period ending after the [second anniversary] and on or prior
to the [fifth anniversary] of the Issue Date of the 7-Year Notes, and (C) 2.50
to 1.0 for any such period ending after the [fifth anniversary] of the Issue
Date of the 7-Year Notes; provided
that the Company will not be subject to the limitation set forth in this
covenant in any fiscal quarter but not more than two consecutive fiscal
quarters if a Macroeconomic Disruption Event has occurred during the prior
fiscal quarter.

 

16.                                 Limitation
on Repurchase of 7-Year Notes and 10-Year Notes

 

Under the terms of the 7-Year Notes Indenture, so long
as any 7-Year Notes shall remain Outstanding, the Company shall not purchase
any 7-Year Notes or 10-Year Notes in the open market or by tender or private
agreement until the first Transfer Date following the issuance of the 7-Year
Notes and thereafter the Company shall not be permitted to purchase any 10-Year
Notes in the open market or by tender or private agreement by using an amount
of Excess Cash during the period between any two Transfer Dates that is greater
than any amount of Excess Cash used by the Company to redeem any Outstanding 7-Year
Notes on the immediately preceding Transfer Date in accordance with the terms
of the 7-Year Notes Indenture.

 

17.                                 Limitation
on Restricted Payments

 

So long as any 7-Year Notes shall remain outstanding,
the Company shall not redeem, repurchase, retire or otherwise acquire any of
its capital stock, make a dividend or distribution with respect to its capital
stock or other ownership interest in it (or options or warrants in respect
thereto).

 

Events of Default

 

The following events will be each defined as an “Event
of Default” for the 7-Year Notes Indenture:

 

(a)                                  failure
to pay principal of or premium, if any, on any of the 7-Year Notes when the
same shall become due and payable at maturity, upon acceleration, redemption or
otherwise;

 

A-18

 

(b)                                 failure
to pay interest, or Additional Amounts, if any, (or, with respect to the 7-Year
Floating Rate Notes, Other Additional Amounts, if any) on any of the 7-Year
Notes when the same shall become due and payable, and such failure continues
for a period of 30 days;

 

(c)                                  failure
to perform or comply with the “Consolidation, Merger and Sale of Assets”
covenant, the “Cash Sweep” covenant, or for a period of 30 consecutive
days after the occurrence of such failure, the “Maximum Total Consolidated
Indebtedness” covenant, the “Limitation on Indebtedness” covenant, or the “Limitation
on Interest Expense” covenant;

 

(d)                                 failure
to perform or breach of any other covenant or agreement in the 7-Year Notes
Indenture or under the 7-Year Notes (other than those referred to in clauses
(a), (b) and (c) above) and such failure or breach continues for a
period of 30 consecutive days after written notice shall have been given to the
Company by the Trustee or to the Company and the Trustee by the Holders of at
least 25% in aggregate principal amount of the 7-Year Notes then Outstanding;

 

(e)                                  the
occurrence with respect to any issue or issues of Indebtedness of the Company
or any Significant Subsidiary having an outstanding principal amount of U.S.$5
million or more (or its equivalent in other currencies) in the aggregate for
all such issues of all such Persons, whether such Indebtedness now exists or
shall hereafter be created, of (I) an event of default that has caused such
Indebtedness to become, or the holders thereof to declare such Indebtedness to
be, due and payable prior to its Stated Maturity and/or (II) the failure to
make a payment of principal and in the case of the 10-Year Notes, interest when
such payment is due and payable;

 

(f)                                    one
or more final judgments, orders or binding arbitration awards, for the payment
of money in excess of U.S.$5 million (or its equivalent in other currencies),
either individually or in the aggregate for all such final judgments, orders or
binding arbitration awards, shall be rendered against the Company or any
Significant Subsidiary or any of their respective properties and shall not be
paid or discharged, and there shall have been a period of 60 consecutive
days following entry of the final judgment, order or binding arbitration award
that causes the aggregate amount for all such final judgment, orders or binding
arbitration awards outstanding and not paid or discharged against all such
Persons to exceed U.S.$5 million (or its equivalent in other currencies) during
which a stay of enforcement of such final judgments, orders or binding
arbitration awards, by reason of a pending appeal or otherwise, shall not be in
effect;

 

(g)                                 any
government or governmental authority shall have condemned, nationalized,
seized, or otherwise expropriated all or any substantial portion of the assets
or property of the Company or any Significant Subsidiary or the share capital
of the Company or any Significant Subsidiary, or shall have assumed custody or
control of such assets or property or of the business or operations of the
Company or any Significant Subsidiary or of the share capital of the Company or
any Significant Subsidiary, or shall have taken any action that would prevent
the Company or any Significant Subsidiary or its officers from carrying on its
business or operations or a substantial part thereof for a period of longer
than 60 consecutive days and the result of any such action shall materially
prejudice the ability of the Company to perform its obligations under the 7-Year
Notes;

 

A-19

 

(h)                                 the
Argentine Government shall declare a general suspension of payment or a
moratorium on the payment of debt of the Company (which does not expressly
exclude the 7-Year Notes);

 

(i)                                     the
Company or any Significant Subsidiary (I) is declared by a court of competent
jurisdiction to be insolvent or bankrupt or unable to pay its debts, (II)
commences or consents to the commencement of a case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, (III)
makes a general assignment or an arrangement or composition with or for the
benefit of creditors, (IV) admits in writing its inability to pay its debts
generally as they become due, or (V) takes corporate action in furtherance of
any of the foregoing;

 

(j)                                     an
order or decree is made or an effective resolution passed for relief against
the Company or a Significant Subsidiary under any applicable bankruptcy law, or
for the winding-up or dissolution of the Company or any Significant Subsidiary
or adjudging the Company or any Significant Subsidiary bankrupt or insolvent
under any applicable bankruptcy law and in each case such order or decree
remains unstayed and in effect for a period of 60 consecutive days, or the
Company or any Significant Subsidiary ceases or threatens to cease to carry on
all or a material part of its business or operations, except for the purpose of
and followed by a reconstruction, amalgamation, reorganization (“concurso preventivo” or “concordato”), merger or consolidation in
the case of a Significant Subsidiary, whereby the undertaking and the assets of
such Significant Subsidiary, or all of the undertaking and assets relating to
the Company’s direct or indirect shareholding in such Significant Subsidiary,
as the case may be, are transferred to or otherwise vested in the Company or
any other Significant Subsidiary or Subsidiary which as a result of such
transfer would become a Significant Subsidiary; or

 

(k)                                  it
becomes unlawful for the Company to perform or comply with any one or more of
its obligations under any of the 7-Year Notes or the 7-Year Notes Indenture,
and such unlawfulness continues for a period of 60 consecutive days after
written notice shall have been given to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate principal
amount of the 7-Year Notes then outstanding.

 

Acceleration of Maturity;
Rescission and Annulment

 

If an Event of Default (other than an Event of Default
specified in clause (i) or (j) above that occurs with respect to the
Company) occurs and is continuing under the 7-Year Notes Indenture, the Trustee
thereunder or the Holders of at least 25% in aggregate principal amount then
outstanding of the 7-Year Notes, by written notice to the Company (and to the
Trustee if such notice is given by the Holders), may, and the Trustee at the
request of such Holders shall, declare the 7-Year Notes to be immediately due
and payable at 100% of the principal amount thereof, plus accrued and unpaid
interest thereon, if any, to the date of such declaration.  Upon a declaration of acceleration, such
principal, premium if any, and accrued interest shall be immediately due and
payable.  In the event of a declaration
of acceleration because an Event of Default set forth in clause (e) above
has occurred and is continuing, such declaration of acceleration shall be
automatically rescinded and annulled if the event of default triggering such
Event of Default pursuant to clause (e) shall be remedied or cured by the
Company and/or the

 

A-20

 

relevant Subsidiaries or
waived by the holders of the relevant Indebtedness within 30 days after the
declaration of acceleration with respect thereto.  If an Event of Default specified in clause (i) or
(j) above occurs with respect to the Company, the 7-Year Notes then outstanding
shall ipso facto become and be immediately due and payable at 100% of the
outstanding principal amount thereof, plus premium, if any, thereon and accrued
and unpaid interest thereon in each case without any declaration or other act
on the part of the Trustee or any Holder.

 

The Holders of at least a majority in principal amount
of the outstanding 7-Year Notes, by written notice to the Company and to the
Trustee, may rescind and annul a declaration of acceleration and its
consequences if, in addition to certain other covenants, (i) all existing
Events of Default, other than the nonpayment of the principal of and premium,
if any, interest and Additional Amounts, if any, (and, with respect to the 7-Year
Floating Rate Notes, Other Additional Amounts, if any) on such 7-Year Notes
that have become due solely by such declaration of acceleration, have been
cured or waived and (ii) the rescission would not conflict with any
judgment, decree or order of a court of competent jurisdiction.  The Holders of at least a majority in
aggregate principal amount of the outstanding 7-Year Notes, by written notice
to the Trustee, may waive an existing Default or Event of Default and the
consequences under the 7-Year Notes Indenture, except a Default in the payment
of principal of, premium, if any, on or interest on the 7-Year Notes or in
respect of a covenant or provision of the 7-Year Notes Indenture that cannot be
modified or amended without the consent of the Holder of each outstanding 7-Year
Note affected.

 

The Holders of at least a majority in aggregate
principal amount of the outstanding 7-Year Notes may on behalf of the Holders
of all of the 7-Year Notes, direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee with respect to the 7-Year Notes by the 7-Year
Notes Indenture.  However, the Trustee
under the 7-Year Notes Indenture may refuse to follow any direction that
conflicts with law or the 7-Year Notes Indenture, that may involve the Trustee
in personal liability, or that the Trustee determines in good faith may be
unduly prejudicial to the rights of Holders of 7-Year Notes not joining in the
giving of such direction and may take any other action it deems proper that is
not inconsistent with any such direction received from Holders of 7-Year
Notes.  A Holder may not pursue any
remedy with respect to the 7-Year Notes Indenture or this 7-Year Note
unless:  (i) the Holder gives the
Trustee written notice of a continuing Event of Default; (ii) the Holders
of at least 25% in aggregate principal amount at maturity of outstanding 7-Year
Notes make a written request to the Trustee to pursue the remedy; (iii) such
Holder or Holders offer the Trustee indemnity satisfactory to the Trustee
against any costs, liability or expense; (iv) the Trustee does not comply
with the request within 60 days after receipt of the request and the offer of
indemnity; and (v) during such 60-day period, the Holders of a majority in
aggregate principal amount of the outstanding 7-Year Notes do not give the
Trustee a direction that is inconsistent with the request.  However, such limitations do not apply to the
right of any Holder of a 7-Year Note to receive payment of the principal of,
premium, if any, on or interest on such 7-Year Note or to bring suit for the
enforcement of any such payment, on or after the due date expressed in the 7-Year
Notes, which right shall not be impaired or affected without the consent of
such Holder.

 

A-21

 

Meetings of Holders;
Modification and Waiver

 

(a)                                  The
Trustee or the Company shall, upon the written request of the Holders of at
least five percent in aggregate principal amount of the 7-Year Notes at the
time Outstanding, or the Company or the Trustee at its discretion, may, call a
meeting of the Holders at any time and from time to time, to make, give or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided by the 7-Year Notes to be made, given or taken by such
Holders.  With respect to all matters not
contemplated in the 7-Year Notes Indenture, meetings of Holders will be held in
Buenos Aires in accordance with the Negotiable Obligations Law; provided, however, that the Company or the Trustee may
determine to hold any such meetings simultaneously in Buenos Aires and in The
City of New York by any means of telecommunication.  Meetings shall be held at such time and at
such place as the Company or the Trustee shall determine in such cities.  If a meeting is being held pursuant to a
request of Holders, the agenda for the meeting shall be as determined in the
request and such meeting shall be convened within 40 days from the date such
request is received by the Trustee or the Company, as the case may be.  Notice of any meeting of Holders (which shall
include the date, place and time of the meeting, the agenda therefor and the
requirements to attend) shall be published not less than ten days nor more than
30 days prior to the date fixed for the meeting in the Boletín
Oficial de la República (the Official Gazette of Argentina) and,
while there are Holders domiciled in Argentina, in a newspaper having major
circulation in Argentina and any publication of such notice shall be for five
consecutive Business Days in each place of publication.

 

(b)                                 Any
Holder may attend the meeting in person or by proxy.  Directors, officers, managers, members of the
Supervisory Committee and employees of the Company may not be appointed as
proxies.  Holders of 7-Year Notes who
intend to attend a meeting of Holders must notify the Registrar of their
intention to do so at least three days prior to the date of such meeting.  The
Company shall, prior to any vote, deliver to the Trustee a notice signed by the
CFO or the chief accounting officer certifying, to the best of the Company’s
knowledge, as to the Notes held by any Affiliate of the Company.

 

(c)                                  Except
as specified in “Acceleration of Maturity; Rescission and Annulment,” decisions
shall be made by the affirmative vote of the Holders of at least 51% in
aggregate principal amount of the 7-Year Notes at the time outstanding present
or represented at a meeting of such Holders at which a quorum is present; provided, however, that the affirmative vote of the Holders
of the applicable percentage in aggregate principal amount of the 7-Year Notes
at the time Outstanding specified under “Events of Default” shall be required
to take the actions specified under such heading; provided
further, however, that the unanimous affirmative vote of the Holders
of 7-Year Notes shall be required to adopt a valid decision on:

 

(i)                                     changing
the Stated Maturity of, or failing to pay, the principal of, premium, if any,
on or any installment of interest on any 7-Year Note, or reducing the principal
amount thereof, premium, if any, thereon or the rate of interest thereon or
changing the requirement to pay Additional Amounts thereon (or, with respect to
the 7-Year Floating Rate Notes, changing the requirement to pay Other
Additional Amounts thereon), or releasing any amounts held in the Reserve
Accounts;

 

A-22

 

(ii)                                  changing
the place of payment where, or the coin or currency in which, the principal of,
premium, if any, on or interest or Additional Amounts (if any) on any 7-Year
Note (or Other Additional Amounts (if any) on any Floating Rate Note) is
payable;

 

(iii)                               impairing the right to
institute suit for the enforcement of any such payment on or after the Stated
Maturity thereof (or, in the case of redemption, on or after the Redemption
Date);

 

(iv)                              reducing
the percentage in principal amount of the outstanding 7-Year Notes, the consent
of the Holders of which is required for the adoption of a resolution or the
quorum required to constitute a meeting of Holders at which a resolution is
adopted or the percentage in principal amount of outstanding Step Up Notes the
Holders of which are entitled to request the calling of a meeting of Holders;
or

 

(v)                                 modifying
the percentage in principal amount of the 7-Year Notes, the consent of Holders
which is required to waive a past Default or Event of Default.

 

Except as provided above,
any modifications, amendments or waivers to the terms and conditions of the 7-Year
Notes will be conclusive and binding on all Holders of 7-Year Notes, whether or
not they were present at any meeting, and whether or not notation of such
modifications, amendments or waivers is made upon the 7-Year Notes, provided that any such modification, amendment or waiver was
duly passed at a meeting convened and held in accordance with the provisions of
the Negotiable Obligations Law.

 

(d)                                 Meetings
of the Holders of 7-Year Notes shall be either “first call” meetings (“primera convocatoria”) or “second call” meetings (“segunda convocatoria”). 
All meetings of the Holders of 7-Year Notes shall be deemed to be a
first call meeting; provided, however, that any reconvened meeting adjourned for lack of a
requisite quorum shall be deemed a second call meeting.  The quorum applicable at a meeting of the
Holders of 7-Year Notes shall be as follows:

 

(i)                                     the
quorum for meetings called to adopt a resolution by which Holders of 7-Year
Notes shall make any request, demand or direction or give any notice (other
than a resolution specified in paragraph (ii) below) shall, (A) in
the case of first call meetings, be such Persons holding or representing a
majority in aggregate principal amount of the 7-Year Notes at the time
outstanding and (B) in the case of second call meetings, be such Persons
present at such meeting holding or representing 7-Year Notes at the time
outstanding; and

 

(ii)                                  the
quorum for meetings called to adopt a resolution by which Holders of 7-Year
Notes consent to any waiver under the 7-Year Notes or the 7-Year Notes
Indenture, agree to any amendment to the 7-Year Notes Indenture or the terms
and conditions of the 7-Year Notes, or specify the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred upon the Trustee with respect to the 7-Year Notes by the 7-Year
Notes Indenture shall (A) in the case of first call meetings, be Persons
holding or representing at

 

A-23

 

least 60% in aggregate
principal amount of the 7-Year Notes at the time outstanding and (B) in
the case of second call meetings, be Persons holding or representing at least
30% in aggregate principal amount of the 7-Year Notes at the time outstanding.

 

(e)                                  Without
the vote of any Holders of 7-Year Notes, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental to the 7-Year Notes Indenture in form
satisfactory to the Trustee, for any of the following purposes:

 

(i)                                     to
evidence the succession of another Person to the Company and the assumption by
any such successor of the covenants of the Company in the 7-Year Notes
Indenture and in the 7-Year Notes; or

 

(ii)                                  to
add to the covenants of the Company for the benefit of the Holders or to
surrender any right or power herein conferred upon the Company; or

 

(iii)                               to secure the 7-Year
Notes; or

 

(iv)                              to
comply with any requirements of the Commission in order to effect and maintain
the qualification of the 7-Year Notes Indenture under the Trust Indenture Act;
or

 

(v)                                 to
evidence and provide for acceptance of appointment hereunder by a successor
Trustee pursuant to the provisions of the 7-Year Notes Indenture; or

 

(vi)                              to
evidence any further issue of notes having terms and conditions the same as
those of the 7-Year Notes (or the same except for the payment of interest
accruing prior to the issue date of such additional notes or except for the
first payment of interest following the issue date of such additional notes),
which additional notes may be consolidated and form a single series with the 7-Year
Notes; or

 

(vii)                           to cure any ambiguity, to
correct or supplement any provision herein which may be inconsistent with any
other provision herein, or to make any other provisions with respect to matters
or questions arising under the 7-Year Notes Indenture which shall not be
inconsistent with the provisions of the 7-Year Notes Indenture, provided that such action pursuant to this clause (vii) shall
not adversely affect the interests of the Holders in any material respect; or

 

(viii)                        to increase the aggregate
principal amount of Public Debt Securities at any time outstanding under the 7-Year
Notes Indenture.

 

No reference herein to the 7-Year Notes Indenture and
no provision of this 7-Year Note or of the 7-Year Notes Indenture shall alter
or impair the obligation of the Company, which is absolute and unconditional,
to pay the principal of, premium, if any, on and interest and Additional
Amounts, if any, on this 7-Year Note at the times, place and rate, and in the
coin or currency, herein prescribed.

 

A-24

 

Notices

 

Notices to Holders of Registered 7-Year Fixed Rate
Notes will be mailed to them at their respective addresses as they appear in
the register maintained by the Registrar and shall be published as may be
required by applicable law or, to the extent there are Holders domiciled in
Argentina (i) in a leading newspaper having general circulation in
Argentina, (ii) for so long as any 7-Year Fixed Rate Notes is listed on
the Buenos Aires Stock Exchange, in the Bulletin of the Buenos Aires Stock
Exchange, and (iii) in the Official Gazette of
Argentina.  Any notice so
mailed shall be deemed to have been given on the date of such mailing.  In any case where notice to Holders is given
by mail, neither the failure to mail such notice, nor any defect in any notice
so mailed, to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders of Registered 7-Year Fixed Rate Notes.  Any notice mailed to a Holder in the manner
herein prescribed shall be deemed to have been received by (i) a Holder domiciled
in Argentina when actually received and (ii) a Holder domiciled outside of
Argentina when so mailed.

 

Discharge and Defeasance

 

Under the terms of the 7-Year Notes Indenture, the
Company may at its option by a resolution of the Board of Directors, at any
time, upon the satisfaction of certain conditions described below, elect to be
discharged from its obligations with respect to outstanding 7-Year Fixed Rate
Notes (“defeasance”).  In general,
upon a defeasance, the Company shall be deemed to have paid and discharged the
entire indebtedness represented by the outstanding 7-Year Fixed Rate Notes and
to have satisfied all of its obligations under such 7-Year Fixed Rate Notes
except for (i) the rights of Holders of such 7-Year Fixed Rate Notes and
any related coupons to receive, solely from the trust fund established for such
purposes as described below, payments in respect of the principal of, premium,
if any, on and interest on such 7-Year Fixed Rate Notes when such payments are
due, (ii) certain provisions relating to ownership, registration and
transfer of the 7-Year Fixed Rate Notes, (iii) certain provisions relating
to the mutilation, destruction, loss or theft of the 7-Year Fixed Rate Notes, (iv) the
Company’s obligations to effect a registered exchange offer or a private
exchange offer, (v) the covenant relating to the maintenance of an office
or agency in Buenos Aires and The City of New York and (vi) certain
provisions relating to the rights, powers, trusts duties and immunities of the
Trustee.

 

In addition, the Company may at its option by Board
Resolution, at any time, upon the satisfaction of certain conditions described
below, elect to be released from certain covenants described in the 7-Year
Notes Indenture (“covenant defeasance”). 
Following such covenant defeasance, the occurrence of a breach or
violation of any such covenant will not be deemed to be an Event of Default
under the 7-Year Notes Indenture.

 

In order to cause a defeasance or covenant defeasance,
the Company will be required to satisfy, among other conditions, the following
conditions:

 

(a)                                  the
Company shall have irrevocably deposited or caused to be deposited with the
Trustee as funds in trust, money or U.S. Government Obligations, or a
combination thereof, sufficient, in the opinion of an internationally
recognized firm of independent public

 

A-25

 

accountants, to pay and
discharge the principal of, premium, if any, on and each installment of
interest on the outstanding 7-Year Fixed Rate Notes on the Stated Maturity or
on the applicable Redemption Date, as the case may be, of such principal,
premium, if any, or installment of interest in accordance with the terms of
this 7-Year Note, and such amounts will be applied for such purpose, and the
Company must specify whether the 7-Year Fixed Rate Notes are being defeased to
maturity or to a particular Redemption Date;

 

(b)                                 in
the case of an election fully to defease the 7-Year Fixed Rate Notes, the
Company shall have delivered to the Trustee an Opinion of Counsel stating that
(x) the Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (y) since the date of the 7-Year Notes Indenture
there has been a change in the applicable federal income tax law or the
interpretation thereof, in either case to the effect that, and based thereon
such opinion shall confirm that, the Holders of the outstanding 7-Year Fixed
Rate Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit, defeasance and discharge and will be
subject to federal income tax on the same amount, in the same manner and at the
same time as would have been the case if such deposit, defeasance and discharge
had not occurred;

 

(c)                                  in
the case of a covenant defeasance, the Company shall have delivered to the
Trustee an Opinion of Counsel to the effect that the Holders of the outstanding
7-Year Fixed Rate Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such deposit and covenant defeasance and
will be subject to federal income tax on the same amount, in the same manner
and at the same time as would have been the case if such deposit and covenant
defeasance had not occurred;

 

(d)                                 the
Company shall have delivered to the Trustee an Officers’ Certificate to the
effect that the 7-Year Fixed Rate Notes, if then listed on any securities
exchange, will not be delisted as a result of such deposit;

 

(e)                                  no
Event of Default or event which with notice or lapse of time or both would
become an Event of Default shall have occurred and be continuing on the date of
such deposit (other than a Default or Event of Default resulting from the
borrowing of funds to be applied to such deposit) after giving effect thereto
or, with respect to a Default or Event of Default specified in clauses (i) or
(j) of the first paragraph of “Events of Default”, at any time during the
period ending on the 121st day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until the
expiration of such period);

 

(f)                                    such
defeasance or covenant defeasance shall not cause the Trustee to have a
conflicting interest as defined in the 7-Year Notes Indenture and for the
purposes of the Trust Indenture Act with respect to any securities of the
Company;

 

(g)                                 such
defeasance or covenant defeasance shall not result in a breach or violation of,
or constitute a default under, any other material agreement or instrument to
which the Company is a party or by which it is bound;

 

A-26

 

(h)                                 the
Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent relating to
either defeasance or covenant defeasance (as the case may be) have been
complied with; and

 

(i)                                     such
defeasance or covenant defeasance shall not result in the trust arising from
such deposit constituting an investment company as defined in the U.S.
Investment Company Act of 1940, as amended, or such trust shall be qualified
under such act or exempt from regulation thereunder.

 

Trustee Dealings with the
Company

 

Subject to certain limitations imposed by the Trust
Indenture Act, the Trustee under the 7-Year Notes Indenture, in its individual
or any other capacity, may become the owner or pledgee of 7-Year Fixed Rate
Notes and may otherwise deal with the Company and receive, collect, hold and
retain collections from the Company or its Affiliates with the same rights it
would have if it were not Trustee.  Any
Paying Agent, Registrar or Co-Registrar may do the same with like rights.

 

No Personal Liability of
Incorporators, Shareholders, Officers, Board of Directors Members or Employees

 

The 7-Year Notes Indenture provides that no recourse
for the payment of the principal of, premium, if any, on or interest on any of
the 7-Year Fixed Rate Notes or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in the 7-Year Notes Indenture or in this 7-Year Note
or because of the creation of any Indebtedness represented thereby, shall be
had against any incorporator, shareholder, officer, director, employee, Board
of Directors member or controlling person of the Company or of any successor
Person thereof.  Each Holder, by
accepting the 7-Year Fixed Rate Notes, waives and releases all such
liability.  The waiver and release are
part of the consideration for issuance of the 7-Year Fixed Rate Notes.  Such waiver may not be effective to waive
liabilities under Argentine or the U.S. federal securities laws and it is the
view of the Commission that such a waiver is against public policy.

 

Additional Waiver
and Release

 

As
part of the consideration for issuance of the 7-Year Fixed Rate Notes, each
Holder of 7-Year Fixed Rate Notes, by accepting the 7-Year Fixed Rate Notes,
waives any rights that it may have pursuant to Argentine law to claw back (acción revocatoria) or bring action
against any director of the Company (acción
de responsabilidad), and releases such director from any liability,
arising out of payments made by the Company as a result of consummation of the
cash option under the Company’s APE.

 

Governing Law and
Enforceability

 

The Negotiable Obligations Law governs the requirements
for the 7-Year Fixed Rate Notes to qualify as Obligaciones
Negociables thereunder, while such law, together with the

 

A-27

 

Argentine Business
Companies Law No. 19,550, as amended, and other applicable Argentine laws,
govern the capacity and corporate authority of the Company to execute and
deliver the 7-Year Fixed Rate Notes and the authorization of the public
offering of the 7-Year Fixed Rate Notes by the CNV.  All other matters in respect of the 7-Year
Fixed Rate Notes and the 7-Year Notes Indenture, including but not limited to
the statute of limitations applicable thereto, are governed by and shall be
construed in accordance with the laws of the State of New York, United States.

 

The Company consents to the non-exclusive jurisdiction
of any court of the State of New York or any United States federal court
sitting in the Borough of Manhattan, The City of New York, New York, United
States, and any appellate court from any thereof, and waives any immunity from
the jurisdiction of such courts over any suit, action or proceeding that may be
brought in connection with the 7-Year Notes Indenture or this 7-Year Note.  The Company irrevocably waives, to the
fullest extent permitted by law, any objection to any suit, action, or
proceeding that may be brought in connection with the 7-Year Notes Indenture or
this 7-Year Note in such courts whether on the grounds of venue, residence or
domicile or on the ground that any such suit, action or proceeding has been
brought in an inconvenient forum.  The
Company agrees that final judgment in any such suit, action or proceeding
brought in such court shall be conclusive and binding upon the Company and may
be enforced in any court to the jurisdiction of which the Company is subject by
a suit upon such judgment; provided that
service of process is effected upon the Company in the manner provided by the 7-Year
Notes Indenture.  Notwithstanding the
foregoing, any suit, action or proceeding brought in connection with the 7-Year
Notes Indenture or this 7-Year Note may be instituted in any competent court in
Argentina.

 

The Company agrees that service of all writs, process
and summonses in any suit, action or proceeding brought in connection with the 7-Year
Notes Indenture or this 7-Year Note against the Company in any court of the
State of New York or any United States federal court sitting in the Borough of
Manhattan, The City of New York, New York, United States, may be made upon CT
Corporation System at 111 Eighth Avenue, New York, New York 10011, whom the
Company irrevocably appoints as its authorized agent for service of
process.  The Company represents and
warrants that CT Corporation System has agreed to act as the Company’s agent
for service of process.  The Company agrees
that such appointment shall be irrevocable so long as any of the 7-Year Notes
remain Outstanding or until the irrevocable appointment by the Company of a
successor in The City of New York as its authorized agent for such purpose and
the acceptance of such appointment by such successor.  The Company further agrees to take any and
all action, including the filing of any and all documents and instruments, that
may be necessary to continue such appointment in full force and effect as
aforesaid.  If CT Corporation System
shall cease to act as the Company’s agent for service of process, the Company
shall appoint without delay another such agent and provide prompt written
notice to the Trustee of such appointment. 
With respect to any such action in any court of the State of New York or
any United States federal court in the Borough of Manhattan, The City of New
York, New York, United States, service of process upon CT Corporation
System, as the authorized agent of the Company for service of process, and written
notice of such service to the Company, shall be deemed, in every respect,
effective service of process upon the Company.

 

A-28

 

Currency Indemnity

 

The U.S. Dollar is the sole currency of account and
payment for all sums payable by the Company under or in connection with this 7-Year
Note.  Any amount received or recovered
in currency other than U.S. Dollars (whether as a result of, or of the
enforcement of, a judgment or order of a court of any jurisdiction, in the
winding up or dissolution of the Company or otherwise) by any Holder of 7-Year
Fixed Rate Notes in respect of any sum expressed to be due to it from the
Company shall only constitute a discharge of the Company to the extent of the
U.S. Dollar amount which the recipient is able to purchase with the amount so
received or recovered in that other currency on the date of that receipt or
recovery (or, if it is not practicable to make that purchase on that date, on
the first date on which it is practicable to do so).  If that U.S. Dollar amount is less than the
U.S. Dollar amount expressed to be due to the recipient under any 7-Year Note,
the Company shall indemnify such recipient against any loss sustained by it as
a result.  In any event, the Company
shall indemnify the recipient against the cost of making any such
purchase.  For the purposes of this
paragraph, it will be sufficient for the Holder to certify (indicating the
sources of information used) that it would have suffered a loss had an actual
purchase of U.S. Dollars been made with the amount so received in that other
currency on the date of receipt or recovery (or, if a purchase of U.S. Dollars
on such date had not been practicable, or the first date on which it would have
been practicable).  These indemnities
constitute a separate and independent obligation from the Company’s other
obligations, shall give rise to a separate and independent cause of action,
shall apply irrespective of any waiver granted by any Holder of 7-Year Fixed
Rate Notes and shall continue in full force and effect despite any other
judgment, order, claim or proof for a liquidated amount in respect of any sum
due under any 7-Year Note or any other judgment or order.

 

Defined Terms

 

“7-Year Floating Rate Notes” means the series
of Debt Securities known as the Company’s 7-Year Floating Rate Notes issued (or
to be issued) pursuant to the 7-Year Notes Indenture.

 

“7-Year Note Register” means the books for the
exchange, registration and registration of transfer of Registered 7-Year Fixed
Rate Notes.

 

“7-Year Notes” means both the series of Debt
Securities known as the Company’s 7-Year Fixed Rate Notes due [2012] and the
series of Debt Securities known as the Company’s 7-Year Floating Rate Notes,
all of which were (or to be) issued pursuant to the 7-Year Notes Indenture.

 

“10-Year Notes
Indenture” means the Indenture, as supplemented and amended by the First
Supplemental Indenture, dated as of [   
], [2005], among the Company, Law Debenture Trust Company of
New York, as the Trustee, Co-Registrar and Principal
Paying Agent thereunder, and HSBC Bank Argentina S.A., as Registrar and Paying
Agent thereunder.

 

“10-Year Notes”
means the series of Debt Securities known as the Company’s Step-Up 10-Year
Notes issued (or to be issued) pursuant to the 10-Year Notes Indenture.

 

A-29

 

“Acquired Indebtedness” means Indebtedness of a
Person existing at the time such Person became or was designated a Subsidiary
of the Company and not Incurred in connection with, or in contemplation of,
such Person becoming a Subsidiary of the Company.

 

“Affiliate” means, as applied to any Person,
any other Person directly or indirectly controlling, controlled by, or under
direct or indirect common control with, such Person.

 

“Annualized Pro Forma Consolidated Operating Cash
Flow” means Consolidated Operating Cash Flow for the latest fiscal quarter
for which consolidated financial statements of the Company are available
multiplied by four.  For purposes of
calculating “Consolidated Operating Cash Flow” for any fiscal quarter
for purposes of this definition, (i) any Subsidiary of the Company that is
a Subsidiary on the Transaction Date shall be deemed to have been a Subsidiary
at all times during such fiscal quarter and (ii) any Subsidiary of the
Company that is not a Subsidiary on the Transaction Date shall be deemed not to
have been a Subsidiary at any time during such fiscal quarter.  In addition to and without limitation of the
foregoing, for purposes of this definition, “Consolidated Operating Cash
Flow” shall be calculated after giving effect on a pro forma basis for the
applicable fiscal quarter to, without duplication, any Asset Sale or Asset
Acquisition (including, without limitation, any Asset Acquisition giving rise
to the need to make such calculation as a result of the Company or one of its
Subsidiaries (including any Person who becomes a Subsidiary as a result of the
Asset Acquisition) Incurring Acquired Indebtedness) occurring during the period
commencing on the first day of such fiscal quarter to and including the
Transaction Date (the “Reference Period”), as if such Asset Sale or
Asset Acquisition occurred on the first day of the Reference Period.

 

“APE” means an acuerdo preventivo
extrajudicial, or Argentine
pre-packaged reorganization plan.

 

“Argentina” means the Republic of Argentina.

 

“Argentine Government” means the government of
Argentina.

 

“Asset Acquisition” means (i) an
Investment or capital contribution (by means of transfers of cash or other
property to others or payments for property or services for the account or use
of others, or otherwise) by the Company or any of its Subsidiaries in any other
Person, or any acquisition or purchase of Capital Stock of another Person by
the Company or any of its Subsidiaries, in either case pursuant to which such
Person shall become a Subsidiary of the Company or shall be merged with or into
or consolidated with the Company or any Subsidiary of the Company or (ii) an
acquisition by the Company or any of its Subsidiaries of the property and
assets of any Person other than the Company or any of its Subsidiaries which
constitute substantially all of a division, operating unit or line of business
of such Person or which is otherwise outside the ordinary course of business.

 

“Asset Sale” means any direct or indirect sale,
transfer, conveyance or lease (which has the effect of a disposition and is not
for security purposes) or other disposition (including by way of sale-leaseback
transactions) in one transaction or a series of related transactions by the
Company or any Subsidiary of the Company to any Person other than the Company
or any Subsidiary of the Company of (i) all or any of the Capital Stock of
any

 

A-30

 

Subsidiary of the Company
(other than directors’ qualifying shares or shares owned by a Person, to the
extent mandated by applicable law), (ii) any material license or other
authorization of the Company or any Subsidiary of the Company pertaining to a
Cable/Telecommunications Business, (iii) all or substantially all of the
property and assets of an operating unit or business of the Company or any
Subsidiary of the Company or (iv) any other property and assets of the
Company or any Subsidiary of the Company and, in each case, that is not
governed by the “Consolidation, Merger and Sale of Assets” covenant hereof; provided, however that the term “Asset Sale” shall in
no case include any sale, transfer, conveyance, lease or other disposition in
one transaction or a series of related transactions (i) of property or
equipment that has become worn out, obsolete or damaged or otherwise unsuitable
for use in connection with the business of the Company or any Subsidiary of the
Company, as the case may be, (ii) involving assets with a Fair Market
Value not in excess of U.S.$500,000, (iii) of inventory in the ordinary
course of business, or (iv) involving the sale or other disposition of
cash or Cash Equivalents.

 

“Asset Sale Proceeds
Reinvestment” means any Capital Expenditure made with the proceeds of any
Asset Sale within 180 days of such Asset Sale.

 

“Average Life” means, at any date of
determination with respect to any Indebtedness, the quotient obtained by
dividing (i) the sum of the products of (a) the number of years from
such date of determination to the dates of each successive scheduled principal
payment, redemption or similar payment with respect to such Indebtedness and (b) the
amount of such principal payment by (ii) the sum of all such principal
payments.

 

“Board of Directors” means the board of
directors of the Company.

 

“Board Resolution” means a copy of a resolution
certified by a director of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

 

“Business Day” means any day (other than a
Saturday or Sunday) on which DTC, Euroclear or Clearstream, Luxembourg and
banks in The City of New York and Buenos Aires are open for business.

 

“Cable/Telecommunications Business” means any
business operating a cable and/or telecommunications services and/or
communications services or programming business located in South America,
including, without limitation, any business conducted by the Company on the
Issue Date.

 

“Capital Expenditure” means with respect to any
Person for any period the sum of all Investments and, without duplication,
expenditures made directly or indirectly for equipment, fixed assets, real
property or improvement thereto or substitutions thereof that have been or
should be reflected as additions to property, plant or equipment on a consolidated balance sheet in accordance with GAAP.

 

“Capital Stock” means, with respect to any
Person, any and all shares, interests, participations, rights in or other
equivalents (however designated, whether voting or non-voting) in equity of
such Person, whether outstanding at the Issue Date or issued thereafter,
including,

 

A-31

 

without limitation, all
Common Stock and Disqualified Stock, and any and all rights, warrants or
options exchangeable for or convertible into any thereof.

 

“Capitalized Lease” means, as applied to any
Person, any lease or license of, or other agreement conveying the right to use,
any property (whether real, personal or mixed, movable or immovable) of which
the present value of the obligations of such Person to pay rent or other
amounts is required, in conformity with GAAP, to be classified and accounted
for as a finance lease obligation; and “Capitalized Lease Obligation” is
defined to mean the capitalized present value of the obligations to pay rent or
other amounts under such lease or other agreement, determined in accordance
with GAAP.

 

“Cash Equivalents” means (i) any evidence
of Indebtedness with a maturity of 365 days or less issued or directly and
fully guaranteed or insured by Argentina or the United States or any agency or
instrumentality thereof (provided that
the full faith and credit of Argentina or the United States, as the case may
be, is pledged in support thereof or such Indebtedness constitutes a general
obligation of such country); (ii) deposits, certificates of deposit or
acceptances with a maturity of 180 days or less of, or Indebtedness with a
maturity of 365 days or less directly and fully secured by an irrevocable
standby letter of credit issued or confirmed by, (x) any financial institution
that is a member of the Federal Reserve System, and has combined capital and
surplus and undivided profits (or any similar capital concept) of not less than
U.S.$500 million or (y) Credit Suisse First Boston Corporation, Fleet Bank,
Banco Francés - BBVA, Banco Río de la Plata S.A, Banco de Galicia y Buenos
Aires S.A., Citibank, N.A. and any of the five largest banks (based on assets
as of the last December 31) organized under the laws of Argentina, provided that such bank is not under intervention,
receivership or any similar arrangement at the time of such deposit or the
acquisition of such certificate of deposit or acceptance; (iii) commercial
paper with a maturity of 180 days or less issued by a corporation (other than
an Affiliate of the Company) organized under the laws of Argentina or any part
thereof or the United States or any state thereof or the District of Columbia
and rated at least “A-1” by Standard & Poor’s Corporation or “P-1” by
Moody’s Investors Service; (iv) repurchase agreements and reverse
repurchase agreements relating to marketable direct obligations issued or
unconditionally guaranteed by the government of Argentina or the United States
government (in the case of any Argentine or United States government
obligations), in each case maturing within one year from the date of
acquisition and (v) investments in money market funds all of the assets of
which consist of securities of the type described in the foregoing clauses (i) through
(iii).

 

“Clearstream, Luxembourg” means Clearstream
Banking, société anonyme (formerly known as Cedelbank), and its successors.

 

“CNV” means the Argentine Comisión Nacional de
Valores.

 

“Co-Registrar” means Law Debenture Trust
Company of New York, until a successor Co-Registrar shall have become such
pursuant to the applicable provisions of the 7-Year Notes Indenture, and,
thereafter, “Co-Registrar” shall mean such successor Co-Registrar.

 

“Commission” means the U.S. Securities and
Exchange Commission, as from time to time constituted, created under the
Exchange Act, or, if at any time after the execution of

 

A-32

 

this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.

 

“Common Stock” means with respect to any
Person, any and all shares, interests or other participations in, and other
equivalents (however designated and whether voting or non-voting) of such
Person’s common stock or ordinary shares, whether or not outstanding at the
Issue Date or issued thereafter, and includes, without limitation, all series
and classes of such common stock or ordinary shares.

 

“Company” means the Person named as the “Company”
in the first paragraph of this instrument until a successor Person shall have
become such pursuant to the applicable provisions of the 7-Year Notes Indenture
and thereafter “Company” shall mean such successor Person.

 

“Company Request” or “Company Order”
means a written request or order signed in the name of the Company by any of
its directors or alternate directors or its chief financial officer and a
director or alternate director and delivered to the Trustee.

 

“Consolidated Income Tax Expense” means, for
any period, the provision for local, foreign and all other income taxes of the
Company and its Subsidiaries for such period as determined in accordance with
GAAP.

 

“Consolidated Interest Expense” means, for any
period, the aggregate amount of interest expense in respect of Indebtedness
(including, without limitation, amortization of original issue discount on any
indebtedness and the interest portion of any deferred payment obligation, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers’ acceptance financing and the net costs associated with
Interest Rate Protection Obligations, but excluding, for the avoidance of
doubt, any taxes or other governmental charges) and all but the principal
component of rent or other amounts in respect of Capitalized Lease Obligations
paid, accrued or scheduled to be paid or to be accrued by the Company and its
Subsidiaries during such period, but excluding, any premiums, fees and expenses
(and any amortization thereof) payable in connection with the offering of any 7-Year
Notes or other Indebtedness, all as determined on a consolidated basis in
conformity with GAAP.

 

“Consolidated Net Income” means, for any
period, the consolidated net income (or loss) of the Company and its
Subsidiaries for such period determined in accordance with GAAP, adjusted, to
the extent included in calculating such consolidated net income, by excluding,
without duplication, (i) all extraordinary gains or losses of such Person
for such period, (ii) income of the Company and its Subsidiaries derived
from or in respect of all Investments in Persons other than any of its
Subsidiaries, (iii) the portion of net income (or loss) of such Person
allocable to minority interests in unconsolidated Persons for such period,
except to the extent actually received by the Company or any of its
Subsidiaries, (iv) net income (or loss) of any other Person combined with
such Person on a “pooling of interests” basis attributable to any period prior
to the date of combination, (v) any gain or loss, net of taxes, realized
by such Person upon the termination of any employee pension benefit plan during
such period, (vi) gains (but not losses) in respect of any Asset Sales
during such period and (vii) the net income of any Subsidiary of the
Company for such period to the extent that the declaration of

 

A-33

 

dividends or similar
distributions by such Subsidiary of that income is not at the time permitted,
directly or indirectly, by operation of the terms of its constitutional
documents or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulations applicable to that Subsidiary or its stockholders.

 

“Consolidated Net Worth” means, with respect to
any Person as of any date, the total of the amounts shown on the balance sheet
of such Person and its consolidated subsidiaries, determined on a consolidated
basis in accordance with GAAP, as of the end of the most recent fiscal quarter
for which consolidated financial statements for such Person and its
consolidated subsidiaries have been prepared prior to the taking of any action
for the purpose of which the determination is being made, as (i) the par or
stated value of all outstanding Capital Stock of such Person plus (ii) paid-in
capital or capital surplus relating to such Capital Stock plus (iii) any
retained earnings or earned surplus less (iv) (A) any accumulated
deficit and (B) any amounts attributable to Disqualified Stock of such
Person not held by such Person or its Subsidiaries.

 

“Consolidated Operating Cash Flow” means, with
respect to any period, the Consolidated Net Income for such period increased by
the sum of (i) the Consolidated Income Tax Expense of the Company and its
Subsidiaries accrued according to GAAP for such period (only to the extent the
corresponding income was included in computing Consolidated Net Income for such
period and other than taxes attributable to extraordinary, unusual or
nonrecurring gains or losses); (ii) Consolidated Interest Expense of the
Company and its Subsidiaries for such period; (iii) consolidated
depreciation of the Company and its Subsidiaries for such period; (iv) consolidated
amortization of the Company and its Subsidiaries for such period, including,
without limitation, amortization of capitalized debt issuance costs for such
period; and (v) all other non-cash items of the Company and its
Subsidiaries reducing Consolidated Net Income (excluding any non-cash items to
the extent they represent an accrual of, or a reserve for, cash disbursements
for any subsequent period); and reduced by (vi) all non-cash items of the
Company and its Subsidiaries increasing Consolidated Net Income for such
period; in each case determined on a consolidated basis in accordance with
GAAP.

 

“control” (including, with correlative
meanings, the terms “controlling,” “controlled by” and “under
common control with”), as applied to any Person, means the possession by
another Person (whether directly or indirectly and whether by the ownership of
share capital, the possession of voting power, contract or otherwise) of the
power to appoint and/or remove the majority of the members of the board of
directors or other governing body of such Person or otherwise to direct or
cause the direction of the affairs and policies of such Person.

 

“Corporate Trust Office” means the office of
the Trustee located at 767 Third Avenue, 31st Floor, New York, New
York 10017.

 

“Corporation” means a sociedad anónima,
sociedad de responsibilidad limitada,
corporation, association, company or business trust.

 

“Currency Agreement” means any foreign exchange
contract, currency swap agreement or other similar agreement or arrangement
designed to protect the Company or any Significant Subsidiary against
fluctuations in currency values.

 

A-34

 

“Default” means any event that is, or after
notice or passage of time or both would be, an Event of Default.

 

“Depositary” means, DTC, its nominees, and
their respective successors or such other depositary as may be designated with
respect thereto.

 

“Disqualified Stock” means, with respect to any
Person, any Capital Stock of such Person which, by its terms (or by the terms
of any security into which it is convertible or for which it is exchangeable),
or upon the happening of any event, matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or is exchangeable for
Indebtedness, or is redeemable at the option of the holder thereof, in whole or
in part, on or prior to the final maturity date of the 7-Year Notes.

 

“DTC” means The
Depository Trust Company and its successors.

 

“Euroclear” means Euroclear Bank S.A./N.V., as
operator of the Euroclear System, and its successors.

 

“Event of Default” means any of the events
specified in “Events of Default” herein.

 

“Excess Cash” means an
amount equal to (x) in the case of the First Annual Transfer Date, the sum of
the Company’s consolidated cash and cash equivalents as of March 31st of
each calendar year (net of any balance held in the Reserve Accounts as of such
date) and in the case of the Second Annual Transfer Date, the sum of the
Company’s consolidated cash and cash equivalents as of September 30th of
such calendar year (net of any balance held in the Reserve Accounts as of such
date), in each case assuming the conversion into U.S. Dollars of cash and cash
equivalents that are not denominated in U.S. Dollars using the prevailing
exchange rate on the Buenos Aires business day immediately preceding such
Transfer Date.

 

“Exchange Act” means the U.S. Securities
Exchange Act of 1934, as amended.

 

“Fair Market Value” means, with respect to any
asset or property, the price that could be negotiated in an arms-length free
market transaction, for cash, between a willing seller and a willing buyer,
neither of whom is under pressure or compulsion to complete the
transaction.  Unless otherwise specified
in the 7-Year Notes Indenture, Fair Market Value shall be determined by the
chief financial officer of the Company and shall be evidenced by an Officers’
Certificate delivered to the Trustee at its request.

 

“GAAP” means generally accepted accounting
principles in effect in Argentina as of the date of determination.

 

“Global Note” means a 7-Year Note in definitive
global form that is deposited with DTC or another Depositary, or a nominee
thereof, for credit to the respective accounts of the beneficial owners of the 7-Year
Fixed Rate Notes represented thereby.

 

“Governmental Agency” means any public legal
entity or public agency of Argentina or the United States, whether created by
any competent authority, federal, state or

 

A-35

 

local government, or any
other legal entity now existing or hereafter created, or now or hereafter owned
or controlled, directly or indirectly, by any public legal entity or public
agency of Argentina or the United States.

 

“Guarantee” means any obligation, contingent or
otherwise, of any Person directly or indirectly guaranteeing any Indebtedness
or other obligation of any other Person and, without limiting the generality of
the foregoing, any obligation, direct or indirect, contingent or otherwise, of
such Person (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation of such other
Person (whether arising by virtue of partnership arrangements, or by agreements
to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or (ii) entered
into for purposes of assuring in any other manner the obligee of such
Indebtedness or other obligation of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part); provided that the term “Guarantee” shall not include
endorsements for collection or deposit in the ordinary course of business.  The term “Guarantee” used as a verb
has a corresponding meaning.

 

“Guarantor” means any Person obligated under a
Guarantee.

 

“Holder” means a Person in whose name a 7-Year
Note or a 7-Year Note, as the case may be, is registered in the 7-Year Note
Register and/or the books for the exchange, registration and registration of
transfer of the registered 7-Year Floating Rate Notes.

 

“Incur” means, with respect to any
Indebtedness, to incur, create, issue, assume, Guarantee or otherwise,
contingently or otherwise, become liable, directly or indirectly, for or with
respect to, or become responsible for, the payment of such Indebtedness,
including an Incurrence of Acquired Indebtedness by reason of the acquisition
of more than 50% of the Capital Stock of any Person; provided
that neither the accrual of interest nor the accretion of original issue
discount shall be considered an Incurrence of Indebtedness.  The term “Incurrence” used as a noun has a
corresponding meaning.

 

“Indebtedness” means, with respect to any
Person at any date of determination (without duplication), (i) any
liability, contingent or otherwise, of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all obligations of such Person in respect of
letters of credit or other similar instruments (including reimbursement
obligations with respect thereto), (iv) all obligations of such Person to
pay the deferred and unpaid purchase price of property or services, including
purchase money obligations, which purchase price is due more than 180 days
after the date of placing such property in service or taking delivery and title
thereto or the completion of such services, except Trade Payables, (v) all
obligations of such Person as lessee under Capitalized Leases, (vi) all
Indebtedness of other Persons secured by a Lien on any asset of such Person,
whether or not such Indebtedness is assumed by or is otherwise the legal
liability of such Person; provided that
the amount of such Indebtedness shall be the lesser of (A) the Fair Market
Value of such asset at such date of determination and (B) the amount of
such Indebtedness, (vii) all Indebtedness of other Persons Guaranteed by
such Person or which is otherwise the legal liability of such Person, to the
extent such Indebtedness is Guaranteed by or is otherwise the legal liability
of such Person, (viii) to the extent not otherwise included in this
definition, obligations

 

A-36

 

under Currency Agreements
and Interest Rate Protection Obligations, (ix) any and all deferrals,
renewals, extensions and refundings of, or amendments of or supplements to, any
liability or obligation of the kind described in this definition, and
(x) Disqualified Stock.  The amount
of Indebtedness of any Person at any date shall be the outstanding balance at
such date of all unconditional obligations as described above and, with respect
to contingent obligations, the maximum liability upon the occurrence of the
contingency giving rise to the obligation, provided that
the amount outstanding at any time of any Indebtedness issued with original
issue discount is the face amount of such Indebtedness less the remaining
unamortized portion of the original issue discount of such Indebtedness at such
time as determined in conformity with GAAP.

 

“Independent Financial Advisor” means an
investment banking firm of international standing (i) which does not, and
whose shareholders, members, directors, officers or Affiliates do not, have a
material direct or indirect financial interest in the Company or one or more
Significant Subsidiaries, and (ii) which is otherwise independent and
qualified to perform the task for which it is to be engaged.

 

“Interest Payment Date” means in the case of
the first interest payment [the date these Notes are delivered or made available to holders pursuant to
the Company’s APE], in the case of the second
interest payment, [the date that is six months after the
Company accepts Eligible Notes upon expiration of the Election Offers, if the
Company consummates the transactions contemplated in the APE before such date]
and for each interest payment thereafter, [     ] and
[     ] of each year, commencing on
[    ], [2005].

 

“Interest Rate Protection Obligations” means
the obligations of any Person pursuant to any arrangement with any other Person
whereby, directly or indirectly, such Person is entitled to receive from time
to time periodic payments calculated by applying either a floating or a fixed
rate of interest on a stated notional amount and shall include, without
limitation, interest rate swaps, caps, floors, collars, forward interest rate
agreements and similar agreements.

 

“Investment” means, with respect to any Person,
any direct or indirect advance, loan, account receivable (other than an account
receivable arising in the ordinary course of business), or other extension of
credit (including, without limitation, by means of any Guarantee or similar
arrangement) or any capital contribution to (by means of transfers of property
to others, payments for property or services for the account or use of others,
or otherwise), or any purchase or ownership of any stocks, bonds, notes,
debentures or other securities of, any other Person (excluding Subsidiaries but
not any Person that becomes a Subsidiary after giving effect to the
Investment).  Notwithstanding the
foregoing, in no event shall any issuance of Capital Stock (other than
Disqualified Stock) of the Company in exchange for Capital Stock, property or
assets of another Person constitute an Investment by the Company in such other
Person.

 

“Issue Date” means the original date of
issuance and purchase of the 7-Year Fixed Rate Notes as specified in or
pursuant to the relevant Board Resolution, Officers’ Certificate, or indenture
supplemental hereto with respect thereto.

 

“Lien” means any mortgage, charge, pledge,
security interest, encumbrance, lien (statutory or other), hypothecation,
assignment for security, claim, or preference or priority or other encumbrance
of any kind upon or with respect to any property (including, without

 

A-37

 

limitation, any
conditional sale or other title retention agreement or lease in the nature
thereof, any sale with recourse against the seller or any Affiliate of the
seller, or any agreement to give any security interest).

 

“Macroeconomic Disruption Event” means for any
fiscal quarter a depreciation in the average Peso-U.S. dollar exchange rate (as
determined by reference to the rate for the purchase of U.S. dollars with
Argentine Pesos quoted by Reuters page ARSIB=offer prices as of 3:00 p.m.
Buenos Aires time for each day of such fiscal quarter) of 20% or more compared
to such average exchange rate for the prior fiscal quarter.

 

“Material Adverse Effect” means any material
adverse effect whatsoever on the property, financial condition, business or
operations of the Company and its Subsidiaries, taken as a whole.

 

“Maturity”, when used with respect to any 7-Year
Note, means the date on which the principal of such 7-Year Note becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise, as specified in
or pursuant to the relevant Board Resolution, Officers’ Certificate or the
indenture supplemental hereto with respect thereto.

 

“Negotiable Obligations Law” means Argentine
Law No. 23,576, as amended.

 

“Officer” means the chairman of the Board of
Directors, the chief executive officer, the chief financial officer, the
treasurer, the controller or any member of the Board of Directors of the
Company.

 

“Officers’ Certificate” means a certificate
signed by any two of the chief executive officer, chief operating officer and
chief financial officer of the Company.

 

“Opinion of Counsel” means a written opinion
from legal counsel who is reasonably acceptable to the Trustee, which may
include an individual employed as counsel to the Company or the Trustee.

 

“Outstanding” means, as of the date of
determination, all 7-Year Notes theretofore authenticated and delivered under
the 7-Year Notes Indenture, except:

 

(i)            7-Year
Notes theretofore canceled by the Trustee or delivered to the Trustee for
cancellation;

 

(ii)           7-Year
Notes, or portions thereof, for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any Paying
Agent (other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the Holders
of such 7-Year Notes; provided that,
if such 7-Year Notes are to be redeemed, notice of such redemption has been
duly given pursuant to the 7-Year Notes Indenture or provision therefor
satisfactory to the Trustee has been made;

 

A-38

 

(iii)          7-Year
Notes which have been duly defeased or as to which the Company has effected
covenant defeasance pursuant to “Discharge and Defeasance” herein; and

 

(iv)          7-Year
Notes which have been paid pursuant to the 7-Year Notes Indenture or in
exchange for or in lieu of which other 7-Year Notes have been authenticated and
delivered pursuant to the 7-Year Notes Indenture, other than any such 7-Year
Notes in respect of which there shall have been presented to the Trustee proof
satisfactory to it that such 7-Year Notes are held by a bona fide
purchaser in whose hands such 7-Year Notes are valid obligations of the
Company; provided, however, that in determining
whether the Holders of the requisite principal amount of the Outstanding 7-Year
Notes have given any request, demand, authorization, direction, notice, consent
or waiver hereunder, 7-Year Notes owned by the Company or any other obligor
upon such 7-Year Notes or any Subsidiary or Affiliate of the Company or of such
other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
7-Year Notes which a Responsible Officer of the Trustee actually knows to be so
owned shall be so disregarded.  7-Year
Notes so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee’s right so to act with respect to such 7-Year Notes and that the
pledgee is not the Company or any other obligor upon such 7-Year Notes or any
Subsidiary or Affiliate of the Company or of such other obligor.

 

“pari passu”
means, as applied to the ranking of any Indebtedness of a Person in relation to
other Indebtedness of such Person, that each such Indebtedness either (i) is
not subordinate in right of payments to any Indebtedness or (ii) is
subordinate in right of payment to the same Indebtedness as is the other, and
so subordinate to the same extent, and is not subordinate in right of payment
to each other or to any Indebtedness as to which the other is not so
subordinate.

 

“Participant” means, with respect to DTC,
Euroclear or Clearstream, Luxembourg, Persons who have accounts with DTC,
Euroclear or Clearstream, Luxembourg, respectively (and, with respect to DTC,
shall include Euroclear and Clearstream, Luxembourg).

 

“Paying Agent” means initially the Persons
named as Paying Agent in the first paragraph of the 7-Year Notes Indenture, any
successor thereof, and any Person authorized by the Company to pay the
principal of or interest on any 7-Year Notes on behalf of the Company,
including the Principal Paying Agent.

 

“Permitted Indebtedness” means the following
indebtedness (each of which shall be given independent effect) of the Company:

 

(a)  Indebtedness under the 7-Year Notes and the 7-Year
Notes Indenture with respect to such 7-Year Notes;

 

(b)  Indebtedness of the Company outstanding on
the Issue Date;

 

(c)  Indebtedness of the Company owed to and held
by any Subsidiary of the Company; provided that
an Incurrence of Indebtedness shall be deemed to have occurred upon
(x) any sale or other disposition of any Indebtedness of the Company
referred to in this clause (c)

 

A-39

 

to a Person other than
the Company or a Subsidiary of the Company, or (y) any sale or other
disposition of Capital Stock of a Subsidiary of the Company which holds
Indebtedness of the Company to any person other than the Company or another
Subsidiary;

 

(d)  Interest Rate Protection Obligations of the
Company to the extent relating to Indebtedness of the Company, as the case may
be (which Indebtedness (x) bears interest at fluctuating interest rates
and (y) is otherwise permitted to be incurred under the “Limitation on
Indebtedness” covenant);

 

(e)  Indebtedness of the Company under Currency
Agreements to the extent relating to (i) Indebtedness of the Company and/or
(ii) obligations to purchase assets, properties or services incurred in
the ordinary course of business of the Company; provided
that such Currency Agreements do not increase the Indebtedness or other
obligations of the Company and its Significant Subsidiaries outstanding other
than as a result of fluctuations in foreign currency exchange rates or by
reason of fees, indemnities or compensation payable thereunder;

 

(f)  Indebtedness of the Company in respect of
performance bonds of or surety or performance bonds provided by the Company
incurred in the ordinary course of business in connection with the construction
or operation of a Cable/Telecommunications Business; or

 

(g)  Indebtedness of the Company to the extent it
represents a replacement, renewal, refinancing, or extension of outstanding
Indebtedness of the Company incurred or outstanding pursuant to clause (a) or
(b) or this clause (g) of this definition or the proviso to the
first sentence of the “Limitation on Indebtedness” covenant; provided that (A) Indebtedness of the Company may not
be replaced, renewed, refinanced or extended under this clause (g) with
Indebtedness of any Subsidiary of the Company, (B) any such replacement,
renewal, refinancing or extension (x) shall not result in such Indebtedness
having a shorter Average Life as compared with the Indebtedness being replaced,
renewed, refinanced or extended and (y) shall not exceed the sum of the
principal amount (or, if such Indebtedness provides for a lesser amount to be
due and payable upon a declaration or acceleration thereof, an amount no
greater than such lesser amount) of the Indebtedness being replaced, renewed,
refinanced or extended plus the amount of accrued interest thereon and the
amount of any reasonably determined prepayment premium necessary to accomplish
such replacement, renewal, refinancing or extension and such reasonable fees
and expenses incurred in connection therewith, and (C) in the case of any
Indebtedness replacing, renewing, refinancing, or extending Indebtedness which
is pari passu to the 7-Year Notes, any such
replacing, renewing, refinancing or extending Indebtedness is made pari passu to the 7-Year Notes or subordinated to the 7-Year
Notes, and, in the case of any Indebtedness replacing, renewing, refinancing,
or extending Subordinated Indebtedness, any such replacing, renewing,
refinancing or extending Indebtedness is subordinated to the 7-Year Notes to
the same extent as the Indebtedness being replaced, renewed, refinanced or
extended.

 

“Permitted Lien” means (i) Liens on the 7-Year
Reserve Account for the benefit of the holders of 7-Year Notes and on the
reserve account established on or about the date hereof for the benefit of the
holders of the 10-Year Notes; (ii) Liens existing on the Issue Date; (iii) Liens
(including extensions and renewals thereof) upon real or personal property
acquired after the Issue Date; provided
that (a) such Lien is created solely for the purpose of securing
Indebtedness Incurred in accordance with the “Limitation on Indebtedness” covenant,
(1) to

 

A-40

 

finance the cost
(including the cost of design, development, construction, improvement,
installation or integration) of the item of property or assets subject thereto
and such Lien is created prior to, at the time of or within six months after
the later of the acquisition, the completion of construction or the
commencement of full operation of such property or (2) to refinance any
Indebtedness previously so secured, (b) the principal amount of the
Indebtedness secured by such Lien does not exceed 100% of such cost and (c) any
such Lien shall not extend to or cover any property or assets other than such
item of property or assets and any improvements on such item; (iv) any
interest or title of a lessor in the property subject to any Capitalized Lease
or operating lease; (v) Liens on property of, or on shares of stock or
Indebtedness of, any Person existing at the time such Person becomes a
Subsidiary of the Company, or is merged into or consolidated with the Company
or any Subsidiary of the Company; provided
that such Liens were not granted in contemplation of such acquisition, merger
or consolidation and do not extend to or cover any property or assets of the
Company or any Subsidiary of the Company other than the property or assets
acquired; (vi) Liens in favor of the Company or any Subsidiary of the
Company; (vii) Liens securing reimbursement obligations with respect to
letters of credit that encumber documents and other property relating to such
letters of credit and the products and proceeds thereof; (viii) Liens
securing Indebtedness of the Company permitted pursuant to clause (g) of
the definition of “Permitted Indebtedness” or clause (c) of the definition
of “Permitted Subsidiary Indebtedness”, provided
that any such Indebtedness being refinanced was previously secured by a
Permitted Lien and any such Lien shall not extend to or cover any property or
assets other than those encumbered by the Lien securing the Indebtedness being
refinanced; and (ix) Liens incurred in the ordinary course of business
securing Indebtedness under Interest Rate Protection Obligations and Currency
Agreements, provided that such
Lien is created solely upon Excess Cash not required to be applied in
accordance with the “Cash Sweep” covenant herein.

 

“Permitted Subsidiary Indebtedness” means the
following Indebtedness (each of which shall be given independent effect) of a
Subsidiary of the Company:

 

(a)  Indebtedness of any Subsidiary of the
Company outstanding on the Issue Date;

 

(b)  Indebtedness of any Subsidiary of the
Company owed to and held by the Company or a Subsidiary of the Company; provided that an Incurrence of Indebtedness shall be deemed
to have occurred upon (x) any sale or other disposition of any Indebtedness of
a Subsidiary of the Company referred to in this clause (b) to a Person
other than the Company or a Subsidiary of the Company, or (y) any sale or other
disposition of Capital Stock of a Subsidiary of the Company which holds
Indebtedness of another Subsidiary of the Company except to the extent
permitted under clause (v) of the “Limitation on the Issuance and Sale of
Capital Stock of Significant Subsidiaries” covenant herein; and

 

(c)  Indebtedness of any Subsidiary of the
Company to the extent it represents a replacement, renewal, refinancing, or
extension of outstanding Indebtedness of such Subsidiary incurred or
outstanding pursuant to clause (a) or this clause (c) of this
definition; provided that (A) any such
replacement, renewal, refinancing or extension (x) shall not result in such
Indebtedness having a shorter Average Life as compared with the Indebtedness
being replaced, renewed, refinanced or extended and (y) shall not exceed the
sum of the principal amount (or, if

 

A-41

 

such Indebtedness
provides for a lesser amount to be due and payable upon a declaration or
acceleration thereof, an amount no greater than such lesser amount) of the
Indebtedness being replaced, renewed, refinanced or extended plus the amount of
accrued interest thereon and the amount of any reasonably determined prepayment
premium necessary to accomplish such replacement, renewal, refinancing or
extension and such reasonable fees and expenses incurred in connection therewith.

 

“Person” means any individual, Corporation,
partnership, joint venture, trust, unincorporated organization or government or
any agency or political subdivision thereof.

 

“Predecessor 7-Year Note” of any particular 7-Year
Note means every previous 7-Year Note evidencing all or a portion of the same
debt as that evidenced by such particular 7-Year Note; and, for the purposes of
this definition, any 7-Year Note authenticated and delivered under the 7-Year
Notes Indenture in exchange for or in lieu of a mutilated, destroyed, lost or
stolen 7-Year Note shall be deemed to evidence the same debt as the mutilated,
destroyed, lost or stolen 7-Year Note.

 

“Pro Forma Consolidated Operating Cash Flow”
for any period means “Consolidated Operating Cash Flow” for such period after
giving effect on a pro forma basis for the applicable period to, without
duplication, any Asset Sale or Asset Acquisition (including, without
limitation, any Asset Acquisition giving rise to the need to make such
calculation as a result of our or one of our Subsidiaries (including any Person
who becomes a Subsidiary as a result of the Asset Acquisition) Incurring
Acquired Indebtedness) or any transaction permitted under clause (iii) of
the “Consolidation, Merger and Sale of Assets” covenant herein occurring during
the period commencing on the first day of such period to and including the
Transaction Date (the “Reference Period”), as if such Asset Sale or Asset
Acquisition occurred on the first day of the Reference Period.

 

“Redemption Date” means the fixed date, on
which a 7-Year Note is to be redeemed, in whole or in part, by the Company
pursuant to the terms of the 7-Year Note.

 

“Registered 7-Year Fixed Rate Notes” means any 7-Year
Note registered in the 7-Year Note Register.

 

“Registrar” means HSBC Bank Argentina S.A,
until a successor Registrar shall have become such pursuant to the applicable
provisions of the 7-Year Notes Indenture, and, thereafter “Registrar”
shall mean such successor Registrar.

 

“Regular Record Date”
means the close of business in New York on the fifteenth day (whether or not a
Business Day) immediately preceding each Interest Payment Date.

 

“Responsible Officer” shall mean, when used
with respect to the Trustee, any officer of the Trustee who shall have direct
responsibility for the administration of this 7-Year Notes Indenture, or to
whom any corporate trust matter is referred because of such person’s knowledge
of and familiarity with the particular subject.

 

“Securities Act” means the U.S. Securities Act
of 1933, as amended.

 

A-42

 

“Significant Subsidiary” means, at any date of
determination, any Subsidiary of the Company that, together with its
Subsidiaries, (i) for the most recent fiscal year of the Company,
accounted for more than 10% of the consolidated revenues of the Company and its
Subsidiaries or (ii) as of the end of such fiscal year, was the owner of
more than 10% of the consolidated assets of the Company and its Subsidiaries,
all as set forth on the most recently available consolidated financial
statements of the Company for such fiscal year.

 

“Stated Maturity” means (i) with respect
to any security, the date specified in such security as the fixed date on which
the final installment of principal of such security is due and payable and (ii) with
respect to any scheduled installment of principal of or interest on any
security, the date specified in such security as the fixed date on which such
installment is due and payable.

 

“Subordinated Indebtedness” means any Indebtedness
of the Company which is expressly subordinated in right of payment to the 7-Year
Notes, including premium and accrued and unpaid interest.

 

“Subsidiary” means, with respect to any Person,
any Corporation, association or other business entity (i) of which
outstanding Capital Stock having at least a majority of the votes entitled to
be cast in the election of directors is owned, directly or indirectly, by such
Person and one or more other Subsidiaries of such Person, or (ii) of which
at least a majority of voting interest is owned, directly or indirectly, by
such Person and one or more other Subsidiaries of such Person.

 

“Total Consolidated Indebtedness” means, at the
time of determination, an amount equal to the aggregate amount of all
Indebtedness of the Company and its Subsidiaries outstanding (without
duplication) as of the date of determination.

 

“Trade Payables” means, with respect to any
Person, any accounts payable or any other Indebtedness or monetary obligation
to trade creditors created, assumed or Guaranteed by such Person or any of its
Subsidiaries arising in the ordinary course of business in connection with the
acquisition of goods or services.

 

“Transaction Date” means, with respect to the
Incurrence of any Indebtedness by the Company or any of its Subsidiaries, the
date such Indebtedness is to be Incurred.

 

“Transfer Agent” means any Person authorized by
the Company to effectuate the exchange or transfer of any 7-Year Note on behalf
of the Company hereunder.

 

“Trust Indenture Act” or “TIA” means the
U.S. Trust Indenture Act of 1939 as in force at the date as of which the 7-Year
Notes Indenture was executed; provided, however,
that in the event the U.S. Trust Indenture Act of 1939 is amended after such
date, “Trust Indenture Act” or “TIA” means, to the extent
required by any such amendment, the U.S. Trust Indenture Act of 1939 as so
amended.

 

“Trustee” means Law Debenture Trust Company of
New York, until a successor Trustee shall have become such pursuant to the
applicable provisions of the Indenture, and, thereafter “Trustee” shall
mean such successor Trustee.

 

A-43

 

“Unapplied Net Asset Sale Proceeds” means the
net cash proceeds of any Asset Sale consummated at least 181 days prior to the
date of determination that do not constitute Asset Sale Proceeds Reinvestment.

 

“U.S. Dollars”, “United States Dollars”,
“U.S.$” and the symbol “$” each mean dollars of the United
States.

 

“U.S. Government Obligations” means securities
that are (x) direct obligations of the United States for the payment of
which its full faith and credit is pledged or (y) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States the payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any such U.S.
Government Obligation held by such custodian for the account of the holder of
such depositary receipt, provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depositary receipt from
any amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal of or interest on the U.S.
Government Obligation evidenced by such depositary receipt.

 

“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 Board of Directors members, managing directors, managers or
other voting members of the governing body of such Person.

 

“Wholly-Owned” is defined to mean, with respect
to any Subsidiary of any Person, such Subsidiary if all the outstanding Capital
Stock in such Subsidiary (other than any directors’ qualifying shares or shares
held by a Person, to the extent mandated by applicable law) is owned by such
Person, or one or more Wholly-Owned Subsidiaries of such Person.

 

Terms used herein and not defined herein shall have
the meanings assigned to them in the 7-Year Notes Indenture.

 

A-44

 

SCHEDULE A

SCHEDULE OF PRINCIPAL AMOUNT

 

The initial principal amount at maturity of this
Global Note shall be
U.S.$[            ].
The following increases or decreases in the principal amount at maturity
of this Global Note have been made:

 

	
  Date of

  Exchange

  	
   

  	
  Amount of

  decrease in

  Principal

  Amount at

  Maturity of this

  Global Note

  	
   

  	
  Amount of

  increase in

  Principal

  Amount at

  Maturity of this

  Global Note

  	
   

  	
  Principal

  Amount of this

  Global Note

  following such

  decrease or

  increase

  	
   

  	
  Signature of

  authorized

  officer of

  Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

A-45

 

Trustee’s Certificate of Authentication

 

This is one of the 7-Year Fixed Rate Notes referred to
in the within-mentioned 7-Year Notes Indenture.

 

	
  Dated:

  
	
   

  	
   

  
	
   

  	
  LAW DEBENTURE TRUST COMPANY

  OF NEW YORK,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  (Authorized Signatory)

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

A-46

 

EXHIBIT B

FORM OF RESTRICTED GLOBAL NOTE (7-Year Fixed Rate Notes)*

 

UNLESS THIS 7% NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”),
EUROCLEAR BANK S.A./N.V. (“EUROCLEAR”) OR CLEARSTREAM BANKING, SOCIÉTÉ ANONYME
(“CLEARSTREAM, LUXEMBOURG”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY 7% NOTE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC, EUROCLEAR OR CLEARSTREAM, LUXEMBOURG (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC, EUROCLEAR OR CLEARSTREAM, LUXEMBOURG),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.

 

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE 7-YEAR NOTES INDENTURE REFERRED TO ON THE REVERSE
HEREOF.

 

THIS 7% NOTE HAS NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT (1) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (2) INSIDE THE
UNITED STATES, TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT (“RULE
144A”) PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (3) OUTSIDE
THE UNITED STATES IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES
ACT, (4) PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION.

 

BY ACCEPTANCE OF THIS 7% NOTE BEARING THE ABOVE
LEGEND, WHETHER UPON ORIGINAL ISSUANCE OR SUBSEQUENT TRANSFER, EACH

 

* Appropriate adjustments
to be made if Note is issued in certificated form.

 

B-1

 

HOLDER OF THIS 7% NOTE
ACKNOWLEDGES THE RESTRICTIONS ON THE TRANSFER OF THIS 7% NOTE SET FORTH ABOVE
AND AGREES THAT IT SHALL TRANSFER THIS 7% NOTE ONLY AS PROVIDED HEREIN AND IN
THE 7-YEAR NOTES INDENTURE REFERRED TO ON THE REVERSE HEREOF.

 

THE FOREGOING LEGEND MAY BE REMOVED FROM THIS 7%
NOTE ON SATISFACTION OF THE CONDITIONS SPECIFIED IN THE 7-YEAR NOTES INDENTURE
REFERRED TO ON THE REVERSE HEREOF.

 

B-2

 

MULTICANAL S.A. (INCORPORATED IN BUENOS AIRES,
ARGENTINA, WITH LIMITED LIABILITY (“SOCIEDAD ANÓNIMA”) UNDER THE LAWS OF THE REPUBLIC
OF ARGENTINA ON JULY 26, 1991, WITH A TERM OF DURATION EXPIRING ON JULY 27,
2090, AND REGISTERED WITH THE PUBLIC REGISTRY OF COMMERCE ON JULY 26, 1991
UNDER NUMBER 5225, BOOK 109 OF VOLUME “A” OF CORPORATIONS, AND WITH DOMICILE AT
AVALOS 2057 (C1431 DPM) BUENOS AIRES,
ARGENTINA)

 

7-YEAR FIXED RATE NOTES

 

	
  No. R-  

  	
  $  

  	
   

  
	
   

  	
  CUSIP No.

  	
   

  
	
   

  	
  ISIN No.

  	
   

  
	
   

  	
  Common Code No.

  	
   

  

 

Multicanal S.A., a sociedad anónima
duly organized and existing under the laws of Argentina (the “Company”),
for value received, hereby promises to pay to [Cede & Co.]*, or
registered assigns, the principal sum indicated on Schedule A hereof in
installments on each of the [Interest Payment Dates] as set forth in “Principal”
on the reverse hereof (or on such earlier date as the principal sum may become
repayable in accordance with the terms and conditions set forth in the 7-Year
Notes Indenture or on the reverse hereof), and to pay interest thereon from (1) in the case of the first Interest
Payment Date, December 10, 2003 until [the date the
Company accepts Eligible Notes upon expiration of the Election Offers], (2) in the case of the second Interest
Payment Date, from [the date the Company accepts Eligible Notes upon
expiration of the Election Offers]
until a date that is six months thereafter, or (3) in the case of each
Interest Payment Date thereafter, from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semiannually in
arrears on [    ] and [      ] of each year, commencing [               ], [2005] [on the date these
Notes are delivered or made available
to holders pursuant to the Company’s APE], at a rate of 7.0% per annum, until the principal hereof is paid or duly
provided for, all subject to and in accordance with the 7-Year Notes Indenture.  The interest so payable and punctually
paid or duly provided for on any Interest Payment Date will, as provided in the
7-Year Notes Indenture, be paid to the Person in whose name this 7-Year Note
(or one or more Predecessor 7-Year Fixed Rate Notes) is registered at the close
of business on the fifteenth day (whether or not a Business Day), immediately
preceding such Interest Payment Date.

 

Any such interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular
Record Date, and such defaulted interest, and (to the extent lawful) interest
on such defaulted interest at the rate borne by the 7-Year Fixed Rate Notes,
may be paid to the Person in whose name this 7-Year Note (or one or more
Predecessor 7-Year Fixed Rate Notes) is registered at the close of business on
a Special Record Date for the payment of such defaulted interest to be fixed by
the Trustee, notice whereof shall be given to

 

* Appropriate adjustments
to be made if Note is issued in certificated form.

 

B-3

 

Holders of 7-Year Fixed
Rate Notes not less than 15 days prior to such Special Record Date, or may be
paid at any time in any other lawful manner not inconsistent with the
requirements of any exchange on which the 7-Year Fixed Rate Notes may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in the 7-Year Notes Indenture.

 

The principal of, premium, if any, on and interest on
this 7-Year Note shall be payable, and the transfer of this 7-Year Note shall
be registrable, at the Corporate Trust Office of Law Debenture Trust Company of
New York, as Trustee, Co-Registrar and Principal Paying Agent, in The City of
New York, at the main office of HSBC Bank Argentina S.A., as Registrar and
Paying Agent, in Buenos Aires, Argentina or at the option of the Holder and
subject to any fiscal or other laws and regulations applicable thereto, at the
office of any other Paying Agent appointed by the Company.  The Company shall provide to the Principal
Paying Agent, in funds available on or prior to the Business Day prior to each
date on which a payment of principal of, premium, if any, or any interest on
the 7-Year Fixed Rate Notes shall become due, as set forth herein, such amount
in U.S. Dollars as is necessary to make such payment, and the Company hereby
authorizes and directs the Principal Paying Agent from funds so provided to it
to make or cause to be made payment of the principal of and any interest, as the
case may be, on the 7-Year Fixed Rate Notes as set forth herein and in the 7-Year
Notes Indenture; provided that payment with
respect to principal of and premium, if any, interest and Additional Amounts,
if any, on any 7-Year Note may, at the Company’s option, be made, subject to
applicable laws and regulations, by U.S. Dollar check drawn on a bank in The
City of New York mailed to the Holders of 7-Year Fixed Rate Notes at their
respective addresses set forth in the register of Holders of 7-Year Fixed Rate Notes;
provided further that all payments with
respect to Global Notes the Holders of which have given wire transfer
instructions to the Company will be required to be made by wire transfer of
immediately available funds to the accounts specified by the Holders
thereof.  Unless such designation is
revoked, any such designation made by such Person with respect to such 7-Year
Note will remain in effect with respect to any future payments with respect to
such 7-Year Note payable to such Person.

 

Interest on the 7-Year Fixed Rate Notes shall be
computed on the basis of a 360-day year consisting of 12 months of 30 days each
and, in the case of an incomplete month, the number of days actually elapsed.

 

All payments of principal and interest hereunder shall
be made exclusively in U.S. Dollars or in such coin or currency of the United
States as at the time of payment shall be legal tender for the payment of
public and private debts.

 

This 7-Year Note has been issued pursuant to
resolutions of an ordinary meeting of shareholders of the Company adopted on January 22,
2003 and resolutions of the Board of Directors of the Company adopted at its
meetings on [               ].

 

Reference is hereby made to the further provisions of
this 7-Year 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.

 

B-4

 

Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse hereof by manual
signature, this 7-Year Note shall not be valid or obligatory for any purpose.

 

B-5

 

IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.

 

	
   

  	
  MULTICANAL S.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

B-6

 

[REVERSE OF 7-YEAR FIXED
RATE NOTE]

 

7-YEAR FIXED RATE NOTES

 

This 7-Year Note is a negotiable obligation under the
Negotiable Obligations Law and is one of a duly authorized issue of a series of
Debt Securities of the Company designated as its 7-Year Fixed Rate Notes due
[2012], initially limited in aggregate principal amount to U.S.$[ ] (the “7-Year
Fixed Rate Notes” and each, a “7-Year Note”), as may be set forth
from time to time, issued and to be issued under an indenture, dated as of
[         ], [2005] (the “Indenture”),
as supplemented and amended by a second supplemental indenture, dated as of
[              ], [2005] (the “Second
Supplemental Indenture” and, together with the Indenture, the “7-Year
Notes Indenture”), each of the Indenture and the Second Supplemental
Indenture among the Company, Law Debenture Trust Company of New York, as
Trustee, Co-Registrar and Principal Paying Agent, and HSBC Bank Argentina S.A.,
as Registrar and Paying Agent thereunder. 
Reference to the 7-Year Notes Indenture and all indentures supplemental
thereto is hereby made for a statement of the respective rights, limitations of
rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of 7-Year Fixed Rate Notes and of the terms upon which the 7-Year Fixed
Rate Notes are, and are to be, authenticated and delivered.  The terms of the 7-Year Fixed Rate Notes
include those stated in the 7-Year Notes Indenture and those made part of the 7-Year
Notes Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
§§ 77aaa-77bbbb), as amended (the “Trust Indenture Act”).  The 7-Year Fixed Rate Notes are subject to
all such terms, and Holders are referred to the 7-Year Notes Indenture and the
Trust Indenture Act for a statement of those terms.

 

The Indebtedness evidenced by the 7-Year Fixed Rate
Notes will constitute the direct, unsecured and unconditional unsubordinated Indebtedness
of the Company and will rank pari passu in
right of payment without any preference among themselves.  The payment obligations of the Company under
the 7-Year Fixed Rate Notes will at all times rank at least equally in priority
of payment with all other present and future unsecured and unsubordinated
Indebtedness of the Company and senior in priority of payment with all other
present and future Subordinated Indebtedness of the Company from time to time
outstanding.

 

Form, Denomination and
Registration

 

The 7-Year Fixed Rate Notes shall be issuable only in
registered form without coupons in denominations of U.S.$1.00 or multiples of
U.S.$1.00 in excess thereof, including if issued other than as a Global Note
and in exchange for beneficial interests in a Restricted Global Note.  No service charge shall be made for any
registration of transfer or exchange of 7-Year Fixed Rate Notes, but the
Trustee may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.

 

B-7

 

Principal

 

Any principal not prepaid (in whole or in part) on the
7-Year Fixed Rate Notes shall be due and payable in installments on the
following [Interest Payment Dates] and in the following percentages or amount:

 

	
   

  	
   

  	
   

  	
  Third

  Anniversary

  of the
  [date

  the Company

  accepts

  Eligible

  Notes upon

  expiration of

  the Election

  Offers],

  [2005]

  	
   

  	
   

  	
  Fourth

  Anniversary

  of [the
  date

  the Company

  accepts

  Eligible Notes

  upon

  expiration of

  the Election

  Offers],

  [2005]

  	
   

  	
   

  	
  Fifth

  Anniversary

  of [the
  date

  the Company

  accepts

  Eligible

  Notes upon

  expiration of

  the Election

  Offers],

  [2005]

  	
   

  	
   

  	
  Sixth

  Anniversary

  of [the
  date

  the

  Company

  accepts

  Eligible

  Notes upon

  expiration of

  the Election

  Offers],

  [2005]

  	
   

  	
   

  	
  Maturity

  Date

  	
   

  
	
  Percentage/amount
  of outstanding principal amount payable as of such date

  	
   

  	
   

  	
  5%

  	
   

  	
   

  	
  10%

  	
   

  	
   

  	
  15%

  	
   

  	
   

  	
  20%

  	
   

  	
   

  	
  Remaining principal outstanding

  	
   

  

 

provided that the
amount of each such installment will be calculated for each U.S.$1.00 of the
face amount of the 7-Year Fixed Rate Notes and rounded to the nearest cent
(half a cent being rounded upwards); and provided
further that the last such installment will be in the amount
necessary to repay in full the outstanding principal amount of the 7-Year Fixed
Rate Notes.

 

Payment; Paying Agents
and Transfer Agent

 

The principal of, premium, if any, on and interest on
the Registered 7-Year Fixed Rate Notes shall be payable, and the transfer of
such Registered 7-Year Fixed Rate Notes will be registrable, at the corporate
trust office of the Trustee in the Borough of Manhattan, The City of New York,
at the main office of the Paying Agent in Argentina and, at the option of the
Holder of such Registered 7-Year Fixed Rate Notes and subject to any fiscal or
other laws and regulations applicable thereto, at the office of any other
Paying Agents appointed by the Company. 
Payments with respect to principal of the 7-Year Fixed Rate Notes will
be made only against surrender of such 7-Year Fixed Rate Notes at the office of
the Trustee in The City of New York or at the main office of the Paying Agent
in Argentina.  Payment with respect to
principal, premium, if any, and interest with respect to any 7-Year Note may,
at the Company’s option, be made, subject to applicable laws and regulations,
by U.S. Dollar check drawn on a bank in The City of New York mailed to the
Holders of 7-Year Fixed Rate Notes at their respective addresses set forth in
the 7-Year Note Register, provided that
all payments with respect to Global Notes the Holders of which have given wire
transfer instructions to the Company will be required to be made by wire
transfer of immediately available funds to the accounts specified by the
Holders thereof.  Unless such designation
is revoked, any such

 

B-8

 

designation made by such
Person with respect to such 7-Year Note will remain in effect with respect to
any future payments with respect to such 7-Year Note payable to such Person.

 

Any money deposited with the Trustee or any Paying
Agent in trust for the payment of the principal of, or premium, if any,
interest or Additional Amounts, if any, on any 7-Year Note and remaining
unclaimed for two years after such principal, premium, if any, interest or
Additional Amounts, if any, has become due and payable shall be repaid to the
Company on Company Request; and the Holder of such 7-Year Note shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, (i) in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in The
City of New York, and (ii) in the Official Gazette of
Argentina and in a newspaper published in the Spanish language and
of general circulation in Argentina, notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such publication, any unclaimed balance of such money then
remaining shall be repaid to the Company.

 

If any payment on a 7-Year Note is due on a day that
is, at any place of payment, a day on which banking institutions are authorized
or obligated by law or executive order to close, then, at each such place of
payment, such payment need not be made on such day but may be made on the next
succeeding day that is not, at such place of payment, a day on which banking
institutions are authorized or obligated by law or executive order to close,
with the same force and effect as if made on the date for such payment, and no
interest will accrue for the period from and after such due date to such next
succeeding day that is not, at such place of payment, a day on which banking
institutions are authorized or obligated by law or executive order to close.

 

Payments of Additional Amounts

 

All payments by the Company in respect of the 7-Year
Fixed Rate Notes will be made free and clear of and without deduction or
withholding for or on account of any present or future taxes, duties, levies,
imposts, assessments or other charges (including penalties, interest and other
additions thereto) that are imposed by or on behalf of any political
subdivision or territory or possession of Argentina or any authority or agency
therein or thereof having power to tax (“Taxes”) unless such withholding
or deduction is required by law.  If the
Company is required by law to make any such withholding or deduction, the
Company will pay to any Holder such additional amounts (“Additional Amounts”)
as may be necessary in order that every net payment made by the Company on the
Holder’s 7-Year Note after deduction or withholding for or on account of any
such present or future Taxes will not be less than the amount then due and
payable on such 7-Year Note.  The
foregoing obligation to pay Additional Amounts, however, will not apply to (i) any
Taxes that would not have been imposed but for the existence of any present or
former connection between such Holder and Argentina other than the mere receipt
of such payment or the ownership or holding of such 7-Year Note; (ii) any
Taxes that would not

 

B-9

 

have been imposed but for
the presentation by the Holder of such 7-Year Note for payment on a date more
than 15 days after the date on which such payment became due and payable or the
date on which payment thereof is duly provided for, whichever occurs later; (iii) if
the beneficial owner of such 7-Year Note had been the Holder of the 7-Year Note
and would not be entitled to the payment of Additional Amounts; (iv) any
Taxes required to be deducted or withheld by any paying agent from a payment on
a 7-Year Note, if such payment can be made without such deduction or
withholding by any other paying agent; or (v) any Taxes that would not
have been imposed but for the failure of the Holder to comply with any
applicable certification, documentation, information or other reporting
requirement concerning the nationality, residence, identity or connection with
the taxing jurisdiction of the Holder or beneficial owner of such 7-Year Note.

 

Any reference herein to principal and/or interest
shall be deemed also to refer to any Additional Amounts which may be payable
under the undertakings described in this paragraph, and express reference to
the payment of Additional Amounts (if applicable) in any provisions hereof
shall not be construed as excluding Additional Amounts in those provisions
hereof where such express reference is not made.

 

In addition, the Company agrees to pay any stamp,
issue, registration, documentary or other similar taxes and duties, including
interest and penalties that may be imposed by Argentina or the United States in
connection with the creation, issue and offering of this 7-Year Note.

 

Redemption for Tax
Reasons

 

If at any time subsequent to the issuance of the 7-Year
Fixed Rate Notes, as a result of any change in or amendment to the laws,
regulations or governmental policy having the force of law or in the official
interpretation or application thereof of Argentina (or of any political
subdivision or taxing authority thereof or therein) or any execution of or
amendment to, any treaty or treaties affecting taxation to which Argentina (or
such political subdivision or taxing authority) is a party, which change or
amendment becomes effective after the date of the Indenture, the Company is
required, or would be required on the next succeeding interest payment date, to
pay Additional Amounts in respect of payments on the 7-Year Fixed Rate Notes
and the payment of such Additional Amounts cannot be avoided by the use of any
reasonable measures available to the Company (which shall not include any
adverse modification of the terms of the 7-Year Notes Indenture or the 7-Year
Fixed Rate Notes), then the 7-Year Fixed Rate Notes may be redeemed as a whole
(but not in part), at the option of the Company, at any time upon not less than
30 nor more than 90 days’ notice given to the Holders of 7-Year Fixed Rate
Notes at any time at an amount equal to 100% of their principal amount together
with accrued and unpaid interest thereon to the date fixed for redemption.

 

In order to effect a redemption of the 7-Year Fixed
Rate Notes pursuant to the preceding paragraph, the Company shall deliver to
the Trustee, at least 45 days prior to the Redemption Date, (i) a
certificate signed by two directors of the Company stating that the obligation
to pay such Additional Amounts cannot be avoided by the Company taking
reasonable

 

B-10

 

measures available to it
and (ii) an opinion of independent legal counsel of recognized standing to
the effect that the Company has or will become obligated to pay such Additional
Amounts as a result of such change, amendment or executed or amended
treaty.  Such certificate, once delivered
by the Company to the Trustee, will be irrevocable and upon its delivery the
Company shall be obligated to make the payment or payments referred to
therein.  No notice of redemption may be
given earlier than 90 days prior to the earliest date on which the Company
would be obligated to pay such Additional Amounts were a payment in respect of
the 7-Year Fixed Rate Notes then due. 
The certificate shall additionally specify the Redemption Date and all
other information necessary for the publication and mailing by the Trustee of
notices of such redemption.  The Trustee
shall be entitled to rely conclusively upon the information so furnished by the
Company in such certificate and shall be under no duty to check the accuracy or
completeness thereof.

 

Purchase by the Company

 

Subject to the “Limitation on Repurchase of 7-Year
Notes and 10-Year Notes” covenant, Company may at any time purchase 7-Year
Fixed Rate Notes in the open market or by tender or private agreement at any
price.  All 7-Year Fixed Rate Notes so
purchased must be delivered by the Company to the Trustee for cancellation.

 

Certain Covenants

 

1.             Limitation
on Indebtedness.

 

Under the terms of the 7-Year Notes Indenture, so long
as any of the 7-Year Notes are Outstanding, the Company will not, and will not
permit any of its Subsidiaries to directly or indirectly Incur any Indebtedness
(including Acquired Indebtedness); provided
that the Company (but not any Subsidiary of the Company) may Incur Indebtedness
(including Acquired Indebtedness) and a Subsidiary of the Company may Incur
Acquired Indebtedness if, after giving effect to the application of the
Incurrence of any such Indebtedness and the receipt and application of the
proceeds therefrom, the ratio of Total Consolidated Indebtedness to Annualized
Pro Forma Consolidated Operating Cash Flow would be less than or equal to 6.5
to 1.0.

 

The foregoing limitations on the Incurrence of
Indebtedness will not apply to:

 

(i)            the
Incurrence by the Company of Permitted Indebtedness;

 

(ii)           the
Incurrence by any Subsidiary of the Company of Permitted Subsidiary
Indebtedness;

 

(iii)          the
Incurrence of Indebtedness by the Company (but not any Subsidiary of the
Company) other than Indebtedness described in the foregoing clause (i), which
Indebtedness when added to the then outstanding Indebtedness previously
Incurred under this clause (iii) and the outstanding Indebtedness of
Subsidiaries of the Company

 

B-11

 

previously Incurred under
clause (iv) below, does not exceed, as of the date of determination,
U.S.$25 million in aggregate principal amount; and

 

(iv)          the
Incurrence of Indebtedness by Subsidiaries of the Company which Indebtedness, (A) when
added to the outstanding Indebtedness of Subsidiaries of the Company previously
Incurred under this clause (iv), does not exceed, as of the date of
determination, U.S.$10 million in aggregate principal amount, and (B) when
added to the outstanding Indebtedness of the Company previously Incurred under
clause (iii) above and the outstanding Indebtedness of Subsidiaries of the
Company previously Incurred under this clause (iv), does not exceed, as of the
date of determination, U.S.$25 million in aggregate principal amount.

 

2.             Maximum
Total Consolidated Indebtedness.

 

So long as any 7-Year Notes remain Outstanding, the Company will maintain a Total
Consolidated Indebtedness of no greater than the initial aggregate principal
amount of the 7-Year Notes and the 10-Year Notes plus U.S.$5 million of
seller financing outstanding on the Issue Date plus U.S.$10 million (or
its equivalent in other currencies) minus 90% of the aggregate principal
amount of any 7-Year Notes or 10-Year Notes cancelled on or prior to the date
of determination, minus 90% of the aggregate principal amount of any
seller financing outstanding on the Issue Date plus the aggregate amount
of Indebtedness Incurred as a result of a transaction permitted under clause (iii) of
the “Consolidation, Merger and Sale of Assets” covenant herein minus 90%
of the aggregate principal amount of any such Indebtedness discharged prior to
the date of determination.

 

3.             Limitation
on Dividends and Other Payment Restrictions Affecting Significant Subsidiaries

 

Under the terms of the 7-Year Notes Indenture, so long
as any of the 7-Year Notes are Outstanding, the Company will not, and will not
permit any Significant Subsidiary to, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or consensual restriction
of any kind on the ability of any Significant Subsidiary to (i) pay
dividends or make any other distributions permitted by applicable law to the
Company or any Significant Subsidiary on its Capital Stock or with respect to
any other interest or participation in, or measured by, its profits, (ii) pay
any Indebtedness or other obligation owed to the Company or any other
Significant Subsidiary, (iii) make loans or advances to the Company or any
other Significant Subsidiary or (iv) sell, lease or transfer any of its
property or assets to the Company or any other Significant Subsidiary.

 

The foregoing provisions shall not restrict (A) in
the case of clause (i), (ii), (iii) or (iv), any such encumbrance or
restriction (I) existing under the 7-Year Notes Indenture; (II) existing under
or by reason of applicable law; (III) existing under any instrument governing
Acquired Indebtedness or Capital Stock of any Person or the property or assets
of such Person acquired by the Company or any Significant Subsidiary and
existing at the time of such acquisition (except to the extent such Acquired
Indebtedness was Incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any

 

B-12

 

Person or the property or
assets of any Person other than such Person or the property or assets of such
Person so acquired; (IV) existing under any agreement or instrument that
refinances an Indebtedness or replaces, renews or amends an agreement or
instrument containing an encumbrance or restriction that is permitted by clauses
(I) and (III) above, provided
that the terms and conditions of any such restrictions taken as a whole are not
less favorable to the Holders than those under or pursuant to the Indebtedness
being refinanced or the agreements or instruments being replaced, renewed or
amended; or (V) with respect to a Significant Subsidiary and imposed pursuant
to an agreement that has been entered into for the sale or disposition of all
or substantially all of the Capital Stock of, or property and assets of, such
Significant Subsidiary; or (B), in the case of clause (iv) only, any such
encumbrance or restriction (I) that restricts in a customary manner the
subletting, assignment or transfer of any property or asset subject to a lease
or license, or (II) existing by virtue of any transfer of, agreement to
transfer, option or right with respect to, or Lien on, any property or assets
of the Company or any Significant Subsidiary not otherwise prohibited by the 7-Year
Notes Indenture.  Nothing contained in
this paragraph shall prevent the Company or any Significant Subsidiary from (1) creating,
incurring, assuming or suffering to exist any Liens otherwise permitted under
the “Limitation on Liens” covenant or (2) restricting the sale or other
disposition of property or assets of the Company or any of its Significant
Subsidiaries that secure Indebtedness of the Company or any Significant
Subsidiary, subject to compliance with the “Limitation on Asset Sales”
covenant.

 

4.             Limitation
on the Issuance and Sale of Capital Stock of Significant Subsidiaries

 

Under the terms of the 7-Year Notes Indenture, the
Company will not sell, and will not permit any Significant Subsidiary, directly
or indirectly, to issue or sell, any shares of Capital Stock of a Significant
Subsidiary (including options, warrants or other rights to purchase shares of
such Capital Stock) except (i) to the Company or a Wholly-Owned Subsidiary
that, at the time of such sale, is a Significant Subsidiary, (ii) if,
immediately after giving effect to such issuance or sale, such Significant
Subsidiary would no longer constitute a Significant Subsidiary, (iii) in
the case of issuances of Capital Stock by a Significant Subsidiary if, after
giving effect to such issuance, the Company maintains its percentage ownership
of such Significant Subsidiary, (iv) the issuance to or ownership by
directors of directors’ qualifying shares or the issuance to or ownership by a
Person of Capital Stock of any Significant Subsidiary, to the extent mandated
by applicable law, or (v) the issuance or transfer of Capital Stock of a
Significant Subsidiary to the seller or transferor of a
Cable/Telecommunications Business, provided
that after giving effect to any such issuance or transfer, the Company holds at
least 51% of the Capital Stock (including 51% of the Voting Stock) of any such
Significant Subsidiary, and provided
further that in the case of
clauses (ii), (iii) and (v) above, any such issuance or sale shall
comply with the “Limitation on Asset Sales” covenant.

 

5.             Limitation
on Issuances of Guarantees by Subsidiaries

 

Under the terms of the 7-Year Notes Indenture, the
Company will not permit any Subsidiary of the Company, directly or indirectly,
to Guarantee any Indebtedness of the Company (“Guaranteed Indebtedness”),
unless (i) such Subsidiary simultaneously executes and delivers a
supplemental indenture to the 7-Year Notes Indenture providing for a Guarantee
by

 

B-13

 

such Subsidiary (a “Subsidiary
Guarantee”) of payment of the 7-Year Notes and (ii) such Subsidiary
waives and will not in any manner whatsoever claim or take the benefit or
advantage of, any rights of reimbursement, indemnity or subrogation or any
other rights against the Company or any other Subsidiary of the Company as a
result of any payment by such Subsidiary under its Subsidiary Guarantee; provided that this paragraph shall not be
applicable to any Guarantee of any Subsidiary of the Company that (x) exists at
the time such Person becomes a Subsidiary of the Company and (y) was not Incurred
in connection with, or in contemplation of, such Person becoming a Subsidiary
of the Company.  If the Guaranteed
Indebtedness is pari passu with
the 7-Year Notes, then the Guarantee of such Guaranteed Indebtedness shall be pari passu with, or subordinated to, the
Subsidiary Guarantee.  If the Guaranteed
Indebtedness is subordinated to the 7-Year Notes, then the Guarantee of such
Guaranteed Indebtedness shall be subordinated to the Subsidiary Guarantee at
least to the extent that the Guaranteed Indebtedness is subordinated to the 7-Year
Notes.

 

Notwithstanding the foregoing, any Subsidiary
Guarantee by a Subsidiary of the Company shall provide by its terms that it
shall be automatically and unconditionally released and discharged upon (i) any
sale, exchange or transfer, to any Person not an Affiliate of the Company, of
all of the Company’s and each of its Subsidiary’s Capital Stock in, or all or
substantially all the assets of, such Subsidiary (which sale, exchange or
transfer is not in contravention of the “Limitation on Asset Sales” covenant
and is not otherwise prohibited hereby) or (ii) the release or discharge
of the Guarantee which resulted in the creation of such Subsidiary Guarantee,
except a discharge or release by or as a result of payment under such
Guarantee.

 

6.             Limitation
on Transactions with Shareholders and Affiliates

 

Under the terms of the 7-Year Notes Indenture, the
Company will not, and will not permit any Subsidiary to, directly or
indirectly, conduct any business, enter into, renew or extend any transaction
(including, without limitation, the purchase, sale, lease, exchange or transfer
of property or assets, the rendering of any service, or the making of any
payment, loan, advance or guarantee) with, or for the benefit of, any holder (or
any Affiliate of such holder) of 10% or more of the Capital Stock of the
Company or with any Affiliate of the Company or of any Subsidiary (together, “Related
Persons” and each, a “Related Person”), unless the terms to the
Company or such Subsidiary (i) are at least as favorable to the Company or
such Subsidiary as those that could be obtained at the time of such transaction
in arm’s length dealings with a Person who is not a Related Person, and (ii) in
the case of any transaction (or series of transactions) with a Related Person
involving aggregate payments made on or after the Issue Date in excess of
U.S.$10 million in any fiscal year, shall be approved by a majority of the
disinterested members of the Board of Directors of the Company, or if no such disinterested
directors exist with respect to such transaction (or series of transactions),
shall be confirmed by an opinion of an Independent Financial Advisor to be
fair, from a financial point of view, to the Company or such Subsidiary.

 

The foregoing limitation does not limit, and shall not
apply to (i) any transaction between the Company and any of its
Subsidiaries or between Subsidiaries, (ii) payment of reasonable and
customary compensation and fees to directors of the Company and the

 

B-14

 

Subsidiaries who are not
employees of the Company or any Subsidiary, or (iii) the grant of stock
options or similar rights to acquire Capital Stock (other than Disqualified
Stock) to employees and directors of the Company pursuant to plans approved by
the Board of Directors provided that, in the aggregate, the shares of Capital
Stock underlying such options or similar rights issued since the Issue Date
(exclusive of any shares of Capital Stock or similar rights required to be
issued by law) shall not exceed 2.5% of the outstanding Common Stock of the
Company on a fully diluted basis at the date of determination.

 

7.             Limitation
on Liens

 

Under the terms of the 7-Year Notes Indenture, the
Company will not, and will not permit any Subsidiary of the Company to create,
incur, assume or suffer to exist any Liens of any kind (other than Permitted
Liens) against or upon any of its property or assets (including any shares of
Capital Stock), now owned or hereafter acquired, or any proceeds therefrom
securing any Indebtedness unless provision is made directly to secure the 7-Year
Notes equally and ratably by a Lien on such property, assets or proceeds with
(or, if the obligation or liability to be secured by such Lien is Subordinated Indebtedness,
prior to) the obligation or liability secured by such Lien.

 

8.             Limitations
on Sale and Leaseback Transactions

 

Under the terms of the 7-Year Notes Indenture, the
Company will not, and will not permit any of its Subsidiaries to, directly or indirectly,
enter into, assume, guarantee or otherwise become liable with respect to any
Sale and Leaseback Transaction, unless:  (i) the
net proceeds from such transaction are at least equal to the Fair Market Value
of the property being transferred and (ii) shall comply with the “Limitation
on Asset Sales” covenant.

 

For purposes of the preceding paragraph, “Sale and
Leaseback Transaction” means, with respect to any Person, any direct or
indirect arrangement (excluding, however, any such arrangement between such
Person and a Wholly-Owned Subsidiary of such Person or between one or more
Wholly-Owned Subsidiaries of such Person) pursuant to which property is sold or
transferred by such Person or a Subsidiary of such Person and is thereafter
leased back from the purchaser or transferee thereof by such Person or one of
their Subsidiaries.

 

9.             Limitation
on Asset Sales

 

Under the terms of the 7-Year Notes Indenture, the
Company will not, and will not permit any of its Subsidiaries to make any Asset
Sale that would result in a Material Adverse Effect occurring and, in the case
of Asset Sales involving consideration of U.S.$10 million or more, unless an
Independent Financial Advisor shall have delivered a valuation of the property
or asset being sold to the Board of Directors and at a price consistent with
such valuation.

 

10.           Reports
to Holders

 

Under the terms of the 7-Year Notes Indenture, the
Company covenants to deliver to the Trustee:

 

B-15

 

(a)           (i) annual
consolidated financial statements with a report from a major internationally
recognized independent public accountant with respect to such year within 180
days after the end of the fiscal year and (ii) quarterly consolidated
financial statements within 60 days after the end of each of the first three
fiscal quarters;

 

(b)           such
additional information as the Company has filed with any regulatory authority
with jurisdiction over the Company within ten business days of the filing
thereof;

 

(c)           written
notice of the occurrence of any Default or Event of Default within ten Business
Days of the Company becoming aware of any such Default or Event of Default,
which notice shall be signed by the CEO, CFO or the chief accounting officer of
the Company; and

 

(d)           written
certification, on or before a date not more than 90 days after the end of each
fiscal year, that a review has been conducted of the activities of the Company
and its Subsidiaries, and of the Company’s and its Subsidiaries’ performance
under the 7-Year Notes Indenture, and that the Company has, to the best of
their knowledge, fulfilled all obligations under the 7-Year Notes Indenture,
or, if there has been a default in the fulfillment of any such obligation,
specifying each such default and the nature and status thereof.

 

Delivery of such reports, information and documents to
the Trustee is for informational purposes only and the Trustee’s receipt of
such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Company’s compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers’ Certificates).

 

11.           Consolidation,
Merger and Sale of Assets

 

Under the terms of the 7-Year Notes Indenture, the
Company shall not consolidate with, merge with or into, or sell, convey,
transfer, lease or otherwise dispose of all or substantially all of its
property and assets (as an entirety or substantially an entirety in one
transaction or a series of related transactions) to, any Person (other than a
consolidation or merger with or into a Wholly-Owned Subsidiary which, at the
time of such consolidation or merger, is a Significant Subsidiary with a
positive net worth; provided
that, in connection with any such merger or consolidation, no consideration
(other than Common Stock in the surviving Person or the Company) shall be
issued or distributed to the stockholders of the Company) or permit any Person
to merge with or into the Company unless: 
(i) the Company shall be the continuing Person, or the Person (if
other than the Company) formed by such consolidation or into which the Company
is merged or that acquired or leased such property and assets of the Company
shall expressly assume, by a supplemental indenture, executed and delivered to
a Responsible Officer of the Trustee, all of the obligations of the Company
under the 7-Year Notes Indenture; (ii) immediately after giving effect to
such transaction, no Default or Event of Default shall have occurred and be
continuing; (iii) (A) the transaction will involve a Person
principally engaged in the Company’s line of business or in a business or
activities ancillary to the Company’s line of business, or reasonably related
therewith (including, but not limited to programming, MMDS, broadband, pay
television and the provision of access service to, content

 

B-16

 

for or ancillary services
such as web-hosting, network security and monitoring, digital certificates or
equipment installation or maintenance, for the Internet, but excluding non-pay
television services, AM or FM radio broadcasting, telephone or cellular
communications and publication of newspapers), (B) immediately after
giving effect to such transaction on a pro forma basis, the Company, or any
surviving Person will have Consolidated Net Worth equal to or greater than the
Consolidated Net Worth of the Company immediately preceding the transaction
(provided that this requirement will not apply where such transaction involves
another Person engaged in substantially the Company’s line of business in
Argentina), and (C) (1) the weighted average life of the Company’s
(or the surviving Person’s) consolidated Indebtedness after giving effect to
the transaction would exceed the lesser of (x) (1) five years and (y) the
weighted average life of the Company’s consolidated Indebtedness immediately
prior to the transaction and (2) after giving effect to such transaction
the Company (or the surviving Person) would either be permitted to Incur at
least U.S.$1.00 of additional Indebtedness pursuant to the “Limitation on
Indebtedness” covenant, if such Incurrence was not permitted prior to giving
effect to such transaction or, if such Incurrence was permitted, have a lower ratio
of Total Consolidated Indebtedness to Annualized Pro Forma Consolidated
Operating Cash Flow than that of the Company prior to giving effect to such
transaction; and (iv) the Company delivers to the Trustee an Officers’
Certificate (attaching the arithmetic computations to demonstrate compliance
with clause (iii)) and an opinion of reputable Argentine counsel, in each case
stating that such consolidation, merger or transfer and such supplemental
indenture complies with clause (i) of this provision and that all
conditions precedent provided for herein relating to such transaction have been
complied with.

 

12.           Reserve
Accounts

 

Under
the terms of the 7-Year Notes Indenture, so long as any of the 7-Year Notes are
Outstanding, the Company will establish and maintain with a bank located in New
York two U.S. dollar-denominated reserve accounts (the “Reserve Accounts”)
to which the Company will transfer, on a ratable basis (by reference to the amounts
of principal and interest due (including additional amounts) within twelve
months of the date of determination under the 7-Year Notes, in one case, and
the 10-Year Notes, in the other case), on the first Interest Payment Date
following May 15th (the “First Annual Transfer Date”)
and November 15th (the “Second Annual Transfer Date”
and, together with the First Annual Transfer Date, the “Transfer Dates”)
of any given year, any amount of Excess Cash calculated, in the case of the
First Annual Transfer Date, by reference to the Company’s unaudited interim
consolidated financial statements as of and for the three-month period ended March 31st
of the same calendar year, and for the Second Annual Transfer Date, by
reference to the Company’s unaudited interim consolidated financial statements
as of and for the three-month period ended September 30th of
the same calendar year, so that (A) the balance in one of the Reserve
Accounts (the “7-Year Notes Reserve Account”) shall not exceed the sum
of (x) 12 months of interest payments on the 7-Year Notes (assuming an interest
rate of 7% for any 7-Year Notes that are 7-Year Floating Rate Notes) and
Additional Amounts, if any, thereon and (y) any amount of principal of the 7-Year
Notes due within 12 months of such Transfer Date, and (B) the balance in
the other Reserve Account (the “10-Year Notes Reserve Account”) shall
not exceed 12 months of interest payments on the 10-Year Notes and Additional
Amounts, if any, thereon.  Amounts
required to be transferred in accordance herewith will be determined by
reference to the Peso amounts using the Company’s consolidated

 

B-17

 

balance sheets for the
relevant dates and converting such amounts into U.S. Dollars at the prevailing
exchange rate on the Buenos Aires business day immediately preceding the
relevant Transfer Date.  The 7-Year Notes
Reserve Account shall be subject to a first-priority security interest in favor
of the Trustee, as collateral agent for the Holders of 7-Year Notes.  In the event that on any Transfer Date any
restrictions or prohibition of access to the Argentine foreign exchange market
exists, the Company agrees to transfer all amounts required to be transferred
under this section either (i) by purchasing, with Pesos, any series
of “Bonos Externos de la República Argentina” or any other securities or public
or private bonds issued in Argentina and denominated in U.S. Dollars, and
transferring and selling such instruments outside Argentina for U.S. dollars,
or (ii) by means of any other legal procedure existing in Argentina on any
such Transfer Date.  All costs and taxes
payable in connection with the procedures referred to in (i) and (ii) above
shall be borne by the Company.  In the
event that the Company consummates the transactions contemplated in the APE on
the date that is after March 31 or September 30, as applicable, the
amount of Excess Cash required to be transferred on the first Transfer Date
after the issuance of the 7-Year Notes will be reduced by an amount equal to
all cash payments the Company is required to make in connection with or in
contemplation of that closing.

 

13.           Cash
Sweep

 

Under the terms of the 7-Year Notes Indenture, so long
as any principal amount of 7-Year Notes shall remain outstanding, if the amount
of Excess Cash for any Transfer Date (after complying with the obligation set
forth in Clause 12) exceeds U.S.$3,000,000 (or the equivalent thereof in other
currencies), the Company will apply 70% of any such surplus Excess Cash (the
determination of such amount to be certified by the Company’s independent auditors)
plus, without duplication, 100% of the Unapplied Net Asset Sale Proceeds on
such Transfer Date to the ratable pre-payment of any outstanding 7-Year
Notes.  Amounts required to be prepaid in
accordance herewith will be determined by reference to the Peso amounts using
the Company’s consolidated balance sheets for the relevant dates and converting
such amounts into U.S. Dollars at the prevailing exchange rate on the date of
the mandatory prepayment).  In the event
that on any Transfer Date any restriction or prohibition of access to the
Argentine foreign exchange market exists, the Company agrees to pay all amounts
required to be paid under this section either (i) by purchasing, with
Pesos, any series of “Bonos Externos de la República Argentina” or any other
securities or public or private bonds issued in Argentina and denominated in
U.S. Dollars, and transferring and selling such instruments outside Argentina
for U.S. dollars, or (ii) by means of any other legal procedure existing
in Argentina on any such Transfer Date. 
All costs and taxes payable in connection with the procedures referred
to in (i) and (ii) above shall be borne by the Company.

 

The Company shall effectuate any pre-payment of the 7-Year
Notes described in Section 4.3(a) by providing not more than 30 nor
less than five days’ irrevocable notice to Holders of 7-Year Notes and
redeeming Outstanding 7-Year Notes, on a pro rata basis, at their remaining
principal amount thereof, together with accrued interest to the relevant
Transfer Date.

 

B-18

 

14.           Limitation
on Capital Expenditures

 

Under the terms of the 7-Year Notes Indenture, so long
as any 7-Year Notes shall remain Outstanding, except for Asset Sale Proceed
Reinvestments, the Company shall not make or permit any Subsidiaries to make
any Capital Expenditure at any time, except that the Company and its
Subsidiaries may make such Capital Expenditures if after giving effect to such
Capital Expenditures, the aggregate amount of all Capital Expenditures of the
Company and its Subsidiaries in each of the following periods would not exceed
the sum of:

 

(A) U.S.$15 million for every six months starting
with the six-month period ending June 30, 2005 through the maturity date
of the 7-Year Notes;

 

and

 

(B) in each of the periods, the unused portion of
Capital Expenditures permitted under clause (A) above for the prior period
(after giving effect to the application of this clause (B)).

 

15.           Limitation
on Interest Expense

 

At any time after the issuance of the 7-Year Notes, so
long as any 7-Year Notes remain Outstanding, the Company will not permit the
ratio of Pro Forma Consolidated Operating Cash Flow to Consolidated Interest
Expense in each case for any period of four consecutive fiscal quarters to be
less than (A) 2.0 to 1.0 for any such period ending on or prior to the
[second anniversary of the Issue Date of the 7-Year Notes], (B) 2.25 to
1.0 for any such period ending after the [second anniversary] and on or prior
to the [fifth anniversary] of the Issue Date of the 7-Year Notes, and (C) 2.50
to 1.0 for any such period ending after the [fifth anniversary] of the Issue
Date of the 7-Year Notes; provided
that the Company will not be subject to the limitation set forth in this
covenant in any fiscal quarter but not more than two consecutive fiscal
quarters if a Macroeconomic Disruption Event has occurred during the prior
fiscal quarter.

 

16.           Limitation
on Repurchase of 7-Year Notes and 10-Year Notes

 

Under the terms of the 7-Year Notes Indenture, so long
as any 7-Year Notes shall remain Outstanding, the Company shall not purchase
any 7-Year Notes or 10-Year Notes in the open market or by tender or private
agreement until the first Transfer Date following the issuance of the 7-Year
Notes and thereafter the Company shall not be permitted to purchase any 10-Year
Notes in the open market or by tender or private agreement by using an amount
of Excess Cash during the period between any two Transfer Dates that is greater
than any amount of Excess Cash used by the Company to redeem any Outstanding 7-Year
Notes on the immediately preceding Transfer Date in accordance with the terms
of the 7-Year Notes Indenture.

 

17.           Limitation
on Restricted Payments

 

So long as any 7-Year Notes shall remain outstanding,
the Company shall not redeem, repurchase, retire or otherwise acquire any of
its capital stock, make a dividend or

 

B-19

 

distribution with respect
to its capital stock or other ownership interest in it (or options or warrants
in respect thereto).

 

Events of Default

 

The following events will be each defined as an “Event
of Default” for the 7-Year Notes Indenture:

 

(a)           failure to
pay principal of or premium, if any, on any of the 7-Year Notes when the same
shall become due and payable at maturity, upon acceleration, redemption or
otherwise;

 

(b)           failure to
pay interest, or Additional Amounts, if any, (or, with respect to the 7-Year
Floating Rate Notes, Other Additional Amounts, if any) on any of the 7-Year
Notes when the same shall become due and payable, and such failure continues
for a period of 30 days;

 

(c)           failure to
perform or comply with the “Consolidation, Merger and Sale of Assets” covenant,
the “Cash Sweep” covenant, or for a period of 30 consecutive days after the
occurrence of such failure, the “Maximum Total Consolidated Indebtedness”
covenant, the “Limitation on Indebtedness” covenant, or the “Limitation on
Interest Expense” covenant;

 

(d)           failure to
perform or breach of any other covenant or agreement in the 7-Year Notes
Indenture or under the 7-Year Notes (other than those referred to in clauses
(a), (b) and (c) above) and such failure or breach continues for a
period of 30 consecutive days after written notice shall have been given to the
Company by the Trustee or to the Company and the Trustee by the Holders of at
least 25% in aggregate principal amount of the 7-Year Notes then Outstanding;

 

(e)           the
occurrence with respect to any issue or issues of Indebtedness of the Company
or any Significant Subsidiary having an outstanding principal amount of U.S.$5
million or more (or its equivalent in other currencies) in the aggregate for
all such issues of all such Persons, whether such Indebtedness now exists or
shall hereafter be created, of (I) an event of default that has caused such
Indebtedness to become, or the holders thereof to declare such Indebtedness to
be, due and payable prior to its Stated Maturity and/or (II) the failure to
make a payment of principal and in the case of the 10-Year Notes, interest when
such payment is due and payable;

 

(f)            one or
more final judgments, orders or binding arbitration awards, for the payment of
money in excess of U.S.$5 million (or its equivalent in other currencies),
either individually or in the aggregate for all such final judgments, orders or
binding arbitration awards, shall be rendered against the Company or any
Significant Subsidiary or any of their respective properties and shall not be
paid or discharged, and there shall have been a period of 60 consecutive
days following entry of the final judgment, order or binding arbitration award
that causes the aggregate amount for all such final judgment, orders or binding
arbitration awards outstanding and not paid or discharged against all such
Persons to exceed U.S.$5 million (or its equivalent in other currencies) during
which a stay of enforcement of such final judgments,

 

B-20

 

orders or binding
arbitration awards, by reason of a pending appeal or otherwise, shall not be in
effect;

 

(g)           any
government or governmental authority shall have condemned, nationalized,
seized, or otherwise expropriated all or any substantial portion of the assets
or property of the Company or any Significant Subsidiary or the share capital
of the Company or any Significant Subsidiary, or shall have assumed custody or
control of such assets or property or of the business or operations of the
Company or any Significant Subsidiary or of the share capital of the Company or
any Significant Subsidiary, or shall have taken any action that would prevent
the Company or any Significant Subsidiary or its officers from carrying on its
business or operations or a substantial part thereof for a period of longer
than 60 consecutive days and the result of any such action shall materially
prejudice the ability of the Company to perform its obligations under the 7-Year
Notes;

 

(h)           the
Argentine Government shall declare a general suspension of payment or a
moratorium on the payment of debt of the Company (which does not expressly
exclude the 7-Year Notes);

 

(i)            the
Company or any Significant Subsidiary (I) is declared by a court of competent
jurisdiction to be insolvent or bankrupt or unable to pay its debts, (II)
commences or consents to the commencement of a case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, (III)
makes a general assignment or an arrangement or composition with or for the
benefit of creditors, (IV) admits in writing its inability to pay its debts
generally as they become due, or (V) takes corporate action in furtherance of
any of the foregoing;

 

(j)            an order
or decree is made or an effective resolution passed for relief against the
Company or a Significant Subsidiary under any applicable bankruptcy law, or for
the winding-up or dissolution of the Company or any Significant Subsidiary or
adjudging the Company or any Significant Subsidiary bankrupt or insolvent under
any applicable bankruptcy law and in each case such order or decree remains
unstayed and in effect for a period of 60 consecutive days, or the Company or
any Significant Subsidiary ceases or threatens to cease to carry on all or a
material part of its business or operations, except for the purpose of and
followed by a reconstruction, amalgamation, reorganization (“concurso preventivo” or “concordato”), merger or consolidation in
the case of a Significant Subsidiary, whereby the undertaking and the assets of
such Significant Subsidiary, or all of the undertaking and assets relating to
the Company’s direct or indirect shareholding in such Significant Subsidiary,
as the case may be, are transferred to or otherwise vested in the Company or
any other Significant Subsidiary or Subsidiary which as a result of such
transfer would become a Significant Subsidiary; or

 

(k)           it becomes
unlawful for the Company to perform or comply with any one or more of its
obligations under any of the 7-Year Notes or the 7-Year Notes Indenture, and
such unlawfulness continues for a period of 60 consecutive days after written
notice shall have been given to the Company by the Trustee or to the Company
and the Trustee by the Holders of at least 25% in aggregate principal amount of
the 7-Year Notes then outstanding.

 

B-21

 

Acceleration of Maturity;
Rescission and Annulment

 

If an Event of Default (other than an Event of Default
specified in clause (i) or (j) above that occurs with respect to the
Company) occurs and is continuing under the 7-Year Notes Indenture, the Trustee
thereunder or the Holders of at least 25% in aggregate principal amount then
outstanding of the 7-Year Notes, by written notice to the Company (and to the
Trustee if such notice is given by the Holders), may, and the Trustee at the
request of such Holders shall, declare the 7-Year Notes to be immediately due
and payable at 100% of the principal amount thereof, plus accrued and unpaid
interest thereon, if any, to the date of such declaration.  Upon a declaration of acceleration, such
principal, premium if any, and accrued interest shall be immediately due and
payable.  In the event of a declaration
of acceleration because an Event of Default set forth in clause (e) above
has occurred and is continuing, such declaration of acceleration shall be
automatically rescinded and annulled if the event of default triggering such
Event of Default pursuant to clause (e) shall be remedied or cured by the
Company and/or the relevant Subsidiaries or waived by the holders of the
relevant Indebtedness within 30 days after the declaration of acceleration with
respect thereto.  If an Event of Default
specified in clause (i) or (j) above occurs with respect to the Company,
the 7-Year Notes then outstanding shall ipso facto become and be immediately
due and payable at 100% of the outstanding principal amount thereof, plus
premium, if any, thereon and accrued and unpaid interest thereon in each case
without any declaration or other act on the part of the Trustee or any Holder.

 

The Holders of at least a majority in principal amount
of the outstanding 7-Year Notes, by written notice to the Company and to the
Trustee, may rescind and annul a declaration of acceleration and its
consequences if, in addition to certain other covenants, (i) all existing
Events of Default, other than the nonpayment of the principal of and premium,
if any, interest and Additional Amounts, if any, (and, with respect to the 7-Year
Floating Rate Notes, Other Additional Amounts, if any) on such 7-Year Notes
that have become due solely by such declaration of acceleration, have been
cured or waived and (ii) the rescission would not conflict with any
judgment, decree or order of a court of competent jurisdiction.  The Holders of at least a majority in
aggregate principal amount of the outstanding 7-Year Notes, by written notice
to the Trustee, may waive an existing Default or Event of Default and the
consequences under the 7-Year Notes Indenture, except a Default in the payment
of principal of, premium, if any, on or interest on the 7-Year Notes or in
respect of a covenant or provision of the 7-Year Notes Indenture that cannot be
modified or amended without the consent of the Holder of each outstanding 7-Year
Note affected.

 

The Holders of at least a majority in aggregate
principal amount of the outstanding 7-Year Notes may on behalf of the Holders
of all of the 7-Year Notes, direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee with respect to the 7-Year Notes by the 7-Year
Notes Indenture.  However, the Trustee
under the 7-Year Notes Indenture may refuse to follow any direction that
conflicts with law or the 7-Year Notes Indenture, that may involve the Trustee
in personal liability, or that the Trustee determines in good faith may be
unduly prejudicial to the rights of Holders of 7-Year Notes not joining in the
giving of such direction and may take any other action it deems proper that is
not inconsistent with any such direction received from Holders of 7-Year Notes.  A Holder may not pursue any remedy with
respect to

 

B-22

 

the 7-Year Notes
Indenture or this 7-Year Note unless:  (i) the
Holder gives the Trustee written notice of a continuing Event of Default; (ii) the
Holders of at least 25% in aggregate principal amount at maturity of
outstanding 7-Year Notes make a written request to the Trustee to pursue the
remedy; (iii) such Holder or Holders offer the Trustee indemnity
satisfactory to the Trustee against any costs, liability or expense; (iv) the
Trustee does not comply with the request within 60 days after receipt of the
request and the offer of indemnity; and (v) during such 60-day period, the
Holders of a majority in aggregate principal amount of the outstanding 7-Year
Notes do not give the Trustee a direction that is inconsistent with the
request.  However, such limitations do
not apply to the right of any Holder of a 7-Year Note to receive payment of the
principal of, premium, if any, on or interest on such 7-Year Note or to bring
suit for the enforcement of any such payment, on or after the due date
expressed in the 7-Year Notes, which right shall not be impaired or affected
without the consent of such Holder.

 

Meetings of Holders;
Modification and Waiver

 

(a)           The
Trustee or the Company shall, upon the written request of the Holders of at
least five percent in aggregate principal amount of the 7-Year Notes at the
time Outstanding, or the Company or the Trustee at its discretion, may, call a
meeting of the Holders at any time and from time to time, to make, give or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided by the 7-Year Notes to be made, given or taken by such
Holders.  With respect to all matters not
contemplated in the 7-Year Notes Indenture, meetings of Holders will be held in
Buenos Aires in accordance with the Negotiable Obligations Law; provided, however, that the Company or the Trustee may
determine to hold any such meetings simultaneously in Buenos Aires and in The
City of New York by any means of telecommunication.  Meetings shall be held at such time and at
such place as the Company or the Trustee shall determine in such cities.  If a meeting is being held pursuant to a
request of Holders, the agenda for the meeting shall be as determined in the
request and such meeting shall be convened within 40 days from the date such
request is received by the Trustee or the Company, as the case may be.  Notice of any meeting of Holders (which shall
include the date, place and time of the meeting, the agenda therefor and the
requirements to attend) shall be published not less than ten days nor more than
30 days prior to the date fixed for the meeting in the Boletín
Oficial de la República (the Official Gazette of Argentina) and,
while there are Holders domiciled in Argentina, in a newspaper having major
circulation in Argentina and any publication of such notice shall be for five
consecutive Business Days in each place of publication.

 

(b)           Any Holder
may attend the meeting in person or by proxy. 
Directors, officers, managers, members of the Supervisory Committee and
employees of the Company may not be appointed as proxies.  Holders of 7-Year Notes who intend to attend
a meeting of Holders must notify the Registrar of their intention to do so at
least three days prior to the date of such meeting.  The
Company shall, prior to any vote, deliver to the Trustee a notice signed by the
CFO or the chief accounting officer certifying, to the best of the Company’s
knowledge, as to the Notes held by any Affiliate of the Company.

 

B-23

 

(c)           Except as
specified in “Acceleration of Maturity; Rescission and Annulment,” decisions
shall be made by the affirmative vote of the Holders of at least 51% in
aggregate principal amount of the 7-Year Notes at the time outstanding present
or represented at a meeting of such Holders at which a quorum is present; provided, however, that the affirmative vote of the Holders
of the applicable percentage in aggregate principal amount of the 7-Year Notes
at the time Outstanding specified under “Events of Default” shall be required
to take the actions specified under such heading; provided
further, however, that the unanimous affirmative vote of the Holders
of 7-Year Notes shall be required to adopt a valid decision on:

 

(i)            changing
the Stated Maturity of, or failing to pay, the principal of, premium, if any,
on or any installment of interest on any 7-Year Note, or reducing the principal
amount thereof, premium, if any, thereon or the rate of interest thereon or
changing the requirement to pay Additional Amounts thereon (or, with respect to
the 7-Year Floating Rate Notes, changing the requirement to pay Other
Additional Amounts thereon), or releasing any amounts held in the Reserve
Accounts;

 

(ii)           changing
the place of payment where, or the coin or currency in which, the principal of,
premium, if any, on or interest or Additional Amounts (if any) on any 7-Year
Note (or Other Additional Amounts (if any) on any Floating Rate Note) is
payable;

 

(iii)          impairing
the right to institute suit for the enforcement of any such payment on or after
the Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date);

 

(iv)          reducing
the percentage in principal amount of the outstanding 7-Year Notes, the consent
of the Holders of which is required for the adoption of a resolution or the
quorum required to constitute a meeting of Holders at which a resolution is
adopted or the percentage in principal amount of outstanding Step Up Notes the
Holders of which are entitled to request the calling of a meeting of Holders;
or

 

(v)           modifying
the percentage in principal amount of the 7-Year Notes, the consent of Holders
which is required to waive a past Default or Event of Default.

 

Except as provided above,
any modifications, amendments or waivers to the terms and conditions of the 7-Year
Notes will be conclusive and binding on all Holders of 7-Year Notes, whether or
not they were present at any meeting, and whether or not notation of such
modifications, amendments or waivers is made upon the 7-Year Notes, provided that any such modification, amendment or waiver was
duly passed at a meeting convened and held in accordance with the provisions of
the Negotiable Obligations Law.

 

(d)           Meetings
of the Holders of 7-Year Notes shall be either “first call” meetings (“primera convocatoria”) or “second call” meetings (“segunda convocatoria”). 
All meetings of the Holders of 7-Year Notes shall be deemed to be a
first call meeting; provided, however, that any reconvened meeting adjourned for lack of a
requisite quorum shall be deemed

 

B-24

 

a second call
meeting.  The quorum applicable at a
meeting of the Holders of 7-Year Notes shall be as follows:

 

(i)            the
quorum for meetings called to adopt a resolution by which Holders of 7-Year
Notes shall make any request, demand or direction or give any notice (other
than a resolution specified in paragraph (ii) below) shall, (A) in the
case of first call meetings, be such Persons holding or representing a majority
in aggregate principal amount of the 7-Year Notes at the time outstanding and (B) in
the case of second call meetings, be such Persons present at such meeting
holding or representing 7-Year Notes at the time outstanding; and

 

(ii)           the quorum
for meetings called to adopt a resolution by which Holders of 7-Year Notes
consent to any waiver under the 7-Year Notes or the 7-Year Notes Indenture,
agree to any amendment to the 7-Year Notes Indenture or the terms and
conditions of the 7-Year Notes, or specify the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred upon the Trustee with respect to the 7-Year Notes
by the 7-Year Notes Indenture shall (A) in the case of first call
meetings, be Persons holding or representing at least 60% in aggregate
principal amount of the 7-Year Notes at the time outstanding and (B) in
the case of second call meetings, be Persons holding or representing at least
30% in aggregate principal amount of the 7-Year Notes at the time outstanding.

 

(e)           Without
the vote of any Holders of 7-Year Notes, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental to the 7-Year Notes Indenture in form
satisfactory to the Trustee, for any of the following purposes:

 

(i)            to
evidence the succession of another Person to the Company and the assumption by
any such successor of the covenants of the Company in the 7-Year Notes
Indenture and in the 7-Year Notes; or

 

(ii)           to add to
the covenants of the Company for the benefit of the Holders or to surrender any
right or power herein conferred upon the Company; or

 

(iii)          to
secure the 7-Year Notes; or

 

(iv)          to comply
with any requirements of the Commission in order to effect and maintain the
qualification of the 7-Year Notes Indenture under the Trust Indenture Act; or

 

(v)           to
evidence and provide for acceptance of appointment hereunder by a successor
Trustee pursuant to the provisions of the 7-Year Notes Indenture; or

 

(vi)          to evidence
any further issue of notes having terms and conditions the same as those of the
7-Year Notes (or the same except for the payment of interest accruing prior to
the issue date of such additional notes or except for the first payment of

 

B-25

 

interest following the
issue date of such additional notes), which additional notes may be consolidated
and form a single series with the 7-Year Notes; or

 

(vii)         to
cure any ambiguity, to correct or supplement any provision herein which may be
inconsistent with any other provision herein, or to make any other provisions
with respect to matters or questions arising under the 7-Year Notes Indenture
which shall not be inconsistent with the provisions of the 7-Year Notes
Indenture, provided that such action pursuant to
this clause (vii) shall not adversely affect the interests of the Holders
in any material respect; or

 

(viii)        to
increase the aggregate principal amount of Public Debt Securities at any time
outstanding under the 7-Year Notes Indenture.

 

No reference herein to the 7-Year Notes Indenture and
no provision of this 7-Year Note or of the 7-Year Notes Indenture shall alter
or impair the obligation of the Company, which is absolute and unconditional,
to pay the principal of, premium, if any, on and interest and Additional
Amounts, if any, on this 7-Year Note at the times, place and rate, and in the
coin or currency, herein prescribed.

 

Notices

 

Notices to Holders of Registered 7-Year Fixed Rate
Notes will be mailed to them at their respective addresses as they appear in
the register maintained by the Registrar and shall be published as may be required
by applicable law or, to the extent there are Holders domiciled in Argentina (i) in
a leading newspaper having general circulation in Argentina, (ii) for so
long as any 7-Year Fixed Rate Notes is listed on the Buenos Aires Stock
Exchange, in the Bulletin of the Buenos Aires Stock Exchange, and (iii) in
the Official Gazette of Argentina.  Any notice so mailed shall be deemed to have
been given on the date of such mailing. 
In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders of Registered 7-Year Fixed Rate Notes.  Any notice mailed to a Holder in the manner
herein prescribed shall be deemed to have been received by (i) a Holder
domiciled in Argentina when actually received and (ii) a Holder domiciled
outside of Argentina when so mailed.

 

Discharge and Defeasance

 

Under the terms of the 7-Year Notes Indenture, the
Company may at its option by a resolution of the Board of Directors, at any
time, upon the satisfaction of certain conditions described below, elect to be
discharged from its obligations with respect to outstanding 7-Year Fixed Rate
Notes (“defeasance”).  In general,
upon a defeasance, the Company shall be deemed to have paid and discharged the
entire indebtedness represented by the outstanding 7-Year Fixed Rate Notes and
to have satisfied all of its obligations under such 7-Year Fixed Rate Notes
except for (i) the rights of Holders of such 7-Year Fixed Rate Notes and
any related coupons to receive, solely from the trust fund established for such
purposes as described below, payments in respect

 

B-26

 

of the principal of, premium,
if any, on and interest on such 7-Year Fixed Rate Notes when such payments are
due, (ii) certain provisions relating to ownership, registration and
transfer of the 7-Year Fixed Rate Notes, (iii) certain provisions relating
to the mutilation, destruction, loss or theft of the 7-Year Fixed Rate Notes, (iv) the
Company’s obligations to effect a registered exchange offer or a private
exchange offer, (v) the covenant relating to the maintenance of an office
or agency in Buenos Aires and The City of New York and (vi) certain
provisions relating to the rights, powers, trusts duties and immunities of the
Trustee.

 

In addition, the Company may at its option by Board
Resolution, at any time, upon the satisfaction of certain conditions described
below, elect to be released from certain covenants described in the 7-Year
Notes Indenture (“covenant defeasance”). 
Following such covenant defeasance, the occurrence of a breach or
violation of any such covenant will not be deemed to be an Event of Default
under the 7-Year Notes Indenture.

 

In order to cause a defeasance or covenant defeasance,
the Company will be required to satisfy, among other conditions, the following
conditions:

 

(a)           the
Company shall have irrevocably deposited or caused to be deposited with the Trustee
as funds in trust, money or U.S. Government Obligations, or a combination
thereof, sufficient, in the opinion of an internationally recognized firm of
independent public accountants, to pay and discharge the principal of, premium,
if any, on and each installment of interest on the outstanding 7-Year Fixed
Rate Notes on the Stated Maturity or on the applicable Redemption Date, as the
case may be, of such principal, premium, if any, or installment of interest in
accordance with the terms of this 7-Year Note, and such amounts will be applied
for such purpose, and the Company must specify whether the 7-Year Fixed Rate
Notes are being defeased to maturity or to a particular Redemption Date;

 

(b)           in the
case of an election fully to defease the 7-Year Fixed Rate Notes, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (x) the
Company has received from, or there has been published by, the Internal Revenue
Service a ruling, or (y) since the date of the 7-Year Notes Indenture there has
been a change in the applicable federal income tax law or the interpretation
thereof, in either case to the effect that, and based thereon such opinion
shall confirm that, the Holders of the outstanding 7-Year Fixed Rate Notes will
not recognize income, gain or loss for federal income tax purposes as a result
of such deposit, defeasance and discharge and will be subject to federal income
tax on the same amount, in the same manner and at the same time as would have
been the case if such deposit, defeasance and discharge had not occurred;

 

(c)           in the
case of a covenant defeasance, the Company shall have delivered to the Trustee
an Opinion of Counsel to the effect that the Holders of the outstanding 7-Year
Fixed Rate Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit and covenant defeasance and will be
subject to federal income tax on the same amount, in the same manner and at the
same time as would have been the case if such deposit and covenant defeasance
had not occurred;

 

B-27

 

(d)           the
Company shall have delivered to the Trustee an Officers’ Certificate to the
effect that the 7-Year Fixed Rate Notes, if then listed on any securities
exchange, will not be delisted as a result of such deposit;

 

(e)           no Event
of Default or event which with notice or lapse of time or both would become an
Event of Default shall have occurred and be continuing on the date of such
deposit (other than a Default or Event of Default resulting from the borrowing
of funds to be applied to such deposit) after giving effect thereto or, with
respect to a Default or Event of Default specified in clauses (i) or (j)
of the first paragraph of “Events of Default”, at any time during the period
ending on the 121st day after the date of such deposit (it being understood
that this condition shall not be deemed satisfied until the expiration of such
period);

 

(f)            such
defeasance or covenant defeasance shall not cause the Trustee to have a
conflicting interest as defined in the 7-Year Notes Indenture and for the
purposes of the Trust Indenture Act with respect to any securities of the
Company;

 

(g)           such
defeasance or covenant defeasance shall not result in a breach or violation of,
or constitute a default under, any other material agreement or instrument to
which the Company is a party or by which it is bound;

 

(h)           the
Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent relating to
either defeasance or covenant defeasance (as the case may be) have been
complied with; and

 

(i)            such
defeasance or covenant defeasance shall not result in the trust arising from
such deposit constituting an investment company as defined in the U.S.
Investment Company Act of 1940, as amended, or such trust shall be qualified
under such act or exempt from regulation thereunder.

 

Trustee Dealings with the
Company

 

Subject to certain limitations imposed by the Trust
Indenture Act, the Trustee under the 7-Year Notes Indenture, in its individual
or any other capacity, may become the owner or pledgee of 7-Year Fixed Rate
Notes and may otherwise deal with the Company and receive, collect, hold and
retain collections from the Company or its Affiliates with the same rights it
would have if it were not Trustee.  Any
Paying Agent, Registrar or Co-Registrar may do the same with like rights.

 

No Personal Liability of
Incorporators, Shareholders, Officers, Board of Directors Members or Employees

 

The 7-Year Notes Indenture provides that no recourse
for the payment of the principal of, premium, if any, on or interest on any of
the 7-Year Fixed Rate Notes or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in the 7-Year Notes Indenture or in this

 

B-28

 

7-Year Note or because of
the creation of any Indebtedness represented thereby, shall be had against any
incorporator, shareholder, officer, director, employee, Board of Directors
member or controlling person of the Company or of any successor Person
thereof.  Each Holder, by accepting the 7-Year
Fixed Rate Notes, waives and releases all such liability.  The waiver and release are part of the
consideration for issuance of the 7-Year Fixed Rate Notes.  Such waiver may not be effective to waive
liabilities under Argentine or the U.S. federal securities laws and it is the
view of the Commission that such a waiver is against public policy.

 

Additional Waiver
and Release

 

As
part of the consideration for issuance of the 7-Year Fixed Rate Notes, each
Holder of 7-Year Fixed Rate Notes, by accepting the 7-Year Fixed Rate Notes,
waives any rights that it may have pursuant to Argentine law to claw back (acción revocatoria) or bring action
against any director of the Company (acción
de responsabilidad), and releases such director from any liability,
arising out of payments made by the Company as a result of the consummation of
the cash option under the Company’s APE.

 

Governing Law and
Enforceability

 

The Negotiable Obligations Law governs the
requirements for the 7-Year Fixed Rate Notes to qualify as Obligaciones
Negociables thereunder, while such law, together with the Argentine
Business Companies Law No. 19,550, as amended, and other applicable
Argentine laws, govern the capacity and corporate authority of the Company to
execute and deliver the 7-Year Fixed Rate Notes and the authorization of the
public offering of the 7-Year Fixed Rate Notes by the CNV.  All other matters in respect of the 7-Year
Fixed Rate Notes and the 7-Year Notes Indenture, including but not limited to
the statute of limitations applicable thereto, are governed by and shall be
construed in accordance with the laws of the State of New York, United States.

 

The Company consents to the non-exclusive jurisdiction
of any court of the State of New York or any United States federal court
sitting in the Borough of Manhattan, The City of New York, New York, United
States, and any appellate court from any thereof, and waives any immunity from
the jurisdiction of such courts over any suit, action or proceeding that may be
brought in connection with the 7-Year Notes Indenture or this 7-Year Note.  The Company irrevocably waives, to the
fullest extent permitted by law, any objection to any suit, action, or
proceeding that may be brought in connection with the 7-Year Notes Indenture or
this 7-Year Note in such courts whether on the grounds of venue, residence or
domicile or on the ground that any such suit, action or proceeding has been
brought in an inconvenient forum.  The
Company agrees that final judgment in any such suit, action or proceeding
brought in such court shall be conclusive and binding upon the Company and may
be enforced in any court to the jurisdiction of which the Company is subject by
a suit upon such judgment; provided that
service of process is effected upon the Company in the manner provided by the 7-Year
Notes Indenture.  Notwithstanding the
foregoing, any suit, action or proceeding brought in connection with the 7-Year
Notes Indenture or this 7-Year Note may be instituted in any competent court in
Argentina.

 

B-29

 

The Company agrees that service of all writs, process
and summonses in any suit, action or proceeding brought in connection with the 7-Year
Notes Indenture or this 7-Year Note against the Company in any court of the
State of New York or any United States federal court sitting in the Borough of
Manhattan, The City of New York, New York, United States, may be made upon CT
Corporation System at 111 Eighth Avenue, New York, New York 10011, whom the
Company irrevocably appoints as its authorized agent for service of
process.  The Company represents and
warrants that CT Corporation System has agreed to act as the Company’s agent
for service of process.  The Company
agrees that such appointment shall be irrevocable so long as any of the 7-Year
Notes remain Outstanding or until the irrevocable appointment by the Company of
a successor in The City of New York as its authorized agent for such purpose
and the acceptance of such appointment by such successor.  The Company further agrees to take any and
all action, including the filing of any and all documents and instruments, that
may be necessary to continue such appointment in full force and effect as
aforesaid.  If CT Corporation System
shall cease to act as the Company’s agent for service of process, the Company
shall appoint without delay another such agent and provide prompt written
notice to the Trustee of such appointment. 
With respect to any such action in any court of the State of New York or
any United States federal court in the Borough of Manhattan, The City of New York,
New York, United States, service of process upon CT Corporation System, as
the authorized agent of the Company for service of process, and written notice
of such service to the Company, shall be deemed, in every respect, effective
service of process upon the Company.

 

Currency Indemnity

 

The U.S. Dollar is the sole currency of account and
payment for all sums payable by the Company under or in connection with this 7-Year
Note.  Any amount received or recovered
in currency other than U.S. Dollars (whether as a result of, or of the
enforcement of, a judgment or order of a court of any jurisdiction, in the
winding up or dissolution of the Company or otherwise) by any Holder of 7-Year
Fixed Rate Notes in respect of any sum expressed to be due to it from the
Company shall only constitute a discharge of the Company to the extent of the
U.S. Dollar amount which the recipient is able to purchase with the amount so
received or recovered in that other currency on the date of that receipt or
recovery (or, if it is not practicable to make that purchase on that date, on
the first date on which it is practicable to do so).  If that U.S. Dollar amount is less than the
U.S. Dollar amount expressed to be due to the recipient under any 7-Year Note,
the Company shall indemnify such recipient against any loss sustained by it as
a result.  In any event, the Company
shall indemnify the recipient against the cost of making any such
purchase.  For the purposes of this
paragraph, it will be sufficient for the Holder to certify (indicating the
sources of information used) that it would have suffered a loss had an actual
purchase of U.S. Dollars been made with the amount so received in that other
currency on the date of receipt or recovery (or, if a purchase of U.S. Dollars
on such date had not been practicable, or the first date on which it would have
been practicable).  These indemnities
constitute a separate and independent obligation from the Company’s other
obligations, shall give rise to a separate and independent cause of action,
shall apply irrespective of any waiver granted by any Holder of 7-Year Fixed
Rate Notes and shall continue in full force and effect despite any other
judgment, order, claim or proof for a liquidated amount in respect of any sum
due under any 7-Year Note or any other judgment or order.

 

B-30

 

Defined Terms

 

“7-Year Floating Rate Notes” means the series
of Debt Securities known as the Company’s 7-Year Floating Rate Notes issued (or
to be issued) pursuant to the 7-Year Notes Indenture.

 

“7-Year Note Register” means the books for the
exchange, registration and registration of transfer of Registered 7-Year Fixed
Rate Notes.

 

“7-Year Notes” means both the series of Debt
Securities known as the Company’s 7-Year Fixed Rate Notes due [2012] and the
series of Debt Securities known as the Company’s 7-Year Floating Rate Notes,
all of which were (or to be) issued pursuant to the 7-Year Notes Indenture.

 

“10-Year Notes
Indenture” means the Indenture, as supplemented and amended by the First
Supplemental Indenture, dated as of [   
], [2005], among the Company, Law Debenture Trust Company of
New York, as the Trustee, Co-Registrar and Principal
Paying Agent thereunder, and HSBC Bank Argentina S.A., as Registrar and Paying
Agent thereunder.

 

“10-Year Notes”
means the series of Debt Securities known as the Company’s Step-Up 10-Year
Notes issued (or to be issued) pursuant to the 10-Year Notes Indenture.

 

“Acquired Indebtedness” means Indebtedness of a
Person existing at the time such Person became or was designated a Subsidiary
of the Company and not Incurred in connection with, or in contemplation of,
such Person becoming a Subsidiary of the Company.

 

“Affiliate” means, as applied to any Person,
any other Person directly or indirectly controlling, controlled by, or under
direct or indirect common control with, such Person.

 

“Annualized Pro Forma Consolidated Operating Cash
Flow” means Consolidated Operating Cash Flow for the latest fiscal quarter
for which consolidated financial statements of the Company are available multiplied
by four.  For purposes of calculating “Consolidated
Operating Cash Flow” for any fiscal quarter for purposes of this
definition, (i) any Subsidiary of the Company that is a Subsidiary on the
Transaction Date shall be deemed to have been a Subsidiary at all times during
such fiscal quarter and (ii) any Subsidiary of the Company that is not a
Subsidiary on the Transaction Date shall be deemed not to have been a
Subsidiary at any time during such fiscal quarter.  In addition to and without limitation of the
foregoing, for purposes of this definition, “Consolidated Operating Cash
Flow” shall be calculated after giving effect on a pro forma basis for the
applicable fiscal quarter to, without duplication, any Asset Sale or Asset
Acquisition (including, without limitation, any Asset Acquisition giving rise
to the need to make such calculation as a result of the Company or one of its
Subsidiaries (including any Person who becomes a Subsidiary as a result of the
Asset Acquisition) Incurring Acquired Indebtedness) occurring during the period
commencing on the first day of such fiscal quarter to and including the
Transaction Date (the “Reference Period”), as if such Asset Sale or
Asset Acquisition occurred on the first day of the Reference Period.

 

B-31

 

“APE” means an acuerdo preventivo
extrajudicial, or Argentine
pre-packaged reorganization plan.

 

“Argentina” means the Republic of Argentina.

 

“Argentine Government” means the government of
Argentina.

 

“Asset Acquisition” means (i) an
Investment or capital contribution (by means of transfers of cash or other
property to others or payments for property or services for the account or use
of others, or otherwise) by the Company or any of its Subsidiaries in any other
Person, or any acquisition or purchase of Capital Stock of another Person by
the Company or any of its Subsidiaries, in either case pursuant to which such
Person shall become a Subsidiary of the Company or shall be merged with or into
or consolidated with the Company or any Subsidiary of the Company or (ii) an
acquisition by the Company or any of its Subsidiaries of the property and
assets of any Person other than the Company or any of its Subsidiaries which
constitute substantially all of a division, operating unit or line of business
of such Person or which is otherwise outside the ordinary course of business.

 

“Asset Sale” means any direct or indirect sale,
transfer, conveyance or lease (which has the effect of a disposition and is not
for security purposes) or other disposition (including by way of sale-leaseback
transactions) in one transaction or a series of related transactions by the
Company or any Subsidiary of the Company to any Person other than the Company
or any Subsidiary of the Company of (i) all or any of the Capital Stock of
any Subsidiary of the Company (other than directors’ qualifying shares or
shares owned by a Person, to the extent mandated by applicable law), (ii) any
material license or other authorization of the Company or any Subsidiary of the
Company pertaining to a Cable/Telecommunications Business, (iii) all or
substantially all of the property and assets of an operating unit or business
of the Company or any Subsidiary of the Company or (iv) any other property
and assets of the Company or any Subsidiary of the Company and, in each case,
that is not governed by the “Consolidation, Merger and Sale of Assets” covenant
hereof; provided, however that the term “Asset
Sale” shall in no case include any sale, transfer, conveyance, lease or other
disposition in one transaction or a series of related transactions (i) of
property or equipment that has become worn out, obsolete or damaged or
otherwise unsuitable for use in connection with the business of the Company or
any Subsidiary of the Company, as the case may be, (ii) involving assets
with a Fair Market Value not in excess of U.S.$500,000, (iii) of inventory
in the ordinary course of business, or (iv) involving the sale or other
disposition of cash or Cash Equivalents.

 

“Asset Sale Proceeds Reinvestment”
means any Capital Expenditure made with the proceeds of any Asset Sale within
180 days of such Asset Sale.

 

“Average Life” means, at any date of
determination with respect to any Indebtedness, the quotient obtained by
dividing (i) the sum of the products of (a) the number of years from
such date of determination to the dates of each successive scheduled principal
payment, redemption or similar payment with respect to such Indebtedness and (b) the
amount of such principal payment by (ii) the sum of all such principal
payments.

 

B-32

 

“Board of Directors” means the board of
directors of the Company.

 

“Board Resolution” means a copy of a resolution
certified by a director of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

 

“Business Day” means any day (other than a
Saturday or Sunday) on which DTC, Euroclear or Clearstream, Luxembourg and
banks in The City of New York and Buenos Aires are open for business.

 

“Cable/Telecommunications Business” means any
business operating a cable and/or telecommunications services and/or
communications services or programming business located in South America,
including, without limitation, any business conducted by the Company on the
Issue Date.

 

“Capital Expenditure” means with respect to any
Person for any period the sum of all Investments and, without duplication,
expenditures made directly or indirectly for equipment, fixed assets, real
property or improvement thereto or substitutions thereof that have been or
should be reflected as additions to property, plant or equipment on a consolidated balance sheet in accordance with GAAP.

 

“Capital Stock” means, with respect to any
Person, any and all shares, interests, participations, rights in or other
equivalents (however designated, whether voting or non-voting) in equity of
such Person, whether outstanding at the Issue Date or issued thereafter,
including, without limitation, all Common Stock and Disqualified Stock, and any
and all rights, warrants or options exchangeable for or convertible into any
thereof.

 

“Capitalized Lease” means, as applied to any
Person, any lease or license of, or other agreement conveying the right to use,
any property (whether real, personal or mixed, movable or immovable) of which
the present value of the obligations of such Person to pay rent or other
amounts is required, in conformity with GAAP, to be classified and accounted for
as a finance lease obligation; and “Capitalized Lease Obligation” is
defined to mean the capitalized present value of the obligations to pay rent or
other amounts under such lease or other agreement, determined in accordance
with GAAP.

 

“Cash Equivalents” means (i) any evidence
of Indebtedness with a maturity of 365 days or less issued or directly and
fully guaranteed or insured by Argentina or the United States or any agency or
instrumentality thereof (provided that
the full faith and credit of Argentina or the United States, as the case may
be, is pledged in support thereof or such Indebtedness constitutes a general
obligation of such country); (ii) deposits, certificates of deposit or
acceptances with a maturity of 180 days or less of, or Indebtedness with a
maturity of 365 days or less directly and fully secured by an irrevocable
standby letter of credit issued or confirmed by, (x) any financial institution
that is a member of the Federal Reserve System, and has combined capital and
surplus and undivided profits (or any similar capital concept) of not less than
U.S.$500 million or (y) Credit Suisse First Boston Corporation, Fleet Bank,
Banco Francés - BBVA, Banco Río de la Plata S.A, Banco de Galicia y Buenos
Aires S.A., Citibank,

 

B-33

 

N.A. and any of the five
largest banks (based on assets as of the last December 31) organized under
the laws of Argentina, provided that
such bank is not under intervention, receivership or any similar arrangement at
the time of such deposit or the acquisition of such certificate of deposit or
acceptance; (iii) commercial paper with a maturity of 180 days or less
issued by a corporation (other than an Affiliate of the Company) organized
under the laws of Argentina or any part thereof or the United States or any
state thereof or the District of Columbia and rated at least “A-1” by Standard &
Poor’s Corporation or “P-1” by Moody’s Investors Service; (iv) repurchase
agreements and reverse repurchase agreements relating to marketable direct
obligations issued or unconditionally guaranteed by the government of Argentina
or the United States government (in the case of any Argentine or United States
government obligations), in each case maturing within one year from the date of
acquisition and (v) investments in money market funds all of the assets of
which consist of securities of the type described in the foregoing clauses (i) through
(iii).

 

“Clearstream, Luxembourg” means Clearstream
Banking, société anonyme (formerly known as Cedelbank), and its successors.

 

“CNV” means the Argentine Comisión Nacional de
Valores.

 

“Co-Registrar” means Law Debenture Trust
Company of New York, until a successor Co-Registrar shall have become such
pursuant to the applicable provisions of the 7-Year Notes Indenture, and,
thereafter, “Co-Registrar” shall mean such successor Co-Registrar.

 

“Commission” means the U.S. Securities and
Exchange Commission, as from time to time constituted, created under the
Exchange Act, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.

 

“Common Stock” means with respect to any
Person, any and all shares, interests or other participations in, and other
equivalents (however designated and whether voting or non-voting) of such
Person’s common stock or ordinary shares, whether or not outstanding at the
Issue Date or issued thereafter, and includes, without limitation, all series
and classes of such common stock or ordinary shares.

 

“Company” means the Person named as the “Company”
in the first paragraph of this instrument until a successor Person shall have
become such pursuant to the applicable provisions of the 7-Year Notes Indenture
and thereafter “Company” shall mean such successor Person.

 

“Company Request” or “Company Order”
means a written request or order signed in the name of the Company by any of
its directors or alternate directors or its chief financial officer and a
director or alternate director and delivered to the Trustee.

 

“Consolidated Income Tax Expense” means, for
any period, the provision for local, foreign and all other income taxes of the
Company and its Subsidiaries for such period as determined in accordance with
GAAP.

 

B-34

 

“Consolidated Interest Expense” means, for any
period, the aggregate amount of interest expense in respect of Indebtedness
(including, without limitation, amortization of original issue discount on any
indebtedness and the interest portion of any deferred payment obligation, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers’ acceptance financing and the net costs associated with
Interest Rate Protection Obligations, but excluding, for the avoidance of
doubt, any taxes or other governmental charges) and all but the principal
component of rent or other amounts in respect of Capitalized Lease Obligations
paid, accrued or scheduled to be paid or to be accrued by the Company and its
Subsidiaries during such period, but excluding, any premiums, fees and expenses
(and any amortization thereof) payable in connection with the offering of any 7-Year
Notes or other Indebtedness, all as determined on a consolidated basis in
conformity with GAAP.

 

“Consolidated Net Income” means, for any
period, the consolidated net income (or loss) of the Company and its
Subsidiaries for such period determined in accordance with GAAP, adjusted, to
the extent included in calculating such consolidated net income, by excluding,
without duplication, (i) all extraordinary gains or losses of such Person
for such period, (ii) income of the Company and its Subsidiaries derived
from or in respect of all Investments in Persons other than any of its
Subsidiaries, (iii) the portion of net income (or loss) of such Person
allocable to minority interests in unconsolidated Persons for such period,
except to the extent actually received by the Company or any of its Subsidiaries,
(iv) net income (or loss) of any other Person combined with such Person on
a “pooling of interests” basis attributable to any period prior to the date of
combination, (v) any gain or loss, net of taxes, realized by such Person
upon the termination of any employee pension benefit plan during such period, (vi) gains
(but not losses) in respect of any Asset Sales during such period and (vii) the
net income of any Subsidiary of the Company for such period to the extent that
the declaration of dividends or similar distributions by such Subsidiary of
that income is not at the time permitted, directly or indirectly, by operation
of the terms of its constitutional documents or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulations
applicable to that Subsidiary or its stockholders.

 

“Consolidated Net Worth” means, with respect to
any Person as of any date, the total of the amounts shown on the balance sheet
of such Person and its consolidated subsidiaries, determined on a consolidated
basis in accordance with GAAP, as of the end of the most recent fiscal quarter
for which consolidated financial statements for such Person and its
consolidated subsidiaries have been prepared prior to the taking of any action
for the purpose of which the determination is being made, as (i) the par
or stated value of all outstanding Capital Stock of such Person plus (ii) paid-in
capital or capital surplus relating to such Capital Stock plus (iii) any
retained earnings or earned surplus less (iv) (A) any accumulated
deficit and (B) any amounts attributable to Disqualified Stock of such
Person not held by such Person or its Subsidiaries.

 

“Consolidated Operating Cash Flow” means, with
respect to any period, the Consolidated Net Income for such period increased by
the sum of (i) the Consolidated Income Tax Expense of the Company and its Subsidiaries
accrued according to GAAP for such period (only to the extent the corresponding
income was included in computing Consolidated Net Income for such period and
other than taxes attributable to extraordinary, unusual or nonrecurring gains
or losses); (ii) Consolidated Interest Expense of the Company and its

 

B-35

 

Subsidiaries for such
period; (iii) consolidated depreciation of the Company and its
Subsidiaries for such period; (iv) consolidated amortization of the
Company and its Subsidiaries for such period, including, without limitation,
amortization of capitalized debt issuance costs for such period; and (v) all
other non-cash items of the Company and its Subsidiaries reducing Consolidated
Net Income (excluding any non-cash items to the extent they represent an
accrual of, or a reserve for, cash disbursements for any subsequent period);
and reduced by (vi) all non-cash items of the Company and its Subsidiaries
increasing Consolidated Net Income for such period; in each case determined on
a consolidated basis in accordance with GAAP.

 

“control” (including, with correlative
meanings, the terms “controlling,” “controlled by” and “under
common control with”), as applied to any Person, means the possession by
another Person (whether directly or indirectly and whether by the ownership of
share capital, the possession of voting power, contract or otherwise) of the
power to appoint and/or remove the majority of the members of the board of
directors or other governing body of such Person or otherwise to direct or
cause the direction of the affairs and policies of such Person.

 

“Corporate Trust Office” means the office of
the Trustee located at 767 Third Avenue, 31st Floor, New York, New
York 10017.

 

“Corporation” means a sociedad
anónima, sociedad de
responsibilidad limitada, corporation, association, company or
business trust.

 

“Currency Agreement” means any foreign exchange
contract, currency swap agreement or other similar agreement or arrangement
designed to protect the Company or any Significant Subsidiary against
fluctuations in currency values.

 

“Default” means any event that is, or after
notice or passage of time or both would be, an Event of Default.

 

“Depositary” means, DTC, its nominees, and
their respective successors or such other depositary as may be designated with
respect thereto.

 

“Disqualified Stock” means, with respect to any
Person, any Capital Stock of such Person which, by its terms (or by the terms
of any security into which it is convertible or for which it is exchangeable),
or upon the happening of any event, matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or is exchangeable for
Indebtedness, or is redeemable at the option of the holder thereof, in whole or
in part, on or prior to the final maturity date of the 7-Year Notes.

 

“DTC” means The
Depository Trust Company and its successors.

 

“Euroclear” means Euroclear Bank S.A./N.V., as
operator of the Euroclear System, and its successors.

 

“Event of Default” means any of the events
specified in “Events of Default” herein.

 

B-36

 

“Excess Cash” means
an amount equal to (x) in the case of the First Annual Transfer Date, the sum
of the Company’s consolidated cash and cash equivalents as of March 31st
of each calendar year (net of any balance held in the Reserve Accounts as of
such date) and in the case of the Second Annual Transfer Date, the sum of the
Company’s consolidated cash and cash equivalents as of September 30th of
such calendar year (net of any balance held in the Reserve Accounts as of such
date), in each case assuming the conversion into U.S. Dollars of cash and cash
equivalents that are not denominated in U.S. Dollars using the prevailing
exchange rate on the Buenos Aires business day immediately preceding such
Transfer Date.

 

“Exchange Act” means the U.S. Securities
Exchange Act of 1934, as amended.

 

“Fair Market Value” means, with respect to any
asset or property, the price that could be negotiated in an arms-length free
market transaction, for cash, between a willing seller and a willing buyer,
neither of whom is under pressure or compulsion to complete the transaction.  Unless otherwise specified in the 7-Year
Notes Indenture, Fair Market Value shall be determined by the chief financial
officer of the Company and shall be evidenced by an Officers’ Certificate
delivered to the Trustee at its request.

 

“GAAP” means generally accepted accounting
principles in effect in Argentina as of the date of determination.

 

“Global Note” means a 7-Year Note in definitive
global form that is deposited with DTC or another Depositary, or a nominee
thereof, for credit to the respective accounts of the beneficial owners of the 7-Year
Fixed Rate Notes represented thereby.

 

“Governmental Agency” means any public legal
entity or public agency of Argentina or the United States, whether created by
any competent authority, federal, state or local government, or any other legal
entity now existing or hereafter created, or now or hereafter owned or
controlled, directly or indirectly, by any public legal entity or public agency
of Argentina or the United States.

 

“Guarantee” means any obligation, contingent or
otherwise, of any Person directly or indirectly guaranteeing any Indebtedness
or other obligation of any other Person and, without limiting the generality of
the foregoing, any obligation, direct or indirect, contingent or otherwise, of
such Person (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation of such other
Person (whether arising by virtue of partnership arrangements, or by agreements
to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or (ii) entered
into for purposes of assuring in any other manner the obligee of such
Indebtedness or other obligation of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part); provided that the term “Guarantee” shall not include
endorsements for collection or deposit in the ordinary course of business.  The term “Guarantee” used as a verb
has a corresponding meaning.

 

“Guarantor” means any Person obligated under a
Guarantee.

 

B-37

 

“Holder” means a Person in whose name a 7-Year
Note or a 7-Year Note, as the case may be, is registered in the 7-Year Note
Register and/or the books for the exchange, registration and registration of
transfer of the registered 7-Year Floating Rate Notes.

 

“Incur” means, with respect to any
Indebtedness, to incur, create, issue, assume, Guarantee or otherwise,
contingently or otherwise, become liable, directly or indirectly, for or with
respect to, or become responsible for, the payment of such Indebtedness,
including an Incurrence of Acquired Indebtedness by reason of the acquisition
of more than 50% of the Capital Stock of any Person; provided
that neither the accrual of interest nor the accretion of original issue
discount shall be considered an Incurrence of Indebtedness.  The term “Incurrence” used as a noun has a
corresponding meaning.

 

“Indebtedness” means, with respect to any Person
at any date of determination (without duplication), (i) any liability,
contingent or otherwise, of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all obligations of such Person in respect of
letters of credit or other similar instruments (including reimbursement
obligations with respect thereto), (iv) all obligations of such Person to
pay the deferred and unpaid purchase price of property or services, including
purchase money obligations, which purchase price is due more than 180 days
after the date of placing such property in service or taking delivery and title
thereto or the completion of such services, except Trade Payables, (v) all
obligations of such Person as lessee under Capitalized Leases, (vi) all
Indebtedness of other Persons secured by a Lien on any asset of such Person,
whether or not such Indebtedness is assumed by or is otherwise the legal
liability of such Person; provided that
the amount of such Indebtedness shall be the lesser of (A) the Fair Market
Value of such asset at such date of determination and (B) the amount of
such Indebtedness, (vii) all Indebtedness of other Persons Guaranteed by
such Person or which is otherwise the legal liability of such Person, to the
extent such Indebtedness is Guaranteed by or is otherwise the legal liability
of such Person, (viii) to the extent not otherwise included in this
definition, obligations under Currency Agreements and Interest Rate Protection
Obligations, (ix) any and all deferrals, renewals, extensions and
refundings of, or amendments of or supplements to, any liability or obligation
of the kind described in this definition, and (x) Disqualified Stock.  The amount of Indebtedness of any Person at any
date shall be the outstanding balance at such date of all unconditional
obligations as described above and, with respect to contingent obligations, the
maximum liability upon the occurrence of the contingency giving rise to the
obligation, provided that the amount outstanding at
any time of any Indebtedness issued with original issue discount is the face
amount of such Indebtedness less the remaining unamortized portion of the
original issue discount of such Indebtedness at such time as determined in conformity
with GAAP.

 

“Independent Financial Advisor” means an
investment banking firm of international standing (i) which does not, and
whose shareholders, members, directors, officers or Affiliates do not, have a
material direct or indirect financial interest in the Company or one or more
Significant Subsidiaries, and (ii) which is otherwise independent and
qualified to perform the task for which it is to be engaged.

 

“Interest Payment Date” means in the case of
the first interest payment, [the date these Notes are delivered or made available to holders pursuant to
the Company’s APE], in the

 

B-38

 

case of the second interest payment, [the date
that is six months after the Company accepts Eligible Notes upon expiration of
the Election Offers, if the Company consummates the transactions contemplated
in the APE before such date] and for each interest payment thereafter,
[     ] and [     ] of each
year, commencing on [    ], [2005].

 

“Interest Rate Protection Obligations” means
the obligations of any Person pursuant to any arrangement with any other Person
whereby, directly or indirectly, such Person is entitled to receive from time
to time periodic payments calculated by applying either a floating or a fixed
rate of interest on a stated notional amount and shall include, without
limitation, interest rate swaps, caps, floors, collars, forward interest rate
agreements and similar agreements.

 

“Investment” means, with respect to any Person,
any direct or indirect advance, loan, account receivable (other than an account
receivable arising in the ordinary course of business), or other extension of
credit (including, without limitation, by means of any Guarantee or similar
arrangement) or any capital contribution to (by means of transfers of property
to others, payments for property or services for the account or use of others,
or otherwise), or any purchase or ownership of any stocks, bonds, notes,
debentures or other securities of, any other Person (excluding Subsidiaries but
not any Person that becomes a Subsidiary after giving effect to the
Investment).  Notwithstanding the
foregoing, in no event shall any issuance of Capital Stock (other than
Disqualified Stock) of the Company in exchange for Capital Stock, property or
assets of another Person constitute an Investment by the Company in such other
Person.

 

“Issue Date” means the original date of
issuance and purchase of the 7-Year Fixed Rate Notes as specified in or
pursuant to the relevant Board Resolution, Officers’ Certificate, or indenture
supplemental hereto with respect thereto.

 

“Lien” means any mortgage, charge, pledge,
security interest, encumbrance, lien (statutory or other), hypothecation,
assignment for security, claim, or preference or priority or other encumbrance
of any kind upon or with respect to any property (including, without
limitation, any conditional sale or other title retention agreement or lease in
the nature thereof, any sale with recourse against the seller or any Affiliate
of the seller, or any agreement to give any security interest).

 

“Macroeconomic Disruption Event” means for any
fiscal quarter a depreciation in the average Peso-U.S. dollar exchange rate (as
determined by reference to the rate for the purchase of U.S. dollars with
Argentine Pesos quoted by Reuters page ARSIB=offer prices as of 3:00 p.m.
Buenos Aires time for each day of such fiscal quarter) of 20% or more compared
to such average exchange rate for the prior fiscal quarter.

 

“Material Adverse Effect” means any material
adverse effect whatsoever on the property, financial condition, business or
operations of the Company and its Subsidiaries, taken as a whole.

 

“Maturity”, when used with respect to any 7-Year
Note, means the date on which the principal of such 7-Year Note becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise,

 

B-39

 

as specified in or
pursuant to the relevant Board Resolution, Officers’ Certificate or the
indenture supplemental hereto with respect thereto.

 

“Negotiable Obligations Law” means Argentine
Law No. 23,576, as amended.

 

“Officer” means the chairman of the Board of
Directors, the chief executive officer, the chief financial officer, the
treasurer, the controller or any member of the Board of Directors of the
Company.

 

“Officers’ Certificate” means a certificate
signed by any two of the chief executive officer, chief operating officer and
chief financial officer of the Company.

 

“Opinion of Counsel” means a written opinion
from legal counsel who is reasonably acceptable to the Trustee, which may
include an individual employed as counsel to the Company or the Trustee.

 

“Outstanding” means, as of the date of determination,
all 7-Year Notes theretofore authenticated and delivered under the 7-Year Notes
Indenture, except:

 

(i)            7-Year
Notes theretofore canceled by the Trustee or delivered to the Trustee for
cancellation;

 

(ii)           7-Year
Notes, or portions thereof, for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any Paying
Agent (other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the Holders
of such 7-Year Notes; provided that,
if such 7-Year Notes are to be redeemed, notice of such redemption has been
duly given pursuant to the 7-Year Notes Indenture or provision therefor
satisfactory to the Trustee has been made;

 

(iii)          7-Year
Notes which have been duly defeased or as to which the Company has effected
covenant defeasance pursuant to “Discharge and Defeasance” herein; and

 

(iv)          7-Year
Notes which have been paid pursuant to the 7-Year Notes Indenture or in
exchange for or in lieu of which other 7-Year Notes have been authenticated and
delivered pursuant to the 7-Year Notes Indenture, other than any such 7-Year
Notes in respect of which there shall have been presented to the Trustee proof
satisfactory to it that such 7-Year Notes are held by a bona fide
purchaser in whose hands such 7-Year Notes are valid obligations of the
Company; provided, however, that in determining
whether the Holders of the requisite principal amount of the Outstanding 7-Year
Notes have given any request, demand, authorization, direction, notice, consent
or waiver hereunder, 7-Year Notes owned by the Company or any other obligor
upon such 7-Year Notes or any Subsidiary or Affiliate of the Company or of such
other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
7-Year Notes which a Responsible Officer of the Trustee actually knows to be so
owned shall be so disregarded.  7-Year
Notes so owned which have been pledged in good faith may be regarded as
Outstanding

 

B-40

 

if the pledgee
establishes to the satisfaction of the Trustee the pledgee’s right so to act
with respect to such 7-Year Notes and that the pledgee is not the Company or
any other obligor upon such 7-Year Notes or any Subsidiary or Affiliate of the
Company or of such other obligor.

 

“pari passu”
means, as applied to the ranking of any Indebtedness of a Person in relation to
other Indebtedness of such Person, that each such Indebtedness either (i) is
not subordinate in right of payments to any Indebtedness or (ii) is
subordinate in right of payment to the same Indebtedness as is the other, and
so subordinate to the same extent, and is not subordinate in right of payment
to each other or to any Indebtedness as to which the other is not so
subordinate.

 

“Participant” means, with respect to DTC,
Euroclear or Clearstream, Luxembourg, Persons who have accounts with DTC,
Euroclear or Clearstream, Luxembourg, respectively (and, with respect to DTC,
shall include Euroclear and Clearstream, Luxembourg).

 

“Paying Agent” means initially the Persons
named as Paying Agent in the first paragraph of the 7-Year Notes Indenture, any
successor thereof, and any Person authorized by the Company to pay the
principal of or interest on any 7-Year Notes on behalf of the Company,
including the Principal Paying Agent.

 

“Permitted Indebtedness” means the following
indebtedness (each of which shall be given independent effect) of the Company:

 

(a)  Indebtedness under the 7-Year Notes and the 7-Year
Notes Indenture with respect to such 7-Year Notes;

 

(b)  Indebtedness of the Company outstanding on
the Issue Date;

 

(c)  Indebtedness of the Company owed to and held
by any Subsidiary of the Company; provided that
an Incurrence of Indebtedness shall be deemed to have occurred upon
(x) any sale or other disposition of any Indebtedness of the Company
referred to in this clause (d) to a Person other than the Company or
a Subsidiary of the Company, or (y) any sale or other disposition of
Capital Stock of a Subsidiary of the Company which holds Indebtedness of the
Company to any person other than the Company or another Subsidiary;

 

(d)  Interest Rate Protection Obligations of the
Company to the extent relating to Indebtedness of the Company, as the case may
be (which Indebtedness (x) bears interest at fluctuating interest rates
and (y) is otherwise permitted to be incurred under the “Limitation on
Indebtedness” covenant);

 

(e)  Indebtedness of the Company under Currency
Agreements to the extent relating to (i) Indebtedness of the Company
and/or (ii) obligations to purchase assets, properties or services
incurred in the ordinary course of business of the Company; provided that such Currency Agreements do not increase the
Indebtedness or other obligations of the Company and its Significant
Subsidiaries outstanding other than as a result of fluctuations in foreign
currency exchange rates or by reason of fees, indemnities or compensation
payable thereunder;

 

B-41

 

(f)  Indebtedness of the Company in respect of
performance bonds of or surety or performance bonds provided by the Company
incurred in the ordinary course of business in connection with the construction
or operation of a Cable/Telecommunications Business; or

 

(g)  Indebtedness of the Company to the extent it
represents a replacement, renewal, refinancing, or extension of outstanding
Indebtedness of the Company incurred or outstanding pursuant to clause (a) or
(b) or this clause (g) of this definition or the proviso to the
first sentence of the “Limitation on Indebtedness” covenant; provided that (A) Indebtedness of the Company may not
be replaced, renewed, refinanced or extended under this clause (g) with
Indebtedness of any Subsidiary of the Company, (B) any such replacement,
renewal, refinancing or extension (x) shall not result in such
Indebtedness having a shorter Average Life as compared with the Indebtedness
being replaced, renewed, refinanced or extended and (y) shall not exceed
the sum of the principal amount (or, if such Indebtedness provides for a lesser
amount to be due and payable upon a declaration or acceleration thereof, an
amount no greater than such lesser amount) of the Indebtedness being replaced,
renewed, refinanced or extended plus the amount of accrued interest thereon and
the amount of any reasonably determined prepayment premium necessary to accomplish
such replacement, renewal, refinancing or extension and such reasonable fees
and expenses incurred in connection therewith, and (C) in the case of any
Indebtedness replacing, renewing, refinancing, or extending Indebtedness which
is pari passu to the 7-Year Notes, any such
replacing, renewing, refinancing or extending Indebtedness is made pari passu to the 7-Year Notes or subordinated to the 7-Year
Notes, and, in the case of any Indebtedness replacing, renewing, refinancing,
or extending Subordinated Indebtedness, any such replacing, renewing,
refinancing or extending Indebtedness is subordinated to the 7-Year Notes to
the same extent as the Indebtedness being replaced, renewed, refinanced or
extended.

 

“Permitted Lien” means (i) Liens on the 7-Year
Notes Reserve Account for the benefit of the holders of 7-Year Notes and on the
reserve account established on or about the date hereof for the benefit of the
holders of the 10-Year Notes; (ii) Liens existing on the Issue Date; (iii) Liens
(including extensions and renewals thereof) upon real or personal property
acquired after the Issue Date; provided
that (a) such Lien is created solely for the purpose of securing
Indebtedness Incurred in accordance with the “Limitation on Indebtedness”
covenant, (1) to finance the cost (including the cost of design,
development, construction, improvement, installation or integration) of the
item of property or assets subject thereto and such Lien is created prior to,
at the time of or within six months after the later of the acquisition, the
completion of construction or the commencement of full operation of such
property or (2) to refinance any Indebtedness previously so secured, (b) the
principal amount of the Indebtedness secured by such Lien does not exceed 100%
of such cost and (c) any such Lien shall not extend to or cover any
property or assets other than such item of property or assets and any
improvements on such item; (iv) any interest or title of a lessor in the
property subject to any Capitalized Lease or operating lease; (v) Liens on
property of, or on shares of stock or Indebtedness of, any Person existing at
the time such Person becomes a Subsidiary of the Company, or is merged into or
consolidated with the Company or any Subsidiary of the Company; provided that such Liens were not granted
in contemplation of such acquisition, merger or consolidation and do not extend
to or cover any property or assets of the Company or any Subsidiary of the
Company other than the property or assets acquired; (vi) Liens in favor of
the Company or any Subsidiary of the Company; (vii) Liens securing
reimbursement obligations

 

B-42

 

with respect to letters
of credit that encumber documents and other property relating to such letters
of credit and the products and proceeds thereof; (viii) Liens securing
Indebtedness of the Company permitted pursuant to clause (g) of the
definition of “Permitted Indebtedness” or clause (c) of the definition of “Permitted
Subsidiary Indebtedness”, provided
that any such Indebtedness being refinanced was previously secured by a
Permitted Lien and any such Lien shall not extend to or cover any property or
assets other than those encumbered by the Lien securing the Indebtedness being
refinanced; and (ix) Liens incurred in the ordinary course of business
securing Indebtedness under Interest Rate Protection Obligations and Currency
Agreements, provided that such
Lien is created solely upon Excess Cash not required to be applied in
accordance with the “Cash Sweep” covenant herein.

 

“Permitted Subsidiary Indebtedness” means the
following Indebtedness (each of which shall be given independent effect) of a
Subsidiary of the Company:

 

(a)  Indebtedness of any Subsidiary of the
Company outstanding on the Issue Date;

 

(b)  Indebtedness of any Subsidiary of the
Company owed to and held by the Company or a Subsidiary of the Company; provided that an Incurrence of Indebtedness shall be deemed
to have occurred upon (x) any sale or other disposition of any Indebtedness of
a Subsidiary of the Company referred to in this clause (b) to a Person
other than the Company or a Subsidiary of the Company, or (y) any sale or other
disposition of Capital Stock of a Subsidiary of the Company which holds
Indebtedness of another Subsidiary of the Company except to the extent
permitted under clause (v) of the “Limitation on the Issuance and Sale of
Capital Stock of Significant Subsidiaries” covenant herein; and

 

(c)  Indebtedness of any Subsidiary of the
Company to the extent it represents a replacement, renewal, refinancing, or
extension of outstanding Indebtedness of such Subsidiary incurred or
outstanding pursuant to clause (a) or this clause (c) of this
definition; provided that (A) any such
replacement, renewal, refinancing or extension (x) shall not result in such
Indebtedness having a shorter Average Life as compared with the Indebtedness
being replaced, renewed, refinanced or extended and (y) shall not exceed the
sum of the principal amount (or, if such Indebtedness provides for a lesser amount
to be due and payable upon a declaration or acceleration thereof, an amount no
greater than such lesser amount) of the Indebtedness being replaced, renewed,
refinanced or extended plus the amount of accrued interest thereon and the
amount of any reasonably determined prepayment premium necessary to accomplish
such replacement, renewal, refinancing or extension and such reasonable fees
and expenses incurred in connection therewith.

 

“Person” means any individual, Corporation,
partnership, joint venture, trust, unincorporated organization or government or
any agency or political subdivision thereof.

 

“Predecessor 7-Year Note” of any particular 7-Year
Note means every previous 7-Year Note evidencing all or a portion of the same
debt as that evidenced by such particular 7-Year Note; and, for the purposes of
this definition, any 7-Year Note authenticated and delivered under the 7-Year
Notes Indenture in exchange for or in lieu of a mutilated, destroyed,

 

B-43

 

lost or stolen 7-Year
Note shall be deemed to evidence the same debt as the mutilated, destroyed,
lost or stolen 7-Year Note.

 

“Pro Forma Consolidated Operating Cash Flow”
for any period means “Consolidated Operating Cash Flow” for such period after
giving effect on a pro forma basis for the applicable period to, without
duplication, any Asset Sale or Asset Acquisition (including, without
limitation, any Asset Acquisition giving rise to the need to make such
calculation as a result of our or one of our Subsidiaries (including any Person
who becomes a Subsidiary as a result of the Asset Acquisition) Incurring
Acquired Indebtedness) or any transaction permitted under clause (iii) of
the “Consolidation, Merger and Sale of Assets” covenant herein occurring during
the period commencing on the first day of such period to and including the
Transaction Date (the “Reference Period”), as if such Asset Sale or Asset
Acquisition occurred on the first day of the Reference Period.

 

“Redemption Date” means the fixed date, on which
a 7-Year Note is to be redeemed, in whole or in part, by the Company pursuant
to the terms of the 7-Year Note.

 

“Registered 7-Year Fixed Rate Notes” means any 7-Year
Note registered in the 7-Year Note Register.

 

“Registrar” means HSBC Bank Argentina S.A.,
until a successor Registrar shall have become such pursuant to the applicable
provisions of the 7-Year Notes Indenture, and, thereafter “Registrar”
shall mean such successor Registrar.

 

“Regular Record Date”
means the close of business in New York on the fifteenth day (whether or not a
Business Day) immediately preceding each Interest Payment Date.

 

“Responsible Officer” shall mean, when used
with respect to the Trustee, any officer of the Trustee who shall have direct
responsibility for the administration of this 7-Year Notes Indenture, or to
whom any corporate trust matter is referred because of such person’s knowledge
of and familiarity with the particular subject.

 

“Securities Act” means the U.S. Securities Act
of 1933, as amended.

 

“Significant Subsidiary” means, at any date of
determination, any Subsidiary of the Company that, together with its
Subsidiaries, (i) for the most recent fiscal year of the Company,
accounted for more than 10% of the consolidated revenues of the Company and its
Subsidiaries or (ii) as of the end of such fiscal year, was the owner of
more than 10% of the consolidated assets of the Company and its Subsidiaries,
all as set forth on the most recently available consolidated financial
statements of the Company for such fiscal year.

 

“Stated Maturity” means (i) with respect
to any security, the date specified in such security as the fixed date on which
the final installment of principal of such security is due and payable and (ii) with
respect to any scheduled installment of principal of or interest on any
security, the date specified in such security as the fixed date on which such
installment is due and payable.

 

B-44

 

“Subordinated Indebtedness” means any
Indebtedness of the Company which is expressly subordinated in right of payment
to the 7-Year Notes, including premium and accrued and unpaid interest.

 

“Subsidiary” means, with respect to any Person,
any Corporation, association or other business entity (i) of which
outstanding Capital Stock having at least a majority of the votes entitled to
be cast in the election of directors is owned, directly or indirectly, by such
Person and one or more other Subsidiaries of such Person, or (ii) of which
at least a majority of voting interest is owned, directly or indirectly, by
such Person and one or more other Subsidiaries of such Person.

 

“Total Consolidated Indebtedness” means, at the
time of determination, an amount equal to the aggregate amount of all
Indebtedness of the Company and its Subsidiaries outstanding (without
duplication) as of the date of determination.

 

“Trade Payables” means, with respect to any
Person, any accounts payable or any other Indebtedness or monetary obligation
to trade creditors created, assumed or Guaranteed by such Person or any of its
Subsidiaries arising in the ordinary course of business in connection with the
acquisition of goods or services.

 

“Transaction Date” means, with respect to the
Incurrence of any Indebtedness by the Company or any of its Subsidiaries, the
date such Indebtedness is to be Incurred.

 

“Transfer Agent” means any Person authorized by
the Company to effectuate the exchange or transfer of any 7-Year Note on behalf
of the Company hereunder.

 

“Trust Indenture Act” or “TIA” means the
U.S. Trust Indenture Act of 1939 as in force at the date as of which the 7-Year
Notes Indenture was executed; provided, however,
that in the event the U.S. Trust Indenture Act of 1939 is amended after such
date, “Trust Indenture Act” or “TIA” means, to the extent required
by any such amendment, the U.S. Trust Indenture Act of 1939 as so amended.

 

“Trustee” means Law Debenture Trust Company of
New York, until a successor Trustee shall have become such pursuant to the
applicable provisions of the Indenture, and, thereafter “Trustee” shall
mean such successor Trustee.

 

“Unapplied Net Asset Sale Proceeds” means the
net cash proceeds of any Asset Sale consummated at least 181 days prior to the
date of determination that do not constitute Asset Sale Proceeds Reinvestment.

 

“U.S. Dollars”, “United States Dollars”,
“U.S.$” and the symbol “$” each mean dollars of the United
States.

 

“U.S. Government Obligations” means securities
that are (x) direct obligations of the United States for the payment of
which its full faith and credit is pledged or (y) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States the payment of which is unconditionally guaranteed as a full
faith and credit obligation by

 

B-45

 

the United States, which,
in either case, are not callable or redeemable at the option of the issuer
thereof, and shall also include a depositary receipt issued by a bank (as
defined in Section 3(a)(2) of the Securities Act) as custodian with
respect to any such U.S. Government Obligation or a specific payment of
principal of or interest on any such U.S. Government Obligation held by such
custodian for the account of the holder of such depositary receipt, provided that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depositary receipt from any amount received by the custodian in respect of
the U.S. Government Obligation or the specific payment of principal of or
interest on the U.S. Government Obligation evidenced by such depositary
receipt.

 

“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 Board of Directors members, managing directors, managers or
other voting members of the governing body of such Person.

 

“Wholly-Owned” is defined to mean, with respect
to any Subsidiary of any Person, such Subsidiary if all the outstanding Capital
Stock in such Subsidiary (other than any directors’ qualifying shares or shares
held by a Person, to the extent mandated by applicable law) is owned by such
Person, or one or more Wholly-Owned Subsidiaries of such Person.

 

Terms used herein and not defined herein shall have
the meanings assigned to them in the 7-Year Notes Indenture.

 

B-46

 

Trustee’s
Certificate of Authentication

 

This is one of the 7-Year Fixed Rate Notes referred to
in the within-mentioned 7-Year Notes Indenture.

 

	
  Dated:

  
	
   

  
	
   

  	
  LAW DEBENTURE TRUST COMPANY

  OF NEW YORK,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  (Authorized Signatory)

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

B-47

 

EXHIBIT C

FORM OF UNRESTRICTED GLOBAL NOTE (7-YEAR FLOATING RATE NOTES)*

 

UNLESS THIS FLOATING RATE NOTE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION (“DTC”), EUROCLEAR BANK S.A./N.V. (“EUROCLEAR”) OR CLEARSTREAM
BANKING, SOCIÉTÉ ANONYME (“CLEARSTREAM, BANKING”), TO THE COMPANY OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY FLOATING RATE NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, EUROCLEAR OR
CLEARSTREAM, BANKING (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, EUROCLEAR
OR CLEARSTREAM, BANKING), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNERS
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE 7-YEAR NOTES INDENTURE REFERRED TO ON THE REVERSE
HEREOF.

 

* Appropriate adjustments
to be made if Note is issued in certificated form.

 

C-1

 

MULTICANAL S.A. (INCORPORATED IN BUENOS AIRES, ARGENTINA, WITH

LIMITED LIABILITY (“SOCIEDAD ANÓNIMA”) UNDER THE LAWS OF THE

REPUBLIC OF ARGENTINA ON JULY 26, 1991, WITH A TERM OF DURATION

EXPIRING ON JULY 27, 2090, AND REGISTERED WITH THE PUBLIC REGISTRY

OF COMMERCE ON JULY 26, 1991 UNDER NUMBER 5225, BOOK 109 OF

VOLUME “A” OF CORPORATIONS, AND WITH DOMICILE AT AVALOS 2057

(C1431DPM) BUENOS AIRES, ARGENTINA)

 

7-YEAR FLOATING RATE
NOTES

 

	
  No. S-

  	
   

  	
   

  	
  $  

  	
   

  
	
   

  	
  CUSIP No.

  	
   

  
	
   

  	
  ISIN No.

  	
   

  
	
   

  	
  Common Code No.

  	
   

  

 

Multicanal S.A., a sociedad anónima
duly organized and existing under the laws of Argentina (the “Company”),
for value received, hereby promises to pay to [Cede & Co.]*, or
registered assigns, the principal sum indicated on Schedule A hereof in
installments on each of the [Interest Payment Dates] as set forth in “Principal”
on the reverse hereof (or on such earlier date as the principal sum may become
repayable in accordance with the terms and conditions set forth in the 7-Year
Notes Indenture or on the reverse hereof), and to pay interest thereon in
accordance with the provisions of “Interest” on the reverse hereof from December 10,
2003(1) or from the most recent Interest Payment Date to which
interest has been paid or duly provided for in arrears.  The interest so payable and punctually paid
or duly provided for on any Interest Payment Date will, as provided in the 7-Year
Notes Indenture, be paid to the Person in whose name this 7-Year Floating Rate
Note (or one or more Predecessor 7-Year Floating Rate Notes) is registered at
the close of business on the 15th day immediately preceding such
Interest Payment Date (whether or not a Business Day).

 

Any such interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular
Record Date, and such defaulted interest, and (to the extent lawful) interest
on such defaulted interest at the rate borne by the Post-Default Rate (as
defined in “Interest” on the reverse hereof), may be paid to the Person in
whose name this 7-Year Floating Rate Note (or one or more Predecessor 7-Year
Floating Rate Notes) is registered at the close of business on a Special Record
Date for the payment of such defaulted interest to be fixed by the Trustee,
notice whereof shall be given to Holders of 7-Year Floating Rate Notes not less
than 15 days prior to such Special Record Date, or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any exchange
on which the 7-Year Floating Rate Notes may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in the 7-Year
Notes Indenture.

 

* Appropriate adjustments
to be made if Note is issued in certificated form.

 

(1) This sentence
may need to be revised if stub period exceeds six months.

 

C-2

 

The principal of, premium, if any, on and interest on
this 7-Year Floating Rate Note shall be payable, and the transfer of this 7-Year
Floating Rate Note shall be registrable, at the Corporate Trust Office of Law
Debenture Trust Company of New York, as Trustee, Co-Registrar and Principal
Paying Agent, in The City of New York, at the main office of HSBC Bank
Argentina S.A., as Registrar and Paying Agent, in Buenos Aires, Argentina or at
the option of the Holder and subject to any fiscal or other laws and
regulations applicable thereto, at the office of any other Paying Agent
appointed by the Company.  The Company
shall provide to the Principal Paying Agent, in funds available on or prior to
the Business Day prior to each date on which a payment of principal of,
premium, if any, or any interest on the 7-Year Floating Rate Notes shall become
due, as set forth herein, such amount in U.S. Dollars as is necessary to make
such payment, and the Company hereby authorizes and directs the Principal
Paying Agent from funds so provided to it to make or cause to be made payment
of the principal of and any interest, as the case may be, on the 7-Year
Floating Rate Notes as set forth herein and in the 7-Year Notes Indenture; provided that payment with respect to principal of and
premium, if any, interest and Additional Amounts, if any, on any 7-Year
Floating Rate Note may, at the Company’s option, be made, subject to applicable
laws and regulations, by U.S. Dollar check drawn on a bank in The City of New
York mailed to the Holders of 7-Year Floating Rate Notes at their respective
addresses set forth in the register of Holders of 7-Year Floating Rate Notes; provided further that all payments with respect to Global
Notes the Holders of which have given wire transfer instructions to the Company
will be required to be made by wire transfer of immediately available funds to
the accounts specified by the Holders thereof. 
Unless such designation is revoked, any such designation made by such
Person with respect to such 7-Year Floating Rate Note will remain in effect
with respect to any future payments with respect to such 7-Year Floating Rate
Note payable to such Person.

 

All payments of principal and interest hereunder shall
be made exclusively in U.S. Dollars or in such coin or currency of the United
States as at the time of payment shall be legal tender for the payment of
public and private debts.

 

This 7-Year Floating Rate Note has been issued
pursuant to resolutions of an ordinary meeting of shareholders of the Company
adopted on January 22, 2003 and resolutions of the Board of Directors of
the Company adopted at its meetings on
[                    ].

 

Reference is hereby made to the further provisions of
this 7-Year Floating Rate 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.

 

Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse hereof by manual
signature, this 7-Year Floating Rate Note shall not be valid or obligatory for
any purpose.

 

C-3

 

IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.

 

	
   

  	
  MULTICANAL S.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

C-4

 

[REVERSE OF 7-YEAR
FLOATING RATE NOTE]

 

7-Year Floating Rate
Notes

 

This 7-Year Floating Rate Note is a negotiable
obligation under the Negotiable Obligations Law and is one of a duly authorized
issue of a series of Debt Securities of the Company designated as its 7-Year
Floating Rate Notes, without limitation in aggregate principal amount (the “7-Year
Floating Rate Notes” and each, a “Floating Rate Note”), as may be
set forth from time to time, issued and to be issued under an indenture, dated
as of [         ], [2005] (the “Indenture”),
as supplemented and amended by a second supplemental indenture, dated as of
[               ],
[2005] (the “Second Supplemental Indenture” and, together with the
Indenture, the “7-Year Notes Indenture”), each of the Indenture and the
Second Supplemental Indenture among the Company, Law Debenture Trust Company of
New York, as Trustee, Co-Registrar and Principal Paying Agent, and HSBC Bank
Argentina S.A., as Registrar and Paying Agent thereunder.  Reference to the 7-Year Notes Indenture and
all indentures supplemental thereto is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of 7-Year Floating Rate Notes and of
the terms upon which the 7-Year Floating Rate Notes are, and are to be,
authenticated and delivered.  The terms
of the 7-Year Floating Rate Notes include those stated in the 7-Year Notes
Indenture and those made part of the 7-Year Notes Indenture by reference to the
Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb), as amended
(the “Trust Indenture Act”).  The 7-Year
Floating Rate Notes are subject to all such terms, and Holders are referred to
the 7-Year Notes Indenture and the Trust Indenture Act for a statement of those
terms.

 

The Indebtedness evidenced by the 7-Year Floating Rate
Notes will constitute the direct, unsecured and unconditional unsubordinated
Indebtedness of the Company and will rank pari passu in
right of payment without any preference among themselves.  The payment obligations of the Company under
the 7-Year Floating Rate Notes will at all times rank at least equally in
priority of payment with all other present and future unsecured and
unsubordinated Indebtedness of the Company and senior in priority of payment
with all other present and future Subordinated Indebtedness of the Company from
time to time outstanding.

 

Form, Denomination and
Registration

 

The 7-Year Floating Rate Notes shall be issuable only
in registered form without coupons in denominations of U.S.$1.00 or multiples
of U.S.$1.00 in excess thereof, including if issued other than as a Global Note
and in exchange for beneficial interests in a Restricted Global Note.  No service charge shall be made for any
registration of transfer or exchange of 7-Year Floating Rate Notes, but the
Trustee may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.

 

C-5

 

Principal

 

Any principal not prepaid (in whole or in part) on the
7-Year Floating Rate Notes shall be due and payable in installments on the
following Interest Payment Dates and in the following percentages or amount:

 

	
   

  	
   

  	
   

  	
  Third

  Anniversary

  of [the
  date

  the Company

  accepts

  Eligible

  Notes upon

  expiration of

  the Election

  Offers],

  [2005]

  	
   

  	
   

  	
  Fourth

  Anniversary

  of [the
  date

  the Company

  accepts

  Eligible Notes

  upon

  expiration of

  the Election

  Offers],

  [2005]

  	
   

  	
   

  	
  Fifth

  Anniversary

  of [the
  date

  the Company

  accepts

  Eligible

  Notes upon

  expiration of

  the Election

  Offers],

  [2005]

  	
   

  	
   

  	
  Sixth

  Anniversary

  of [the
  date

  the

  Company

  accepts

  Eligible

  Notes upon

  expiration of

  the Election

  Offers],

  [2005]

  	
   

  	
   

  	
  Maturity

  Date

  	
   

  
	
  Percentage/amount
  of outstanding principal amount payable as of such date

  	
   

  	
   

  	
  5%

  	
   

  	
   

  	
  10%

  	
   

  	
   

  	
  15%

  	
   

  	
   

  	
  20%

  	
   

  	
   

  	
  Remaining principal outstanding

  	
   

  

 

provided that the
amount of each such installment will be calculated for each U.S.$1.00 of the
face amount of the 7-Year Floating Rate Notes and rounded to the nearest cent
(half a cent being rounded upwards); and provided
further that the last such installment will be in the amount necessary
to repay in full the outstanding principal amount of the 7-Year Floating Rate
Notes.

 

Payment; Paying Agents
and Transfer Agent

 

The principal of, premium, if any, on and interest on
the Registered 7-Year Floating Rate Notes shall be payable, and the transfer of
such Registered 7-Year Floating Rate Notes will be registrable, at the
corporate trust office of the Trustee in the Borough of Manhattan, The City of
New York, at the main office of the Paying Agent in Argentina and, at the
option of the Holder of such Registered 7-Year Floating Rate Notes and subject
to any fiscal or other laws and regulations applicable thereto, at the office
of any other Paying Agents appointed by the Company.  Payments with respect to principal of the 7-Year
Floating Rate Notes will be made only against surrender of such 7-Year Floating
Rate Notes at the office of the Trustee in The City of New York or at the main
office of the Paying Agent in Argentina. 
Payment with respect to principal, premium, if any, and interest with
respect to any 7-Year Floating Rate Note may, at the Company’s option, be made,
subject to applicable laws and regulations, by U.S. Dollar check drawn on a
bank in The City of New York mailed to the Holders of 7-Year Floating Rate
Notes at their respective addresses set forth in the 7-Year Floating Rate Note
Register, provided that all
payments with respect to Global Notes the Holders of which have given wire
transfer instructions to the Company will be required to be made by wire
transfer of immediately available funds to the accounts specified by the
Holders thereof.  Unless such designation
is revoked, any such designation made by such Person with respect to

 

C-6

 

such 7-Year Floating Rate
Note will remain in effect with respect to any future payments with respect to
such 7-Year Floating Rate Note payable to such Person.

 

Any money deposited with the Trustee or any Paying
Agent in trust for the payment of the principal of, or premium, if any,
interest or Additional Amounts, if any, on any 7-Year Floating Rate Note and
remaining unclaimed for two years after such principal, premium, if any,
interest or additional Amounts, if any, has become due and payable shall be
repaid to the Company on Company Request; and the Holder of such 7-Year
Floating Rate Note shall thereafter, as an unsecured general creditor, look
only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, (i) in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in The City of New York, and (ii) in the Official Gazette of Argentina and in a
newspaper published in the Spanish language and of general circulation in
Argentina, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining shall be repaid
to the Company.

 

If any payment on a 7-Year Floating Rate Note is due
on a day that is, at any place of payment, a day on which banking institutions
are authorized or obligated by law or executive order to close, then, at each
such place of payment, such payment need not be made on such day but may be
made on the next succeeding date that is not, at such place of payment, a day
on which banking institutions are authorized or obligated by law or executive
order to close, with the same force and effect as if made on the date for such
payment, and no interest will accrue for the period from and after such due
date to such next succeeding day that is not, at such place of payment, a day
on which banking institutions are authorized or obligated by law or executive
order to close.

 

Interest

 

(a)           Interest
Payment Dates.

 

The 7-Year Floating Rate Notes will bear interest from
December 10, 2003 and such interest will be payable on each Interest
Payment Date which (except as mentioned below) falls (i) in the case of
the first Interest Payment Date, [on the date these Notes are delivered or made available to holders pursuant to
the Company’s APE], (ii) in the case of each Interest Payment Date
thereafter, three months after the preceding Interest Payment Date (other than
the second Interest Payment Date which shall be three months after [the date the
Company accepts Eligible Notes upon expiration of the Election Offers, if the
Company consummates the transactions contemplated in the APE before such date])
and (iii) in the case of the last Interest Payment Date, on the final
Maturity date. If any Interest Payment Date would otherwise fall on a day which
is not a Business Day, it shall be postponed to the next day which is a
Business Day unless it would thereby fall into the next calendar month in which
event (i) it shall be brought forward to the immediately
preceding Business Day, and (ii) each subsequent Interest Payment Date
shall be the last Business Day of the last month of each subsequent Interest
Period.  The period beginning on December 10,
2003 and ending on the [the date the Company accepts

 

C-7

 

Eligible Notes upon expiration of the
Election Offers] and each successive period beginning on an Interest
Payment Date (other than the second Interest Period, which shall commence on [the date the
Company accepts Eligible Notes upon expiration of the Election Offers])
and ending on the next succeeding Interest Payment Date is called an “Interest
Period.”

 

(b)           Interest
Payments.

 

Each 7-Year Floating Rate Note (or in the case of the
repayment on redemption of part only of a 7-Year Floating Rate Note, that part
only of such 7-Year Floating Rate Note) will cease to bear interest from the
date for its repayment on redemption unless, upon due presentation thereof,
payment of principal is improperly withheld, refused or delayed.  In such event, or if any payment of interest
under the 7-Year Floating Rate Notes is not paid when due on the relevant
Interest Payment Date, the Company agrees to pay interest on such principal
and/or interest, as the case may be, for the period from and including the due
date thereof to but excluding the date the same is paid in full, at the Post-Default
Rate, payable from time to time on demand. 
For the purposes of this paragraph “Post-Default Rate” means, at any
time, a rate per annum equal to (a) for the balance of the then current
Interest Period, the Rate of Interest applicable to that Interest Period and (b) thereafter,
the Rate of Interest for each succeeding Interest Period applicable to that
Interest Period which shall be determined by the Calculation Agent in
accordance with this paragraph “Interest”.

 

(c)           Rate of
Interest.

 

The rate of interest from time to time in respect of
the 7-Year Floating Rate Notes (“Rate of Interest”) will be determined
on the following basis:

 

(i)            On the second
business day before the beginning of each Interest Period (the “Interest
Determination Date”) the Calculation Agent will determine the offered rate
for deposits in U.S. Dollars for the Interest Period concerned as at 11:00 a.m.
(London time) on the Interest Determination Date in question, provided
however that in the case of the first Interest Period, the Calculation Agent
will determine the Rate of Interest by reference to the relevant rate on December 12,
2003.  Such offered rate will be that
which appears on the display designated as page ”3750” on the Telerate
Monitor (or such other page or service as may replace it for the purpose
of displaying London Interbank offered rates of major banks for U.S. Dollar
deposits).  The Rate of Interest for such
Interest Period will be the aggregate of the Applicable Margin and the rate
which so appears, as determined by the Calculation Agent.

 

(ii)           If, on an
Interest Determination Date, no offered rate appears on page ”3750” on the
Telerate Monitor as specified above, the Calculation Agent will request the
principal London offices of each of four major banks in the London interbank
market, as selected by the Calculation Agent, to provide the Calculation Agent
with its offered quotations for deposits in U.S. Dollars for the Interest
Period concerned, to prime banks in the London interbank market at
approximately 11:00 a.m. (London time) on the relevant Interest
Determination Date and in an amount (not less than U.S.$l,000,000) that is
representative of a single transaction in such market at such time.  If at least two such quotations are so
provided, the Rate of Interest for such Interest Period will be the aggregate
of the Applicable Margin and the arithmetic mean (rounded upwards to the
nearest 1/16 of 1%) of such quotations.

 

C-8

 

(iii)          If
fewer than two quotations are so provided, the Rate of Interest with respect to
such Interest Period will be the higher of (x) the aggregate of the Applicable
Margin and the arithmetic mean (rounded upwards to the nearest 1/16 of 1%) of
the rates quoted at approximately 11:00 a.m., New York City time, on such
Interest Determination Date by three major banks in The City of New York
selected by the Calculation Agent for loans in U.S. Dollars to leading European
banks for the Interest Period concerned and in a principal amount (not less
than U.S.$1,000,000) that is representative of a single transaction in such
market at such time and (y) the Rate of Interest in effect for the last
preceding Interest Period to which one of the preceding subparagraphs (i) and
(ii) shall have applied.

 

(d)           Determination
of Rate of Interest and Calculation of Interest Amounts.

 

The Calculation Agent will, as soon as practicable
after 11:00 a.m. (London time) on each Interest Determination Date,
determine the Rate of Interest and calculate the amount of interest payable
(the “Interest Amounts”) per 7-Year Floating Rate Note for the relevant
Interest Period.  The Interest Amounts
shall be calculated by applying the Rate of Interest to the principal amount of
each Floating Rate Note, multiplying such product by the actual number of days
in the Interest Period concerned divided by 360 and rounding the resulting
figure to the nearest cent (half a cent being rounded upwards).  The determination of the Rate of Interest and
the Interest Amounts by the Calculation Agent shall (in the absence of manifest
error) be final and binding upon all parties.

 

(e)           Publication
of Rate of Interest and Interest Amounts.

 

The Calculation Agent will cause the Rate of Interest
and the Interest Amounts for each Interest Period and the relevant Interest
Payment Date to be notified to the Company, the Trustee, each of the Paying
Agents and any Stock Exchange on which the Notes are for the time being listed
and to be notified to Holders of the 7-Year Floating Rate Notes as soon as
possible after their determination but in no event later than the second
business day thereafter.  The Interest
Amounts and Interest Payment Date so published may subsequently be amended (or
appropriate alternative arrangements made with the consent of the Trustee by
way of adjustment) without notice other than to the Company and the Trustee in
the event of an extension or shortening of the Interest Period.  If the 7-Year Floating Rate Notes become due
and payable under its terms, the accrued interest and the Rate of Interest
payable in respect of the 7-Year Floating Rate Notes shall nevertheless
continue to be calculated as previously by the Calculation Agent in accordance
with this paragraph “Interest” but no publication of the Rate of Interest or
the Interest Amounts so calculated need be made unless the Trustee otherwise
requires.

 

(f)            Determination
or Calculation by Trustee.

 

If the Calculation Agent does not at any time for any
reason so determine the Rate of Interest or calculate
the Interest Amounts for an Interest Period, the Trustee shall do so and such
determination or calculation shall be deemed to have been made by the
Calculation Agent.  In doing so, the
Trustee shall, subject to Section 7 of the Indenture and after consultation
with the Company, apply the foregoing provisions of this paragraph “Interest”,
with any necessary consequential amendments, to the extent that, in its
opinion, it can do so, and, in all other

 

C-9

 

respects
it shall do so in such manner as it shall deem fair and reasonable in all the
circumstances.

 

(g)           Calculation
Agent.

 

The Company will procure that, so long as any 7-Year
Floating Rate Note is outstanding, there shall at all times be a Calculation
Agent for the purposes of the 7-Year Floating Rate Notes.  If any such bank (acting through its relevant
office) is unable or unwilling to continue to act as the Calculation Agent or
if the Calculation Agent fails duly to establish the Rate of Interest for any
Interest Period or to calculate the Interest Amounts, the Company shall appoint
some other leading bank engaged in the London interbank market (acting through
its principal London office) to act as such in its place.

 

The Calculation Agent may not resign its duties
without a successor having been so appointed.

 

In this paragraph “Interest”, the expression “business
day” means a day upon which U.S. Dollar deposits may be dealt in on the
London interbank market and commercial banks and foreign exchange markets are
open in London and, if on that day a payment is to be made, in The City of New
York also.

 

Payments of Additional
Amounts

 

All payments made by the Company under or with respect
to the Notes will be made free and clear of and without withholding or
deduction for or on account of any present or future Taxes imposed or levied by
or on behalf of any Taxing Authority within Argentina or any political
subdivision or taxing authority thereof, or any present or future Taxes imposed
or levied within any other jurisdiction in which the Company is organized or
engaged in business for tax purposes or within any other jurisdiction from or
through which any payment is made by the Company or its agents, unless the
Company is required to withhold or deduct Taxes by law or by the official
interpretation or application thereof. 
If the Company is required to withhold or deduct any amount for or on
account of Taxes imposed by a Taxing Authority within Argentina, or within any
other jurisdiction in which the Company is organized or engaged in business for
tax purposes or such withholding or deduction occurs as a result of the Company’s
requirement to pay tax to a Taxing Authority within Argentina as a substitute
obligor in respect of the Notes, in accordance with Argentine Law No. 23,966,
as amended, and regulations thereunder, from any payment made under or with
respect to the Notes, the Company will pay such additional amounts as may be
necessary (“Additional Amounts”) so that the net amount received by each
Holder of Notes (including such Additional Amounts) after such withholding or
deduction will not be less than the amount the Holder or beneficial owner would
have received if such Taxes had not been withheld or deducted; provided, that no Additional Amounts will be payable with
respect to a payment made to a Holder of this Note (an “Excluded Holder”)
with respect to any Taxes which would not have been imposed, payable or
due:  (i) but for the existence of
any present or former connection between the Holder (or the beneficial owner
of, or person ultimately entitled to obtain an interest in, such Note) and the
taxing jurisdiction other than the holding of, or the receipt of payments
under, this Note; (ii) if the beneficial owner of such Note

 

C-10

 

had been the Holder of
the Note and would not be entitled to the payment of Additional Amounts; or (iii) where
any such taxes, duties, assessments or governmental charges would not have been
imposed but for the failure of the Holder of such Note to comply with any
certification, identification, information, documentation or other reporting
requirements concerning the nationality, residence or connection with Argentina
of the Holder or beneficial owner of such Note, if (x) such compliance is
required by applicable law, regulation or administrative practice or any
applicable treaty of the taxing jurisdiction as a precondition to exemption
from, or reduction in the rate of, deduction or withholding of, such taxes,
duties, assessments or governmental charges, (y) at least thirty (30) days
prior to the first payment date with respect to which such requirements under
Argentine law, regulation, or administrative practice or any applicable treaty
shall apply, the Company shall have notified all Holders that such Holders will
be required to comply with such requirements, and (z) in the case of such
requirements under Argentine law, regulation or administrative practice or any
such applicable treaty, such requirements are not materially more onerous to
such Holders of Notes (in form, in procedure or in the substance of information
disclosed) than comparable information or other reporting requirements imposed
under U.S. tax law, regulation (including proposed regulations) and administrative
practice (such as IRS Forms 1001, W-8 and W-9 or any comparable successor
forms).  The Company will also (i) make
such withholding or deduction and (ii) remit the full amount deducted or
withheld to the relevant authority in accordance with applicable law.  The Company will make reasonable efforts to
obtain certified copies of tax receipts evidencing the payment of any Taxes so
deducted or withheld from each Taxing Authority imposing such Taxes.  The Company will furnish to the Holder of
this Note, within sixty (60) days after the date the payment of any Taxes so
deducted or withheld is due pursuant to applicable law,
either certified copies of tax receipts evidencing such payment by the Company
or, if such receipts are not obtainable, other evidence of such payments by the
Company.

 

At least thirty (30) days prior to each date on which
any payment under or with respect to this Note is due and payable, if the
Company will be obligated to pay Additional Amounts with respect to such
payment, the Company will deliver to the Trustee an Officers’ Certificate
stating the fact that such Additional Amounts will be payable and the amounts
so payable and will set forth such other information necessary to enable the
Trustee to pay such Additional Amounts to the Holders of Notes on the payment
date.

 

In addition, the Company shall reimburse any non-Argentine
domiciled Holder of this Note or any interest herein or rights in respect
hereof who has paid Taxes to a Taxing Authority in Argentina in respect of its
holding of Notes including taxes levied in accordance with Argentine Law No. 23,966,
as amended, and regulations thereunder for any tax so paid (but only to the
extent that the Company is not required to pay Additional Amounts in respect of
such tax as provided above) within 30 days of written evidence of such payment,
including the amount paid, being provided to the Company.

 

In addition, the Company agrees to pay any stamp,
issue, registration, documentary, value added or other similar taxes and
duties, including interest and penalties, payable in Argentina or the United
States, any jurisdiction out of which payment is made or any other jurisdiction
in which the Company is organized or engaged in business, or any political
subdivision thereof or taxing authority of or in the foregoing in respect of
the creation, issue and offering of this Note. 
The Company also agrees to indemnify each Holder of this Note from and

 

C-11

 

against
all court taxes or other taxes and duties, including interest and penalties,
imposed on or paid by such Holder in any jurisdiction in connection with any
action permitted to be taken by such Holder to enforce the obligations of the
Company under this Note.  Furthermore,
the Company waives its right to reimbursement in accordance with Argentine Law No. 23,966,
as amended, and regulations thereunder, from any Holder of any amount required
to be paid by the Company to a Taxing Authority in Argentina in respect of such
Holder’s holding of Notes.

 

Any reference herein to principal and/or interest
shall be deemed also to refer to any Additional Amounts or Other Additional
Amounts, as applicable, which may be payable under the undertakings described
in this paragraph, and express reference to the payment of Additional Amounts
(if applicable) in any provisions hereof shall not be construed as excluding
Additional Amounts or Other Additional Amounts, as applicable, in those
provisions hereof where such express reference is not made.

 

Notwithstanding the foregoing,
the obligation to pay Additional Amounts to any Holder of the 7-Year Floating
Rate Notes will be subject to a maximum level not to exceed the amount required
to gross-up payments for withholdings on interest payments to a bank domiciled in a jurisdiction that (i) is
not deemed to be of low or zero taxation pursuant to Decree No. 916/2004, or (ii) has entered into an exchange
of information agreement with Argentina and that is not limited by banking or
other secrecy rules in respect of requests made by the tax authority of
such jurisdiction.

 

Other Additional Amounts

 

(a)           If, due to
either (i) the introduction of or any change in or in the interpretation
of any law or regulation (including, without limitation, the imposition of any
Eurocurrency Reserve Requirements greater than zero) or (ii) the
compliance with any guideline or request from any Governmental Agency (whether
or not having the force of law), there shall be any increase in the cost to any
Holder of 7-Year Floating Rate Notes of funding, owning, holding or maintaining
its 7-Year Floating Rate Notes or a reduction in the amount of any sum received
or receivable by any such Holder under the 7-Year Floating Rate Notes with
respect thereto, by an amount deemed by such Holder to be material, within 15
days after receipt by the Company of written demand by such Holder pursuant to
paragraph (c), the Company shall from time to time, pay to such Holder
additional amounts sufficient to compensate such Holder for such cost or
reduction from and after the later of the date such cost or reduction is
suffered by such Holder and the date of the receipt of notice specified in
paragraph (c) pursuant to which such Holder requires such payment (“Other
Additional Amounts”).  Together with
such notice, the Holder of 7-Year Floating Rate Notes will provide a
certificate as to the amount of such increased cost or reduction and providing
reasonable detail of the circumstances giving rise to the demand, prepared in
good faith and submitted to the Trustee for delivery to the Company by such
Holder, which certificate shall be prima facie
evidence for all purposes, absent manifest error.

 

(b)           Each
Holder of 7-Year Floating Rate Notes will, before requesting compensation for
Other Additional Amounts pursuant to paragraph (a), use its best efforts to
minimize or eliminate such compensation through the transfer of its 7-Year
Floating Rate Notes to a different Holding Office or to another Person if such
transfer will avoid the need for

 

C-12

 

compensation
for such Other Additional Amounts and will not, in the sole judgment of such
Holder, be otherwise disadvantageous to such Holder.

 

(c)           Each
Holder of 7-Year Floating Rate Notes will promptly notify the Trustee for
delivery to the Company of any event of which it has knowledge, occurring after
the date hereof, which will entitle such Holder of 7-Year Floating Rate Notes
to compensation pursuant to paragraph (a) and advise the Company in such
notice, or a subsequent notice, if it requires the Company to pay Other
Additional Amounts in respect of such event.

 

(d)           The
Company shall not be required to compensate a Holder of 7-Year Floating Rate
Notes as provided by paragraph (a) (i) if the increased cost or
reduction in respect of which such claim for Other Additional Amounts arises
results solely from a requirement which is applicable to the relevant Holder by
reason of its financial condition or assets and which is not of general
application to similar persons of a similar type in similar circumstances in
the same jurisdiction, (ii) in respect of franchise taxes or taxes on such
Holder’s assets or overall net income, or (iii) if the increased cost or
reduction in respect of which such claim for Other Additional Amounts arises
results solely from the transfer of the 7-Year Floating Rate Note from one
Holder to another Holder or from the designation by the Holder of 7-Year
Floating Rate Notes of a new Holding Office if the original Holder or the
Holder holding through the original Holding Office would not have been entitled
to such Other Additional Amounts, unless such transfer or designation is made
(x) with the Company’s written consent or (y) at a time when the circumstances
giving rise to such claim for Other Additional Amounts did not exist.

 

C-13

 

Redemption for
Regulatory Reasons.

 

In the event that the adoption of any applicable law, rule or
regulation or any change in any applicable law, rule or regulation or any
change in the interpretation or administration thereof by any Governmental
Agency charged with the interpretation or administration thereof, or compliance
by any Holder of 7-Year Floating Rate Notes with any request or directive
(whether or not having the force of law) of any such Governmental Agency shall
make it unlawful or impossible for any Holder of 7-Year Floating Rate Notes to
continue to hold, own, maintain or fund its 7-Year Floating Rate Notes and such
Holder so notifies the Trustee, the Trustee will forthwith give notice thereof
to the Company.  If such Holder
determines that it may not lawfully continue to maintain and fund its 7-Year
Floating Rate Notes until maturity and so specifies in such notice, the Company
will, on the date provided therein, repay in full the then outstanding
principal amount of each such 7-Year Floating Rate Note, together with accrued
interest thereon, upon presentation thereof by such Holder with respect to any
such Note.  If it is lawful for such
Holder to maintain such 7-Year Floating Rate Note through the next Interest
Payment Date then applicable to such 7-Year Floating Rate Note, such repayment
will be due on such Interest Payment Date. 
If such Holder shall instead determine that it is not lawful to continue
to maintain such 7-Year Floating Rate Note, such repayment will be due within
15 days after the date of receipt of such notice by the Company; provided, however, that Holders of 7-Year Floating Rate
Notes will use their best efforts to avoid such unlawfulness through, without
limitation, the transfer of its 7-Year Floating Rate Notes to a different
Holding Office or to another Person if such
transfer will avoid such unlawfulness and will not, in the sole judgment of
such Holders, be otherwise reasonably disadvantageous to such Holders.

 

Optional
Redemption of the 7-Year Floating Rate Notes.

 

The Company will have the right exercisable at any
time on giving not more than 30 nor less than five days’ irrevocable notice to
the Holders, to redeem all, or only some (subject to a minimum of U.S.$1
million and in accordance with the provision for selection of Floating Rate
Notes to be redeemed provided for in the 7-Year Notes Indenture), of the 7-Year
Floating Rate Notes at their principal amount, together with interest accrued
to the date fixed for redemption, subject only to the provisions set forth in “Other
Redemption Costs”.

 

Other Redemption
Costs.

 

In respect of any 7-Year Floating Rate Notes which are
to be redeemed by the Company or which become due and payable by the Company
following an Event of Default, in addition to the principal amount of the 7-Year
Floating Rate Notes and accrued interest otherwise payable, if the date of
redemption or date of repayment is other than an Interest Payment Date, the
Company will pay each Holder whose 7-Year Floating Rate Notes are being
redeemed or repaid on the date of redemption or repayment, as and by way of
indemnity for its other redemption costs (without requirement of actual proof
of loss), an amount “E” calculated as follows:

 

(A - B) x C x D/360
= E

 

C-14

 

where:

 

“A” is the Rate of Interest calculated pursuant to “Interest”
for the Interest Period during which such Notes are redeemed or repaid;

 

“B” is the Rate of Interest which would be determined pursuant
to “Interest” were the date of redemption or repayment of the 7-Year Floating
Rate Notes the commencement of an Interest Period for the 7-Year Floating Rate
Notes having a duration of three months (if “D” is greater than or equal to
75), two months (if “D” is greater than or equal to 45 but less than 75) or one
month (if “D” is less than 45) minus 1/8%;

 

“C” is the principal amount of the 7-Year Floating
Rate Notes of such Holder being redeemed or repaid; and

 

“D” is the actual number of days from and including
the date of redemption or repayment to but excluding the commencement of the
next succeeding Interest Period were the 7-Year Floating Rate Notes not so
redeemed or repaid,

 

provided, however,
that no amount will be payable pursuant to this paragraph if (i) ”A” is
less than or equal to “B” or (ii) such redemption occurs in connection
with the exchange of 7-Year Floating Rate Notes for 7-Year Fixed Rate Notes as
set forth in “Exchange for 7-Year Fixed Rate Notes” below.

 

Exchange for 7-Year Fixed
Rate Notes

 

Under the terms of the 7-Year Notes Indenture, each
Holder of 7-Year Floating Rate Notes shall be entitled on any Business Day
(other than any day following any Regular Record Date to and including the day
immediately preceding the related Interest Payment Date) to exchange such 7-Year
Floating Rate Notes for an equivalent principal amount in the 7-Year Fixed Rate
Notes, provided that any expenses
incurred as a result of such exchange by either such Holder or the Company
(other than any registration fees with the CNV) shall be paid by such Holder,
and provided further that the
Company shall not be required to any Other Additional Amounts incurred as a
result of such exchange.

 

To exchange a Floating Rate Note, a Holder must (a) complete
and manually sign an exchange notice in substantially the form attached to this
7-Year Floating Rate Note and deliver such notice to the Exchange Agent at its
own expense, (b) surrender the 7-Year Floating Rate Note to the Exchange
Agent duly endorsed or assigned to the Company or in blank, (c) furnish
appropriate endorsements and transfer documents (if any) required by the
Registrar or the Exchange Agent, and (d) pay any required transfer or
similar tax and make any other required payment.  Additional information regarding the exchange
right and procedures are set forth in Article Six of the Second
Supplemental Indenture.

 

For purposes of the preceding paragraph, “Exchange
Agent” means any Person authorized by the Company to accept the
presentation of 7-Year Floating Rate Notes by Holders thereof for exchange into
7-Year Fixed Rate Notes.

 

C-15

 

Purchase by the Company

 

Subject to the “Limitation on Repurchase of 7-Year
Notes and 10-Year Notes” covenant, Company may at any time purchase 7-Year
Floating Rate Notes in the open market or by tender or private agreement at any
price.  All 7-Year Floating Rate Notes so
purchased must be delivered by the Company to the Trustee for cancellation.

 

Certain Covenants

 

1.             Limitation
on Indebtedness.

 

Under the terms of the 7-Year Notes Indenture, so long
as any of the 7-Year Notes are Outstanding, the Company will not, and will not
permit any of its Subsidiaries to directly or indirectly Incur any Indebtedness
(including Acquired Indebtedness); provided
that the Company (but not any Subsidiary of the Company) may Incur Indebtedness
(including Acquired Indebtedness) and a Subsidiary of the Company may Incur
Acquired Indebtedness if, after giving effect to the application of the Incurrence
of any such Indebtedness and the receipt and application of the proceeds
therefrom, the ratio of Total Consolidated Indebtedness to Annualized Pro Forma
Consolidated Operating Cash Flow would be less than or equal to 6.5 to 1.0.

 

The foregoing limitations on the Incurrence of
Indebtedness will not apply to:

 

(i)            the Incurrence by the Company of Permitted Indebtedness;

 

(ii)           the Incurrence by any Subsidiary of the Company of Permitted
Subsidiary Indebtedness;

 

(iii)          the
Incurrence of Indebtedness by the Company (but not any Subsidiary of the
Company) other than Indebtedness described in the foregoing clause (i), which
Indebtedness when added to the then outstanding Indebtedness previously
Incurred under this clause (iii) and the outstanding Indebtedness of
Subsidiaries of the Company previously Incurred under clause (iv) below,
does not exceed, as of the date of determination, U.S.$25
million in aggregate principal amount; and

 

(iv)          the
Incurrence of Indebtedness by Subsidiaries of the Company which Indebtedness, (A) when
added to the outstanding Indebtedness of Subsidiaries of the Company previously
Incurred under this clause (iv), does not exceed, as of the date of
determination, U.S.$10 million in aggregate principal amount, and (B) when
added to the outstanding Indebtedness of the Company previously Incurred under
clause (iii) above and the outstanding Indebtedness of Subsidiaries of the
Company previously Incurred under this clause (iv), does not exceed, as of the
date of determination, U.S.$25 million in aggregate principal amount.

 

2.             Maximum
Total Consolidated Indebtedness.

 

So long as any 7-Year Notes remain Outstanding, the Company will maintain a Total
Consolidated Indebtedness of no greater than the initial aggregate principal
amount of the

 

C-16

 

7-Year Notes and the 10-Year
Notes plus U.S.$5 million of seller financing outstanding on the Issue
Date plus U.S.$10 million (or its equivalent in other currencies) minus
90% of the aggregate principal amount of any 7-Year Notes or 10-Year Notes
cancelled on or prior to the date of determination, minus 90% of the
aggregate principal amount of any seller financing outstanding on the Issue
Date plus the aggregate amount of Indebtedness Incurred as a result of a
transaction permitted under clause (iii) of the “Consolidation, Merger and
Sale of Assets” covenant herein minus 90% of the aggregate principal
amount of any such Indebtedness discharged prior to the date of determination.

 

3.             Limitation
on Dividends and Other Payment Restrictions Affecting Significant Subsidiaries

 

Under the terms of the 7-Year Notes Indenture, so long
as any of the 7-Year Notes are Outstanding, the Company will not, and will not
permit any Significant Subsidiary to, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or consensual restriction
of any kind on the ability of any Significant Subsidiary to (i) pay
dividends or make any other distributions permitted by applicable law to the
Company or any Significant Subsidiary on its Capital Stock or with respect to
any other interest or participation in, or measured by, its profits, (ii) pay
any Indebtedness or other obligation owed to the Company or any other
Significant Subsidiary, (iii) make loans or advances to the Company or any
other Significant Subsidiary or (iv) sell, lease or transfer any of its
property or assets to the Company or any other Significant Subsidiary.

 

The foregoing provisions shall not restrict (A) in
the case of clause (i), (ii), (iii) or (iv), any such encumbrance or
restriction (I) existing under the 7-Year Notes Indenture; (II) existing under
or by reason of applicable law; (III) existing under any instrument governing
Acquired Indebtedness or Capital Stock of any Person or the property or assets
of such Person acquired by the Company or any Significant Subsidiary and
existing at the time of such acquisition (except to the extent such Acquired
Indebtedness was Incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person
or the property or assets of any Person other than such Person or the property
or assets of such Person so acquired; (IV) existing under any agreement or
instrument that refinances an Indebtedness or replaces, renews or amends an
agreement or instrument containing an encumbrance or restriction that is
permitted by clauses (I) and (III) above, provided
that the terms and conditions of any such restrictions taken as a whole are not
less favorable to the Holders than those under or pursuant to the Indebtedness
being refinanced or the agreements or instruments being replaced, renewed or
amended; or (V) with respect to a Significant Subsidiary and imposed pursuant
to an agreement that has been entered into for the sale or disposition of all
or substantially all of the Capital Stock of, or property and assets of, such
Significant Subsidiary; or (B), in the case of clause (iv) only, any such
encumbrance or restriction (I) that restricts in a customary manner the
subletting, assignment or transfer of any property or asset subject to a lease
or license, or (II) existing by virtue of any transfer of, agreement to
transfer, option or right with respect to, or Lien on, any property or assets
of the Company or any Significant Subsidiary not otherwise prohibited by the 7-Year
Notes Indenture.  Nothing contained in
this paragraph shall prevent the Company or any Significant Subsidiary from (1) creating,
incurring, assuming or suffering to exist any Liens otherwise permitted under
the “Limitation on Liens” covenant or (2) restricting the sale or other
disposition of property or assets of the Company or any of its

 

C-17

 

Significant Subsidiaries
that secure Indebtedness of the Company or any Significant Subsidiary, subject
to compliance with the “Limitation on Asset Sales” covenant.

 

4.             Limitation
on the Issuance and Sale of Capital Stock of Significant Subsidiaries

 

Under the terms of the 7-Year Notes Indenture, the
Company will not sell, and will not permit any Significant Subsidiary, directly
or indirectly, to issue or sell, any shares of Capital Stock of a Significant
Subsidiary (including options, warrants or other rights to purchase shares of
such Capital Stock) except (i) to the Company or a Wholly-Owned Subsidiary
that, at the time of such sale, is a Significant Subsidiary, (ii) if,
immediately after giving effect to such issuance or sale, such Significant
Subsidiary would no longer constitute a Significant Subsidiary, (iii) in
the case of issuances of Capital Stock by a Significant Subsidiary if, after
giving effect to such issuance, the Company maintains its percentage ownership
of such Significant Subsidiary, (iv) the issuance to or ownership by
directors of directors’ qualifying shares or the issuance to or ownership by a
Person of Capital Stock of any Significant Subsidiary, to the extent mandated
by applicable law, or (v) the issuance or transfer of Capital Stock of a
Significant Subsidiary to the seller or transferor of a
Cable/Telecommunications Business, provided
that after giving effect to any such issuance or transfer, the Company holds at
least 51% of the Capital Stock (including 51% of the Voting Stock) of any such
Significant Subsidiary, and provided further
that in the case of clauses (ii), (iii) and (v) above, any
such issuance or sale shall comply with the “Limitation on Asset Sales”
covenant.

 

5.             Limitation
on Issuances of Guarantees by Subsidiaries

 

Under the terms of the 7-Year Notes Indenture, the
Company will not permit any Subsidiary of the Company, directly or indirectly,
to Guarantee any Indebtedness of the Company (“Guaranteed Indebtedness”),
unless (i) such Subsidiary simultaneously executes and delivers a
supplemental indenture to the 7-Year Notes Indenture providing for a Guarantee
by such Subsidiary (a “Subsidiary Guarantee”) of payment of the 7-Year
Notes and (ii) such Subsidiary waives and will not in any manner
whatsoever claim or take the benefit or advantage of, any rights of reimbursement,
indemnity or subrogation or any other rights against the Company or any other
Subsidiary of the Company as a result of any payment by such Subsidiary under
its Subsidiary Guarantee; provided
that this paragraph shall not be applicable to any Guarantee of any Subsidiary
of the Company that (x) exists at the time such Person becomes a Subsidiary of
the Company and (y) was not Incurred in connection with, or in contemplation
of, such Person becoming a Subsidiary of the Company.  If the Guaranteed Indebtedness is pari passu with the 7-Year Notes, then the
Guarantee of such Guaranteed Indebtedness shall be pari passu with, or subordinated to, the Subsidiary
Guarantee.  If the Guaranteed
Indebtedness is subordinated to the 7-Year Notes, then the Guarantee of such
Guaranteed Indebtedness shall be subordinated to the Subsidiary Guarantee at
least to the extent that the Guaranteed Indebtedness is subordinated to the 7-Year
Notes.

 

Notwithstanding the foregoing, any Subsidiary
Guarantee by a Subsidiary of the Company shall provide by its terms that it
shall be automatically and unconditionally released and discharged upon (i) any
sale, exchange or transfer, to any Person not an Affiliate of the Company, of
all of the Company’s and each of its Subsidiary’s Capital Stock in, or all or

 

C-18

 

substantially all the
assets of, such of its Subsidiary (which sale, exchange or transfer is not in
contravention of the “Limitation on Asset Sales” covenant and is not otherwise
prohibited hereby) or (ii) the release or discharge of the Guarantee which
resulted in the creation of such Subsidiary Guarantee, except a discharge or
release by or as a result of payment under such Guarantee.

 

6.             Limitation
on Transactions with Shareholders and Affiliates

 

Under the terms of the 7-Year Notes Indenture, the
Company will not, and will not permit any Subsidiary to, directly or
indirectly, conduct any business, enter into, renew or extend any transaction
(including, without limitation, the purchase, sale, lease, exchange or transfer
of property or assets, the rendering of any service, or the making of any
payment, loan, advance or guarantee) with, or for the benefit of, any holder
(or any Affiliate of such holder) of 10% or more of the Capital Stock of the
Company or with any Affiliate of the Company or of any Subsidiary (together, “Related
Persons” and each, a “Related Person”), unless the terms to the
Company or such Subsidiary (i) are at least as favorable to the Company or
such Subsidiary as those that could be obtained at the time of such transaction
in arm’s length dealings with a Person who is not a Related Person, and (ii) in
the case of any transaction (or series of transactions) with a Related Person
involving aggregate payments made on or after the Issue Date in excess of
U.S.$10 million in any fiscal year, shall be approved by a majority of the
disinterested members of the Board of Directors of the Company, or if no such
disinterested directors exist with respect to such transaction (or series of
transactions), shall be confirmed by an opinion of an Independent Financial
Advisor to be fair, from a financial point of view, to the Company or such
Subsidiary.

 

The foregoing limitation does not limit, and shall not
apply to (i) any transaction between the Company and any of its
Subsidiaries or between Subsidiaries, (ii) payment of reasonable and
customary compensation and fees to directors of the Company and the
Subsidiaries who are not employees of the Company or any Subsidiary, or (iii) the
grant of stock options or similar rights to acquire Capital Stock (other than
Disqualified Stock) to employees and directors of the Company pursuant to plans
approved by the Board of Directors provided that, in the aggregate, the shares
of Capital Stock underlying such options or similar rights issued since the
Issue Date (exclusive of any shares of Capital Stock or similar rights required
to be issued by law) shall not exceed 2.5% of the outstanding Common Stock of
the Company on a fully diluted basis at the date of determination.

 

7.             Limitation
on Liens

 

Under the terms of the 7-Year Notes Indenture, the
Company will not, and will not permit any Subsidiary of the Company to create,
incur, assume or suffer to exist any Liens of any kind (other than Permitted
Liens) against or upon any of its property or assets (including any shares of
Capital Stock), now owned or hereafter acquired, or any proceeds therefrom
securing any Indebtedness unless provision is made directly to secure the 7-Year
Notes equally and ratably by a Lien on such property, assets or proceeds with
(or, if the obligation or liability to be secured by such Lien is Subordinated
Indebtedness, prior to) the obligation or liability secured by such Lien.

 

C-19

 

8.             Limitations
on Sale and Leaseback Transactions

 

Under the terms of the 7-Year Notes Indenture, the
Company will not, and will not permit any of its Subsidiaries to, directly or
indirectly, enter into, assume, guarantee or otherwise become liable with
respect to any Sale and Leaseback Transaction, unless:  (i) the net proceeds from such
transaction are at least equal to the Fair Market Value of the property being
transferred and (ii) shall comply with the “Limitation on Asset Sales”
covenant.

 

For purposes of the preceding paragraph, “Sale and
Leaseback Transaction” means, with respect to any Person, any direct or
indirect arrangement (excluding, however, any such arrangement between such
Person and a Wholly-Owned Subsidiary of such Person or between one or more
Wholly-Owned Subsidiaries of such Person) pursuant to which property is sold or
transferred by such Person or a Subsidiary of such Person and is thereafter
leased back from the purchaser or transferee thereof by such Person or one of their
Subsidiaries.

 

9.             Limitation
on Asset Sales

 

Under the terms of the 7-Year Notes Indenture, the
Company will not, and will not permit any of its Subsidiaries to make any Asset
Sale that would result in a Material Adverse Effect occurring and, in the case
of Asset Sales involving consideration of U.S.$10
million or more, unless an Independent Financial Advisor shall have delivered a
valuation of the property or asset being sold to the Board of Directors and at
a price consistent with such valuation.

 

10.           Reports
to Holders

 

Under the terms of the 7-Year Notes Indenture, the
Company covenants to deliver to the Trustee:

 

(a)           (i) annual
consolidated financial statements with a report from a major internationally
recognized independent public accountant with respect to such year within 180
days after the end of the fiscal year and (ii) quarterly consolidated
financial statements within 60 days after the end of each of the first three
fiscal quarters;

 

(b)           such additional information as the Company has filed with
any regulatory authority with jurisdiction over the Company within ten business
days of the filing thereof;

 

(c)           written
notice of the occurrence of any Default or Event of Default within ten Business
Days of the Company becoming aware of any such Default or Event of Default,
which notice shall be signed by the CEO, CFO or the chief accounting officer of
the Company; and

 

(d)           written
certification, on or before a date not more than 90 days after the end of each
fiscal year, that a review has been conducted of the activities of the Company
and its Subsidiaries, and of the Company’s and its Subsidiaries’ performance
under the 7-Year Notes Indenture, and that the Company has, to the best of
their knowledge, fulfilled all obligations under the 7-Year Notes Indenture,
or, if there has been a default in the fulfillment of any such obligation,
specifying each such default and the nature and status thereof.

 

C-20

 

Delivery of such reports, information and documents to
the Trustee is for informational purposes only and the Trustee’s receipt of
such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Company’s compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers’ Certificates).

 

11.           Consolidation,
Merger and Sale of Assets

 

Under the terms of the 7-Year Notes Indenture, the
Company shall not consolidate with, merge with or into, or sell, convey,
transfer, lease or otherwise dispose of all or substantially all of its
property and assets (as an entirety or substantially an entirety in one
transaction or a series of related transactions) to, any Person (other than a
consolidation or merger with or into a Wholly-Owned Subsidiary which, at the
time of such consolidation or merger, is a Significant Subsidiary with a
positive net worth; provided
that, in connection with any such merger or consolidation, no consideration
(other than Common Stock in the surviving Person or the Company) shall be
issued or distributed to the stockholders of the Company) or permit any Person
to merge with or into the Company unless: 
(i) the Company shall be the continuing Person, or the Person (if
other than the Company) formed by such consolidation or into which the Company
is merged or that acquired or leased such property and assets of the Company
shall expressly assume, by a supplemental indenture, executed and delivered to
a Responsible Officer of the Trustee, all of the obligations of the Company
under the 7-Year Notes Indenture; (ii) immediately after giving effect to
such transaction, no Default or Event of Default shall have occurred and be
continuing; (iii) (A) the transaction will involve a Person
principally engaged in the Company’s line of business or in a business or
activities ancillary to the Company’s line of business, or reasonably related
therewith (including, but not limited to programming, MMDS, broadband, pay
television and the provision of access service to, content for or ancillary
services such as web-hosting, network security and monitoring, digital
certificates or equipment installation or maintenance, for the Internet, but
excluding non-pay television services, AM or FM radio broadcasting, telephone
or cellular communications and publication of newspapers), (B) immediately
after giving effect to such transaction on a pro forma basis, the Company, or
any surviving Person will have Consolidated Net Worth equal to or greater than
the Consolidated Net Worth of the Company immediately preceding the transaction
(provided that this requirement will not apply where such transaction involves
another Person engaged in substantially the Company’s line of business in
Argentina), and (C) (1) the weighted average life of the Company’s
(or the surviving Person’s) consolidated Indebtedness after giving effect to
the transaction would exceed the lesser of (x) five years and (y) the weighted
average life of the Company’s consolidated Indebtedness immediately prior to
the transaction and (2) after giving effect to such transaction the
Company (or the surviving Person) would either be permitted to Incur at least
U.S.$1.00 of additional Indebtedness pursuant to the “Limitation on
Indebtedness” covenant, if such Incurrence was not permitted prior to giving
effect to such transaction or, if such Incurrence was permitted, have a lower
ratio of Total Consolidated Indebtedness to Annualized Pro Forma Consolidated
Operating Cash Flow than that of the Company prior to giving effect to such
transaction; and (iv) the Company delivers to the Trustee an Officers’
Certificate (attaching the arithmetic computations to demonstrate compliance
with clause (iii)) and an opinion of reputable Argentine counsel, in each case
stating that such consolidation, merger or transfer and such supplemental
indenture complies with clause (i)

 

C-21

 

of
this provision and that all conditions precedent provided for herein relating
to such transaction have been complied with.

 

12.           Reserve
Accounts

 

Under
the terms of the 7-Year Notes Indenture, so long as any of the 7-Year Notes are
Outstanding, the Company will establish and maintain with a bank located in New
York two U.S. dollar-denominated reserve accounts (the “Reserve Accounts”)
to which the Company will transfer, on a ratable basis (by reference to the amounts
of principal and interest due (including additional amounts) within twelve
months of the date of determination under the 7-Year Notes, in one case, and
the 10-Year Notes, in the other case), on the first Interest Payment Date
following May 15th (the “First Annual Transfer Date”)
and November 15th (the “Second Annual Transfer Date”
and, together with the First Annual Transfer Date, the “Transfer Dates”)
of any given year, any amount of Excess Cash calculated, in the case of the
First Annual Transfer Date, by reference to the Company’s unaudited interim
consolidated financial statements as of and for the three-month period ended March 31st
of the same calendar year, and for the Second Annual Transfer Date, by
reference to the Company’s unaudited interim consolidated financial statements
as of and for the three-month period ended September 30th of
the same calendar year, so that (A) the balance in one of the Reserve
Accounts (the “7-Year Notes Reserve Account”) shall not exceed the sum
of (x) 12 months of interest payments on the 7-Year Notes (assuming an interest
rate of 7% for any 7-Year Notes that are 7-Year Floating Rate Notes) and
Additional Amounts, if any, thereon and (y) any amount of principal of the 7-Year
Notes due within 12 months of such Transfer Date, and (B) the balance in
the other Reserve Account (the “10-Year Notes Reserve Account”) shall
not exceed 12 months of interest payments on the 10-Year Notes and Additional
Amounts, if any, thereon.  Amounts
required to be transferred in accordance herewith will be determined by
reference to the Peso amounts using the Company’s consolidated balance sheets
for the relevant dates and converting such amounts into U.S. Dollars at the
prevailing exchange rate on the Buenos Aires business day immediately preceding
the relevant Transfer Date.  The 7-Year
Notes Reserve Account shall be subject to a first-priority security interest in
favor of the Trustee, as collateral agent for the Holders of 7-Year Notes.  In the event that on any Transfer Date any
restrictions or prohibition of access to the Argentine foreign exchange market
exists, the Company agrees to transfer all amounts required to be transferred
under this section either (i) by purchasing, with Pesos, any series
of “Bonos Externos de la República Argentina” or any other securities or public
or private bonds issued in Argentina and denominated in U.S. Dollars, and
transferring and selling such instruments outside Argentina for U.S. dollars,
or (ii) by means of any other legal procedure existing in Argentina on any
such Transfer Date.  All costs and taxes
payable in connection with the procedures referred to in (i) and (ii) above
shall be borne by the Company.  In the
event that the Company consummates the transactions contemplated in the APE on
the date that is after March 31 or September 30, as applicable, the
amount of Excess Cash required to be transferred on the first Transfer Date
after the issuance of the 7-Year Notes will be reduced by an amount equal to
all cash payments the Company is required to make in connection with or in
contemplation of that closing.

 

13.           Cash
Sweep

 

Under the terms of the 7-Year Notes Indenture, so long
as any principal amount of 7-Year Notes shall remain outstanding, if the amount
of Excess Cash for any Transfer Date

 

C-22

 

(after complying with the
obligation set forth in Clause 12) exceeds U.S.$3,000,000
(or the equivalent in other currencies), the Company will apply 70% of any such
surplus Excess Cash (the determination of such amount to be certified by the
Company’s independent auditors) plus, without duplication, 100% of the
Unapplied Net Asset Sale Proceeds on such Transfer Date to the ratable
pre-payment of any outstanding 7-Year Notes. 
Amounts required to be prepaid in accordance herewith will be determined
by reference to the Peso amounts using the Company’s consolidated balance
sheets for the relevant dates and converting such amounts into U.S. Dollars at
the prevailing exchange rate on the date of the mandatory prepayment).  In the event that on any Transfer Date any
restriction or prohibition of access to the Argentine foreign exchange market exists,
the Company agrees to pay all amounts required to be paid under this section either
(i) by purchasing, with Pesos, any series of “Bonos Externos de la
República Argentina” or any other securities or public or private bonds issued
in Argentina and denominated in U.S. Dollars, and transferring and selling such
instruments outside Argentina for U.S. dollars, or (ii) by means of any
other legal procedure existing in Argentina on any such Transfer Date.  All costs and taxes payable in connection
with the procedures referred to in (i) and (ii) above shall be borne
by the Company.

 

The Company shall effectuate any pre-payment of the 7-Year
Notes described in Section 4.3(a) by providing not more than 30 nor
less than five days’ irrevocable notice to Holders of 7-Year Notes and
redeeming Outstanding 7-Year Notes, on a pro rata basis, at their remaining
principal amount thereof, together with accrued interest to the relevant
Transfer Date.

 

14.           Limitation
on Capital Expenditures

 

Under the terms of the 7-Year Notes Indenture, so long
as any 7-Year Notes shall remain Outstanding, except for Asset Sale Proceed
Reinvestments, the Company shall not make or permit any Subsidiaries to make
any Capital Expenditure at any time, except that the Company and its Subsidiaries
may make such Capital Expenditures if after giving effect to such Capital
Expenditures, the aggregate amount of all Capital Expenditures of the Company
and its Subsidiaries in each of the following periods would not exceed the sum
of:

 

(A) U.S.$15 million for
every six months starting with the six-month period ending June 30, 2005
through the maturity date of the 7-Year Notes;

 

and

 

(B) in each of the
periods, the unused portion of Capital Expenditures permitted under clause (A) above
for the prior period (after giving effect to the application of this clause
(B)).

 

15.           Limitation
on Interest Expense

 

At any time after the issuance of the 7-Year Notes, so
long as any 7-Year Notes remain Outstanding, the Company will not permit the
ratio of Pro Forma Consolidated Operating Cash Flow to Consolidated Interest
Expense in each case for any period of four consecutive fiscal quarters to be
less than (A) 2.0 to 1.0 for any such period ending on or prior to the
[second anniversary of the Issue Date of the 7-Year Notes], (B) 2.25 to
1.0 for any such period ending after the [second anniversary] and on or prior
to the [fifth anniversary] of the Issue Date of the 

 

C-23

 

7-Year Notes, and (C) 2.50
to 1.0 for any such period ending after the [fifth anniversary] of the Issue
Date of the 7-Year Notes; provided
that the Company will not be subject to the limitation set forth in this
covenant in any fiscal quarter but not more than two consecutive fiscal
quarters if a Macroeconomic Disruption Event has occurred during the prior
fiscal quarter.

 

16.           Limitation
on Repurchase of 7-Year Notes and 10-Year Notes

 

Under the terms of the 7-Year Notes Indenture, so long
as any 7-Year Notes shall remain Outstanding, the Company shall not purchase
any 7-Year Notes or 10-Year Notes in the open market or by tender or private
agreement until the first Transfer Date following the issuance of the 7-Year
Notes and thereafter the Company shall not be permitted to purchase any 10-Year
Notes in the open market or by tender or private agreement by using an amount
of Excess Cash during the period between any two Transfer Dates that is greater
than any amount of Excess Cash used by the Company to redeem any Outstanding 7-Year
Notes on the immediately preceding Transfer Date in accordance with the terms
of the 7-Year Notes Indenture.

 

17.           Limitation
on Restricted Payments

 

So long as any 7-Year Notes shall remain outstanding,
the Company shall not redeem, repurchase, retire or otherwise acquire any of
its capital stock, make a dividend or distribution with respect to its capital
stock or other ownership interest in it (or options or warrants in respect
thereto).

 

Events of Default

 

The following events will be each defined as an “Event
of Default” for the 7-Year Notes Indenture:

 

(a)           failure to pay principal of or premium, if any, on any of
the 7-Year Notes when the same shall become due and payable at maturity, upon
acceleration, redemption or otherwise;

 

(b)           failure to
pay interest, or Additional Amounts, if any, (or, with respect to the 7-Year
Floating Rate Notes, Other Additional Amounts, if any) on any of the 7-Year
Notes when the same shall become due and payable, and such failure continues
for a period of 30 days;

 

(c)           failure to
perform or comply with the “Consolidation, Merger and Sale of Assets” covenant,
the “Cash Sweep” covenant, or for a period of 30 consecutive days after
the occurrence of such failure, the “Maximum Total Consolidated Indebtedness”
covenant, the “Limitation on Indebtedness” covenant, or the “Limitation on
Interest Expense” covenant;

 

(d)           failure to
perform or breach of any other covenant or agreement in the 7-Year Notes
Indenture or under the 7-Year Notes (other than those referred to in clauses
(a), (b) and (c) above) and such failure or breach continues for a
period of 30 consecutive days after written notice shall have been given to the
Company by the Trustee or to the Company and the

 

C-24

 

Trustee by the Holders of
at least 25% in aggregate principal amount of the 7-Year Notes then
Outstanding;

 

(e)           the
occurrence with respect to any issue or issues of Indebtedness of the Company
or any Significant Subsidiary having an outstanding principal amount of U.S.$5
million or more (or its equivalent in other currencies) in the aggregate for
all such issues of all such Persons, whether such Indebtedness now exists or
shall hereafter be created, of (I) an event of default that has caused such
Indebtedness to become, or the holders thereof to declare such Indebtedness to
be, due and payable prior to its Stated Maturity and/or (II) the failure to
make a payment of principal and in the case of the 10-Year Notes, interest when
such payment is due and payable;

 

(f)            one or
more final judgments, orders or binding arbitration awards, for the payment of
money in excess of U.S.$5 million (or its equivalent in other currencies),
either individually or in the aggregate for all such final judgments, orders or
binding arbitration awards, shall be rendered against the Company or any
Significant Subsidiary or any of their respective properties and shall not be
paid or discharged, and there shall have been a period of 60 consecutive
days following entry of the final judgment, order or binding arbitration award that
causes the aggregate amount for all such final judgment, orders or binding
arbitration awards outstanding and not paid or discharged against all such
Persons to exceed U.S.$5 million (or its equivalent in other currencies) during
which a stay of enforcement of such final judgments, orders or binding
arbitration awards, by reason of a pending appeal or otherwise, shall not be in
effect;

 

(g)           any
government or governmental authority shall have condemned, nationalized,
seized, or otherwise expropriated all or any substantial portion of the assets
or property of the Company or any Significant Subsidiary or the share capital
of the Company or any Significant Subsidiary, or shall have assumed custody or
control of such assets or property or of the business or operations of the
Company or any Significant Subsidiary or of the share capital of the Company or
any Significant Subsidiary, or shall have taken any action that would prevent
the Company or any Significant Subsidiary or its officers from carrying on its business
or operations or a substantial part thereof for a period of longer than 60
consecutive days and the result of any such action shall materially prejudice
the ability of the Company to perform its obligations under the 7-Year Notes;

 

(h)           the Argentine Government shall declare a general suspension
of payment or a moratorium on the payment of debt of the Company (which does
not expressly exclude the 7-Year Notes);

 

(i)            the
Company or any Significant Subsidiary (I) is declared by a court of competent
jurisdiction to be insolvent or bankrupt or unable to pay its debts, (II)
commences or consents to the commencement of a case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, (III)
makes a general assignment or an arrangement or composition with or for the
benefit of creditors, (IV) admits in writing its inability to pay its debts
generally as they become due, or (V) takes corporate action in furtherance of
any of the foregoing;

 

C-25

 

(j)            an order
or decree is made or an effective resolution passed for relief against the
Company or a Significant Subsidiary under any applicable bankruptcy law, or for
the winding-up or dissolution of the Company or any Significant Subsidiary or
adjudging the Company or any Significant Subsidiary bankrupt or insolvent under
any applicable bankruptcy law and in each case such order or decree remains
unstayed and in effect for a period of 60 consecutive days, or the Company or
any Significant Subsidiary ceases or threatens to cease to carry on all or a
material part of its business or operations, except for the purpose of and
followed by a reconstruction, amalgamation, reorganization (“concurso preventivo” or “concordato”), merger or consolidation in
the case of a Significant Subsidiary, whereby the undertaking and the assets of
such Significant Subsidiary, or all of the undertaking and assets relating to
the Company’s direct or indirect shareholding in such Significant Subsidiary,
as the case may be, are transferred to or otherwise vested in the Company or
any other Significant Subsidiary or Subsidiary which as a result of such
transfer would become a Significant Subsidiary; or

 

(k)           it becomes
unlawful for the Company to perform or comply with any one or more of its
obligations under any of the 7-Year Notes or the 7-Year Notes Indenture, and
such unlawfulness continues for a period of 60 consecutive days after written
notice shall have been given to the Company by the Trustee or to the Company and
the Trustee by the Holders of at least 25% in aggregate principal amount of the
7-Year Notes then outstanding.

 

Acceleration of Maturity;
Rescission and Annulment

 

If an Event of Default (other than an Event of Default
specified in clause (i) or (j) above that occurs with respect to the
Company) occurs and is continuing under the 7-Year Notes Indenture, the Trustee
thereunder or the Holders of at least 25% in aggregate principal amount then
outstanding of the 7-Year Notes, by written notice to the Company (and to the
Trustee if such notice is given by the Holders), may, and the Trustee at the
request of such Holders shall, declare the 7-Year Notes to be immediately due
and payable at 100% of the principal amount thereof, plus accrued and unpaid
interest thereon, if any, to the date of such declaration.  Upon a declaration of acceleration, such
principal, premium if any, and accrued interest shall be immediately due and
payable.  In the event of a declaration
of acceleration because an Event of Default set forth in clause (e) above
has occurred and is continuing, such declaration of acceleration shall be
automatically rescinded and annulled if the event of default triggering such
Event of Default pursuant to clause (e) shall be remedied or cured by the
Company and/or the relevant Subsidiaries or waived by the holders of the
relevant Indebtedness within 30 days after the declaration of acceleration with
respect thereto.  If an Event of Default
specified in clause (i) or (j) above occurs with respect to the Company,
the 7-Year Notes then outstanding shall ipso facto become and be immediately
due and payable at 100% of the outstanding principal amount thereof, plus
premium, if any, thereon and accrued and unpaid interest thereon in each case
without any declaration or other act on the part of the Trustee or any Holder.

 

The Holders of at least a majority in principal amount
of the outstanding 7-Year Notes, by written notice to the Company and to the
Trustee, may rescind and annul a declaration of acceleration and its
consequences if, in addition to certain other covenants, (i) all existing
Events of Default, other than the nonpayment of the principal of and premium,
if any, interest and Additional Amounts, if any, (and, with respect to the 7-Year
Floating Rate Notes, Other

 

C-26

 

Additional Amounts, if
any) on such 7-Year Notes that have become due solely by such declaration of
acceleration, have been cured or waived and (ii) the rescission would not
conflict with any judgment, decree or order of a court of competent
jurisdiction.  The Holders of at least a
majority in aggregate principal amount of the outstanding 7-Year Notes, by
written notice to the Trustee, may waive an existing Default or Event of
Default and the consequences under the 7-Year Notes Indenture, except a Default
in the payment of principal of, premium, if any, on or interest on the 7-Year
Notes or in respect of a covenant or provision of the 7-Year Notes Indenture
that cannot be modified or amended without the consent of the Holder of each
outstanding 7-Year Note affected.

 

The Holders of at least a majority in aggregate
principal amount of the outstanding 7-Year Notes may on behalf of the Holders
of all of the 7-Year Notes, direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee with respect to the 7-Year Notes by the 7-Year
Notes Indenture.  However, the Trustee
under the 7-Year Notes Indenture may refuse to follow any direction that
conflicts with law or the 7-Year Notes Indenture, that may involve the Trustee
in personal liability, or that the Trustee determines in good faith may be
unduly prejudicial to the rights of Holders of 7-Year Notes not joining in the
giving of such direction and may take any other action it deems proper that is
not inconsistent with any such direction received from Holders of 7-Year
Notes.  A Holder may not pursue any
remedy with respect to the 7-Year Notes Indenture or this 7-Year Note
unless:  (i) the Holder gives the
Trustee written notice of a continuing Event of Default; (ii) the Holders
of at least 25% in aggregate principal amount at maturity of outstanding 7-Year
Notes make a written request to the Trustee to pursue the remedy; (iii) such
Holder or Holders offer the Trustee indemnity satisfactory to the Trustee
against any costs, liability or expense; (iv) the Trustee does not comply
with the request within 60 days after receipt of the request and the offer of
indemnity; and (v) during such 60-day period, the Holders of a majority in
aggregate principal amount of the outstanding 7-Year Notes do not give the
Trustee a direction that is inconsistent with the request.  However, such limitations do not apply to the
right of any Holder of a 7-Year Note to receive payment of the principal of,
premium, if any, on or interest on such 7-Year Note or to bring suit for the
enforcement of any such payment, on or after the due date expressed in the 7-Year
Notes, which right shall not be impaired or affected without the consent of
such Holder.

 

Meetings of Holders;
Modification and Waiver

 

(a)           The
Trustee or the Company shall, upon the written request of the Holders of at
least five percent in aggregate principal amount of the 7-Year Notes at the
time Outstanding, or the Company or the Trustee at its discretion, may, call a
meeting of the Holders at any time and from time to time, to make, give or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided by the 7-Year Notes to be made, given or taken by such
Holders.  With respect to all matters not
contemplated in the 7-Year Notes Indenture, meetings of Holders will be held in
Buenos Aires in accordance with the Negotiable Obligations Law; provided, however, that the Company or the Trustee may
determine to hold any such meetings simultaneously in Buenos Aires and in The
City of New York by any means of telecommunication.  Meetings shall be held at such time and at
such place as the Company or the Trustee shall determine in such cities.  If a meeting is being held pursuant to a
request of

 

C-27

 

Holders, the agenda for
the meeting shall be as determined in the request and such meeting shall be convened
within 40 days from the date such request is received by the Trustee or the
Company, as the case may be.  Notice of
any meeting of Holders (which shall include the date, place and time of the
meeting, the agenda therefor and the requirements to attend) shall be published
not less than ten days nor more than 30 days prior to the date fixed for the
meeting in the Boletín Oficial de la República
(the Official Gazette of Argentina) and, while there are Holders domiciled in
Argentina, in a newspaper having major circulation in Argentina and any
publication of such notice shall be for five consecutive Business Days in each
place of publication.

 

(b)           Any Holder
may attend the meeting in person or by proxy. 
Directors, officers, managers, members of the Supervisory Committee and
employees of the Company may not be appointed as proxies.  Holders of 7-Year Notes who intend to attend
a meeting of Holders must notify the Registrar of their intention to do so at
least three days prior to the date of such meeting.  The
Company shall, prior to any vote, deliver to the Trustee a notice signed by the
CFO or the chief accounting officer certifying, to the best of the Company’s
knowledge, as to the Notes held by any Affiliate of the Company.

 

(c)           Except as
specified in “Acceleration of Maturity; Rescission and Annulment,” decisions
shall be made by the affirmative vote of the Holders of at least 51% in
aggregate principal amount of the 7-Year Notes at the time outstanding present
or represented at a meeting of such Holders at which a quorum is present; provided, however, that the affirmative vote of the Holders
of the applicable percentage in aggregate principal amount of the 7-Year Notes
at the time Outstanding specified under “Events of Default” shall be required
to take the actions specified under such heading; provided
further, however, that the unanimous affirmative vote of the Holders
of 7-Year Notes shall be required to adopt a valid decision on:

 

(i)            changing
the Stated Maturity of, or failing to pay, the principal of, premium, if any,
on or any installment of interest on any 7-Year Note, or reducing the principal
amount thereof, premium, if any, thereon or the rate of interest thereon or
changing the requirement to pay Additional Amounts thereon (or, with respect to
the 7-Year Floating Rate Notes, changing the requirement to pay Other
Additional Amounts thereon), or releasing any amounts held in the Reserve
Accounts;

 

(ii)           changing the place of payment where, or the coin or currency
in which, the principal of, premium, if any, on or interest or Additional
Amounts (if any) on any 7-Year Note (or Other Additional Amounts (if any) on
any 7-Year Floating Rate Notes) is payable;

 

(iii)          impairing the right to institute suit for the enforcement of
any such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date);

 

(iv)          reducing the percentage in principal amount of the
outstanding 7-Year Notes, the consent of the Holders of which is required for
the adoption of a resolution or the quorum required to constitute a meeting of
Holders at which a resolution is

 

C-28

 

adopted or the percentage in principal amount of
outstanding Step Up Notes the Holders of which are entitled to request the
calling of a meeting of Holders; or

 

(v)           modifying the percentage in principal amount of the 7-Year
Notes, the consent of Holders which is required to waive a past Default or
Event of Default.

 

Except as provided above,
any modifications, amendments or waivers to the terms and conditions of the 7-Year
Notes will be conclusive and binding on all Holders of 7-Year Notes, whether or
not they were present at any meeting, and whether or not notation of such
modifications, amendments or waivers is made upon the 7-Year Notes, provided that any such modification, amendment or waiver was
duly passed at a meeting convened and held in accordance with the provisions of
the Negotiable Obligations Law.

 

(d)           Meetings
of the Holders of 7-Year Notes shall be either “first call” meetings (“primera convocatoria”) or “second call” meetings (“segunda convocatoria”). 
All meetings of the Holders of 7-Year Notes shall be deemed to be a
first call meeting; provided, however, that any reconvened meeting adjourned for lack of a
requisite quorum shall be deemed a second call meeting.  The quorum applicable at a meeting of the
Holders of 7-Year Notes shall be as follows:

 

(i)            the
quorum for meetings called to adopt a resolution by which Holders of 7-Year
Notes shall make any request, demand or direction or give any notice (other
than a resolution specified in paragraph (ii) below) shall, (A) in
the case of first call meetings, be such Persons holding or representing a
majority in aggregate principal amount of the 7-Year Notes at the time
outstanding and (B) in the case of second call meetings, be such Persons
present at such meeting holding or representing 7-Year Notes at the time
outstanding; and

 

(ii)           the quorum
for meetings called to adopt a resolution by which Holders of 7-Year Notes
consent to any waiver under the 7-Year Notes or the 7-Year Notes Indenture,
agree to any amendment to the 7-Year Notes Indenture or the terms and
conditions of the 7-Year Notes, or specify the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred upon the Trustee with respect to the 7-Year Notes
by the 7-Year Notes Indenture shall (A) in the case of first call
meetings, be Persons holding or representing at least 60% in aggregate
principal amount of the 7-Year Notes at the time outstanding and (B) in
the case of second call meetings, be Persons holding or representing at least
30% in aggregate principal amount of the 7-Year Notes at the time outstanding.

 

(e)           Without
the vote of any Holders of 7-Year Notes, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental to the 7-Year Notes Indenture in form
satisfactory to the Trustee, for any of the following purposes:

 

(i)            to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants of the Company in the
7-Year Notes Indenture and in the 7-Year Notes; or

 

C-29

 

(ii)           to add to the covenants of the Company for the benefit of
the Holders or to surrender any right or power herein conferred upon the
Company; or

 

(iii)          to secure the 7-Year Notes; or

 

(iv)          to comply with any requirements of the Commission in order
to effect and maintain the qualification of the 7-Year Notes Indenture under
the Trust Indenture Act; or

 

(v)           to evidence and provide for acceptance of appointment
hereunder by a successor Trustee pursuant to the provisions of the 7-Year Notes
Indenture; or

 

(vi)          to evidence
any further issue of notes having terms and conditions the same as those of the
7-Year Notes (or the same except for the payment of interest accruing prior to
the issue date of such additional notes or except for the first payment of
interest following the issue date of such additional notes), which additional
notes may be consolidated and form a single series with the 7-Year Notes; or

 

(vii)         to
cure any ambiguity, to correct or supplement any provision herein which may be
inconsistent with any other provision herein, or to make any other provisions
with respect to matters or questions arising under the 7-Year Notes Indenture
which shall not be inconsistent with the provisions of the 7-Year Notes
Indenture, provided that such action pursuant to
this clause (vii) shall not adversely affect the interests of the Holders
in any material respect; or

 

(viii)        to increase the aggregate principal amount of Public Debt
Securities at any time outstanding under the 7-Year Notes Indenture.

 

No reference herein to the 7-Year Notes Indenture and
no provision of this 7-Year Floating Rate Note or of the 7-Year Notes Indenture
shall alter or impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of and premium (if any), interest,
Additional Amounts (if any) and Other Additional Amounts (if any) on this 7-Year
Floating Rate Note at the times, place and rate, and in the coin or currency,
herein prescribed.

 

Notices

 

Notices to Holders of Registered 7-Year Floating Rate
Notes will be mailed to them at their respective addresses as they appear in
the register maintained by the Registrar and shall be published as may be
required by applicable law or, to the extent there are Holders domiciled in Argentina
(i) in a leading newspaper having general circulation in Argentina, (ii) for
so long as any 7-Year Floating Rate Notes is listed on the Buenos Aires Stock
Exchange, in the Bulletin of the Buenos Aires Stock Exchange, and (iii) in
the Official Gazette of Argentina.  Any notice so mailed shall be deemed to have
been given on the date of such mailing. 
In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders of Registered 7-Year Floating Rate Notes.  Any notice mailed to a Holder in the manner
herein prescribed shall be deemed to have been received by (i) a Holder

 

C-30

 

domiciled
in Argentina when actually received and (ii) a Holder domiciled outside of
Argentina when so mailed.

 

Discharge and Defeasance

 

Under the terms of the 7-Year Notes Indenture, the
Company may at its option by a resolution of the Board of Directors, at any
time, upon the satisfaction of certain conditions described below, elect to be
discharged from its obligations with respect to outstanding 7-Year Floating
Rate Notes (“defeasance”).  In
general, upon a defeasance, the Company shall be deemed to have paid and
discharged the entire indebtedness represented by the outstanding 7-Year
Floating Rate Notes and to have satisfied all of its obligations under such 7-Year
Floating Rate Notes except for (i) the rights of Holders of such 7-Year
Floating Rate Notes and any related coupons to receive, solely from the trust
fund established for such purposes as described below, payments in respect of
the principal of, premium, if any, on and interest on such 7-Year Floating Rate
Notes when such payments are due, (ii) certain provisions relating to
ownership, registration and transfer of the 7-Year Floating Rate Notes, (iii) certain
provisions relating to the mutilation, destruction, loss or theft of the 7-Year
Floating Rate Notes, (iv) the Company’s obligations to effect a registered
exchange offer or a private exchange offer, (v) the covenant relating to
the maintenance of an office or agency in Buenos Aires and The City of New York
and (vi) certain provisions relating to the rights, powers, trusts duties
and immunities of the Trustee.

 

In addition, the Company may at its option by Board
Resolution, at any time, upon the satisfaction of certain conditions described
below, elect to be released from certain covenants described in the 7-Year
Notes Indenture (“covenant defeasance”). 
Following such covenant defeasance, the occurrence of a breach or
violation of any such covenant will not be deemed to be an Event of Default
under the 7-Year Notes Indenture.

 

In order to cause a defeasance or covenant defeasance,
the Company will be required to satisfy, among other conditions, the following
conditions:

 

(a)           the
Company shall have irrevocably deposited or caused to be deposited with the
Trustee as funds in trust, money or U.S. Government Obligations, or a
combination thereof, sufficient, in the opinion of an internationally
recognized firm of independent public accountants, to pay and discharge the
principal of, premium, if any, on and each installment of interest on the
outstanding 7-Year Floating Rate Notes on the Stated Maturity or on the
applicable Redemption Date, as the case may be, of such principal, premium, if
any, or installment of interest in accordance with the terms of this Floating
Rate Note, and such amounts will be applied for such purpose, and the Company
must specify whether the 7-Year Floating Rate Notes are being defeased to
maturity or to a particular Redemption Date;

 

(b)           in the
case of an election fully to defease the 7-Year Floating Rate Notes, the
Company shall have delivered to the Trustee an Opinion of Counsel stating that
(x) the Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (y) since the date of the 7-Year Notes Indenture
there has been a change in the applicable federal income tax law or the
interpretation thereof, in either case to the effect that,

 

C-31

 

and based thereon such
opinion shall confirm that, the Holders of the outstanding 7-Year Floating Rate
Notes will not recognize income, gain or loss for federal income tax purposes
as a result of such deposit, defeasance and discharge and will be subject to
federal income tax on the same amount, in the same manner and at the same time
as would have been the case if such deposit, defeasance and discharge had not
occurred;

 

(c)           in the
case of a covenant defeasance, the Company shall have delivered to the Trustee
an Opinion of Counsel to the effect that the Holders of the outstanding 7-Year
Floating Rate Notes will not recognize income, gain or loss for federal income
tax purposes as a result of such deposit and covenant defeasance and will be
subject to federal income tax on the same amount, in the same manner and at the
same time as would have been the case if such deposit and covenant defeasance
had not occurred;

 

(d)           the
Company shall have delivered to the Trustee an Officers’ Certificate to the
effect that the 7-Year Floating Rate Notes, if then listed on any securities
exchange, will not be delisted as a result of such deposit;

 

(e)           no Event
of Default or event which with notice or lapse of time or both would become an
Event of Default shall have occurred and be continuing on the date of such
deposit (other than a Default or Event of Default resulting from the borrowing
of funds to be applied to such deposit) after giving effect thereto or, with
respect to a Default or Event of Default specified in clauses (i) or (j)
of the first paragraph of “Events of Default”, at any time during the period
ending on the 121st day after the date of such deposit (it being understood
that this condition shall not be deemed satisfied until the expiration of such
period);

 

(f)            such
defeasance or covenant defeasance shall not cause the Trustee to have a
conflicting interest as defined in the 7-Year Notes Indenture and for the
purposes of the Trust Indenture Act with respect to any securities of the
Company;

 

(g)           such
defeasance or covenant defeasance shall not result in a breach or violation of,
or constitute a default under, any other material agreement or instrument to
which the Company is a party or by which it is bound;

 

(h)           the
Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent relating to either
defeasance or covenant defeasance (as the case may be) have been complied with;
and

 

(i)            such defeasance or covenant defeasance shall not result in
the trust arising from such deposit constituting an investment company as
defined in the U.S. Investment Company Act of 1940, as amended, or such trust
shall be qualified under such act or exempt from regulation thereunder.

 

Trustee Dealings with the
Company

 

Subject to certain limitations imposed by the Trust
Indenture Act, the Trustee under the 7-Year Notes Indenture, in its individual
or any other capacity, may become the owner or pledgee of 7-Year Floating Rate
Notes and may otherwise deal with the Company and receive,

 

C-32

 

collect,
hold and retain collections from the Company or its Affiliates with the same
rights it would have if it were not Trustee. 
Any Paying Agent, Registrar or Co-Registrar may do the same with like
rights.

 

No Personal Liability of
Incorporators, Shareholders, Officers, Board of Directors Members or Employees

 

The 7-Year Notes Indenture provides that no recourse
for the payment of the principal of, premium, if any, on or interest on any of
the 7-Year Floating Rate Notes or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in the 7-Year Notes Indenture or in this 7-Year
Floating Rate Note or because of the creation of any Indebtedness represented
thereby, shall be had against any incorporator, shareholder, officer, director,
employee, Board of Directors member or controlling person of the Company or of
any successor Person thereof.  Each
Holder, by accepting the 7-Year Floating Rate Notes, waives and releases all
such liability.  The waiver and release
are part of the consideration for issuance of the 7-Year Floating Rate
Notes.  Such waiver may not be effective
to waive liabilities under Argentine or the U.S. federal securities laws and it
is the view of the Commission that such a waiver is against public policy.

 

Additional Waiver
and Release

 

As
part of the consideration for issuance of the 7-Year Floating Rate Notes, each
Holder of 7-Year Floating Rate Notes, by accepting the 7-Year Floating Rate
Notes, waives any rights that it may have pursuant to Argentine law to claw
back (acción revocatoria) or
bring action against any director of the Company (acción de responsabilidad), and releases such director from
any liability, arising out of payments made by the Company as a result of the
consummation of the cash option under the Company’s APE.

 

Governing Law and
Enforceability

 

The Negotiable Obligations Law governs the
requirements for the 7-Year Floating Rate Notes to qualify as Obligaciones Negociables thereunder, while such law, together with the Argentine Business Companies Law No. 19,550,
as amended, and other applicable Argentine laws, govern the capacity and
corporate authority of the Company to execute and deliver the 7-Year Floating
Rate Notes.  All other matters in respect
of the 7-Year Floating Rate Notes and the 7-Year Notes Indenture, including but
not limited to the statute of limitations applicable thereto, are governed by
and shall be construed in accordance with the laws of the State of New York,
United States.

 

The Company consents to the non-exclusive jurisdiction
of any court of the State of New York or any United States federal court
sitting in the Borough of Manhattan, The City of New York, New York, United
States, and any appellate court from any thereof, and waives any immunity from
the jurisdiction of such courts over any suit, action or proceeding that may be
brought in connection with the 7-Year Notes Indenture or this Floating Rate
Note.  The Company irrevocably waives, to
the fullest extent permitted by law, any objection to any suit, action, or proceeding that may be brought in connection with the 7-Year
Notes Indenture or this

 

C-33

 

7-Year Floating Rate Note
in such courts whether on the grounds of venue, residence or domicile or on the
ground that any such suit, action or proceeding has been brought in an
inconvenient forum.  The Company agrees
that final judgment in any such suit, action or proceeding brought in such
court shall be conclusive and binding upon the Company and may be enforced in
any court to the jurisdiction of which the Company is subject by a suit upon
such judgment; provided that service of process
is effected upon the Company in the manner provided by the 7-Year Notes
Indenture.  Notwithstanding the foregoing,
any suit, action or proceeding brought in connection with the 7-Year Notes
Indenture or this 7-Year Floating Rate Note may be instituted in any competent
court in Argentina.

 

The Company agrees that service of all writs, process
and summonses in any suit, action or proceeding brought in connection with the 7-Year
Notes Indenture or this 7-Year Floating Rate Note against the Company in any
court of the State of New York or any United States federal court sitting in
the Borough of Manhattan, The City of New York, New York, United States, may be
made upon CT Corporation System at 111 Eighth Avenue, New York, New York 10011,
whom the Company irrevocably appoints as its authorized agent for service of
process.  The Company represents and
warrants that CT Corporation System has agreed to act as the Company’s agent
for service of process.  The Company
agrees that such appointment shall be irrevocable so
long as any of the 7-Year Notes remain Outstanding or until the irrevocable
appointment by the Company of a successor in The City of New York as its
authorized agent for such purpose and the acceptance of such appointment by
such successor.  The Company further
agrees to take any and all action, including the filing of any and all
documents and instruments, that may be necessary to
continue such appointment in full force and effect as aforesaid.  If CT Corporation System shall cease to act
as the Company’s agent for service of process, the Company shall appoint
without delay another such agent and provide prompt written notice to the
Trustee of such appointment.  With
respect to any such action in any court of the State of New York or any United
States federal court in the Borough of Manhattan, The City of New York, New
York, United States, service of process upon CT Corporation System, as the
authorized agent of the Company for service of process, and written notice of
such service to the Company, shall be deemed, in every respect, effective
service of process upon the Company.

 

Currency Indemnity

 

The U.S. Dollar is the sole currency of account and
payment for all sums payable by the Company under or in connection with this
Floating Rate Note.  Any amount received
or recovered in currency other than U.S. Dollars (whether as a result of, or of
the enforcement of, a judgment or order of a court of any jurisdiction, in the
winding up or dissolution of the Company or otherwise) by any Holder of 7-Year
Floating Rate Notes in respect of any sum expressed to be due to it from the
Company shall only constitute a discharge of the Company to the extent of the
U.S. Dollar amount which the recipient is able to purchase with the amount so
received or recovered in that other currency on the date of that receipt or
recovery (or, if it is not practicable to make that purchase on that date, on
the first date on which it is practicable to do so).  If that U.S. Dollar amount is less than the
U.S. Dollar amount expressed to be due to the recipient under any Floating Rate
Note, the Company shall indemnify such recipient against any loss sustained by
it as a result.  In any event, the
Company shall indemnify the recipient against the cost of making any such
purchase.  For the purposes of this
paragraph, it will be sufficient for the Holder to certify (indicating the
sources of information used) that it would have suffered a loss

 

C-34

 

had
an actual purchase of U.S. Dollars been made with the amount so received in
that other currency on the date of receipt or recovery (or, if a purchase of
U.S. Dollars on such date had not been practicable, or the first date on which
it would have been practicable).  These
indemnities constitute a separate and independent obligation from the Company’s
other obligations, shall give rise to a separate and independent cause of
action, shall apply irrespective of any waiver granted by any Holder of 7-Year
Floating Rate Notes and shall continue in full force and effect despite any
other judgment, order, claim or proof for a liquidated amount in respect of any
sum due under any 7-Year Floating Rate Note or any other judgment or order.

 

Defined Terms

 

“7-Year Fixed Rate Notes” means the series of
Debt Securities known as the Company’s 7-Year Fixed Rate Notes due [2012]
issued (or to be issued) pursuant to the 7-Year Notes Indenture.

 

“7-Year Notes” means both the series of Debt
Securities known as the Company’s 7-Year Fixed Rate Notes due [2012] and the
series of Debt Securities known as the Company’s 7-Year Floating Rate Notes,
all of which were (or to be) issued pursuant to the 7-Year Notes Indenture.

 

“10-Year Notes
Indenture” means the Indenture, as supplemented and amended by the First
Supplemental Indenture, dated as of [   
], [2005], among the
Company, Law Debenture Trust Company of New York, as the Trustee, Co-Registrar and Principal Paying Agent
thereunder, and HSBC Bank Argentina S.A., as Registrar and Paying Agent
thereunder.

 

“10-Year Notes”
means the series of Debt Securities known as the Company’s Step-Up 10-Year
Notes issued (or to be issued) pursuant to the 10-Year Notes Indenture.

 

“Acquired Indebtedness” means Indebtedness of a
Person existing at the time such Person became or was designated a Subsidiary
of the Company and not Incurred in connection with, or in contemplation of,
such Person becoming a Subsidiary of the Company.

 

“Affiliate” means, as applied to any Person,
any other Person directly or indirectly controlling, controlled by, or under
direct or indirect common control with, such Person.

 

“Annualized Pro Forma Consolidated Operating Cash
Flow” means Consolidated Operating Cash Flow for the latest fiscal quarter
for which consolidated financial statements of the Company are available
multiplied by four.  For purposes of
calculating “Consolidated Operating Cash Flow” for any fiscal quarter
for purposes of this definition, (i) any Subsidiary of the Company that is
a Subsidiary on the Transaction Date shall be deemed to have been a Subsidiary
at all times during such fiscal quarter and (ii) any Subsidiary of the
Company that is not a Subsidiary on the Transaction Date shall be deemed not to
have been a Subsidiary at any time during such fiscal quarter.  In addition to and without limitation of the
foregoing, for purposes of this definition, “Consolidated Operating Cash
Flow” shall be calculated after giving effect on a pro forma basis for the
applicable fiscal quarter to, without duplication, any Asset Sale or Asset
Acquisition (including, without limitation, any Asset Acquisition giving rise
to the need to make such calculation as a result of the Company or one of its
Subsidiaries (including

 

C-35

 

any Person who becomes a
Subsidiary as a result of the Asset Acquisition) Incurring Acquired
Indebtedness) occurring during the period commencing on the first day of such
fiscal quarter to and including the Transaction Date (the “Reference Period”),
as if such Asset Sale or Asset Acquisition occurred on the first day of the
Reference Period.

 

“APE” means an acuerdo preventivo
extrajudicial, or Argentine
pre-packaged reorganization plan.

 

“Applicable Margin” means
[    ]% per annum.

 

“Argentina” means the Republic of Argentina.

 

“Argentine Government” means the government of
Argentina.

 

“Asset Acquisition” means (i) an
Investment or capital contribution (by means of transfers of cash or other
property to others or payments for property or services for the account or use
of others, or otherwise) by the Company or any of its Subsidiaries in any other
Person, or any acquisition or purchase of Capital Stock of another Person by
the Company or any of its Subsidiaries, in either case pursuant to which such
Person shall become a Subsidiary of the Company or shall be merged with or into
or consolidated with the Company or any Subsidiary of the Company or (ii) an
acquisition by the Company or any of its Subsidiaries of the property and
assets of any Person other than the Company or any of its Subsidiaries which
constitute substantially all of a division, operating unit or line of business
of such Person or which is otherwise outside the ordinary course of business.

 

“Asset Sale” means any direct or indirect sale,
transfer, conveyance or lease (which has the effect of a disposition and is not
for security purposes) or other disposition (including by way of sale-leaseback
transactions) in one transaction or a series of related transactions by the
Company or any Subsidiary of the Company to any Person other than the Company
or any Subsidiary of the Company of (i) all or any of the Capital Stock of
any Subsidiary of the Company (other than directors’ qualifying shares or
shares owned by a Person, to the extent mandated by applicable law), (ii) any
material license or other authorization of the Company or any Subsidiary of the
Company pertaining to a Cable/Telecommunications Business, (iii) all or
substantially all of the property and assets of an operating unit or business
of the Company or any Subsidiary of the Company or (iv) any other property
and assets of the Company or any Subsidiary of the Company and, in each case,
that is not governed by the “Consolidation, Merger and Sale of Assets” covenant
hereof; provided, however that the term “Asset
Sale” shall in no case include any sale, transfer, conveyance, lease or
other disposition in one transaction or a series of related transactions (i) of
property or equipment that has become worn out, obsolete or damaged or
otherwise unsuitable for use in connection with the business of the Company or
any Subsidiary of the Company, as the case may be, (ii) involving assets
with a Fair Market Value not in excess of U.S.$500,000, (iii) of inventory
in the ordinary course of business, or (iv) involving the sale or other
disposition of cash or Cash Equivalents.

 

“Asset Sale Proceeds
Reinvestment” means any Capital Expenditure made with the proceeds of any
Asset Sale within 180 days of such Asset Sale.

 

C-36

 

“Average Life” means, at any date of
determination with respect to any Indebtedness, the quotient obtained by
dividing (i) the sum of the products of (a) the number of years from
such date of determination to the dates of each successive scheduled principal
payment, redemption or similar payment with respect to such Indebtedness and (b) the
amount of such principal payment by (ii) the sum of all such principal
payments.

 

“Board of Directors” means the board of
directors of the Company.

 

“Board Resolution” means a copy of a resolution
certified by a director of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

 

“Business Day” means any day (other than a
Saturday or Sunday) on which DTC, Euroclear or Clearstream, Luxembourg and
banks in The City of New York and Buenos Aires are open for business.

 

“Cable/Telecommunications Business” means any
business operating a cable and/or telecommunications services and/or
communications services or programming business located in South America,
including, without limitation, any business conducted by the Company on the
Issue Date.

 

“Calculation Agent” means [ ], until a
successor Calculation Agent shall have become designated pursuant to the
applicable provisions of the 7-Year Notes Indenture, and, thereafter, “Calculation
Agent” shall mean such successor Calculation Agent.

 

“Capital Expenditure” means with respect to any
Person for any period the sum of all Investments and, without duplication,
expenditures made directly or indirectly for equipment, fixed assets, real
property or improvement thereto or substitutions thereof that
have been or should be reflected as additions to property, plant or
equipment on a consolidated balance sheet in
accordance with GAAP.

 

“Capital Stock” means, with respect to any
Person, any and all shares, interests, participations, rights in or other
equivalents (however designated, whether voting or non-voting) in equity of
such Person, whether outstanding at the Issue Date or issued thereafter,
including, without limitation, all Common Stock and Disqualified Stock, and any
and all rights, warrants or options exchangeable for or convertible into any
thereof.

 

“Capitalized Lease” means, as applied to any
Person, any lease or license of, or other agreement conveying the right to use,
any property (whether real, personal or mixed, movable or immovable) of which
the present value of the obligations of such Person to pay rent or other
amounts is required, in conformity with GAAP, to be classified and accounted
for as a finance lease obligation; and “Capitalized Lease Obligation” is
defined to mean the capitalized present value of the obligations to pay rent or
other amounts under such lease or other agreement, determined in accordance
with GAAP.

 

“Cash Equivalents” means (i) any evidence
of Indebtedness with a maturity of 365 days or less issued or directly and
fully guaranteed or insured by Argentina or the United States or any agency or
instrumentality thereof (provided that
the full faith and credit of

 

C-37

 

Argentina or the United
States, as the case may be, is pledged in support thereof or such Indebtedness
constitutes a general obligation of such country); (ii) deposits,
certificates of deposit or acceptances with a maturity of 180 days or less of,
or Indebtedness with a maturity of 365 days or less directly and fully secured
by an irrevocable standby letter of credit issued or confirmed by, (x) any
financial institution that is a member of the Federal Reserve System, and has
combined capital and surplus and undivided profits (or any similar capital
concept) of not less than U.S.$500 million or (y) Credit Suisse First Boston
Corporation, Fleet Bank, Banco Francés - BBVA, Banco Río de la Plata S.A, Banco
de Galicia y Buenos Aires S.A., Citibank, N.A. and any of the five largest
banks (based on assets as of the last December 31) organized under the
laws of Argentina, provided that
such bank is not under intervention, receivership or any similar arrangement at
the time of such deposit or the acquisition of such certificate of deposit or
acceptance; (iii) commercial paper with a maturity of 180 days or less
issued by a corporation (other than an Affiliate of the Company) organized
under the laws of Argentina or any part thereof or the United States or any
state thereof or the District of Columbia and rated at least “A-1” by Standard &
Poor’s Corporation or “P-1” by Moody’s Investors Service; (iv) repurchase
agreements and reverse repurchase agreements relating to marketable direct
obligations issued or unconditionally guaranteed by the government of Argentina
or the United States government (in the case of any Argentine or United States
government obligations), in each case maturing within one year from the date of
acquisition and (v) investments in money market funds all of the assets of
which consist of securities of the type described in the foregoing clauses (i) through
(iii).

 

“Clearstream, Luxembourg” means Clearstream
Banking, société anonyme (formerly known as Cedelbank), and its successors.

 

“CNV” means the Argentine Comisión Nacional de
Valores.

 

“Co-Registrar” means Law Debenture Trust
Company of New York, until a successor Co-Registrar shall have become such
pursuant to the applicable provisions of the 7-Year Notes Indenture, and,
thereafter, “Co-Registrar” shall mean such successor Co-Registrar.

 

“Commission” means the U.S. Securities and
Exchange Commission, as from time to time constituted, created under the
Exchange Act, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.

 

“Common Stock” means with respect to any
Person, any and all shares, interests or other participations in, and other
equivalents (however designated and whether voting or non-voting) of such
Person’s common stock or ordinary shares, whether or not outstanding at the
Issue Date or issued thereafter, and includes, without limitation, all series
and classes of such common stock or ordinary shares.

 

“Company” means the Person named as the “Company”
in the first paragraph of this instrument until a successor Person shall have
become such pursuant to the applicable provisions of the 7-Year Notes Indenture
and thereafter “Company” shall mean such successor Person.

 

C-38

 

“Company Request” or “Company Order”
means a written request or order signed in the name of the Company by any of
its directors or alternate directors or its chief financial officer and a
director or alternate director and delivered to the Trustee.

 

“Consolidated Income Tax Expense” means, for
any period, the provision for local, foreign and all other income taxes of the
Company and its Subsidiaries for such period as determined in accordance with
GAAP.

 

“Consolidated Interest Expense” means, for any
period, the aggregate amount of interest expense in respect of Indebtedness
(including, without limitation, amortization of original issue discount on any
indebtedness and the interest portion of any deferred payment obligation, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers’ acceptance financing and the net costs associated with
Interest Rate Protection Obligations, but excluding, for the avoidance of
doubt, any taxes or other governmental charges) and all but the principal
component of rent or other amounts in respect of Capitalized Lease Obligations
paid, accrued or scheduled to be paid or to be accrued by the Company and its
Subsidiaries during such period, but excluding, any premiums, fees and expenses
(and any amortization thereof) payable in connection with the offering of any 7-Year
Notes or other Indebtedness, all as determined on a consolidated basis in
conformity with GAAP.

 

“Consolidated Net Income” means, for any
period, the consolidated net income (or loss) of the Company and its
Subsidiaries for such period determined in accordance with GAAP, adjusted, to
the extent included in calculating such consolidated net income, by excluding,
without duplication, (i) all extraordinary gains or losses of such Person
for such period, (ii) income of the Company and its Subsidiaries derived
from or in respect of all Investments in Persons other than any of its
Subsidiaries, (iii) the portion of net income (or loss) of such Person
allocable to minority interests in unconsolidated Persons for such period,
except to the extent actually received by the Company or any of its
Subsidiaries, (iv) net income (or loss) of any other Person combined with
such Person on a “pooling of interests” basis attributable to any period prior
to the date of combination, (v) any gain or loss, net of taxes, realized
by such Person upon the termination of any employee pension benefit plan during
such period, (vi) gains (but not losses) in respect of any Asset Sales
during such period and (vii) the net income of any Subsidiary of the
Company for such period to the extent that the declaration of dividends or
similar distributions by such Subsidiary of that income is not at the time permitted,
directly or indirectly, by operation of the terms of its constitutional
documents or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulations applicable to that Subsidiary or its stockholders.

 

“Consolidated Net Worth” means, with respect to
any Person as of any date, the total of the amounts shown on the balance sheet
of such Person and its consolidated subsidiaries, determined on a consolidated
basis in accordance with GAAP, as of the end of the most recent fiscal quarter
for which consolidated financial statements for such Person and its
consolidated subsidiaries have been prepared prior to the taking of any action
for the purpose of which the determination is being made, as (i) the par
or stated value of all outstanding Capital Stock of such Person plus (ii) paid-in
capital or capital surplus relating to such Capital Stock plus (iii) any
retained earnings or earned surplus less (iv) (A) any accumulated
deficit and (B) any amounts attributable to Disqualified Stock of such
Person not held by such Person or its Subsidiaries.

 

C-39

 

“Consolidated Operating Cash Flow” means, with
respect to any period, the Consolidated Net Income for such period increased by
the sum of (i) the Consolidated Income Tax Expense of the Company and its
Subsidiaries accrued according to GAAP for such period (only to the extent the
corresponding income was included in computing Consolidated Net Income for such
period and other than taxes attributable to extraordinary, unusual or
nonrecurring gains or losses); (ii) Consolidated Interest Expense of the
Company and its Subsidiaries for such period; (iii) consolidated
depreciation of the Company and its Subsidiaries for such period; (iv) consolidated
amortization of the Company and its Subsidiaries for such period, including,
without limitation, amortization of capitalized debt issuance costs for such
period; and (v) all other non-cash items of the Company and its
Subsidiaries reducing Consolidated Net Income (excluding any non-cash items to
the extent they represent an accrual of, or a reserve for, cash disbursements
for any subsequent period); and reduced by (vi) all non-cash items of the
Company and its Subsidiaries increasing Consolidated Net Income for such
period; in each case determined on a consolidated basis in accordance with
GAAP.

 

“control” (including, with correlative
meanings, the terms “controlling,” “controlled by” and “under
common control with”), as applied to any Person, means the possession by
another Person (whether directly or indirectly and whether by the ownership of
share capital, the possession of voting power, contract or otherwise) of the
power to appoint and/or remove the majority of the members of the board of
directors or other governing body of such Person or otherwise to direct or
cause the direction of the affairs and policies of such Person.

 

“Corporate Trust Office” means the office of
the Trustee located at 767 Third Avenue, 31st Floor, New York, New York 10017.

 

“Corporation” means a sociedad
anónima, sociedad de
responsibilidad limitada, corporation, association, company or
business trust.

 

“Currency Agreement” means any foreign exchange
contract, currency swap agreement or other similar agreement or arrangement designed
to protect the Company or any Significant Subsidiary against fluctuations in
currency values.

 

“Default” means any event that is, or after
notice or passage of time or both would be, an Event of Default.

 

“Depositary” means, DTC, its nominees, and
their respective successors or such other depositary as may be designated with
respect thereto.

 

“Disqualified Stock” means, with respect to any
Person, any Capital Stock of such Person which, by its terms (or by the terms
of any security into which it is convertible or for which it is exchangeable),
or upon the happening of any event, matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or is exchangeable for
Indebtedness, or is redeemable at the option of the holder thereof, in whole or
in part, on or prior to the final maturity date of the 7-Year Notes.

 

“DTC” means The
Depository Trust Company and its successors.

 

C-40

 

“Euroclear” means Euroclear Bank S.A./N.V., as operator of the Euroclear System, and its
successors.

 

“Eurocurrency Reserve Requirements” means, for
any day, the aggregate (without duplication) of the rates (expressed as a
decimal fraction) of reserve requirements in effect on such day (including,
without limitation, basic, supplemental, marginal and emergency reserves under
any regulations of the Board of Governors of the Federal Reserve System of the
United States (the “Board”) or other Governmental Agency having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System of the United States.

 

“Event of Default” means any of the events
specified in “Events of Default” herein.

 

“Excess Cash” means
an amount equal to (x) in the case of the First Annual Transfer Date, the sum
of the Company’s consolidated cash and cash equivalents as of March 31st
of each calendar year (net of any balance held in the Reserve Accounts as of
such date) and in the case of the Second Annual Transfer Date, the sum of the
Company’s consolidated cash and cash equivalents as of September 30th of
such calendar year (net of any balance held in the Reserve Accounts as of such
date), in each case assuming the conversion into U.S. Dollars of cash and cash
equivalents that are not denominated in U.S. Dollars using the prevailing
exchange rate on the Buenos Aires business day immediately preceding such Transfer
Date.

 

“Exchange Act” means the U.S. Securities
Exchange Act of 1934, as amended.

 

“Fair Market Value” means, with respect to any
asset or property, the price that could be negotiated in an arms-length free
market transaction, for cash, between a willing seller and a willing buyer,
neither of whom is under pressure or compulsion to complete the
transaction.  Unless otherwise specified
in the 7-Year Notes Indenture, Fair Market Value shall be determined by the
chief financial officer of the Company and shall be evidenced by an Officers’
Certificate delivered to the Trustee at its request.

 

“Floating Rate Note Register” means the books
for the exchange, registration and registration of transfer for Registered 7-Year
Floating Rate Notes.

 

“GAAP” means generally accepted accounting
principles in effect in Argentina as of the date of determination.

 

“Global Note” means a 7-Year Floating Rate Note
in definitive global form that is deposited with DTC or another Depositary, or
a nominee thereof, for credit to the respective accounts of the beneficial
owners of the 7-Year Floating Rate Notes represented thereby.

 

“Governmental Agency” means any public legal
entity or public agency of Argentina or the United States, whether created by
any competent authority, federal, state or local government, or any other legal
entity now existing or hereafter created, or now or hereafter owned or
controlled, directly or indirectly, by any public legal entity or public agency
of Argentina or the United States.

 

C-41

 

“Guarantee” means any obligation, contingent or
otherwise, of any Person directly or indirectly guaranteeing any Indebtedness
or other obligation of any other Person and, without limiting the generality of
the foregoing, any obligation, direct or indirect, contingent or otherwise, of
such Person (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation of such other
Person (whether arising by virtue of partnership arrangements, or by agreements
to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or (ii) entered
into for purposes of assuring in any other manner the obligee of such
Indebtedness or other obligation of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part); provided that the term “Guarantee” shall not include
endorsements for collection or deposit in the ordinary course of business.  The term “Guarantee” used as a verb
has a corresponding meaning.

 

“Guarantor” means any Person obligated under a
Guarantee.

 

“Holder” means a Person in whose name a 7-Year
Floating Rate Note or a 7-Year Note, as the case may be, is registered in the 7-Year
Floating Rate Note Register and/or the books for the exchange, registration and
registration of transfer of the registered 7-Year Fixed Rate Notes.

 

“Holding Office” means any particular office or
branch through which a Holder holds a Floating Rate Note.

 

“Incur” means, with respect to any
Indebtedness, to incur, create, issue, assume, Guarantee or otherwise,
contingently or otherwise, become liable, directly or indirectly, for or with
respect to, or become responsible for, the payment of such Indebtedness,
including an Incurrence of Acquired Indebtedness by reason of the acquisition
of more than 50% of the Capital Stock of any Person; provided
that neither the accrual of interest nor the accretion of original issue
discount shall be considered an Incurrence of Indebtedness.  The term “Incurrence” used as a noun has a
corresponding meaning.

 

“Indebtedness” means, with respect to any
Person at any date of determination (without duplication), (i) any
liability, contingent or otherwise, of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all obligations of such Person in respect of
letters of credit or other similar instruments (including reimbursement
obligations with respect thereto), (iv) all obligations of such Person to
pay the deferred and unpaid purchase price of property or services, including
purchase money obligations, which purchase price is due more than 180 days
after the date of placing such property in service or taking delivery and title
thereto or the completion of such services, except Trade Payables, (v) all
obligations of such Person as lessee under Capitalized Leases, (vi) all
Indebtedness of other Persons secured by a Lien on any asset of such Person,
whether or not such Indebtedness is assumed by or is otherwise the legal
liability of such Person; provided that
the amount of such Indebtedness shall be the lesser of (A) the Fair Market
Value of such asset at such date of determination and (B) the amount of
such Indebtedness, (vii) all Indebtedness of other Persons Guaranteed by
such Person or which is otherwise the legal liability of such Person, to the
extent such Indebtedness is Guaranteed by or is otherwise the legal liability
of such Person, (viii) to the extent not otherwise included in this
definition, obligations

 

C-42

 

under Currency Agreements
and Interest Rate Protection Obligations, (ix) any and all deferrals,
renewals, extensions and refundings of, or amendments of or supplements to, any
liability or obligation of the kind described in this definition, and
(x) Disqualified Stock.  The amount
of Indebtedness of any Person at any date shall be the outstanding balance at
such date of all unconditional obligations as described above and, with respect
to contingent obligations, the maximum liability upon the occurrence of the
contingency giving rise to the obligation, provided that
the amount outstanding at any time of any Indebtedness issued with original
issue discount is the face amount of such Indebtedness less the remaining
unamortized portion of the original issue discount of such Indebtedness at such
time as determined in conformity with GAAP.

 

“Independent Financial Advisor” means an
investment banking firm of international standing (i) which does not, and
whose shareholders, members, directors, officers or Affiliates do not, have a
material direct or indirect financial interest in the Company or one or more
Significant Subsidiaries, and (ii) which is otherwise independent and
qualified to perform the task for which it is to be engaged.

 

“Interest Payment Date” means each of the dates
on which interest is due on the 7-Year Floating Rate Notes specified in “Interest”
herein.

 

“Interest Rate Protection Obligations” means
the obligations of any Person pursuant to any arrangement with any other Person
whereby, directly or indirectly, such Person is entitled to receive from time
to time periodic payments calculated by applying either a floating or a fixed
rate of interest on a stated notional amount and shall include, without
limitation, interest rate swaps, caps, floors, collars, forward interest rate
agreements and similar agreements.

 

“Investment” means, with respect to any Person,
any direct or indirect advance, loan, account receivable (other than an account
receivable arising in the ordinary course of business), or other extension of
credit (including, without limitation, by means of any Guarantee or similar
arrangement) or any capital contribution to (by means of transfers of property
to others, payments for property or services for the account or use of others,
or otherwise), or any purchase or ownership of any stocks, bonds, notes,
debentures or other securities of, any other Person (excluding Subsidiaries but
not any Person that becomes a Subsidiary after giving effect to the
Investment).  Notwithstanding the
foregoing, in no event shall any issuance of Capital Stock (other than
Disqualified Stock) of the Company in exchange for Capital Stock, property or
assets of another Person constitute an Investment by the Company in such other
Person.

 

“Issue Date” means the original date of
issuance and purchase of the 7-Year Floating Rate Notes as specified in or
pursuant to the relevant Board Resolution, Officers’ Certificate, or indenture
supplemental hereto with respect thereto.

 

“Lien” means any mortgage, charge, pledge,
security interest, encumbrance, lien (statutory or other), hypothecation,
assignment for security, claim, or preference or priority or other encumbrance
of any kind upon or with respect to any property (including, without
limitation, any conditional sale or other title retention agreement or lease in
the nature thereof, any sale with recourse against the seller or any Affiliate
of the seller, or any agreement to give any security interest).

 

C-43

 

“Macroeconomic Disruption Event” means for any
fiscal quarter a depreciation in the average Peso-U.S. dollar exchange rate (as
determined by reference to the rate for the purchase of U.S. dollars with
Argentine Pesos quoted by Reuters page ARSIB=offer prices as of 3:00 p.m.
Buenos Aires time for each day of such fiscal quarter) of 20% or more compared
to such average exchange rate for the prior fiscal quarter.

 

“Material Adverse Effect” means any material
adverse effect whatsoever on the property, financial condition, business or
operations of the Company and its Subsidiaries, taken as a whole.

 

“Maturity”, when used with respect to any
Floating Rate Note, means the date on which the principal of such 7-Year
Floating Rate Note becomes due and payable as therein or herein provided,
whether at the Stated Maturity or by declaration of acceleration, call for
redemption or otherwise, as specified in or pursuant to the relevant Board
Resolution, Officers’ Certificate or the indenture supplemental hereto with
respect thereto.

 

“Negotiable Obligations Law” means Argentine
Law No. 23,576, as amended.

 

“Officer” means the chairman of the Board of
Directors, the chief executive officer, the chief financial officer, the
treasurer, the controller or any member of the Board of Directors of the
Company.

 

“Officers’ Certificate” means a certificate
signed by any two of the chief executive officer, chief operating officer and
chief financial officer of the Company.

 

“Opinion of Counsel” means a written opinion
from legal counsel who is reasonably acceptable to the Trustee, which may
include an individual employed as counsel to the Company or the Trustee.

 

“Other Additional
Amounts” means those certain additional amounts that may be paid to Holders
of 7-Year Floating Rate Notes as specified in “Other Additional Amounts”
herein.

 

“Outstanding” means, as of the date of
determination, all 7-Year Notes theretofore authenticated and delivered under
the 7-Year Notes Indenture, except:

 

(i)            7-Year
Notes theretofore canceled by the Trustee or delivered to the Trustee for
cancellation;

 

(ii)           7-Year
Notes, or portions thereof, for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any Paying
Agent (other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the Holders
of such 7-Year Notes; provided that,
if such 7-Year Notes are to be redeemed, notice of such redemption has been
duly given pursuant to the 7-Year Notes Indenture or provision therefor
satisfactory to the Trustee has been made;

 

C-44

 

(iii)          7-Year
Notes which have been duly defeased or as to which the Company has effected
covenant defeasance pursuant to “Discharge and Defeasance” herein; and

 

(iv)          7-Year
Notes which have been paid pursuant to the 7-Year Notes Indenture or in
exchange for or in lieu of which other 7-Year Notes have been authenticated and
delivered pursuant to the 7-Year Notes Indenture, other than any such 7-Year
Notes in respect of which there shall have been presented to the Trustee proof
satisfactory to it that such 7-Year Notes are held by a bona fide
purchaser in whose hands such 7-Year Notes are valid obligations of the
Company; provided, however, that in determining
whether the Holders of the requisite principal amount of the Outstanding 7-Year
Notes have given any request, demand, authorization, direction, notice, consent
or waiver hereunder, 7-Year Notes owned by the Company or any other obligor
upon such 7-Year Notes or any Subsidiary or Affiliate of the Company or of such
other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
7-Year Notes which a Responsible Officer of the Trustee actually knows to be so
owned shall be so disregarded.  7-Year
Notes so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee’s right so to act with respect to such 7-Year Notes and that the
pledgee is not the Company or any other obligor upon such 7-Year Notes or any
Subsidiary or Affiliate of the Company or of such other obligor.

 

“pari passu”
means, as applied to the ranking of any Indebtedness of a Person in relation to
other Indebtedness of such Person, that each such Indebtedness either (i) is
not subordinate in right of payments to any Indebtedness or (ii) is
subordinate in right of payment to the same Indebtedness as is the other, and
so subordinate to the same extent, and is not subordinate in right of payment
to each other or to any Indebtedness as to which the other is not so
subordinate.

 

“Participant” means, with respect to DTC,
Euroclear or Clearstream, Luxembourg, Persons who have accounts with DTC,
Euroclear or Clearstream, Luxembourg, respectively (and, with respect to DTC,
shall include Euroclear and Clearstream, Luxembourg).

 

“Paying Agent” means initially the Persons
named as Paying Agent in the first paragraph of the 7-Year Notes Indenture, any
successor thereof, and any Person authorized by the Company to pay the
principal of or interest on any 7-Year Notes on behalf of the Company,
including the Principal Paying Agent.

 

“Permitted Indebtedness” means the following
indebtedness (each of which shall be given independent effect) of the Company:

 

(a)  Indebtedness under the 7-Year Notes and the 7-Year
Notes Indenture with respect to such 7-Year Notes;

 

(b)  Indebtedness of the Company outstanding on
the Issue Date;

 

(c)  Indebtedness of the Company owed to and held
by any Subsidiary of the Company; provided that
an Incurrence of Indebtedness shall be deemed to have occurred upon
(x) any sale or other disposition of any Indebtedness of the Company
referred to in this clause (d)

 

C-45

 

to a Person other than
the Company or a Subsidiary of the Company, or (y) any sale or other
disposition of Capital Stock of a Subsidiary of the Company which holds
Indebtedness of the Company to any person other than the Company or another Subsidiary;

 

(d)  Interest Rate Protection Obligations of the
Company to the extent relating to Indebtedness of the Company, as the case may
be (which Indebtedness (x) bears interest at fluctuating interest rates
and (y) is otherwise permitted to be incurred under the “Limitation on
Indebtedness” covenant);

 

(e)  Indebtedness of the Company under Currency
Agreements to the extent relating to (i) Indebtedness of the Company
and/or (ii) obligations to purchase assets, properties or services
incurred in the ordinary course of business of the Company; provided that such Currency Agreements do not increase the
Indebtedness or other obligations of the Company and its Significant
Subsidiaries outstanding other than as a result of fluctuations in foreign
currency exchange rates or by reason of fees, indemnities or compensation
payable thereunder;

 

(f)  Indebtedness of the Company in respect of
performance bonds of or surety or performance bonds provided by the Company
incurred in the ordinary course of business in connection with the construction
or operation of a Cable/Telecommunications Business; or

 

(g)  Indebtedness of the Company to the extent it
represents a replacement, renewal, refinancing, or extension of outstanding
Indebtedness of the Company incurred or outstanding pursuant to clause (a) or
(b) or this clause (g) of this definition or the proviso to the
first sentence of the “Limitation on Indebtedness” covenant; provided that (A) Indebtedness of the Company may not
be replaced, renewed, refinanced or extended under this clause (g) with
Indebtedness of any Subsidiary of the Company, (B) any such replacement,
renewal, refinancing or extension (x) shall not result in such
Indebtedness having a shorter Average Life as compared with the Indebtedness
being replaced, renewed, refinanced or extended and (y) shall not exceed
the sum of the principal amount (or, if such Indebtedness provides for a lesser
amount to be due and payable upon a declaration or acceleration thereof, an
amount no greater than such lesser amount) of the Indebtedness being replaced,
renewed, refinanced or extended plus the amount of accrued interest thereon and
the amount of any reasonably determined prepayment premium necessary to
accomplish such replacement, renewal, refinancing or extension and such
reasonable fees and expenses incurred in connection therewith, and (C) in
the case of any Indebtedness replacing, renewing, refinancing, or extending
Indebtedness which is pari passu to
the 7-Year Notes, any such replacing, renewing, refinancing or extending
Indebtedness is made pari passu to
the 7-Year Notes or subordinated to the 7-Year Notes, and, in the case of any
Indebtedness replacing, renewing, refinancing, or extending Subordinated
Indebtedness, any such replacing, renewing, refinancing or extending
Indebtedness is subordinated to the 7-Year Notes to the same extent as the
Indebtedness being replaced, renewed, refinanced or extended.

 

“Permitted Lien” means (i) Liens on the 7-Year
Notes Reserve Account for the benefit of the holders of 7-Year Notes and on the
reserve account established on or about the date hereof for the benefit of the
10-Year Notes; (ii) Liens existing on the Issue Date; (iii) Liens
(including extensions and renewals thereof) upon real or personal property
acquired after the Issue Date; provided
that (a) such Lien is created solely for the purpose of securing
Indebtedness Incurred in accordance with the “Limitation on Indebtedness”
covenant, (1) to finance the cost

 

C-46

 

(including the cost of
design, development, construction, improvement, installation or integration) of
the item of property or assets subject thereto and such Lien is created prior
to, at the time of or within six months after the later of the acquisition, the
completion of construction or the commencement of full operation of such
property or (2) to refinance any Indebtedness previously so secured, (b) the
principal amount of the Indebtedness secured by such Lien does not exceed 100%
of such cost and (c) any such Lien shall not extend to or cover any
property or assets other than such item of property or assets and any
improvements on such item; (iv) any interest or title of a lessor in the
property subject to any Capitalized Lease or operating lease; (v) Liens on
property of, or on shares of stock or Indebtedness of, any Person existing at
the time such Person becomes a Subsidiary of the Company, or is merged into or
consolidated with the Company or any Subsidiary of the Company; provided that such Liens were not granted
in contemplation of such acquisition, merger or consolidation and do not extend
to or cover any property or assets of the Company or any Subsidiary of the
Company other than the property or assets acquired; (vi) Liens in favor of
the Company or any Subsidiary of the Company; (vii) Liens securing
reimbursement obligations with respect to letters of credit that encumber
documents and other property relating to such letters of credit and the
products and proceeds thereof; (viii) Liens securing Indebtedness of the
Company permitted pursuant to clause (g) of the definition of “Permitted
Indebtedness” or clause (c) of the definition of “Permitted Subsidiary
Indebtedness”, provided that any
such Indebtedness being refinanced was previously secured by a Permitted Lien
and any such Lien shall not extend to or cover any property or assets other
than those encumbered by the Lien securing the Indebtedness being refinanced;
and (ix) Liens incurred in the ordinary course of business securing
Indebtedness under Interest Rate Protection Obligations and Currency
Agreements, provided that such
Lien is created solely upon Excess Cash not required to be applied in
accordance with the “Cash Sweep” covenant herein.

 

“Permitted Subsidiary Indebtedness” means the
following Indebtedness (each of which shall be given independent effect) of a
Subsidiary of the Company:

 

(a)  Indebtedness of any Subsidiary of the
Company outstanding on the Issue Date;

 

(b)  Indebtedness of any Subsidiary of the
Company owed to and held by the Company or a Subsidiary of the Company; provided that an Incurrence of Indebtedness shall be deemed
to have occurred upon (x) any sale or other disposition of any Indebtedness of
a Subsidiary of the Company referred to in this clause (b) to a Person
other than the Company or a Subsidiary of the Company, or (y) any sale or other
disposition of Capital Stock of a Subsidiary of the Company which holds
Indebtedness of another Subsidiary of the Company except to the extent
permitted under clause (v) of the “Limitation on the Issuance and Sale of
Capital Stock of Significant Subsidiaries” covenant herein; and

 

(c)  Indebtedness of any Subsidiary of the
Company to the extent it represents a replacement, renewal, refinancing, or
extension of outstanding Indebtedness of such Subsidiary incurred or
outstanding pursuant to clause (a) or this clause (c) of this
definition; provided that (A) any such
replacement, renewal, refinancing or extension (x) shall not result in such
Indebtedness having a shorter Average Life as compared with the Indebtedness
being replaced, renewed, refinanced or extended and (y) shall not exceed the
sum of the principal amount (or, if such Indebtedness provides for a lesser
amount to be due and payable upon a declaration or

 

C-47

 

acceleration thereof, an
amount no greater than such lesser amount) of the Indebtedness being replaced,
renewed, refinanced or extended plus the amount of accrued interest thereon and
the amount of any reasonably determined prepayment premium necessary to
accomplish such replacement, renewal, refinancing or extension and such
reasonable fees and expenses incurred in connection therewith.

 

“Person” means any individual, Corporation,
partnership, joint venture, trust, unincorporated organization or government or
any agency or political subdivision thereof.

 

“Predecessor Floating Rate Note” of any
particular 7-Year Floating Rate Note means every previous 7-Year Floating Rate
Note evidencing all or a portion of the same debt as that evidenced by such
particular Floating Rate Note; and, for the purposes of this definition, any 7-Year
Floating Rate Note authenticated and delivered under the 7-Year Notes Indenture
in exchange for or in lieu of a mutilated, destroyed, lost or stolen 7-Year
Floating Rate Note shall be deemed to evidence the same debt as the mutilated,
destroyed, lost or stolen Floating Rate Note.

 

“Pro Forma Consolidated Operating Cash Flow”
for any period means “Consolidated Operating Cash Flow” for such period after
giving effect on a pro forma basis for the applicable period to, without
duplication, any Asset Sale or Asset Acquisition (including, without
limitation, any Asset Acquisition giving rise to the need to make such
calculation as a result of our or one of our Subsidiaries (including any Person
who becomes a Subsidiary as a result of the Asset Acquisition) Incurring
Acquired Indebtedness) or any transaction permitted under clause (iii) of
the “Consolidation, Merger and Sale of Assets” covenant herein occurring during
the period commencing on the first day of such period to and including the
Transaction Date (the “Reference Period”), as if such Asset Sale or Asset
Acquisition occurred on the first day of the Reference Period.

 

“Redemption Date” means the fixed date, on
which a 7-Year Note is to be redeemed, in whole or in part, by the Company
pursuant to the terms of the 7-Year Note.

 

“Registered 7-Year Floating Rate Notes” means
any 7-Year Floating Rate Note registered in the 7-Year Floating Rate Note
Register.

 

“Registrar” means HSBC Bank Argentina S.A.,
until a successor Registrar shall have become such pursuant to the applicable
provisions of the 7-Year Notes Indenture, and, thereafter “Registrar”
shall mean such successor Registrar.

 

“Regular Record Date”
means the close of business in New York on the fifteenth date (whether or not a
Business Day) immediately preceding each Interest Payment Date.

 

“Responsible Officer” shall mean, when used
with respect to the Trustee, any officer of the Trustee who shall have direct
responsibility for the administration of this 7-Year Notes Indenture, or to
whom any corporate trust matter is referred because of such person’s knowledge
of and familiarity with the particular subject.

 

“Securities Act” means the U.S. Securities Act
of 1933, as amended.

 

C-48

 

“Significant Subsidiary” means, at any date of
determination, any Subsidiary of the Company that, together with its
Subsidiaries, (i) for the most recent fiscal year of the Company, accounted
for more than 10% of the consolidated revenues of the Company and its
Subsidiaries or (ii) as of the end of such fiscal year, was the owner of
more than 10% of the consolidated assets of the Company and its Subsidiaries,
all as set forth on the most recently available consolidated financial
statements of the Company for such fiscal year.

 

“Stated Maturity” means (i) with respect
to any security, the date specified in such security as the fixed date on which
the final installment of principal of such security is due and payable and (ii) with
respect to any scheduled installment of principal of or interest on any
security, the date specified in such security as the fixed date on which such
installment is due and payable.

 

“Subordinated Indebtedness” means any
Indebtedness of the Company which is expressly subordinated in right of payment
to the 7-Year Notes, including premium and accrued and unpaid interest.

 

“Subsidiary” means, with respect to any Person,
any Corporation, association or other business entity (i) of which
outstanding Capital Stock having at least a majority of the votes entitled to
be cast in the election of directors is owned, directly or indirectly, by such
Person and one or more other Subsidiaries of such Person, or (ii) of which
at least a majority of voting interest is owned, directly or indirectly, by
such Person and one or more other Subsidiaries of such Person.

 

“Total Consolidated Indebtedness” means, at the
time of determination, an amount equal to the aggregate amount of all Indebtedness
of the Company and its Subsidiaries outstanding (without duplication) as of the
date of determination.

 

“Trade Payables” means, with respect to any
Person, any accounts payable or any other Indebtedness or monetary obligation
to trade creditors created, assumed or Guaranteed by such Person or any of its
Subsidiaries arising in the ordinary course of business in connection with the
acquisition of goods or services.

 

“Transaction Date” means, with respect to the
Incurrence of any Indebtedness by the Company or any of its Subsidiaries, the
date such Indebtedness is to be Incurred.

 

“Transfer Agent” means any Person authorized by
the Company to effectuate the exchange or transfer of any 7-Year Note on behalf
of the Company hereunder.

 

“Trust Indenture Act” or “TIA” means the
U.S. Trust Indenture Act of 1939 as in force at the date as of which the 7-Year
Notes Indenture was executed; provided, however,
that in the event the U.S. Trust Indenture Act of 1939 is amended after such
date, “Trust Indenture Act” or “TIA” means, to the extent
required by any such amendment, the U.S. Trust Indenture Act of 1939 as so
amended.

 

“Trustee” means Law Debenture Trust Company of
New York, until a successor Trustee shall have become such pursuant to the
applicable provisions of the Indenture, and, thereafter “Trustee” shall
mean such successor Trustee.

 

C-49

 

“Unapplied Net Asset Sale Proceeds” means the
net cash proceeds of any Asset Sale consummated at least 181 days prior to the
date of determination that do not constitute Asset Sale Proceeds Reinvestment.

 

“U.S. Dollars”, “United States Dollars”,
“U.S.$” and the symbol “$” each mean dollars of the United
States.

 

“U.S. Government Obligations” means securities
that are (x) direct obligations of the United States for the payment of
which its full faith and credit is pledged or (y) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States the payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any such U.S.
Government Obligation held by such custodian for the account of the holder of
such depositary receipt, provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depositary receipt from
any amount received by the custodian in respect of the U.S. Government Obligation
or the specific payment of principal of or interest on the U.S. Government
Obligation evidenced by such depositary receipt.

 

“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 Board of Directors members, managing directors, managers or
other voting members of the governing body of such Person.

 

“Wholly-Owned” is defined to mean, with respect
to any Subsidiary of any Person, such Subsidiary if all the outstanding Capital
Stock in such Subsidiary (other than any directors’ qualifying shares or shares
held by a Person, to the extent mandated by applicable law) is owned by such
Person, or one or more Wholly-Owned Subsidiaries of such Person.

 

Terms used herein and not defined herein shall have
the meanings assigned to them in the 7-Year Notes Indenture.

 

C-50

 

SCHEDULE A

SCHEDULE OF PRINCIPAL AMOUNT

 

The initial principal amount at maturity of this
Global Note shall be U.S.$[            ].
The following increases or decreases in the principal amount at maturity
of this Global Note have been made:

 

	
  Date of

  Exchange

  	
   

  	
  Amount of

  decrease in

  Principal

  Amount at

  Maturity of this

  Global Note

  	
   

  	
  Amount of

  increase in

  Principal

  Amount at

  Maturity of this

  Global Note

  	
   

  	
  Principal

  Amount of this

  Global Note

  following such

  decrease or

  increase

  	
   

  	
  Signature of

  authorized

  officer of

  Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

C-51

 

FORM OF EXCHANGE
NOTICE

 

The undersigned registered Holder of the within 7-Year
Floating Rate Note hereby irrevocably exercises the option to convert this 7-Year
Floating Rate Note (or the portion thereof specified below) into the Company’s 7-Year
Fixed Rate Notes due [2012] pursuant to the terms of the Second Supplemental
Indenture referred to in this Floating Rate Note, and directs that the Company’s
7-Year Fixed Rate Notes due [2012] issuable upon exchange and any 7-Year
Floating Rate Note representing any unexchanged principal amount hereof, be
issued and delivered to the registered Holder hereof unless a different name
has been provided below:

 

	
   

  	
   

  	
   

  
	
   

  	
  (Name,
  Address and Taxpayer Identification Number.)

  	
   

  

 

 

 

If less than the entire principal amount of this 7-Year
Floating Rate Note is to be exchanged, specify the denomination(s) of the
Floating Rate Note(s) to be issued for the unexchanged amount (U.S.$1.00 or any
integral multiple of U.S.$1.00):  U.S.$         .

 

The undersigned agrees to pay all transfer taxes and
any expenses (other than any registration fees with the CNV) payable with
respect thereto.  The undersigned is also
delivering herewith (1) a certificate in proper form certifying that the
applicable restrictions on transfer have been complied with and (2) evidence
of payment to an account designated by the Trustee for the benefit of the
Company of an amount equivalent to any interest actually paid by the Company on
or prior to the date hereof to the Holder corresponding to interest accrued on
the principal amount of this 7-Year Floating Rate Note for which an exchange is
being requested from the first day of the current interest period under the 7-Year
Fixed Rate Notes due [2012] to the date hereof and covenants to deposit in such
account any additional interest actually paid by the Company to the Holder
corresponding to interest accrued on such principal amount from and after the
date hereof to but excluding the date designated by the Company to effect such
exchange.  The Holder hereby acknowledges
and agrees that no request for conversion of this 7-Year Floating Rate Note
into 7-Year Fixed Rate Notes due [2012] will be given effect unless such
payment is credited to the account designated by the Trustee.

 

The undersigned hereby agrees that, promptly after
request of the Company or Exchange Agent, it will furnish such proof in support
of this certificate as the Company or Exchange Agent may request.

 

	
  Dated:

  
	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Signature of Registered
  Holder

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Signature Guaranty

  

 

 

For
Exchange Agent’s Use only:

 

C-52

 

	
  (A)

  	
   

  	
  Date of Deposit:                                                   

  
	
   

  	
   

  	
  Exchange Date:                                                     

  
	
  (B)

  	
   

  	
  Principal amount
  of 7-Year Fixed Rate Notes issuable:                                                  

  

 

C-53

 

Trustee’s
Certificate of Authentication

 

This is one of the 7-Year Floating Rate Notes referred
to in the within-mentioned 7-Year Notes Indenture.

 

	
  Dated:

  
	
   

  
	
   

  	
  LAW DEBENTURE TRUST COMPANY

  OF NEW YORK,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  (Authorized Signatory)

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

C-54

 

EXHIBIT D

FORM OF RESTRICTED GLOBAL NOTE (7-YEAR FLOATING RATE NOTES)*

 

UNLESS THIS FLOATING RATE NOTE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION (“DTC”), EUROCLEAR BANK S.A./N.V. (“EUROCLEAR”) OR CLEARSTREAM
BANKING, SOCIÉTÉ ANONYME (“CLEARSTREAM, LUXEMBOURG”), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY FLOATING RATE
NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, EUROCLEAR OR
CLEARSTREAM, LUXEMBOURG (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC,
EUROCLEAR OR CLEARSTREAM, LUXEMBOURG), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE 10-YEAR NOTES INDENTURE REFERRED TO ON THE
REVERSE HEREOF.

 

THIS FLOATING RATE NOTE
HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT (1) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (2) INSIDE THE UNITED STATES, TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) PURCHASING FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (3) OUTSIDE THE UNITED STATES IN COMPLIANCE
WITH REGULATION S UNDER THE SECURITIES ACT, (4) PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (5) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH
CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER JURISDICTION.

 

BY ACCEPTANCE OF THIS FLOATING RATE NOTE BEARING THE
ABOVE LEGEND, WHETHER UPON ORIGINAL ISSUANCE OR SUBSEQUENT TRANSFER, EACH
HOLDER OF THIS FLOATING RATE NOTE ACKNOWLEDGES THE

 

* Appropriate adjustments
to be made if Note is issued in certificated form.

 

D-1

 

RESTRICTIONS ON THE
TRANSFER OF THIS FLOATING RATE NOTE SET FORTH ABOVE AND AGREES THAT IT SHALL
TRANSFER THIS FLOATING RATE NOTE ONLY AS PROVIDED HEREIN AND IN THE 10-YEAR
NOTES INDENTURE REFERRED TO ON THE REVERSE HEREOF.

 

THE FOREGOING LEGEND MAY BE REMOVED FROM THIS
FLOATING RATE NOTE ON SATISFACTION OF THE CONDITIONS SPECIFIED IN THE 10-YEAR
NOTES INDENTURE REFERRED TO ON THE REVERSE HEREOF.

 

MULTICANAL S.A. (INCORPORATED
IN BUENOS AIRES, ARGENTINA, WITH LIMITED LIABILITY (“SOCIEDAD ANÓNIMA”) UNDER
THE LAWS OF THE REPUBLIC OF ARGENTINA ON JULY 26, 1991, WITH A TERM OF
DURATION EXPIRING ON JULY 27, 2090, AND REGISTERED WITH THE PUBLIC
REGISTRY OF COMMERCE ON JULY 26, l991 UNDER NUMBER 5225, BOOK 109 OF
VOLUME “A” OF CORPORATIONS, AND WITH DOMICILE AT AVALOS 2057 (C1431 DPM) BUENOS AIRES, ARGENTINA).

 

7-YEAR FLOATING RATE NOTES

 

	
  No. R-

  	
   

  	
   

  	
  $  

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CUSIP No.

  	
   

  
	
   

  	
  ISIN No.

  	
   

  
	
   

  	
  Common Code No.

  	
   

  

 

Multicanal S.A., a sociedad anónima
duly organized and existing under the laws of Argentina (the “Company”),
for value received, hereby promises to pay to [Cede & Co.]*, or
registered assigns, the principal sum indicated on Schedule A hereof in
installments on each of the [Interest Payment Dates] as set forth in “Principal”
on the reverse hereof (or on such earlier date as the principal sum may become
repayable in accordance with the terms and conditions set forth in the 7-Year
Notes Indenture or on the reverse hereof), and to pay interest thereon in
accordance with the provisions of “Interest” on the reverse hereof from December 10,
2003(2) or from the most recent Interest Payment Date to which
interest has been paid or duly provided for in arrears.  The interest so payable and punctually paid
or duly provided for on any Interest Payment Date will, as provided in the 7-Year
Notes Indenture, be paid to the Person in whose name this 7-Year Floating Rate
Note (or one or more Predecessor 7-Year Floating Rate Notes) is registered at
the close of business on the 15th day immediately preceding such
Interest Payment Date (whether or not a Business Day).

 

* Appropriate adjustments
to be made if Note is issued in certificated form.

 

(2)  This sentence
may need to be revised if stub period exceeds six months.

 

D-2

 

Any such interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular
Record Date, and such defaulted interest, and (to the extent lawful) interest
on such defaulted interest at the rate borne by the Post-Default Rate (as
defined in “Interest” on the reverse hereof), may be paid to the Person in
whose name this 7-Year Floating Rate Note (or one or more Predecessor 7-Year
Floating Rate Notes) is registered at the close of business on a Special Record
Date for the payment of such defaulted interest to be fixed by the Trustee,
notice whereof shall be given to Holders of 7-Year Floating Rate Notes not less
than 15 days prior to such Special Record Date, or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any exchange
on which the 7-Year Floating Rate Notes may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in the 7-Year
Notes Indenture.

 

The principal of, premium, if any, on and interest on
this 7-Year Floating Rate Note shall be payable, and the transfer of this 7-Year
Floating Rate Note shall be registrable, at the Corporate Trust Office of Law
Debenture Trust Company of New York, as Trustee, Co-Registrar and Principal
Paying Agent, in The City of New York, at the main office of HSBC Bank
Argentina S.A., as Registrar and Paying Agent, in Buenos Aires, Argentina or at
the option of the Holder and subject to any fiscal or other laws and
regulations applicable thereto, at the office of any other Paying Agent
appointed by the Company.  The Company
shall provide to the Principal Paying Agent, in funds available on or prior to
the Business Day prior to each date on which a payment of principal of,
premium, if any, or any interest on the 7-Year Floating Rate Notes shall become
due, as set forth herein, such amount in U.S. Dollars as is necessary to make
such payment, and the Company hereby authorizes and directs the Principal
Paying Agent from funds so provided to it to make or cause to be made payment
of the principal of and any interest, as the case may be, on the 7-Year
Floating Rate Notes as set forth herein and in the 7-Year Notes Indenture; provided that payment with respect to principal of and
premium, if any, interest and Additional Amounts, if any, on any 7-Year
Floating Rate Note may, at the Company’s option, be made, subject to applicable
laws and regulations, by U.S. Dollar check drawn on a bank in The City of New
York mailed to the Holders of 7-Year Floating Rate Notes at their respective
addresses set forth in the register of Holders of 7-Year Floating Rate Notes; provided further that all payments with respect to Global
Notes the Holders of which have given wire transfer instructions to the Company
will be required to be made by wire transfer of immediately available funds to
the accounts specified by the Holders thereof. 
Unless such designation is revoked, any such designation made by such
Person with respect to such 7-Year Floating Rate Note will remain in effect
with respect to any future payments with respect to such 7-Year Floating Rate
Note payable to such Person.

 

All payments of principal and interest hereunder shall
be made exclusively in U.S. Dollars or in such coin or currency of the United
States as at the time of payment shall be legal tender for the payment of
public and private debts.

 

This 7-Year Floating Rate Note has been issued
pursuant to resolutions of an ordinary meeting of shareholders of the Company
adopted on January 22, 2003 and resolutions of the Board of Directors of
the Company adopted at its meetings on
[                    ].

 

D-3

 

Reference is hereby made to the further provisions of
this 7-Year Floating Rate 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.

 

Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse hereof by manual signature,
this 7-Year Floating Rate Note shall not be valid or obligatory for any
purpose.

 

D-4

 

IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.

 

	
   

  	
  MULTICANAL S.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

D-5

 

[REVERSE OF 7-YEAR
FLOATING RATE NOTE]

 

7-Year Floating Rate
Notes

 

This 7-Year Floating Rate Note is a negotiable
obligation under the Negotiable Obligations Law and is one of a duly authorized
issue of a series of Debt Securities of the Company designated as its 7-Year
Floating Rate Notes, without limitation in aggregate principal amount (the “7-Year
Floating Rate Notes” and each, a “Floating Rate Note”), as may be
set forth from time to time, issued and to be issued under an indenture, dated
as of [         ], [2005] (the “Indenture”),
as supplemented and amended by a second supplemental indenture, dated as of
[               ],
[2005] (the “Second Supplemental Indenture” and, together with the
Indenture, the “7-Year Notes Indenture”), each of the Indenture and the
Second Supplemental Indenture among the Company, Law Debenture Trust Company of
New York, as Trustee, Co-Registrar and Principal Paying Agent, and HSBC Bank
Argentina S.A., as Registrar and Paying Agent thereunder.  Reference to the 7-Year Notes Indenture and
all indentures supplemental thereto is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of 7-Year Floating Rate Notes and of
the terms upon which the 7-Year Floating Rate Notes are, and are to be,
authenticated and delivered.  The terms
of the 7-Year Floating Rate Notes include those stated in the 7-Year Notes
Indenture and those made part of the 7-Year Notes Indenture by reference to the
Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb), as amended
(the “Trust Indenture Act”).  The 7-Year
Floating Rate Notes are subject to all such terms, and Holders are referred to
the 7-Year Notes Indenture and the Trust Indenture Act for a statement of those
terms.

 

The Indebtedness evidenced by the 7-Year Floating Rate
Notes will constitute the direct, unsecured and unconditional unsubordinated
Indebtedness of the Company and will rank pari passu in
right of payment without any preference among themselves.  The payment obligations of the Company under
the 7-Year Floating Rate Notes will at all times rank at least equally in
priority of payment with all other present and future unsecured and
unsubordinated Indebtedness of the Company and senior in priority of payment
with all other present and future Subordinated Indebtedness of the Company from
time to time outstanding.

 

Form, Denomination and Registration

 

The 7-Year Floating Rate Notes shall be issuable only
in registered form without coupons in denominations of U.S.$1.00 or multiples
of U.S.$1.00 in excess thereof, including if issued other than as a Global Note
and in exchange for beneficial interests in a Restricted Global Note.  No service charge shall be made for any
registration of transfer or exchange of 7-Year Floating Rate Notes, but the
Trustee may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.

 

D-6

 

Principal

 

Any principal not prepaid (in whole or in part) on the
7-Year Floating Rate Notes shall be due and payable in installments on the
following Interest Payment Dates and in the following percentages or amount:

 

	
   

  	
   

  	
   

  	
  Third

  Anniversary

  of [the
  date

  the Company

  accepts

  Eligible

  Notes upon

  expiration of

  the Election

  Offers],

  [2005]

  	
   

  	
   

  	
  Fourth

  Anniversary

  of [the
  date

  the Company

  accepts

  Eligible Notes

  upon

  expiration of

  the Election

  Offers],

  [2005]

  	
   

  	
   

  	
  Fifth

  Anniversary

  of [the
  date

  the Company

  accepts

  Eligible

  Notes upon

  expiration of

  the Election

  Offers],

  [2005]

  	
   

  	
   

  	
  Sixth

  Anniversary

  of [the
  date

  the

  Company

  accepts

  Eligible

  Notes upon

  expiration of

  the Election

  Offers],

  [2005]

  	
   

  	
   

  	
  Maturity

  Date

  	
   

  
	
  Percentage/amount
  of outstanding principal amount payable as of such date

  	
   

  	
   

  	
  5%

  	
   

  	
   

  	
  10%

  	
   

  	
   

  	
  15%

  	
   

  	
   

  	
  20%

  	
   

  	
   

  	
  Remaining principal outstanding

  	
   

  

 

provided that the
amount of each such installment will be calculated for each U.S.$1.00 of the
face amount of the 7-Year Floating Rate Notes and rounded to the nearest cent
(half a cent being rounded upwards); and provided
further that the last such installment will be in the amount
necessary to repay in full the outstanding principal amount of the 7-Year Floating
Rate Notes.

 

Payment; Paying Agents
and Transfer Agent

 

The principal of, premium, if any, on and interest on
the Registered 7-Year Floating Rate Notes shall be payable, and the transfer of
such Registered 7-Year Floating Rate Notes will be registrable, at the
corporate trust office of the Trustee in the Borough of Manhattan, The City of
New York, at the main office of the Paying Agent in Argentina and, at the
option of the Holder of such Registered 7-Year Floating Rate Notes and subject
to any fiscal or other laws and regulations applicable thereto, at the office
of any other Paying Agents appointed by the Company.  Payments with respect to principal of the 7-Year
Floating Rate Notes will be made only against surrender of such 7-Year Floating
Rate Notes at the office of the Trustee in The City of New York or at the main
office of the Paying Agent in Argentina. 
Payment with respect to principal, premium, if any, and interest with
respect to any 7-Year Floating Rate Note may, at the Company’s option, be made,
subject to applicable laws and regulations, by U.S. Dollar check drawn on a
bank in The City of New York mailed to the Holders of 7-Year Floating Rate
Notes at their respective addresses set forth in the 7-Year Floating Rate Note
Register, provided that all
payments with respect to Global Notes the Holders of which have given wire
transfer instructions to the Company will be required to be made by wire
transfer of immediately available funds to the accounts specified by the
Holders thereof.  Unless such designation
is revoked, any such designation made by such Person with respect to

 

D-7

 

such 7-Year Floating Rate
Note will remain in effect with respect to any future payments with respect to
such 7-Year Floating Rate Note payable to such Person.

 

Any money deposited with the Trustee or any Paying
Agent in trust for the payment of the principal of, or premium, if any,
interest or Additional Amounts, if any, on any 7-Year Floating Rate Note and
remaining unclaimed for two years after such principal, premium, if any,
interest or additional Amounts, if any, has become due and payable shall be
repaid to the Company on Company Request; and the Holder of such 7-Year
Floating Rate Note shall thereafter, as an unsecured general creditor, look
only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, (i) in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in The City of New York, and (ii) in the Official Gazette of Argentina and in a
newspaper published in the Spanish language and of general circulation in
Argentina, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining shall be repaid
to the Company.

 

If any payment on a 7-Year Floating Rate Note is due
on a day that is, at any place of payment, a day on which banking institutions
are authorized or obligated by law or executive order to close, then, at each
such place of payment, such payment need not be made on such day but may be
made on the next succeeding date that is not, at such place of payment, a day
on which banking institutions are authorized or obligated by law or executive
order to close, with the same force and effect as if made on the date for such
payment, and no interest will accrue for the period from and after such due
date to such next succeeding day that is not, at such place of payment, a day
on which banking institutions are authorized or obligated by law or executive
order to close.

 

Interest

 

(a)           Interest
Payment Dates.

 

The 7-Year Floating Rate Notes will bear interest from
December 10, 2003 and such interest will be payable on each Interest
Payment Date which (except as mentioned below) falls (i) in the case of
the first Interest Payment Date, [on the date these Notes are delivered or made available to holders pursuant to
the Company’s APE], (ii) in the case of each Interest Payment Date
thereafter, three months after the preceding Interest Payment Date (other than
the second Interest Payment Date which shall be three months after the [the date the
Company accepts Eligible Notes upon expiration of the Election Offers, if the
Company consummates the transactions contemplated in the APE before such date])
and (iii) in the case of the last Interest Payment Date, on the final
Maturity date. If any Interest Payment Date would otherwise fall on a day which
is not a Business Day, it shall be postponed to the next day which is a
Business Day unless it would thereby fall into the next calendar month in which
event (i) it shall be brought forward to the immediately
preceding Business Day, and (ii) each subsequent Interest Payment Date shall
be the last Business Day of the last month of each subsequent Interest
Period.  The period beginning on December 10,
2003 and ending on the [the date the Company accepts

 

D-8

 

Eligible Notes upon expiration of the
Election Offers] and each successive period beginning on an Interest
Payment Date (other than the second Interest Period, which shall commence on [the date the
Company accepts Eligible Notes upon expiration of the Election Offers])
and ending on the next succeeding Interest Payment Date is called an “Interest
Period.”

 

(b)           Interest
Payments.

 

Each 7-Year Floating Rate Note (or in the case of the
repayment on redemption of part only of a 7-Year Floating Rate Note, that part
only of such 7-Year Floating Rate Note) will cease to bear interest from the
date for its repayment on redemption unless, upon due presentation thereof,
payment of principal is improperly withheld, refused or delayed.  In such event, or if any payment of interest
under the 7-Year Floating Rate Notes is not paid when due on the relevant
Interest Payment Date, the Company agrees to pay interest on such principal
and/or interest, as the case may be, for the period from and including the due
date thereof to but excluding the date the same is paid in full, at the Post-Default
Rate, payable from time to time on demand. 
For the purposes of this paragraph “Post-Default Rate” means, at any
time, a rate per annum equal to (a) for the balance of the then current
Interest Period, the Rate of Interest applicable to that Interest Period and (b) thereafter,
the Rate of Interest for each succeeding Interest Period applicable to that
Interest Period which shall be determined by the Calculation Agent in
accordance with this paragraph “Interest”.

 

(c)           Rate of
Interest.

 

The rate of interest from time to time in respect of
the 7-Year Floating Rate Notes (“Rate of Interest”) will be determined
on the following basis:

 

(i)            On the
second business day before the beginning of each Interest Period (the “Interest
Determination Date”) the Calculation Agent will determine the offered rate
for deposits in U.S. Dollars for the Interest Period concerned as at 11:00 a.m.
(London time) on the Interest Determination Date in question, provided
however that in the case of the first Interest Period, the Calculation Agent
will determine the Rate of Interest by reference to the relevant rate on December 12,
2003.  Such offered rate will be that
which appears on the display designated as page ”3750” on the Telerate
Monitor (or such other page or service as may replace it for the purpose
of displaying London Interbank offered rates of major banks for U.S. Dollar
deposits).  The Rate of Interest for such
Interest Period will be the aggregate of the Applicable Margin and the rate
which so appears, as determined by the Calculation Agent.

 

(ii)           If, on an
Interest Determination Date, no offered rate appears on page ”3750” on the
Telerate Monitor as specified above, the Calculation Agent will request the
principal London offices of each of four major banks in the London interbank
market, as selected by the Calculation Agent, to provide the Calculation Agent
with its offered quotations for deposits in U.S. Dollars for the Interest
Period concerned, to prime banks in the London interbank market at
approximately 11:00 a.m. (London time) on the relevant Interest
Determination Date and in an amount (not less than U.S.$l,000,000) that is
representative of a single transaction in such market at such time.  If at least two such quotations are so
provided, the Rate of Interest for such Interest Period will be the aggregate
of the Applicable Margin and the arithmetic mean (rounded upwards to the
nearest 1/16 of 1%) of such quotations.

 

D-9

 

(iii)          If
fewer than two quotations are so provided, the Rate of Interest with respect to
such Interest Period will be the higher of (x) the aggregate of the Applicable
Margin and the arithmetic mean (rounded upwards to the nearest 1/16 of 1%) of
the rates quoted at approximately 11:00 a.m., New York City time, on such
Interest Determination Date by three major banks in The City of New York
selected by the Calculation Agent for loans in U.S. Dollars to leading European
banks for the Interest Period concerned and in a principal amount (not less
than U.S.$1,000,000) that is representative of a single transaction in such
market at such time and (y) the Rate of Interest in effect for the last
preceding Interest Period to which one of the preceding subparagraphs (i) and
(ii) shall have applied.

 

(d)           Determination
of Rate of Interest and Calculation of Interest Amounts.

 

The Calculation Agent will, as soon as practicable
after 11:00 a.m. (London time) on each Interest Determination Date,
determine the Rate of Interest and calculate the amount of interest payable
(the “Interest Amounts”) per 7-Year Floating Rate Note for the relevant
Interest Period.  The Interest Amounts
shall be calculated by applying the Rate of Interest to the principal amount of
each Floating Rate Note, multiplying such product by the actual number of days
in the Interest Period concerned divided by 360 and rounding the resulting
figure to the nearest cent (half a cent being rounded upwards).  The determination of the Rate of Interest and
the Interest Amounts by the Calculation Agent shall (in the absence of manifest
error) be final and binding upon all parties.

 

(e)           Publication
of Rate of Interest and Interest Amounts.

 

The Calculation Agent will cause the Rate of Interest
and the Interest Amounts for each Interest Period and the relevant Interest
Payment Date to be notified to the Company, the Trustee, each of the Paying
Agents and any Stock Exchange on which the Notes are for the time being listed
and to be notified to Holders of the 7-Year Floating Rate Notes as soon as
possible after their determination but in no event later than the second
business day thereafter.  The Interest
Amounts and Interest Payment Date so published may subsequently be amended (or
appropriate alternative arrangements made with the consent of the Trustee by
way of adjustment) without notice other than to the Company and the Trustee in
the event of an extension or shortening of the Interest Period.  If the 7-Year Floating Rate Notes become due
and payable under its terms, the accrued interest and the Rate of Interest
payable in respect of the 7-Year Floating Rate Notes shall nevertheless
continue to be calculated as previously by the Calculation Agent in accordance
with this paragraph “Interest” but no publication of the Rate of Interest or
the Interest Amounts so calculated need be made unless the Trustee otherwise
requires.

 

(f)            Determination
or Calculation by Trustee.

 

If the Calculation Agent does not at any time for any
reason so determine the Rate of Interest or calculate the Interest Amounts for
an Interest Period, the Trustee shall do so and such determination or
calculation shall be deemed to have been made by the Calculation Agent.  In doing so, the Trustee shall, subject to Section 7
of the Indenture and after consultation with the Company, apply the foregoing
provisions of this paragraph “Interest”, with any necessary consequential
amendments, to the extent that, in its opinion, it can do so, and, in all other

 

D-10

 

respects it shall do so
in such manner as it shall deem fair and reasonable in all the circumstances.

 

(g)           Calculation
Agent.

 

The Company will procure that, so long as any 7-Year
Floating Rate Note is outstanding, there shall at all times be a Calculation
Agent for the purposes of the 7-Year Floating Rate Notes.  If any such bank (acting through its relevant
office) is unable or unwilling to continue to act as the Calculation Agent or
if the Calculation Agent fails duly to establish the Rate of Interest for any Interest
Period or to calculate the Interest Amounts, the Company shall appoint some
other leading bank engaged in the London interbank market (acting through its
principal London office) to act as such in its place.

 

The Calculation Agent may not resign its duties
without a successor having been so appointed.

 

In this paragraph “Interest”, the expression “business
day” means a day upon which U.S. Dollar deposits may be dealt in on the
London interbank market and commercial banks and foreign exchange markets are
open in London and, if on that day a payment is to be made, in The City of New
York also.

 

Payments of Additional
Amounts

 

All payments made by the Company under or with respect
to the Notes will be made free and clear of and without withholding or deduction
for or on account of any present or future Taxes imposed or levied by or on
behalf of any Taxing Authority within Argentina or any political subdivision or
taxing authority thereof, or any present or future Taxes imposed or levied
within any other jurisdiction in which the Company is organized or engaged in
business for tax purposes or within any other jurisdiction from or through
which any payment is made by the Company or its agents, unless the Company is
required to withhold or deduct Taxes by law or by the official interpretation
or application thereof.  If the Company
is required to withhold or deduct any amount for or on account of Taxes imposed
by a Taxing Authority within Argentina, or within any other jurisdiction in
which the Company is organized or engaged in business for tax purposes or such
withholding or deduction occurs as a result of the Company’s requirement to pay
tax to a Taxing Authority within Argentina as a substitute obligor in respect
of the Notes, in accordance with Argentine Law No. 23,966, as amended, and
regulations thereunder, from any payment made under or with respect to the
Notes, the Company will pay such additional amounts as may be necessary (“Additional
Amounts”) so that the net amount received by each Holder of Notes
(including such Additional Amounts) after such withholding or deduction will
not be less than the amount the Holder or beneficial owner would have received
if such Taxes had not been withheld or deducted; provided,
that no Additional Amounts will be payable with respect to a payment made to a
Holder of this Note (an “Excluded Holder”) with respect to any Taxes
which would not have been imposed, payable or due:  (i) but for the existence of any present
or former connection between the Holder (or the beneficial owner of, or person
ultimately entitled to obtain an interest in, such Note) and the taxing
jurisdiction other than the holding of, or the receipt of payments under, this
Note; (ii) if the beneficial owner of such Note

 

D-11

 

had been the Holder of
the Note and would not be entitled to the payment of Additional Amounts; or (iii) where
any such taxes, duties, assessments or governmental charges would not have been
imposed but for the failure of the Holder of such Note to comply with any
certification, identification, information, documentation or other reporting
requirements concerning the nationality, residence or connection with Argentina
of the Holder or beneficial owner of such Note, if (x) such compliance is
required by applicable law, regulation or administrative practice or any
applicable treaty of the taxing jurisdiction as a precondition to exemption
from, or reduction in the rate of, deduction or withholding of, such taxes,
duties, assessments or governmental charges, (y) at least thirty (30) days
prior to the first payment date with respect to which such requirements under
Argentine law, regulation, or administrative practice or any applicable treaty
shall apply, the Company shall have notified all Holders that such Holders will
be required to comply with such requirements, and (z) in the case of such
requirements under Argentine law, regulation or administrative practice or any
such applicable treaty, such requirements are not materially more onerous to
such Holders of Notes (in form, in procedure or in the substance of information
disclosed) than comparable information or other reporting requirements imposed
under U.S. tax law, regulation (including proposed regulations) and
administrative practice (such as IRS Forms 1001, W-8 and W-9 or any comparable
successor forms).  The Company will also (i) make
such withholding or deduction and (ii) remit the full amount deducted or
withheld to the relevant authority in accordance with applicable law.  The Company will make reasonable efforts to
obtain certified copies of tax receipts evidencing the payment of any Taxes so
deducted or withheld from each Taxing Authority imposing such Taxes.  The Company will furnish to the Holder of
this Note, within sixty (60) days after the date the payment of any Taxes so
deducted or withheld is due pursuant to applicable law, either certified copies
of tax receipts evidencing such payment by the Company or, if such receipts are
not obtainable, other evidence of such payments by the Company.

 

At least thirty (30) days prior to each date on which
any payment under or with respect to this Note is due and payable, if the
Company will be obligated to pay Additional Amounts with respect to such
payment, the Company will deliver to the Trustee an Officers’ Certificate
stating the fact that such Additional Amounts will be payable and the amounts
so payable and will set forth such other information necessary to enable the
Trustee to pay such Additional Amounts to the Holders of Notes on the payment
date.

 

In addition, the Company shall reimburse any non-Argentine
domiciled Holder of this Note or any interest herein or rights in respect
hereof who has paid Taxes to a Taxing Authority in Argentina in respect of its
holding of Notes including taxes levied in accordance with Argentine Law No. 23,966,
as amended, and regulations thereunder for any tax so paid (but only to the
extent that the Company is not required to pay Additional Amounts in respect of
such tax as provided above) within 30 days of written evidence of such payment,
including the amount paid, being provided to the Company.

 

In addition, the Company agrees to pay any stamp,
issue, registration, documentary, value added or other similar taxes and
duties, including interest and penalties, payable in Argentina or the United
States, any jurisdiction out of which payment is made or any other jurisdiction
in which the Company is organized or engaged in business, or any political
subdivision thereof or taxing authority of or in the foregoing in respect of
the creation, issue and offering of this Note. 
The Company also agrees to indemnify each Holder of this Note from and

 

D-12

 

against all court taxes
or other taxes and duties, including interest and penalties, imposed on or paid
by such Holder in any jurisdiction in connection with any action permitted to
be taken by such Holder to enforce the obligations of the Company under this
Note.  Furthermore, the Company waives
its right to reimbursement in accordance with Argentine Law No. 23,966, as
amended, and regulations thereunder, from any Holder of any amount required to
be paid by the Company to a Taxing Authority in Argentina in respect of such
Holder’s holding of Notes.

 

Any reference herein to principal and/or interest
shall be deemed also to refer to any Additional Amounts or Other Additional
Amounts, as applicable, which may be payable under the undertakings described
in this paragraph, and express reference to the payment of Additional Amounts
(if applicable) in any provisions hereof shall not be construed as excluding
Additional Amounts or Other Additional Amounts, as applicable, in those
provisions hereof where such express reference is not made.

 

Notwithstanding the
foregoing, the obligation to pay Additional Amounts to any Holder of the 7-Year
Floating Rate Notes will be subject to a maximum level not to exceed the amount
required to gross-up payments for withholdings on interest payments to a bank domiciled in a jurisdiction that (i) is
not deemed to be of low or zero taxation pursuant to Decree No. 916/2004, or (ii) has entered into an exchange
of information agreement with Argentina and that is not limited by banking or
other secrecy rules in respect of requests made by the tax authority of
such jurisdiction.

 

Other Additional Amounts

 

(a)           If, due to
either (i) the introduction of or any change in or in the interpretation
of any law or regulation (including, without limitation, the imposition of any
Eurocurrency Reserve Requirements greater than zero) or (ii) the
compliance with any guideline or request from any Governmental Agency (whether
or not having the force of law), there shall be any increase in the cost to any
Holder of 7-Year Floating Rate Notes of funding, owning, holding or maintaining
its 7-Year Floating Rate Notes or a reduction in the amount of any sum received
or receivable by any such Holder under the 7-Year Floating Rate Notes with
respect thereto, by an amount deemed by such Holder to be material, within 15
days after receipt by the Company of written demand by such Holder pursuant to
paragraph (c), the Company shall from time to time, pay to such Holder
additional amounts sufficient to compensate such Holder for such cost or
reduction from and after the later of the date such cost or reduction is
suffered by such Holder and the date of the receipt of notice specified in
paragraph (c) pursuant to which such Holder requires such payment (“Other
Additional Amounts”).  Together with
such notice, the Holder of 7-Year Floating Rate Notes will provide a
certificate as to the amount of such increased cost or reduction and providing
reasonable detail of the circumstances giving rise to the demand, prepared in
good faith and submitted to the Trustee for delivery to the Company by such
Holder, which certificate shall be prima facie
evidence for all purposes, absent manifest error.

 

(b)           Each
Holder of 7-Year Floating Rate Notes will, before requesting compensation for
Other Additional Amounts pursuant to paragraph (a), use its best efforts to
minimize or eliminate such compensation through the transfer of its 7-Year
Floating Rate Notes to a different Holding Office or to another Person if such
transfer will avoid the need for

 

D-13

 

compensation for such
Other Additional Amounts and will not, in the sole judgment of such Holder, be
otherwise disadvantageous to such Holder.

 

(c)           Each
Holder of 7-Year Floating Rate Notes will promptly notify the Trustee for
delivery to the Company of any event of which it has knowledge, occurring after
the date hereof, which will entitle such Holder of 7-Year Floating Rate Notes
to compensation pursuant to paragraph (a) and advise the Company in such
notice, or a subsequent notice, if it requires the Company to pay Other
Additional Amounts in respect of such event.

 

(d)           The
Company shall not be required to compensate a Holder of 7-Year Floating Rate
Notes as provided by paragraph (a) (i) if the increased cost or
reduction in respect of which such claim for Other Additional Amounts arises
results solely from a requirement which is applicable to the relevant Holder by
reason of its financial condition or assets and which is not of general
application to similar persons of a similar type in similar circumstances in
the same jurisdiction, (ii) in respect of franchise taxes or taxes on such
Holder’s assets or overall net income, or (iii) if the increased cost or
reduction in respect of which such claim for Other Additional Amounts arises
results solely from the transfer of the 7-Year Floating Rate Note from one
Holder to another Holder or from the designation by the Holder of 7-Year
Floating Rate Notes of a new Holding Office if the original Holder or the
Holder holding through the original Holding Office would not have been entitled
to such Other Additional Amounts, unless such transfer or designation is made
(x) with the Company’s written consent or (y) at a time when the circumstances
giving rise to such claim for Other Additional Amounts did not exist.

 

Redemption for Regulatory
Reasons

 

In the event that the adoption of any applicable law, rule or
regulation or any change in any applicable law, rule or regulation or any
change in the interpretation or administration thereof by any Governmental
Agency charged with the interpretation or administration thereof, or compliance
by any Holder of 7-Year Floating Rate Notes with any request or directive
(whether or not having the force of law) of any such Governmental Agency shall
make it unlawful or impossible for any Holder of 7-Year Floating Rate Notes to
continue to hold, own, maintain or fund its 7-Year Floating Rate Notes and such
Holder so notifies the Trustee, the Trustee will forthwith give notice thereof
to the Company.  If such Holder
determines that it may not lawfully continue to maintain and fund its 7-Year
Floating Rate Notes until maturity and so specifies in such notice, the Company
will, on the date provided therein, repay in full the then outstanding
principal amount of each such 7-Year Floating Rate Note, together with accrued
interest thereon, upon presentation thereof by such Holder with respect to any
such 7-Year Floating Rate Note.  If it is
lawful for such Holder to maintain such 7-Year Floating Rate Note through the
next Interest Payment Date then applicable to such 7-Year Floating Rate Note,
such repayment will be due on such Interest Payment Date.  If such Holder shall instead determine that
it is not lawful to continue to maintain such 7-Year Floating Rate Note, such
repayment will be due within 15 days after the date of receipt of such notice
by the Company; provided, however, that Holders
of 7-Year Floating Rate Notes will use their best efforts to avoid such
unlawfulness through, without limitation, the transfer of its 7-Year Floating
Rate Notes to a different Holding Office or to another Person
if such transfer will avoid such unlawfulness and will not, in the sole
judgment of such Holders, be otherwise reasonably disadvantageous to such
Holders.

 

D-14

 

Optional Redemption of
the 7-Year Floating Rate Notes

 

The Company will have the right exercisable at any
time on giving not more than 30 nor less than five days’ irrevocable notice to
the Holders, to redeem all, or only some (subject to a minimum of U.S.$1
million and in accordance with the provision for selection of Floating Rate
Notes to be redeemed provided for in the 7-Year Notes Indenture), of the 7-Year
Floating Rate Notes at their principal amount, together with interest accrued
to the date fixed for redemption, subject only to the provisions set forth in “Other
Redemption Costs”.

 

Other Redemption Costs

 

In respect of any 7-Year Floating Rate Notes which are
to be redeemed by the Company or which become due and payable by the Company
following an Event of Default, in addition to the principal amount of the 7-Year
Floating Rate Notes and accrued interest otherwise payable, if the date of
redemption or date of repayment is other than an Interest Payment Date, the
Company will pay each Holder whose 7-Year Floating Rate Notes are being
redeemed or repaid on the date of redemption or repayment, as and by way of
indemnity for its other redemption costs (without requirement of actual proof
of loss), an amount “E” calculated as follows:

 

(A - B) x C x D/360
= E

 

where:

 

“A” is the Rate of Interest calculated pursuant to “Interest”
for the Interest Period during which such Notes are redeemed or repaid;

 

“B” is the Rate of Interest which would be determined
pursuant to “Interest” were the date of redemption or repayment of the 7-Year
Floating Rate Notes the commencement of an Interest Period for the 7-Year
Floating Rate Notes having a duration of three months (if “D” is greater than
or equal to 75), two months (if “D” is greater than or equal to 45 but less
than 75) or one month (if “D” is less than 45) minus 1/8%;

 

“C” is the principal amount of the 7-Year Floating
Rate Notes of such Holder being redeemed or repaid; and

 

“D” is the actual number of days from and including
the date of redemption or repayment to but excluding the commencement of the
next succeeding Interest Period were the 7-Year Floating Rate Notes not so
redeemed or repaid,

 

provided, however,
that no amount will be payable pursuant to this paragraph if (i) ”A” is
less than or equal to “B” or (ii) such redemption occurs in connection
with the exchange of 7-Year Floating Rate Notes for 7-Year Fixed Rate Notes as
set forth in “Exchange for 7-Year Fixed Rate Notes” below.

 

D-15

 

Exchange for 7-Year
Fixed Rate Notes

 

Under the terms of the 7-Year Notes Indenture, each
Holder of 7-Year Floating Rate Notes shall be entitled on any Business Day
(other than any day following any Regular Record Date to and including the day
immediately preceding the related Interest Payment Date) to exchange such 7-Year
Floating Rate Notes for an equivalent principal amount in the 7-Year Fixed Rate
Notes, provided that any expenses
incurred as a result of such exchange by either such Holder or the Company
(other than any registration fees with the CNV) shall be paid by such Holder,
and provided further that the
Company shall not be required to any Other Additional Amounts incurred as a
result of such exchange.

 

To exchange a Floating Rate Note, a Holder must (a) complete
and manually sign an exchange notice in substantially the form attached to this
7-Year Floating Rate Note and deliver such notice to the Exchange Agent at its
own expense, (b) surrender the 7-Year Floating Rate Note to the Exchange
Agent duly endorsed or assigned to the Company or in blank, (c) furnish
appropriate endorsements and transfer documents (if any) required by the
Registrar or the Exchange Agent, and (d) pay any required transfer or
similar tax and make any other required payment.  Additional information regarding the exchange
right and procedures are set forth in Article Six of the Second
Supplemental Indenture.

 

For purposes of the preceding paragraph, “Exchange
Agent” means any Person authorized by the Company to accept the
presentation of 7-Year Floating Rate Notes by Holders thereof for exchange into
7-Year Fixed Rate Notes.

 

Purchase by the
Company

 

Subject to the “Limitation on Repurchase of 7-Year
Notes and 10-Year Notes” covenant, Company may at any time purchase 7-Year
Floating Rate Notes in the open market or by tender or private agreement at any
price.  All 7-Year Floating Rate Notes so
purchased must be delivered by the Company to the Trustee for cancellation.

 

Certain Covenants

 

1.             Limitation
on Indebtedness.

 

Under the terms of the 7-Year Notes Indenture, so long
as any of the 7-Year Notes are Outstanding, the Company will not, and will not
permit any of its Subsidiaries to directly or indirectly Incur any Indebtedness
(including Acquired Indebtedness); provided
that the Company (but not any Subsidiary of the Company) may Incur Indebtedness
(including Acquired Indebtedness) and a Subsidiary of the Company may Incur
Acquired Indebtedness if, after giving effect to the application of the
Incurrence of any such Indebtedness and the receipt and application of the
proceeds therefrom, the ratio of Total Consolidated Indebtedness to Annualized
Pro Forma Consolidated Operating Cash Flow would be less than or equal to 6.5
to 1.0.

 

The foregoing limitations on the Incurrence of
Indebtedness will not apply to:

 

(i)            the
Incurrence by the Company of Permitted Indebtedness;

 

D-16

 

(ii)           the
Incurrence by any Subsidiary of the Company of Permitted Subsidiary
Indebtedness;

 

(iii)          the
Incurrence of Indebtedness by the Company (but not any Subsidiary of the
Company) other than Indebtedness described in the foregoing clause (i), which
Indebtedness when added to the then outstanding Indebtedness previously
Incurred under this clause (iii) and the outstanding Indebtedness of
Subsidiaries of the Company previously Incurred under clause (iv) below,
does not exceed, as of the date of determination, U.S.$25 million in aggregate
principal amount; and

 

(iv)          the
Incurrence of Indebtedness by Subsidiaries of the Company which Indebtedness, (A) when
added to the outstanding Indebtedness of Subsidiaries of the Company previously
Incurred under this clause (iv), does not exceed, as of the date of
determination, U.S.$10 million in aggregate principal amount, and (B) when
added to the outstanding Indebtedness of the Company previously Incurred under
clause (iii) above and the outstanding Indebtedness of Subsidiaries of the
Company previously Incurred under this clause (iv), does not exceed, as of the
date of determination, U.S.$25 million in aggregate principal amount.

 

2.             Maximum
Total Consolidated Indebtedness.

 

So long as any 7-Year Notes remain Outstanding, the Company will maintain a Total
Consolidated Indebtedness of no greater than the initial aggregate principal
amount of the 7-Year Notes and the 10-Year Notes plus U.S.$5 million of
seller financing outstanding on the Issue Date plus U.S.$10 million (or
its equivalent in other currencies) minus 90% of the aggregate principal
amount of any 7-Year Notes or 10-Year Notes cancelled on or prior to the date
of determination, minus 90% of the aggregate principal amount of any
seller financing outstanding on the Issue Date plus the aggregate amount
of Indebtedness Incurred as a result of a transaction permitted under clause (iii) of
the “Consolidation, Merger and Sale of Assets” covenant herein minus 90%
of the aggregate principal amount of any such Indebtedness discharged prior to
the date of determination.

 

3.             Limitation
on Dividends and Other Payment Restrictions Affecting Significant Subsidiaries.

 

Under the terms of the 7-Year Notes Indenture, so long
as any of the 7-Year Notes are Outstanding, the Company will not, and will not
permit any Significant Subsidiary to, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or consensual restriction
of any kind on the ability of any Significant Subsidiary to (i) pay
dividends or make any other distributions permitted by applicable law to the
Company or any Significant Subsidiary on its Capital Stock or with respect to
any other interest or participation in, or measured by, its profits, (ii) pay
any Indebtedness or other obligation owed to the Company or any other
Significant Subsidiary, (iii) make loans or advances to the Company or any
other Significant Subsidiary or (iv) sell, lease or transfer any of its
property or assets to the Company or any other Significant Subsidiary.

 

D-17

 

The foregoing provisions shall not restrict (A) in
the case of clause (i), (ii), (iii) or (iv), any such encumbrance or
restriction (I) existing under the 7-Year Notes Indenture; (II) existing under
or by reason of applicable law; (III) existing under any instrument governing
Acquired Indebtedness or Capital Stock of any Person or the property or assets
of such Person acquired by the Company or any Significant Subsidiary and
existing at the time of such acquisition (except to the extent such Acquired
Indebtedness was Incurred in connection with or in contemplation of such acquisition),
which encumbrance or restriction is not applicable to any Person or the
property or assets of any Person other than such Person or the property or
assets of such Person so acquired; (IV) existing under any agreement or
instrument that refinances an Indebtedness or replaces, renews or amends an
agreement or instrument containing an encumbrance or restriction that is
permitted by clauses (I) and (III) above, provided
that the terms and conditions of any such restrictions taken as a whole are not
less favorable to the Holders than those under or pursuant to the Indebtedness
being refinanced or the agreements or instruments being replaced, renewed or
amended; or (V) with respect to a Significant Subsidiary and imposed pursuant
to an agreement that has been entered into for the sale or disposition of all
or substantially all of the Capital Stock of, or property and assets of, such
Significant Subsidiary; or (B), in the case of clause (iv) only, any such
encumbrance or restriction (I) that restricts in a customary manner the
subletting, assignment or transfer of any property or asset subject to a lease
or license, or (II) existing by virtue of any transfer of, agreement to
transfer, option or right with respect to, or Lien on, any property or assets
of the Company or any Significant Subsidiary not otherwise prohibited by the 7-Year
Notes Indenture.  Nothing contained in
this paragraph shall prevent the Company or any Significant Subsidiary from (1) creating,
incurring, assuming or suffering to exist any Liens otherwise permitted under
the “Limitation on Liens” covenant or (2) restricting the sale or other
disposition of property or assets of the Company or any of its Significant
Subsidiaries that secure Indebtedness of the Company or any Significant Subsidiary,
subject to compliance with the “Limitation on Asset Sales” covenant.

 

4.             Limitation
on the Issuance and Sale of Capital Stock of Significant Subsidiaries.

 

Under the terms of the 7-Year Notes Indenture, the
Company will not sell, and will not permit any Significant Subsidiary, directly
or indirectly, to issue or sell, any shares of Capital Stock of a Significant
Subsidiary (including options, warrants or other rights to purchase shares of
such Capital Stock) except (i) to the Company or a Wholly-Owned Subsidiary
that, at the time of such sale, is a Significant Subsidiary, (ii) if,
immediately after giving effect to such issuance or sale, such Significant
Subsidiary would no longer constitute a Significant Subsidiary, (iii) in
the case of issuances of Capital Stock by a Significant Subsidiary if, after
giving effect to such issuance, the Company maintains its percentage ownership
of such Significant Subsidiary, (iv) the issuance to or ownership by
directors of directors’ qualifying shares or the issuance to or ownership by a
Person of Capital Stock of any Significant Subsidiary, to the extent mandated
by applicable law, or (v) the issuance or transfer of Capital Stock of a
Significant Subsidiary to the seller or transferor of a
Cable/Telecommunications Business, provided
that after giving effect to any such issuance or transfer, the Company holds at
least 51% of the Capital Stock (including 51% of the Voting Stock) of any such
Significant Subsidiary, and provided further
that in the case of clauses (ii), (iii) and (v) above, any
such issuance or sale shall comply with the “Limitation on Asset Sales”
covenant.

 

D-18

 

5.             Limitation
on Issuances of Guarantees by Subsidiaries.

 

Under the terms of the 7-Year Notes Indenture, the
Company will not permit any Subsidiary of the Company, directly or indirectly,
to Guarantee any Indebtedness of the Company (“Guaranteed Indebtedness”),
unless (i) such Subsidiary simultaneously executes and delivers a
supplemental indenture to the 7-Year Notes Indenture providing for a Guarantee
by such Subsidiary (a “Subsidiary Guarantee”) of payment of the 7-Year
Notes and (ii) such Subsidiary waives and will not in any manner
whatsoever claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any other rights against the Company
or any other Subsidiary of the Company as a result of any payment by such
Subsidiary under its Subsidiary Guarantee; provided
that this paragraph shall not be applicable to any Guarantee of any Subsidiary
of the Company that (x) exists at the time such Person becomes a Subsidiary of
the Company and (y) was not Incurred in connection with, or in contemplation
of, such Person becoming a Subsidiary of the Company.  If the Guaranteed Indebtedness is pari passu with the 7-Year Notes, then the
Guarantee of such Guaranteed Indebtedness shall be pari passu with, or subordinated to, the Subsidiary
Guarantee.  If the Guaranteed
Indebtedness is subordinated to the 7-Year Notes, then the Guarantee of such
Guaranteed Indebtedness shall be subordinated to the Subsidiary Guarantee at
least to the extent that the Guaranteed Indebtedness is subordinated to the 7-Year
Notes.

 

Notwithstanding the foregoing, any Subsidiary
Guarantee by a Subsidiary of the Company shall provide by its terms that it
shall be automatically and unconditionally released and discharged upon (i) any
sale, exchange or transfer, to any Person not an Affiliate of the Company, of
all of the Company’s and each of its Subsidiary’s Capital Stock in, or all or
substantially all the assets of, such of its Subsidiary (which sale, exchange
or transfer is not in contravention of the “Limitation on Asset Sales” covenant
and is not otherwise prohibited hereby) or (ii) the release or discharge
of the Guarantee which resulted in the creation of such Subsidiary Guarantee,
except a discharge or release by or as a result of payment under such
Guarantee.

 

6.             Limitation
on Transactions with Shareholders and Affiliates.

 

Under the terms of the 7-Year Notes Indenture, the
Company will not, and will not permit any Subsidiary to, directly or
indirectly, conduct any business, enter into, renew or extend any transaction
(including, without limitation, the purchase, sale, lease, exchange or transfer
of property or assets, the rendering of any service, or the making of any
payment, loan, advance or guarantee) with, or for the benefit of, any holder
(or any Affiliate of such holder) of 10% or more of the Capital Stock of the
Company or with any Affiliate of the Company or of any Subsidiary (together, “Related
Persons” and each, a “Related Person”), unless the terms to the
Company or such Subsidiary (i) are at least as favorable to the Company or
such Subsidiary as those that could be obtained at the time of such transaction
in arm’s length dealings with a Person who is not a Related Person, and (ii) in
the case of any transaction (or series of transactions) with a Related Person
involving aggregate payments made on or after the Issue Date in excess of U.S.$10
million in any fiscal year, shall be approved by a majority of the
disinterested members of the Board of Directors of the Company, or if no such
disinterested directors exist with respect to such transaction (or series of
transactions), shall be confirmed by

 

D-19

 

an opinion of an
Independent Financial Advisor to be fair, from a financial point of view, to
the Company or such Subsidiary.

 

The foregoing limitation does not limit, and shall not
apply to (i) any transaction between the Company and any of its
Subsidiaries or between Subsidiaries, (ii) payment of reasonable and
customary compensation and fees to directors of the Company and the
Subsidiaries who are not employees of the Company or any Subsidiary, or (iii) the
grant of stock options or similar rights to acquire Capital Stock (other than
Disqualified Stock) to employees and directors of the Company pursuant to plans
approved by the Board of Directors provided that, in the aggregate, the shares
of Capital Stock underlying such options or similar rights issued since the
Issue Date (exclusive of any shares of Capital Stock or similar rights required
to be issued by law) shall not exceed 2.5% of the outstanding Common Stock of
the Company on a fully diluted basis at the date of determination.

 

7.             Limitation
on Liens.

 

Under the terms of the 7-Year Notes Indenture, the
Company will not, and will not permit any Subsidiary of the Company to create,
incur, assume or suffer to exist any Liens of any kind (other than Permitted
Liens) against or upon any of its property or assets (including any shares of
Capital Stock), now owned or hereafter acquired, or any proceeds therefrom
securing any Indebtedness unless provision is made directly to secure the 7-Year
Notes equally and ratably by a Lien on such property, assets or proceeds with
(or, if the obligation or liability to be secured by such Lien is Subordinated
Indebtedness, prior to) the obligation or liability secured by such Lien.

 

8.             Limitations
on Sale and Leaseback Transactions.

 

Under the terms of the 7-Year Notes Indenture, the
Company will not, and will not permit any of its Subsidiaries to, directly or
indirectly, enter into, assume, guarantee or otherwise become liable with
respect to any Sale and Leaseback Transaction, unless:  (i) the net proceeds from such
transaction are at least equal to the Fair Market Value of the property being
transferred and (ii) shall comply with the “Limitation on Asset Sales”
covenant.

 

For purposes of the preceding paragraph, “Sale and
Leaseback Transaction” means, with respect to any Person, any direct or
indirect arrangement (excluding, however, any such arrangement between such
Person and a Wholly-Owned Subsidiary of such Person or between one or more
Wholly-Owned Subsidiaries of such Person) pursuant to which property is sold or
transferred by such Person or a Subsidiary of such Person and is thereafter
leased back from the purchaser or transferee thereof by such Person or one of
their Subsidiaries.

 

9.             Limitation
on Asset Sales.

 

Under the terms of the 7-Year Notes Indenture, the
Company will not, and will not permit any of its Subsidiaries to make any Asset
Sale that would result in a Material Adverse Effect occurring and, in the case
of Asset Sales involving consideration of U.S.$10 million or more, unless an
Independent Financial Advisor shall have delivered a valuation of the property
or asset being sold to the Board of Directors and at a price consistent with
such valuation.

 

D-20

 

10.           Reports
to Holders.

 

Under the terms of the 7-Year Notes Indenture, the
Company covenants to deliver to the Trustee:

 

(a)           (i) annual
consolidated financial statements with a report from a major internationally
recognized independent public accountant with respect to such year within 180
days after the end of the fiscal year and (ii) quarterly consolidated
financial statements within 60 days after the end of each of the first three
fiscal quarters;

 

(b)           such
additional information as the Company has filed with any regulatory authority
with jurisdiction over the Company within ten business days of the filing
thereof;

 

(c)           written
notice of the occurrence of any Default or Event of Default within ten Business
Days of the Company becoming aware of any such Default or Event of Default,
which notice shall be signed by the CEO, CFO or the chief accounting officer of
the Company; and

 

(d)           written
certification, on or before a date not more than 90 days after the end of each
fiscal year, that a review has been conducted of the activities of the Company
and its Subsidiaries, and of the Company’s and its Subsidiaries’ performance
under the 7-Year Notes Indenture, and that the Company has, to the best of
their knowledge, fulfilled all obligations under the 7-Year Notes Indenture,
or, if there has been a default in the fulfillment of any such obligation,
specifying each such default and the nature and status thereof.

 

Delivery of such reports, information and documents to
the Trustee is for informational purposes only and the Trustee’s receipt of
such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Company’s compliance with any of its covenants hereunder (as to which the Trustee
is entitled to rely exclusively on Officers’ Certificates).

 

11.           Consolidation,
Merger and Sale of Assets.

 

Under the terms of the 7-Year Notes Indenture, the
Company shall not consolidate with, merge with or into, or sell, convey,
transfer, lease or otherwise dispose of all or substantially all of its
property and assets (as an entirety or substantially an entirety in one
transaction or a series of related transactions) to, any Person (other than a
consolidation or merger with or into a Wholly-Owned Subsidiary which, at the
time of such consolidation or merger, is a Significant Subsidiary with a
positive net worth; provided
that, in connection with any such merger or consolidation, no consideration
(other than Common Stock in the surviving Person or the Company) shall be
issued or distributed to the stockholders of the Company) or permit any Person
to merge with or into the Company unless: 
(i) the Company shall be the continuing Person, or the Person (if
other than the Company) formed by such consolidation or into which the Company
is merged or that acquired or leased such property and assets of the Company
shall expressly assume, by a supplemental indenture, executed and delivered to
a Responsible Officer of the Trustee, all of the obligations of the Company
under the 7-Year Notes Indenture; (ii) immediately after giving effect to
such transaction, no Default or Event of Default shall have occurred and be
continuing; (iii) (A) the transaction will involve a Person
principally

 

D-21

 

engaged in the Company’s
line of business or in a business or activities ancillary to the Company’s line
of business, or reasonably related therewith (including, but not limited to
programming, MMDS, broadband, pay television and the provision of access
service to, content for or ancillary services such as web-hosting, network
security and monitoring, digital certificates or equipment installation or
maintenance, for the Internet, but excluding non-pay television services, AM or
FM radio broadcasting, telephone or cellular communications and publication of
newspapers), (B) immediately after giving effect to such transaction on a
pro forma basis, the Company, or any surviving Person will have Consolidated
Net Worth equal to or greater than the Consolidated Net Worth of the Company
immediately preceding the transaction (provided that this requirement will not
apply where such transaction involves another Person engaged in substantially
the Company’s line of business in Argentina), and (C) (1) the
weighted average life of the Company’s (or the surviving Person’s) consolidated
Indebtedness after giving effect to the transaction would exceed the lesser of
(x) five years and (y) the weighted average life of the Company’s consolidated
Indebtedness immediately prior to the transaction and (2) after giving
effect to such transaction the Company (or the surviving Person) would either
be permitted to Incur at least U.S.$1.00 of additional Indebtedness pursuant to
the “Limitation on Indebtedness” covenant, if such Incurrence was not permitted
prior to giving effect to such transaction or, if such Incurrence was
permitted, have a lower ratio of Total Consolidated Indebtedness to Annualized
Pro Forma Consolidated Operating Cash Flow than that of the Company prior to
giving effect to such transaction; and (iv) the Company delivers to the
Trustee an Officers’ Certificate (attaching the arithmetic computations to
demonstrate compliance with clause (iii)) and an opinion of reputable Argentine
counsel, in each case stating that such consolidation, merger or transfer and
such supplemental indenture complies with clause (i) of this provision and
that all conditions precedent provided for herein relating to such transaction
have been complied with.

 

12.           Reserve
Accounts.

 

Under
the terms of the 7-Year Notes Indenture, so long as any of the 7-Year Notes are
Outstanding, the Company will establish and maintain with a bank located in New
York two U.S. dollar-denominated reserve accounts (the “Reserve Accounts”)
to which the Company will transfer, on a ratable basis (by reference to the amounts
of principal and interest due (including additional amounts) within twelve
months of the date of determination under the 7-Year Notes, in one case, and
the 10-Year Notes, in the other case), on the first Interest Payment Date
following May 15th (the “First Annual Transfer Date”)
and November 15th (the “Second Annual Transfer Date”
and, together with the First Annual Transfer Date, the “Transfer Dates”)
of any given year, any amount of Excess Cash calculated, in the case of the
First Annual Transfer Date, by reference to the Company’s unaudited interim
consolidated financial statements as of and for the three-month period ended March 31st
of the same calendar year, and for the Second Annual Transfer Date, by
reference to the Company’s unaudited interim consolidated financial statements
as of and for the three-month period ended September 30th of
the same calendar year, so that (A) the balance in one of the Reserve
Accounts (the “7-Year Notes Reserve Account”) shall not exceed the sum
of (x) 12 months of interest payments on the 7-Year Notes (assuming an interest
rate of 7% for any 7-Year Notes that are 7-Year Floating Rate Notes) and
Additional Amounts, if any, thereon and (y) any amount of principal of the 7-Year
Notes due within 12 months of such Transfer Date, and (B) the balance in
the other Reserve Account (the “10-Year Notes Reserve Account”) shall
not exceed 12 months of interest payments on the 10-Year Notes

 

D-22

 

and Additional Amounts,
if any, thereon.  Amounts required to be
transferred in accordance herewith will be determined by reference to the Peso
amounts using the Company’s consolidated balance sheets for the relevant dates
and converting such amounts into U.S. Dollars at the prevailing exchange rate
on the Buenos Aires business day immediately preceding the relevant Transfer
Date.  The 7-Year Notes Reserve Account
shall be subject to a first-priority security interest in favor of the Trustee,
as collateral agent for the Holders of 7-Year Notes.  In the event that on any Transfer Date any
restrictions or prohibition of access to the Argentine foreign exchange market
exists, the Company agrees to transfer all amounts required to be transferred
under this section either (i) by purchasing, with Pesos, any series
of “Bonos Externos de la República Argentina” or any other securities or public
or private bonds issued in Argentina and denominated in U.S. Dollars, and transferring
and selling such instruments outside Argentina for U.S. dollars, or (ii) by
means of any other legal procedure existing in Argentina on any such Transfer
Date.  All costs and taxes payable in
connection with the procedures referred to in (i) and (ii) above
shall be borne by the Company.  In the
event that the Company consummates the transactions contemplated in the APE on
the date that is after March 31 or September 30, as applicable, the
amount of Excess Cash required to be transferred on the first Transfer Date
after the issuance of the 7-Year Notes will be reduced by an amount equal to
all cash payments the Company is required to make in connection with or in
contemplation of that closing.

 

13.           Cash
Sweep.

 

Under the terms of the 7-Year Notes Indenture, so long
as any principal amount of 7-Year Notes shall remain outstanding, if the amount
of Excess Cash for any Transfer Date (after complying with the obligation set
forth in Clause 12) exceeds U.S.$3,000,000 (or the equivalent thereof in other
currencies), the Company will apply 70% of any such surplus Excess Cash (the
determination of such amount to be certified by the Company’s independent
auditors) plus, without duplication, 100% of the Unapplied Net Asset Sale
Proceeds on such Transfer Date to the ratable pre-payment of any outstanding 7-Year
Notes.  Amounts required to be prepaid in
accordance herewith will be determined by reference to the Peso amounts using
the Company’s consolidated balance sheets for the relevant dates and converting
such amounts into U.S. Dollars at the prevailing exchange rate on the date of
the mandatory prepayment).  In the event
that on any Transfer Date any restriction or prohibition of access to the
Argentine foreign exchange market exists, the Company agrees to pay all amounts
required to be paid under this section either (i) by purchasing, with
Pesos, any series of “Bonos Externos de la República Argentina” or any other
securities or public or private bonds issued in Argentina and denominated in
U.S. Dollars, and transferring and selling such instruments outside Argentina
for U.S. dollars, or (ii) by means of any other legal procedure existing
in Argentina on any such Transfer Date. 
All costs and taxes payable in connection with the procedures referred
to in (i) and (ii) above shall be borne by the Company.

 

The Company shall effectuate any pre-payment of the 7-Year
Notes described in Section 4.3(a) by providing not more than 30 nor
less than five days’ irrevocable notice to Holders of 7-Year Notes and
redeeming Outstanding 7-Year Notes, on a pro rata basis, at their remaining
principal amount thereof, together with accrued interest to the relevant
Transfer Date.

 

D-23

 

14.           Limitation
on Capital Expenditures.

 

Under the terms of the 7-Year Notes Indenture, so long
as any 7-Year Notes shall remain Outstanding, except for Asset Sale Proceed
Reinvestments, the Company shall not make or permit any Subsidiaries to make
any Capital Expenditure at any time, except that the Company and its
Subsidiaries may make such Capital Expenditures if after giving effect to such
Capital Expenditures, the aggregate amount of all Capital Expenditures of the
Company and its Subsidiaries in each of the following periods would not exceed
the sum of:

 

(A) U.S.$15 million for every six months starting
with the six-month period ending June 30, 2005 through the maturity date
of the 7-Year Notes;

 

and

 

(B) in each of the periods, the unused portion of
Capital Expenditures permitted under clause (A) above for the prior period
(after giving effect to the application of this clause (B)).

 

15.           Limitation
on Interest Expense.

 

At any time after the issuance of the 7-Year Notes, so
long as any 7-Year Notes remain Outstanding, the Company will not permit the
ratio of Pro Forma Consolidated Operating Cash Flow to Consolidated Interest
Expense in each case for any period of four consecutive fiscal quarters to be
less than (A) 2.0 to 1.0 for any such period ending on or prior to the
[second anniversary of the Issue Date of the 7-Year Notes], (B) 2.25 to
1.0 for any such period ending after the [second anniversary] and on or prior
to the [fifth anniversary] of the Issue Date of the 7-Year Notes, and (C) 2.50
to 1.0 for any such period ending after the [fifth anniversary] of the Issue
Date of the 7-Year Notes; provided
that the Company will not be subject to the limitation set forth in this
covenant in any fiscal quarter but not more than two consecutive fiscal
quarters if a Macroeconomic Disruption Event has occurred during the prior
fiscal quarter.

 

16.           Limitation
on Repurchase of 7-Year Notes and 10-Year Notes.

 

Under the terms of the 7-Year Notes Indenture, so long
as any 7-Year Notes shall remain Outstanding, the Company shall not purchase
any 7-Year Notes or 10-Year Notes in the open market or by tender or private
agreement until the first Transfer Date following the issuance of the 7-Year
Notes and thereafter the Company shall not be permitted to purchase any 10-Year
Notes in the open market or by tender or private agreement by using an amount
of Excess Cash during the period between any two Transfer Dates that is greater
than any amount of Excess Cash used by the Company to redeem any Outstanding 7-Year
Notes on the immediately preceding Transfer Date in accordance with the terms
of the 7-Year Notes Indenture.

 

17.           Limitation
on Restricted Payments.

 

So long as any 7-Year Notes shall remain outstanding,
the Company shall not redeem, repurchase, retire or otherwise acquire any of
its capital stock, make a dividend or

 

D-24

 

distribution with respect
to its capital stock or other ownership interest in it (or options or warrants
in respect thereto).

 

Events of Default

 

The following events will be each defined as an “Event
of Default” for the 7-Year Notes Indenture:

 

(a)           failure to
pay principal of or premium, if any, on any of the 7-Year Notes when the same
shall become due and payable at maturity, upon acceleration, redemption or
otherwise;

 

(b)           failure to
pay interest, or Additional Amounts, if any, (or, with respect to the 7-Year
Floating Rate Notes, Other Additional Amounts, if any) on any of the 7-Year
Notes when the same shall become due and payable, and such failure continues
for a period of 30 days;

 

(c)           failure to
perform or comply with the “Consolidation, Merger and Sale of Assets” covenant,
the “Cash Sweep” covenant, or for a period of 30 consecutive days after
the occurrence of such failure, the “Maximum Total Consolidated Indebtedness”
covenant, the “Limitation on Indebtedness” covenant, or the “Limitation on
Interest Expense” covenant;

 

(d)           failure to
perform or breach of any other covenant or agreement in the 7-Year Notes
Indenture or under the 7-Year Notes (other than those referred to in clauses
(a), (b) and (c) above) and such failure or breach continues for a
period of 30 consecutive days after written notice shall have been given to the
Company by the Trustee or to the Company and the Trustee by the Holders of at
least 25% in aggregate principal amount of the 7-Year Notes then Outstanding;

 

(e)           the
occurrence with respect to any issue or issues of Indebtedness of the Company
or any Significant Subsidiary having an outstanding principal amount of U.S.$5
million or more (or its equivalent in other currencies) in the aggregate for
all such issues of all such Persons, whether such Indebtedness now exists or
shall hereafter be created, of (I) an event of default that has caused such
Indebtedness to become, or the holders thereof to declare such Indebtedness to
be, due and payable prior to its Stated Maturity and/or (II) the failure to
make a payment of principal and in the case of the 10-Year Notes, interest when
such payment is due and payable;

 

(f)            one or
more final judgments, orders or binding arbitration awards, for the payment of
money in excess of U.S.$5 million (or its equivalent in other currencies),
either individually or in the aggregate for all such final judgments, orders or
binding arbitration awards, shall be rendered against the Company or any Significant
Subsidiary or any of their respective properties and shall not be paid or
discharged, and there shall have been a period of 60 consecutive days
following entry of the final judgment, order or binding arbitration award that
causes the aggregate amount for all such final judgment, orders or binding
arbitration awards outstanding and not paid or discharged against all such
Persons to exceed U.S.$5 million (or its equivalent in other currencies) during
which a stay of enforcement of such final judgments,

 

D-25

 

orders or binding
arbitration awards, by reason of a pending appeal or otherwise, shall not be in
effect;

 

(g)           any
government or governmental authority shall have condemned, nationalized,
seized, or otherwise expropriated all or any substantial portion of the assets
or property of the Company or any Significant Subsidiary or the share capital
of the Company or any Significant Subsidiary, or shall have assumed custody or
control of such assets or property or of the business or operations of the
Company or any Significant Subsidiary or of the share capital of the Company or
any Significant Subsidiary, or shall have taken any action that would prevent
the Company or any Significant Subsidiary or its officers from carrying on its
business or operations or a substantial part thereof for a period of longer
than 60 consecutive days and the result of any such action shall materially
prejudice the ability of the Company to perform its obligations under the 7-Year
Notes;

 

(h)           the
Argentine Government shall declare a general suspension of payment or a
moratorium on the payment of debt of the Company (which does not expressly
exclude the 7-Year Notes);

 

(i)            the
Company or any Significant Subsidiary (I) is declared by a court of competent
jurisdiction to be insolvent or bankrupt or unable to pay its debts, (II)
commences or consents to the commencement of a case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, (III)
makes a general assignment or an arrangement or composition with or for the
benefit of creditors, (IV) admits in writing its inability to pay its debts
generally as they become due, or (V) takes corporate action in furtherance of
any of the foregoing;

 

(j)            an order
or decree is made or an effective resolution passed for relief against the
Company or a Significant Subsidiary under any applicable bankruptcy law, or for
the winding-up or dissolution of the Company or any Significant Subsidiary or
adjudging the Company or any Significant Subsidiary bankrupt or insolvent under
any applicable bankruptcy law and in each case such order or decree remains
unstayed and in effect for a period of 60 consecutive days, or the Company or
any Significant Subsidiary ceases or threatens to cease to carry on all or a
material part of its business or operations, except for the purpose of and
followed by a reconstruction, amalgamation, reorganization (“concurso preventivo” or “concordato”), merger or consolidation in
the case of a Significant Subsidiary, whereby the undertaking and the assets of
such Significant Subsidiary, or all of the undertaking and assets relating to
the Company’s direct or indirect shareholding in such Significant Subsidiary,
as the case may be, are transferred to or otherwise vested in the Company or
any other Significant Subsidiary or Subsidiary which as a result of such
transfer would become a Significant Subsidiary; or

 

(k)           it becomes
unlawful for the Company to perform or comply with any one or more of its
obligations under any of the 7-Year Notes or the 7-Year Notes Indenture, and
such unlawfulness continues for a period of 60 consecutive days after written
notice shall have been given to the Company by the Trustee or to the Company
and the Trustee by the Holders of at least 25% in aggregate principal amount of
the 7-Year Notes then outstanding.

 

D-26

 

Acceleration of Maturity;
Rescission and Annulment

 

If an Event of Default (other than an Event of Default
specified in clause (i) or (j) above that occurs with respect to the
Company) occurs and is continuing under the 7-Year Notes Indenture, the Trustee
thereunder or the Holders of at least 25% in aggregate principal amount then
outstanding of the 7-Year Notes, by written notice to the Company (and to the
Trustee if such notice is given by the Holders), may, and the Trustee at the
request of such Holders shall, declare the 7-Year Notes to be immediately due
and payable at 100% of the principal amount thereof, plus accrued and unpaid
interest thereon, if any, to the date of such declaration.  Upon a declaration of acceleration, such
principal, premium if any, and accrued interest shall be immediately due and
payable.  In the event of a declaration
of acceleration because an Event of Default set forth in clause (e) above
has occurred and is continuing, such declaration of acceleration shall be
automatically rescinded and annulled if the event of default triggering such
Event of Default pursuant to clause (e) shall be remedied or cured by the
Company and/or the relevant Subsidiaries or waived by the holders of the
relevant Indebtedness within 30 days after the declaration of acceleration with
respect thereto.  If an Event of Default
specified in clause (i) or (j) above occurs with respect to the Company,
the 7-Year Notes then outstanding shall ipso facto become and be immediately
due and payable at 100% of the outstanding principal amount thereof, plus
premium, if any, thereon and accrued and unpaid interest thereon in each case
without any declaration or other act on the part of the Trustee or any Holder.

 

The Holders of at least a majority in principal amount
of the outstanding 7-Year Notes, by written notice to the Company and to the
Trustee, may rescind and annul a declaration of acceleration and its
consequences if, in addition to certain other covenants, (i) all existing
Events of Default, other than the nonpayment of the principal of and premium,
if any, interest and Additional Amounts, if any, (and, with respect to the 7-Year
Floating Rate Notes, Other Additional Amounts, if any) on such 7-Year Notes
that have become due solely by such declaration of acceleration, have been
cured or waived and (ii) the rescission would not conflict with any
judgment, decree or order of a court of competent jurisdiction.  The Holders of at least a majority in
aggregate principal amount of the outstanding 7-Year Notes, by written notice
to the Trustee, may waive an existing Default or Event of Default and the
consequences under the 7-Year Notes Indenture, except a Default in the payment
of principal of, premium, if any, on or interest on the 7-Year Notes or in
respect of a covenant or provision of the 7-Year Notes Indenture that cannot be
modified or amended without the consent of the Holder of each outstanding 7-Year
Note affected.

 

The Holders of at least a majority in aggregate
principal amount of the outstanding 7-Year Notes may on behalf of the Holders
of all of the 7-Year Notes, direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee with respect to the 7-Year Notes by the 7-Year
Notes Indenture.  However, the Trustee
under the 7-Year Notes Indenture may refuse to follow any direction that
conflicts with law or the 7-Year Notes Indenture, that may involve the Trustee
in personal liability, or that the Trustee determines in good faith may be
unduly prejudicial to the rights of Holders of 7-Year Notes not joining in the
giving of such direction and may
take any other action it deems proper that is not inconsistent with any such
direction received from Holders of 7-Year Notes.  A Holder may not pursue any remedy with
respect to the 7-Year Notes Indenture or this 7-Year Note unless:  (i) the Holder gives the Trustee written

 

D-27

 

notice of a continuing
Event of Default; (ii) the Holders of at least 25% in aggregate principal
amount at maturity of outstanding 7-Year Notes make a written request to the
Trustee to pursue the remedy; (iii) such Holder or Holders offer the
Trustee indemnity satisfactory to the Trustee against any costs, liability or
expense; (iv) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of indemnity; and (v) during
such 60-day period, the Holders of a majority in aggregate principal amount of
the outstanding 7-Year Notes do not give the Trustee a direction that is
inconsistent with the request.  However,
such limitations do not apply to the right of any Holder of a 7-Year Note to
receive payment of the principal of, premium, if any, on or interest on such 7-Year
Note or to bring suit for the enforcement of any such payment, on or after the
due date expressed in the 7-Year Notes, which right shall not be impaired or
affected without the consent of such Holder.

 

Meetings of Holders;
Modification and Waiver

 

(a)           The
Trustee or the Company shall, upon the written request of the Holders of at
least five percent in aggregate principal amount of the 7-Year Notes at the
time Outstanding, or the Company or the Trustee at its discretion, may, call a
meeting of the Holders at any time and from time to time, to make, give or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided by the 7-Year Notes to be made, given or taken by such
Holders.  With respect to all matters not
contemplated in the 7-Year Notes Indenture, meetings of Holders will be held in
Buenos Aires in accordance with the Negotiable Obligations Law; provided, however, that the Company or the Trustee may
determine to hold any such meetings simultaneously in Buenos Aires and in The
City of New York by any means of telecommunication.  Meetings shall be held at such time and at
such place as the Company or the Trustee shall determine in such cities.  If a meeting is being held pursuant to a
request of Holders, the agenda for the meeting shall be as determined in the
request and such meeting shall be convened within 40 days from the date such
request is received by the Trustee or the Company, as the case may be.  Notice of any meeting of Holders (which shall
include the date, place and time of the meeting, the agenda therefor and the
requirements to attend) shall be published not less than ten days nor more than
30 days prior to the date fixed for the meeting in the Boletín
Oficial de la República (the Official Gazette of Argentina) and,
while there are Holders domiciled in Argentina, in a newspaper having major
circulation in Argentina and any publication of such notice shall be for five
consecutive Business Days in each place of publication.

 

(b)           Any Holder
may attend the meeting in person or by proxy. 
Directors, officers, managers, members of the Supervisory Committee and
employees of the Company may not be appointed as proxies.  Holders of 7-Year Notes who intend to attend
a meeting of Holders must notify the Registrar of their intention to do so at
least three days prior to the date of such meeting.  The
Company shall, prior to any vote, deliver to the Trustee a notice signed by the
CFO or the chief accounting officer certifying, to the best of the Company’s
knowledge, as to the Notes held by any Affiliate of the Company.

 

(c)           Except as
specified in “Acceleration of Maturity; Rescission and Annulment,” decisions
shall be made by the affirmative vote of the Holders of at least 51% in
aggregate principal amount of the 7-Year Notes at the time outstanding present
or represented at

 

D-28

 

a meeting of such Holders
at which a quorum is present; provided, however,
that the affirmative vote of the Holders of the applicable percentage in
aggregate principal amount of the 7-Year Notes at the time Outstanding
specified under “Events of Default” shall be required to take the actions
specified under such heading; provided further, however,
that the unanimous affirmative vote of the Holders of 7-Year Notes shall be
required to adopt a valid decision on:

 

(i)            changing
the Stated Maturity of, or failing to pay, the principal of, premium, if any,
on or any installment of interest on any 7-Year Note, or reducing the principal
amount thereof, premium, if any, thereon or the rate of interest thereon or
changing the requirement to pay Additional Amounts thereon (or, with respect to
the 7-Year Floating Rate Notes, changing the requirement to pay Other
Additional Amounts thereon), or releasing any amounts held in the Reserve
Accounts;

 

(ii)           changing
the place of payment where, or the coin or currency in which, the principal of,
premium, if any, on or interest or Additional Amounts (if any) on any 7-Year
Note (or Other Additional Amounts (if any) on any 7-Year Floating Rate Notes)
is payable;

 

(iii)          impairing
the right to institute suit for the enforcement of any such payment on or after
the Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date);

 

(iv)          reducing
the percentage in principal amount of the outstanding 7-Year Notes, the consent
of the Holders of which is required for the adoption of a resolution or the
quorum required to constitute a meeting of Holders at which a resolution is
adopted or the percentage in principal amount of outstanding Step Up Notes the
Holders of which are entitled to request the calling of a meeting of Holders;
or

 

(v)           modifying
the percentage in principal amount of the 7-Year Notes, the consent of Holders
which is required to waive a past Default or Event of Default.

 

Except as provided above,
any modifications, amendments or waivers to the terms and conditions of the 7-Year
Notes will be conclusive and binding on all Holders of 7-Year Notes, whether or
not they were present at any meeting, and whether or not notation of such
modifications, amendments or waivers is made upon the 7-Year Notes, provided that any such modification, amendment or waiver was
duly passed at a meeting convened and held in accordance with the provisions of
the Negotiable Obligations Law.

 

(d)           Meetings
of the Holders of 7-Year Notes shall be either “first call” meetings (“primera convocatoria”) or “second call” meetings (“segunda convocatoria”). 
All meetings of the Holders of 7-Year Notes shall be deemed to be a
first call meeting; provided, however, that any reconvened meeting adjourned for lack of a
requisite quorum shall be deemed a second call meeting.  The quorum applicable at a meeting of the
Holders of 7-Year Notes shall be as follows:

 

(i)            the
quorum for meetings called to adopt a resolution by which Holders of 7-Year
Notes shall make any request, demand or direction or give any notice (other
than

 

D-29

 

a resolution specified in
paragraph (ii) below) shall, (A) in the case of first call meetings,
be such Persons holding or representing a majority in aggregate principal
amount of the 7-Year Notes at the time outstanding and (B) in the case of
second call meetings, be such Persons present at such meeting holding or
representing 7-Year Notes at the time outstanding; and

 

(ii)           the quorum
for meetings called to adopt a resolution by which Holders of 7-Year Notes
consent to any waiver under the 7-Year Notes or the 7-Year Notes Indenture,
agree to any amendment to the 7-Year Notes Indenture or the terms and
conditions of the 7-Year Notes, or specify the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred upon the Trustee with respect to the 7-Year Notes
by the 7-Year Notes Indenture shall (A) in the case of first call
meetings, be Persons holding or representing at least 60% in aggregate
principal amount of the 7-Year Notes at the time outstanding and (B) in
the case of second call meetings, be Persons holding or representing at least
30% in aggregate principal amount of the 7-Year Notes at the time outstanding.

 

(e)           Without
the vote of any Holders of 7-Year Notes, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental to the 7-Year Notes Indenture in form
satisfactory to the Trustee, for any of the following purposes:

 

(i)            to
evidence the succession of another Person to the Company and the assumption by
any such successor of the covenants of the Company in the 7-Year Notes
Indenture and in the 7-Year Notes; or

 

(ii)           to add to
the covenants of the Company for the benefit of the Holders or to surrender any
right or power herein conferred upon the Company; or

 

(iii)          to
secure the 7-Year Notes; or

 

(iv)          to comply
with any requirements of the Commission in order to effect and maintain the
qualification of the 7-Year Notes Indenture under the Trust Indenture Act; or

 

(v)           to
evidence and provide for acceptance of appointment hereunder by a successor
Trustee pursuant to the provisions of the 7-Year Notes Indenture; or

 

(vi)          to evidence
any further issue of notes having terms and conditions the same as those of the
7-Year Notes (or the same except for the payment of interest accruing prior to
the issue date of such additional notes or except for the first payment of
interest following the issue date of such additional notes), which additional
notes may be consolidated and form a single series with the 7-Year Notes; or

 

(vii)         to
cure any ambiguity, to correct or supplement any provision herein which may be
inconsistent with any other provision herein, or to make any other provisions
with respect to matters or questions arising under the 7-Year Notes Indenture
which shall not be inconsistent with the provisions of the 7-Year Notes
Indenture,

 

D-30

 

provided that
such action pursuant to this clause (vii) shall not adversely affect the
interests of the Holders in any material respect; or

 

(viii)        to
increase the aggregate principal amount of Public Debt Securities at any time
outstanding under the 7-Year Notes Indenture.

 

No reference herein to the 7-Year Notes Indenture and
no provision of this 7-Year Floating Rate Note or of the 7-Year Notes Indenture
shall alter or impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of and premium (if any), interest,
Additional Amounts (if any) and Other Additional Amounts (if any) on this 7-Year
Floating Rate Note at the times, place and rate, and in the coin or currency,
herein prescribed.

 

Notices

 

Notices to Holders of Registered 7-Year Floating Rate
Notes will be mailed to them at their respective addresses as they appear in
the register maintained by the Registrar and shall be published as may be
required by applicable law or, to the extent there are Holders domiciled in
Argentina (i) in a leading newspaper having general circulation in
Argentina, (ii) for so long as any 7-Year Floating Rate Notes is listed on
the Buenos Aires Stock Exchange, in the Bulletin of the Buenos Aires Stock
Exchange, and (iii) in the Official Gazette of
Argentina.  Any notice so
mailed shall be deemed to have been given on the date of such mailing.  In any case where notice to Holders is given
by mail, neither the failure to mail such notice, nor any defect in any notice
so mailed, to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders of Registered 7-Year Floating Rate Notes.  Any notice mailed to a Holder in the manner
herein prescribed shall be deemed to have been received by (i) a Holder
domiciled in Argentina when actually received and (ii) a Holder domiciled
outside of Argentina when so mailed.

 

Discharge and Defeasance

 

Under the terms of the 7-Year Notes Indenture, the
Company may at its option by a resolution of the Board of Directors, at any
time, upon the satisfaction of certain conditions described below, elect to be
discharged from its obligations with respect to outstanding 7-Year Floating
Rate Notes (“defeasance”).  In
general, upon a defeasance, the Company shall be deemed to have paid and
discharged the entire indebtedness represented by the outstanding 7-Year
Floating Rate Notes and to have satisfied all of its obligations under such 7-Year
Floating Rate Notes except for (i) the rights of Holders of such 7-Year
Floating Rate Notes and any related coupons to receive, solely from the trust
fund established for such purposes as described below, payments in respect of
the principal of, premium, if any, on and interest on such 7-Year Floating Rate
Notes when such payments are due, (ii) certain provisions relating to
ownership, registration and transfer of the 7-Year Floating Rate Notes, (iii) certain
provisions relating to the mutilation, destruction, loss or theft of the 7-Year
Floating Rate Notes, (iv) the Company’s obligations to effect a registered
exchange offer or a private exchange offer, (v) the covenant relating to
the maintenance of an office or agency in Buenos Aires and The City of New York
and (vi) certain provisions relating to the rights, powers, trusts duties
and immunities of the Trustee.

 

D-31

 

In addition, the Company may at its option by Board
Resolution, at any time, upon the satisfaction of certain conditions described
below, elect to be released from certain covenants described in the 7-Year
Notes Indenture (“covenant defeasance”). 
Following such covenant defeasance, the occurrence of a breach or
violation of any such covenant will not be deemed to be an Event of Default
under the 7-Year Notes Indenture.

 

In order to cause a defeasance or covenant defeasance,
the Company will be required to satisfy, among other conditions, the following
conditions:

 

(a)           the
Company shall have irrevocably deposited or caused to be deposited with the
Trustee as funds in trust, money or U.S. Government Obligations, or a
combination thereof, sufficient, in the opinion of an internationally
recognized firm of independent public accountants, to pay and discharge the
principal of, premium, if any, on and each installment of interest on the
outstanding 7-Year Floating Rate Notes on the Stated Maturity or on the
applicable Redemption Date, as the case may be, of such principal, premium, if
any, or installment of interest in accordance with the terms of this Floating
Rate Note, and such amounts will be applied for such purpose, and the Company
must specify whether the 7-Year Floating Rate Notes are being defeased to
maturity or to a particular Redemption Date;

 

(b)           in the
case of an election fully to defease the 7-Year Floating Rate Notes, the
Company shall have delivered to the Trustee an Opinion of Counsel stating that
(x) the Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (y) since the date of the 7-Year Notes Indenture
there has been a change in the applicable federal income tax law or the
interpretation thereof, in either case to the effect that, and based thereon
such opinion shall confirm that, the Holders of the outstanding 7-Year Floating
Rate Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit, defeasance and discharge and will be
subject to federal income tax on the same amount, in the same manner and at the
same time as would have been the case if such deposit, defeasance and discharge
had not occurred;

 

(c)           in the
case of a covenant defeasance, the Company shall have delivered to the Trustee
an Opinion of Counsel to the effect that the Holders of the outstanding 7-Year
Floating Rate Notes will not recognize income, gain or loss for federal income
tax purposes as a result of such deposit and covenant defeasance and will be
subject to federal income tax on the same amount, in the same manner and at the
same time as would have been the case if such deposit and covenant defeasance
had not occurred;

 

(d)           the
Company shall have delivered to the Trustee an Officers’ Certificate to the
effect that the 7-Year Floating Rate Notes, if then listed on any securities
exchange, will not be delisted as a result of such deposit;

 

(e)           no Event of
Default or event which with notice or lapse of time or both would become an
Event of Default shall have occurred and be continuing on the date of such
deposit (other than a Default or Event of Default resulting from the borrowing
of funds to be applied to such deposit) after giving effect thereto or, with
respect to a Default or Event of Default specified in clauses (i) or (j)
of the first paragraph of “Events of Default”, at any time

 

D-32

 

during the period ending
on the 121st day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until the expiration of such period);

 

(f)            such
defeasance or covenant defeasance shall not cause the Trustee to have a
conflicting interest as defined in the 7-Year Notes Indenture and for the
purposes of the Trust Indenture Act with respect to any securities of the
Company;

 

(g)           such
defeasance or covenant defeasance shall not result in a breach or violation of,
or constitute a default under, any other material agreement or instrument to
which the Company is a party or by which it is bound;

 

(h)           the
Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent relating to
either defeasance or covenant defeasance (as the case may be) have been
complied with; and

 

(i)            such
defeasance or covenant defeasance shall not result in the trust arising from
such deposit constituting an investment company as defined in the U.S.
Investment Company Act of 1940, as amended, or such trust shall be qualified
under such act or exempt from regulation thereunder.

 

Trustee Dealings with the
Company

 

Subject to certain limitations imposed by the Trust
Indenture Act, the Trustee under the 7-Year Notes Indenture, in its individual
or any other capacity, may become the owner or pledgee of 7-Year Floating Rate
Notes and may otherwise deal with the Company and receive, collect, hold and
retain collections from the Company or its Affiliates with the same rights it
would have if it were not Trustee.  Any
Paying Agent, Registrar or Co-Registrar may do the same with like rights.

 

No Personal Liability of
Incorporators, Shareholders, Officers, Board of Directors Members or Employees

 

The 7-Year Notes Indenture provides that no recourse
for the payment of the principal of, premium, if any, on or interest on any of
the 7-Year Floating Rate Notes or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in the 7-Year Notes Indenture or in this 7-Year
Floating Rate Note or because of the creation of any Indebtedness represented
thereby, shall be had against any incorporator, shareholder, officer, director,
employee, Board of Directors member or controlling person of the Company or of
any successor Person thereof.  Each
Holder, by accepting the 7-Year Floating Rate Notes, waives and releases all
such liability.  The waiver and release
are part of the consideration for issuance of the 7-Year Floating Rate
Notes.  Such waiver may not be effective
to waive liabilities under Argentine or the U.S. federal securities laws and it
is the view of the Commission that such a waiver is against public policy.

 

D-33

 

Additional Waiver
and Release

 

As
part of the consideration for issuance of the 7-Year Floating Rate Notes, each
Holder of 7-Year Floating Rate Notes, by accepting the 7-Year Floating Rate
Notes, waives any rights that it may have pursuant to Argentine law to claw
back (acción revocatoria) or
bring action against any director of the Company (acción de responsabilidad), and releases such director from
any liability, arising out of payments made by the Company as a result of the
consummation of the cash option under the Company’s APE.

 

Governing Law and
Enforceability

 

The Negotiable Obligations Law governs the
requirements for the 7-Year Floating Rate Notes to qualify as Obligaciones Negociables thereunder, while such law,
together with the Argentine Business Companies Law No. 19,550, as amended,
and other applicable Argentine laws, govern the capacity and corporate
authority of the Company to execute and deliver the 7-Year Floating Rate
Notes.  All other matters in respect of
the 7-Year Floating Rate Notes and the 7-Year Notes Indenture, including but
not limited to the statute of limitations applicable thereto, are governed by
and shall be construed in accordance with the laws of the State of New York,
United States.

 

The Company consents to the non-exclusive jurisdiction
of any court of the State of New York or any United States federal court
sitting in the Borough of Manhattan, The City of New York, New York, United
States, and any appellate court from any thereof, and waives any immunity from
the jurisdiction of such courts over any suit, action or proceeding that may be
brought in connection with the 7-Year Notes Indenture or this Floating Rate
Note.  The Company irrevocably waives, to
the fullest extent permitted by law, any objection to any suit, action, or
proceeding that may be brought in connection with the 7-Year Notes Indenture or
this 7-Year Floating Rate Note in such courts whether on the grounds of venue,
residence or domicile or on the ground that any such suit, action or proceeding
has been brought in an inconvenient forum. 
The Company agrees that final judgment in any such suit, action or
proceeding brought in such court shall be conclusive and binding upon the Company
and may be enforced in any court to the jurisdiction of which the Company is
subject by a suit upon such judgment; provided that
service of process is effected upon the Company in the manner provided by the 7-Year
Notes Indenture.  Notwithstanding the
foregoing, any suit, action or proceeding brought in connection with the 7-Year
Notes Indenture or this 7-Year Floating Rate Note may be instituted in any
competent court in Argentina.

 

The Company agrees that service of all writs, process
and summonses in any suit, action or proceeding brought in connection with the 7-Year
Notes Indenture or this 7-Year Floating Rate Note against the Company in any
court of the State of New York or any United States federal court sitting in
the Borough of Manhattan, The City of New York, New York, United States, may be
made upon CT Corporation System at 111 Eighth Avenue, New York, New York 10011,
whom the Company irrevocably appoints as its authorized agent for service of
process.  The Company represents and
warrants that CT Corporation System has agreed to act as the Company’s agent
for service of process.  The Company
agrees that such appointment shall be irrevocable so long as any of the 7-Year
Notes remain Outstanding or until the irrevocable appointment by the Company of
a successor in The City of New York as its authorized agent for

 

D-34

 

such purpose and the
acceptance of such appointment by such successor.  The Company further agrees to take any and
all action, including the filing of any and all documents and instruments, that
may be necessary to continue such appointment in full force and effect as
aforesaid.  If CT Corporation System
shall cease to act as the Company’s agent for service of process, the Company
shall appoint without delay another such agent and provide prompt written
notice to the Trustee of such appointment. 
With respect to any such action in any court of the State of New York or
any United States federal court in the Borough of Manhattan, The City of New
York, New York, United States, service of process upon CT Corporation
System, as the authorized agent of the Company for service of process, and
written notice of such service to the Company, shall be deemed, in every
respect, effective service of process upon the Company.

 

Currency Indemnity

 

The U.S. Dollar is the sole currency of account and
payment for all sums payable by the Company under or in connection with this
Floating Rate Note.  Any amount received
or recovered in currency other than U.S. Dollars (whether as a result of, or of
the enforcement of, a judgment or order of a court of any jurisdiction, in the
winding up or dissolution of the Company or otherwise) by any Holder of 7-Year
Floating Rate Notes in respect of any sum expressed to be due to it from the
Company shall only constitute a discharge of the Company to the extent of the
U.S. Dollar amount which the recipient is able to purchase with the amount so
received or recovered in that other currency on the date of that receipt or
recovery (or, if it is not practicable to make that purchase on that date, on
the first date on which it is practicable to do so).  If that U.S. Dollar amount is less than the
U.S. Dollar amount expressed to be due to the recipient under any Floating Rate
Note, the Company shall indemnify such recipient against any loss sustained by
it as a result.  In any event, the
Company shall indemnify the recipient against the cost of making any such
purchase.  For the purposes of this paragraph,
it will be sufficient for the Holder to certify (indicating the sources of
information used) that it would have suffered a loss had an actual purchase of
U.S. Dollars been made with the amount so received in that other currency on
the date of receipt or recovery (or, if a purchase of U.S. Dollars on such date
had not been practicable, or the first date on which it would have been
practicable).  These indemnities
constitute a separate and independent obligation from the Company’s other
obligations, shall give rise to a separate and independent cause of action,
shall apply irrespective of any waiver granted by any Holder of 7-Year Floating
Rate Notes and shall continue in full force and effect despite any other
judgment, order, claim or proof for a liquidated amount in respect of any sum
due under any 7-Year Floating Rate Note or any other judgment or order.

 

Defined Terms

 

“7-Year Fixed Rate Notes” means the series of
Debt Securities known as the Company’s 7-Year Fixed Rate Notes due [2012]
issued (or to be issued) pursuant to the 7-Year Notes Indenture.

 

“7-Year Notes” means both the series of Debt
Securities known as the Company’s 7-Year Fixed Rate Notes due [2012] and the
series of Debt Securities known as the Company’s 7-Year Floating Rate Notes,
all of which were (or to be) issued pursuant to the 7-Year Notes Indenture.

 

D-35

 

“10-Year Notes
Indenture” means the Indenture, as supplemented and amended by the First
Supplemental Indenture, dated as of [   
], [2005], among the
Company, Law Debenture Trust Company of New York, as the Trustee, Co-Registrar and Principal Paying Agent
thereunder, and HSBC Bank Argentina S.A., as Registrar and Paying Agent
thereunder.

 

“10-Year Notes”
means the series of Debt Securities known as the Company’s Step-Up 10-Year
Notes issued (or to be issued) pursuant to the 10-Year Notes Indenture.

 

“Acquired Indebtedness” means Indebtedness of a
Person existing at the time such Person became or was designated a Subsidiary
of the Company and not Incurred in connection with, or in contemplation of,
such Person becoming a Subsidiary of the Company.

 

“Affiliate” means, as applied to any Person,
any other Person directly or indirectly controlling, controlled by, or under
direct or indirect common control with, such Person.

 

“Annualized Pro Forma Consolidated Operating Cash
Flow” means Consolidated Operating Cash Flow for the latest fiscal quarter
for which consolidated financial statements of the Company are available
multiplied by four.  For purposes of
calculating “Consolidated Operating Cash Flow” for any fiscal quarter
for purposes of this definition, (i) any Subsidiary of the Company that is
a Subsidiary on the Transaction Date shall be deemed to have been a Subsidiary
at all times during such fiscal quarter and (ii) any Subsidiary of the
Company that is not a Subsidiary on the Transaction Date shall be deemed not to
have been a Subsidiary at any time during such fiscal quarter.  In addition to and without limitation of the
foregoing, for purposes of this definition, “Consolidated Operating Cash
Flow” shall be calculated after giving effect on a pro forma basis for the
applicable fiscal quarter to, without duplication, any Asset Sale or Asset
Acquisition (including, without limitation, any Asset Acquisition giving rise
to the need to make such calculation as a result of the Company or one of its
Subsidiaries (including any Person who becomes a Subsidiary as a result of the
Asset Acquisition) Incurring Acquired Indebtedness) occurring during the period
commencing on the first day of such fiscal quarter to and including the
Transaction Date (the “Reference Period”), as if such Asset Sale or
Asset Acquisition occurred on the first day of the Reference Period.

 

“APE” means an acuerdo preventivo
extrajudicial, or Argentine
pre-packaged reorganization plan.

 

“Applicable Margin” means
[    ]% per annum.

 

“Argentina” means the Republic of Argentina.

 

“Argentine Government” means the government of
Argentina.

 

“Asset Acquisition” means (i) an
Investment or capital contribution (by means of transfers of cash or other
property to others or payments for property or services for the account or use
of others, or otherwise) by the Company or any of its Subsidiaries in any other
Person, or any acquisition or purchase of Capital Stock of another Person by
the Company or any of its Subsidiaries, in either case pursuant to which such
Person shall become a Subsidiary of the Company or shall be merged with or into
or consolidated with the Company or any Subsidiary of the Company or (ii) an
acquisition by the Company or any of its Subsidiaries of the property and

 

D-36

 

assets of any Person
other than the Company or any of its Subsidiaries which constitute
substantially all of a division, operating unit or line of business of such
Person or which is otherwise outside the ordinary course of business.

 

“Asset Sale” means any direct or indirect sale,
transfer, conveyance or lease (which has the effect of a disposition and is not
for security purposes) or other disposition (including by way of sale-leaseback
transactions) in one transaction or a series of related transactions by the
Company or any Subsidiary of the Company to any Person other than the Company
or any Subsidiary of the Company of (i) all or any of the Capital Stock of
any Subsidiary of the Company (other than directors’ qualifying shares or
shares owned by a Person, to the extent mandated by applicable law), (ii) any
material license or other authorization of the Company or any Subsidiary of the
Company pertaining to a Cable/Telecommunications Business, (iii) all or
substantially all of the property and assets of an operating unit or business
of the Company or any Subsidiary of the Company or (iv) any other property
and assets of the Company or any Subsidiary of the Company and, in each case,
that is not governed by the “Consolidation, Merger and Sale of Assets” covenant
hereof; provided, however that the term “Asset
Sale” shall in no case include any sale, transfer, conveyance, lease or
other disposition in one transaction or a series of related transactions (i) of
property or equipment that has become worn out, obsolete or damaged or
otherwise unsuitable for use in connection with the business of the Company or
any Subsidiary of the Company, as the case may be, (ii) involving assets with
a Fair Market Value not in excess of U.S.$500,000, (iii) of inventory in
the ordinary course of business, or (iv) involving the sale or other
disposition of cash or Cash Equivalents.

 

“Asset Sale Proceeds
Reinvestment” means any Capital Expenditure made with the proceeds of any
Asset Sale within 180 days of such Asset Sale.

 

“Average Life” means, at any date of
determination with respect to any Indebtedness, the quotient obtained by
dividing (i) the sum of the products of (a) the number of years from
such date of determination to the dates of each successive scheduled principal
payment, redemption or similar payment with respect to such Indebtedness and (b) the
amount of such principal payment by (ii) the sum of all such principal
payments.

 

“Board of Directors” means the board of
directors of the Company.

 

“Board Resolution” means a copy of a resolution
certified by a director of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such certification,
and delivered to the Trustee.

 

“Business Day” means any day (other than a
Saturday or Sunday) on which DTC, Euroclear or Clearstream, Luxembourg and
banks in The City of New York and Buenos Aires are open for business.

 

“Cable/Telecommunications Business” means any
business operating a cable and/or telecommunications services and/or
communications services or programming business located in South America,
including, without limitation, any business conducted by the Company on the
Issue Date.

 

D-37

 

“Calculation Agent” means [ ], until a
successor Calculation Agent shall have become designated pursuant to the
applicable provisions of the 7-Year Notes Indenture, and, thereafter, “Calculation
Agent” shall mean such successor Calculation Agent.

 

“Capital Expenditure” means with respect to any
Person for any period the sum of all Investments and, without duplication,
expenditures made directly or indirectly for equipment, fixed assets, real
property or improvement thereto or substitutions thereof that have been or
should be reflected as additions to property, plant or equipment on a consolidated balance sheet in accordance with GAAP.

 

“Capital Stock” means, with respect to any
Person, any and all shares, interests, participations, rights in or other
equivalents (however designated, whether voting or non-voting) in equity of
such Person, whether outstanding at the Issue Date or issued thereafter,
including, without limitation, all Common Stock and Disqualified Stock, and any
and all rights, warrants or options exchangeable for or convertible into any
thereof.

 

“Capitalized Lease” means, as applied to any
Person, any lease or license of, or other agreement conveying the right to use,
any property (whether real, personal or mixed, movable or immovable) of which
the present value of the obligations of such Person to pay rent or other
amounts is required, in conformity with GAAP, to be classified and accounted
for as a finance lease obligation; and “Capitalized Lease Obligation” is
defined to mean the capitalized present value of the obligations to pay rent or
other amounts under such lease or other agreement, determined in accordance
with GAAP.

 

“Cash Equivalents” means (i) any evidence
of Indebtedness with a maturity of 365 days or less issued or directly and
fully guaranteed or insured by Argentina or the United States or any agency or
instrumentality thereof (provided that
the full faith and credit of Argentina or the United States, as the case may
be, is pledged in support thereof or such Indebtedness constitutes a general
obligation of such country); (ii) deposits, certificates of deposit or
acceptances with a maturity of 180 days or less of, or Indebtedness with a
maturity of 365 days or less directly and fully secured by an irrevocable
standby letter of credit issued or confirmed by, (x) any financial institution
that is a member of the Federal Reserve System, and has combined capital and
surplus and undivided profits (or any similar capital concept) of not less than
U.S.$500 million or (y) Credit Suisse First Boston Corporation, Fleet Bank,
Banco Francés - BBVA, Banco Río de la Plata S.A, Banco de Galicia y Buenos
Aires S.A., Citibank, N.A. and any of the five largest banks (based on assets
as of the last December 31) organized under the laws of Argentina, provided that such bank is not under intervention,
receivership or any similar arrangement at the time of such deposit or the
acquisition of such certificate of deposit or acceptance; (iii) commercial
paper with a maturity of 180 days or less issued by a corporation (other than
an Affiliate of the Company) organized under the laws of Argentina or any part
thereof or the United States or any state thereof or the District of Columbia
and rated at least “A-1” by Standard & Poor’s Corporation or “P-1” by
Moody’s Investors Service; (iv) repurchase agreements and reverse
repurchase agreements relating to marketable direct obligations issued or
unconditionally guaranteed by the government of Argentina or the United States
government (in the case of any Argentine or United States government
obligations), in each case maturing within one year from the date of
acquisition and (v) investments in money

 

D-38

 

market funds all of the
assets of which consist of securities of the type described in the foregoing
clauses (i) through (iii).

 

“Clearstream, Luxembourg” means Clearstream
Banking, société anonyme (formerly known as Cedelbank), and its successors.

 

“CNV” means the Argentine Comisión Nacional de
Valores.

 

“Co-Registrar” means Law Debenture Trust
Company of New York, until a successor Co-Registrar shall have become such
pursuant to the applicable provisions of the 7-Year Notes Indenture, and,
thereafter, “Co-Registrar” shall mean such successor Co-Registrar.

 

“Commission” means the U.S. Securities and
Exchange Commission, as from time to time constituted, created under the
Exchange Act, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.

 

“Common Stock” means with respect to any
Person, any and all shares, interests or other participations in, and other
equivalents (however designated and whether voting or non-voting) of such
Person’s common stock or ordinary shares, whether or not outstanding at the
Issue Date or issued thereafter, and includes, without limitation, all series
and classes of such common stock or ordinary shares.

 

“Company” means the Person named as the “Company”
in the first paragraph of this instrument until a successor Person shall have
become such pursuant to the applicable provisions of the 7-Year Notes Indenture
and thereafter “Company” shall mean such successor Person.

 

“Company Request” or “Company Order”
means a written request or order signed in the name of the Company by any of
its directors or alternate directors or its chief financial officer and a
director or alternate director and delivered to the Trustee.

 

“Consolidated Income Tax Expense” means, for
any period, the provision for local, foreign and all other income taxes of the
Company and its Subsidiaries for such period as determined in accordance with
GAAP.

 

“Consolidated Interest Expense” means, for any
period, the aggregate amount of interest expense in respect of Indebtedness
(including, without limitation, amortization of original issue discount on any
indebtedness and the interest portion of any deferred payment obligation, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers’ acceptance financing and the net costs associated with
Interest Rate Protection Obligations, but excluding, for the avoidance of
doubt, any taxes or other governmental charges) and all but the principal
component of rent or other amounts in respect of Capitalized Lease Obligations
paid, accrued or scheduled to be paid or to be accrued by the Company and its
Subsidiaries during such period, but excluding, any premiums, fees and expenses
(and any amortization thereof) payable in connection with the offering of any 7-Year
Notes or other Indebtedness, all as determined on a consolidated basis in
conformity with GAAP.

 

D-39

 

“Consolidated Net Income” means, for any
period, the consolidated net income (or loss) of the Company and its
Subsidiaries for such period determined in accordance with GAAP, adjusted, to
the extent included in calculating such consolidated net income, by excluding,
without duplication, (i) all extraordinary gains or losses of such Person
for such period, (ii) income of the Company and its Subsidiaries derived
from or in respect of all Investments in Persons other than any of its
Subsidiaries, (iii) the portion of net income (or loss) of such Person
allocable to minority interests in unconsolidated Persons for such period,
except to the extent actually received by the Company or any of its
Subsidiaries, (iv) net income (or loss) of any other Person combined with
such Person on a “pooling of interests” basis attributable to any period prior
to the date of combination, (v) any gain or loss, net of taxes, realized
by such Person upon the termination of any employee pension benefit plan during
such period, (vi) gains (but not losses) in respect of any Asset Sales
during such period and (vii) the net income of any Subsidiary of the
Company for such period to the extent that the declaration of dividends or
similar distributions by such Subsidiary of that income is not at the time
permitted, directly or indirectly, by operation of the terms of its
constitutional documents or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulations applicable to that Subsidiary or
its stockholders.

 

“Consolidated Net Worth” means, with respect to
any Person as of any date, the total of the amounts shown on the balance sheet
of such Person and its consolidated subsidiaries, determined on a consolidated
basis in accordance with GAAP, as of the end of the most recent fiscal quarter
for which consolidated financial statements for such Person and its
consolidated subsidiaries have been prepared prior to the taking of any action
for the purpose of which the determination is being made, as (i) the par
or stated value of all outstanding Capital Stock of such Person plus (ii) paid-in
capital or capital surplus relating to such Capital Stock plus (iii) any
retained earnings or earned surplus less (iv) (A) any accumulated
deficit and (B) any amounts attributable to Disqualified Stock of such
Person not held by such Person or its Subsidiaries.

 

“Consolidated Operating Cash Flow” means, with
respect to any period, the Consolidated Net Income for such period increased by
the sum of (i) the Consolidated Income Tax Expense of the Company and its
Subsidiaries accrued according to GAAP for such period (only to the extent the
corresponding income was included in computing Consolidated Net Income for such
period and other than taxes attributable to extraordinary, unusual or
nonrecurring gains or losses); (ii) Consolidated Interest Expense of the
Company and its Subsidiaries for such period; (iii) consolidated
depreciation of the Company and its Subsidiaries for such period; (iv) consolidated
amortization of the Company and its Subsidiaries for such period, including,
without limitation, amortization of capitalized debt issuance costs for such
period; and (v) all other non-cash items of the Company and its
Subsidiaries reducing Consolidated Net Income (excluding any non-cash items to
the extent they represent an accrual of, or a reserve for, cash disbursements
for any subsequent period); and reduced by (vi) all non-cash items of the
Company and its Subsidiaries increasing Consolidated Net Income for such
period; in each case determined on a consolidated basis in accordance with
GAAP.

 

“control” (including, with correlative
meanings, the terms “controlling,” “controlled by” and “under
common control with”), as applied to any Person, means the possession by
another Person (whether directly or indirectly and whether by the ownership of
share capital, the possession of voting power, contract or otherwise) of the
power to appoint

 

D-40

 

and/or remove the
majority of the members of the board of directors or other governing body of
such Person or otherwise to direct or cause the direction of the affairs and
policies of such Person.

 

“Corporate Trust Office” means the office of
the Trustee located at 767 Third Avenue, 31st Floor, New York, New
York 10017.

 

“Corporation” means a sociedad
anónima, sociedad de
responsibilidad limitada, corporation, association, company or
business trust.

 

“Currency Agreement” means any foreign exchange
contract, currency swap agreement or other similar agreement or arrangement
designed to protect the Company or any Significant Subsidiary against
fluctuations in currency values.

 

“Default” means any event that is, or after
notice or passage of time or both would be, an Event of Default.

 

“Depositary” means, DTC, its nominees, and
their respective successors or such other depositary as may be designated with
respect thereto.

 

“Disqualified Stock” means, with respect to any
Person, any Capital Stock of such Person which, by its terms (or by the terms
of any security into which it is convertible or for which it is exchangeable),
or upon the happening of any event, matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or is exchangeable for
Indebtedness, or is redeemable at the option of the holder thereof, in whole or
in part, on or prior to the final maturity date of the 7-Year Notes.

 

“DTC” means The
Depository Trust Company and its successors.

 

“Euroclear” means Euroclear Bank S.A./N.V., as
operator of the Euroclear System, and its successors.

 

“Eurocurrency Reserve Requirements” means, for
any day, the aggregate (without duplication) of the rates (expressed as a
decimal fraction) of reserve requirements in effect on such day (including,
without limitation, basic, supplemental, marginal and emergency reserves under
any regulations of the Board of Governors of the Federal Reserve System of the
United States (the “Board”) or other Governmental Agency having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System of the United States.

 

“Event of Default” means any of the events
specified in “Events of Default” herein.

 

“Excess Cash” means
an amount equal to (x) in the case of the First Annual Transfer Date, the sum
of the Company’s consolidated cash and cash equivalents as of March 31st
of each calendar year (net of any balance held in the Reserve Accounts as of
such date) and in the case of the Second Annual Transfer Date, the sum of the
Company’s consolidated cash

 

D-41

 

and cash equivalents as of September 30th of such calendar year
(net of any balance held in the Reserve Accounts as of such date), in each case
assuming the conversion into U.S. Dollars of cash and cash equivalents that are
not denominated in U.S. Dollars using the prevailing exchange rate on the
Buenos Aires business day immediately preceding such Transfer Date.

 

“Exchange Act” means the U.S. Securities
Exchange Act of 1934, as amended.

 

“Fair Market Value” means, with respect to any
asset or property, the price that could be negotiated in an arms-length free
market transaction, for cash, between a willing seller and a willing buyer,
neither of whom is under pressure or compulsion to complete the
transaction.  Unless otherwise specified
in the 7-Year Notes Indenture, Fair Market Value shall be determined by the
chief financial officer of the Company and shall be evidenced by an Officers’
Certificate delivered to the Trustee at its request.

 

“Floating Rate Note Register” means the books
for the exchange, registration and registration of transfer for Registered 7-Year
Floating Rate Notes.

 

“GAAP” means generally accepted accounting
principles in effect in Argentina as of the date of determination.

 

“Global Note” means a 7-Year Floating Rate Note
in definitive global form that is deposited with DTC or another Depositary, or
a nominee thereof, for credit to the respective accounts of the beneficial
owners of the 7-Year Floating Rate Notes represented thereby.

 

“Governmental Agency” means any public legal
entity or public agency of Argentina or the United States, whether created by
any competent authority, federal, state or local government, or any other legal
entity now existing or hereafter created, or now or hereafter owned or
controlled, directly or indirectly, by any public legal entity or public agency
of Argentina or the United States.

 

“Guarantee” means any obligation, contingent or
otherwise, of any Person directly or indirectly guaranteeing any Indebtedness
or other obligation of any other Person and, without limiting the generality of
the foregoing, any obligation, direct or indirect, contingent or otherwise, of
such Person (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation of such other
Person (whether arising by virtue of partnership arrangements, or by agreements
to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or (ii) entered
into for purposes of assuring in any other manner the obligee of such
Indebtedness or other obligation of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part); provided that the term “Guarantee” shall not include
endorsements for collection or deposit in the ordinary course of business.  The term “Guarantee” used as a verb
has a corresponding meaning.

 

“Guarantor” means any Person obligated under a
Guarantee.

 

“Holder” means a Person in whose name a 7-Year
Floating Rate Note or a 7-Year Note, as the case may be, is registered in the 7-Year
Floating Rate Note Register and/or the

 

D-42

 

books for the exchange,
registration and registration of transfer of the registered 7-Year Fixed Rate
Notes.

 

“Holding Office” means any particular office or
branch through which a Holder holds a Floating Rate Note.

 

“Incur” means, with respect to any
Indebtedness, to incur, create, issue, assume, Guarantee or otherwise,
contingently or otherwise, become liable, directly or indirectly, for or with
respect to, or become responsible for, the payment of such Indebtedness,
including an Incurrence of Acquired Indebtedness by reason of the acquisition
of more than 50% of the Capital Stock of any Person; provided
that neither the accrual of interest nor the accretion of original issue discount
shall be considered an Incurrence of Indebtedness.  The term “Incurrence” used as a noun has a
corresponding meaning.

 

“Indebtedness” means, with respect to any
Person at any date of determination (without duplication), (i) any
liability, contingent or otherwise, of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all obligations of such Person in respect of
letters of credit or other similar instruments (including reimbursement
obligations with respect thereto), (iv) all obligations of such Person to
pay the deferred and unpaid purchase price of property or services, including
purchase money obligations, which purchase price is due more than 180 days
after the date of placing such property in service or taking delivery and title
thereto or the completion of such services, except Trade Payables, (v) all
obligations of such Person as lessee under Capitalized Leases, (vi) all
Indebtedness of other Persons secured by a Lien on any asset of such Person,
whether or not such Indebtedness is assumed by or is otherwise the legal
liability of such Person; provided that
the amount of such Indebtedness shall be the lesser of (A) the Fair Market
Value of such asset at such date of determination and (B) the amount of
such Indebtedness, (vii) all Indebtedness of other Persons Guaranteed by
such Person or which is otherwise the legal liability of such Person, to the
extent such Indebtedness is Guaranteed by or is otherwise the legal liability
of such Person, (viii) to the extent not otherwise included in this
definition, obligations under Currency Agreements and Interest Rate Protection
Obligations, (ix) any and all deferrals, renewals, extensions and
refundings of, or amendments of or supplements to, any liability or obligation
of the kind described in this definition, and (x) Disqualified Stock.  The amount of Indebtedness of any Person at
any date shall be the outstanding balance at such date of all unconditional
obligations as described above and, with respect to contingent obligations, the
maximum liability upon the occurrence of the contingency giving rise to the
obligation, provided that the amount outstanding at
any time of any Indebtedness issued with original issue discount is the face
amount of such Indebtedness less the remaining unamortized portion of the
original issue discount of such Indebtedness at such time as determined in
conformity with GAAP.

 

“Independent Financial Advisor” means an
investment banking firm of international standing (i) which does not, and
whose shareholders, members, directors, officers or Affiliates do not, have a
material direct or indirect financial interest in the Company or one or more
Significant Subsidiaries, and (ii) which is otherwise independent and
qualified to perform the task for which it is to be engaged.

 

D-43

 

“Interest Payment Date” means each of the dates
on which interest is due on the 7-Year Floating Rate Notes specified in “Interest”
herein.

 

“Interest Rate Protection Obligations” means
the obligations of any Person pursuant to any arrangement with any other Person
whereby, directly or indirectly, such Person is entitled to receive from time
to time periodic payments calculated by applying either a floating or a fixed
rate of interest on a stated notional amount and shall include, without
limitation, interest rate swaps, caps, floors, collars, forward interest rate
agreements and similar agreements.

 

“Investment” means, with respect to any Person,
any direct or indirect advance, loan, account receivable (other than an account
receivable arising in the ordinary course of business), or other extension of
credit (including, without limitation, by means of any Guarantee or similar arrangement)
or any capital contribution to (by means of transfers of property to others,
payments for property or services for the account or use of others, or
otherwise), or any purchase or ownership of any stocks, bonds, notes,
debentures or other securities of, any other Person (excluding Subsidiaries but
not any Person that becomes a Subsidiary after giving effect to the
Investment).  Notwithstanding the
foregoing, in no event shall any issuance of Capital Stock (other than
Disqualified Stock) of the Company in exchange for Capital Stock, property or
assets of another Person constitute an Investment by the Company in such other
Person.

 

“Issue Date” means the original date of
issuance and purchase of the 7-Year Floating Rate Notes as specified in or
pursuant to the relevant Board Resolution, Officers’ Certificate, or indenture
supplemental hereto with respect thereto.

 

“Lien” means any mortgage, charge, pledge,
security interest, encumbrance, lien (statutory or other), hypothecation,
assignment for security, claim, or preference or priority or other encumbrance
of any kind upon or with respect to any property (including, without
limitation, any conditional sale or other title retention agreement or lease in
the nature thereof, any sale with recourse against the seller or any Affiliate
of the seller, or any agreement to give any security interest).

 

“Macroeconomic Disruption Event” means for any
fiscal quarter a depreciation in the average Peso-U.S. dollar exchange rate (as
determined by reference to the rate for the purchase of U.S. dollars with
Argentine Pesos quoted by Reuters page ARSIB=offer prices as of 3:00 p.m.
Buenos Aires time for each day of such fiscal quarter) of 20% or more compared
to such average exchange rate for the prior fiscal quarter.

 

“Material Adverse Effect” means any material
adverse effect whatsoever on the property, financial condition, business or
operations of the Company and its Subsidiaries, taken as a whole.

 

“Maturity”, when used with respect to any
Floating Rate Note, means the date on which the principal of such 7-Year
Floating Rate Note becomes due and payable as therein or herein provided,
whether at the Stated Maturity or by declaration of acceleration, call for
redemption or otherwise, as specified in or pursuant to the relevant Board
Resolution, Officers’ Certificate or the indenture supplemental hereto with
respect thereto.

 

“Negotiable Obligations Law” means Argentine
Law No. 23,576, as amended.

 

D-44

 

“Officer” means the chairman of the Board of
Directors, the chief executive officer, the chief financial officer, the
treasurer, the controller or any member of the Board of Directors of the
Company.

 

“Officers’ Certificate” means a certificate
signed by any two of the chief executive officer, chief operating officer and
chief financial officer of the Company.

 

“Opinion of Counsel” means a written opinion
from legal counsel who is reasonably acceptable to the Trustee, which may
include an individual employed as counsel to the Company or the Trustee.

 

“Other Additional
Amounts” means those certain additional amounts that may be paid to Holders
of 7-Year Floating Rate Notes as specified in “Other Additional Amounts”
herein.

 

“Outstanding” means, as of the date of
determination, all 7-Year Notes theretofore authenticated and delivered under
the 7-Year Notes Indenture, except:

 

(i)            7-Year
Notes theretofore canceled by the Trustee or delivered to the Trustee for
cancellation;

 

(ii)           7-Year
Notes, or portions thereof, for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any Paying
Agent (other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the Holders
of such 7-Year Notes; provided that,
if such 7-Year Notes are to be redeemed, notice of such redemption has been
duly given pursuant to the 7-Year Notes Indenture or provision therefor
satisfactory to the Trustee has been made;

 

(iii)          7-Year
Notes which have been duly defeased or as to which the Company has effected
covenant defeasance pursuant to “Discharge and Defeasance” herein; and

 

(iv)          7-Year
Notes which have been paid pursuant to the 7-Year Notes Indenture or in
exchange for or in lieu of which other 7-Year Notes have been authenticated and
delivered pursuant to the 7-Year Notes Indenture, other than any such 7-Year
Notes in respect of which there shall have been presented to the Trustee proof
satisfactory to it that such 7-Year Notes are held by a bona fide
purchaser in whose hands such 7-Year Notes are valid obligations of the
Company; provided, however, that in determining
whether the Holders of the requisite principal amount of the Outstanding 7-Year
Notes have given any request, demand, authorization, direction, notice, consent
or waiver hereunder, 7-Year Notes owned by the Company or any other obligor
upon such 7-Year Notes or any Subsidiary or Affiliate of the Company or of such
other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
7-Year Notes which a Responsible Officer of the Trustee actually knows to be so
owned shall be so disregarded.  7-Year
Notes so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee’s right so to act with

 

D-45

 

respect to such 7-Year
Notes and that the pledgee is not the Company or any other obligor upon such 7-Year
Notes or any Subsidiary or Affiliate of the Company or of such other obligor.

 

“pari passu”
means, as applied to the ranking of any Indebtedness of a Person in relation to
other Indebtedness of such Person, that each such Indebtedness either (i) is
not subordinate in right of payments to any Indebtedness or (ii) is
subordinate in right of payment to the same Indebtedness as is the other, and
so subordinate to the same extent, and is not subordinate in right of payment
to each other or to any Indebtedness as to which the other is not so
subordinate.

 

“Participant” means, with respect to DTC,
Euroclear or Clearstream, Luxembourg, Persons who have accounts with DTC,
Euroclear or Clearstream, Luxembourg, respectively (and, with respect to DTC,
shall include Euroclear and Clearstream, Luxembourg).

 

“Paying Agent” means initially the Persons
named as Paying Agent in the first paragraph of the 7-Year Notes Indenture, any
successor thereof, and any Person authorized by the Company to pay the
principal of or interest on any 7-Year Notes on behalf of the Company,
including the Principal Paying Agent.

 

“Permitted Indebtedness” means the following
indebtedness (each of which shall be given independent effect) of the Company:

 

(a)  Indebtedness under the 7-Year Notes and the 7-Year
Notes Indenture with respect to such 7-Year Notes;

 

(b)  Indebtedness of the Company outstanding on
the Issue Date;

 

(c)  Indebtedness of the Company owed to and held
by any Subsidiary of the Company; provided that
an Incurrence of Indebtedness shall be deemed to have occurred upon
(x) any sale or other disposition of any Indebtedness of the Company
referred to in this clause (d) to a Person other than the Company or
a Subsidiary of the Company, or (y) any sale or other disposition of
Capital Stock of a Subsidiary of the Company which holds Indebtedness of the
Company to any person other than the Company or another Subsidiary;

 

(d)  Interest Rate Protection Obligations of the
Company to the extent relating to Indebtedness of the Company, as the case may
be (which Indebtedness (x) bears interest at fluctuating interest rates
and (y) is otherwise permitted to be incurred under the “Limitation on
Indebtedness” covenant);

 

(e)  Indebtedness of the Company under Currency
Agreements to the extent relating to (i) Indebtedness of the Company
and/or (ii) obligations to purchase assets, properties or services
incurred in the ordinary course of business of the Company; provided that such Currency Agreements do not increase the
Indebtedness or other obligations of the Company and its Significant
Subsidiaries outstanding other than as a result of fluctuations in foreign
currency exchange rates or by reason of fees, indemnities or compensation
payable thereunder;

 

D-46

 

(f)  Indebtedness of the Company in respect of
performance bonds of or surety or performance bonds provided by the Company
incurred in the ordinary course of business in connection with the construction
or operation of a Cable/Telecommunications Business; or

 

(g)  Indebtedness of the Company to the extent it
represents a replacement, renewal, refinancing, or extension of outstanding Indebtedness
of the Company incurred or outstanding pursuant to clause (a) or (b) or
this clause (g) of this definition or the proviso to the first
sentence of the “Limitation on Indebtedness” covenant; provided
that (A) Indebtedness of the Company may not be replaced, renewed,
refinanced or extended under this clause (g) with Indebtedness of any
Subsidiary of the Company, (B) any such replacement, renewal, refinancing
or extension (x) shall not result in such Indebtedness having a shorter
Average Life as compared with the Indebtedness being replaced, renewed,
refinanced or extended and (y) shall not exceed the sum of the principal
amount (or, if such Indebtedness provides for a lesser amount to be due and
payable upon a declaration or acceleration thereof, an amount no greater than
such lesser amount) of the Indebtedness being replaced, renewed, refinanced or
extended plus the amount of accrued interest thereon and the amount of any
reasonably determined prepayment premium necessary to accomplish such replacement,
renewal, refinancing or extension and such reasonable fees and expenses
incurred in connection therewith, and (C) in the case of any Indebtedness
replacing, renewing, refinancing, or extending Indebtedness which is pari passu to the 7-Year Notes, any such replacing,
renewing, refinancing or extending Indebtedness is made pari passu
to the 7-Year Notes or subordinated to the 7-Year Notes, and, in the case of
any Indebtedness replacing, renewing, refinancing, or extending Subordinated
Indebtedness, any such replacing, renewing, refinancing or extending
Indebtedness is subordinated to the 7-Year Notes to the same extent as the
Indebtedness being replaced, renewed, refinanced or extended.

 

“Permitted Lien” means (i) Liens on the 7-Year
Notes Reserve Account for the benefit of the holders of 7-Year Notes and on the
reserve account established on or about the date hereof for the benefit of the
10-Year Notes; (ii) Liens existing on the Issue Date; (iii) Liens
(including extensions and renewals thereof) upon real or personal property
acquired after the Issue Date; provided
that (a) such Lien is created solely for the purpose of securing
Indebtedness Incurred in accordance with the “Limitation on Indebtedness”
covenant, (1) to finance the cost (including the cost of design,
development, construction, improvement, installation or integration) of the
item of property or assets subject thereto and such Lien is created prior to,
at the time of or within six months after the later of the acquisition, the
completion of construction or the commencement of full operation of such
property or (2) to refinance any Indebtedness previously so secured, (b) the
principal amount of the Indebtedness secured by such Lien does not exceed 100%
of such cost and (c) any such Lien shall not extend to or cover any
property or assets other than such item of property or assets and any
improvements on such item; (iv) any interest or title of a lessor in the
property subject to any Capitalized Lease or operating lease; (v) Liens on
property of, or on shares of stock or Indebtedness of, any Person existing at
the time such Person becomes a Subsidiary of the Company, or is merged into or
consolidated with the Company or any Subsidiary of the Company; provided that such Liens were not granted
in contemplation of such acquisition, merger or consolidation and do not extend
to or cover any property or assets of the Company or any Subsidiary of the
Company other than the property or assets acquired; (vi) Liens in favor of
the Company or any Subsidiary of the Company; (vii) Liens securing
reimbursement obligations with respect to letters of credit that encumber
documents and other property relating to such letters of credit and the
products and proceeds

 

D-47

 

thereof; (viii) Liens
securing Indebtedness of the Company permitted pursuant to clause (g) of
the definition of “Permitted Indebtedness” or clause (c) of the definition
of “Permitted Subsidiary Indebtedness”, provided
that any such Indebtedness being refinanced was previously secured by a
Permitted Lien and any such Lien shall not extend to or cover any property or
assets other than those encumbered by the Lien securing the Indebtedness being
refinanced; and (ix) Liens incurred in the ordinary course of business
securing Indebtedness under Interest Rate Protection Obligations and Currency
Agreements, provided that such
Lien is created solely upon Excess Cash not required to be applied in
accordance with the “Cash Sweep” covenant herein.

 

“Permitted Subsidiary Indebtedness” means the
following Indebtedness (each of which shall be given independent effect) of a
Subsidiary of the Company:

 

(a)  Indebtedness of any Subsidiary of the
Company outstanding on the Issue Date;

 

(b)  Indebtedness of any Subsidiary of the
Company owed to and held by the Company or a Subsidiary of the Company; provided that an Incurrence of Indebtedness shall be deemed
to have occurred upon (x) any sale or other disposition of any Indebtedness of
a Subsidiary of the Company referred to in this clause (b) to a Person
other than the Company or a Subsidiary of the Company, or (y) any sale or other
disposition of Capital Stock of a Subsidiary of the Company which holds
Indebtedness of another Subsidiary of the Company except to the extent
permitted under clause (v) of the “Limitation on the Issuance and Sale of
Capital Stock of Significant Subsidiaries” covenant herein; and

 

(c)  Indebtedness of any Subsidiary of the
Company to the extent it represents a replacement, renewal, refinancing, or
extension of outstanding Indebtedness of such Subsidiary incurred or
outstanding pursuant to clause (a) or this clause (c) of this
definition; provided that (A) any such
replacement, renewal, refinancing or extension (x) shall not result in such
Indebtedness having a shorter Average Life as compared with the Indebtedness
being replaced, renewed, refinanced or extended and (y) shall not exceed the
sum of the principal amount (or, if such Indebtedness provides for a lesser
amount to be due and payable upon a declaration or acceleration thereof, an
amount no greater than such lesser amount) of the Indebtedness being replaced,
renewed, refinanced or extended plus the amount of accrued interest thereon and
the amount of any reasonably determined prepayment premium necessary to
accomplish such replacement, renewal, refinancing or extension and such
reasonable fees and expenses incurred in connection therewith.

 

“Person” means any individual, Corporation,
partnership, joint venture, trust, unincorporated organization or government or
any agency or political subdivision thereof.

 

“Predecessor Floating Rate Note” of any
particular 7-Year Floating Rate Note means every previous 7-Year Floating Rate
Note evidencing all or a portion of the same debt as that evidenced by such
particular Floating Rate Note; and, for the purposes of this definition, any 7-Year
Floating Rate Note authenticated and delivered under the 7-Year Notes Indenture
in exchange for or in lieu of a mutilated, destroyed, lost or stolen 7-Year
Floating Rate Note shall be deemed to evidence the same debt as the mutilated,
destroyed, lost or stolen Floating Rate Note.

 

D-48

 

“Pro Forma Consolidated Operating Cash Flow”
for any period means “Consolidated Operating Cash Flow” for such period after
giving effect on a pro forma basis for the applicable period to, without
duplication, any Asset Sale or Asset Acquisition (including, without
limitation, any Asset Acquisition giving rise to the need to make such calculation
as a result of our or one of our Subsidiaries (including any Person who becomes
a Subsidiary as a result of the Asset Acquisition) Incurring Acquired
Indebtedness) or any transaction permitted under clause (iii) of the “Consolidation,
Merger and Sale of Assets” covenant herein occurring during the period
commencing on the first day of such period to and including the Transaction
Date (the “Reference Period”), as if such Asset Sale or Asset Acquisition
occurred on the first day of the Reference Period.

 

“Redemption Date” means the fixed date, on
which a 7-Year Note is to be redeemed, in whole or in part, by the Company
pursuant to the terms of the 7-Year Note.

 

“Registered 7-Year Floating Rate Notes” means
any 7-Year Floating Rate Note registered in the 7-Year Floating Rate Note
Register.

 

“Registrar” means HSBC Bank Argentina S.A.,
until a successor Registrar shall have become such pursuant to the applicable
provisions of the 7-Year Notes Indenture, and, thereafter “Registrar”
shall mean such successor Registrar.

 

“Regular Record Date”
means the close of business in New York on the fifteenth date (whether or not a
Business Day) immediately preceding each Interest Payment Date.

 

“Responsible Officer” shall mean, when used
with respect to the Trustee, any officer of the Trustee who shall have direct
responsibility for the administration of this 7-Year Notes Indenture, or to
whom any corporate trust matter is referred because of such person’s knowledge
of and familiarity with the particular subject.

 

“Securities Act” means the U.S. Securities Act
of 1933, as amended.

 

“Significant Subsidiary” means, at any date of
determination, any Subsidiary of the Company that, together with its
Subsidiaries, (i) for the most recent fiscal year of the Company,
accounted for more than 10% of the consolidated revenues of the Company and its
Subsidiaries or (ii) as of the end of such fiscal year, was the owner of
more than 10% of the consolidated assets of the Company and its Subsidiaries,
all as set forth on the most recently available consolidated financial
statements of the Company for such fiscal year.

 

“Stated Maturity” means (i) with respect
to any security, the date specified in such security as the fixed date on which
the final installment of principal of such security is due and payable and (ii) with
respect to any scheduled installment of principal of or interest on any
security, the date specified in such security as the fixed date on which such
installment is due and payable.

 

“Subordinated Indebtedness” means any Indebtedness
of the Company which is expressly subordinated in right of payment to the 7-Year
Notes, including premium and accrued and unpaid interest.

 

D-49

 

“Subsidiary” means, with respect to any Person,
any Corporation, association or other business entity (i) of which
outstanding Capital Stock having at least a majority of the votes entitled to
be cast in the election of directors is owned, directly or indirectly, by such
Person and one or more other Subsidiaries of such Person, or (ii) of which
at least a majority of voting interest is owned, directly or indirectly, by
such Person and one or more other Subsidiaries of such Person.

 

“Total Consolidated Indebtedness” means, at the
time of determination, an amount equal to the aggregate amount of all
Indebtedness of the Company and its Subsidiaries outstanding (without
duplication) as of the date of determination.

 

“Trade Payables” means, with respect to any
Person, any accounts payable or any other Indebtedness or monetary obligation
to trade creditors created, assumed or Guaranteed by such Person or any of its
Subsidiaries arising in the ordinary course of business in connection with the
acquisition of goods or services.

 

“Transaction Date” means, with respect to the
Incurrence of any Indebtedness by the Company or any of its Subsidiaries, the
date such Indebtedness is to be Incurred.

 

“Transfer Agent” means any Person authorized by
the Company to effectuate the exchange or transfer of any 7-Year Note on behalf
of the Company hereunder.

 

“Trust Indenture Act” or “TIA” means the
U.S. Trust Indenture Act of 1939 as in force at the date as of which the 7-Year
Notes Indenture was executed; provided, however,
that in the event the U.S. Trust Indenture Act of 1939 is amended after such
date, “Trust Indenture Act” or “TIA” means, to the extent
required by any such amendment, the U.S. Trust Indenture Act of 1939 as so
amended.

 

“Trustee” means Law Debenture Trust Company of
New York, until a successor Trustee shall have become such pursuant to the
applicable provisions of the Indenture, and, thereafter “Trustee” shall
mean such successor Trustee.

 

“Unapplied Net Asset Sale Proceeds” means the
net cash proceeds of any Asset Sale consummated at least 181 days prior to the date
of determination that do not constitute Asset Sale Proceeds Reinvestment.

 

“U.S. Dollars”, “United States Dollars”,
“U.S.$” and the symbol “$” each mean dollars of the United
States.

 

“U.S. Government Obligations” means securities
that are (x) direct obligations of the United States for the payment of
which its full faith and credit is pledged or (y) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States the payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any such U.S.
Government Obligation held by such custodian for the account of the holder of
such depositary receipt, provided that
(except as

 

D-50

 

required by law) such
custodian is not authorized to make any deduction from the amount payable to
the holder of such depositary receipt from any amount received by the custodian
in respect of the U.S. Government Obligation or the specific payment of
principal of or interest on the U.S. Government Obligation evidenced by such
depositary receipt.

 

“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 Board of Directors members, managing directors, managers or
other voting members of the governing body of such Person.

 

“Wholly-Owned” is defined to mean, with respect
to any Subsidiary of any Person, such Subsidiary if all the outstanding Capital
Stock in such Subsidiary (other than any directors’ qualifying shares or shares
held by a Person, to the extent mandated by applicable law) is owned by such
Person, or one or more Wholly-Owned Subsidiaries of such Person.

 

Terms used herein and not defined herein shall have
the meanings assigned to them in the 7-Year Notes Indenture.

 

D-51

 

SCHEDULE A

SCHEDULE OF PRINCIPAL AMOUNT

 

The initial principal amount at maturity of this
Global Note shall be
U.S.$[            ].
The following increases or decreases in the principal amount at maturity
of this Global Note have been made:

 

	
  Date of

  Exchange

  	
   

  	
  Amount of

  decrease in

  Principal

  Amount at

  Maturity of this

  Global Note

  	
   

  	
  Amount of

  increase in

  Principal

  Amount at

  Maturity of this

  Global Note

  	
   

  	
  Principal

  Amount of this

  Global Note

  following such

  decrease or

  increase

  	
   

  	
  Signature of

  authorized

  officer of

  Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

D-52

 

FORM OF EXCHANGE
NOTICE

 

The undersigned registered Holder of the within 7-Year
Floating Rate Note hereby irrevocably exercises the option to convert this 7-Year
Floating Rate Note (or the portion thereof specified below) into the Company’s 7-Year
Fixed Rate Notes due [2012] pursuant to the terms of the Second Supplemental
Indenture referred to in this Floating Rate Note, and directs that the Company’s
7-Year Fixed Rate Notes due [2012] issuable upon exchange and any 7-Year Floating
Rate Note representing any unexchanged principal amount hereof, be issued and
delivered to the registered Holder hereof unless a different name has been
provided below:

 

	
   

  	
   

  	
   

  
	
   

  	
  (Name,
  Address and Taxpayer Identification Number.)

  	
   

  

 

If less than the entire principal amount of this 7-Year
Floating Rate Note is to be exchanged, specify the denomination(s) of the
Floating Rate Note(s) to be issued for the unexchanged amount (U.S.$1.00 or any
integral multiple of U.S.$1.00):  U.S.$         .

 

The undersigned agrees to pay all transfer taxes and
any expenses (other than any registration fees with the CNV) payable with
respect thereto.  The undersigned is also
delivering herewith (1) a certificate in proper form certifying that the
applicable restrictions on transfer have been complied with and (2) evidence
of payment to an account designated by the Trustee for the benefit of the
Company of an amount equivalent to any interest actually paid by the Company on
or prior to the date hereof to the Holder corresponding to interest accrued on
the principal amount of this 7-Year Floating Rate Note for which an exchange is
being requested from the first day of the current interest period under the 7-Year
Fixed Rate Notes due [2012] to the date hereof and covenants to deposit in such
account any additional interest actually paid by the Company to the Holder
corresponding to interest accrued on such principal amount from and after the
date hereof to but excluding the date designated by the Company to effect such
exchange.  The Holder hereby acknowledges
and agrees that no request for conversion of this 7-Year Floating Rate Note
into 7-Year Fixed Rate Notes due [2012] will be given effect unless such
payment is credited to the account designated by the Trustee.

 

The undersigned hereby agrees that, promptly after
request of the Company or Exchange Agent, it will furnish such proof in support
of this certificate as the Company or Exchange Agent may request.

	
   

  
	
  Dated:

  
	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Signature of
  Registered Holder

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Signature Guaranty

  

 

For
Exchange Agent’s Use only:

 

D-53

 

	
  (A)

  	
   

  	
  Date of Deposit:                                                   

  
	
   

  	
   

  	
  Exchange Date:                                                     

  
	
  (B)

  	
   

  	
  Principal amount
  of 7-Year Fixed Rate Notes issuable:                                                  

  

 

D-54

 

Trustee’s Certificate of Authentication

 

This is one of the 7-Year Floating Rate Notes referred
to in the within-mentioned 7-Year Notes Indenture.

 

	
  Dated:

  
	
   

  
	
   

  	
  LAW DEBENTURE TRUST COMPANY

  OF NEW YORK,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  (Authorized Signatory)

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

D-55

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