SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (date of earliest event reported) August 27, 1997
HYPERION TELECOMMUNICATIONS, INC.
(Exact name of registrant as specified in charter)
Delaware 0-21605 25-1669404
(State or other (Commission File Number) (IRS Employer
jurisdiction of incorporation) Identification No.)
Main at Water Street - Coudersport, PA 16915-1141 (Address of
principal executive offices) (Zip Code)
Registrant's telephone number, including area code (814) 274-9830
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Item 5. Other Events
The Registrant is filing certain exhibits herewith under Item 7 hereof.
Item 7. Financial Statements and Exhibits
Exhibit No. Description
4.01 Indenture, dated as of August 27, 1997, with respect to the
Registrant's 12-1/4% Senior Secured Notes due 2004, between
the Registrant and the Bank of Montreal Trust Company (Filed
herewith).
4.02 Form of 12-1/4% Senior Secured Note due 2004 (contained in
Exhibit 4.01)
4.03 Pledge Agreement between the Registrant and the Bank of
Montreal Trust Company as Collateral Agent, dated as of August
27, 1997 (Filed herewith).
4.04 Registration Rights Agreement between the Registrant and the
Initial Purchasers, dated August 27, 1997, regarding the
12-1/4% Senior Secured Notes due 2004 (Filed herewith).
4.05 Pledge, Escrow and Disbursement Agreement, between the
Registrant and the Bank of Montreal Trust Company, dated as of
August 27, 1997 (Filed herewith).
4.06 Second Supplemental Indenture, dated as of August 27, 1997,
between the Registrant and the Bank of Montreal Trust Company,
regarding the Registrant's 13% Senior Discount Notes due 2003
(Filed herewith).
10.01 Purchase Agreement among the Registrant, Bear Stearns & Co.
Inc., Chase Securities Inc., TD Securities (USA) Inc., CIBC
Wood Gundy Securities Corp., and Scotia Capital Markets (the
"Initial Purchasers") dated August 21, 1997 (Filed herewith).
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: September 12, 1997 HYPERION TELECOMMUNICATIONS, INC.
(Registrant)
By: /s/Timothy J. Rigas
------------------------
Timothy J. Rigas
Vice Chairman, Treasurer and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description
4.01 Indenture, dated as of August 27, 1997, with respect to the
Registrant's 12-1/4% Senior Secured Notes due 2004, between
the Registrant and the Bank of Montreal Trust Company (Filed
herewith).
4.02 Form of 12-1/4% Senior Secured Note due 2004 (contained in
Exhibit 4.01)
4.03 Pledge Agreement between the Registrant and the Bank of
Montreal Trust Company as Collateral Agent, dated as of August
27, 1997 (Filed herewith).
4.04 Registration Rights Agreement between the Registrant and the
Initial Purchasers, dated August 27, 1997, regarding the
12-1/4% Senior Secured Notes due 2004 (Filed herewith).
4.05 Pledge, Escrow and Disbursement Agreement, between the
Registrant and the Bank of Montreal Trust Company, dated as of
August 27, 1997 (Filed herewith).
4.06 Second Supplemental Indenture, dated as of August 27, 1997,
between the Registrant and the Bank of Montreal Trust Company,
regarding the Registrant's 13% Senior Discount Notes due 2003
(Filed herewith).
10.01 Purchase Agreement among the Registrant, Bear Stearns & Co.
Inc., Chase Securities Inc., TD Securities (USA) Inc., CIBC
Wood Gundy Securities Corp., and Scotia Capital Markets (the
"Initial Purchasers") dated August 21, 1997 (Filed herewith).
EXHIBIT 4.01
INDENTURE dated as of August 27, 1997 between HYPERION
TELECOMMUNICATIONS, INC., a Delaware corporation (the "Company") and BANK OF
MONTREAL TRUST COMPANY, as trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the holders (the "Holders") of
the 12 1/4% Series A Senior Secured Notes due 2004 (the "Series A Notes") and
the 12 1/4% Series B Senior Secured Notes due 2004 (the "Series B Notes" and,
together with the Series A Notes, the "Senior Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Accredited Investor" has the meaning set forth in Rule 501(a) (1),
(2), (3) of (7) of the Securities Act.
"Acquired Indebtedness" means, with respect to any specified Person:
(i) Indebtedness of any other Person existing at the time such other Person
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise. For purposes of this
Indenture, beneficial ownership of 10% or more of the Voting Stock of a Person
shall be deemed to be control; provided, that no Local Partner will be deemed an
affiliate of a Subsidiary or a Joint Venture solely as a result of such Local
Partner's ownership of more than 10% of the Voting Stock of such Subsidiary or
Joint Venture.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Agent Members" means members of, or participants in,
the Depository.
"Annualized Pro Forma EBITDA" means with respect to any Person, such
Person's Pro Forma EBITDA for the fiscal quarter with respect to which a
calculation of the Company's Consolidated Leverage Ratio is being made hereunder
multiplied by four.
"Applicable Procedures" means applicable procedures of the
Depository, Euroclear or Cedel Bank, as the case may be.
"Asset Sale" means
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(i) the sale, lease, conveyance, disposition or other transfer of any
assets (including, without limitation, by way of a Sale and Leaseback
Transaction) other than (a) sales of inventory in the ordinary course of
business consistent with past practices and (b) issuances and sales by the
Company of its Equity Interests (provided that the sale, lease,
conveyance, disposition or other transfer of all or substantially all of
the assets of the Company and its Subsidiaries taken as a whole shall be
governed by Sections 4.15 and 5.01 of the Indenture), and
(ii) the issuance or sale by the Company or any of its Subsidiaries
of Equity Interests of any of the Company's Subsidiaries or Joint
Ventures, in the case of either clause (i) or (ii), whether in a single
transaction or a series of related transactions (a) that have a fair
market value in excess of $1.0 million or (b) for net proceeds in excess
of $1.0 million.
Notwithstanding the foregoing: (x) a transfer of assets by the Company to a
Wholly Owned Subsidiary or by a Subsidiary to the Company or to another Wholly
Owned Subsidiary, (y) an issuance of Equity Interests by a Subsidiary to the
Company or to a Wholly Owned Subsidiary and (z) a Restricted Payment that is
permitted by Section 4.07 will not be deemed to be Asset Sales.
"Attributable Debt" in respect of a Sale and Leaseback Transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale and leaseback transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company, or
any authorized committee of the Board of Directors.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited) and (iv) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more that one year from the date of acquisition, (iii) certificates of deposit
and eurodollar time deposits with maturities of one year or less from the date
of acquisition, bankers' acceptances with maturities not exceeding one year and
overnight bank deposits, in each case with any domestic commercial bank having
capital and surplus in excess of $500,000,000 and a Keefe Bank Watch Rating of
"B" or better,
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(iv) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (ii) and (iii) above
entered into with any financial institution meeting the qualifications specified
in clause (iii) above and (v) commercial paper having the highest rating
obtainable from either Moody's Investors Service, Inc. or Standard & Poor's
Corporation and, in each case, maturing within six months after the date of
acquisition.
"Change of Control" means the occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Subsidiaries taken as a
whole to any "person" (as such term is used in Section 13(d)(3) of the Exchange
Act) other than the Principals or their Affiliates, (ii) the adoption of a plan
relating to the liquidation or dissolution of the Company, (iii) the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any "person", other than the
Principals and their Affiliates, becomes the "beneficial owner" (as such term is
defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or
indirectly, of more than 50% of the voting power of the Capital Stock of the
Company, (iv) the consummation of the first transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" becomes the "beneficial owner," directly or indirectly, of more of the
voting power of the Capital Stock of the Company than is at the time
"beneficially owned" by the Principals and their Affiliates in the aggregate or
(v) the first day on which a majority of the members of the Board of Directors
of the Company are not Continuing Directors. For purposes of this definition,
any transfer of an Equity Interest of an entity that was formed for the purpose
of acquiring voting power of Capital Stock of the Company shall be deemed to be
a transfer of such portion of such voting power of Capital Stock as corresponds
to the portion of the equity of such entity that has been so transferred.
"Closing Date" means the date on which the Senior Notes are
originally issued under the Indenture.
"Collateral Agent" means Bank of Montreal Trust Company, as
Collateral Agent under the Pledge Agreement or any successor thereto appointed
pursuant to such Agreement.
"Collateral Agreements" mean the Escrow and Disbursement Agreement
and the Pledge Agreement.
"Collateral Documents" means the Pledge Agreement and all related
agreements, instruments, financing statements or other documents that set forth
the Lien of the Trustee in the Pledged Collateral.
"Consolidated Interest Expense" means, for any Person, for any
period, the aggregate of the following for such Person for such period
determined on a consolidated basis in accordance with GAAP: (a) the amount of
interest in respect of Indebtedness (including amortization of original issue
discount, amortization of debt issuance costs and non-cash interest payments on
any Indebtedness and the interest portion of any deferred payment obligation)
and (b) the interest component of rentals in respect of any Capital Lease
Obligation paid, in each case whether accrued or scheduled to be paid or accrued
by such Person during such period to the extent such amounts were deducted in
computing Consolidated Net Income, determined on a consolidated basis in
accordance with GAAP. For purposes of this definition, interest on a Capital
Lease Obligation shall be deemed to accrue at an interest rate reasonably
determined by such Person to be the rate of interest implicit in such Capital
Lease Obligation in accordance with GAAP consistently applied.
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"Company" means Hyperion Telecommunications, Inc. a Delaware
corporation.
"Consolidated Leverage Ratio" means, for any Person, as of any date,
the ratio of (i) the sum of the aggregate outstanding amount of all Indebtedness
of a Person and its Subsidiaries (other than any Indebtedness of a General
Partner Subsidiary to the extent that such Indebtedness has been incurred in
connection with such General Partner Subsidiary's partnership interest in the
Restricted Joint Venture of which such General Partner Subsidiary is a general
partner) determined on a consolidated basis in accordance with GAAP to (ii)
Annualized Pro Forma EBITDA.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP;
provided that (i) the Net Income (but not loss) of any Person that is not a
Subsidiary or that is accounted for by the equity method of accounting shall be
included only to the extent of the amount of dividends or distributions actually
paid in cash to the referent Person or a Wholly Owned Subsidiary thereof, (ii)
the Net Income of any Subsidiary shall be excluded to the extent that the
declaration or payment of dividends or similar distributions by that Subsidiary
of that Net Income is not at the date of determination permitted without any
prior governmental approval (that has not been obtained) or, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary or its stockholders, (iii) the Net Income of any
Person acquired in a pooling of interests transaction for any period prior to
the date of such acquisition shall be excluded and (iv) the cumulative effect of
a change in accounting principles shall be excluded.
"Consolidated Net Worth" means, with respect to any Person as of any
date, the sum of (i) the consolidated equity of the common stockholders of such
Person and its consolidated Subsidiaries as of such date plus (ii) the
respective amounts reported on such Person's balance sheet as of such date with
respect to any series of preferred stock (other than Disqualified Stock) that by
its terms is not entitled to the payment of dividends unless such dividends may
be declared and paid only out of net earnings in respect of the year of such
declaration and payment, but only to the extent of any cash received by such
Person upon issuance of such preferred stock, less (x) all write-ups (other than
write-ups resulting from foreign currency translations and write-ups of tangible
assets of a going concern business made within 12 months after the acquisition
of such business) subsequent to the date of the Indenture in the book value of
any asset owned by such Person or a consolidated Subsidiary of such Person, (y)
all investments as of such date in unconsolidated Subsidiaries and in Persons
that are not Subsidiaries (except, in each case, Permitted Investments) and (z)
all unamortized debt discount and expense and unamortized deferred charges as of
such date, all of the foregoing determined in accordance with GAAP.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date of this Indenture or (ii) was nominated for
election or elected to such Board of Directors with the approval of a majority
of the Continuing Directors who were members of such Board at the time of such
nomination or election.
"Corporate Trust Office of the Trustee" shall be at the address of
the Trustee specified in Section 11.02 hereof or such other address as to which
the Trustee may give notice to the Company.
"Credit Agreement" means, with respect to any Person, any agreement
entered into by and among such Person and one or more commercial banks or
financial institutions, providing for senior term or revolving credit borrowings
of a type similar to credit agreements typically entered into by commercial
banks and financial institutions, including any related notes, Guarantees,
collateral documents, instruments
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and agreements executed in connection therewith, as such credit agreement and
related agreements may be amended, extended, refinanced, renewed, restated,
replaced or refunded from time to time.
"Cumulative Interest Expense" means the aggregate amount of
Consolidated Interest Expense of the Company paid or accrued by the Company from
and after the first day of the first fiscal quarter beginning after the date of
the Indenture to the end of the fiscal quarter immediately preceding a proposed
Restricted Payment, determined on a consolidated basis in accordance with GAAP.
"Cumulative Pro Forma EBITDA" means the cumulative EBITDA of the
Company from and after the first day of the first fiscal quarter beginning after
the date of the Indenture to the end of the fiscal quarter immediately preceding
the date of a proposed Restricted Payment, or, if such cumulative EBITDA for
such period is negative, minus the amount by which such cumulative EBITDA is
less than zero.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Definitive Senior Notes" means Restricted Definitive Notes and
Unrestricted Definitive Notes.
"Depository" means, with respect to any Global Note, the Person
specified in Section 2.03 hereof as the Depositary with respect to such Note,
until a successor shall have been appointed and become such pursuant to the
applicable provision of this Indenture, and, thereafter, ADepository@ shall mean
or include such successor.
"Disqualified Stock" means any Capital Stock 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 redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
that is 91 days after the date on which the Senior Notes mature; provided,
however, that any Capital Stock which would not constitute Disqualified Stock
but for provisions thereof giving holders the right to require the Company to
repurchase or redeem such Capital Stock upon the occurrence of a Charge in
Control occurring prior to the final maturity of the Senior Notes shall not
constitute Disqualified Stock if the change of control provisions applicable to
such Capital Stock are no more favorable to the holders of such Capital Stock
than the provisions applicable to the Senior Notes contained in Section 4.15
hereof and such Capital Stock specifically provides that the Company will not
repurchase or redeem any such stock pursuant to such provisions prior to the
Company's repurchase of such Senior Notes as are required to be repurchased
pursuant to Section 4.15 hereof.
"EBITDA" means, for any Person, for any period, an amount equal to
(A) the sum of (i) Consolidated Net Income for such period plus (ii) the
provision for taxes for such period based on income or profits to the extent
such income or profits were included in computing Consolidated Net Income and
any provision for taxes utilized in computing net loss under clause (i) hereof
plus (iii) Consolidated Interest Expense for such period, plus (iv) depreciation
for such period on a consolidated basis plus (v) amortization of intangibles for
such period on a consolidated basis, plus (vi) any other non-cash items reducing
Consolidated Net Income for such period minus (B) all non-cash items increasing
Consolidated Net Income for such period, all for each such Person and its
Subsidiaries determined in accordance with GAAP consistently applied.
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"Enhanced Services Provider" means (i) !NTERPRISE, a wholly owned
subsidiary of US West, (ii) any nationally recognized Person which provides
enhanced telecommunications services, including but not limited to, frame relay,
Asynchronous Transfer Mode data transport, business video conferencing, private
line data interconnect service and LAN connection and monitoring services, or
(iii) any Person that has least 500 existing enhanced data services
installations in the United States.
"Enhanced Services Venture" means any entity in which any Qualified
Subsidiary or Permitted Joint Venture owns at least 50% of the Equity Interests,
provided that the remainder of the Equity Interests are owned by an Enhanced
Services Provider.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Escrow Account" means an escrow account for the deposit of
approximately $83.5 million of the net proceeds from the sale of the Senior
Notes under the Escrow and Disbursement Agreement.
"Escrow Agent" means Bank of Montreal Trust Company, as Escrow Agent
under the Escrow and Disbursement Agreement, or any successor thereto appointed
pursuant to such agreement.
"Escrow and Disbursement Agreement" means the Pledge, Escrow and
Disbursement Agreement, dated as of the date of this Indenture, by and among the
Escrow Agent, the Trustee and the Company, governing the disbursement of funds
from the Escrow Account.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means the offer that may be made by the Company
pursuant to the Registration Rights Agreement to exchange Series A Notes for
Series B Notes.
"Existing Indebtedness" means the Senior Notes and any other
Indebtedness of the Company and its Subsidiaries in existence on the date
hereof.
"Existing Networks" means the telecommunications networks operated by
the Company, its Subsidiaries and Joint Ventures, including, but not limited to,
all networks under construction, on the date hereof.
"Fiber Lease Agreements" means the agreements relating to fiber
leases as set forth on Schedule A hereto.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect on the date of this Indenture.
"General Partner Subsidiary" means a direct or indirect Wholly Owned
Subsidiary of the Company that (i) is a general partner or stockholder of a
Restricted Joint Venture and (ii) (a) is not engaged in any trade or business
other than the holding, voting, disposing of or taking any action with respect
to its Equity Interest
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in such Restricted Joint Venture, (b) has no material assets other than its
Equity Interest in such Restricted Joint Venture, (c) has no material
liabilities other than liabilities arising (1) as a result of the guarantee by
such General Partner Subsidiary of Indebtedness incurred by the Restricted Joint
Venture of which such General Partner Subsidiary is a general partner or (2) by
operation of law; provided that, for purposes of this definition, Hyperion
Telecommunications of Virginia, Inc. shall be deemed to be a General Partner
Subsidiary for all purposes so long as Hyperion Telecommunications of Virginia,
Inc. does not engage in any operations or business that is materially different
from the operations or business engaged in by such company on the date hereof.
"Global Note" means, individually and collectively, the Regulation S
Global Note, the Rule 144A Global Note and the Unrestricted Global Note.
"Guarantee" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any part of
any Indebtedness.
"Holder" means a Person in whose name a Senior Note is registered.
"Indebtedness" means, with respect to any Person, (a) any liability
of any Person, whether or not contingent (i) for borrowed money, or under any
reimbursement obligation relating to a letter of credit, bankers' acceptance or
note purchase facility; or (ii) evidenced by a bond, note, debenture or similar
instrument (including a purchase money obligation); or (iii) for the payment of
money relating to a lease that is required to be classified as a Capitalized
Lease Obligation in accordance with GAAP; (iv) for Disqualified Stock; or (v)
for preferred stock of any Subsidiary (other than preferred stock held by the
Company or any of its Subsidiaries); (b) any liability of others described in
the preceding clause (a) that the Person has guaranteed, that is recourse to
such Person or that is otherwise its legal liability; and (c) any amendment,
supplement, modification, deferral, renewal, extension or refunding of any
liability of the types referred to in clauses (a) and (b) above.
"Indenture" means this Indenture, as amended or supplemented from
time to time.
"Initial Public Offering" means an initial underwritten public
offering of common stock of the Company pursuant to an effective registration
statement under the Securities Act of 1933, as amended.
"Intercompany Notes" means the intercompany notes issued by
Subsidiaries and Joint Ventures of the Company in favor of the Company or its
Subsidiaries to evidence loans by the Company to such Subsidiary or Joint
Venture, in each case, in the form attached as Annex 1 hereto.
"Invested Equity Capital" means, with respect to any of the Company's
Subsidiaries or Joint Ventures as of any date, the sum of (i) the total dollar
amount contributed in cash plus the value of all property contributed (valued at
the lower of fair market value of such property at the time of contribution,
determined in good faith by the Company's Board of Directors, or the book value
of such property at the time of contribution on the books of the Person making
such contribution) to such Subsidiary or Joint Venture, as the case may be,
since the date of its formation in the form of common equity plus, without
duplication, (ii) the total dollar amount contributed in cash plus the value of
all property contributed (valued at the lower of fair market value of such
property at the time of contribution, determined in good faith by the Company's
Board of Directors, or the book value of such property at the time of
contribution on the books of the Person
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making such contribution) to such Subsidiary or Joint Venture, as the case may
be, since the date of its formation by Local Partners (and their Affiliates) in
consideration of the issuance of preferred equity on a basis that is
substantially proportionate to their common equity interests plus, without
duplication, (iii) the total dollar amount contributed in cash plus the value of
all property contributed (valued at the lower of fair market value of such
property at the time of contribution, determined in good faith by the Company's
Board of Directors, or the book value of such property at the time of
contribution on the books of the Person making such contribution) to such
Subsidiary or Joint Venture since the date of its formation by the Company in
consideration of the issuance of preferred equity less (iv) the fair market
value of all dividends and other distributions (in respect of any Equity
Interest and in whatever form and however designated) made by such Subsidiary or
Joint Venture, as the case may be, since the date of its formation to the
holders of its common equity (and their Affiliates); provided that in no event
shall the aggregate amount of such dividends and other distributions made by
such Subsidiary or Joint Venture, as the case may be, to any such Person (or its
Affiliates) reduce the Invested Equity Capital of such Subsidiary or Joint
Venture, as the case may be, by more than the total contributions (per clauses
(i) through (iii) above) to such Subsidiary or Joint Venture, as the case may
be, by such Person (and its Affiliates).
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances (excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business), capital contributions,
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP;
provided that an acquisition of assets, Equity Interests or other securities by
the Company for consideration consisting solely of common equity securities of
the Company shall not be deemed to be an Investment. If the Company or any
Subsidiary of the Company sells or otherwise disposes of any Equity Interests of
any direct or indirect Subsidiary of the Company such that, after giving effect
to any such sale or disposition, such Person is no longer a Subsidiary of the
Company, the Company shall be deemed to have made an Investment on the date of
any such sale or disposition equal to the fair market value of the Equity
Interests of such Subsidiary not sold or disposed of.
"Joint Venture" means a corporation, partnership or other entity
engaged in one or more Telecommunications Businesses (i) in which the Company or
its Subsidiaries owns, directly or indirectly, an Equity Interest with the
balance of the Equity Interest thereof being held by one or more Local Partners
and (ii) that is managed and operated by the Company or any of its Subsidiaries.
"Joint Venture Investment" means any Investment in a Joint Venture.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
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"Liquidated Damages" means all liquidated damages then owing pursuant
to Section 5 of the Registration Rights Agreement.
"Local Partner" means, with respect to any Joint Venture (i) the
Joint Venture partners set forth on Schedule B hereto, and (ii) any other
Person, provided that such other Person (a) is a major cable company or utility
that has a substantial presence within the specific market of such Joint
Venture, which presence shall be evidenced, (1) in the case of a cable company,
by such company having a market share consisting of at least 50% of the total
number of cable subscribers in such market and (2) in the case of a utility
company, by such company having at least 75% of the total customer base of such
market or (b) is a Wholly Owned Subsidiary of a major cable company or utility
that (1) meets the criteria set forth in the immediately preceding clause (a) or
(2) has all of its initial capital contributions under the agreement governing
the Joint Venture fully and unconditionally guaranteed, until such time as all
such contributions have been made, by one or more Persons who meet the criteria
set forth in the immediately preceding clause (a).
"Local Partner Agreements" means the joint venture agreements with
Local Partners, as set forth on Schedule C hereto.
"Management Agreements" means the agreements governing the management
of the networks, as set forth on Schedule D hereto.
"Net Cash Proceeds" means the aggregate cash proceeds received by the
Company or any of its Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale and principal payments on
debt, as and when received), net of the direct costs relating to such Asset Sale
(including, without limitation, legal, accounting and investment banking fees,
and sales commissions) and any relocation expenses incurred as a result thereof,
taxes paid or payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements) and any
reserve for adjustment in respect of the sale price of such asset or assets
established in accordance with GAAP.
"Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain or loss,
together with any related provision for taxes on such gain or loss, realized in
connection with (a) any Asset Sale (including, without limitation, dispositions
pursuant to Sale and Leaseback Transactions), or (b) the disposition of any
securities by such Person or any of its Subsidiaries or the extinguishment of
any Indebtedness of such Person or any of its Subsidiaries, and (ii) any
extraordinary gain or loss, together with any related provision for taxes on
such extraordinary gain or loss.
"New Telecommunications Service Market" means a Telecommunications
Service Market in an area that is not within ten miles of any of the Company's
Existing Networks.
"Non-Recourse Debt" means Indebtedness: (i) as to which neither the
Company nor any of its Subsidiaries nor any of its Permitted Joint Ventures (a)
provides credit support of any kind (including any undertaking, agreement or
instrument that would constitute Indebtedness), (b) is directly or indirectly
liable (as a guarantor, co-obligor or otherwise) or (c) constitutes the lender;
(ii) as to which no default with respect to which (including any rights that the
holders thereof may have to take enforcement action against a Restricted Joint
Venture) would permit (upon notice, lapse of time, the occurrence or failure to
occur, of any
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other condition or event or any combination thereof) any holder of any other
Indebtedness of the Company, any of its Subsidiaries or any of its Permitted
Joint Ventures to declare a default on such other Indebtedness or cause or
permit the payment thereof to be accelerated prior to its stated maturity; and
(iii) as to which the lenders have been notified in writing that they will not
have any recourse to the stock or assets of the Company, any of its Subsidiaries
or any of its Permitted Joint Ventures; provided that the recourse (if any) of a
holder of such Indebtedness to the General Partner Subsidiary of a Restricted
Joint Venture in which such General Partner Subsidiary is a general partner as a
result of being a general partner of such Restricted Joint Venture will not be
considered credit support or direct or indirect liability of such General
Partner Subsidiary for purposes of clauses (i)(a), (ii)(b) and (iii) above.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 11.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
11.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Permitted Investments" means
(a) any Investment in a Wholly Owned Subsidiary of the Company
that is engaged, either directly or indirectly through a Qualified
Subsidiary or Joint Venture, in the Telecommunications Business;
(b) any Investment in a Qualified Subsidiary of the Company
that is directly engaged in the Telecommunications Business;
(c) any Investment in Cash Equivalents;
(d) any Investment in a Person that is not a Subsidiary of the
Company, if as a result of such Investment (i)(A) such Person becomes
a Qualified Subsidiary or Wholly Owned Subsidiary of the Company or
(B) such Person is merged, consolidated or amalgamated with or into,
or transfers or conveys substantially all of its assets to, or is
liquidated into, the Company or a Qualified Subsidiary and (ii)(A)
such Wholly Owned Subsidiary, either directly or indirectly through a
Qualified Subsidiary or a Joint Venture, is engaged in the
Telecommunications Business or (B) such Qualified Subsidiary is
directly engaged in the Telecommunications Business;
(e) any Permitted Joint Venture Investment;
(f) any Investment made as a result of the receipt of non-cash
consideration (whether or not
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such non-cash consideration is deemed to be cash for the purposes of
Section 4.10) from an Asset Sale that was made pursuant to and in
compliance with Section 4.10 hereof; or
(g) any Investment in an Enhanced Services Venture; or
(h) any Investment pursuant to the terms of the Escrow and
Disbursement Agreement.
"Permitted Joint Venture" means any Joint Venture in which the
Company has, directly or indirectly, a 45% or greater Equity Interest.
"Permitted Joint Venture Investment" means any Joint Venture
Investment by the Company or a Wholly Owned Subsidiary of the Company if, after
such Joint Venture Investment, the Company has, directly or indirectly, a 45% or
greater Equity Interest in such Joint Venture.
"Permitted Liens" means
(i) Liens on the property of the Company, any Subsidiary or any
Permitted Joint Venture securing Obligations under Indebtedness that
may be incurred pursuant to clause (i) of Section 4.09 hereof;
(ii) Liens in favor of the Company;
(iii) Liens on property of a Person existing at the time such
Person is merged into or consolidated with the Company, any
Subsidiary or any Permitted Joint Venture; provided that such Liens
were in existence prior to the contemplation of such merger or
consolidation and do not extend to any assets other than those of the
Person merged into or consolidated with the Company;
(iv) Liens on property existing at the time of acquisition
thereof by the Company, any Subsidiary or any Permitted Joint
Venture, provided that such Liens were in existence prior to the
contemplation of such acquisition;
(v) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a
like nature incurred in the ordinary course of business;
(vi) Liens existing on the date of this Indenture;
(vii) Liens on property of Subsidiaries and Permitted Joint
Ventures securing Obligations under Indebtedness incurred pursuant to
clause (viii) of Section 4.09 hereof but only to the extent that (a)
in the case of Subsidiaries and Permitted Joint Ventures that are
incurring Indebtedness other than Related Network Debt, such Liens
secure only such Indebtedness incurred by such Subsidiary or such
Joint Venture; and (b) in the case of Subsidiaries and Joint Ventures
that are incurring Related Network Debt, such Liens secure only such
Related Network Debt;
(viii) Liens securing Obligations under the Senior Notes and
this Indenture;
(ix) Liens securing Obligations under Vendor Debt pursuant to
clause (ii) of Section 4.09 hereof; provided that the principal
amount of such Vendor Debt secured by such Lien does not
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exceed 100% of the purchase price or cost of acquisition,
construction or improvement of the Telecommunications Related Assets
subject to such Liens;
(x) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in
good faith by appropriate proceedings promptly instituted and
diligently concluded, provided that any reserve or other appropriate
provision as shall be required in conformity with GAAP shall have
been made therefor;
(xi) Liens incurred in the ordinary course of business of the
Company, any Subsidiary or any Permitted Joint Venture with respect
to obligations that do not exceed $5.0 million at any one time
outstanding and that (a) are not incurred in connection with the
borrowing of money or the obtaining of advances or credit (other than
trade credit in the ordinary course of business) and (b) do not in
the aggregate materially detract from the value of the property or
materially impair the use thereof in the operation of business by the
Company, such Subsidiary or such Permitted Joint Venture;
(xii) Liens granted in favor of the Holders; and
(xiii) Liens securing Refinancing Indebtedness, but only if, and
to the extent, that such Liens that are incurred in connection with
such Refinancing Indebtedness are at least as favorable to the
Holders of Senior Notes as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or agency or political subdivision thereof (including any subdivision
or ongoing business of any such entity or substantially all of the assets of any
such entity, subdivision or business).
"Pledge Agreement" means the Pledge and Security Agreement, dated as
of August 27, 1997 between the Company and the Trustee.
"Pledged Collateral" means all amounts held by the Collateral Agent
under the terms of the Pledge Agreement.
"Pledged Securities" means the securities purchased by the Company
with a portion of the proceeds from the sale of the Senior Notes, which shall
consist of U.S. Government Obligations.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(i)(A) to be placed on all Notes issued under this Indenture except as
permitted pursuant to Section 2.06(g)(i)(B).
"Preferred Stock" for any Person means Capital Stock of such Person
of any class or classes (however designated) that ranks prior, as to the payment
of dividends or as to the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of such Person, to shares of
Capital Stock of any other class of such Person.
"Principals" means John J. Rigas and members of his immediate family,
any of their respective spouses, estates, lineal descendants, heirs, executors,
personal representatives, administrators, trusts for any
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of their benefit and charitable foundations to which shares of the Company's
Capital Stock beneficially owned by any of the foregoing have been transferred.
"Pro Forma EBITDA" means, for any Person, for any period, the EBITDA
of such Person as determined on a consolidated basis in accordance with GAAP
consistently applied, after giving effect to the following: (i) if, during or
after such period, such Person or any of its Subsidiaries shall have made any
Asset Sale, Pro Forma EBITDA for such Person and its Subsidiaries for such
period shall be reduced by an amount equal to the Pro Forma EBITDA (if positive)
directly attributable to the assets which are the subject of such Asset Sale for
the period or increased by an amount equal to the Pro Forma EBITDA (if negative)
directly attributable thereto for such period, (ii) if, during or after such
period, such Person or any of its Subsidiaries completes an acquisition of any
Person or business which immediately after such acquisition is a Subsidiary of
such Person or a Subsidiary of such Person, Pro Forma EBITDA shall be computed
so as to give pro forma effect to such Asset Sale or the acquisition of such
Person or business, as the case maybe, as if such acquisition had been completed
as of the beginning of such periods, and (iii) if, during or after such period,
such Person or any of its Subsidiaries incurs any Indebtedness (including
without limitation, any Acquired Indebtedness) or issues any Disqualified Stock,
Pro Forma EBITDA shall be computed so as to give pro forma effect (including pro
forma application of the proceeds therefrom) thereto as if such Indebtedness or
Disqualified Stock had been incurred or issued at the beginning of such period.
"Qualified Subsidiary" means any Subsidiary in which a Local Partner
or Local Partners own at least 5% but less than 50% of the Equity Interests of
such Subsidiary; provided that such Subsidiary remains a Subsidiary of the
Company at all times for purposes of this Indenture.
"Refinancing Indebtedness" means any Indebtedness of the Company, any
of its Subsidiaries or any of its Permitted Joint Ventures issued in exchange
for, or the net proceeds of which are used to extend, refinance, renew, replace,
defease or refund other Indebtedness of the Company, any of its Subsidiaries or
any of its Permitted Joint Ventures; provided that: (i) the principal amount (or
accreted value, if applicable) of such Refinancing Indebtedness does not exceed
the principal amount (or accreted value, if applicable) of the Indebtedness so
extended, refinanced, renewed, replaced, defeased or refunded (plus the amount
of reasonable expenses incurred in connection therewith); (ii) such Refinancing
Indebtedness has a final maturity date later than the final maturity date of,
and has a Weighted Average Life to Maturity equal to or greater than the
Weighted Average Life to Maturity of, the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; (iii) if the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded is
subordinated in right of payment to the Senior Notes, such Refinancing
Indebtedness has a final maturity date later than the final maturity date of the
Senior Notes, and is subordinated in right of payment to the Senior Notes on
terms at least as favorable to the Holders of Senior Notes as those contained in
the documentation governing the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded; (iv) to the extent that the
Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded
was secured by Liens, any Liens being incurred in connection with such
Refinancing Indebtedness are at least as favorable to the Holders of Senior
Notes as those contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; and (v) such
Indebtedness is incurred either by the Company, the Subsidiary or the Permitted
Joint Venture who is the obligor on the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of August 27, 1997, by and among the Company and the other
parties named on the signature pages thereof, as such
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agreement may be amended, modified or supplemented from time to time.
"Regulation S" means Regulation S promulgated under the Securities
Act.
"Regulation S Global Note" means a Regulation S Temporary Global Note
or Regulation S Permanent Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent global Senior
Note in the form of Exhibit A-1 hereto bearing the Global Note Legend and the
Private Placement Legend and deposited with or on behalf of and registered in
the name of the Depository or its nominee, issued in a denomination equal to the
outstanding principal amount of the Regulation S Temporary Global Note upon
expiration of the Restricted Period.
"Regulation S Temporary Global Note" means a temporary global Senior
Note in the form of Exhibit A-2 hereto bearing the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depository or
its nominee, issued in a denomination equal to the outstanding principal amount
of the Senior Notes initially sold in reliance on Rule 903 of Regulation S.
"Related Networks" means any group of Qualified Subsidiaries or
Permitted Joint Ventures in which the same Local Partner owns, or the same group
of Local Partners own, all the Equity Interests of each such Qualified
Subsidiary or Permitted Joint Venture that comprise such Related Network that
are not owned by the Company.
"Related Network Debt" means any Credit Agreement entered into by and
among the Qualified Subsidiaries and/or Permitted Joint Ventures that comprise a
Related Network.
"Responsible Officer," when used with respect to the Trustee, means
any officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Definitive Notes" means Senior Notes that are in the form
of the Senior Notes attached hereto as Exhibit A-1, that do not include the
information called for by footnotes 1 and 2 thereof.
"Restricted Global Notes" means the Regulation S Global Notes and the
Rule 144A Global Notes.
"Restricted Period" means the 40-day restricted period as defined in
Regulation S.
"Restricted Investment" means any Investment other than a Permitted
Investment.
"Restricted Joint Venture" means any Joint Venture that is not a
Permitted Joint Venture, but only if such Joint Venture: (a) has no Indebtedness
other than Non-Recourse Debt; (b) is not a party to any agreement, contract,
arrangement or understanding with the Company, any of its Subsidiaries or any of
its Permitted Joint Ventures unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the Company, such
Subsidiary or such Permitted Joint Venture than those that might be obtained at
the time from Persons who are not Affiliates of the Company; and (c) has not
guaranteed or
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otherwise directly or indirectly provided credit support for any Indebtedness of
the Company, any of its Subsidiaries or any of its Permitted Joint Ventures. If,
at any time, a Restricted Joint Venture would fail to meet the requirements of a
Restricted Joint Venture by becoming a Permitted Joint Venture or otherwise, it
shall thereafter cease to be a Restricted Joint Venture for purposes of this
Indenture and (i) all of the then outstanding Indebtedness of such entity shall
be deemed to be incurred as of the date on which such entity becomes a Permitted
Joint Venture or otherwise ceases to be a Restricted Joint Venture for purposes
of Section 4.09 hereof subject to the provisions of Section 6.01(d) hereof(and
if such Indebtedness is not permitted to be incurred as of such date, the
Company shall be in default of such covenant) and (ii) all of the then
outstanding Investments made by such entity since the date of this Indenture
shall be deemed to have been made as of the date that such Restricted Joint
Venture becomes a Permitted Joint Venture or otherwise ceases to be a Restricted
Joint Venture for purposes of Section 4.07 hereof (and if such Investments are
not permitted to be made as of such date under Section 4.07 hereof, the Company
shall be in default of such covenant); provided that if a Restricted Joint
Venture ceases to be a Restricted Joint Venture as a result of (i) the loss of
its Local Partner or (ii) the loss of management control of such Restricted
Joint Venture, then the provisions of Section 4.07 shall not be applied to such
entity.
"Restricted Joint Venture Investment" means any Joint Venture
Investment by a General Partner Subsidiary if, after such Joint Venture
Investment, such Joint Venture is a Restricted Joint Venture.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 144A Global Note" means a permanent global note that contains
the paragraph referred to in footnote 1 and the additional schedule referred to
in footnote 2 to the form of the Senior Note attached hereto as Exhibit A-1, and
that is deposited with and registered in the name of the Depository,
representing Notes sold in reliance on Rule 144A.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated under the Securities Act.
"Sale and Leaseback Transaction" of any Person means an arrangement
with any lender or investor or to which such lender or investor is a party
providing for the leasing by such Person of any property or asset of such Person
which has been or is being sold or transferred by such Person more than 365 days
after the acquisition thereof or the completion of construction or commencement
of operation thereof to such lender or investor or to any Person to whom funds
have been or are to be advanced by lender or investor on the security of such
property or asset. The stated maturity of such arrangement shall be the date of
the last payment of rent or any other amount due under such arrangement prior to
the first date on which such arrangement may be terminated by the lessee without
payment of a penalty.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Note Custodian" means the Trustee, as custodian with respect
to the Senior Notes in global form, or any successor entity thereto.
"Senior Notes" means the Company's 12 1/4% Series A Senior Secured
Notes due 2004 issued
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pursuant to this Indenture and 12 1/4% Series B Senior Secured Notes due 2004
issued in exchange for 12 1/4% Series A Senior Secured Notes.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date of this Indenture.
"Stated Maturity" means with respect to any debt security, the date
specified in such debt security as the fixed date on which the final installment
of principal of such debt security is due and payable.
"Stock Collateral" means the Capital Stock of Hyperion of Tennessee,
Inc., Hyperion of Florida, Inc., Hyperion of Vermont, Inc., Hyperion of
Kentucky, Inc. and Hyperion of New York, Inc. pledged by the Company to the
Trustee pursuant to the Pledge Agreement.
"Strategic Investor" means a corporation, partnership or other entity
engaged in one or more Telecommunications Businesses that has, or 80% or more of
the voting power of the Capital Stock of which is owned by a Person that has, an
equity market capitalization, at the time (i) of its initial Investment in the
Company or (ii) it purchases an Equity Interest in a Subsidiary or Joint Venture
of the Company, as the case may be, in excess of $2.0 billion.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity (other than a partnership) of which more
than 50% of the total voting power of shares of Capital Stock entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other Subsidiaries
of that Person (or a combination thereof) and (ii) any partnership of which more
than 50% of the partnership's capital accounts, distribution rights or general
or limited partnership interests are owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of that
Person or a combination thereof.
"Telecommunications Business" means the business of (i) transmitting,
or providing services relating to the transmission of, voice, video or data
through owned or leased transmission facilities, (ii) creating, developing or
marketing communications related network equipment, software and other devices
for use in a telecommunications business or (iii) evaluating, participating or
pursuing any other activity or opportunity that is primarily related to those
identified in (i) or (ii) above; provided that the determination of what
constitutes a Telecommunications Business shall be made in good faith by the
Board of Directors of the Company.
"Telecommunications Related Assets" means all assets, rights
(contractual or otherwise) and properties, whether tangible or intangible, used
or intended for use in connection with a Telecommunications Business.
"Telecommunications Service Market" means a network built by the
Company to service a market.
"13% Notes" means the Company's outstanding 13% Senior Discount Notes
due 2004.
"13% Note Indenture" means the indenture governing the 13% Notes.
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"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. "77aaa-77bbbb)
as in effect on the date on which this Indenture is qualified under the TIA.
"Transfer Restricted Securities" means securities that bear or are
required to bear the legend set forth in Section 2.06 hereof.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"U.S. Government Obligations" means fixed rate obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged, which are not callable and which mature (or may be put to the issues
by the holder at no less than par) no later than the maturity date of the Senior
Notes.
"Unrestricted Global Note" means a permanent global Senior Note that
contains the paragraph referred to in footnote 1 and the additional schedule
referred to in footnote 2 to the form of the Senior Note attached hereto as
Exhibit A-3, and that is deposited with or on behalf of and registered in the
name of the Depository.
"Unrestricted Definitive Note" means Senior Notes that are in the
form of the Senior Notes attached hereto as Exhibit A-3 that do not include the
information called for by footnotes 1 and 2 thereof.
"Unrestricted Notes" means the Unrestricted Global Notes and
Unrestricted Definitive Notes.
"Vendor Debt" means any purchase money Indebtedness of the Company or
any Subsidiary incurred in connection with the acquisition of Telecommunications
Related Assets and which purchase money Indebtedness was extended by the vendor
of such Telecommunications Related Assets or an affiliate thereof.
"Voting Stock" of any person means Capital Stock of such person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such person, whether at all times or only so long as no
senior class of securities has voting power by reason of any contingency.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the sum
of the products obtained by multiplying (x) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (y) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (b) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such
Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person or a
combination thereof.
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SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
"Affiliate Transaction"........................................ 4.11
"Asset Sale"................................................... 4.10
"Asset Sale Offer"............................................. 3.09
"Bankruptcy Law"............................................... 4.01
"Change of Control Offer"...................................... 4.15
"Change of Control Payment".................................... 4.15
"Change of Control Payment Date"............................... 4.15
"Covenant Defeasance".......................................... 8.03
"Custodian".................................................... 4.13
"Event of Default"............................................. 6.01
"Excess Proceeds".............................................. 4.10
"incur"........................................................ 4.09
"Legal Defeasance" ............................................ 8.02
"Offer Amount"................................................. 3.09
"Offer Period"................................................. 3.09
"Paying Agent"................................................. 2.03
"Purchase Date"................................................ 3.09
"Qualified Equity Offering" . . . . . . ....................... 3.07
"Registrar".................................................... 2.03
"Restricted Payments".......................................... 4.07
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Senior Notes;
"indenture security Holder" means a Holder of a Senior Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Senior Notes means the Company and any successor
obligor upon the Senior Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
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SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act shall
be deemed to include substitute, replacement of successor sections or
rules adopted by the SEC from time to time.
ARTICLE 2
THE SENIOR NOTES
SECTION 2.01. FORM AND DATING.
The Senior Notes and the Trustee=s certificate of authentication
shall be substantially in the form of Exhibits A-1, A-2 and A-3 attached hereto.
The Senior Notes may have notations, legends or endorsements required by law,
stock exchange rule or usage, as designated by the Company or its counsel. Each
Note shall be dated the date of its authentication. The Senior Notes shall be in
denominations of $1,000 and integral multiples thereof (subject to a minimum
initial purchase requirement of $250,000 for Notes sold to Accredited Investors
other than in reliance on Rule 144A or Regulation S).
The Senior Notes offered and sold in reliance on Rule 144A shall be
issued initially in the form of a Rule 144A Global Note. Notes offered and sold
to Accredited Investors in transactions exempt from registration under the
Securities Act not made in reliance on Rule 144A or Regulation S shall be issued
initially in the form of Restricted Definitive Notes. Notes offered and sold in
reliance on Regulation S shall be issued initially in the form of the Regulation
S Temporary Global Note, which shall be deposited on behalf of the purchasers of
the Senior Notes represented thereby with the Trustee, at its New York office,
as custodian for the Depository, and registered in the name of the Depository or
the nominee of the Depository for the accounts of designated agents holding on
behalf of Euroclear or Cedel Bank, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The Restricted Period
shall be terminated upon the receipt by the Trustee of (i) a written certificate
from the Depository or the Note Custodian, together with copies of certificates
from Euroclear and Cedel Bank certifying that they have received certification
of non-United States beneficial ownership of 100% of the aggregate principal
amount of the Regulation S Temporary Global Note, and (ii) an Officers'
Certificate from the Company to the effect set forth in Section 11.04(a) hereof.
Following the termination of the Restricted Period, beneficial interests in the
Regulation S Temporary Global Note shall be exchanged for beneficial interests
in Regulation S
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Permanent Global Notes pursuant to the Applicable Procedures. Simultaneously
with the authentication of Regulation S Permanent Global Notes, the Trustee
shall cancel the Regulation S Temporary Global Note.
Notes issued in global form shall be substantially in the form of
Exhibits A-1, A-2 or A-3 attached hereto (including the Global Note Legend and
the ASchedule of Exchanges in the Global Note@ attached thereto). Notes issued
in definitive form shall be substantially in the form of Exhibit A-1 or A-3
attached hereto (but without the Global Note Legend and without the ASchedule of
Exchanges of Interests in the Global Note@ attached thereto). Each Global Note
shall represent such of the outstanding Notes as shall be specified therein and
each shall provide that it shall represent the aggregate principal amount of
outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any increase or
decrease in the aggregate principal amount of outstanding Notes represented
thereby shall be made by the Trustee or the Note Custodian, at the direction of
the Trustee, in accordance with instructions given by the Holder thereof as
required by Section 2.06 hereof.
The provisions of the AOperating Procedures of the Euroclear System@
and ATerms and Conditions Governing Use of Euroclear@ and the AGeneral Terms and
Conditions of Cedel Bank@ and ACustomer Handbook@ of Cedel Bank shall be
applicable to transfers of beneficial interests in the Regulation S Temporary
Global Note and the Regulation S Permanent Global Notes that are held by the
Agent Members through Euroclear or Cedel Bank.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Senior Notes for the Company by manual or
facsimile signature. If an Officer whose signature is on a Senior
Note no longer holds that office at the time a Senior
Note is authenticated, the Senior Note shall nevertheless be valid.
A Senior Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Senior Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by two
Officers, authenticate Senior Notes for original issue up to the aggregate
principal amount stated in paragraph 4 of the Senior Notes. The aggregate
principal amount of Senior Notes outstanding at any time may not exceed such
amount except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Senior Notes. An authenticating agent may authenticate
Senior Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain (i) an office or agency where Senior Notes
may be presented for registration of transfer or for exchange ("Registrar") and
(ii) an office or agency where Senior Notes may
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be presented for payment ("Paying Agent"). The Registrar shall keep a register
of the Senior Notes and of their transfer and exchange. The Company may appoint
one or more co-registrars and one or more additional paying agents. The term
"Registrar" includes any co-registrar and the term "Paying Agent" includes any
additional paying agent. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company shall notify the Trustee in writing of
the name and address of any Agent not a party to this Indenture. If the Company
fails to appoint or maintain another entity as Registrar or Paying Agent, the
Trustee shall act as such. The Company or any of its Subsidiaries may act as
Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC")
to act as Depository with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar
and Paying Agent and to act as Senior Note Custodian with respect to the Global
Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Senior
Notes, and will notify the Trustee of any default by the Company in making any
such payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee shall serve as Paying Agent for the Senior Notes.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA ' 312(a). If the Trustee is not
the Registrar, the Company shall furnish to the Trustee at least seven Business
Days before each interest payment date and at such other times as the Trustee
may request in writing, a list in such form and as of such date as the Trustee
may reasonably require of the names and addresses of the Holders of Senior Notes
and the Company shall otherwise comply with TIA ' 312(a).
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SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depository to the Depository or to another nominee of the
Depository, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Company for Definitive Notes if (i) the Company delivers to the Trustee
notice from the Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor Depositary is not appointed by the
Company within 120 days after the date of such notice from the Depositary or
(ii) the Company in its sole discretion determines that the Global Notes (in
whole but not in part) should be exchanged for Definitive Notes and delivers a
written notice to such effect to the Trustee; provided that in no event shall
the Regulation S Temporary Global Note be exchanged by the Company for
Definitive Notes prior to (x) the expiration of the Restricted Period and (y)
the receipt by the Registrar of any certificates identified by the Company or
its counsel to be required pursuant to Rule 903 under the Securities Act. Upon
the occurrence of either of the preceding events in (i) or (ii) above,
Definitive Notes shall be issued in such names as the Depositary shall instruct
the Trustee. Global Notes also may be exchanged or replaced, in whole or in
part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and
delivered in exchange for, or in lieu of, a Global Note or any portion thereof,
pursuant to Section 2.07 or 2.10 hereof, shall be authenticated and delivered in
the form of, and shall be, a Global Note. A Global Note may not be exchanged for
another Note other than as provided in this Section 2.06(a), however, beneficial
interests in a Global Note may be transferred and exchanged as provided in
Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in Global Notes.
The transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes shall be subject to restrictions on transfer described in the
Private Placement Legend to the extent required by the Securities Act. Transfers
of beneficial interests in the Global Notes also shall require compliance with
either subparagraph (i) or (ii) below, as applicable, as well as one or more of
the other following subparagraphs as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend; provided, however,
that prior to the expiration of the Restricted Period transfers of
beneficial interests in the Temporary Regulation S Global Note may not be
made to a U.S. Person or for the account or benefit of a U.S. Person
(other than an Initial Purchaser). Beneficial interests in any
Unrestricted Global Note may be transferred only to Persons who take
delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note. No written orders or instructions shall be required to be
delivered to the Registrar to effect the transfers described in this
Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of beneficial
interests (other than a transfer of a beneficial interest in a Global Note
to a Person who takes delivery thereof in the form of a beneficial
interest in the same Global Note), the transferor of such beneficial
interest must deliver to the Registrar either (A) (1) a
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written order from an Agent Member to the Depositary in accordance with
the Applicable Procedures directing the Depositary to credit or cause to
be credited a beneficial interest in another Global Note in an amount
equal to the beneficial interest to be transferred or exchanged and (2)
instructions given in accordance with the Applicable Procedures containing
information regarding the Agent Member account to be credited with such
increase or (B) (1) a written order from an Agent Member given to the
Depositary in accordance with the Applicable Procedures directing the
Depositary to cause to be issued a Definitive Note in an amount equal to
the beneficial interest to be transferred or exchanged and (2)
instructions given by the Depositary to the Registrar containing
information regarding the Person in whose name such Definitive Note shall
be registered to effect the transfer or exchange referred to in (1) above;
provided that in no event shall Definitive Notes be issued upon the
transfer or exchange of beneficial interests in the Regulation S Temporary
Global Note prior to (x) the expiration of the Restricted Period and (y)
the receipt by the Registrar of any certificates identified by the Company
or its counsel to be required pursuant to Rule 903 under the Securities
Act. Upon an Exchange Offer by the Company in accordance with Section
2.06(f) hereof, the requirements of this Section 2.06(b)(ii) shall be
deemed to have been satisfied upon receipt by the Registrar of the
instructions contained in the Letter of Transmittal delivered by the
Holder of such beneficial interests in the Restricted Global Notes. Upon
satisfaction of all of the requirements for transfer or exchange of
beneficial interests in Global Notes contained in this Indenture, the
Senior Notes and otherwise applicable under the Securities Act, the
Trustee shall adjust the principal amount of the relevant Global Note(s)
pursuant to Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted Global
Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of clause (ii) above and the Registrar
receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof; and
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Temporary Global Note or the
Regulation S Global Note, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof.
(iv) Transfer and Exchange of Beneficial Interests in a Restricted
Global Note for Beneficial Interests in the Unrestricted Global Note. A
beneficial interest in any Restricted Global Note may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of clause (ii) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of the beneficial interest to be transferred, in the
case of an exchange, or the transferee, in the case of a transfer, is
not (1) a Broker-Dealer, (2) a Person participating in the
distribution of the Senior Notes issues in the Exchange Offer or (3)
a Person who is an affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance
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with the Registration Rights Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement
in accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest
for a beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit C hereto,
including the certifications in item (1)(a) thereof;
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial interest
to a Person who shall take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note, a certificate
from such holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof; and
(3) in each such case set forth in this subparagraph (D),
an Opinion of Counsel in form reasonably acceptable to the Registrar
to the effect that such exchange or transfer is in compliance with
the Securities Act and that the restrictions on transfer contained
herein and in the Private Placement Legend are not required in order
to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or
(D) above at a time when an Unrestricted Global Note has not yet been
issued, the Company shall issue and, upon receipt of an authentication
order in accordance with Section 2.02 hereof, the Trustee shall
authenticate one or more Unrestricted Global Notes in an aggregate
principal amount equal to the principal amount of beneficial interests
transferred pursuant to subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to, Persons who take delivery thereof in the
form of a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests in Global Notes
for Definitive Notes.
(i) If any holder of a beneficial interest in a Restricted Global
Note proposes to exchange such beneficial interest for a Restricted
Definitive Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of a Restricted Definitive Note, then,
upon receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest proposes to
exchange such beneficial interest for a Restricted Definitive Note, a
certificate from such holder in the form of Exhibit C hereto,
including the certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a Non-
U.S. Person in an offshore
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transaction in accordance with Rule 903 or Rule 904 under the
Securities Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant to
an exemption from the registration requirements of the Securities Act
in accordance with Rule 144 under the Securities Act, a certificate
to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Accredited Investor in reliance on an exemption from the registration
requirements of the Securities Act other than those listed in
subparagraphs (B) through (D) above, a certificate to the effect set
forth in Exhibit B hereto, including the certifications, certificates
and Opinion of Counsel required by item (3)(d) thereof, if
applicable;
(F) if such beneficial interest is being transferred to the
Company or any of its Subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item
(3)(b) thereof; or
(G) if such beneficial interest is being transferred pursuant to
an effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable
Restricted Global Note to be reduced accordingly pursuant to Section
2.06(h) hereof, and the Company shall execute and the Trustee shall
authenticate and deliver to the Person designated in the instructions a
Restricted Definitive Note in the appropriate principal amount. Any
Restricted Definitive Note issued in exchange for a beneficial interest in
a Restricted Global Note pursuant to this Section 2.06(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Agent Member.
The Trustee shall deliver such Restricted Definitive Notes to the Persons
in whose names such Notes are so registered. Any Restricted Definitive
Note issued in exchange for a beneficial interest in a Restricted Global
Note pursuant to this Section 2.06(c)(i) shall bear the Private Placement
Legend and shall be subject to all restrictions on transfer contained
therein.
(ii) Notwithstanding Sections 2.06(c)(i)(A) and (C) hereof, a
beneficial interest in the Regulation S Temporary Global Note may not be
(A) exchanged for a Definitive Note prior to (x) the expiration of the
Restricted Period and (y) the receipt by the Registrar of any certificates
required pursuant to Rule 903(c)(3)(B) under the Securities Act or (B)
transferred to a Person who takes delivery thereof in the form of a
Definitive Note prior to the conditions set forth in clause (A) above or
unless the transfer is pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 903 or Rule 904.
(iii) Notwithstanding 2.06(c)(i) hereof, a holder of a beneficial
interest in a Restricted Global Note may exchange such beneficial interest
for an Unrestricted Definitive Note or may transfer such beneficial
interest to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note if:
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(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of such beneficial interest, in the case of an
exchange, or the transferee, in the case of a transfer, is not (1) a
Broker-Dealer, (2) a Person participating in the distribution of the
Senior Notes issued in the Exchange Offer or (3) a Person who is an
affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement
in accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest
for an Unrestricted Definitive Note, a certificate from such holder
in the form of Exhibit C hereto, including the certifications in item
(1)(b) thereof;
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial interest
to a Person who shall take delivery thereof in the form of an
Unrestricted Definitive Note, a certificate from such holder in the
form of Exhibit B hereto, including the certifications in item (4)
thereof; and
(3) in each such case set forth in this subparagraph (D),
an Opinion of Counsel in form reasonably acceptable to the Company,
to the effect that such exchange or transfer is in compliance with
the Securities Act and that the restrictions on transfer contained
herein and in the Private Placement Legend are not required in order
to maintain compliance with the Securities Act.
(iv) If any holder of a beneficial interest in an Unrestricted Global
Note proposes to exchange such beneficial interest for an Unrestricted
Definitive Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of an Unrestricted Definitive Note,
then, upon satisfaction of the conditions set forth in Section 2.06(b)(ii)
hereof, the Trustee shall cause the aggregate principal amount of the
applicable Unrestricted Global Note to be reduced accordingly pursuant to
Section 2.06(h) hereof, and the Company shall execute and the Trustee
shall authenticate and deliver to the Person designated in the
instructions an Unrestricted Definitive Note in the appropriate principal
amount. Any Unrestricted Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.06(c)(iv) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Agent Member.
The Trustee shall deliver such Unrestricted Definitive Notes to the
Persons in whose names such Notes are so registered. Any Unrestricted
Definitive Note issued in exchange for a beneficial interest pursuant to
this section 2.06(c)(iv) shall not bear the Private Placement Legend. A
beneficial interest in an Unrestricted Global Note cannot be exchanged for
a Restricted Definitive Note or transferred to a Person who takes delivery
thereof in the form of a Restricted Definitive Note.
(d) Transfer and Exchange of Definitive Notes for Beneficial
Interests in Global Note.
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(i) If any Holder of a Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global Note
or to transfer such Restricted Definitive Notes to a Person who takes
delivery thereof in the form of a beneficial interest in a Restricted
Global Note, then, upon receipt by the Registrar of the following
documentation:
(A) if the Holder of such Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global
Note, a certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred to a
QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (1) thereof; or
(C) if such Restricted Definitive Note is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule
903 or Rule 904 under the Securities Act, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in item
(2) thereof;
the Trustee shall cancel the Restricted Definitive Note, increase or cause
to be increased the aggregate principal amount of, in the case of clause
(A) above, the appropriate Restricted Global Note, in the case of clause
(B) above, the 144A Global Note, and in the case of clause (C) above, the
Regulation S Global Note.
(ii) A Holder of a Restricted Definitive Note may exchange such Note
for a beneficial interest in an Unrestricted Global Note or transfer such
Restricted Definitive Note to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, is not (1) a Broker-Dealer, (2) a Person
participating in the distribution of the Senior Notes issued in the
Exchange Offer or (3) a Person who is an affiliate (as defined in
Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement
in accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in the form
of Exhibit C hereto, including the certifications in item (1)(c)
thereof;
(2) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take delivery
thereof in the form of a beneficial interest in the Unrestricted
Global Note, a certificate from such Holder in the form of Exhibit B
hereto, including the
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certifications in item (4) thereof; and
(3) in each such case set forth in this subparagraph (D),
an Opinion of Counsel in form reasonably acceptable to the Company to
the effect that such exchange or transfer is in compliance with the
Securities Act, that the restrictions on transfer contained herein
and in the Private Placement Legend are not required in order to
maintain compliance with the Securities Act, and such Restricted
Definitive Notes are being exchanged or transferred in compliance
with any applicable blue sky securities laws of any State of the
United States.
Upon satisfaction of the conditions of any of the subparagraphs in this
Section 2.06(d)(ii), the Trustee shall cancel the Restricted Definitive
Notes and increase or cause to be increased the aggregate principal amount
of the Unrestricted Global Note.
(iii) A Holder of an Unrestricted Definitive Note may exchange such
Note for a beneficial interest in an Unrestricted Global Note or transfer
such Unrestricted Definitive Notes to a Person who takes delivery thereof
in the form of a beneficial interest in an Unrestricted Global Note at any
time. Upon receipt of a request for such an exchange or transfer, the
Trustee shall cancel the applicable Unrestricted Definitive Note and
increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Note.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or
(iii) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an authentication order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of beneficial interests transferred pursuant to subparagraphs
(ii)(B), (ii)(D) or (iii) above.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, pursuant to the provisions of this Section 2.06(e).
(i) Restricted Definitive Notes may be transferred to and registered
in the name of Persons who take delivery thereof if the Registrar receives
the following:
(A) if the transfer will be made pursuant to Rule 144A under the
Securities Act, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item (1)
thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule
904, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2) thereof;
and
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(C) if the transfer will be made pursuant to any other exemption
from the registration requirements of the Securities Act, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications, certificates and Opinion of
Counsel required by item (3) thereof, if applicable.
(ii) Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person or
Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, is not (1) a Broker-Dealer, (2) a Person
participating in the distribution of the Senior Notes issued in the
Exchange Offer or (3) a Person who is an affiliate (as defined in
Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement
in accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for an Unrestricted Definitive Note,
a certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(d) thereof;
(2) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take delivery
thereof in the form of an Unrestricted Definitive Note, a certificate
from such Holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof; and
(3) in each such case set forth in this subparagraph (D),
an Opinion of Counsel in form reasonably acceptable to the Company to
the effect that such exchange or transfer is in compliance with the
Securities Act, that the restrictions on transfer contained herein
and in the Private Placement Legend are not required in order to
maintain compliance with the Securities Act, and such Restricted
Definitive Note is being exchanged or transferred in compliance with
any applicable blue sky securities laws of any State of the United
States.
(iii) A Holder of Unrestricted Definitive Notes may transfer such
Notes to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note. Upon receipt of a request for such a
transfer, the Registrar shall register the Unrestricted Definitive Notes
pursuant to the instructions from the Holder thereof. Unrestricted
Definitive Notes cannot be exchanged for or transferred to Persons who
take delivery thereof in the form of a Restricted Definitive Note.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue and,
upon receipt of an authentication order in
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accordance with Section 2.02, the Trustee shall authenticate (i) one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of the beneficial interests in the Restricted Global Notes
tendered for acceptance by persons that are not (x) Broker-Dealers, (y) Persons
participating in the distribution of the Senior Notes issued in the Exchange
Offer or (z) Persons who are Affiliates (as defined in Rule 144) of the Company
and accepted for exchange in the Exchange Offer and (ii) Unrestricted Definitive
Notes in an aggregate principal amount equal to the principal amount of the
Restricted Definitive Notes accepted for exchange in the Exchange Offer.
Concurrent with the issuance of such Notes, the Trustee shall cause the
aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company shall execute and the Trustee shall
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Unrestricted Definitive Notes in the appropriate principal
amount.
(g) Legends. The following legends shall appear on the face of all Global
Notes and Definitive Notes issued under this Indenture unless specifically
stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (b) below, each Global
Note and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear the legend in
substantially the following form:
"THE SENIOR NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND THE SENIOR NOTE EVIDENCED
HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THE SENIOR NOTE EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED
BY RULE 144A THEREUNDER. BY ITS ACQUISITION HEREOF, THE HOLDER
OF THE SENIOR NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF
HYPERION TELECOMMUNICATIONS, INC. (THE "COMPANY") THAT (A) SUCH
SENIOR NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (1) (A) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A
FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
904 UNDER THE SECURITIES ACT, (D) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR
(7) OF REGULATION D UNDER THE SECURITIES ACT (AN "IAI") THAT,
PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO
THE TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM THE TRUSTEE OR (E) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION
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REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH
CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION
AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY PURCHASER OF THE SENIOR NOTE EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH IN (1) ABOVE."
(B) Notwithstanding the foregoing, any Unrestricted Global Note
or Unrestricted Definitive Note issued pursuant to subparagraphs
(b)(iv), (c)(iii), (c)(iv), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or
(f) to this Section 2.06 (and all Notes issued in exchange therefor
or substitution thereof) shall not bear the Private Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
ATHIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON
AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS
GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION
2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE
TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND
(IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH
THE PRIOR WRITTEN CONSENT OF THE COMPANY.@
(iii) Regulation S Temporary Global Note Legend. The Regulation S
Temporary Global Note shall bear a legend in substantially the following
form:
ATHE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES,
ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER
NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL
BE ENTITLED TO RECEIVE CASH PAYMENTS OF INTEREST DURING THE PERIOD WHICH
SUCH HOLDER HOLDS THIS NOTE. NOTHING IN THIS LEGEND SHALL BE DEEMED TO
PREVENT INTEREST FROM ACCRUING ON THIS NOTE.@
(h) Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
cancelled in whole and not in part, each such Global Note shall be returned to
or retained and cancelled by the Trustee in accordance with Section 2.11 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for or transferred to a Person who will
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take delivery thereof in the form of a beneficial interest in another Global
Note or for Definitive Notes, the principal amount of Notes represented by such
Global Note shall be reduced accordingly and an endorsement shall be made on
such Global Note, by the Trustee or by the Depositary at the direction of the
Trustee, to reflect such reduction; and if the beneficial interest is being
exchanged for or transferred to a Person who will take delivery thereof in the
form of a beneficial interest in another Global Note, such other Global Note
shall be increased accordingly and an endorsement shall be made on such Global
Note, by the Trustee or by the Depositary at the direction of the Trustee, to
reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon receipt of a Company Order or at the Registrar's
request.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.10, 3.08, 4.09, 4.10 and 9.05 hereof).
(iii) The Registrar shall not be required to register the transfer of
or exchange any Note selected for redemption in whole or in part, except
the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Global
Notes or Definitive Notes surrendered upon such registration of transfer
or exchange.
(v) The Company shall not be required (A) to issue, to register the
transfer of or to exchange Notes during a period beginning at the opening
of business 15 days before the day of any selection of Notes for
redemption under Section 3.02 hereof and ending at the close of business
on the day of selection, (B) to register the transfer of or to exchange
any Note so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part or (C) to register
the transfer of or to exchange a Note between a record date and the next
succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of a transfer of
any Note, the Trustee, any Agent and the Company may deem and treat the
Person in whose name any Note is registered as the absolute owner of such
Note for the purpose of receiving payment of principal of and interest on
such Notes and for all other purposes, and none of the Trustee, any Agent
or the Company shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 2.02 hereof.
(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06 to
effect a transfer or exchange may be submitted by facsimile.
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SECTION 2.07. REPLACEMENT SENIOR NOTES.
If any mutilated Senior Note is surrendered to the Trustee, or the
Company and the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Senior Note, the Company shall issue and the
Trustee, upon the written order of the Company signed by two Officers of the
Company, shall authenticate a replacement Senior Note if the Trustee's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Senior Note
is replaced. The Company may charge for its expenses in replacing a Senior Note.
Every replacement Senior Note is an additional obligation of the
Company and shall be entitled to all of the benefits of this Indenture equally
and proportionately with all other Senior Notes duly issued hereunder.
SECTION 2.08. OUTSTANDING SENIOR NOTES.
The Senior Notes outstanding at any time are all the Senior Notes
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation, those reductions in the interest in a Global Note
effected by the Trustee in accordance with the provisions hereof, and those
described in this Section as not outstanding. Except as set forth in Section
2.09 hereof, a Senior Note does not cease to be outstanding because the Company
or an Affiliate of the Company holds the Senior Note.
If a Senior Note is replaced pursuant to Section 2.07 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Senior Note is held by a bona fide purchaser.
If the principal amount of any Senior Note is considered paid under
Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Senior Notes payable on that date, then on and after that date
such Senior Notes shall be deemed to be no longer outstanding and shall cease to
accrete or accrue interest.
SECTION 2.09. TREASURY SENIOR NOTES.
In determining whether the Holders of the required principal amount
of Senior Notes have concurred in any direction, waiver or consent, Senior Notes
owned by the Company, or by any Affiliate thereof shall be considered as though
not outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Senior Notes that a Trustee knows are so owned shall be so disregarded.
SECTION 2.10. TEMPORARY SENIOR NOTES.
Until definitive Senior Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Senior Notes upon a written
order of the Company signed by two Officers of
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the Company. Temporary Senior Notes shall be substantially in the form of
definitive Senior Notes but may have variations that the Company considers
appropriate for temporary Senior Notes and as shall be reasonably acceptable to
the Trustee. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate definitive Senior Notes in exchange for temporary
Senior Notes.
Holders of temporary Senior Notes shall be entitled to all of the
benefits of this Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Senior Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Senior Notes surrendered to them for registration of transfer, exchange or
payment. The Trustee and no one else shall cancel all Senior Notes surrendered
for registration of transfer, exchange, payment, replacement or cancellation and
shall destroy cancelled Senior Notes (subject to the record retention
requirement of the Exchange Act). Certification of the destruction of all
cancelled Senior Notes shall be delivered to the Company. The Company may not
issue new Senior Notes to replace Senior Notes that it has paid or that have
been delivered to the Trustee for cancellation.
SECTION 2.12. RECORD DATE.
The record date for purposes of determining the identity of Holders
of the Senior Notes entitled to vote or consent to any action by vote or consent
authorized or permitted under this Indenture shall be determined as provided for
in TIA ' 316 (c).
SECTION 2.13. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Senior Notes,
it shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Senior Notes and in Section 4.01 hereof. The Company shall notify the
Trustee in writing of the amount of defaulted interest proposed to be paid on
each Senior Note and the date of the proposed payment. The Company shall fix or
cause to be fixed each such special record date and payment date, provided that
no such special record date shall be less than 10 days prior to the related
payment date for such defaulted interest. At least 15 days before the special
record date, the Company (or, upon the written request of the Company, the
Trustee in the name and at the expense of the Company) shall mail or cause to be
mailed to Holders a notice that states the special record date, the related
payment date and the amount of such interest to be paid.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Senior Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 45 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Senior Notes to be redeemed and (iv) the redemption price.
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SECTION 3.02. SELECTION OF SENIOR NOTES TO BE REDEEMED.
If less than all of the Senior Notes are to be redeemed at any time,
the Trustee shall select the Senior Notes to be redeemed among the Holders of
the Senior Notes in compliance with the requirements of the principal national
securities exchange, if any, on which the Senior Notes are listed or, if the
Senior Notes are not so listed, on a pro rata basis, by lot or in accordance
with any other method the Trustee considers fair and appropriate. In the event
of partial redemption by lot, the particular Senior Notes to be redeemed shall
be selected, unless otherwise provided herein, not less than 30 nor more than 60
days prior to the redemption date by the Trustee from the outstanding Senior
Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the
Senior Notes selected for redemption and, in the case of any Senior Note
selected for partial redemption, the principal amount thereof to be redeemed.
Senior Notes and portions of Senior Notes selected shall be in amounts of $1,000
or whole multiples of $1,000; except that if all of the Senior Notes of a Holder
are to be redeemed, the entire outstanding amount of Senior Notes held by such
Holder, even if not a multiple of $1,000, shall be redeemed. Except as provided
in the preceding sentence, provisions of this Indenture that apply to Senior
Notes called for redemption also apply to portions of Senior Notes called for
redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.09 hereof, at least 30 days
but not more than 60 days before a redemption date, the Company shall mail or
cause to be mailed, by first class mail, a notice of redemption to each Holder
whose Senior Notes are to be redeemed at its registered address.
The notice shall identify the Senior Notes to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) if any Senior Note is being redeemed in part, the portion of the
principal amount of such Senior Note to be redeemed and that, after the
redemption date upon surrender of such Senior Note, a new Senior Note or
Senior Notes in principal amount equal to the unredeemed portion shall be
issued upon cancellation of the original Senior Note;
(d) the name and address of the Paying Agent;
(e) that Senior Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest on Senior Notes called for redemption ceases to accrue
on and after the redemption date;
(g) the paragraph of the Senior Notes and/or Section of this
Indenture pursuant to which the Senior Notes called for redemption are
being redeemed; and
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(h) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Senior Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Senior Notes called for redemption become irrevocably due and payable on
the redemption date at the redemption price. A notice of redemption may not be
conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
One Business Day prior to the redemption date, the Company shall
deposit with the Trustee or with the Paying Agent money sufficient to pay the
redemption price of and accrued interest on all Senior Notes to be redeemed on
that date. The Trustee or the Paying Agent shall promptly return to the Company
any money deposited with the Trustee or the Paying Agent by the Company in
excess of the amounts necessary to pay the redemption price of, accrued interest
on and Liquidated Damages, if any, all Senior Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Senior Notes or the portions of Senior Notes called for redemption. If a
Senior Note is redeemed on or after an interest record date but on or prior to
the related interest payment date, then any accrued and unpaid interest and
Liquidated Damages, if any, shall be paid to the Person in whose name such
Senior Note was registered at the close of business on such record date. If any
Senior Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
date until such principal is paid, and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the Senior
Notes and in Section 4.01 hereof.
SECTION 3.06. SENIOR NOTES REDEEMED IN PART.
Upon surrender of a Senior Note that is redeemed in part, the Company
shall issue and, upon the Company's written request, the Trustee shall
authenticate for the Holder at the expense of the Company a new Senior Note
equal in principal amount to the unredeemed portion of the Senior Note
surrendered.
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SECTION 3.07. OPTIONAL REDEMPTION.
(a) Except as set forth in clause (b) of this Section 3.07, the
Company shall not have the option to redeem the Senior Notes prior to September
1, 2001. Thereafter, the Company shall have the option to redeem the Senior
Notes, in whole or in part, upon not less than 30 nor more than 60 days notice,
at the redemption prices (expressed as percentages of principal amount) set
forth below plus accrued and unpaid interest thereon and Liquidated Damages, if
any, to the applicable redemption date, if redeemed during the twelve-month
period beginning on September 1 of the years indicated below:
Year Percentage
2001............................................. 106.125%
2002............................................. 103.063%
2003 and thereafter.............................. 100.000%
(b) Notwithstanding the foregoing, the Company, on or prior to
September 1, 2000, may redeem up to a maximum of 25% of the aggregate principal
amount of the Senior Notes then outstanding at a redemption price of 112.25% of
the principal amount thereof, with the net proceeds from either (i) an Initial
Public Offering of the common stock of the Company or (ii) a sale of the Capital
Stock (other than Disqualified Stock) of the Company to a Strategic Investor in
a single transaction or a series of related transactions for at least $25.0
million (clauses (i) and (ii) together, collectively referred to herein as
"Qualified Equity Offerings"); provided that, in either case, at least 75% in
aggregate principal amount of the Senior Notes remain outstanding immediately
after the occurrence of such redemption; and provided, further, that such
redemption shall occur within 90 days of the date of the closing of such
Qualified Equity Offering.
(c) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.
SECTION 3.08. MANDATORY REDEMPTION.
Except as set forth under Sections 4.10 and 4.15 hereof, the Company
shall not be required to make mandatory redemption or sinking fund payments with
respect to the Senior Notes.
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Company shall
be required to commence an Asset Sale Offer, it shall follow the procedures
specified below.
The Asset Sale Offer shall remain open for a period of 20 Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law (the "Offer Period"). No later than
five Business Days after the termination of the Offer Period (the "Purchase
Date"), the Company shall purchase the principal amount of Senior Notes required
to be purchased pursuant to Section 4.10 hereof or, if Senior Notes tendered in
response to the Asset Sale Offer are less than the amount required to be
purchased pursuant to Section 4.10 hereof, all Senior Notes tendered in response
to
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the Asset Sale Offer. Payment for any Senior Notes so purchased shall be made
in the same manner as interest payments are made.
The Company shall comply with any tender offer rules under the
Exchange Act which may then be applicable, including Rule 14e-1, in connection
with any offer required to be made by the Company to repurchase the Senior Notes
as a result of an Asset Sale Offer. To the extent that the provisions of any
securities laws or regulations conflict with provisions of this Section 3.09,
the Company shall comply with the applicable securities laws or regulations and
shall not be deemed to have breached its obligations hereunder by virtue
thereof.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest shall
be paid to the Person in whose name a Senior Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Senior Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company shall send,
by first class mail, a notice to the Trustee and each of the Holders, with a
copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Senior Notes pursuant to the Asset
Sale Offer. The Asset Sale Offer shall be made to all Holders. The notice, which
shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this
Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale
Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase
Date;
(c) that any Senior Note not tendered or accepted for payment
shall continue to accrete or accrue interest;
(d) that, unless the Company defaults in making such payment,
any Senior Note accepted for payment pursuant to the Asset Sale Offer
shall cease to accrete or accrue interest after the Purchase Date;
(e) that Holders electing to have a Senior Note purchased
pursuant to an Asset Sale Offer may only elect to have all of such Senior
Note purchased and may not elect to have only a portion of such Senior
Note purchased;
(f) that Holders electing to have a Senior Note purchased
pursuant to any Asset Sale Offer shall be required to surrender the Senior
Note, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Senior Note completed, or transfer by book-entry transfer,
to the Company, a depositary, if appointed by the Company, or a Paying
Agent at the address specified in the notice at least three days before
the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if
the Company, the depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Senior Note the Holder delivered for
purchase and a statement that such Holder is
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withdrawing his election to have such Senior Note purchased;
(h) that, if the aggregate principal amount of Senior Notes
surrendered by Holders exceeds the amount required to be purchased
pursuant to Section 4.10 hereof, the Company shall select the Senior Notes
to be purchased on a pro rata basis (with such adjustments as may be
deemed appropriate by the Company so that only Senior Notes in
denominations of $1,000, or integral multiples thereof, shall be
purchased); and
(i) that Holders whose Senior Notes were purchased only in part
shall be issued new Senior Notes equal in principal amount to the
unpurchased portion of the Senior Notes surrendered (or transferred by
book-entry transfer).
On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Senior Notes or portions thereof tendered or required to be purchased pursuant
to the Asset Sale Offer, or if less than the amount so required to be purchased
has been tendered, all Senior Notes tendered, and shall deliver to the Trustee
an Officers' Certificate stating that such Senior Notes or portions thereof were
accepted for payment by the Company in accordance with the terms of Section 4.10
hereof and this Section 3.09. The Company, the Depository or the Paying Agent,
as the case may be, shall promptly (but in any case not later than five days
after the Purchase Date) mail or deliver to each tendering Holder an amount
equal to the purchase price of the Senior Notes tendered by such Holder and
accepted by the Company for purchase, and the Company shall promptly issue a new
Senior Note, and the Trustee, upon written request from the Company shall
authenticate and mail or deliver such new Senior Note to such Holder, in a
principal amount equal to any unpurchased portion of the Senior Note
surrendered. Any Senior Note not so accepted shall be promptly mailed or
delivered by the Company to the Holder thereof. The Company shall publicly
announce the results of the Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 shall be made pursuant to the provisions
of Sections 3.01 through 3.06 hereof.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SENIOR NOTES.
The Company shall pay or cause to be paid the principal of, premium,
if any, and interest on the Senior Notes (including any additional interest
required to be paid pursuant to the provisions of the Registration Rights
Agreement) on the dates and in the manner provided in the Senior Notes.
Principal, premium, if any, and interest shall be considered paid on the date
due if the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 10:00 a.m. Eastern Time on the due date money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate equal
to 1% per annum in excess of the then applicable interest rate on the Senior
Notes to the extent lawful; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest and Liquidated Damages
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(without regard to any applicable grace period) at the same rate to the extent
lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of
New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Senior Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Senior Notes and this Indenture
may be served. The Company shall give prompt written notice to the Trustee of
the location, and any change in the location, of such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Senior Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York for such purposes. The Company shall
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03 hereof.
SECTION 4.03. REPORTS.
(a) Whether or not required by the rules and regulations of the SEC,
so long as any Senior Notes are outstanding, the Company shall furnish to the
Holders of Senior Notes (i) all quarterly and annual financial information that
would be required to be contained in a filing with the SEC on Forms 10-Q and 10-
K if the Company were required to file such Forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and,
with respect to the annual information only, a report thereon by the Company's
certified independent accountants; (ii) all current reports that would be
required to be filed with the SEC on Form 8-K if the Company were required to
file such reports; and (iii) on a quarterly basis, certain financial information
and operating data with respect to each Subsidiary and Joint Venture engaged in
a Telecommunications Business, in the form specified by Schedule E hereto. In
addition, whether or not required by the rules and regulations of the SEC the
Company shall file a copy of all such information and reports with the SEC for
public availability (unless the SEC will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request. The Company shall at all times comply with TIA ' 314(a).
(b) For so long as any Senior Notes remain outstanding, the Company
shall furnish to all Holders and to securities analysts and prospective
investors, promptly upon their request, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act.
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officers' Certificate stating that a review of
the activities of the Company, its Subsidiaries and Joint Ventures
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during the preceding fiscal year has been made under the supervision of the
signing Officers with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture, and
further stating, as to each such Officer signing such certificate, that to the
best of his or her knowledge the Company has kept, observed, performed and
fulfilled each and every covenant contained in this Indenture and is not in
default in the performance or observance of any of the terms, provisions and
conditions of this Indenture (or, if a Default or Event of Default shall have
occurred, describing all such Defaults or Events of Default of which he or she
may have knowledge and what action the Company is taking or proposes to take
with respect thereto) and that to the best of his or her knowledge no event has
occurred and remains in existence by reason of which payments on account of the
principal of or interest, if any, on the Senior Notes is prohibited or if such
event has occurred, a description of the event and what action the Company is
taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article Four or Article Five hereof or, if any such violation
has occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Senior Notes are
outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware
of any Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or proposes to
take with respect thereto.
SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries and
Joint Ventures to pay, prior to delinquency, all material taxes, assessments,
and governmental levies, except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of Senior Notes.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants or
the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it shall not, by resort to any such law, hinder, delay
or impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law has
been enacted. SECTION 4.07. RESTRICTED PAYMENTS.
The Company shall not, and (i) shall not permit any of its
Subsidiaries or Joint Ventures to, directly or indirectly: (a) declare or pay
any dividend or make any other payment or distribution on account of the
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Company's Equity Interests (other than dividends or distributions payable in
Equity Interests (other than Disqualified Stock) of the Company or dividends or
distributions payable to the Company or any Wholly Owned Subsidiary); (b)
purchase, redeem or otherwise acquire or retire for value any Equity Interests
of the Company or any direct or indirect parent of the Company (other than
Equity Interests owned by the Company or any Wholly Owned Subsidiary of the
Company); or (c) purchase, redeem or otherwise acquire or retire for value,
prior to a scheduled mandatory sinking fund payment date or maturity date, any
Indebtedness of the Company which ranks subordinated in right to payment to the
Senior Notes and (ii) shall not permit any of its Subsidiaries or Permitted
Joint Ventures to, make any Investment other than a Permitted Investment (all
such payments and other actions set forth in clauses (i) and (ii) above being
collectively referred to as "Restricted Payments") unless, at the time of and
after giving effect to such Restricted Payment:
(x) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(y) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments (including, without limitation, all
Restricted Payments referred to in clauses (a), (b) and (b)(1) below but
excluding those made under clauses (b)(2) and (c) below) made by the
Company and its Subsidiaries after the date of the Indenture is less than
the sum of: (1) the excess of (A) Cumulative Pro Forma EBITDA over (B) 2.0
times Cumulative Interest Expense plus (2) the aggregate net cash proceeds
received by the Company (other than from a Subsidiary or Joint Venture)
(A) as capital contributions to the Company, (B) from the issuance and
sale of Equity Interest, other than Disqualified Stock, and (C) from the
issuance and sale of Indebtedness that is convertible into Capital Stock
(other than Disqualified Stock), to the extent such Indebtedness is
actually converted into such Capital Stock (clauses (A), (B) and (C)
collectively referred to as "Equity Issuances"), other than any such net
cash proceeds from Equity Issuances that were used as set forth in clause
(b) and (c) below; and
(z) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have
been permitted to incur at least $1.00 of additional Indebtedness other
than indebtedness permitted pursuant to clauses (i) through (ix) of
Section 4.09 hereof.
The foregoing provisions shall not prohibit the following Restricted
Payments:
(a) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment
would have complied with this Section 4.07;
(b) so long as no Default or Event of Default shall have occurred
and be continuing, Restricted Joint Venture Investments, which
at the time any such Restricted Joint Venture Investment was
made, did not cause the aggregate amount of all Restricted Joint
Venture Investments made on or after the date of this Indenture
and then outstanding under this clause (b) to exceed (1) $20.0
million plus (2) the net cash proceeds from Equity Issuances not
used as set forth in clause (y) above and clause (c) below;
(c) so long as no Default or Event of Default shall have occurred
and be continuing, the making of any Investment in a
Telecommunications Business out of the net cash proceeds from
Equity Issuances not used as set forth in clauses (y) and (b)(2)
above; or
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(d) all payments pursuant to the third sentence of Section 15 of the
Warrant Agreement, dated April 15, 1996, between the Company and
the Bank of Montreal Trust Company, as Warrant Agent.
For purposes of this Section 4.07, in the event that a Restricted
Joint Venture becomes a Permitted Joint Venture or otherwise ceases to be a
Restricted Joint Venture, all of the then outstanding Investments made by such
entity since the date of the Indenture shall be deemed to have been made as of
the date that such Restricted Joint Venture becomes a Permitted Joint Venture or
otherwise ceases to be a Restricted Joint Venture; provided that if a Restricted
Joint Venture ceases to be a Restricted Joint Venture as a result of (i) the
loss of its Local Partner or (ii) the loss of management control of such
Restricted Joint Venture, then the provisions of this paragraph shall not be
applied to such entity.
The amount of all Restricted Payments, other than cash, shall be the
fair market value (evidenced by a resolution of the Board of Directors set forth
in an Officers' Certificate delivered to the Trustee) on the date of such
Restricted Payment of the asset(s) proposed to be transferred by the Company or
such Subsidiary, as the case may be, pursuant to such Restricted Payment. Not
later than the date of making any Restricted Payment, the Company shall deliver
to the Trustee an Officers' Certificate stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations required by
this Section 4.07 were computed, which calculations may be based upon the
Company's latest available financial statements.
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any Subsidiary
to:
(i) (a) pay dividends or make any other distributions to the Company
or any of its Subsidiaries (1) on its Capital Stock or (2) with
respect to any other interest or participation in, or measured
by, its profits, or (b) pay any indebtedness owed to the Company
or any of its Subsidiaries;
(ii) make loans or advances to the Company or any of its
Subsidiaries;
(iii)grant liens or grant security interests on its assets in favor
of the Holders of Senior Notes or guarantee the payment of the
Senior Notes; or
(iv) transfer any of its properties or assets to the Company or any
of its Subsidiaries, except for such encumbrances or
restrictions existing under or by reason of:
(a) Existing Indebtedness as in effect on the date of this Indenture;
provided, that any such encumbrances and restrictions existing in the
13% Note Indenture will be amended as of the date of this Indenture
to permit the activities described in clauses (i) - (iv) above with
respect to Holders of the Senior Notes;
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(b) any Credit Agreement creating or evidencing Indebtedness permitted by
clause (i) of Section 4.09 and any amendments, modifications,
restatements, renewals, increases, supplements, refundings,
replacements or refinancings thereof;
(c) the Indenture and the Senior Notes;
(d) applicable law;
(e) by reason of customary non-assignment provisions in leases entered
into in the ordinary course of business and consistent with past
practices;
(f) purchase money obligations or Vendor Debt for property acquired in
the ordinary course of business that impose restrictions of the
nature described in clause (iv) above on the property so acquired;
(g) Indebtedness incurred pursuant to clause (viii) of Section 4.09;
provided that such encumbrance or restriction only relates to the
Subsidiary or Permitted Joint Venture incurring such Indebtedness;
and
(h) Refinancing Indebtedness, provided that such encumbrances or
restrictions are no more restrictive than those contained in the
documentation governing the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
The Company shall not, and shall not permit any of its Subsidiaries
or Joint Ventures to, directly or indirectly, create, incur, issue, assume,
guaranty or otherwise become directly or indirectly liable, contingently or
otherwise, with respect to (collectively, "incur") any Indebtedness (including,
without limitation, Acquired Indebtedness) and that the Company will not issue
any Disqualified Stock and will not permit any of its Subsidiaries or Joint
Ventures to issue any shares of Preferred Stock; provided that the Company may
incur Indebtedness (including, without limitation, Acquired Indebtedness) or
issue shares of Disqualified Stock if the Company's Consolidated Leverage Ratio
as of the last day of the Company's most recently ended fiscal quarter for which
internal financial statements are available immediately preceding the date on
which such Indebtedness is incurred, or such Disqualified Stock is issued, as
the case may be, would have been (a) greater than zero and less than 5.5 to 1.0,
if such incurrence or issuance is on or prior to March 31, 1999, and (b) greater
than zero and less than 5.0 to 1.0, if such incurrence or issuance is after
March 31, 1999, determined on a pro forma basis (including pro forma application
of the net proceeds therefrom) as if such Indebtedness had been incurred, or
such Disqualified Stock had been issued, as the case may be, at the beginning of
such fiscal quarter.
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The foregoing provisions shall not apply to:
(i) the incurrence of Indebtedness by the Company, any
Subsidiary (other than a General Partner Subsidiary) or
any Permitted Joint Venture pursuant to Credit
Agreement(s), provided that the aggregate principal amount
of such Credit Agreement(s) at any one time outstanding
under this clause (i) does not exceed $50.0 million for
the Company, all of its Subsidiaries (other than a General
Partner Subsidiary) and all of its Permitted Joint
Ventures combined;
(ii) the incurrence of Vendor Debt by the Company, any
Subsidiary (other than a General Partner Subsidiary) or
any Permitted Joint Venture, provided that the aggregate
principal amount of such Vendor Debt does not exceed 80%
of the total cost of the Telecommunications Related Assets
financed therewith (or 100% of the total cost of the
Telecommunications Related Assets financed therewith if
such Vendor Debt was extended for the purchase of tangible
physical assets and was so financed by the vendor thereof
or an affiliate of such vendor);
(iii) Refinancing Indebtedness;
(iv) the incurrence of Indebtedness by the Company not to
exceed, at any one time outstanding 2.0 times (a) the net
cash proceeds received by the Company after the date
hereof from the issuance and sale of its Capital Stock
(other than Disqualified Stock) plus (b) the fair market
value at the time of issuance of Equity Interests (other
than Disqualified Stock) issued after the date of this
Indenture in connection with any acquisition of a
Telecommunications Related Business, in each case to a
Person other than a Subsidiary or a Joint Venture of the
Company, provided that such Indebtedness (y) does not
mature prior to the Stated Maturity of the Senior Notes
and has a Weighted Average Life to Maturity longer than
the Senior Notes and (z) is subordinated to the Senior
Notes;
(v) the incurrence by the Company of Indebtedness (in addition
to Indebtedness permitted by any other clause of this
paragraph) in an aggregate principal amount (or accreted
value, as applicable) at any time outstanding not to
exceed $10.0 million;
(vi) the incurrence by any Restricted Joint Venture of
Non-Recourse Debt, provided that if any Non-Recourse Debt
of a Restricted Joint Venture ceases to be Non-Recourse
Debt, such event shall be deemed to constitute an
incurrence of Indebtedness as of the date such
Indebtedness ceases to be Non-Recourse Debt;
(vii) the guarantee of Indebtedness by a General Partner
Subsidiary in connection with the incurrence of
Indebtedness by the Restricted Joint Venture of which such
General Partner Subsidiary is a general partner;
(viii) the incurrence by any Subsidiary (other than a General
Partner Subsidiary) or any Permitted Joint Venture of
Indebtedness (including, without limitation, Acquired
Indebtedness) so long as all of the net proceeds of such
incurrence are used by such
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Subsidiary or Permitted Joint Venture, as the case may be,
directly in connection with the design, construction,
development or acquisition of a Telecommunications Service
Market; provided that, as of the last day of the Company's
most recently ended fiscal quarter for which internal
financial statements are available immediately preceding
the date on which such Indebtedness is incurred, either:
(a) the aggregate principal amount of all Indebtedness of
such Subsidiary or such Permitted Joint Venture does not
exceed 1.75 times the Invested Equity Capital of such
Subsidiary or such Permitted Joint Venture; or (b) the
Consolidated Leverage Ratio of such Subsidiary or such
Permitted Joint Venture would not have been greater than
3.5 to 1.0, in each case determined on a pro forma basis
(including pro forma application of the net proceeds
therefrom) as if such Indebtedness had been incurred at
the beginning of such fiscal quarter; provided, further
that any Indebtedness incurred by any Subsidiary of the
Company or any Permitted Joint Venture (other than Related
Networks) pursuant to this clause (viii) shall be
non-recourse with respect to the Company or any other
Subsidiary of the Company or any other Joint Venture; and
(ix) the incurrence by the Company of the Existing
Indebtedness.
For purposes of this Section 4.09, in the event that the Company
proposes to incur Indebtedness pursuant to clause (iv) above, the Company shall,
simultaneously with the incurrence of such Indebtedness, deliver to the Trustee
a resolution of the Board of Directors set forth in an Officers' Certificate
stating that the sale or sales of Capital Stock forming the basis for the
incurrence of such Indebtedness (i) constitutes a long term investment in the
Company and (ii) has not been made for the purpose of circumventing this Section
4.09. In the event that the Company rescinds, reverses or unwinds such sale of
Capital Stock or otherwise returns or refunds all or any portion of the net cash
proceeds of such sale of Capital Stock (whether by dividend, distribution or
otherwise) within 270 days of the date of the incurrence of such Indebtedness,
such Indebtedness will be deemed to be incurred on the date of, and immediately
after giving effect to, such rescission, reversal, unwinding, return or refund.
For purposes of this Section 4.09, in the event that a Restricted
Joint Venture becomes a Permitted Joint Venture or otherwise ceases to be a
Restricted Joint Venture, all of the then outstanding Indebtedness of such
entity shall be deemed to have been incurred as of the date that such Restricted
Joint Venture becomes a Permitted Joint Venture or otherwise ceases to be a
Restricted Joint Venture.
SECTION 4.10. ASSET SALES.
The Company shall not, and shall not permit any Subsidiary to,
directly or indirectly, whether in a single transaction or a series of related
transactions occurring within any twelve-month period, make any Asset Sale,
unless:
(i) the Company or the Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at
least equal to the fair market value (as determined in
good faith by the Board of Directors) for the shares or
assets sold or otherwise disposed of; and
(ii) at least 85% of such consideration consists of cash,
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provided that
(A) an amount equal to the fair market value (as determined in good
faith by the Board of Directors) of:
(1) Telecommunications Related Assets received by the Company
or any Subsidiary from the transferee that will be used by
the Company or such Subsidiary in the operation of a
Telecommunications Business;
(2) the Voting Stock of any Person engaged in a
Telecommunications Business received by the Company or any
Subsidiary; provided that on the date such Voting Stock is
received, such Investment in Voting Stock constitutes a
Permitted Joint Venture Investment; or
(3) the publicly tradeable Voting Stock of any person engaged
in the Telecommunications Business received by the Company
or any Subsidiary as consideration for a sale of an Equity
Interest in any Restricted Joint Venture,
shall, for the purposes of this Section 4.10, be deemed to be cash which
was applied in accordance with the first sentence of the penultimate
paragraph of this Section 4.10; and
(B) in the event that any of Hyperion Telecommunications of
Pennsylvania, Inc., Hyperion Telecommunications of Tennessee,
Inc. or Hyperion Telecommunications of New York, Inc. sell their
respective partnership interests in the partnerships to which
each is a partner to the respective partnerships in the manner
specified by the applicable partnership agreement, (1) the
principal amount of any seller note issued to the Company or any
of its Wholly Owned Subsidiaries shall be deemed to be cash for
purposes of this Section 4.10 and (2) the payments of principal
pursuant to such seller note shall be deemed to be
Net Cash Proceeds (for purposes of the penultimate paragraph of
this Section 4.10) as and when such payments are received.
For purposes of this Section 4.10, the first $1.0 million of Net Cash
Proceeds received from Asset Sales (other than Asset Sales of Stock Collateral)
in any fiscal year shall not be subject to the restrictions contained in this
section.
In determining the fair market value with respect to any Asset Sale
or series of related Asset Sales involving aggregate consideration in excess of
$10.0 million, the Board of Directors of the Company must obtain an opinion as
to the fairness to the Holders of Senior Notes of such Asset Sales from a
financial point of view issued by a nationally recognized investment banking
firm with total assets in excess of $1.0 billion; provided that no such opinion
shall be required if such Asset Sale is in accordance with the terms of any
Local Partner Agreement to which the Company or any of its Subsidiaries is a
party on the date hereof.
The Company may apply the Net Cash Proceeds from any Asset Sale to an
investment in Telecommunications Related Assets in a Telecommunications Service
Market within 180 days after such Asset Sale; provided that if the Company
determines to make such investment in a New Telecommunications Service Market,
the Company shall be deemed to have complied with the first clause of this
sentence if, the Company (y) within 180 days of such Asset Sale, delivers to the
Trustee a resolution adopted by a majority of the Board of Directors set forth
in an Officer's Certificate certifying that the Company intends to utilize
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the Net Cash Proceeds of such Asset Sale to invest in a specific new
Telecommunications Service Market and (z) completes such investment within 360
days of such Asset Sale. The Company shall be deemed to have completed its
investment for purposes of the preceding clause (z), so long as the Company has
(i) a business plan that sets forth the Company's investment plans for the
applicable Telecommunications Service Market and (ii) issued all material
purchase orders to the appropriate parties that are necessary to complete such
business plan. A first priority security interest securing the Company's
obligations under the Senior Notes shall be granted in all Telecommunications
Related Assets acquired in whole or in part with the proceeds of any Asset Sale
of Stock Collateral and the Company will take or cause to be taken all actions
necessary to cause such first priority security interest to be granted
concurrently with the acquisitions of such Telecommunications Related Assets.
Any Net Cash Proceeds from an Asset Sale that are not invested as provided in
the two preceding sentences shall constitute Excess Proceeds. When the aggregate
amount of Excess Proceeds exceeds $2.5 million, the Company shall commence to
purchase (an "Asset Sale Offer") the maximum principal amount of Senior Notes
and 13% Notes (on a pro rata basis based upon the relative aggregate principal
amount of 13% Notes (or, if prior to April 15, 2001, the aggregate Accreted
Value, as such term is defined in the 13% Note Indenture, of 13% Notes) and
Senior Notes then outstanding) that may be purchased out of the Excess Proceeds,
at an offer price in cash equal to 100% of the aggregate principal amount
thereof, plus accrued and unpaid interest to the date of repurchase (or, in the
case of 13% Notes prior to April 15, 2001, at a purchase price equal to 100% of
the Accreted Value thereof as of the date of purchase) in accordance with the
procedures set forth in this Indenture, provided, that, in the event of an Asset
Sale Offer as a result (in whole or in part) of an Asset Sale of the Stock
Collateral, the Company shall, purchase (i) first, all Senior Notes tendered
pursuant to such Asset Sale Offer in an aggregate principal amount equal to the
portion of such Excess Proceeds resulting from such Asset Sale of Stock
Collateral and (ii) second, all Senior Notes and 13% Notes on a pro rata basis
(in the same manner as described above) in an aggregate principal amount (or,
with respect to 13% Notes prior to April 15, 2001, an aggregate Accreted Value)
equal to the Excess Proceeds not used to purchase Senior Notes pursuant to
clause (i) of this proviso. To the extent that the aggregate principal amount
thereof, plus accrued and unpaid interest to the date of repurchase (or in the
case of repurchases of 13% Notes prior to April 15, 2001, the Accreted Value
thereof as of the date of repurchase) of the Senior Notes (and the 13% Notes)
tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the
Company may use such remaining Excess Proceeds for any purpose not prohibited by
this Indenture. If the aggregate principal amount thereof, plus accrued and
unpaid interest to the date of repurchase, (or in the case of repurchases of 13%
Notes prior to April 15, 2001, the Accreted Value thereof as of the date of
repurchase) of Senior Notes and the 13% Notes surrendered by Holders thereof
exceeds the amount of Excess Proceeds, the Trustee shall select the Senior Notes
and the 13% Notes to be purchased on a pro rata basis. Upon completion of such
offer, the amount of Excess Proceeds shall be reset at zero. Pending application
of the Net Cash Proceeds as set forth above from Asset Sales, all such Net Cash
Proceeds shall be placed in escrow for the benefit of the Holders of Senior
Notes.
Notwithstanding the foregoing, the Company shall not, and shall not
permit any Subsidiary to, directly or indirectly, make any Asset Sale of any
Equity Interests of any Subsidiary (at least 80% of the voting power of the
Capital Stock of which is owned by the Company) except pursuant to an Asset Sale
of all of the Equity Interests of such Subsidiary; provided that any sale of any
Equity Interest of any such Subsidiary to a Strategic Investor shall be deemed
not to be an Asset Sale for purposes of this Section 4.10, so long as such sale
of such Equity Interests does not result in such Subsidiary ceasing to be a
Subsidiary of the Company.
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SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Subsidiaries
to, make any payment to, or sell, lease, transfer or otherwise dispose of any of
its properties or assets to, or purchase any property or assets from, or enter
into or make or amend any contract, agreement, understanding, loan, advance or
guarantee with, or for the benefit of, any Affiliate (each of the foregoing, an
"Affiliate Transaction"), unless
(i) such Affiliate Transaction is on terms that are no less favorable
to the Company or the relevant Subsidiary, other than those that would
have been obtained in a comparable transaction by the Company or such
Subsidiary with an unrelated Person; and
(ii) the Company delivers to the Trustee (a) with respect to any
Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $1.0 million, a resolution
adopted by a majority of the disinterested members of the Board of
Directors and a majority of the Independent Directors of the Company set
forth in an Officers' Certificate certifying that such Affiliate
Transaction complies with clause (i) above; and (b) with respect to any
Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $10.0 million, an opinion
as to the fairness to the Holders of Senior Notes of such Affiliate
Transaction from a financial point of view issued by a nationally
recognized consulting firm, business valuation firm or investment banking
firm;
provided that: (i) all agreements and arrangements with Affiliates, including
without limitation the Local Partner Agreements, the Fiber Lease Agreements, the
Management Agreements, network monitoring agreements and transactions in
connection therewith or pursuant thereto existing on the date of the 13% Note
Indenture and through the current term thereof; (ii) all arrangements and
transactions with Adelphia, including existing intercompany Indebtedness,
overhead charges made in the ordinary course of business, fiber lease
arrangements and similar services existing on the date the 13% Note Indenture
and through the current term thereof; (iii) all employment arrangements approved
by the Board of Directors; (iv) all restricted Payments made pursuant to Section
4.07 hereof; (v) transactions between or among the Company and/or its Wholly
Owned Subsidiaries; (vi) transactions between a General Partner Subsidiary and
the Restricted Joint Venture of which such General Partner Subsidiary is a
general partner; and (vii) management and network monitoring agreements between
the Company and any of its Joint Ventures, shall not be deemed Affiliate
Transactions.
SECTION 4.12. LIENS.
The Company shall not, and shall not permit any of its Subsidiaries
or Permitted Joint Ventures to, directly or indirectly, create, incur, assume or
suffer to exist any Lien on any asset now owned or hereafter acquired, or any
income or profits therefrom or assign or convey any right to receive income
therefrom, except Permitted Liens.
SECTION 4.13. LINE OF BUSINESS.
The Company shall not, and shall not permit any of its Subsidiaries
to, engage in any business other than Telecommunications Business and such
business activities as are incidental or related thereto.
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SECTION 4.14. CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of the Company or any such
Subsidiary and (ii) the rights (charter and statutory), licenses and franchises
of the Company and its Subsidiaries; provided, that the Company shall not be
required to preserve any such right, license or franchise, or the corporate,
partnership or other existence of any of its Subsidiaries, if the Board of
Directors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and its Subsidiaries, taken as a
whole, and that the loss thereof is not adverse in any material respect to the
Holders of the Senior Notes.
SECTION 4.15. OFFER TO PURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, the Company shall
make an offer (the "Change of Control Offer") to each holder of Senior Notes to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of
such Holder's Senior Notes at a purchase price equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest to the date of
repurchase in accordance with the procedures set forth in this Section 4.15 (the
"Change of Control Payment"). Within ten days following any Change of Control,
the Company shall mail a notice to each Holder stating: (1) that the Change of
Control Offer is being made pursuant to this Section 4.15 and that all Senior
Notes tendered will be accepted for payment; (2) the purchase price and the
purchase date, which shall be no later than 30 business days from the date such
notice is mailed (the "Change of Control Payment Date"); (3) that any Senior
Note not tendered will continue to accrete or accrue interest; (4) that, unless
the Company defaults in the payment of the Change of Control Payment, all Senior
Notes accepted for payment pursuant to the Change of Control Offer shall cease
to accrete or accrue interest after the Change of Control Payment Date; (5) that
Holders electing to have any Senior Notes purchased pursuant to a Change of
Control Offer will be required to surrender the Senior Notes, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Senior Notes
completed, to the Paying Agent at the address specified in the notice prior to
the close of business on the third Business Day preceding the Change of Control
Payment Date; (6) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than the close of business on the second
Business Day preceding the Change of Control Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of Senior Notes delivered for purchase, and a statement that
such Holder is withdrawing his election to have the Senior Notes purchased; and
(7) that Holders whose Senior Notes are being purchased only in part will be
issued new Senior Notes equal in principal amount to the unpurchased portion of
the Senior Notes surrendered, which unpurchased portion must be equal to $1,000
in principal amount or an integral multiple thereof. The Company shall comply
with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of Senior Notes as
a result of a Change of Control.
(b) On the Change of Control Payment Date, the Company shall, to the
extent lawful, (1) accept for payment all Senior Notes or portions thereof
properly tendered pursuant to the Change of Control Offer, (2) deposit with the
Paying Agent an amount equal to the Change of Control Payment in respect of all
Senior Notes or portions thereof so tendered and (3) deliver or cause to be
delivered to the Trustee the Senior Notes so accepted together with an Officers'
Certificate stating the aggregate principal amount of Senior Notes or
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portions thereof being purchased by the Company. The Paying Agent shall promptly
mail to each Holder of Senior Notes so tendered payment in an amount equal to
the purchase price for the Senior Notes, and the Trustee shall promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
a new Senior Note equal in principal amount to any unpurchased portion of the
Senior Notes surrendered by such Holder, if any; provided, that each such new
Senior Note shall be in a principal amount of $1,000 or an integral multiple
thereof. The Company shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date.
SECTION 4.16. LIMITATIONS ON SALE AND LEASEBACK TRANSACTIONS.
The Company shall not, and shall not permit any of its Subsidiaries
to, enter into any Sale and Leaseback Transaction; provided that the Company or
any Subsidiary (other than a General Partner Subsidiary) may enter into a Sale
and Leaseback Transaction if (i) the Company or other entity could have incurred
the Indebtedness relating to such Sale and Leaseback Transaction pursuant to
Sections 4.09 and 4.12 hereof to incur secured Indebtedness in an amount equal
to the Attributable Debt with respect to such transaction, (ii) the net proceeds
of such Sale and Leaseback Transaction are at least equal to the fair market
value of such property as determined in good faith by the Board of Directors of
the Company and (iii) such proceeds are applied in accordance with Section 4.10
hereof.
SECTION 4.17. LOANS TO SUBSIDIARIES AND JOINT VENTURES.
All loans to Subsidiaries or Joint Ventures made by the Company from
time to time after the date of this Indenture shall be evidenced by Intercompany
Notes in favor of the Company. All loans by the Company to any Subsidiary or
Joint Venture outstanding on the date hereof shall be evidenced by an unsecured
Intercompany Note. The Company shall not, and shall not permit any of its
Subsidiaries to, make any loans by Subsidiaries to other Subsidiaries and by
Subsidiaries to Joint Ventures in which such Subsidiary does not have an Equity
Interest, except that such loans may be (i) incurred and maintained between and
among the Company, its Subsidiaries and Permitted Joint Ventures in connection
with the incurrence of Indebtedness pursuant to clause (i) of Section 4.09
hereof or (ii) incurred and maintained between and among Related Networks in
connection with the incurrence of Indebtedness by such Related Networks pursuant
to the proviso in clause (viii) of Section 4.09 hereof. A form of Intercompany
Note is attached as an annex hereto.
SECTION 4.18. LIMITATION ON STATUS AS INVESTMENT COMPANY.
The Company shall not, and shall not permit any of its Subsidiaries
to, conduct its business in a fashion that would cause it to be required to
register as an "investment company" (as that term is defined in the Investment
Company Act of 1940, as amended) or otherwise become subject to regulation under
the Investment Company Act of 1940.
SECTION 4.19. PAYMENTS FOR CONSENT.
Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any holder of any Senior Notes for or as
inducement to any consent, waiver or amendment of any terms or provisions or the
Senior Notes unless such consideration is offered to be paid or agreed to be
paid to all Holders of Senior Notes which so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver
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or agreement.
SECTION 4.20. INDEPENDENT DIRECTORS.
The Company shall, no later than 360 days from the date hereof, have
at least two members of its Board of Directors who are neither officers nor
employees of the Company or its Affiliates (the "Independent Directors"). Any
transaction requiring the approval of the majority of the Independent Directors
shall be prohibited at any time that there are not at least two Independent
Directors on the Company's Board of Directors. If the Company fails to comply
with this Section 4.20, the Company shall pay Liquidated Damages to each Holder
of the Senior Notes (i) with respect to the first 90-day period immediately
following the occurrence of such default at a rate of 0.5% per annum, determined
daily on the principal amount of the Senior Notes) and (ii) at the beginning of
each subsequent 90-day period at a rate increased by an additional 0.25% per
annum up to a maximum aggregate increase of 2.0% per annum until such default
has been cured.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company shall not consolidate or merge with or into (whether or
not the Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions, to another corporation, Person or
entity unless (i) the Company is the surviving corporation or the entity or the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia; (ii) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or Person to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made assumes all the obligations of the Company under the Senior
Notes and the Indenture pursuant to a supplemental indenture in a form
reasonably satisfactory to the Trustee; (iii) immediately after such transaction
no Default or Event of Default exists; and (iv) except in the case of a merger
of the Company with or into a Wholly Owned Subsidiary of the Company, the
Company or the entity or Person formed by or surviving any such consolidation or
merger (if other than the Company), or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made (A) will have
Consolidated Net Worth immediately after the transaction equal to or greater
than the Consolidated Net Worth of the Company immediately preceding the
transaction and (B) will, at the time of such transaction and after giving pro
forma effect thereto as if such transaction had occurred at the beginning of the
applicable four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness (other than the Indebtedness incurred pursuant to
clauses (i) through (ix) thereof) pursuant to Section 4.09 hereof.
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SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.01 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; provided, however, that
the predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Senior Notes except in the case of a sale of
all of the Company's assets that meets the requirements of Section 5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(a) the Company defaults in the payment when due of interest on,
or Liquidated Damages with respect to, the Senior Notes and such
default continues for a period of 30 days;
(b) the Company defaults in the payment when due of principal of
or premium, if any, on the Senior Notes when the same becomes due and
payable at maturity, upon redemption (including in connection with an
offer to purchase) or otherwise;
(c) the Company fails to comply with any of the provisions of
Section 4.07, 4.10, 4.15 or 5.01 hereof;
(d) the Company fails to comply with the provisions described
under Section 4.09; provided that, for purposes of the last paragraph
of Section 4.09, in the event that the Company fails to comply with
such section because Indebtedness is deemed to be incurred by a
Restricted Joint Venture solely as a result of such Restricted Joint
Venture ceasing to be a Restricted Joint Venture as a result of (i)
the loss of a Local Partner or (ii) the loss of management control of
such Restricted Joint Venture, such failure continues for 90 days;
(e) the Company fails to observe or perform any other covenant,
representation, warranty or other agreement in this Indenture or the
Senior Notes for 30 days after notice to the Company by the Trustee
or the Holders of at least 25% in principal amount of the Senior
Notes then outstanding;
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(f) default occurs under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any
of its Subsidiaries (or the payment of which is guaranteed by the
Company or any of its Subsidiaries) whether such Indebtedness or
guarantee now exists, or is created after the date of the Indenture,
which default (a) is caused by a failure to pay principal of or
premium, if any, or interest on such Indebtedness prior to the
expiration of the grace period provided in such Indebtedness on the
date of such default (a "Payment Default") or (b) results in the
acceleration of such Indebtedness prior to its express maturity and,
in each case, the principal amount of any such Indebtedness, together
with the principal amount of any other such Indebtedness under which
there has been a Payment Default or the maturity of which has been so
accelerated, aggregates $5.0 million or more;
(g) a final judgment or final judgments for the payment of money
are entered by a court or courts of competent jurisdiction against
the Company or any of its Significant Subsidiaries or any group of
Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary and such judgment or judgments are not paid within,
discharged by or stayed for a period of 60 days; provided that the
aggregate of all such undischarged, unpaid or unstayed judgments
exceeds $5.0 million;
(h) any breach or default by the Company in the performance of
any covenant set forth in the Collateral Agreements which breach or
default continues for 30 days, or any repudiation by the Company of
its obligations under any of the Collateral Agreements or the
unenforceability of any of the Collateral Agreements, for any reason;
provided that any failure by the Company to comply with the
provisions of Section 1A of the Pledge Agreement shall not be deemed
to be a default under this clause (h) so long as, in the event of
such failure to comply, the Company complies with its obligations
under Section 10.08 hereof;
(i) the Company or any of its Significant Subsidiaries or any of
its Joint Ventures that would, if it were a Subsidiary constitute a
Significant Subsidiary, or any group of Subsidiaries or Joint
Ventures that, taken as a whole, would constitute a Significant
Subsidiary pursuant to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against
it in an involuntary case,
(iii) consents to the appointment of a Custodian of it or
for all or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) generally is not paying its debts as they become due;
or
(j) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against the Company or any of its
Significant Subsidiaries or any of its
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Joint Ventures that would, if it were a Subsidiary constitute a
Significant Subsidiary, or any group of Subsidiaries or Joint
Ventures that, taken as a whole, would constitute a Significant
Subsidiary in an involuntary case;
(ii) appoints a Custodian of the Company or any of its
Significant Subsidiaries or any of its Joint Ventures that
would, if it were a Subsidiary constitute a Significant
Subsidiary, or any group of Subsidiaries or Joint Ventures that,
taken as a whole, would constitute a Significant Subsidiary or
for all or substantially all of the property of the Company or
any of its Significant Subsidiaries or any of its Joint Ventures
that would, if it were a Subsidiary constitute a Significant
Subsidiary, or any group of Subsidiaries or Joint Ventures that,
taken as a whole, would constitute a Significant Subsidiary; or
(iii) orders the liquidation of the Company or any of its
Significant Subsidiaries or any of its Joint Ventures that
would, if it were a Subsidiary constitute a Significant
Subsidiary, or any group of Subsidiaries or Joint Ventures that,
taken as a whole, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days.
SECTION 6.02. ACCELERATION.
If any Event of Default (other than an Event of Default specified in
clause (i) or (j) of Section 6.01 hereof with respect to the Company, any
Significant Subsidiary or any of its Joint Ventures that would, if it were a
Subsidiary constitute a Significant Subsidiary, or any group of Subsidiaries or
Joint Ventures that, taken as a whole, would constitute a Significant
Subsidiary) occurs and is continuing, the Trustee or the Holders of at least 25%
in principal amount of the then outstanding Senior Notes may declare all the
Senior Notes to be due and payable immediately; upon any such declaration, the
Senior Notes shall become due and payable immediately. Notwithstanding the
foregoing, if an Event of Default specified in clause (h) or (i) of Section 6.01
hereof occurs with respect to the Company, any of its Significant Subsidiaries
or any of its Joint Ventures that would, if it were a Subsidiary constitute a
Significant Subsidiary, or any group of Subsidiaries or Joint Ventures that,
taken as a whole, would constitute a Significant Subsidiary, all outstanding
Senior Notes shall be due and payable immediately without further action or
notice. Holders of the Senior Notes may not enforce this Indenture or the Senior
Notes except as provided in this Indenture. The Holders of a majority in
aggregate principal amount of the then outstanding Senior Notes by written
notice to the Trustee may on behalf of all of the Holders rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default (except nonpayment of
principal, interest or premium that has become due solely because of the
acceleration) have been cured or waived.
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In the case of any Event of Default occurring by reason of any
willful action (or inaction) taken (or not taken) by or on behalf of the Company
with the intention of avoiding payment of the premium that the Company would
have had to pay if the Company then had elected to redeem the Senior Notes
pursuant to Section 3.07 hereof, an equivalent premium shall also become and be
immediately due and payable to the extent permitted by law upon the acceleration
of the Senior Notes. If an Event of Default occurs prior to August 31, 2001 by
reason of any willful action (or inaction) taken (or not taken) by or on behalf
of the Company with the intention of avoiding the prohibition of redemption of
the Senior Notes prior to August 31, 2001, then the premium payable for purposes
of this paragraph for the period beginning of the date hereof and ending on
August 31, 2001 shall be 106.125% of the amount that would otherwise be due but
for the provisions of this paragraph, plus accrued interest, if any, to the date
of payment.
The Company is required to deliver to the Trustee annually a
statement regarding compliance with the Indenture, and the Company is required
upon becoming aware of any Default or Event of Default, to deliver to the
Trustee a statement specifying such Default or Event of Default.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium, if
any, and interest on the Senior Notes or to enforce the performance of any
provision of the Senior Notes, this Indenture, the Escrow and Disbursement
Agreement or the Pledge Agreement.
The Trustee may maintain a proceeding even if it does not possess any
of the Senior Notes or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Holder of a Senior Note in exercising any
right or remedy accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of Default. All
remedies are cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount of
the then outstanding Senior Notes by notice to the Trustee may on behalf of the
Holders of all of the Senior Notes waive an existing Default or Event of Default
and its consequences hereunder, except a continuing Default or Event of Default
in the payment of the principal of, premium and Liquidated Damages, if any, or
interest on, the Senior Notes (including in connection with an offer to
purchase) (provided, however, that the Holders of a majority in aggregate
principal amount of the then outstanding Senior Notes may rescind an
acceleration and its consequences, including any related payment default that
resulted from such acceleration in accordance with Section 6.02 hereof). Upon
any such waiver, such Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
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SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding
Senior Notes may direct the time, method and place of conducting any proceeding
for exercising any remedy available to the Trustee or exercising any trust or
power conferred on it, including, without limitation, the exercise of any remedy
under the Collateral Documents. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture that the Trustee determines
may be unduly prejudicial to the rights of other Holders of Senior Notes or that
may involve the Trustee in personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Senior Note may pursue a remedy with respect to this
Indenture or the Senior Notes only if:
(a) the Holder of a Senior Note gives to the Trustee written notice
of a continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Senior Notes make a written request to the Trustee to pursue
the remedy;
(c) such Holder of a Senior Note or Holders of Senior Notes offer
and, if requested, provide to the Trustee indemnity satisfactory to the
Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Senior Notes do not give the Trustee a
direction inconsistent with the request.
A Holder of a Senior Note may not use this Indenture to prejudice the rights of
another Holder of a Senior Note or to obtain a preference or priority over
another Holder of a Senior Note.
SECTION 6.07. RIGHTS OF HOLDERS OF SENIOR NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Senior Note to receive payment of principal, premium and
Liquidated Damages, if any, and interest on the Senior Note, on or after the
respective due dates expressed in the Senior Note (including in connection with
an offer to purchase), or to bring suit for the enforcement of any such payment
on or after such respective dates, shall not be impaired or affected without the
consent of such Holder.
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SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on the Senior Notes and interest on overdue principal and, to the extent
lawful, interest and such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Senior Notes allowed in any judicial proceedings relative to the
Company (or any other obligor upon the Senior Notes), its creditors or its
property and shall be entitled and empowered to collect, receive and distribute
any money or other property payable or deliverable on any such claims and any
custodian in any such judicial proceeding is hereby authorized by each Holder to
make such payments to the Trustee, and in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 hereof. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorgan-
ization or arrangement or otherwise. Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf of
any Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Senior Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Senior Notes for amounts due and unpaid on the
Senior Notes for principal, premium and Liquidated Damages, if any, and
interest, ratably, without preference or priority of any kind, according to the
amounts due and payable on the Senior Notes for principal, premium and
Liquidated Damages, if any and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
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The Trustee may fix a record date and payment date for any payment to
Holders of Senior Notes pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder of a
Senior Note pursuant to Section 6.07 hereof, or a suit by Holders of more than
10% in principal amount of the then outstanding Senior Notes.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture and the Collateral Documents, and use the same degree of care and
skill in its exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Collateral Documents and the
Trustee need perform only those duties that are specifically set forth in
this Indenture and the Collateral Documents and no others, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture and
the Collateral Documents. However, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
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(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b) and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed by
it to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Senior Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as trustee or resign. Any Agent may do the same with like
rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
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SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture, the Collateral Documents or
the Senior Notes, it shall not be accountable for the Company's use of the
proceeds from the Senior Notes or any money paid to the Company or upon the
Company's direction under any provision of this Indenture or the Collateral
Documents, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Senior
Notes or any other document in connection with the sale of the Senior Notes or
pursuant to this Indenture other than its certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to Holders of Senior Notes a
notice of the Default or Event of Default within 90 days after it occurs. Except
in the case of a Default or Event of Default in payment of principal of,
premium, if any, or interest on any Senior Note, the Trustee may withhold the
notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of the Holders of the
Senior Notes.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE SENIOR NOTES.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Senior Notes remain outstanding,
the Trustee shall mail to the Holders of the Senior Notes a brief report dated
as of such reporting date that complies with TIA ' 313(a) (but if no event
described in TIA ' 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also shall comply
with TIA ' 313(b)(2). The Trustee shall also transmit by mail all reports as
required by TIA ' 313(c).
A copy of each report at the time of its mailing to the Holders of
Senior Notes shall be mailed to the Company and filed with the SEC and each
stock exchange on which the Senior Notes are listed in accordance with TIA '
313(d). The Company shall promptly notify the Trustee when the Senior Notes are
listed on any stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. To the
extent permitted by law, the Trustee's compensa-
tion shall not be limited by any law on compensation of a trustee of an express
trust. The Company shall reimburse the Trustee promptly upon request for all
reasonable disbursements, advances and expenses incurred or made by it in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee's agents and
counsel.
The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, including the
costs and expenses of enforcing this Indenture, the Collateral Documents or the
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Escrow and Disbursement Agreement against the Company (including this Section
7.07) and defending itself against any claim (whether asserted by the Company or
any Holder or any other person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder or under the Collateral
Documents or the Escrow and Disbursement Agreement except to the extent any such
loss, liability or expense may be attributable to its negligence or bad faith.
The Trustee shall notify the Company promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Company shall not relieve the
Company of its obligations hereunder. The Company shall defend the claim and the
Trustee shall cooperate in the defense. The Trustee may have separate counsel
and the Company shall pay the reasonable fees and expenses of such counsel. The
Company need not pay for any settlement made without its consent, which consent
shall not be unreasonably withheld.
The obligations of the Company under this Section 7.07 shall survive
the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Senior Notes on all money or property
held or collected by the Trustee, except that held in trust to pay principal and
interest on particular Senior Notes. Such Lien shall survive the satisfaction
and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(g) or (h) hereof occurs, the expenses and
the compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA ' 313(b)(2) to
the extent applicable.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of Senior
Notes of a majority in principal amount of the then outstanding Senior Notes may
remove the Trustee by so notifying the Trustee and the Company in writing.
The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respectto the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes
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office, the Holders of a majority in principal amount of the then outstanding
Senior Notes may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Senior Notes of at least 10% in principal amount of the then
outstanding Senior Notes may petition any court of competent jurisdiction for
the appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Senior Note
who has been a Holder of a Senior Note for at least six months, fails to comply
with Section 7.10, such Holder of a Senior Note may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and the duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of its
succession to the Holders of the Senior Notes. The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor Trustee,
provided that all sums owing to the Trustee hereunder have been paid and subject
to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of
the Trustee pursuant to this Section 7.08, the Company's obligations under
Section 7.07 hereof shall continue for the benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities. The Trustee and its direct parent shall at all times have a
combined capital surplus of at least fifty million dollars. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for
purposes of this Section 7.10 the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ' 310(a)(1), (2) and (5). The Trustee is subject to TIA '
310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee is subject to TIA ' 311(a), excluding any creditor
relationship listed in TIA ' 311(b). A Trustee who has resigned or been removed
shall be subject to TIA ' 311(a) to the extent indicated therein.
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ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced by
a resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Senior Notes
upon compliance with the conditions set forth below in this Article Eight.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Senior Notes on
the date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Senior Notes, which shall thereafter be deemed to be "outstanding"
only for the purposes of Section 8.05 hereof and the other Sections of this
Indenture referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Senior Notes and this Indenture (and the Trustee, on
demand of and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Senior Notes to receive payments in respect of the principal of,
premium, if any, and interest on such Senior Notes when such payments are due,
(b) the Company's obligations with respect to such Senior Notes under Article 2
and Section 4.02 hereof, (c) the rights, powers, trusts, duties and immunities
of the Trustee hereunder and the Company's obligations in connection therewith
and (d) this Article Eight. Subject to compliance with this Article Eight, the
Company may exercise its option under this Section 8.02 notwithstanding the
prior exercise of its option under Section 8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10,
4.11, 4.12, 4.13, 4.15, 4.16 and 4.17 hereof with respect to the outstanding
Senior Notes on and after the date the conditions set forth below are satisfied
(hereinafter, "Covenant Defeasance"), and the Senior Notes shall thereafter be
deemed not "outstanding" for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder (it being understood that such Senior Notes
shall not be deemed outstanding for accounting purposes). For this purpose,
Covenant Defeasance means that, with respect to the outstanding Senior Notes,
the Company may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 6.01 hereof, but,
except as specified above, the remainder of this Indenture and such Senior Notes
shall be unaffected thereby. In addition, upon
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the Company's exercise under Section 8.01 hereof of the option applicable to
this Section 8.03 hereof, subject to the satisfaction of the conditions set
forth in Section 8.04 hereof, Sections 6.01(d) through 6.01(g) hereof shall not
constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Senior Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders of the Senior Notes, cash in U.S. dollars,
non-callable U.S. Government Obligations or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized firm of
independent public accounts, to pay the principal of, premium, if any, and
interest and Liquidated Damages, if any, on the outstanding Senior Notes on the
stated maturity or on the applicable redemption date, as the case may be, and
the Company must specify whether the Senior Notes are being defeased to maturity
or to a particular redemption date;
(b) in the case of an election under Section 8.02 hereof, the Company
shall have delivered to the Trustee an opinion of counsel in the United States
reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of the Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect that, and based
thereon such opinion of counsel shall confirm that, the Holders of the
outstanding Senior Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Legal Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same time
as would have been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the Company
shall have delivered to the Trustee an opinion of counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Senior Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Covenant Defeasance and will be subject
to federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the incurrence of Indebtedness all or a portion of the proceeds
of which will be used to defease the Senior Notes pursuant to this Article Eight
concurrently with such incurrence) or insofar as Sections 6.01(h) and 6.01(i)
hereof are concerned, at any time in the period ending on the 91st day after the
date of deposit;
(e) such Legal Defeasance or Covenant Defeasance will not result in a
breach or violation of, or constitute a default under any material agreement or
instrument (other than this Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its subsidiaries is
bound;
(f) the Company shall have delivered to the Trustee an opinion of
counsel to the effect that after the 91st day following the deposit, the trust
funds will not be subject to the effect of any applicable
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bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders of Senior Notes over the other creditors of the
Company with the intent of defeating, hindering, delaying or defrauding any
other creditors of the Company; and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an opinion of counsel, each stating that all conditions
precedent provided for relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable U.S.
Government Obligations (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of the
outstanding Senior Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Senior Notes and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as Paying Agent) as the Trustee may determine, to the Holders of such
Senior Notes of all sums due and to become due thereon in respect of principal,
premium, if any, and interest, but such money need not be segregated from other
funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or non-callable U.S.
Government Obligations deposited pursuant to Section 8.04 hereof or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of the
outstanding Senior Notes.
Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or non-callable U.S. Government Obligations held by it
as provided in Section 8.04 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
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SECTION 8.06. REPAYMENT TO THE COMPANY.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium, if
any, or interest on any Senior Note and remaining unclaimed for two years after
such principal, and premium, if any, or interest or Liquidated Damages, if any,
has become due and payable shall be paid to the Company on its request or (if
then held by the Company) shall be discharged from such trust; and the Holder of
such Senior Note shall thereafter, as a secured 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, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining will be repaid to the Company.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Senior
Notes shall be revived and reinstated as though no deposit had occurred pursuant
to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.02 or 8.03
hereof, as the case may be; provided, however, that, if the Company makes any
payment of principal of, premium, if any, or interest or Liquidated Damages, if
any, on any Senior Note following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Senior Notes to
receive such payment from the money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF THE SENIOR NOTES.
Notwithstanding Section 9.02 of this Indenture, the Company and the
Trustee may amend or supplement this Indenture, the Senior Notes, the Escrow and
Disbursement Agreement or the Collateral Documents without the consent of any
Holder of a Senior Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Senior Notes in addition to or in
place of certificated Senior Notes;
(c) to provide for the assumption of the Company's obligations to the
Holders of the Senior Notes in the case of a merger or consolidation
pursuant to Article Five hereof;
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(d) to make any change that would provide any additional rights or
benefits to the Holders of the Senior Notes or that does not adversely
affect the legal rights hereunder of any Holder of the Senior Note; or
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
(f) to enter into additional or supplemental Collateral Documents.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture or Collateral Documents, and upon receipt by the Trustee of the
documents described in Section 9.06 hereof, the Trustee shall join with the
Company in the execution of any amended or supplemental Indenture or Collateral
Documents authorized or permitted by the terms of this Indenture and to make any
further appropriate agreements and stipulations that may be therein contained,
but the Trustee shall not be obligated to enter into such amended or
supplemental Indenture that affects its own rights, duties or immunities under
this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF SENIOR NOTES.
Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture, the Collateral Documents and the
Senior Notes may be amended or supplemented with the consent of the Holders of
at least a majority in principal amount of the Senior Notes then outstanding
(including consents obtained in connection with a purchase of or a tender offer
or exchange offer for the Senior Notes), and, subject to Sections 6.04 and 6.07
hereof, any existing Default or Event of Default (other than a Default or Event
of Default in the payment of the principal of, premium, if any, or interest on
the Senior Notes, except a payment default resulting from an acceleration that
has been rescinded) or compliance with any provision of this Indenture, the
Collateral Documents or the Senior Notes may be waived with the consent of the
Holders of a majority in aggregate principal amount of the then outstanding
Senior Notes (including consents obtained in connection with a purchase of or a
tender offer or exchange offer for the Senior Notes).
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Senior Notes as aforesaid, and upon
receipt by the Trustee of the documents described in Section 9.06 hereof, the
Trustee shall join with the Company in the execution of such amended or
supplemental Indenture unless such amended or supplemental Indenture affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise, in
which case the Trustee may in its discretion, but shall not be obligated to,
enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Senior
Notes under this Section 9.02 to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of each Senior Note affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
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however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Senior Notes then
outstanding may waive compliance in a particular instance by the Company with
any provision of this Indenture, the Collateral Agreements or the Senior Notes.
However, without the consent of each Holder affected, an amendment, supplement
or waiver may not (with respect to any Senior Notes held by a non-consenting
Holder):
(a) reduce the principal amount of Senior Notes whose Holders
must consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any
Senior Note or alter or waive any of the provisions with respect to
the redemption of the Senior Notes except as provided in clause (g)
below with respect to Sections 3.09, 4.10 and 4.15 hereof;
(c) reduce the rate of or change the time for payment of
interest, including default interest, on any Senior Note;
(d) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Senior Notes
(except a rescission of acceleration of the Senior Notes by the
Holders of at least a majority in aggregate principal amount of the
then outstanding Senior Notes and a waiver of the payment default
that resulted from such acceleration);
(e) make any Senior Note payable in money other than that stated
in the Senior Notes;
(f) make any change in the provisions of this Indenture relating
to waivers of past Defaults or the rights of Holders of Senior Notes
to receive payments of principal of or premium, if any, or interest
on the Senior Notes;
(g) waive a redemption payment with respect to any Senior Note
(other than a payment required by Sections 3.09, 4.10 and 4.15
hereof);
(h) make any change in the provisions of this Indenture relating
to Collateral and Security or the Collateral Agreements that would
adversely affect the holders of the Senior Notes; or
(i) make any change in the foregoing amendment and waiver
provisions.
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SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture, the Collateral
Documents or the Senior Notes shall be set forth in a amended or supplemental
Indenture that complies with the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Senior Note is a continuing consent by the Holder and
every subsequent Holder of a Senior Note or portion of a Senior Note that
evidences the same debt as the consenting Holder's Senior Note, even if notation
of the consent is not made on any Senior Note. However, any such Holder or
subsequent Holder of a Senior Note may revoke the consent as to its Senior Note
if the Trustee receives written notice of revocation before the date the waiver,
supplement or amendment becomes effective. An amendment, supplement or waiver
becomes effective in accordance with its terms and thereafter binds every
Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SENIOR NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Senior Note thereafter authenticated. The Company in
exchange for all Senior Notes may issue and the Trustee shall authenticate new
Senior Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Senior Note
shall not affect the validity and effect of such amendment, supplement or
waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article Nine if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental Indenture until the Board
of Directors approves it. In executing any amended or supplemental indenture,
the Trustee shall be entitled to receive and (subject to Section 7.01) shall be
fully protected in relying upon, an Officer's Certificate and an Opinion of
Counsel stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture.
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ARTICLE 10
COLLATERAL AND SECURITY
SECTION 10.01. PLEDGE AGREEMENT.
The due and punctual payment of the principal of and interest and
Liquidated Damages, if any, on the Senior Notes when and as the same shall be
due and payable, whether on an interest payment date, at maturity, by
acceleration, repurchase, redemption or otherwise, and interest on the overdue
principal of and interest and premium or Liquidated Damages (to the extent
permitted by law), if any, on the Senior Notes and performance of all other
obligations of the Company to the Holders of Senior Notes or the Trustee under
this Indenture and the Senior Notes, according to the terms hereunder or
thereunder, shall be secured as provided in the Pledge Agreement. Each Holder of
Senior Notes, by its acceptance thereof, consents and agrees to the terms of the
Pledge Agreement (including, without limitation, the provisions providing for
foreclosure and release of the Pledged Collateral) as the same may be in effect
or may be amended from time to time in accordance with its terms and authorizes
and directs the Collateral Agent to enter into the Pledge Agreement and to
perform its obligations and exercise its rights thereunder in accordance
therewith. The Company shall deliver to the Trustee copies of all documents
delivered to the Collateral Agent pursuant to the Pledge Agreement, and shall do
or cause to be done all such acts and things as may be necessary or proper, or
as may be required by the provisions of the Pledge Agreement, to assure and
confirm to the Trustee and the Collateral Agent the security interest in the
Pledged Collateral contemplated hereby, by the Pledge Agreement or any part
thereof, as from time to time constituted, so as to render the same available
for the security and benefit of this Indenture and of the Senior Notes secured
hereby, according to the intent and purposes herein expressed. The Company shall
take, or shall cause its Subsidiaries and, if necessary, its Joint Ventures to
take, any and all actions reasonably required to cause the Pledge Agreement to
create and maintain, as security for the Obligations of the Company hereunder, a
valid and enforceable perfected first priority Lien in and on all the Pledged
Collateral, in favor of the Collateral Agent for the benefit of the Holders of
Senior Notes, superior to and prior to the rights of all third Persons and
subject to no other Liens than Permitted Liens.
SECTION 10.02. RECORDING AND OPINIONS.
(a) The Company shall furnish to the Trustee simultaneously with the
execution and delivery of this Indenture an Opinion of Counsel either (i)
stating that in the opinion of such counsel all action has been taken with
respect to the recording, registering and filing of this Indenture, financing
statements (other than the filing of such financing statements, which shall be
completed promptly after the execution of this Indenture but in no event later
than two Business Days after the date hereof) or other instruments necessary to
make effective the Lien intended to be created by the Pledge Agreement, and
reciting with respect to the security interests in the Pledged Collateral, the
details of such action, or (ii) stating that, in the opinion of such counsel, no
such action is necessary to make such Lien effective.
(b) The Company shall furnish to the Collateral Agent and the Trustee on
August 15 in each year beginning with August 15, 1998, an Opinion of Counsel,
dated as of such date, either (i) (A) stating that, in the opinion of such
counsel, action has been taken with respect to the recording, registering,
filing, re-recording, re-registering and refiling of all supplemental
indentures, financing statements, continuation statements or other instruments
of further assurance as is necessary to maintain the Lien of the Pledge
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Agreement and reciting with respect to the security interests in the Pledged
Collateral the details of such action or referring to prior Opinions of Counsel
in which such details are given, (B) stating that, based on relevant laws as in
effect on the date of such Opinion of Counsel, all financing statements and
continuation statements have been executed and filed that are necessary as of
such date and during the succeeding 12 months fully to preserve and protect, to
the extent such protection and preservation are possible by filing, the rights
of the Holders of Senior Notes and the Collateral Agent and the Trustee
hereunder and under the Pledge Agreement with respect to the security interests
in the Pledged Collateral, or (ii) stating that, in the opinion of such counsel,
no such action is necessary to maintain such Lien and assignment.
(c) The Company shall otherwise comply with the provisions of TIA '314(b).
SECTION 10.03. RELEASE OF COLLATERAL.
(a) Subject to subsections (b), (c) and (d) of this Section 10.03, Pledged
Collateral may be released from the Lien and security interest created by the
Pledge Agreement at any time or from time to time in accordance with the
provisions of the Pledge Agreement or as provided hereby. In addition, upon the
request of the Company pursuant to an Officers' Certificate certifying that all
conditions precedent hereunder have been met and stating whether or not such
release is in connection with an Asset Sale and (at the sole cost and expense of
the Company) the Collateral Agent shall release (i) Pledged Collateral that is
sold, conveyed or disposed of in compliance with the provisions of this
Indenture; provided, that if such sale, conveyance or disposition constitutes an
Asset Sale, the Company shall apply the Net Proceeds in accordance with Section
4.10 hereof. Upon receipt of such Officers' Certificate the Collateral Agent
shall execute, deliver or acknowledge any necessary or proper instruments of
termination, satisfaction or release to evidence the release of any Pledged
Collateral permitted to be released pursuant to this Indenture or the Pledge
Agreement.
(b) No Pledged Collateral shall be released from the Lien and security
interest created by the Pledge Agreement pursuant to the provisions of the
Pledge Agreement unless there shall have been delivered to the Collateral Agent
the certificate required by this Section 10.03.
(c) At any time when an Event of Default shall have occurred and be
continuing and the maturity of the Senior Notes shall have been accelerated
(whether by declaration or otherwise) and the Trustee shall have delivered a
notice of acceleration to the Collateral Agent, no release of Pledged Collateral
pursuant to the provisions of the Pledge Agreement shall be effective as against
the Holders of Senior Notes.
(d) The release of any Pledged Collateral from the terms of this Indenture
and the Pledge Agreement shall not be deemed to impair the security under this
Indenture in contravention of the provisions hereof if and to the extent the
Pledged Collateral is released pursuant to the terms of the Pledge Agreement. To
the extent applicable, the Company shall cause TIA ' 313(c), relating to
reports, and TIA ' 314(b), relating to the release of property or securities
from the Lien and security interest of the Pledge Agreement and relating to the
substitution therefor of any property or securities to be subjected to the Lien
and security interest of the Pledge Agreement, to be complied with. The Trustee
shall comply (to the extent required) with TIA ' 313(b)(1) and 313(d). Any
certificate or opinion required by TIA ' 314(d) may be made by an Officer of the
Company except in cases where TIA ' 314(d) requires that such certificate or
opinion be made by an independent Person, which Person shall be an independent
engineer, appraiser or other expert selected or approved by the Trustee and the
Collateral Agent in the exercise of reasonable care.
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SECTION 10.04. CERTIFICATES OF THE COMPANY.
(a) The Company shall furnish to the Trustee and the Collateral Agent,
prior to each proposed release of Pledged Collateral pursuant to the Pledge
Agreement or the Escrow and Disbursement Agreement, (i) all documents required
by TIA '314(c) and (d) and (ii) an Opinion of Counsel to the effect that such
accompanying documents constitute all documents required by TIA '314(d). The
Trustee may, to the extent permitted by Sections 7.01 and 7.02 hereof, accept as
conclusive evidence of compliance with the foregoing provisions the appropriate
statements contained in such documents and such Opinion of Counsel.
SECTION 10.05. CERTIFICATES OF THE TRUSTEE.
In the event that the Company wishes to release Pledged Collateral in
accordance with the Pledge Agreement and has delivered the certificates and
documents required by the Pledge Agreement and Sections 10.03 and 10.04 hereof
as well as all documentation required by TIA '314(d) in connection with such
release and the Trustee shall direct the Collateral Agent to effectuate such
release.
SECTION 10.06. AUTHORIZATION OF ACTIONS TO BE TAKEN BY THE TRUSTEE UNDER THE
PLEDGE AGREEMENT.
Subject to the provisions of Section 7.01 and 7.02 hereof, the Trustee
may, in its sole discretion and without the consent of the Holders of Senior
Notes, direct, on behalf of the Holders of Senior Notes, the Collateral Agent
to, take all actions it deems necessary or appropriate in order to (a) enforce
any of the terms of the Pledge Agreement and (b) collect and receive any and all
amounts payable in respect of the Obligations of the Company hereunder. The
Trustee shall have power to institute and maintain such suits and proceedings as
it may deem expedient to prevent any impairment of the Pledged Collateral by any
acts that may be unlawful or in violation of the Pledge Agreement or this
Indenture, and such suits and proceedings as the Trustee may deem expedient to
preserve or protect its interests and the interests of the Holders of Senior
Notes in the Pledged Collateral (including power to institute and maintain suits
or proceedings to restrain the enforcement of or compliance with any legislative
or other governmental enactment, rule or order that may be unconstitutional or
otherwise invalid if the enforcement of, or compliance with, such enactment,
rule or order would impair the security interest hereunder or be prejudicial to
the interests of the Holders of Senior Notes or of the Trustee).
SECTION 10.07. AUTHORIZATION OF RECEIPT OF FUNDS BY THE TRUSTEE UNDER THE PLEDGE
AGREEMENT.
The Trustee is authorized to receive any funds for the benefit of the
Holders of Senior Notes distributed under the Pledge Agreement, and to make
further distributions of such funds to the Holders of Senior Notes according to
the provisions of this Indenture.
SECTION 10.08. COMPLIANCE WITH PLEDGE AGREEMENT.
In the event that the Company fails to comply with Section 1A of the
Pledge Agreement, the interest rate on the Senior Notes shall increase in
accordance with the provisions of the Senior Notes; provided that, upon such
time as the Company complies with Section 1A, if any, the interest shall
decrease in accordance with the provisions of the Senior Notes.
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SECTION 10.09. TERMINATION OF SECURITY INTEREST.
Upon the payment in full of all Obligations of the Company under this
Indenture and the Senior Notes, or upon Legal Defeasance, the Trustee shall, at
the written request of the Company set forth in an Officers' Certificate,
deliver a certificate to the Collateral Agent stating that such Obligations have
been paid in full, and instruct the Collateral Agent to release the Liens
pursuant to this Indenture and the Pledge Agreement.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by TIA '318(c), the imposed duties shall control.
SECTION 11.02. NOTICES.
Any notice or communication by the Company or the Trustee to the
others is duly given if in writing and delivered in Person or mailed by first
class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:
If to the Company:
Hyperion Telecommunications, Inc.
Main at Water Street
P.O. Box 472
Coudersport, Pennsylvania 16915
Telecopy: (814) 274-8631
Attention: Daniel R. Milliard
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With a copy to:
Buchanan Ingersoll
One Oxford Centre
301 Grant Street
20th Floor
Pittsburgh, Pennsylvania 15219-1410
Attention: Carl E. Rothenberger, Jr.
If to the Trustee:
Bank of Montreal Trust Company
77 Water Street
New York, New York 10005
Telecopier No.: (212) 701-7684
Attention: Corporate Trust Department
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first
class mail, certified or registered, return receipt requested, or by overnight
air courier guaranteeing next day delivery to its address shown on the register
kept by the Registrar. Any notice or communication shall also be so mailed to
any Person described in TIA ' 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 11.03. COMMUNICATION BY HOLDERS OF SENIOR NOTES WITH OTHER HOLDERS OF
SENIOR NOTES.
Holders may communicate pursuant to TIA ' 312(b) with other Holders
with respect to their rights under this Indenture or the Senior Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA ' 312(c).
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SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 11.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 11.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA ' 314(a)(4)) shall comply with the provisions of TIA '
314(e) and shall include:
(a) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
SECTION 11.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting
of Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 11.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No director, officer, employee, incorporator or stockholder of the
Company, as such, shall have any liability for any obligations of the Company
under the Senior Notes or the Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of Senior
Notes by accepting a Senior Note waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Senior
Notes. Such waiver may not be effective to waive liabilities under the federal
securities laws and it is the view of the SEC that such a wavier is against
public policy.
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SECTION 11.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE COLLATERAL DOCUMENTS AND THE SENIOR NOTES.
SECTION 11.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 11.10. SUCCESSORS.
All agreements of the Company in this Indenture and the Senior Notes
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors.
SECTION 11.11. SEVERABILITY.
In case any provision in this Indenture or in the Senior Notes shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 11.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 11.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
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SIGNATURES
Dated as of August 27, 1997 HYPERION TELECOMMUNICATIONS, INC.
ISSUER
By:/s/ Daniel R. Milliard
Name:
Title:
Attest: /s/ Michelle D. Bergman
Dated as of August 27, 1997 BANK OF MONTREAL TRUST COMPANY
TRUSTEE
By: /s/ Therese Gaballah
Name:
Title:
Attest:/s/ Michelle D. Bergman
<PAGE>
EXHIBIT A-1
(Face of Senior Note)
12 1/4% Series A/B Senior Secured Notes due 2004
No. $_______________
CUSIP NO. __________
HYPERION TELECOMMUNICATIONS, INC.
promises to pay to _____________________________________
or registered assigns,
the principal sum of $
dollars on [_____], 2004.
Interest Payment Dates: _________ and ________, of each year,
commencing __________, 1998.
Record Dates: _______ and _______
Dated: __________, 1997
HYPERION TELECOMMUNICATIONS, INC.
By:______________________________
Name: Daniel R. Milliard
Title: President and Secretary
By:______________________________
Name: Edward R. Babcock
Title: Vice President, Finance
This is one of the Global Senior Notes referred to in the within-mentioned
Indenture:
BANK OF MONTREAL TRUST COMPANY
as Trustee
By:__________________________________
Name:
Title:
A-1-1
<PAGE>
(Back of Senior Note)
12 1/4% Series A/B Senior Secured Notes due 2004
Unless and until it is exchanged in whole or in part for Senior Notes
in definitive form, this Senior Note may not be transferred except as a whole by
the Depository to a nominee of the Depository or by a nominee of the Depository
to the Depository or another nominee of the Depository or by the Depository or
any such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) ("DTC"),
to the issuer or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or such other
name as may be requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or such other entity as may be requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein..
THE SENIOR NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER
SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND THE SENIOR NOTE EVIDENCED HEREBY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
THE SENIOR NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY
BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. BY ITS ACQUISITION
HEREOF, THE HOLDER OF THE SENIOR NOTE EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF HYPERION TELECOMMUNICATIONS, INC. (THE "COMPANY") THAT (A)
SUCH SENIOR NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY
(1) (A) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN OF RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (B) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT, (C) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, (D) TO
AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1),
(2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN "IAI")
THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM
THE TRUSTEE OR (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR
(3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE,
IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
OF THE SENIOR NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET
FORTH IN (1) ABOVE.
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Hyperion Telecommunications, Inc., a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this Senior
Note at the rate of 12 1/4% per annum from
<PAGE>
August 27, 1997 until maturity (including any additional interest required to be
paid pursuant to the provisions of the Registration Rights Agreement) and will
be payable semi-annually in cash on September 1 and March 1 of each year, or if
any such day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"); provided that in the event that the Company does not
comply with Section 1A(a) and (b) of the Pledge Agreement, the interest rate on
the Senior Notes will automatically increase by 0.25% per annum (the "Additional
Interest") to 12 1/2% and the Additional Interest shall continue until such time
as the Company complies with its obligations under Section 1A of the Pledge
Agreement, at which time the Additional Interest shall cease. Interest and
Additional Interest, if any, on the Senior Notes will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the date of issuance; provided that if there is no existing Default in the
payment of interest, and if this Senior Note is authenticated between a record
date referred to on the face hereof and the next succeeding Interest Payment
Date, interest shall accrue from such next succeeding Interest Payment Date,
provided, further, that the first Interest Payment Date shall be March 1, 1998.
The Company will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
from time to time on demand at a rate that is 1% per annum in excess of the rate
then in effect; it will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace periods) from time to
time on demand at the same rate to the extent lawful. Interest will be computed
on the basis of a 360-day year comprised of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Senior Notes
(except defaulted interest) to the Persons who are registered Holders of Senior
Notes at the close of business on the August 15 or February 15 next preceding
the Interest Payment Date, even if such Senior Notes are cancelled after such
record date and on or before such Interest Payment Date, except as provided in
Section 2.13 of the Indenture with respect to defaulted interest. The Senior
Notes shall be payable as to principal, premium and interest at the office or
agency of the Company maintained for such purpose within or without the City and
State of New York, or, at the option of the Company, payment of interest may be
made by check mailed to the Holders at their addresses set forth in the register
of Holders; provided that payment by wire transfer of immediately available
funds shall be required with respect to principal of, and interest and premium
on, all Global Notes and all other Senior Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, Bank of Montreal Trust
Company, the Trustee under the Indenture, shall act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. INDENTURE AND PLEDGE AND SECURITY AGREEMENT. The Company issued the
Senior Notes under an Indenture dated as of August 27, 1997 (the "Indenture")
between the Company and the Trustee. The terms of the Senior Notes include those
stated in the Indenture and those made a part of the Indenture by reference to
the Trust Indenture Act of 1939, as amended (15 U.S. Code " 77aaa-77bbbb) (the
"TIA"). The Senior Notes are subject to all such terms, and Holders are referred
to the Indenture and the TIA for a statement of such terms. The Senior Notes are
senior obligations of the Company limited to $250.0 million in aggregate
principal amount at maturity. The Senior Notes are secured by a pledge of the
Pledged Collateral (as defined in the Indenture) pursuant to the Pledge and
Security Agreement referred to in the Indenture. The Senior Notes are senior
obligations of the Company limited to $250.0 million in aggregate principal
amount at maturity.
A-3
<PAGE>
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Company shall not have the option to redeem the Senior Notes prior to September
1, 2001. Thereafter, the Company shall have the option to redeem the Senior
Notes, in whole or in part, upon not less than 30 nor more than 60 days' notice,
at the redemption prices (expressed as percentages of principal amount set forth
below plus accrued and unpaid interest thereon and Liquidated Damages, if any,
to the applicable redemption date, if redeemed during the twelve-month period
beginning on September 1 of the years indicated below:
Year Percentage
2001.................................................... 106.125%
2002 and thereafter..................................... 103.063%
2003 and thereafter..................................... 100.000%
(b) Notwithstanding the foregoing, the Company, on or prior to
September 1, 2000, may redeem up to a maximum of 25% of the aggregate principal
amount of the Senior Notes then outstanding at a redemption price of 112.25% of
the principal amount thereof, with the net proceeds from either (i) an Initial
Public Offering of the common stock of the Company or (ii) a sale of the Capital
Stock (other than Disqualified Stock) of the Company to a Strategic Investor in
a single transaction or a series of related transactions for at least $25.0
million (clauses (i) and (ii) together, collectively referred to herein as
"Qualified Equity Offerings"); provided that, in either case, at least 75% in
aggregate principal amount of the Senior Notes remain outstanding immediately
after the occurrence of such redemption; and provided, further, that such
redemption shall occur within 90 days of the date of the closing of such
Qualified Equity Offering.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall not be
required to make mandatory redemption or sinking fund payments with respect to
the Senior Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, the Company shall be
required to make an offer (a "Change of Control Offer") to each Holder of the
Senior Notes to repurchase all or any part (equal to $1,000 or an integral
multiple thereof) of such Holder's Senior Notes at a purchase price equal to
101% of the aggregate principal amount thereof plus accrued and unpaid interest
and Liquidated Damages, if any, to the date of repurchase (the "Change of
Control Payment"). Within ten days following any Change of Control, the Company
shall mail a notice to each Holder setting forth the procedures governing the
Change of Control Offer as required by the Indenture.
(b) If the Company or any Subsidiary consummates any Asset Sales, within
five Business Days of each date on which the aggregate amount of Excess Proceeds
exceeds $2.5 million, the Company shall offer to purchase (an "Asset Sale
Offer") the maximum principal amount of Senior Notes and 13% Notes (on a pro
rata basis based upon the relative aggregate principal amount of 13% Notes (or,
prior to April 15, 2001, the aggregate Accreted Value of 13% Notes) then
outstanding that may be purchased out of the Excess Proceeds at an offer price
in cash equal to 100% of aggregate principal amount thereof, plus accrued and
unpaid
A-4
<PAGE>
interest to the date of repurchase (or, in the case of repurchases of 13% Notes
prior to April 15, 2001, at a purchase price equal to 100% of the Accreted Value
thereof as of the date of repurchase) in accordance with the procedures set
forth in the Indenture, provided, that in the event of an Asset Sale of Stock
Collateral, the Company shall, purchase (i) first, all Senior Notes tendered
pursuant to such Asset Sale Offer in an aggregate principal amount equal to the
portion of such Excess Proceeds resulting from such Asset Sale of Stock
Collateral and (ii) second, all Senior Notes and 13% Notes on a pro rata basis
(in the same manner as described above) in an aggregate principal amount (or,
with respect to 13% Notes prior to April 15, 2001, an aggregate Accreted Value)
equal to the Excess Proceeds not used to purchase Senior Notes pursuant to
clause (i) of this proviso. The Senior Notes are in registered form without
coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of the Senior Notes may be registered and the Senior Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Senior Note or portion of a Senior Note
selected for redemption, except for the unredeemed portion of any Senior Note
being redeemed in part. Also, it need not exchange or register the transfer of
any Senior Notes for a period of 15 days before a selection of Senior Notes to
be redeemed or during the period between a record date and the corresponding
Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Senior Note may be
treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Senior Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the then outstanding
Senior Notes, and any existing default or compliance with any provision of the
Indenture, the Collateral Documents or the Senior Notes may be waived with the
consent of the Holders of a majority in aggregate principal amount of the then
outstanding Senior Notes. Without the consent of any Holder of a Senior Note,
the Indenture, the Collateral Documents or the Senior Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Senior Notes in addition to or in place of certificated Senior
Notes, to provide for the assumption of the Company's obligations to Holders of
the Senior Notes in case of a merger or consolidation, to make any change that
would provide any additional rights or benefits to the Holders of the Senior
Notes or that does not adversely affect the legal rights under the Indenture of
any such Holder, or to comply with the requirements of the SEC in order to
effect or maintain the qualification of the Indenture under the Trust Indenture
Act.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30
days in the payment when due of interest on, or Liquidated Damages with respect
to, the Senior Notes; (ii) default in payment when due of principal of or
premium, if any, on the Senior Notes when the same becomes due and payable at
maturity, upon redemption (including in connection with an offer to purchase) or
otherwise, (iii) failure by the Company to comply with Section 4.07, 4.10, 4.15
or 5.01 of the Indenture; (iv) failure by the Company to comply with Section
4.09 of the Indenture; provided that in the event that the Company fails to
comply with Section 4.09 of the Indenture because indebtedness is deemed to be
incurred by a Restricted Joint Venture solely as a result of such Restricted
Joint Venture ceasing to be a Restricted Joint Venture as a result of (x) the
loss of a Local Partner or (y) the loss of management control of such Restricted
Joint Venture, and such failure continues for 90 days; (v) failure by the
Company for 30 days after notice to the Company by the Trustee or the Holders of
at least 25% in principal amount of the Senior Notes then outstanding to comply
with certain other agreements in the Indenture or the Senior Notes; (vi) default
under certain other agreements relating to Indebtedness of the Company which
default results in the acceleration of such Indebtedness prior to its express
maturity; (vii) certain final judgments for the payment of money that remain
undischarged for a period of 60 days; (viii) any breach or default by the
Company in the performance of any
A-5
<PAGE>
covenant set forth in the Collateral Agreements which breach or default
continues for 30 days, or any repudiation by the Company of its obligation under
any of the Collateral Agreements or the unenforceability of any of the
Collateral Agreements, for any reason; and (ix) certain events of bankruptcy or
insolvency with respect to the Company or any of its Significant Subsidiaries or
any of its Joint Ventures that would, if it were a Subsidiary, constitute a
Significant Subsidiary. If any Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Senior Notes may declare all the Senior Notes to be due and payable
immediately. Notwithstanding the foregoing, in the case of an Event of Default
arising from certain events of bankruptcy or insolvency with respect to the
Company, any of its Significant Subsidiaries or any Joint Venture that would, if
it were a Subsidiary constitute a Significant Subsidiary, or any group of
Subsidiaries or Joint Ventures that, taken together, would, constitute a
Significant Subsidiary, all outstanding Senior Notes shall become due and
payable without further action or notice. Holders of the Senior Notes may not
enforce the Indenture or the Senior Notes except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in principal amount of the
then outstanding Senior Notes may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Holders of the Senior Notes notice
of any continuing Default or Event of Default (except a Default or Event of
Default relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. The Holders of a majority in aggregate
principal amount of the Senior Notes then outstanding by notice to the Trustee
may on behalf of the Holders of all of the Senior Notes waive any existing
Default or Event of Default and its consequences under the Indenture, except a
continuing Default or Event of Default in the payment of interest on, or the
principal of, the Senior Notes. The Company is required to deliver to the
Trustee annually a statement regarding compliance with the Indenture, and the
Company is required upon becoming aware of any Default or Event of Default, to
deliver to the Trustee a statement specifying such Default or Event of Default.
13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not the Trustee.
14. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company, as such, shall not have any
liability for any obligations of the Company under the Senior Notes or the
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Senior Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Senior Notes.
15. AUTHENTICATION. This Senior Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES. In
addition to the rights provided to Holders of the Senior Notes under the
Indenture, Holders of Transferred Restricted Securities shall have all the
rights set forth in the Registration Rights Agreement dated as of August 27,
1997, between the Company and the parties named on the signature pages thereof
(the "Registration Rights Agreement").
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Senior
A-6
<PAGE>
Notes and the Trustee may use CUSIP numbers in notices of redemption as a
convenience to the Holders. No representation is made as to the accuracy of such
numbers either as printed on the Senior Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers
placed thereon.
The Company shall furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Hyperion Telecommunications, Inc.
Main at Water Street
P.O. Box 472
Coudersport, Pennsylvania 16915
Telecopy: (814) 274-8631
Attention: Daniel R. Milliard
A-7
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
(Insert assignee's soc. sec. or tax I.D. no.)
(Print or type assignee's name, address and zip code)
and irrevocably appoint
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:
Your Signature:
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee.
A-8
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the box below:
Section 4.10 Section 4.15
If you want to elect to have only part of the Senior Note purchased
by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state
the amount you elect to have purchased: $___________
Date: Your Signature:
(Sign exactly as your name appears on the Senior Note)
Tax Identification No.:
Signature Guarantee.
A-9
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE0
The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note, have
been made:
<S> <C> <C> <C> <C>
Date of Exchange Amount of decrease in Amount of increase in Principal Amount Signature of
Principal Amount Principal Amount of this authorized officer of
of this of this Global Note Trustee or Note
Global Note Global Note following such decrease Custodian
(or increase)
<FN>
- --------
0. This should be included only if the Note is a Global Note.
</FN>
</TABLE>
A-10
<PAGE>
EXHIBIT A-2
(Face of Regulation S Temporary Global Note)
12 1/4% Series A/B Senior Secured Notes due 2004
No. $_______________
CUSIP NO. __________
HYPERION TELECOMMUNICATIONS, INC.
promises to pay to _____________________________________
or registered assigns,
the principal sum of $
dollars on [_____], 2004.
Interest Payment Dates: _________ and ________, of each year, commencing
__________, 1998.
Record Dates: _______ and _______
Dated: __________, 1997
HYPERION TELECOMMUNICATIONS, INC.
By:______________________________
Name: Daniel R. Milliard
Title: President and Secretary
By:______________________________
Name: Edward R. Babcock
Title: Vice President, Finance
This is one of the Global Senior Notes referred to in the within-mentioned
Indenture:
BANK OF MONTREAL TRUST COMPANY
as Trustee
By:__________________________________
Name:
Title:
A-2-1
<PAGE>
(Back of Regulation S Temporary Global Note)
12 1/4% Senior Secured Notes due 2004
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE CASH PAYMENTS OF INTEREST DURING THE PERIOD WHICH SUCH HOLDER HOLDS
THIS NOTE. NOTHING IN THIS LEGEND SHALL BE DEEMED TO PREVENT INTEREST FROM
ACCRUING ON THIS NOTE.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (ADTC@), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE SENIOR NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SENIOR NOTE
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SENIOR NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. BY ITS ACQUISITION HEREOF, THE
HOLDER OF THE SENIOR NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF HYPERION
TELECOMMUNICATIONS, INC. (THE "COMPANY") THAT (A) SUCH SENIOR NOTE MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (A) TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
OF RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, (D)
TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN "IAI") THAT, PRIOR TO
SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (THE FORM
OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE OR (E) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY
OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SENIOR NOTE
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (1) ABOVE.
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to
<PAGE>
below unless otherwise indicated.
1. INTEREST. Hyperion Telecommunications, Inc., a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this Senior
Note at the rate of 12-1/4% per annum from August 27, 1997 until maturity
(including any additional interest required to be paid pursuant to the
provisions of the Registration Rights Agreement) and will be payable
semi-annually in cash on September 1 and March 1 of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"); provided that in the event that the Company does not
comply with Section 1A(a) and (b) of the Pledge Agreement, the interest rate on
the Senior Notes will automatically increase by 0.25% per annum (the "Additional
Interest") to 12-1/2% and the Additional Interest shall continue until such time
as the Company complies with its obligations under Section 1A of the Pledge
Agreement, at which time the Additional Interest shall cease. Interest and
Additional Interest, if any, on the Senior Notes will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the date of issuance; provided that if there is no existing Default in the
payment of interest, and if this Senior Note is authenticated between a record
date referred to on the face hereof and the next succeeding Interest Payment
Date, interest shall accrue from such next succeeding Interest Payment Date,
provided, further, that the first Interest Payment Date shall be March 1, 1998.
The Company will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
from time to time on demand at a rate that is 1% per annum in excess of the rate
then in effect; it will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace periods) from time to
time on demand at the same rate to the extent lawful. Interest will be computed
on the basis of a 360-day year comprised of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Senior Notes
(except defaulted interest) to the Persons who are registered Holders of Senior
Notes at the close of business on the August 15 or February 15 next preceding
the Interest Payment Date, even if such Senior Notes are cancelled after such
record date and on or before such Interest Payment Date, except as provided in
Section 2.13 of the Indenture with respect to defaulted interest. The Senior
Notes shall be payable as to principal, premium and interest at the office or
agency of the Company maintained for such purpose within or without the City and
State of New York, or, at the option of the Company, payment of interest may be
made by check mailed to the Holders at their addresses set forth in the register
of Holders; provided that payment by wire transfer of immediately available
funds shall be required with respect to principal of, and interest and premium
on, all Global Notes and all other Senior Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, Bank of Montreal Trust Company,
the Trustee under the Indenture, shall act as Paying Agent and Registrar. The
Company may change any Paying Agent or Registrar without notice to any Holder.
The Company or any of its Subsidiaries may act in any such capacity.
4. INDENTURE AND PLEDGE AND SECURITY AGREEMENT. The Company issued the
Senior Notes under an Indenture dated as of August 27, 1997 (the "Indenture")
between the Company and the Trustee. The terms of the Senior Notes include those
stated in the Indenture and those made a part of the Indenture by reference to
the Trust Indenture Act of 1939, as amended (15 U.S. Code " 77aaa-77bbbb) (the
"TIA"). The Senior Notes are subject to all such terms, and Holders are referred
to the Indenture and the TIA for a statement of such terms. The Senior Notes are
secured by a plege of the Pledged Collateral (as defined in the Indenture)
pursuant to the Pledge and Security Agreement referred to in the Indenture. The
Senior Notes are senior obligations of the Company limited to $250.0 million in
aggregate principal amount at maturity.
A-3
<PAGE>
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Company shall not have the option to redeem the Senior Notes prior to September
1, 2001. Thereafter, the Company shall have the option to redeem the Senior
Notes, in whole or in part, upon not less than 30 nor more than 60 days' notice,
at the redemption prices (expressed as percentages of principal amount set forth
below plus accrued and unpaid interest thereon and Liquidated Damages, if any,
to the applicable redemption date, if redeemed during the twelve-month period
beginning on September 1 of the years indicated below:
Year Percentage
2001....................................................... 106.125%
2002 and thereafter........................................ 103.063%
2003 and thereafter........................................ 100.000%
(b) Notwithstanding the foregoing, the Company, on or prior to
September 1, 2000, may redeem up to a maximum of 25% of the aggregate principal
amount of the Senior Notes then outstanding at a redemption price of 112.25% of
the principal amount thereof, with the net proceeds from either (i) an Initial
Public Offering of the common stock of the Company or (ii) a sale of the Capital
Stock (other than Disqualified Stock) of the Company to a Strategic Investor in
a single transaction or a series of related transactions for at least $25.0
million (clauses (i) and (ii) together, collectively referred to herein as
"Qualified Equity Offerings"); provided that, in either case, at least 75% in
aggregate principal amount of the Senior Notes remain outstanding immediately
after the occurrence of such redemption; and provided, further, that such
redemption shall occur within 90 days of the date of the closing of such
Qualified Equity Offering.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall not be
required to make mandatory redemption or sinking fund payments with respect to
the Senior Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, the Company shall be
required to make an offer (a "Change of Control Offer") to each Holder of the
Senior Notes to repurchase all or any part (equal to $1,000 or an integral
multiple thereof) of such Holder's Senior Notes at a purchase price equal to
101% of the aggregate principal amount thereof plus accrued and unpaid interest
and Liquidated Damages, if any, to the date of repurchase (the "Change of
Control Payment"). Within ten days following any Change of Control, the Company
shall mail a notice to each Holder setting forth the procedures governing the
Change of Control Offer as required by the Indenture.
(b) If the Company or any Subsidiary consummates any Asset Sales, within
five Business Days of each date on which the aggregate amount of Excess Proceeds
exceeds $2.5 million, the Company shall offer to purchase (an "Asset Sale
Offer") the maximum principal amount of Senior Notes and 13% Notes (on a pro
rata basis based upon the relative aggregate principal amount of 13% Notes (or,
prior to April 15, 2001, the aggregate Accreted Value of 13% Notes) then
outstanding that may be purchased out of the Excess Proceeds at an offer price
in cash equal to 100% of aggregate principal amount thereof, plus accrued and
unpaid
A-4
<PAGE>
interest to the date of repurchase (or, in the case of repurchases of 13% Notes
prior to April 15, 2001, at a purchase price equal to 100% of the Accreted Value
thereof as of the date of repurchase) in accordance with the procedures set
forth in the Indenture, provided, that in the event of an Asset Sale of Stock
Collateral, the Company shall, purchase (i) first, all Senior Notes tendered
pursuant to such Asset Sale Offer in an aggregate principal amount equal to the
portion of such Excess Proceeds resulting from such Asset Sale of Stock
Collateral and (ii) second, all Senior Notes and 13% Notes on a pro rata basis
(in the same manner as described above) in an aggregate principal amount (or,
with respect to 13% Notes prior to April 15, 2001, an aggregate Accreted Value)
equal to the Excess Proceeds not used to purchase Senior Notes pursuant to
clause (i) of this proviso. The Senior Notes are in registered form without
coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of the Senior Notes may be registered and the Senior Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Senior Note or portion of a Senior Note
selected for redemption, except for the unredeemed portion of any Senior Note
being redeemed in part. Also, it need not exchange or register the transfer of
any Senior Notes for a period of 15 days before a selection of Senior Notes to
be redeemed or during the period between a record date and the corresponding
Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Senior Note may be
treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Senior Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the then outstanding
Senior Notes, and any existing default or compliance with any provision of the
Indenture, the Collateral Documents or the Senior Notes may be waived with the
consent of the Holders of a majority in aggregate principal amount of the then
outstanding Senior Notes. Without the consent of any Holder of a Senior Note,
the Indenture, the Collateral Documents or the Senior Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Senior Notes in addition to or in place of certificated Senior
Notes, to provide for the assumption of the Company's obligations to Holders of
the Senior Notes in case of a merger or consolidation, to make any change that
would provide any additional rights or benefits to the Holders of the Senior
Notes or that does not adversely affect the legal rights under the Indenture of
any such Holder, or to comply with the requirements of the SEC in order to
effect or maintain the qualification of the Indenture under the Trust Indenture
Act.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30
days in the payment when due of interest on, or Liquidated Damages with respect
to, the Senior Notes; (ii) default in payment when due of principal of or
premium, if any, on the Senior Notes when the same becomes due and payable at
maturity, upon redemption (including in connection with an offer to purchase) or
otherwise, (iii) failure by the Company to comply with Section 4.07, 4.10, 4.15
or 5.01 of the Indenture; (iv) failure by the Company to comply with Section
4.09 of the Indenture; provided that in the event that the Company fails to
comply with Section 4.09 of the Indenture because indebtedness is deemed to be
incurred by a Restricted Joint Venture solely as a result of such Restricted
Joint Venture ceasing to be a Restricted Joint Venture as a result of (x) the
loss of a Local Partner or (y) the loss of management control of such Restricted
Joint Venture, and such failure continues for 90 days; (v) failure by the
Company for 30 days after notice to the Company by the Trustee or the Holders of
at least 25% in principal amount of the Senior Notes then outstanding to comply
with certain other agreements in the Indenture or the Senior Notes; (vi) default
under certain other agreements relating to Indebtedness of the Company which
default results in the acceleration of such Indebtedness prior to its express
maturity; (vii) certain final judgments for the payment of money that remain
undischarged for a period of 60 days; (viii) any breach or default by the
Company in the performance of any
A-5
<PAGE>
covenant set forth in the Collateral Agreements which breach or default
continues for 30 days, or any repudiation by the Company of its obligation under
any of the Collateral Agreements or the unenforceability of any of the
Collateral Agreements, for any reason; and (ix) certain events of bankruptcy or
insolvency with respect to the Company or any of its Significant Subsidiaries or
any of its Joint Ventures that would, if it were a Subsidiary, constitute a
Significant Subsidiary. If any Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Senior Notes may declare all the Senior Notes to be due and payable
immediately. Notwithstanding the foregoing, in the case of an Event of Default
arising from certain events of bankruptcy or insolvency with respect to the
Company, any of its Significant Subsidiaries or any Joint Venture that would, if
it were a Subsidiary constitute a Significant Subsidiary, or any group of
Subsidiaries or Joint Ventures that, taken together, would, constitute a
Significant Subsidiary, all outstanding Senior Notes shall become due and
payable without further action or notice. Holders of the Senior Notes may not
enforce the Indenture or the Senior Notes except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in principal amount of the
then outstanding Senior Notes may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Holders of the Senior Notes notice
of any continuing Default or Event of Default (except a Default or Event of
Default relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. The Holders of a majority in aggregate
principal amount of the Senior Notes then outstanding by notice to the Trustee
may on behalf of the Holders of all of the Senior Notes waive any existing
Default or Event of Default and its consequences under the Indenture, except a
continuing Default or Event of Default in the payment of interest on, or the
principal of, the Senior Notes. The Company is required to deliver to the
Trustee annually a statement regarding compliance with the Indenture, and the
Company is required upon becoming aware of any Default or Event of Default, to
deliver to the Trustee a statement specifying such Default or Event of Default.
13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not the Trustee.
14. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company, as such, shall not have any
liability for any obligations of the Company under the Senior Notes or the
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Senior Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Senior Notes.
15. AUTHENTICATION. This Senior Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES. In
addition to the rights provided to Holders of the Senior Notes under the
Indenture, Holders of Transferred Restricted Securities shall have all the
rights set forth in the Registration Rights Agreement dated as of August 27_,
1997, between the Company and the parties named on the signature pages thereof
(the "Registration Rights Agreement").
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Senior
A-6
<PAGE>
Notes and the Trustee may use CUSIP numbers in notices of redemption as a
convenience to the Holders. No representation is made as to the accuracy of such
numbers either as printed on the Senior Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers
placed thereon.
The Company shall furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Hyperion Telecommunications, Inc.
Main at Water Street
P.O. Box 472
Coudersport, Pennsylvania 16915
Telecopy: (814) 274-8631
Attention: Daniel R. Milliard
A-7
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
(Insert assignee's soc. sec. or tax I.D. no.)
(Print or type assignee's name, address and zip code)
and irrevocably appoint
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:
Your Signature:
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee.
A-8
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL NOTE
The following exchanges of a part of this Regulation S Temporary Global Note for
an interest in another Global Note, or of other Restricted Global Notes for an
interest in this Regulation S Temporary Global Note, have been made:
<S> <C> <C> <C> <C>
Date of Exchange Amount of decrease in Amount of increase in Principal Amount Signature of
Principal Amount Principal Amount of this authorized officer of
of this of this Global Note Trustee or Note
Global Note Global Note following such decrease Custodian
(or increase)
A-9
</TABLE>
<PAGE>
EXHIBIT A-3
(Face of Unrestricted Note)
12 1/4% Series A/B Senior Secured Notes due 2004 No. $_______________
CUSIP NO. __________
HYPERION TELECOMMUNICATIONS, INC.
promises to pay to _____________________________________
or registered assigns,
the principal sum of $
dollars on [_____], 2004.
Interest Payment Dates: _________ and ________, of each year,
commencing __________, 1998.
Record Dates: _______ and _______
Dated: __________, 1997
HYPERION TELECOMMUNICATIONS, INC.
By:______________________________
Name: Daniel R. Milliard
Title: President and Secretary
By:______________________________
Name: Edward R. Babcock
Title: Vice President, Finance
This is one of the Global Senior Notes referred to in the within-mentioned
Indenture:
BANK OF MONTREAL TRUST COMPANY
as Trustee
By:__________________________________
Name:
Title:
A-3-1
<PAGE>
(Back of Unrestricted Note)
12 1/4% Senior Secured Notes due 2004
[Unless and until it is exchanged in whole or in part for Notes in definitive
form, this Note may not be transferred except as a whole by the Depository to a
nominee of the Depository or by a nominee of the Depository to the Depository or
another nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository. Unless this
certificate is presented by an authorized representative of The Depository Trust
Company (55 Water Street, New York, New York) (ADTC@), to the issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or such other name as may be
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or such other entity as may be requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
Capitalized terms used herein shall have the meanings assigned to them in the
Indenture referred to below.
1. INTEREST. Hyperion Telecommunications, Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Senior Note
at the rate of 12-1/4% per annum from August 27, 1997 until maturity (including
any additi nal interest required to be paid pursuant to the provisions of the
Registration Rights Agreement) and will be payable semi-annually in cash on
September 1 and March 1 of each year, or if any such day is not a Business Day,
on the next succeeding Business Day (each an "Interest Payment Date"); provided
that in the event that the Company does not comply with Section 1A(a) and (b) of
the Pledge Agreement, the interest rate on the Senior Notes will automatically
increase by 0.25% per annum (the "Additional Interest") to 12-1/2% and the
Additional Interest shall continue until such time as the Company complies with
its obligations under Section 1A of the Pledge Agreement, at which time the
Additional Interest shall cease. Interest and Additional Interest, if any, on
the Senior Notes will accrue from the most recent date to which interest has
been paid or, if no interest has been paid, from the date of issuance; provided
that if there is no existing Default in the payment of interest, and if this
Senior Note is authenticated between a record date referred to on the face
hereof and the next succeeding Interest Payment Date, interest shall accrue from
such next succeeding Interest Payment Date, provided, further, that the first
Interest Payment Date shall be March 1, 1998. The Company will pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue principal and premium, if any, from time to time on demand at a rate
that is 1% per annum in excess of the rate then in effect; it will pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest and Liquidated Damages (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Senior Notes
(except defaulted interest) to the Persons who are registered Holders of Senior
Notes at the close of business on the August 15 or February 15 next preceding
the Interest Payment Date, even if such Senior Notes are cancelled after such
record date and on or before such Interest Payment Date, except as provided in
Section 2.13 of the Indenture with respect to defaulted interest. The Senior
Notes shall be payable as to principal, premium and interest at the office or
agency of the Company maintained for such purpose within or without the City and
State of New York, or, at the option of the Company, payment of interest may be
made by check mailed to the Holders at their addresses set forth in the register
of Holders; provided that payment by wire transfer of immediately available
funds shall be required with respect to principal of, and interest and premium
on, all Global Notes and all other Senior Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
<PAGE>
3. PAYING AGENT AND REGISTRAR. Initially, Bank of Montreal Trust Company, the
Trustee under the Indenture, shall act as Paying Agent and Registrar. The
Company may change any Paying Agent or Registrar without notice to any Holder.
The Company or any of its Subsidiaries may act in any such capacity.
4. INDENTURE AND PLEDGE AND SECURITY AGREEMENT . The Company issued the Senior
Notes under an Indenture dated as of August 27, 1997 (the "Indenture") between
the Company and the Trustee. The terms of the Senior Notes include those stated
in the Indenture and those made a part of the Indenture by reference to the
Trust Indenture Act of 1939, as amended (15 U.S. Code " 77aaa-77bbbb) (the
"TIA"). The Senior Notes are subject to all such terms, and Holders are referred
to the Indenture and the TIA for a statement of such terms. The Senior Notes are
senior obligations of the Company limited to $250.0 million in aggregate
principal amount at maturity. The Senior Notes are secured by a pledge of the
Pledged Collateral (as defined in the Indenture) pursuant to the Pledge and
Security Agreement referred to in the Indenture.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the Company
shall not have the option to redeem the Senior Notes prior to September 1, 2001.
Thereafter, the Company shall have the option to redeem the Senior Notes, in
whole or in part, upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed as percentages of principal amount set forth below
plus accrued and unpaid interest thereon and Liquidated Damages, if any, to the
applicable redemption date, if redeemed during the twelve-month period beginning
on September 1 of the years indicated below:
Year Percentage
2001....................................................... 106.125%
2002 and thereafter. ...................................... 103.063%
2003 and thereafter........................................ 100.000%
(b) Notwithstanding the foregoing, the Company, on or prior to
September 1, 2000, may redeem up to a maximum of 25% of the aggregate principal
amount of the Senior Notes then outstanding at a redemption price of 112.25% of
the principal amount thereof, with the net proceeds from either (i) an Initial
Public Offering of the common stock of the Company or (ii) a sale of the Capital
Stock (other than Disqualified Stock) of the Company to a Strategic Investor in
a single transaction or a series of related transactions for at least $25.0
million (clauses (i) and (ii) together, collectively referred to herein as
"Qualified Equity Offerings"); provided that, in either case, at least 75% in
aggregate principal amount of the Senior Notes remain outstanding immediately
after the occurrence of such redemption; and provided, further, that such
redemption shall occur within 90 days of the date of the closing of such
Qualified Equity Offering.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall not be
required to make mandatory redemption or sinking fund payments with respect to
the Senior Notes.
A-3
<PAGE>
7. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, the Company shall be
required to make an offer (a "Change of Control Offer") to each Holder of the
Senior Notes to repurchase all or any part (equal to $1,000 or an integral
multiple thereof) of such Holder's Senior Notes at a purchase price equal to
101% of the aggregate principal amount thereof plus accrued and unpaid interest
and Liquidated Damages, if any, to the date of repurchase (the "Change of
Control Payment"). Within ten days following any Change of Control, the Company
shall mail a notice to each Holder setting forth the procedures governing the
Change of Control Offer as required by the Indenture.
(b) If the Company or any Subsidiary consummates any Asset Sales, within
five Business Days of each date on which the aggregate amount of Excess Proceeds
exceeds $2.5 million, the Company shall offer to purchase (an "Asset Sale
Offer") the maximum principal amount of Senior Notes and 13% Notes (on a pro
rata basis based upon the relative aggregate principal amount of 13% Notes (or,
prior to April 15, 2001, the aggregate Accreted Value of 13% Notes) then
outstanding that may be purchased out of the Excess Proceeds at an offer price
in cash equal to 100% of aggregate principal amount thereof, plus accrued and
unpaid interest to the date of repurchase (or, in the case of repurchases of 13%
Notes prior to April 15, 2001, at a purchase price equal to 100% of the Accreted
Value thereof as of the date of repurchase) in accordance with the procedures
set forth in the Indenture, provided, that in the event of an Asset Sale of
Stock Collateral, the Company shall, purchase (i) first, all Senior Notes
tendered pursuant to such Asset Sale Offer in an aggregate principal amount
equal to the portion of such Excess Proceeds resulting from such Asset Sale of
Stock Collateral and (ii) second, all Senior Notes and 13% Notes on a pro rata
basis (in the same manner as described above) in an aggregate principal amount
(or, with respect to 13% Notes prior to April 15, 2001, an aggregate Accreted
Value) equal to the Excess Proceeds not used to purchase Senior Notes pursuant
to clause (i) of this proviso. The Senior Notes are in registered form without
coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of the Senior Notes may be registered and the Senior Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Senior Note or portion of a Senior Note
selected for redemption, except for the unredeemed portion of any Senior Note
being redeemed in part. Also, it need not exchange or register the transfer of
any Senior Notes for a period of 15 days before a selection of Senior Notes to
be redeemed or during the period between a record date and the corresponding
Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Senior Note may be
treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Senior Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the then outstanding
Senior Notes, and any existing default or compliance with any provision of the
Indenture, the Collateral Documents or the Senior Notes may be waived with the
consent of the Holders of a majority in aggregate principal amount of the then
outstanding Senior Notes. Without the consent of any Holder of a Senior Note,
the Indenture, the Collateral Documents or the Senior Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Senior Notes in addition to or in place of certificated Senior
Notes, to provide for the assumption of the Company's obligations to Holders of
the Senior Notes in case of a merger or consolidation, to make any change that
would provide any additional rights or benefits to the Holders of the Senior
Notes or that does not adversely affect the legal rights under the Indenture of
any such Holder, or to comply with the requirements of the SEC
A-4
<PAGE>
in order to effect or maintain the qualification of the Indenture under the
Trust Indenture Act.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30
days in the payment when due of interest on, or Liquidated Damages with respect
to, the Senior Notes; (ii) default in payment when due of principal of or
premium, if any, on the Senior Notes when the same becomes due and payable at
maturity, upon redemption (including in connection with an offer to purchase) or
otherwise, (iii) failure by the Company to comply with Section 4.07, 4.10, 4.15
or 5.01 of the Indenture; (iv) failure by the Company to comply with Section
4.09 of the Indenture; provided that in the event that the Company fails to
comply with Section 4.09 of the Indenture because indebtedness is deemed to be
incurred by a Restricted Joint Venture solely as a result of such Restricted
Joint Venture ceasing to be a Restricted Joint Venture as a result of (x) the
loss of a Local Partner or (y) the loss of management control of such Restricted
Joint Venture, and such failure continues for 90 days; (v) failure by the
Company for 30 days after notice to the Company by the Trustee or the Holders of
at least 25% in principal amount of the Senior Notes then outstanding to comply
with certain other agreements in the Indenture or the Senior Notes; (vi) default
under certain other agreements relating to Indebtedness of the Company which
default results in the acceleration of such Indebtedness prior to its express
maturity; (vii) certain final judgments for the payment of money that remain
undischarged for a period of 60 days; (viii) any breach or default by the
Company in the performance of any covenant set forth in the Collateral
Agreements which breach or default continues for 30 days, or any repudiation by
the Company of its obligation under any of the Collateral Agreements or the
unenforceability of any of the Collateral Agreements, for any reason; and (ix)
certain events of bankruptcy or insolvency with respect to the Company or any of
its Significant Subsidiaries or any of its Joint Ventures that would, if it were
a Subsidiary, constitute a Significant Subsidiary. If any Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Senior Notes may declare all the Senior
Notes to be due and payable immediately. Notwithstanding the foregoing, in the
case of an Event of Default arising from certain events of bankruptcy or
insolvency with respect to the Company, any of its Significant Subsidiaries or
any Joint Venture that would, if it were a Subsidiary constitute a Significant
Subsidiary, or any group of Subsidiaries or Joint Ventures that, taken together,
would, constitute a Significant Subsidiary, all outstanding Senior Notes shall
become due and payable without further action or notice. Holders of the Senior
Notes may not enforce the Indenture or the Senior Notes except as provided in
the Indenture. Subject to certain limitations, Holders of a majority in
principal amount of the then outstanding Senior Notes may direct the Trustee in
its exercise of any trust or power. The Trustee may withhold from Holders of the
Senior Notes notice of any continuing Default or Event of Default (except a
Default or Event of Default relating to the payment of principal or interest) if
it determines that withholding notice is in their interest. The Holders of a
majority in aggregate principal amount of the Senior Notes then outstanding by
notice to the Trustee may on behalf of the Holders of all of the Senior Notes
waive any existing Default or Event of Default and its consequences under the
Indenture, except a continuing Default or Event of Default in the payment of
interest on, or the principal of, the Senior Notes. The Company is required to
deliver to the Trustee annually a statement regarding compliance with the
Indenture, and the Company is required upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default.
13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not the Trustee.
14. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company, as such, shall not have any
liability for any obligations of the Company under the Senior Notes or the
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Senior Note waives and
releases all such liability. The waiver and release are
A-5
<PAGE>
part of the consideration for the issuance of the Senior Notes.
15. AUTHENTICATION. This Senior Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES. In
addition to the rights provided to Holders of the Senior Notes under the
Indenture, Holders of Transferred Restricted Securities shall have all the
rights set forth in the Registration Rights Agreement dated as of August 27,
1997, between the Company and the parties named on the signature pages thereof
(the "Registration Rights Agreement").
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Senior Notes and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to the Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Senior Notes or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
The Company shall furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Hyperion Telecommunications, Inc.
Main at Water Street
P.O. Box 472
Coudersport, Pennsylvania 16915
Telecopy: (814) 274-8631
Attention: Daniel R. Milliard
A-6
<PAGE>
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Hyperion Telecommunications, Inc.
Main at Water Street
P.O. Box 472
Coudersport, Pennsylvania 16915
Telecopy: (814) 274-8631
Attention: Daniel R. Milliard
Bank of Montreal Trust Company
77 Water Street
New York, New York 10005
Attention: Corporate Trust Department
Re: 12 1/4% Senior Secured Notes due 2004
Reference is hereby made to the Indenture, dated as of August 27, 1997
(the AIndenture@), between Hyperion Telecommunications, Inc., as issuer (the
ACompany@), and Bank of Montreal Trust Company, as trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.
______________, (the ATransferor@) owns and proposes to transfer the
Senior Note[s] or interest in such Senior Note[s] specified in Annex A hereto,
in the principal amount of $___________ in such Senior Note[s] or interests (the
ATransfer@), to __________ (the ATransferee@), as further specified in Annex A
hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1.__Check if Transferee will take delivery of a beneficial interest in the 144A
Global Note or a Restricted Definitive Note Pursuant to Rule 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the ASecurities Act@), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Restricted Definitive Note is being transferred to a Person that the
Transferor reasonably believed and believes is purchasing the beneficial
interest or Restricted Definitive Note for its own account, or for one or more
accounts with respect to which such Person exercises sole investment discretion,
and such Person and each such account is a Aqualified institutional buyer@
within the meaning of Rule 144A in a transaction meeting the requirements of
Rule 144A and such Transfer is in compliance with any applicable blue sky
securities laws of any state of the United States. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Restricted Definitive Note will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the 144A Global Note and/or the Restricted Definitive Note and in the Indenture
and the Securities Act.
2.__Check if Transferee will take delivery of a beneficial interest in the
Temporary Regulation S Global Note, the Regulation S Global Note or a Restricted
Definitive Note pursuant to Regulation S. The Transfer is being effected
pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act
and, accordingly, the Transferor hereby further certifies that (i) the Transfer
is not being made to a person in the United States and (x) at the time the buy
order was originated, the Transferee was outside the United
B-1
<PAGE>
States or such Transferor and any Person acting on its behalf reasonably
believed and believes that the Transferee was outside the United States or (y)
the transaction was executed in, on or through the facilities of a designated
offshore securities market and neither such Transferor nor any Person acting on
its behalf knows that the transaction was prearranged with a buyer in the United
States, (ii) no directed selling efforts have been made in contravention of the
requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities
Act, (iii) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act and (iv) if the proposed
transfer is being made prior to the expiration of the Restricted Period, the
transfer is not being made to a U.S. Person or for the account or benefit of a
U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed
transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Restricted Definitive Note will be subject to the
restrictions on Transfer enumerated in the Private Placement Legend printed on
the Regulation S Global Note, the Temporary Regulation S Global Note and/or the
Definitive Note and in the Indenture and the Securities Act.
3.__Check and complete if Transferee will take delivery of a Restricted
Definitive Note pursuant to any provision of the Securities Act other than Rule
144A or Regulation S. The Transfer is being effected in compliance with the
transfer restrictions applicable to Restricted Definitive Notes and pursuant to
and in accordance with the Securities Act and any applicable blue sky securities
laws of any state of the United States, and accordingly the Transferor hereby
further certifies that (check one):
(a)__such Transfer is being effected pursuant to and in accordance with
Rule 144 under the Securities Act;
or
(b)__such Transfer is being effected to the Company or a Subsidiary
thereof;
or
(c)__such Transfer is being effected pursuant to an effective registration
statement under the Securities Act and in compliance with the prospectus
delivery requirements of the Securities Act;
or
(d)__such Transfer is being effected to an Accredited Investor and pursuant
to an exemption from the registration requirements of the Securities Act other
than Rule 144A, Rule 144 or Rule 904, and the Transferor hereby further
certifies that the Transfer complies with the transfer restrictions applicable
to Restricted Definitive Notes and the requirements of the exemption claimed,
which certification is supported by (1) a certificate executed by the Transferee
in the form of Exhibit D to the Indenture and (2) if such Transfer is in respect
of a principal amount of Notes at the time of transfer of less than $100,000, an
Opinion of Counsel provided by the Transferor or the Transferee (a copy of which
the Transferor has attached to this certification), to the effect that such
Transfer is in compliance with the Securities Act. Upon consummation of the
proposed transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Restricted Definitive Note will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Definitive Notes and in the Indenture and the Securities Act.
4.__Check if Transferee will take delivery of a beneficial interest in an
Unrestricted Global Note or of an Unrestricted Definitive Note.
(a)__Check if Transfer is pursuant to Rule 144. (i) The Transfer is being
effected pursuant to and in accordance with Rule 144 under the Securities Act
and in compliance with the transfer restrictions contained in the Indenture and
any applicable blue sky securities laws of any state of the United States and
(ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order
<PAGE>
to maintain compliance with the Securities Act. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Unrestricted Definitive Note will no longer be subject to
the restrictions on transfer enumerated in the Private Placement Legend printed
on the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.
(b)__Check if Transfer is Pursuant to Regulation S. (i) The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Unrestricted Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.
(c)__Check if Transfer is Pursuant to Other Exemption. (i) The Transfer is
being effected pursuant to and in compliance with an exemption from the
registration requirements of the Securities Act other than Rule 144, Rule 903 or
Rule 904 and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any State of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Unrestricted Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
[Insert Name of Transferor]
By:
Name:
Title:
Dated: ,
B-3
B-3
<PAGE>
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a)__a beneficial interest in the:
(i) __ 144A Global Note (CUSIP ), or
(ii) __ Regulation S Global Note (CUSIP/CINS ), or
(b)__a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a)__a beneficial interest in the:
(i) __ 144A Global Note (CUSIP ), or
(ii) __ Regulation S Global Note (CUSIP/CINS ), or
(iii) __ Unrestricted Global Note (CUSIP ); or
(b)__a Restricted Definitive Note; or
(c)__an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
B-4
<PAGE>
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Hyperion Telecommunications, Inc.
Main at Water Street
P.O. Box 472
Coudersport, Pennsylvania 16915
Telecopy: (814) 274-8631
Attention: Daniel R. Milliard
Bank of Montreal Trust Company
77 Water Street
New York, New York 10005
Attention: Corporate Trust Department
Re: 12 1/4% Senior Secured Notes due 2004 (CUSIP )
-- ---- ------ ------- ----- --- ---- ------
Reference is hereby made to the Indenture, dated as of August 27, 1997
(the AIndenture@), between Hyperion Telecommunications, Inc., as issuer (the
ACompany@), and Bank of Montreal Trust Company, as trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.
, (the AOwner@) owns and proposes to exchange the Senior
Note[s] or interest in such Senior Note[s] specified herein, in the
principal amount of $____________ in such Note[s] or interests (the AExchange@).
In connection with the Exchange, the Owner hereby certifies that:
1.Exchange of Restricted Definitive Notes or Beneficial Interests in a
Restricted Global Note for Unrestricted Definitive Notes or Beneficial
Interests in an Unrestricted Global Note
(a)GCheck if Exchange is from beneficial interest in a Restricted
Global Note to beneficial interest in an Unrestricted Global Note. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the United States
Securities Act of 1933, as amended (the ASecurities Act@), (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the beneficial interest in an Unrestricted Global Note is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(b)GCheck if Exchange is from beneficial interest in a Restricted
Global Note to Unrestricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired
C-1
B-1
<PAGE>
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Unrestricted Definitive Note is being acquired
in compliance with any applicable blue sky securities laws of any state of the
United States.
(c)GCheck if Exchange is from Restricted Definitive Note to beneficial
interest in an Unrestricted Global Note. In connection with the Owner's Exchange
of a Restricted Definitive Note for a beneficial interest in an Unrestricted
Global Note, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d)GCheck if Exchange is from Restricted Definitive Note to
Unrestricted Definitive Note. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2.Exchange of Restricted Definitive Notes or Beneficial Interests in Restricted
Global Notes for Restricted Definitive Notes or Beneficial Interests in
Restricted Global Notes
(a)GCheck if Exchange is from beneficial interest in a Restricted
Global Note to Restricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b)GCheck if Exchange is from Restricted Definitive Note to beneficial
interest in a Restricted Global Note. In connection with the Exchange of the
Owner's Restricted Definitive Note for a beneficial interest in the [CHECK ONE]
G 144A Global Note or G Regulation S Global Note, with an equal principal
amount, the Owner hereby certifies (i) such Owner acquired such Restricted
Definitive Note in a transaction pursuant to Rule 144A or Regulation S, (ii) the
beneficial interest is being acquired for the Owner's own account without
transfer and (iii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any applicable
blue sky securities laws of any state of the United States. Upon consummation of
the proposed Exchange in accordance with the terms of the Indenture, the
beneficial interest issued will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the relevant Restricted
Global Note and in the Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
C-2
B-2
<PAGE>
[Insert Name of Owner]
By:
Name:
Title:
Dated: ,
C-3
B-3
<PAGE>
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Re: 12 1/4% Senior Secured Notes due 2004
Reference is hereby made to the Indenture, dated as of August 27, 1997
(the AIndenture@), between Hyperion Telecommunications, Inc., as issuer (the
ACompany@), and Bank of Montreal Trust Company, as trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of Restricted Definitive Notes we confirm that:
1. We understand that any subsequent transfer of the Senior Notes or
any interest therein is subject to certain restrictions and conditions set forth
in the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Senior Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the ASecurities Act@).
2. We understand that the Senior Notes have not been registered under
the Securities Act, and that the Senior Notes and any interest therein may not
be offered or sold except as permitted in the following sentence. We agree, on
our own behalf and on behalf of each account for which we acquire any Notes (for
which are acting as hereinafter stated), that such Notes may be offered, resold,
pledged or otherwise transferred only (i) to a person whom we reasonably believe
to be a Aqualified institutional buyer@ (as defined in Rule 144A under the
Securities Act) in a transaction meeting the requirements of Rule 144A, in a
transaction meeting the requirements of Rule 144 under the Securities Act,
outside the United States in a transaction meeting the requirements of Rule 904
under the Securities Act, or in accordance with another exemption from the
registration requirements of the Securities Act (and based upon an opinion of
counsel if the Company so Requests), (ii) to the Company or (iii) pursuant to an
effective registration statement, and, in each case, in accordance with any
applicable securities laws of any State of the United States or any other
applicable jurisdiction. We further agreement to provide to any person
purchasing the Definitive Note or a beneficial interest in a Global Note from us
in a transaction meeting the requirements of (i) or (ii) of this paragraph a
notice advising such purchaser that resales thereof are restricted as stated
herein.
3. We understand that, on any proposed resale of the Senior Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Senior Notes
purchased by us will bear a legend to the foregoing effect. We further
understand that any subsequent transfer by us of the Senior Notes or beneficial
interest therein acquired by us must be effected through one of the Placement
Agents.
4. We are an institutional Aaccredited investor@ (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Senior Notes, and we
and any accounts for which we are acting are each able to bear the economic risk
of our or its investment.
D-1
B-1
<PAGE>
5. We are acquiring the Senior Notes without a view to distribution
thereof in violation of the Securities Act for our own account or for one or
more accounts (each of which is an institutional Aaccredited investor@) as to
each of which we exercise sole investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
[Insert Name of Accredited Investor]
By:
Name:
Title:
Dated: ,
<PAGE>
ANNEX A
Form of Intercompany Note
FOR VALUE RECEIVED, __________________, a _______________ corporation
(the "Maker"), promises to pay Hyperion Telecommunications, Inc., a Delaware
corporation (the "Lender"), or order to be paid, all cash advanced, from time to
time, together with interest on the unpaid principal amount at a rate per annum
equal to ___%, to the date of payment. All principal and accrued interest under
this Note shall be due and payable on demand][on ____________].
This Note may be prepaid in whole or in part at any time without
penalty or premium.
The right to please any and all statutes of limitations as a defense to
demand hereunder is hereby waived to the extent permitted by law. The Maker, for
itself and its successors and assigns, waives presentment, demand, protest and
notice thereof or of dishonor, and waives the right to be released by reason of
any extension of time or change in the terms of payment or any change,
alteration, or release of any security given for the payment hereof.
This Note shall be governed by and construed in accordance with the
laws of the State of New York.
[MAKER]
By: ____________________________
Name:
Title:
Hyperion Telecommunications, Inc.
By: ____________________
Name:
Title:
D-3
D-3
<PAGE>
SCHEDULE A
Fiber Lease Agreements
Lease Agreement, dated as of December 12, 1995, by and between PECO
Energy Company and PECO Hyperion Telecommunications.
Lease Agreement, dated as of September 29, 1995, by and between Capital
Telecommunications, Inc. and Hyperion Telecommunications of Harrisburg.
Facilities Lease Agreement, dated as of June 1, 1995, by and between TKR
Cable Company and New Jersey Fiber Technologies.
Lease Agreement, dated 1993, by and between Multimedia Cablevision, Inc.
and Multimedia Hyperion Telecommunications.
Facilities Agreement, dated as of June 30, 1994, by and between
International Cablevision, Inc. and NHT Partnership.
Fiber Usage Master Agreement, dated as of August 1, 1992, by and between
NewChannels Corp. and NewChannels/Hyperion Telecommunications of New
York.
Fiber Usage Master Agreement, dated as of August 1, 1992, by and between
NewChannels/Hyperion Telecommunications of New York and Ionian
Communications, L.P. d/b/a Adelphia Cable Communications.
License Agreement, dated as of 1992, by and between Continental
Cablevision of Jacksonville, Inc. and Continental Fiber Technologies,
Inc.
Facilities Lease Agreement, dated as of January 30, 1995, by and between
TCI TKR of Jefferson County, Inc. and Louisville Lightwave.
Contract for the Use of Capacity, dated as of May 1, 1994, as amended, by
and between Viacom International, Inc. and AVR of Tennessee, L.P., d/b/a
Hyperion of Tennessee, L.P.
Facilities Agreement dated as of September 20, 1993, between TCI of
New York, Inc. and NHT Partnership.
License Agreement dated November 1, 1992, between Continental Cablevision
of Virginia, Inc. and Alternet of Virginia.
Facilities Agreement dated as of July 10, 1996, between TCI of Lexington,
Inc. and Louisville Lightwave.
D-4
<PAGE>
Lease Agreement between Susquehanna Cable Co. and Susquehanna Hyperion
Telecommunications, dated as of August 1, 1996, as amended.
Lease Agreement by and between Multi-Channel T.V. Cable Company d/b/a
Adelphia Cable Communications and Hyperion Telecommunications of Vermont,
Inc.
D-5
<PAGE>
SCHEDULE B
Local Partners
PECO Energy Company
Capital Telecommunications, Inc.
Sutton Capital Associates, Inc.
KRC/CCC Investment Partnership
A.C. Communications Inc.
Continental Telecommunications Corp. of Virginia
Multimedia Telecommunications, Inc.
TCI Telephony, Inc.
NewChannels Telecommunications of New York, Inc.
Continental Cablevision Investments, Inc.
TKR Cable of Kentucky, Inc.
Viacom Telecom Inc.
Robin Media Group, Inc.
InterMedia Partners Southeast
CCC-NJFT, Inc.
Advance/Newhouse Partnership
Digital Direct, Inc.
Lenfest Telephony, Inc.
Entergy Local Fiber Company, a division of Entergy Technology Holding
Company
Susquehanna Fiber Systems, Inc.
MediaOne
KRC-NJFT, Inc.
Any other Local Partners listed under, or who are parties to the Local
Partner Agreements
D-6
<PAGE>
listed on, Schedule C.
D-7
<PAGE>
SCHEDULE C
Local Partner Agreements
Partnership Agreement of PECO Hyperion Telecommunications, dated as of
October 9, 1995, by and between Hyperion Telecommunications of
Pennsylvania, Inc. and PECO Energy Company.
Partnership Agreement of Hyperion Telecommunications of Harrisburg, dated
as of September 25, 1994 between Hyperion Telecommunications of
Pennsylvania, Inc. and Capital Telecommunications, Inc., as amended.
New Jersey Fiber Technologies Partnership Agreement, dated as of June
1994, by and among Hyperion Telecommunications of New Jersey, Inc.,
Sutton Capital Associates, Inc., KRC/CCC Investment Partnership and A.C.
Communications Inc.
Joint Venture Agreement of Alternet of Virginia, dated as of November 1,
1992, by and between Hyperion Telecommunications of Virginia, Inc. and
Continental Telecommunications Corp. of Virginia.
General Partnership Agreement of Multimedia Hyperion Telecommunications,
dated as of September 1, 1993, by and between Hyperion Telecommunications
of Kansas, Inc., (assignee of Hyperion Telecommunications, Inc.) and
Multimedia Telecommunications, Inc.
NHT Partnership Agreement, dated as of September 20, 1993, by and among
Hyperion Telecommunications of New York, Inc., TCI Telephony, Inc. and
NewChannels Telecommunications of New York, Inc.
NewChannels/Hyperion Telecommunications of New York Agreement of General
Partnership, dated as of August 1, 1992 between Hyperion
Telecommunications of New York, Inc. and NewChannels Telecommunications
of New York, Inc., as amended, including First Addendum and Second
Addendum thereto.
Continental Fiber Technologies, Inc. Stock Purchase and Stockholders'
Agreement, dated as of August 31, 1992, by and among Hyperion
Telecommunications of Florida, Inc., Continental Cablevision Investments,
Inc. and Continental Fiber Technologies, Inc., n/k/a MediaOne Fiber
Technologies, Inc.
Limited Partnership Agreement of AVR of Tennessee, L.P., dated as of
November 15, 1993, by and among Hyperion Telecommunications of Tennessee,
Inc., InterMedia Partners Southeast and Robin Media Group, Inc., as
amended.
Louisville Lightwave General Partnership Agreement, dated as of July 20,
1994, by and between Hyperion Telecommunication of Kentucky, Inc. and TKR
Cable of Kentucky, Inc., as amended.
D-8
<PAGE>
Limited Partnership Agreement of Hyperion of Tennessee, L.P., dated as of
July 31, 1996, by and among Hyperion Telecommunications of Tennessee,
Inc., InterMedia Partners Southeast and Robin Media Group, Inc., as
amended.
Partnership Agreement of Susquehanna Hyperion Telecommunications by and
between Hyperion Telecommunications of Pennsylvania, Inc., and
Susquehanna Fiber Systems, Inc., dated as of August 1, 1996.
Operating Agreement of Entergy Hyperion Telecommunications of Louisiana,
L.L.C. dated as of April 24, 1997.
Operating Agreement of Entergy Hyperion Telecommunications of
Mississippi, L.L.C. dated as of April 24, 1997.
Operating Agreement of Entergy Hyperion Telecommunications of Arkansas,
L.L.C. dated as of April 24, 1997.
D-9
<PAGE>
SCHEDULE D
Management Agreements
Management Agreement, dated as of October 1995, by and between Hyperion
Telecommunications, Inc. and PECO Hyperion Telecommunications.
Management Agreement, dated as of September 29, 1995, by and between
Hyperion Telecommunications, Inc. and Hyperion Telecommunications of
Harrisburg.
Management Agreement, dated as of June 1995, by and between Hyperion
Telecommunications, Inc. and New Jersey Fiber Technologies.
Management and Consulting Agreement, dated as of November 1, 1992, by and
between Hyperion Telecommunications of Virginia, Inc. and Alternet of
Virginia.
Services Agreement, dated as of November 18, 1993, by and between
Hyperion Telecommunications, Inc. and Multimedia Hyperion
Telecommunications.
Management Agreement, dated as of June 30, 1994, by and between Hyperion
Telecommunications of New York, Inc. and NHT Partnership.
Letter Agreement, dated as of July 13, 1994, by and among Hyperion
Telecommunications, Inc. and NewChannels Hyperion Telecommunications (re:
accounting).
Network Monitoring Agreement, dated as of October 1, 1994, by and among
Hyperion Telecommunications, Inc. and NewChannels Hyperion
Telecommunications.
Network Monitoring Agreement, dated as of August 1, 1993, between EMI
Communications Corp. and NewChannels Hyperion Telecommunications.
Letter Agreement, dated August 16, 1993, as amended November 1994,
between Hyperion Telecommunications, Inc. and NewChannels Hyperion
Telecommunications (re:
accounting).
Letter Agreement, dated February 28, 1995, between Hyperion
Telecommunications, Inc. and NewChannels Hyperion Telecommunications (re:
accounting).
Network Monitoring Agreement, dated as of October 1, 1993, by and between
Hyperion Telecommunications, Inc. and Continental Fiber Technologies
d/b/a AlterNet, n/k/a MediaOne Fiber Technologies, Inc.
Management Agreement, dated as of January 30, 1995, by and between
Hyperion Telecommunications, Inc. and Louisville Lightwave.
- 10 -
D-10
<PAGE>
Management Agreement, dated as of November 15, 1993, by and between
Hyperion Telecommunications, Inc. and AVR of Tennessee, L.P., d/b/a
Hyperion of Tennessee, L.P., as amended.
Management Agreement, dated as of January 1, 1995, by and between
Hyperion Telecommunications, Inc. and Hyperion Telecommunications of
Vermont, Inc.
Management Agreement, dated as of June 27, 1995, by and between Hyperion
Telecommunications, Inc. and Hyperion Telecommunications of Virginia,
Inc.
Network Monitoring Agreement, dated as of October 1, 1993, between
Hyperion Telecommunications, Inc. and Alternet of Virginia.
Management and Consulting Agreement, dated as of June 1992, by and
between Hyperion Telecommunications of Florida, Inc. and Continental
Fiber Technologies, Inc.
Network Monitoring Agreement, dated as of December 1, 1994, between
Hyperion Telecommunications, Inc. and NewChannels Hyperion
Telecommunications.
Management Agreement between Hyperion Telecommunications, Inc. and
Entergy Hyperion Telecommunications of Louisiana, L.L.C. dated as of
April 24, 1997.
Management Agreement between Hyperion Telecommunications, Inc. and
Entergy Hyperion Telecommunications of Mississippi, L.L.C. dated as of
April 24, 1997.
Management Agreement between Hyperion Telecommunications, Inc. and
Entergy Hyperion Telecommunications of Arkansas, L.L.C. dated as of April
24, 1997.
Management Agreement between Hyperion Telecommunications, Inc. and
Susquehanna Hyperion Telecommunications, dated as of August 1, 1996, as
amended.
D-11
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE E
Form of Financial Information and Operating Data
of the Subsidiaries and the Joint Ventures Presented by Cluster
Data presented for the fiscal period ended ____________:
===========================================================================================================================
NORTH MID- MID-SOUTH OTHER
EAST ATLANTIC NETWORKS
<S> <C> <C> <C> <C>
FINANCIAL DATA
- ---------------------------------------------------------------------------------------------------------------------------
Total Revenue
- ---------------------------------------------------------------------------------------------------------------------------
Total Capital Expenditures
- ---------------------------------------------------------------------------------------------------------------------------
Total EBITDA
- ---------------------------------------------------------------------------------------------------------------------------
Proportional Revenue\*
- ---------------------------------------------------------------------------------------------------------------------------
Proportional Capital
Expenditures\*
- ---------------------------------------------------------------------------------------------------------------------------
Proportional EBITDA\*
- ---------------------------------------------------------------------------------------------------------------------------
STATISTICAL DATA
- ---------------------------------------------------------------------------------------------------------------------------
Route Miles
- ---------------------------------------------------------------------------------------------------------------------------
Fiber Miles
- ---------------------------------------------------------------------------------------------------------------------------
Buildings connected
- ---------------------------------------------------------------------------------------------------------------------------
LEC-COs collocated\**
- ---------------------------------------------------------------------------------------------------------------------------
Voice Grade Equivalent
Circuits
===========================================================================================================================
<FN>
\* Represents portion of revenue attributable to the Company.
\** Local Exchange Carrier's central office.
</FN>
</TABLE>
D-12
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE F
Form of Financial Information and Operating
Data of Hyperion of Tennessee, Inc., Hyperion of
Florida, Inc., Hyperion of Vermont, Inc., Hyperion
of Kentucky, Inc. and Hyperion of New York, Inc.
Data presented for the fiscal period ended_________________:
========================================================================================================================
<S> <C>
FINANCIAL DATA ($ in thousands)
- ------------------------------------------------------------------------------------------------------------------------
Total Revenue
- ------------------------------------------------------------------------------------------------------------------------
Total Capital Expenditures
- ------------------------------------------------------------------------------------------------------------------------
Total EBITDA
- ------------------------------------------------------------------------------------------------------------------------
Gross Property, Plant and Equipment
- ------------------------------------------------------------------------------------------------------------------------
STATISTICAL DATA
- ------------------------------------------------------------------------------------------------------------------------
Route Miles
- ------------------------------------------------------------------------------------------------------------------------
Fiber Miles
- ------------------------------------------------------------------------------------------------------------------------
Buildings connected
- ------------------------------------------------------------------------------------------------------------------------
LEC-COs collocated\*
- ------------------------------------------------------------------------------------------------------------------------
Voice Grade Equivalent
Circuits
- ------------------------------------------------------------------------------------------------------------------------
Access Lines
========================================================================================================================
<FN>
\* Local Exchange Carrier's central office.
</FN>
</TABLE>
D-13
<PAGE>
HYPERION TELECOMMUNICATIONS, INC.
SERIES A AND SERIES B
12 1/4% SENIOR SECURED NOTES DUE 2004
-----------------
INDENTURE
Dated as of August 27, 1997
-----------------
-----------------
BANK OF MONTREAL TRUST COMPANY
-----------------
Trustee
D-14
<PAGE>
<TABLE>
<CAPTION>
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
<S> <C>
310 (a)(1)..................................................................... 7.10
(a)(2).................................................................... 7.10
(a)(3) ................................................................... N.A.
(a)(4).................................................................... N.A.
(a)(5).................................................................... 7.10
(b) ...................................................................... 7.10
(c) ...................................................................... N.A.
311 (a) ....................................................................... 7.11
(b) ...................................................................... 7.11
(c) ...................................................................... N.A.
312 (a)........................................................................ 2.05
(b)....................................................................... 11.03
(c) ...................................................................... 11.03
313 (a) ....................................................................... 7.06
(b)(1) ................................................................... 10.03
(b)(2) ................................................................... 7.06
(c) ...................................................................... 7.06;10.03;11.02
(d)....................................................................... 7.06;10.03
314 (a) ....................................................................... 4.03;11.02;11.05
(b) ...................................................................... 10.02;10.03
(c)(1) ................................................................... 10.04
(c)(2) ................................................................... N.A.
(c)(3) ................................................................... N.A.
(d).......................................................................10.03;10.04;10.05
(e) ..................................................................... 11.05
(f)....................................................................... N.A.
315 (a)........................................................................ 7.01
(b)....................................................................... 7.05,11.02
(c) ..................................................................... 7.01
(d)....................................................................... 7.01
(e)....................................................................... 6.11
316 (a)(last sentence) ........................................................ 2.09
(a)(1)(A)................................................................. 6.05
(a)(1)(B) ................................................................ 6.04
(a)(2) ................................................................... N.A.
(b) ...................................................................... 6.07
(c) ...................................................................... 2.12
317 (a)(1) .................................................................... 6.08
(a)(2).................................................................... 6.09
(b) ...................................................................... 2.04
318 (a)........................................................................ 11.01
(b)....................................................................... N.A.
(c)....................................................................... 11.01
N.A. means not applicable.
<FN>
*This Cross-Reference Table is not part of the Indenture.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
<S> <C>
Section 1.01. Definitions....................................................... 1
Section 1.02. Other Definitions................................................. 18
Section 1.03. Incorporation by Reference of Trust Indenture Act................. 19
Section 1.04. Rules of Construction............................................. 19
ARTICLE 2
THE SENIOR NOTES
Section 2.01. Form and Dating................................................... 20
Section 2.02. Execution and Authentication...................................... 21
Section 2.03. Registrar and Paying Agent........................................ 21
Section 2.04. Paying Agent to Hold Money in Trust............................... 22
Section 2.05. Holder Lists...................................................... 22
Section 2.06. Transfer and Exchange............................................. 22
Section 2.07. Replacement Senior Notes.......................................... 33
Section 2.08. Outstanding Senior Notes.......................................... 33
Section 2.09. Treasury Senior Notes............................................. 34
Section 2.10. Temporary Senior Notes............................................ 34
Section 2.11. Cancellation...................................................... 34
Section 2.12. Record Date....................................................... 34
Section 2.13. Defaulted Interest................................................ 35
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee................................................ 35
Section 3.02. Selection of Senior Notes to Be Redeemed.......................... 35
Section 3.03. Notice of Redemption.............................................. 36
Section 3.04. Effect of Notice of Redemption.................................... 36
Section 3.05. Deposit of Redemption Price....................................... 37
Section 3.06. Senior Notes Redeemed in Part..................................... 37
Section 3.07. Optional Redemption............................................... 37
Section 3.08. Mandatory Redemption.............................................. 38
Section 3.09. Offer to Purchase by Application of Excess Proceeds............... 38
ARTICLE 4
COVENANTS
Section 4.01. Payment of Senior Notes........................................... 40
Section 4.02. Maintenance of Office or Agency................................... 40
Section 4.03. Reports........................................................... 41
Section 4.04. Compliance Certificate............................................ 41
Section 4.05. Taxes............................................................. 42
Section 4.06. Stay, Extension and Usury Laws.................................... 42
Section 4.07. Restricted Payments............................................... 42
Section 4.08. Dividend and Other Payment Restrictions Affecting
Subsidiaries...................................................... 44
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred
Stock............................................................. 45
<PAGE>
Section 4.10. Asset Sales....................................................... 47
Section 4.11. Transactions with Affiliates...................................... 49
Section 4.12. Liens............................................................. 50
Section 4.13. Line of Business.................................................. 50
Section 4.14. Corporate Existence............................................... 50
Section 4.15. Offer to Purchase Upon Change of Control.......................... 50
Section 4.16. Limitations on Sale and Leaseback Transactions......................... 51
Section 4.17. Loans to Subsidiaries and Joint Ventures............................... 52
Section 4.18. Limitation on Status as Investment Company............................. 52
Section 4.19. Payments for Consent................................................... 52
Section 4.20. Independent Directors.................................................. 52
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.......................... 53
Section 5.02. Successor Corporation Substituted................................. 53
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default................................................. 54
Section 6.02. Acceleration...................................................... 56
Section 6.03. Other Remedies.................................................... 56
Section 6.04. Waiver of Past Defaults........................................... 57
Section 6.05. Control by Majority............................................... 57
Section 6.06. Limitation on Suits............................................... 57
Section 6.07. Rights of Holders of Senior Notes to Receive Payment.............. 58
Section 6.08. Collection Suit by Trustee........................................ 58
Section 6.09. Trustee May File Proofs of Claim.................................. 58
Section 6.10. Priorities........................................................ 58
Section 6.11. Undertaking for Costs............................................. 59
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee................................................. 59
Section 7.02. Rights of Trustee................................................. 60
Section 7.03. Individual Rights of Trustee...................................... 61
Section 7.04. Trustee's Disclaimer.............................................. 61
Section 7.05. Notice of Defaults................................................ 61
Section 7.06. Reports by Trustee to Holders of the Senior Notes................. 61
Section 7.07. Compensation and Indemnity........................................ 62
Section 7.08. Replacement of Trustee............................................ 62
Section 7.09. Successor Trustee by Merger, etc.................................. 63
Section 7.10. Eligibility; Disqualification..................................... 63
Section 7.11. Preferential Collection of Claims Against The Company............. 64
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant
Defeasance........................................................ 64
Section 8.02. Legal Defeasance and Discharge.................................... 64
2
<PAGE>
Section 8.03. Covenant Defeasance............................................... 64
Section 8.04. Conditions to Legal or Covenant Defeasance........................ 65
Section 8.05. Deposited Money and Government Securities to be Held
in Trust; Other Miscellaneous Provisions.......................... 66
Section 8.06. Repayment to The Company.......................................... 67
Section 8.07. Reinstatement..................................................... 67
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of the Senior Notes.................... 67
Section 9.02. With Consent of Holders of Senior Notes........................... 68
Section 9.03. Compliance with Trust Indenture Act............................... 69
Section 9.04. Revocation and Effect of Consents................................. 69
Section 9.05. Notation on or Exchange of Senior Notes........................... 70
Section 9.06. Trustee to Sign Amendments, etc................................... 70
ARTICLE 10
COLLATERAL AND SECURITY
Section 10.01. Pledge Agreement...................................................... 70
Section 10.02. Recording and Opinions................................................ 71
Section 10.03. Release of Collateral................................................. 71
Section 10.04. Certificates of the Company........................................... 72
Section 10.05. Certificates of the Trustee........................................... 72
Section 10.06. Authorization of Actions to Be Taken by the Trustee
Under the Pledge Agreement........................................ 72
Section 10.07. Authorization of Receipt of Funds by the Trustee Under
the Pledge Agreement.............................................. 73
Section 10.09. Termination of Security Interest...................................... 73
ARTICLE 11
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls...................................... 73
Section 11.02. Notices........................................................... 73
Section 11.03. Communication by Holders of Senior Notes with Other
Holders of Senior Notes........................................... 75
Section 11.04. Certificate and Opinion as to Conditions Precedent................ 75
Section 11.05. Statements Required in Certificate or Opinion..................... 75
Section 11.06. Rules by Trustee and Agents....................................... 76
Section 11.07. No Personal Liability of Directors, Officers, Employees
and Stockholders.................................................. 76
Section 11.08. Governing Law..................................................... 76
Section 11.09. No Adverse Interpretation of Other Agreements..................... 76
Section 11.10. Successors........................................................ 76
Section 11.11. Severability...................................................... 76
Section 11.12. Counterpart Originals............................................. 76
Section 11.13. Table of Contents, Headings, etc.................................. 77
</TABLE>
EXHIBITS
3
<PAGE>
Exhibit A-1 Form of Restricted Definitive Note, Regulation S Permanent
Global Note and Rule 144A Global Note Exhibit A-2 Form of Regulation S
Temporary Global Note Exhibit A-3 Form of Unrestricted Note Exhibit B
Form of Certificate of Transfer Exhibit C Form of Certificate of
Exchange Exhibit D Form of Certificate from Acquiring Institutional
Accredited Investor
ANNEXES
Annex A FORM OF INTERCOMPANY NOTE
SCHEDULES
Schedule A Fiber Lease Agreements
Schedule B Local Partners
Schedule C Local Partner Agreements
Schedule D Management Agreements
Schedule E Form of Financial Information and Operating Data
of the Subsidiaries and the Joint Ventures
Presented by Cluster
Schedule F Form of Financial Information and Operating Data of Hyperion
of Tennessee, Inc., Hyperion of Florida, Inc.,
Hyperion of Vermont, Inc., Hyperion of Kentucky,
Inc. and Hyperion of New York, Inc.
4
<PAGE>
EXHIBIT 4.03
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement") is made and entered
into as of August 27, 1997 by HYPERION TELECOMMUNICATIONS, INC., a Delaware
corporation ("the Company"), having its principal office at Main at Water
Street, P.O. Box 472, Coudersport, Pennsylvania 15912, in favor of Bank of
Montreal Trust Company having an office at 77 Water Street, New York, New York
10005, as collateral agent (the ACollateral Agent@) for the holders (the
"Holders") of the Company's 12 1/4% Senior Secured Notes due 2004 (the "Notes").
Capitalized terms used and not defined herein shall have the meanings given to
such terms in the Indenture referred to below.
W I T N E S S E T H:
WHEREAS, the Company is the legal and beneficial owner of (i)
all of the issued and outstanding shares of capital stock set forth in Column
(b) of Schedule I hereto (the APledged Shares@) of each of the entities set
forth in Column (a) of Schedule 1 hereto (collectively the "Pledged Entities");
and
WHEREAS, the Company and Bank of Montreal Trust Company, as
trustee, have entered into that certain indenture dated as of August 27, 1997
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the "Indenture"), pursuant to which the Company issued $250 million in
aggregate principal amount of 12 1/4% Senior Secured Notes due 2004 (together
with any notes issued in replacement thereof or in exchange or substitution
therefor or in addition thereto, the ANotes@); and
WHEREAS, in order to secure the Notes issued pursuant to the
Indenture, the Company has agreed to (i) on the date hereof, pledge to the
Collateral Agent for the ratable benefit of the Holders of Notes, and grant to
the Collateral Agent for the ratable benefit of the Holders of Notes a security
interest in all of the outstanding Capital Stock (collectively, the "Initial
Pledged Shares") of each of Hyperion Telecommunications of Vermont, Inc.
("Hyperion Vermont"), Hyperion Telecommunications of Tennessee, Inc. ("Hyperion
Tennessee") and Hyperion Telecommunications of Florida, Inc. ("Hyperion
Florida," and together with Hyperion Vermont and Hyperion Tennessee, the
"Initial Pledged Entities"); (ii) subsequent to the date hereof, but in no event
later than the first anniversary of the date hereof, upon the earlier of (A)
consummation of each of the New York Rollup (as defined herein) and the Kentucky
Rollup (as defined herein) or, in the alternative, (B) receipt of the Requisite
Consents (as defined herein), pledge to the Collateral Agent for the ratable
benefit of the Holders of Notes, and grant to the Collateral Agent for the
ratable benefit of the Holders of Notes a security interest in all of
outstanding the Capital Stock (collectively, the "Additional Pledged Shares,"
and together with the Initial Pledged Shares, the "Pledged Shares") of each of
Hyperion Telecommunications of New York, Inc. ("Hyperion New York") and Hyperion
Telecommunications of Kentucky, Inc. ("Hyperion Kentucky," and together with
Hyperion New York, the "Additional Pledged Entities"); and (iii) execute and
deliver this Agreement in order to secure the payment and performance by the
Company of all of the Obligations of the Company under the Indenture and the
Notes (the "Obligations").
<PAGE>
AGREEMENT
NOW, THEREFORE, in consideration of the premises, and in order
to induce the Holders of Notes to purchase the Notes, the Company hereby agrees
with the Collateral Agent for its benefit and the ratable benefit of the Holders
of Notes as follows:
SECTION 1. Pledge and Creation of Security Interest in the Initial
Collateral. The Company hereby pledges to the Collateral Agent for its benefit
and for the ratable benefit of the Holders of Notes, and grants to the
Collateral Agent for the ratable benefit of the Holders of Notes, a continuing
first priority security interest in all of its right, title and interest in the
following (the "Initial Collateral"):
(a) the Initial Pledged Shares and the certificates representing the
Initial Pledged Shares, and, subject to the provisions of Section 6, all
products and proceeds of any of the Initial Pledged Shares, including,
without limitation, all dividends, cash, options, warrants, rights,
instruments, subscriptions and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Initial Pledged Shares or any of the
foregoing; and
(b) all additional shares of, and all securities convertible into or
exercisable or exchangeable for, and all warrants, options or other rights
to purchase, Capital Stock of or other Equity Interests in the Initial
Pledged Entities from time to time acquired by the Company in any manner,
and the certificates representing such additional Capital Stock and Equity
Interests (any such additional Capital Stock and Equity Interests and
other items shall constitute part of the Initial Pledged Shares under and
as defined in this Agreement), and all products and proceeds of any of the
foregoing, including, without limitation, subject to the provisions of
Section 6, all dividends, cash, options, warrants, rights, instruments,
subscriptions, and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any
or all of the foregoing.
SECTION 1A. Pledge and Creation of Security Interest in the Additional
Collateral.
(a) Immediately upon the earlier of (i) the consummation by the Company of
the New York Rollup (as defined below) and the Kentucky Rollup (as defined
below), (ii) the receipt by the Company of the consent of each of
Advance/Newhouse Partnership ("Advance"), and TCI Telephony, Inc. ("TCI") to the
pledge by the Company of all of the Capital Stock of Hyperion New York to secure
the Obligations of the Company pursuant to the terms of the Indenture and the
Notes and in accordance with this Agreement (the "New York Consent") and (iii)
the first anniversary of the date hereof, the Company shall pledge to the
Collateral Agent for its benefit and for the ratable benefit of the Holders of
Notes, and grant to the Collateral Agent for the ratable benefit of the Holders
of Notes, a continuing first priority security interest in all of its right,
title and interest in the following (the "HNY Pledged Collateral"):
(A) all of the outstanding Capital Stock of and other Equity
Interests in Hyperion New York (the "HNY Pledged Shares") and the
certificates representing the HNY Pledged Shares, and, subject to the
provisions of Section 6, all products and proceeds of any of the HNY
Pledged Shares, including, without limitation, all dividends, cash,
options, warrants, rights, instruments, subscriptions and other property
or proceeds from time to time received, receivable or otherwise
distributed in respect of or in
<PAGE>
exchange for any or all of the HNY Pledged Shares or any of the foregoing;
and
(B) all additional shares of, and all securities convertible into or
exercisable or exchangeable for, and all warrants, options or other rights
to purchase, Capital Stock of or other Equity Interests in Hyperion New
York from time to time acquired by the Company in any manner, and the
certificates representing such additional Capital Stock and Equity
Interests (any such additional Capital Stock and Equity Interests and
other items shall constitute part of the HNY Pledged Shares under and as
defined in this Agreement), and all products and proceeds of any of the
foregoing, including, without limitation, subject to the provisions of
Section 6, all dividends, cash, options, warrants, rights, instruments,
subscriptions, and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any
or all of the foregoing.
(b) Immediately upon the earlier of (i) the consummation by the Company of
the Kentucky Rollup (as defined below), (ii) the receipt by the Company of the
consent of TCI to the pledge by the Company of all of the Capital Stock of
Hyperion Kentucky to secure the Obligations of the Company pursuant to the terms
of the Indenture and the Notes and in accordance with this Agreement (the
"Kentucky Consent," and together with the New York Consent, the "Requisite
Consents") and (iii) the first anniversary of the date hereof, the Company shall
pledge to the Collateral Agent for its benefit and for the ratable benefit of
the Holders of Notes, and grant to the Collateral Agent for the ratable benefit
of the Holders of Notes, a continuing first priority security interest in all of
its right, title and interest in the following (the "HKY Pledged Collateral"):
(A) all of the outstanding Capital Stock of and other Equity
Interests in Hyperion Kentucky (the "HKY Pledged Shares") and the
certificates representing the HKY Pledged Shares, and, subject to the
provisions of Section 6, all products and proceeds of any of the HKY
Pledged Shares, including, without limitation, all dividends, cash,
options, warrants, rights, instruments, subscriptions and other property
or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the HKY Pledged
Shares or any of the foregoing; and
(B) all additional shares of, and all securities convertible into or
exercisable or exchangeable for, and all warrants, options or other rights
to purchase, Capital Stock of or other Equity Interests in Hyperion
Kentucky from time to time acquired by the Company in any manner, and the
certificates representing such additional Capital Stock and Equity
Interests (any such additional Capital Stock and Equity Interests and
other items shall constitute part of the HKY Pledged Shares under and as
defined in this Agreement), and all products and proceeds of any of the
foregoing, including, without limitation, subject to the provisions of
Section 6, all dividends, cash, options, warrants, rights, instruments,
subscriptions, and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any
or all of the foregoing.
(c) In the event that the Company fails to comply with (a) or (b) above,
the sole remedy shall be as set forth in Section 10.08 in the Indenture and the
related provisions of the Notes.
For purposes of this Agreement: (i) the "New York Rollup" means the
consummation by the Company of the transactions contemplated by that certain
Purchase Agreement, dated May 8, 1997 by and between Hyperion New York and
Advance, and certain additional agreements entered into between and among
Hyperion New York, the Company and Advance on the same date; (ii) the "Kentucky
Rollup" means the
<PAGE>
consummation by the Company of the transactions contemplated by that certain
Purchase Agreement, dated August 11, 1997 by and between Hyperion Kentucky, TCI
and certain additional agreements entered into between and among Hyperion
Kentucky, the Company and TCI on the same date; and (iii) the New York Rollup
and the Kentucky Rollup are collectively referred to herein as the "Rollups."
The HNY Pledged Collateral and the HKY Pledge Collateral are referred to
herein as the "Additional Collateral." The Initial Collateral and the Additional
Collateral (to the extent that such Additional Collateral is or has been pledged
pursuant to this Section 1A) are referred to herein as the "Pledged Collateral."
SECTION 2. Security for Obligations. This Agreement secures the
prompt and complete payment and performance when due (whether at stated
maturity, by acceleration or otherwise) of all Obligations of the Company under
the Indenture, the Notes, including, without limitation, interest and any other
Obligations accruing after the date of any filing by the Company of any petition
in bankruptcy or the commencement of any bankruptcy, insolvency or similar
proceeding with respect to the Company and the Registration Rights Agreement.
SECTION 3. Delivery of Pledged Collateral. The Company hereby agrees
that all certificates or instruments representing or evidencing the Pledged
Collateral shall be immediately delivered to and held at all times by the
Collateral Agent pursuant hereto in the State of New York and shall be in
suitable form for transfer by delivery, or issued in the name of the Company and
accompanied by instruments of transfer or assignment duly executed in blank and
undated, and in either case having attached thereto all requisite federal or
state stock transfer tax stamps, all in form and substance satisfactory to
create a first priority security interest in the Pledged Collateral.
SECTION 4. Representations and Warranties. The Company hereby makes
all representations and warranties applicable to the Company contained in the
Indenture. The Company further represents and warrants that:
(a) The execution, delivery and performance by the Company of this
Agreement are within the Company's corporate powers, have been duly
authorized by all necessary corporate action, and do not contravene, or
constitute a default under, any provision of applicable law or regulation
or of the certificate of incorporation or bylaws of the Company or of any
agreement, judgment, injunction, order, decree or other instrument binding
upon the Company, or result in the creation or imposition of any Lien on
any assets of the Company, other than the Lien contemplated hereby.
(b) The Pledged Shares have been duly authorized and validly issued
and are fully paid and non-assessable.
(c) The Pledged Shares constitute all of the issued and outstanding
Equity Interests of the Pledged Entities and constitute all of the Equity
Interests of the Pledged Entities beneficially owned by the Company.
(d) The Company is the legal, record and beneficial owner of the
Pledged Collateral, free and clear of any and all Liens or claims of any
Person except (i) with respect to the Initial Collateral, the security
interest created by this Agreement and (ii) with respect to the Additional
Collateral, the Lien contained in the applicable partnership agreement;
provided that upon the pledge by the Company of
<PAGE>
the Additional Collateral pursuant to the terms of this Agreement, such
collateral will be free and clear of any and all Liens or claims of any
person except for the security interest created by this Agreement.
(e) The Company has full power and authority to enter into this
Agreement and has the right to vote, pledge and grant a security interest
in the Initial Collateral as provided by this Agreement, and with respect
to the Additional Collateral, upon the consummation of the Rollups, the
Company will have the right to vote, pledge and grant a security interest
in the Additional Collateral as provided by this Agreement.
(f) This Agreement has been duly executed and delivered by the
Company and constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms.
(g) Upon the delivery to the Collateral Agent of the Pledged
Collateral and (as to certain proceeds therefrom, if any) the filing of
Uniform Commercial Code (the AUCC@) financing statements in the
appropriate jurisdictions, the pledge of the Pledged Collateral pursuant
to this Agreement creates a valid and perfected first priority security
interest in the Pledged Collateral, securing the payment of the
Obligations for the benefit of the Collateral Agent and the Holders of
Notes, and enforceable as such against all creditors of the Company and
any Persons purporting to purchase any of the Pledged Collateral from the
Company.
(h) No consent of any other Person and no consent, authorization,
approval, or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required either (i) for the
pledge by the Company of the Pledged Collateral pursuant to this Agreement
or for the execution, delivery or performance of this Agreement by the
Company or (ii) except as set forth on Schedule II hereto with respect to
the Pledged Collateral, for the exercise by the Collateral Agent of the
voting or other rights provided for in this Agreement or the remedies in
respect of the Pledged Collateral pursuant to this Agreement (except, in
each case, as may be required in connection with such disposition by laws
affecting the offering and sale of securities).
(i) Other than proceedings related to obtaining governmental approval
for the Rollups, no litigation, investigation or proceeding of or before
any arbitrator or governmental authority is pending or, to the best
knowledge of the Company, threatened by or against the Company or against
any of its properties or revenues with respect to this Agreement or any of
the transactions contemplated hereby.
(j) The pledge of the Pledged Collateral pursuant to this Agreement
is not prohibited by any applicable law or governmental regulation,
release, interpretation or opinion of the Board of Governors of the
Federal Reserve System or other regulatory agency (including, without
limitation, Regulations G, T, U and X of the Board of Governors of the
Federal Reserve System).
(k) All information set forth herein relating to the Pledged
Collateral is accurate and complete in all respects.
SECTION 5. Further Assurance. The Company shall at all times cause
the security interests granted pursuant to this Agreement to constitute valid
perfected first priority security interests in the Pledged
<PAGE>
Collateral, enforceable as such against all creditors of the Company and (except
as otherwise specifically provided herein) any Persons purporting to purchase
any Pledged Collateral from the Company. The Company shall, promptly upon
request by the Collateral Agent, execute and deliver or cause to be executed and
delivered, or use its best efforts to procure, all stock powers, proxies, tax
stamps, assignments, instruments and other documents, all in form and substance
satisfactory to the Collateral Agent, deliver any instruments to the Collateral
Agent and take any other actions that are necessary or, in the reasonable
opinion of the Collateral Agent, desirable to perfect, continue the perfection
of, or protect the first priority of the Collateral Agent's security interest
in, the Pledged Collateral, to protect the Pledged Collateral against the
rights, claims, or interests of third persons, to enable the Collateral Agent to
exercise or enforce its rights and remedies hereunder, or otherwise to effect
the purposes of this Agreement. The Company also hereby authorizes the
Collateral Agent to file any financing or continuation statements with respect
to the Pledged Collateral without the signature of the Company to the extent
permitted by applicable law. The Company shall pay all costs incurred in
connection with any of the foregoing.
SECTION 6. Voting Rights; Dividends; Etc.
(a) So long as no Event of Default shall have occurred and be
continuing, the Company shall be entitled to exercise any and all voting
and other consensual rights pertaining to the Pledged Shares or any part
thereof for any purpose not inconsistent with the terms of this Agreement
or the Indenture; provided, however, that the Company shall not exercise
or shall refrain from exercising any such right if such action or omission
would be inconsistent with or violate any provisions of this Agreement or
the Indenture.
(b) So long as no Event of Default shall have occurred and be
continuing, and subject to the other terms and conditions of the
Indenture, the Company shall be entitled to receive, and to utilize
(subject to the provisions of the Indenture) free and clear of the Lien of
this Agreement, all regular cash dividends, interest, principal and other
payments and distributions paid from time to time in respect of the
Pledged Shares, provided that upon the occurrence and during the
continuance of an Event of Default, any and all (i) dividends, other
distributions, interest and principal payments paid or payable in the form
of instruments and/or other property received, receivable or otherwise
distributed in respect of, or in exchange for, any Pledged Collateral,
(ii) dividends and other distributions paid or payable in cash in respect
of any Pledged Shares in connection with a partial or total liquidation or
dissolution or in connection with a reduction of capital, capital surplus
or paid-in-surplus, and (iii) cash paid, payable or otherwise distributed
in redemption of, or in exchange for, any Pledged Collateral, shall in
each case be forthwith delivered to the Collateral Agent to hold as
Pledged Collateral and shall, if received by the Company, be received in
trust for the benefit of the Collateral Agent and the Holders of Notes, be
segregated from the other property and funds of the Company and be
forthwith delivered to the Collateral Agent as Pledged Collateral in the
same form as so received (with any necessary endorsements).
(c) The Collateral Agent shall execute and deliver (or cause to be
executed and delivered) to the Company all such proxies and other
instruments as the Company may reasonably request in writing for the
purpose of enabling the Company to exercise the voting and other rights
that it is entitled to exercise pursuant to Sections 6(a) and 6(b) above.
(d) Upon the occurrence and during the continuance of an Event of
Default, (i) all rights of the
<PAGE>
Company to exercise the voting and other consensual rights that it would
otherwise be entitled to exercise pursuant to Section 6(a) shall
immediately and automatically cease, and all such rights shall thereupon
become vested in the Collateral Agent, which, to the extent permitted by
law, shall thereupon have the sole right to exercise such voting and other
consensual rights, and (ii) all dividends and other distributions payable
in respect of the Pledged Collateral shall be paid to the Collateral Agent
and the Company's right to receive such cash payments pursuant to Section
6(b) hereof shall immediately cease.
(e) Upon the occurrence and during the continuance of an Event of
Default, the Company shall execute and deliver (or cause to be executed
and delivered) to the Collateral Agent all such proxies, dividend and
interest payment orders and other instruments as are necessary or
desirable to enable the Collateral Agent to exercise the voting and other
rights that it is entitled to exercise pursuant to Section 6(d) above.
(f) All payments of interest, principal or premium and all dividends
and other distributions that are received by the Company contrary to the
provisions of this Section 6 shall be received in trust for the benefit of
the Collateral Agent and the Holders, shall be segregated from the other
property or funds of the Company and shall be forthwith delivered to the
Collateral Agent as Pledged Collateral in the same form as so received
(with any necessary endorsements).
SECTION 7. Covenants. The Company hereby covenants and agrees with
the Collateral Agent and the Holders of Notes that it shall comply with all of
the obligations, requirements and restrictions applicable to the Company
contained in the Indenture. The Company further covenants and agrees, from and
after the date of this Agreement and until the Obligations have been paid in
full, as follows:
(a) The Company agrees that it shall not (i) other than as permitted
by and in accordance with the Indenture and Section 18.17(b) hereof, sell,
assign, transfer, convey or otherwise dispose of, or grant any option or warrant
with respect to, any of the Pledged Collateral without the prior written consent
of the Collateral Agent acting in accordance with the directions of the Holders,
(ii) create or permit to exist any Lien upon or with respect to any of the
Pledged Collateral (except for the security interest granted under this
Agreement, and, with respect to the Additional Collateral, until such time as
the Additional Collateral is pledged for the benefit of the Holders of the Notes
pursuant to Section 1A hereof, the Liens contained in the applicable partnership
agreements) and at all times will be the sole beneficial owner of the Pledged
Collateral, (iii) enter into any agreement or understanding that purports to or
that may restrict or inhibit the Collateral Agent's rights or remedies
hereunder, including, without limitation, the Collateral Agent's right to sell
or otherwise dispose of the Pledged Collateral, (iv) take any action, or permit
the taking of any action by the Pledged Entities, with respect to the Pledged
Collateral the taking of which would result in a violation of the Indenture or
this Agreement, including, without limitation, the issuance by the Pledged
Entities of any additional Equity Interests or promissory notes or the
incurrence by the Pledged Entities of any Indebtedness to Persons other than the
Company (except as permitted by the Indenture), (v) permit any of the Pledged
Entities to merge or consolidate with or into another person or entity or sell
or transfer all or substantially all of its assets to another person or entity,
unless (x) the Company shall have delivered to the Collateral Agent an Opinion
of Counsel substantially in the form of Exhibit A-1 hereto and a certificate
executed by the President and Chief Financial Officer of the Company
substantially in the form of Exhibit B hereto and (y) all outstanding capital
stock of the surviving entity in such merger or consolidation or of the entity
to whom such sale or transfer was made, together with any promissory notes
issued by such entity in favor of the Company are, upon such merger or
consolidation, pledged hereunder to and deposited with the Collateral
<PAGE>
Agent, or (vi) fail to pay or discharge any tax, assessment or levy of any
nature not later than five days prior to the date of any proposed sale under any
judgement, writ or warrant of attachment with regard to the Pledged Collateral.
(b) The Company agrees that immediately upon becoming the beneficial
owner of any additional shares of Capital Stock or Equity Interests of the
Pledged Entities (including as a result of the merger or consolidation of the
Issuer with or into another entity) it shall pledge and deliver to the
Collateral Agent for its benefit and the ratable benefit of the Holders and
grant to the Collateral Agent for its benefit and the ratable benefit of the
Holders, a continuing first priority security interest in such shares or Equity
Interests (as well as instruments of transfer or assignment duly executed in
blank and undated and any necessary stock transfer tax stamps, all in form and
substance satisfactory to create a first priority security interest in the
Pledged Collateral). The Company further agrees that it shall promptly deliver
to the Collateral Agent a certificate executed by a principal executive officer
of the Company describing such additional shares or Equity Interests and
certifying that the same have been duly pledged and delivered to the Collateral
Agent hereunder.
(b) The Company agrees that, in accordance with the terms of Section
1A hereof, it shall pledge and deliver to the Collateral Agent for its benefit
and the ratable benefit of the Holders and grant to the Collateral Agent for its
benefit and the ratable benefit of the Holders, a continuing first priority
security interest in the Additional Pledged Shares (as well as instruments of
transfer or assignment duly executed in blank and undated and any necessary
stock transfer tax stamps, all in form and substance satisfactory to create a
first priority security interest in the Additional Pledged Collateral). The
Company further agrees that it shall concurrently with such pledge of the
Additional Pledged Collateral, deliver to the Collateral Agent an opinion of
counsel substantially in the form of Exhibit A-2 hereto and certificate executed
by a principal executive officer of the Company certifying that the Additional
Pledged Shares have been duly pledged and delivered to the Collateral Agent
hereunder and constitutes Pledged Collateral for all purposes hereunder and
under the Indenture.
SECTION 8. Power of Attorney. In addition to all of the powers
granted to the Collateral Agent pursuant to Section 10.06 of the Indenture, the
Company hereby appoints and constitutes the Collateral Agent as the Company's
attorney-in-fact to exercise all of the following powers upon and at any time
after the occurrence of an Event of Default for so long as such Event of Default
is continuing: (i) collection of proceeds of any Pledged Collateral; (ii)
conveyance of any item of Pledged Collateral to any purchaser thereof; (iii)
giving of any notices or recording of any Liens under Section 5 hereof; (iv)
making of any payments (upon receipt of funds thereof) or taking any acts under
Section 9 hereof and (v) paying or discharging taxes or Liens levied or placed
upon or threatened against the Pledged Collateral, in the amounts necessary to
discharge the same, and such payments made by the Collateral Agent to become the
obligations of the Company to the Collateral Agent, due and payable immediately
without demand. The Collateral Agent's authority hereunder shall include,
without limitation, the authority to endorse and negotiate, for the Collateral
Agent's own account, any checks or instruments in the name of the Company,
execute and give receipt for any certificate of ownership or any document,
transfer title to any item of Pledged Collateral, sign the Company's name on all
financing statements or any other documents deemed necessary or appropriate to
preserve, protect or perfect the security interest in the Pledged Collateral and
to file the same, prepare, file and sign the Company's name on any notice of
Lien, and prepare, file and sign the Company's name on a proof of claim in
bankruptcy or similar document against any customer of the Company, and to take
any other actions arising from or incident to the powers granted to the
Collateral Agent in this Agreement. This
<PAGE>
power of attorney is coupled with an interest and is irrevocable by the Company.
SECTION 9. Collateral Agent May Perform. If the Company fails to
perform any agreement contained herein, the Collateral Agent may itself perform,
or cause performance of, such agreement, and the reasonable expenses of the
Collateral Agent incurred in connection therewith shall be payable by the
Company under Section 14 hereof. No provision of this Agreement shall require
the Collateral Agent to expend or risk its own funds or incur any liability. The
Collateral Agent shall be under no obligation to exercise any of its rights and
powers under this Agreement at the request of the Holders of the Notes, unless
such Holders shall have offered the Collateral Agent security and indemnity
satisfactory to it against any loss, liability or expenses.
SECTION 10. No Assumption of Duties; Reasonable Care. The rights and
powers granted to the Collateral Agent hereunder are being granted in order to
preserve and protect the Collateral Agent's and the Holders' of Notes security
interest in and to the Pledged Collateral granted hereby and shall not be
interpreted to, and shall not, impose any duties on the Collateral Agent in
connection therewith. The Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Pledged Collateral in its
possession if the Pledged Collateral is accorded treatment substantially equal
to that which the Collateral Agent accords its own property, it being understood
that the Collateral Agent shall not have any responsibility for (i) ascertaining
or taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relative to any Pledged Collateral, whether or not the
Collateral Agent has or is deemed to have knowledge of such matters, or (ii)
taking any necessary steps to preserve rights against any parties with respect
to any Pledged Collateral.
SECTION 11. Subsequent Changes Affecting Collateral. The Company
represents to the Collateral Agent and the Holders of Notes that the Company has
made its own arrangements for keeping informed of changes or potential changes
affecting the Pledged Collateral (including, but not limited to, rights to
convert, rights to subscribe, payment of dividends, payments of interest and/or
principal, reorganization or other exchanges, tender offers and voting rights),
and the Company agrees that the Collateral Agent and the Holders of Notes shall
have no responsibility or liability for informing the Company of any such
changes or potential changes or for taking any action or omitting to take any
action with respect thereto. The Company covenants that it shall not, without
the prior written consent of the Collateral Agent, vote to enable, or take any
other action to permit, any Pledged Entity to issue any capital stock or other
securities or to sell or otherwise dispose of, or grant any option with respect
to, any of the Pledged Collateral or create or permit to exist any Lien upon or
with respect to any of the Pledged Collateral, except for the security interests
granted under this Agreement. The Company shall defend the right, title and
interest of the Collateral Agent and the Holders of Notes in and to the Pledged
Collateral against the claims and demands of all Persons.
SECTION 12. Remedies Upon Default.
(a) If any Event of Default shall have occurred and be
continuing, the Collateral Agent and the Holders of Notes shall have, in
addition to all other rights given by law or by this Agreement or the
Indenture, all of the rights and remedies with respect to the Pledged
Collateral of a secured party under the UCC as in effect in the State of
New York at that time. The Collateral Agent may, without notice and at its
option, transfer or register, and the Company shall register or cause to
be registered upon request therefor by the Collateral Agent, the Pledged
Collateral or any part thereof on the books of each
<PAGE>
Pledged Entity into the name of the Collateral Agent or the Collateral
Agent's nominee(s), with or without any indication that such Pledged
Collateral is subject to the security interest hereunder. In addition,
with respect to any Pledged Collateral that shall then be in or shall
thereafter come into the possession or custody of the Collateral Agent,
the Collateral Agent may sell or cause the same to be sold at any broker's
board or at public or private sale, in one or more sales or lots, at such
price or prices as the Collateral Agent may deem best, for cash or on
credit or for future delivery, without assumption of any credit risk. The
purchaser of any or all Pledged Collateral so sold shall thereafter hold
the same absolutely, free from any claim, encumbrance or right of any kind
whatsoever. Unless any of the Pledged Collateral threatens to decline
speedily in value or is or becomes of a type sold on a recognized market,
the Collateral Agent shall give the Company reasonable notice of the time
and place of any public sale thereof, or of the time after which any
private sale or other intended disposition is to be made. Any sale of the
Pledged Collateral conducted in conformity with reasonable commercial
practices of banks, insurance companies, commercial finance companies, or
other financial institutions disposing of property similar to the Pledged
Collateral shall be deemed to be commercially reasonable. Any requirements
of reasonable notice shall be met if such notice is mailed to the Company
as provided below in Section 18.1 at least ten days before the time of the
sale or disposition. Any other requirement of notice, demand or
advertisement for sale is, to the extent permitted by law, waived. The
Collateral Agent or any Holder of Notes may, in its own name or in the
name of a designee or nominee, buy any of the Pledged Collateral at any
public sale and, if permitted by applicable law, at any private sale. All
expenses (including court costs and reasonable attorneys' fees and
disbursements) of, or incident to, the enforcement of any of the
provisions hereof shall be recoverable from the proceeds of the sale or
other disposition of the Pledged Collateral.
(b) If the Collateral Agent shall determine to exercise its
right to sell any or all of the Pledged Shares pursuant to Section 12(a)
above, and if in the opinion of counsel for the Collateral Agent it is
necessary, or if in the opinion of the Collateral Agent it is advisable,
to have the Pledged Shares or that portion thereof to be sold, registered
under the provisions of the Securities Act of 1933, as amended (the
ASecurities Act@), the Company shall cause each Pledged Entity to (i)
execute and deliver, and cause its directors and officers to execute and
deliver, all at the expense of the Company, all such instruments and
documents, and to do or cause to be done all such other acts and things as
may be necessary or, in the opinion of the Collateral Agent, advisable to
register such Pledged Shares under the provisions of the Securities Act,
(ii) cause the registration statement relating thereto to become effective
and to remain effective for a period of 180 days from the date of the
first public offering of such Pledged Shares, or that portion thereof to
be sold and (iii) make all amendments thereto and/or to the related
prospectus that, in the opinion of the Collateral Agent, are necessary or
advisable, all in conformity with the requirements of the Securities Act
and the rules and regulations of the Securities and Exchange Commission
applicable thereto; provided that in the event that state regulatory law
prohibits the registration and sale of shares of any particular Pledged
Entity, such Pledged Entity shall not be required to register the shares
of that particular Pledged Entity. The Company agrees to cause each
Pledged Entity to comply with the provisions of the securities or ABlue
Sky@ laws of any jurisdiction that the Collateral Agent shall designate
for the sale of the Pledged Shares and to make available to each such
Pledged Entity's security holders, as soon as practicable, an earnings
statement (which need not be audited) that will satisfy the provisions of
Section 11(a) of the Securities Act. The Company shall cause each such
Pledged Entity to furnish to the Collateral Agent such number of copies as
the Collateral Agent may reasonably request of each registration statement
and preliminary and final prospectus, to notify the Collateral Agent
promptly of the happening of any event as a result of which
<PAGE>
any then effective prospectus includes an untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of circumstances
under which they were made, not misleading, and to cause the Collateral
Agent to be furnished with such number of copies as the Collateral Agent
may request of such supplement to or amendment of such prospectus. The
Company shall cause each such Pledged Entity, to the extent permitted by
law, to indemnify, defend and hold harmless the Collateral Agent and the
Holders of Notes from and against all losses, liabilities, expenses or
claims (including reasonable legal expenses and the reasonable costs of
investigation) that the Collateral Agent or the Holders of Notes may incur
under the Securities Act or otherwise, insofar as such losses,
liabilities, expenses or claims arise out of or are based upon any alleged
untrue statement of a material fact contained in such registration
statement (or any amendment thereto) or in any preliminary or final
prospectus (or any amendment or supplement thereto), or arise out of or
are based upon any alleged omission to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, except to the extent that any such losses, liabilities,
expenses or claims arise solely out of or are based upon any such alleged
untrue statement made or such alleged omission to state a material fact
included or excluded on the written direction of the Collateral Agent. The
Company shall cause each such Pledged Entity to bear all costs and
expenses of carrying out their respective obligations hereunder.
(c) In view of the fact that federal and state securities laws
may impose certain restrictions on the method by which a sale of the
Pledged Collateral may be effected after an Event of Default, the Company
agrees that upon the occurrence or existence of any Event of Default, the
Collateral Agent may, from time to time, attempt to sell all or any part
of the Pledged Collateral by means of a private placement, restricting the
prospective purchasers to those who will represent and agree that they are
purchasing for investment only and not for distribution. In so doing, the
Collateral Agent may solicit offers to buy the Pledged Collateral, or any
part of it, for cash, from a limited number of investors who might be
interested in purchasing the Pledged Collateral. The Company acknowledges
and agrees that any such private sale may result in prices and terms less
favorable than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have
been made in a commercially reasonable manner. The Collateral Agent shall
be under no obligation to delay a sale of any of the Pledged Collateral
for the period of time necessary to permit any Pledged Entity to register
such securities for public sale under the Securities Act, or under
applicable state securities laws, even if any such Pledged Entity agrees
to do so.
(d) The Company further agrees to use its best efforts to do or
cause to be done all such other acts as may be necessary to make such sale
or sales of all or any portion of the Pledged Collateral pursuant to this
Section 12 valid and binding and in compliance with any and all other
applicable requirements of law. The Company further agrees that a breach
of any of the covenants contained in this Section 12 will cause
irreparable injury to the Collateral Agent and the Holders of Notes, that
the Collateral Agent and the Holders of Notes have no adequate remedy at
law in respect of such breach and, as a consequence, that each and every
covenant contained in this Section 12 shall be specifically enforceable
against the Company, and the Company hereby waives and agrees not to
assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred under
the Indenture.
(e) Notwithstanding anything contained herein which may be
construed to the contrary, no action shall be taken by the Collateral
Agent which may require the consent or approval of the Federal
<PAGE>
Communications Commission (the "FCC") or any applicable state regulatory
agency (a "State Agency," and together with the FCC, the "Regulatory
Authorities") unless and until all provisions of the Telecommunications
Act of 1996 (the "1996 Act") and any applicable state regulatory laws,
rules or regulations requiring the consent or approval of any Regulatory
Authority shall have been satisfied. The Company covenants that, upon the
request of the Collateral Agent, the Company shall promptly cause to be
filed such applications and take all such other action as may be requested
by the Collateral Agent to obtain consent or approval of any Regulatory
Authority to any action contemplated by this Agreement and to give full
effect to the security interest of the Collateral Agent hereunder,
including, without limitation, the execution and processing of an
application to any and all applicable Regulatory Authorities to obtain
consent to an assignment or transfer involving a change in ownership or
control pursuant to the provisions of the 1996 Act or any applicable state
law, rule or regulation. The Company hereby irrevocably appoints the
Collateral Agent its true and lawful attorney-in-fact, effective upon the
occurrence and during the continuance of an Event of Default, in its name
and stead, to executed and file all necessary applications with all
appropriate Regulatory Authorities. The power of attorney granted hereby
is coupled with an interest and shall be irrevocable.
SECTION 13. Irrevocable Authorization and Instruction to the Issuer.
The Company hereby authorizes and instructs such Pledged Entity to comply with
any instruction received by each such Pledged Entity from the Collateral Agent
that (i) states that an Event of Default has occurred and (ii) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from the Company, and the Company agrees that the each such Pledged
Entity shall be fully protected in so complying.
SECTION 14. Fees and Expenses. The Company shall, from time to time,
pay to the Collateral Agent such fees as may be agreed upon in writing and the
amount of any reasonable fees and disbursements of its counsel, of any
investment banking firm, business broker or other selling agent and of any other
experts and agents retained by the Collateral Agent) that the Collateral Agent
may incur in connection with (i) the administration of this Agreement, (ii) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of the Collateral Agent and the Holders of
Notes hereunder or (iv) the failure by the Company to perform or observe any of
the provisions hereof, in each case other than any such expenses that arise from
the gross negligence or willful misconduct of the Trustee or Collateral Agent.
SECTION 15. Note Interest Absolute. All rights of the Collateral
Agent and the Holders of Notes and the security interests created hereunder, and
all obligations of the Company hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of the Indenture or any
other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from the Indenture;
(c) any exchange, surrender, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to
departure from any guarantee, for all or any of the Obligations; or
<PAGE>
(d) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Company in respect of the Obligations
or of this Agreement.
SECTION 16. Application of Proceeds. Upon the occurrence and during
the continuance of an Event of Default, the proceeds of any sale of, or other
realization upon, all or any part of the Pledged Collateral and any cash held
shall be applied by the Collateral Agent in the following order of priorities:
first, to payment of the expenses of such sale or other realization,
including reasonable compensation to agents and counsel for the Collateral
Agent, and all expenses, liabilities and advances incurred or made by the
Collateral Agent in connection therewith, and any other unreimbursed fees and
expenses for which the Collateral Agent is to be reimbursed pursuant to Section
14 hereof; and
second, to the Trustee to be paid in accordance with Section 6.10 of
the Indenture.
SECTION 17. Uncertificated Securities. Notwithstanding anything to
the contrary contained herein, if any Pledged Shares (whether now owned or
hereafter acquired) are uncertificated Pledged Shares, the Company shall
promptly notify the Collateral Agent, and shall promptly take all actions
required to perfect the security interest of the Collateral Agent under
applicable law (including, in any event, under Sections 8-313 and 8-321 of the
New York Uniform Commercial Code). The Company further agrees to take such
actions as the Collateral Agent deems necessary or desirable to effect the
foregoing and to permit the Collateral Agent to exercise any of its rights and
remedies hereunder, and agrees to provide an Opinion of Counsel satisfactory to
the Pledgee with respect to any such pledge of uncertificated Pledged Shares
promptly upon request of the Collateral Agent.
SECTION 18. Miscellaneous Provisions.
Section 18.1 Notices. All notices, approvals, consents or other
communications required or desired to be given hereunder shall be in the form
and manner as set forth in Section 11.02 of the Indenture, and delivered to the
addresses set forth in such Section, or, in the case of the Collateral Agent,
to: Bank of Montreal Trust Company, New York, New York 10005, Attention:
Corporate Trust Administration, Telecopy No. 212-701-7684.
Section 18.2 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Collateral Agent to take
any action or omit to take any action under this Agreement, the Company shall
deliver to the Collateral Agent an Officer's Certificate and/or an Opinion of
Counsel in accordance with the requirements of Sections 11.04 and 11.05 of the
Indenture.
Section 18.3 No Adverse Interpretation of Other Agreements. This
Agreement may not be used to interpret another pledge, security or debt
agreement of the Company, each Pledged Entity or any subsidiary thereof. No such
pledge, security or debt agreement may be used to interpret this Agreement.
<PAGE>
Section 18.4 Severability. The provisions of this Agreement are
severable, and if any clause or provision shall be held invalid or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Agreement in any jurisdiction.
Section 18.5 No Recourse Against Others. No director, officer,
employee, stockholder or affiliate, as such, of the Company or any Pledged
Entity shall have any liability for any obligations of the Company under this
Agreement or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder of Notes, by accepting a Note, waives
and releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.
Section 18.6 Headings. The headings of the Articles and Sections
of this Agreement have been inserted for convenience of reference only, are not
to be considered a part hereof and shall in no way modify or restrict any of the
terms or provisions hereof.
Section 18.7 Counterpart Originals. This Agreement may be signed
in two or more counterparts. Each signed copy shall be an original, but all of
them together represent one and the same agreement. Each counterpart may be
executed and delivered by telecopy, if such delivery is promptly followed by the
original manually signed copy sent by overnight courier.
Section 18.8 Benefits of Agreement. Nothing in this Agreement,
express or implied, shall give to any Person, other than the parties hereto and
their successors hereunder, and the Holders of Notes, any benefit or any legal
or equitable right, remedy or claim under this Agreement.
Section 18.9 Amendments, Waivers and Consents. Any amendment or
waiver of any provision of this Agreement and any consent to any departure by
the Company from any provision of this Agreement shall be effective only if made
or given in compliance with all of the terms and provisions of the Indenture
necessary for amendments or waivers of, or consents to any departure by the
Company from any provision of the Indenture, as applicable, and neither the
Collateral Agent or the Trustee nor any Holder of Notes shall be deemed, by any
act, delay, indulgence, omission or otherwise, to have waived any right or
remedy hereunder or to have acquiesced in any Event of Default or in any breach
of any of the terms and conditions hereof. Failure of the Collateral Agent or
any Holder of Notes to exercise, or delay in exercising, any right, power or
privilege hereunder shall not operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
A waiver by the Collateral Agent or any Holder of Notes of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy that the Collateral Agent or such Holder of Notes would otherwise have on
any future occasion. The rights and remedies herein provided are cumulative, may
be exercised singly or concurrently and are not exclusive of any rights or
remedies provided by law.
Section 18.10 Interpretation of Agreement. Time is of the
essence in each provision of this Agreement of which time is an element. All
terms not defined herein or in the Indenture shall have the meaning set forth in
the applicable UCC, except where the context otherwise requires. To the extent a
term or provision of this Agreement conflicts with the Indenture and is not
dealt with herein with more specificity,
<PAGE>
the Indenture shall control with respect to the subject matter of such term or
provision. Acceptance of or acquiescence in a course of performance rendered
under this Agreement shall not be relevant to determine the meaning of this
Agreement even though the accepting or acquiescing party had knowledge of the
nature of the performance and opportunity for objection.
Section 18.11 Continuing Security Interest; Transfer of Notes.
This Agreement shall create a continuing security interest in the Pledged
Collateral and shall (i) remain in full force and effect until the payment in
full of all the Obligations and all the fees and expenses owing to the
Collateral Agent, (ii) be binding upon the Company, its successors and assigns,
and (iii) inure, together with the rights and remedies of the Collateral Agent
hereunder, to the benefit of the Collateral Agent, the Holders of Notes and
their respective successors, transferees and assigns.
Section 18.12 Reinstatement. This Agreement shall continue to be
effective or be reinstated if at any time any amount received by the Collateral
Agent or any Holder of Notes in respect of the Obligations is rescinded or must
otherwise be restored or returned by the Collateral Agent or any Holder of Notes
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
the Company or upon the appointment of any receiver, intervenor, conservator,
trustee or similar official for the Company or any substantial part of its
assets, or otherwise, all as though such payments had not been made.
Section 18.13 Survival of Provisions. All representations,
warranties and covenants of the Company contained herein shall survive the
execution and delivery of this Agreement, and shall terminate only upon the full
and final payment and performance by the Company of the Obligations; except that
the obligations of the Company pursuant to Sections 14 and 18.15 of this
Agreement shall survive the termination or discharge of this Agreement
(including any discharge pursuant to Bankruptcy Law) or the resignation or
removal of the Collateral Agent.
Section 18.14 Waivers. The Company waives presentment and demand
for payment of any of the Obligations, protest and notice of dishonor or default
with respect to any of the Obligations, and all other notices to which the
Company might otherwise be entitled, except as otherwise expressly provided
herein or in the Indenture.
<PAGE>
Section 18.15 Authority of the Collateral Agent.
(a) Subject to the provisions of Section 10.06 of the Indenture,
the Collateral Agent shall have and be entitled to exercise all powers
hereunder that are specifically granted to the Collateral Agent by the
terms hereof, together with such powers as are reasonably incident
thereto. The Collateral Agent may perform any of its duties hereunder or
in connection with the Pledged Collateral by or through agents or
employees and shall be entitled to retain counsel of its choice and to act
in reliance upon the advice of such counsel concerning all such matters.
Neither the Collateral Agent nor any director, officer, employee, attorney
or agent of the Collateral Agent shall be responsible for the validity,
effectiveness or sufficiency hereof or of any document or security
furnished pursuant hereto. The Collateral Agent and its directors,
officers, employees, attorneys and agents shall be entitled to rely on any
communication, instrument or document believed by it or them to be genuine
and correct and to have been signed or sent by the proper person or
persons. The Company agrees to indemnify and hold harmless the Collateral
Agent, the Holders of Notes and any other Person from and against any and
all costs, expenses (including the reasonable fees and disbursements of
counsel (including, the allocated costs of inside counsel)), claims and
liabilities incurred by the Collateral Agent, the Holders of Notes or such
Person hereunder, unless such claim or liability shall be due to willful
misconduct or gross negligence on the part of the Collateral Agent, the
Holders of Notes or such Person.
(b) The Company acknowledges that the rights and
responsibilities of the Collateral Agent under this Agreement with respect
to any action taken by the Collateral Agent or the exercise or
non-exercise by the Collateral Agent of any option, right, request,
judgment or other right or remedy provided for herein or resulting or
arising out of this Agreement shall, as between the Collateral Agent and
the Holders of Notes, be governed by the Indenture and by such other
agreements with respect thereto as may exist from time to time among them,
but, as between the Collateral Agent and the Company, the Collateral Agent
shall be conclusively presumed to be acting as agent for the Holders of
Notes with full and valid authority so to act or refrain from acting, and
the Company shall not be obligated or entitled to make any inquiry
respecting such authority.
(c) No provision of this Agreement shall require the Collateral
Agent to expend or risk its own funds or incur any liability. The
Collateral Agent shall be under no obligation to exercise any of its
rights and powers under this Agreement at the request of any Holders,
unless such Holder shall have offered to the Collateral Agent security and
indemnity satisfactory to it against any loss, liability or expense.
Section 18.16 Resignation or Removal of the Collateral Agent.
Until such time as the Obligations shall have been paid in full, the Collateral
Agent may at any time, by giving written notice to the Company and Holders of
Notes, resign and be discharged of the responsibilities hereby created, such
resignation to become effective upon (i) the appointment of a successor
Collateral Agent and (ii) the acceptance of such appointment by such successor
Collateral Agent. As promptly as practicable after the giving of any such
notice, the Holders of Notes shall appoint a successor Collateral Agent, which
successor Collateral Agent shall be reasonably acceptable to the Company. If no
successor Collateral Agent shall be appointed and shall have accepted such
appointment within 60 days after the Collateral Agent gives the aforesaid notice
of resignation, the Collateral Agent may apply to any court of competent
jurisdiction to appoint a successor Collateral Agent to act until such time, if
any, as a successor shall have been appointed as provided in this Section 18.16.
Any successor so appointed by such court shall immediately and without
<PAGE>
further act be superseded by any successor Collateral Agent appointed by the
Holders of a majority of the then outstanding Notes, as provided in this Section
18.16. Simultaneously with its replacement as Collateral Agent hereunder, the
Collateral Agent so replaced shall deliver to its successor all documents,
instruments, certificates and other items of whatever kind (including, without
limitation, the certificates and instruments evidencing the Pledged Collateral
and all instruments of transfer or assignment) held by it pursuant to the terms
hereof. The Collateral Agent that has resigned shall be entitled to fees, costs
and expenses to the extent incurred or arising, or relating to events occurring,
before its resignation or removal.
Section 18.17 Release; Termination of Agreement.
(a) Subject to the provisions of Section 18.12 hereof, this
Agreement shall terminate (i) upon full and final payment and performance
of the Obligations (and upon receipt by the Collateral Agent of the
Company's written certification that all such Obligations have been
satisfied) and payment in full of all fees and expenses owing by the
Company to the Collateral Agent or (ii) on the day after the first
anniversary of the Legal Defeasance of all of the Obligations pursuant to
Section 8.02 of the Indenture (other than those surviving Obligations
specified therein). At such time, the Collateral Agent shall, at the
request of the Company, reassign and redeliver to the Company all of the
Pledged Collateral hereunder that has not been sold, disposed of, retained
or applied by the Collateral Agent in accordance with the terms hereof.
Such reassignment and redelivery shall be without warranty by or recourse
to the Collateral Agent, except as to the absence of any prior assignments
by the Collateral Agent of its interest in the Pledged Collateral, and
shall be at the expense of the Company.
(b) The Company agrees that it shall not, except as permitted by
the Indenture, sell or dispose of, or grant any option or warrant with
respect to, any of the Pledged Collateral; provided, however, that if the
Company shall sell any of the Pledged Collateral in accordance with the
terms of the Indenture, including the requirement that the Company apply
the Net Proceeds of such sale in accordance with Section 4.10 of the
Indenture, the Collateral Agent shall, at the request of the Company and
subject to requirements of Section 10.03, 10.04 and 10.05 of the
Indenture, release the Pledged Collateral subject to such sale free and
clear of the Lien and security interest under this Agreement.
Section 18.18 Final Expression. This Agreement, together with
any other agreement executed in connection herewith, is intended by the parties
as a final expression of their Agreement and is intended as a complete and
exclusive statement of the terms and conditions thereof.
Section 18.19 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER
OF JURY TRIAL; WAIVER OF DAMAGES.
(i) THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED UNDER
THE LAWS OF THE STATE OF NEW YORK, AND ANY DISPUTE ARISING OUT OF, IN CONNECTION
WITH OR RELATING OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THE
COMPANY, THE COLLATERAL AGENT AND THE HOLDERS OF NOTES IN CONNECTION WITH THIS
AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE
RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF
LAWS PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.
<PAGE>
(ii) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH AND IN PARAGRAPH
(vi) BELOW, THE COMPANY, THE COLLATERAL AGENT AND THE HOLDERS OF NOTES AGREE
THAT ALL DISPUTES BETWEEN OR AMONG THEM ARISING OUT OF, IN CONNECTION WITH OR
RELATING OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY,
OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE OR FEDERAL COURTS LOCATED IN NEW
YORK, NEW YORK, BUT THE COMPANY, THE COLLATERAL AGENT AND THE HOLDERS OF NOTES
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF NEW YORK, NEW YORK. THE COMPANY WAIVES IN ALL DISPUTES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS.
(iii) THE COMPANY AGREES THAT THE COLLATERAL AGENT SHALL, IN
ITS OWN NAME OR IN THE NAME AND ON BEHALF OF ANY HOLDER OF NOTES, HAVE THE
RIGHT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST THE COMPANY
OR ITS PROPERTY IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD FAITH TO
ENABLE THE COLLATERAL AGENT TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE COLLATERAL AGENT. THE
COMPANY AGREES THAT IT SHALL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY
PROCEEDING BROUGHT BY THE COLLATERAL AGENT TO REALIZE ON SUCH PROPERTY, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE COLLATERAL AGENT. THE
COMPANY WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN
WHICH THE COLLATERAL AGENT HAS COMMENCED A PROCEEDING DESCRIBED IN THIS
PARAGRAPH INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR
BASED ON THE GROUNDS OF FORUM NON CONVENIENS.
(iv) THE COMPANY, THE COLLATERAL AGENT AND THE HOLDERS OF
NOTES EACH WAIVE ANY AND ALL RIGHTS TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE ARISING OUT OF, IN
CONNECTION WITH OR RELATING OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT. INSTEAD, ALL DISPUTES RESOLVED
IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
(v) THE COMPANY HEREBY IRREVOCABLY DESIGNATES CT CORPORATION
AS THE DESIGNEE, APPOINTEE AND AGENT OF THE COMPANY TO RECEIVE, FOR AND ON
BEHALF OF THE COMPANY, SERVICE OF PROCESS IN ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT. IT IS UNDERSTOOD THAT NOTICE AND A COPY OF SUCH
PROCESS SERVED ON SUCH AGENT, WILL BE FORWARDED PROMPTLY TO THE COMPANY, BUT THE
FAILURE OF THE COMPANY TO RECEIVE SUCH NOTICE AND COPY SHALL NOT AFFECT IN ANY
WAY THE SERVICE OF SUCH PROCESS. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO THE
<PAGE>
COMPANY AT ITS ADDRESS SET FORTH IN SECTION 11.02 OF THE INDENTURE, SUCH SERVICE
TO BECOME EFFECTIVE FIVE (5) BUSINESS DAYS AFTER SUCH MAILING.
(vi) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL
AGENT OR ANY HOLDER OF NOTES TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY IN
ANY OTHER JURISDICTION.
(vii) THE COMPANY HEREBY AGREES THAT NEITHER THE COLLATERAL
AGENT NOR ANY HOLDER OF NOTES SHALL HAVE ANY LIABILITY TO THE COMPANY (WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE) FOR LOSSES SUFFERED BY THE COMPANY IN
CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATING OR INCIDENTAL TO, THE
TRANSACTIONS CONTEMPLATED AND THE RELATIONSHIP ESTABLISHED BY THIS AGREEMENT, OR
ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH, UNLESS IT IS
DETERMINED BY A FINAL AND NONAPPEALABLE JUDGMENT OF A COURT THAT IS BINDING ON
THE COLLATERAL AGENT OR SUCH HOLDER OF NOTES, AS THE CASE MAY BE, THAT SUCH
LOSSES WERE THE RESULT OF ACTS OR OMISSIONS ON THE PART OF THE COLLATERAL AGENT
OR SUCH HOLDER OF NOTES, AS THE CASE MAY BE, CONSTITUTING GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT.
(viii) THE COMPANY WAIVES ALL RIGHTS OF NOTICE AND HEARING OF
ANY KIND PRIOR TO THE EXERCISE BY THE COLLATERAL AGENT OR ANY HOLDER OF NOTES OF
ITS RIGHTS DURING THE CONTINUANCE OF AN EVENT OF DEFAULT TO REPOSSESS THE
COLLATERAL WITH JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY UPON THE
COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS. THE COMPANY WAIVES THE POSTING
OF ANY BOND OTHERWISE REQUIRED OF THE COLLATERAL AGENT OR ANY HOLDER OF NOTES IN
CONNECTION WITH ANY JUDICIAL PROCESS OR PROCEEDING TO OBTAIN POSSESSION OF,
REPLEVY, ATTACH OR LEVY UPON COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS,
TO ENFORCE ANY JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE COLLATERAL
AGENT OR ANY HOLDER OF NOTES, OR TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY
RESTRAINING ORDER OR PRELIMINARY OR PERMANENT INJUNCTION THIS AGREEMENT OR ANY
OTHER AGREEMENT OR DOCUMENT BETWEEN THE COMPANY, THE COLLATERAL AGENT AND THE
HOLDERS OF NOTES.
Section 18.20 Acknowledgments. The Company hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement;
(b) neither the Collateral Agent nor any Holder of Notes has any
fiduciary relationship to the Company, and the relationship between the
Collateral Agent and the Holders of Notes, on the one hand, and the
Company, on the other hand, is solely that of a secured party and a
creditor; and
(c) no joint venture exists among the Company and the Holders
of Notes.
<PAGE>
IN WITNESS WHEREOF, the Company and the Collateral Agent have each
caused this Agreement to be duly executed and delivered as of the date first
above written.
THE COMPANY:
HYPERION TELECOMMUNICATIONS, INC.
By: /s/ Daniel R. Milliard
Name: Daniel R. Milliard
Title: President and COO
COLLATERAL AGENT:
BANK OF MONTREAL TRUST COMPANY
By: /s/ Therese Gaballah
Name: Therese Gaballah
Title: Vice President
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
PLEDGED SHARES
(A) (B) (C) (D)
Share
Number of Pledged Certificate Percentage of
Issuer Shares Number Outstanding
<S> <C> <C> <C>
1. Initial Collateral
Hyperion Telecommunications 1,000 1 100%
of Vermont, Inc.
Hyperion Telecommunications of 100 1 100%
Tennessee, Inc.
Hyperion Telecommunications of 1000 1 100%
Florida, Inc.
2. Additional Collateral
Hyperion Telecommunications of 1000 1 100%
New York, Inc.
Hyperion Telecommunications of 100 1 100%
Kentucky, Inc.
</TABLE>
<PAGE>
SCHEDULE II
1. With respect to the pledge of the shares of Hyperion of Vermont, before the
Company or the Collateral Agent, as the case may be, takes any action under the
Pledge Agreement to acquire, sell, or exercise voting or other consensual rights
with respect to ten percent or more of the outstanding voting securities of
Hyperion Vermont, it must obtain the approval of the Vermont Public Service
Board as provided in Section 107 of Title 30 of the Vermont Statutes Annotated.
2. With respect to the pledge of the shares of certain or all of the Pledged
Entities, any action that would transfer de facto (actual) or de jure (legal)
control of the Company or any of the Operating Entites (as such term is defined
in the Offering Memorandum, dated August 21, 1997, relating to the Notes) is
subject to the requirement of prior approval from the Federal Communications
Commission and/or state regulatory commissions.
<PAGE>
EXHIBIT A-1
FORM OF OPINION OF COUNSEL
i. [New Entity] is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and has the requisite corporate power and authority to own and to
operate its properties and to carry on its business;
ii. all of the outstanding Capital Stock of [New Entity] has been
validly authorized and issued and is fully paid and nonassessable, is owned of
record by the Company, and, to the best knowledge of such counsel, is owned by
the Company free and clear of any security interest, claim, lien or encumbrance,
other than the security interests created by the Pledge Agreement, and, to the
best knowledge of such counsel, there are no outstanding rights, warrants or
options to acquire, or instruments convertible into or exercisable or
exchangeable for, any shares of Capital Stock or other Equity Interests in [New
Entity];
iii. (A) The Company has the requisite corporate power and authority
to create, deliver and perfect the security interests created under the Pledge
Agreement; (B) the Pledge Agreement has been duly authorized, executed and
delivered by the Company and constitutes the valid and binding obligation of the
Company, enforceable against it in accordance with its terms; (C) after giving
effect to the [merger] [consolidation] [sale or transfer of all or substantially
all assets], and assuming the Collateral Agent is holding the certificates and
notes representing the Pledged Collateral in the State of New York, the Pledge
Agreement will create a valid and perfected security interest in the Pledged
Collateral (including, without limitation, all of the Equity Interests of [New
Entity]) in favor of the Collateral Agent, on behalf and for the benefit of the
Holders of Notes, subject to no other consensual security interest in favor of
any other person, and no filings or recordings will be required in order to
perfect or maintain the security interests created under the Pledge Agreement in
such Pledged Collateral; and
iv. the consummation of the [merger] [consolidation] [sale or
transfer of all or substantially all assets] does not (A) conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company, the Pledged
Entities or [New Entity] is a party by which the Company, any of the Pledged
Entities or [New Entity] is bound or to which any of the property or assets of
the Company, the Pledged Entities or [New Entity] is subject except for such
conflicts, breaches, violations or defaults as would not have a material adverse
effect on the business, condition (financial or other), results of operations or
properties of the Company and its Subsidiaries and Joint Ventures taken as a
whole, nor will such action result in any violation of the provisions of the
respective charter or by-laws of the Company, the Pledged Entities or [New
Entity], nor will such action result in any violation of any application law or
statute or any applicable order, rule or regulation known to such counsel of any
court or governmental agency or body having jurisdiction over the Company, its
Subsidiaries or Joint Ventures or any of their respective properties, or (B)
result in the creation of any lien upon any of the properties or assets of the
Company (other than liens created by the Pledge Agreement).
<PAGE>
EXHIBIT A-2
FORM OF OPINION OF COUNSEL
i. [Hyperion Telecommunications of New York, Inc.][[Hyperion
Telecommunications of Kentucky, Inc.] (the "Issuer") is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has the requisite corporate power and
authority to own and to operate its properties and to carry on its business;
ii. all of the outstanding capital stock of the Issuer has been
validly authorized and issued and is fully paid and nonassessable, is owned of
record by the Company and to the best knowledge of such counsel, is owned by the
Company free and clear of any security interest, claim, lien or encumbrance,
other than the security interests created by the Pledge Agreement, and, to the
best knowledge of such counsel, there are no outstanding rights, warrants or
options to acquire, or instruments convertible into or exercisable or
exchangeable for, any shares of Capital Stock or other Equity Interests in the
Issuer;
iii. (A) The Company has the requisite corporate power and authority
to create, deliver and perfect the security interests created under the Pledge
Agreement; (B) the Pledge Agreement has been duly authorized, executed and
delivered by the Company and constitutes the valid and binding obligation of the
Company, enforceable against it in accordance with its terms; (C) after giving
effect to the pledge by the Company of all of the outstanding Capital Stock of
the Issuer and assuming the Collateral Agent is holding the certificates and
notes representing the Additional Pledged Collateral in the State of New York,
the Pledge Agreement will create a valid and perfected security interest in the
Additional Pledged Collateral (including, without limitation, all of the Equity
Interests of the Issuer) in favor of the Collateral Agent, on behalf and for the
benefit of the Holders of Notes, subject to no other consensual security
interest in favor of any other person, and no filings or recordings will be
required in order to perfect or maintain the security interests created under
the Pledge Agreement in such Additional Pledged Collateral; and
iv. the consummation of the pledge by the Company of all of the
outstanding Capital Stock of the Issuer does not, to the knowledge of such
counsel, (A) conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company, the Initial Pledged Entities or the Issuer is a party by which the
Company, any of the Initial Pledged Entities or the Issuer is bound or to which
any of the property or assets of the Company, the Initial Pledged Entities or
the Issuer is subject except for such conflicts, breaches, violations or
defaults as would not have a material adverse effect on the business, condition
(financial or other), results of operations or properties of the Company and its
Subsidiaries and Joint Ventures taken as a whole, nor will such action result in
any violation of the provisions of the respective charter or by-laws of the
Company, the Initial Pledged Entities or the Issuer nor will such action result
in any violation of any application law or statute or any applicable order, rule
or regulation known to such counsel of any court or governmental agency or body
having jurisdiction over the Company, its Subsidiaries or Joint Ventures or any
of their respective properties, or (B) result in the creation of any lien upon
any of the properties or assets of the Company (other than liens created by the
Pledge Agreement).
<PAGE>
EXHIBIT B
FORM OF SOLVENCY CERTIFICATE
The undersigned, _______________ and ________________, respectively the
President and Chief Financial Officer of Hyperion Telecommunications, Inc., a
Delaware corporation ("the Company"), certify that they are authorized to
execute this Certificate in the name and on behalf of the Company, and further
certify as follows (capitalized terms used but not defined herein have the
respective meanings assigned to them in the Pledge Agreement, dated ____________
__, 1997 (the "Pledge Agreement"), between the Company and Collateral Agent):
a. We are familiar with the historical and current financial
condition of the Company and each Pledged Entity including, after the
[merger] [consolidation] [sale or transfer of all or substantially
all assets] described in Section [7(a)(v)] of the Pledge Agreement.
b. For the purposes of this Certificate, we have reviewed other
financial information and forecasts relating to the Company prepared
by the Company's management, which we believe (as to the historical
financial information) fairly present the historical financial
position and results of operations of the Company as of the dates and
for the periods presented and (in the case of the forecasts) were
based upon reasonable assumptions and provide reasonable estimations
of future performance, although any forecasts are necessarily
uncertain of fulfillment. We know of no facts or circumstances
arising subsequent to the dates as of which such information and
projections were prepared that would materially alter such
conclusions. We have assumed that the fair saleable value of the
Company's assets is the amount for which all the businesses of the
Company could be sold on the date hereof either as an entirety or
separately (including in any such sale all property and assets used
in the business or businesses sold) and, in either case, on a going
concern basis, without potential tax liabilities arising on sale.
c. In addition to such review, we are familiar with and have
considered information, [including the opinions of independent
advisors, if any] as to the fair market values of the Company's
assets and the probable liability, contingent or otherwise, of the
Company to its creditors. We have estimated such values as reliably
and as practicably as possible under the circumstances.
Based upon the foregoing, we have reached the conclusions that, after
giving effect to the transactions contemplated by Section 7(a)(v) of the Pledge
Agreement:
1. The Company does not intend to or believe that it has incurred or
will incur, debts that will be beyond its ability to pay as they mature.
2. The present fair saleable value of the assets of the Company the
amount that will be required to pay the probable liability on its existing debts
(whether matured or unmatured, liquidated or unliquidated, absolute, fixed or
contingent), as they become absolute and matured. In determining "present fair
saleable value," we utilized as a guideline amounts we believe would be reached
by a willing seller and a willing buyer under no compulsion to make the sale.
<PAGE>
3. The Company does not have unreasonably small capital for it to
carry on its businesses as proposed to be conducted. "Unreasonably small
capital" is dependent upon the nature of the particular business or businesses
conducted or to be conducted, and the statement made in the preceding sentence
is correct based upon anticipated future conduct of the businesses of the
Company.
4. The Company is not incurring obligations or making transfers under
any evidence of indebtedness with the intent to hinder, delay or defraud any
entity to which it is or will become indebted.
<PAGE>
WITNESS the signatures of the undersigned, this _____ day of ______,
199_.
-------------------------
President
-------------------------
Chief Financial Officer
<PAGE>
Exhibit 4.04
REGISTRATION RIGHTS AGREEMENT
Dated as of August 27, 1997
by and among
Hyperion Telecommunications, Inc.,
and
BEAR, STEARNS & CO. INC.
CHASE SECURITIES INC.
TD SECURITIES (USA) INC.
CIBC WOOD GUNDY SECURITIES CORP.
SCOTIA CAPITAL MARKETS (USA) INC.
<PAGE>
This Registration Rights Agreement (this "Agreement") is made and
entered into as of August 27, 1997, by and among Hyperion Telecommunications,
Inc., a Delaware corporation (the "Company"), Bear, Stearns & Co. Inc., Chase
Securities Inc., TD Securities (USA) Inc., CIBC Wood Gundy Securities Corp. and
Scotia Capital Markets (USA) Inc. (each, an "Initial Purchaser" and,
collectively, the "Initial Purchasers"), who have collectively agreed to
purchase $250,000,000 in aggregate principal amount of the Company's 12 1/4%
Series A Senior Secured Notes due 2004 (the "Series A Notes"), pursuant to the
Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement dated as of
August 21, 1997 (the "Purchase Agreement"), by and among the Company and the
Initial Purchasers. In order to induce the Initial Purchasers to purchase the
Series A Notes, the Company has agreed to provide the registration rights set
forth in this Agreement. The execution and delivery of this Agreement is a
condition to the obligations of the Initial Purchasers set forth in Section 3 of
the Purchase Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
Act: The Securities Act of 1933, as amended.
Business Day: Any day except a Saturday, Sunday or other day in the
City of New York, or in the city of the corporate trust office of the Trustee,
on which banks are authorized to close.
Broker-Dealer: Any broker or dealer registered under the Exchange
Act.
Broker-Dealer Transfer Restricted Securities: Series B Notes that are
acquired by a Broker-Dealer in the Exchange Offer in exchange for Series A Notes
that such Broker-Dealer acquired for its own account as a result of market
making activities or other trading activities (other than Series A Notes
acquired by such Broker-Dealer directly from the Company or any of its
affiliates).
Certificated Securities: As defined in the Indenture.
Closing Date: The date hereof.
Commission: The Securities and Exchange Commission.
Consummate: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Series B Notes to be issued in the Exchange Offer, (b) the
maintenance of such Registration Statement continuously effective and the
keeping of the Exchange Offer open for a period not less than the minimum period
required pursuant to Section 3(b) hereof and (c) the delivery by the Company to
the Registrar under the Indenture of Series B Notes in the same aggregate
principal amount as the aggregate principal amount of Series A Notes tendered by
Holders thereof pursuant to the Exchange Offer.
<PAGE>
Damages Payment Date: With respect to the Series A Notes, each
Interest Payment Date.
Effectiveness Target Date: As defined in Section 5 hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Offer: The registration by the Company under the Act of the
Series B Notes pursuant to the Exchange Offer Registration Statement pursuant to
which the Company shall offer the Holders of all outstanding Transfer Restricted
Securities the opportunity to exchange all such outstanding Transfer Restricted
Securities for Series B Notes in an aggregate principal amount equal to the
aggregate principal amount of the Transfer Restricted Securities tendered in
such exchange offer by such Holders.
Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial Purchasers
propose to sell the Series A Notes to certain "qualified institutional buyers,"
as such term is defined in Rule 144A under the Act, and to certain non-U.S.
persons outside the United States in reliance upon Regulation S under the Act.
Global Note Holder: As defined in the Indenture.
Holder: As defined in Section 2 hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Indenture: The Indenture, dated the Closing Date, among the Company
and Bank of Montreal Trust Company, as trustee (the "Trustee"), pursuant to
which the Senior Notes are to be issued, as such Indenture is amended or
supplemented from time to time in accordance with the terms thereof.
Interest Payment Date: As defined in the Indenture and the Senior
Notes.
NASD: National Association of Securities Dealers, Inc.
Person: An individual, partnership, corporation, trust,
unincorporated organization, or a government or agency or political subdivision
thereof.
Prospectus: The prospectus included in a Registration Statement at
the time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.
Record Holder: With respect to any Damages Payment Date, each Person
who is a Holder of Series A Notes on the record date with respect to the
Interest Payment Date on which such Damages Payment Date shall occur.
<PAGE>
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Company
relating to (a) an offering of Series B Notes pursuant to an Exchange Offer or
(b) the registration for resale of Transfer Restricted Securities pursuant to
the Shelf Registration Statement, in each case (i) which is filed pursuant to
the provisions of this Agreement and (ii) including the Prospectus included
therein, all amendments and supplements thereto (including post-effective
amendments) and all exhibits and material incorporated by reference therein.
Restricted Broker-Dealer: Any Broker-Dealer which holds
Broker-Dealer Transfer Restricted Securities.
Senior Notes: The Series A Notes and the Series B Notes.
Series B Notes: The Company's 12 1/4% Senior B Senior Secured Notes
due 2004 to be issued pursuant to the Indenture (i) in the Exchange Offer or
(ii) upon the request of any Holder of Series A Notes covered by a Shelf
Registration Statement, in exchange for such Series A Notes.
Shelf Registration Statement: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb)
as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Senior Note, until the earliest
to occur of (a) the date on which such Senior Note is exchanged in the Exchange
Offer and entitled to be resold to the public by the Holder thereof without
complying with the prospectus delivery requirements of the Act, (b) the date on
which such Senior Note has been disposed of in accordance with a Shelf
Registration Statement, (c) the date on which such Senior Note is disposed of by
a Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the
Exchange Offer Registration Statement (including delivery of the Prospectus
contained therein) or (d) the date on which such Senior Note is distributed to
the public pursuant to Rule 144 under the Act.
Underwritten Registration or Underwritten Offering: A registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "Holder") whenever such Person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by applicable
federal law (after the procedures set forth in Section 6(a)(i) below have been
complied with), the Company shall (i) cause to be filed with the Commission as
soon as practicable after the Closing Date, but in no event later than 30 days
<PAGE>
after the Closing Date, the Exchange Offer Registration Statement, (ii) use its
best efforts to cause such Exchange Offer Registration Statement to become
effective at the earliest possible time, but in no event later than 120 days
after the Closing Date, (iii) in connection with the foregoing, (A) file all
pre-effective amendments to such Exchange Offer Registration Statement as may be
necessary in order to cause such Exchange Offer Registration Statement to become
effective, (B) file, if applicable, a post-effective amendment to such Exchange
Offer Registration Statement pursuant to Rule 430A under the Act and (C) cause
all necessary filings, if any, in connection with the registration and
qualification of the Series B Notes to be made under the Blue Sky laws of such
jurisdictions as are necessary to permit Consummation of the Exchange Offer, and
(iv) upon the effectiveness of such Exchange Offer Registration Statement,
commence and Consummate the Exchange Offer. The Exchange Offer shall be on the
appropriate form permitting registration of the Series B Notes to be offered in
exchange for the Series A Notes that are Transfer Restricted Securities and to
permit sales of Broker-Dealer Transfer Restricted Securities by Restricted
Broker-Dealers as contemplated by Section 3(c) below.
(b) The Company shall use its best efforts to cause the Exchange
Offer Registration Statement to be effective continuously, and shall keep the
Exchange Offer open for a period of not less than the minimum period required
under applicable federal and state securities laws to Consummate the Exchange
Offer; provided, however, that in no event shall such period be less than 20
Business Days. The Company shall cause the Exchange Offer to comply with all
applicable federal and state securities laws. No securities other than the
Senior Notes shall be included in the Exchange Offer Registration Statement. The
Company shall use its best efforts to cause the Exchange Offer to be Consummated
on the earliest practicable date after the Exchange Offer Registration Statement
has become effective, but in no event later than 30 Business Days thereafter.
(c) The Company shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that (i) any Restricted Broker-Dealer who holds Series A Notes that are
Transfer Restricted Securities and that were acquired for the account of such
Broker-Dealer as a result of market-making activities or other trading
activities (other than Transfer Restricted Securities acquired directly from the
Company or any Affiliate of the Company) may exchange such Series A Notes
pursuant to the Exchange Offer and (ii) such Broker-Dealer may be deemed to be
an "underwriter" within the meaning of the Act and must, therefore, deliver a
prospectus meeting the requirements of the Act in connection with its initial
sale of each Series B Note received by such BrokerDealer in the Exchange Offer,
which prospectus delivery requirement may be satisfied by the delivery by such
Broker-Dealer of the Prospectus contained in the Exchange Offer Registration
Statement. Such "Plan of Distribution" section shall also contain all other
information with respect to such sales of Broker-Dealer Transfer Restricted
Securities by Restricted Broker-Dealers that the Commission may require in order
to permit such sales pursuant thereto, but such "Plan of Distribution" shall not
name any such Broker-Dealer or disclose the amount of Senior Notes held by any
such Broker-Dealer, except to the extent required by the Commission as a result
of a change in policy after the date of this Agreement.
The Company shall use its best efforts to keep the Exchange Offer
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Section 6(c) below to the extent necessary to
ensure that it is available for sales of Broker-Dealer Transfer Restricted
Securities by Restricted Broker-Dealers, and to ensure that such Registration
Statement conforms with the requirements of this Agreement, the Act and the
policies, rules and regulations of the Commission as announced from time to
time, for a period of one year from the date on which the Exchange Offer is
Consummated.
<PAGE>
The Company shall promptly provide sufficient copies of the latest
version of such Prospectus to such Restricted Broker-Dealers promptly upon
request, and in no event later than one day after such request, at any time
during such one-year period in order to facilitate such sales.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Company is not required to file an
Exchange Offer Registration Statement with respect to the Series B Notes because
the Exchange Offer is not permitted by applicable law (after the procedures set
forth in Section 6(a)(i) below have been complied with) or (ii) any Holder of
Transfer Restricted Securities shall notify the Company within 20 Business Days
following the Consummation of the Exchange Offer that (A) such Holder was
prohibited by law or Commission policy from participating in the Exchange Offer
or (B) such Holder may not resell the Series B Notes acquired by it in the
Exchange Offer to the public without delivering a prospectus and the Prospectus
contained in the Exchange Offer Registration Statement is not appropriate or
available for such resales by such Holder or (C) such Holder is a Broker-Dealer
and holds Series A Notes acquired directly from the Company or one of its
affiliates, then the Company shall:
(x) cause to be filed on or prior to 30 days after the date on which
the Company determines that it is not required to file the Exchange Offer
Registration Statement pursuant to clause (i) above or 30 days after the
date on which the Company receives the notice specified in clause (ii)
above, whichever is earlier, a shelf registration statement pursuant to
Rule 415 under the Act (which may be an amendment to the Exchange Offer
Registration Statement (in either event, the "Shelf Registration
Statement")), relating to all Transfer Restricted Securities the Holders
of which shall have provided the information required pursuant to Section
4(b) hereof; and
(y) use its best efforts to cause such Shelf Registration Statement
to become effective on or prior to 30 days after the date on which the
Company becomes obligated to file such Shelf Registration Statement.
The Company shall use its best efforts to keep the Shelf Registration
Statement discussed in this Section 4(a) continuously effective, supplemented
and amended as required by and subject to the provisions of Sections 6(b) and
(c) hereof to the extent necessary to ensure that it is available for sales of
Transfer Restricted Securities by the Holders thereof entitled to the benefit of
this Section 4(a), and to ensure that it conforms with the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission as
announced from time to time, for a period of at least two years (as extended
pursuant to Section 6(c)(i)) following the date on which such Shelf Registration
Statement first becomes effective under the Act; provided that in the event such
applicable policies, rules and regulations of the Commission are amended to
provide for a period of less than two years, then such period shall be deemed to
be in effect for purposes of this Section 4(a).
(b) Provision by Holders of Certain Information in Connection with
the Shelf Registration Statement. No Holder of Transfer Restricted Securities
may include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 days after receipt of a request therefor, such
information specified in item 507 of Regulation S-K under the Act for use in
connection with any Shelf Registration Statement or
<PAGE>
Prospectus or preliminary Prospectus included therein. No Holder of Transfer
Restricted Securities shall be entitled to Liquidated Damages pursuant to
Section 5 hereof unless and until such Holder shall have used its best efforts
to provide all such information. Each Holder as to which any Shelf Registration
Statement is being effected agrees to furnish promptly to the Company all
information required to be disclosed in order to make the information previously
furnished to the Company by such Holder not materially misleading.
SECTION 5. LIQUIDATED DAMAGES
If (i) any Registration Statement required by this Agreement is not
filed with the Commission on or prior to the date specified for such filing in
this Agreement, (ii) any such Registration Statement has not been declared
effective by the Commission on or prior to the date specified for such
effectiveness in this Agreement (the "Effectiveness Target Date"), (iii) the
Exchange Offer has not been Consummated within 30 Business Days of the
Effectiveness Target Date with respect to the Exchange Offer Registration
Statement or (iv) any Registration Statement required by this Agreement is filed
and declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose without being succeeded immediately by a
post-effective amendment to such Registration Statement that cures such failure
and that is itself declared effective immediately (each such event referred to
in clauses (i) through (iv), a "Registration Default"), then the Company hereby
agrees to pay liquidated damages, in cash, to each Holder of Transfer Restricted
Securities with respect to the first 90-day period immediately following the
occurrence of such Registration Default, at a rate of 0.5% per annum, determined
daily, on the principal amount of the Series A Notes as of the immediately
preceding Interest Payment Date. Such interest rate will increase by an
additional 0.25% per annum at the beginning of each subsequent 90-day period up
to a maximum aggregate increase of 2.0% per annum until all Registration
Defaults have been cured, at which time the interest rate borne by the Series A
Senior Notes will be reduced to the original interest rate. Notwithstanding
anything to the contrary set forth herein, (1) upon filing of the Exchange Offer
Registration Statement (and/or, if applicable, the Shelf Registration
Statement), in the case of clause (i) above, (2) upon the effectiveness of the
Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement) in the case of clause (ii) above, (3) upon Consummation
of the Exchange Offer in the case of clause (iii) above, or (4) upon the filing
of a post-effective amendment to the Registration Statement or an additional
Registration Statement that causes the Exchange Offer Registration Statement
(and/or, if applicable, the Shelf Registration Statement) to again be declared
effective or made usable in the case of clause (iv) above, the liquidated
damages payable with respect to the Transfer Restricted Securities as a result
of such clause (i), (ii), (iii) or (iv), as applicable, shall cease.
All accrued liquidated damages will be paid by the Company on each
Damages Payment Date to the Global Note Holder by wire transfer of immediately
available funds or by federal funds check and to Holders of Certificated
Securities by mailing checks to their registered addresses, as provided in the
Indenture. All obligations of the Company set forth in the preceding paragraph
that are outstanding with respect to any Transfer Restricted Security at the
time such security ceases to be a Transfer Restricted Security shall survive
until such time as all such obligations with respect to such security shall have
been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company
<PAGE>
shall comply with all applicable provisions of Section 6(c) below, shall use its
best efforts to effect such exchange and to permit the sale of Broker-Dealer
Transfer Restricted Securities being sold in accordance with the intended method
or methods of distribution thereof, and shall comply with all of the following
provisions:
(i) If, following the date hereof there has been published a
change in Commission policy with respect to exchange offers such as the
Exchange Offer such that, in the reasonable opinion of counsel to the
Company, there is a substantial question as to whether the Exchange Offer
is permitted by applicable federal law, the Company hereby agrees to seek
a no-action letter or other favorable decision from the Commission
allowing the Company to Consummate an Exchange Offer for such Series A
Notes. The Company hereby agrees to pursue the issuance of such a decision
to the Commission staff level. In connection with the foregoing, the
Company hereby agrees to take all such other actions as are requested by
the Commission or otherwise required in connection with the issuance of
such decision, including without limitation (A) participating in
telephonic conferences with the Commission, (B) delivering to the
Commission staff an analysis prepared by counsel to the Company setting
forth the legal bases, if any, upon which such counsel has concluded that
such an Exchange Offer should be permitted and (C) diligently pursuing a
resolution (which need not be favorable) by the Commission staff of such
submission.
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Securities shall furnish, upon the request of the Company,
prior to the Consummation of the Exchange Offer, a written representation
to the Company (which may be contained in the letter of transmittal
contemplated by the Exchange Offer Registration Statement) to the effect
that (A) it is not an affiliate of the Company, (B) it is not engaged in,
and does not intend to engage in, and has no arrangement or understanding
with any person to participate in, a distribution of the Series B Notes to
be issued in the Exchange Offer and (C) it is acquiring the Series B Notes
in its ordinary course of business. Each Holder hereby acknowledges and
agrees that any Broker-Dealer and any such Holder using the Exchange Offer
to participate in a distribution of the securities to be acquired in the
Exchange Offer (1) could not under Commission policy as in effect on the
date of this Agreement rely on the position of the Commission enunciated
in Morgan Stanley and Co., Inc. (available June 5, 1991) and Exxon Capital
Holdings Corporation (available May 13, 1988), as interpreted in the
Commission's letter to Shearman & Sterling dated July 2, 1993, and similar
noaction letters (including, if applicable, any no-action letter obtained
pursuant to Section 6(a) (i) and (2) must comply with the registration and
prospectus delivery requirements of the Act in connection with a secondary
resale transaction and that such a secondary resale transaction must be
covered by an effective registration statement containing the selling
security holder information required by Item 507 or 508, as applicable, of
Regulation S-K if the resales are of Series B Notes obtained by such
Holder in exchange for Series A Notes acquired by such Holder directly
from the Company or an affiliate thereof.
(iii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Company shall provide a supplemental letter to the
Commission (A) stating that the Company is registering the Exchange Offer
in reliance on the position of the Commission enunciated in Exxon Capital
Holdings Corporation (available May 13, 1988), Morgan Stanley and Co.,
Inc. (available June 5, 1991) and, if applicable, any no-action letter
obtained pursuant to clause (i) above, (B) including a representation that
the Company has not entered into any arrangement or understanding with any
Person to distribute the
<PAGE>
Series B Notes to be received in the Exchange Offer and that, to the best
of the Company's information and belief, each Holder participating in the
Exchange Offer is acquiring the Series B Notes in its ordinary course of
business and has no arrangement or understanding with any Person to
participate in the distribution of the Series B Notes received in the
Exchange Offer and (C) any other undertaking or representation required by
the Commission as set forth in any no-action letter obtained pursuant to
Section 6(a)(i).
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company shall comply with all the provisions of
Section 6(c) below and shall use its best efforts to effect such registration to
permit the sale of the Transfer Restricted Securities being sold in accordance
with the intended method or methods of distribution thereof (as indicated in the
information furnished to the Company pursuant to Section 4(b) hereof), and
pursuant thereto the Company shall prepare and file with the Commission a
Registration Statement relating to the registration on any appropriate form
under the Act, which form shall be available for the sale of the Transfer
Restricted Securities in accordance with the intended method or methods of
distribution thereof within the time periods and otherwise in accordance with
the provisions hereof.
(c) General Provisions. In connection with any Registration Statement
and any related Prospectus required by this Agreement to permit the sale or
resale of Transfer Restricted Securities (including, without limitation, any
Exchange Offer Registration Statement and the related Prospectus, to the extent
that the same are required to be available to permit sales of Broker-Dealer
Transfer Restricted Securities by Restricted Broker-Dealers), the Company shall:
(i) use its best efforts to keep such Registration Statement
continuously effective and provide all requisite financial statements for
the period specified in Section 3 or 4 of this Agreement, as applicable.
Upon the occurrence of any event that would cause any such Registration
Statement or the Prospectus contained therein (A) to contain a material
misstatement or omission or (B) not to be effective and usable for resale
of Transfer Restricted Securities during the period required by this
Agreement, the Company shall file promptly an appropriate amendment to
such Registration Statement, (1) in the case of clause (A), correcting any
such misstatement or omission, and (2) in the case of clauses (A) and (B),
use its best efforts to cause such amendment to be declared effective and
such Registration Statement and the related Prospectus to become usable
for their intended purpose(s) as soon as practicable thereafter;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be
necessary to keep the Registration Statement effective for the applicable
period set forth in Section 3 or 4 hereof, or such shorter period as will
terminate when all Transfer Restricted Securities covered by such
Registration Statement have been sold; cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented
to be filed pursuant to Rule 424 under the Act, and to comply fully with
Rules 424, 430A and 462, as applicable, under the Act in a timely manner;
and comply with the provisions of the Act with respect to the disposition
of all securities covered by such Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in such Registration
Statement or supplement to the Prospectus;
(iii) promptly advise selling Holders and the underwriter(s),
if any, if requested by such
<PAGE>
Persons, confirm such advice in writing, (A) when the Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and,
with respect to any Registration Statement or any post-effective amendment
thereto, when the same has become effective, (B) of any request by the
Commission for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information relating
thereto, (C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement under the Act
or of the suspension by any state securities commission of the
qualification of the Transfer Restricted Securities for offering or sale
in any jurisdiction, or the initiation of any proceeding for any of the
preceding purposes, (D) of the existence of any fact or the happening of
any event that makes any statement of a material fact made in the
Registration Statement, the Prospectus, any amendment or supplement
thereto or any document incorporated by reference therein untrue, or that
requires the making of any additions to or changes in the Registration
Statement in order to make the statements therein not misleading, or that
requires the making of any additions to or changes in the Prospectus in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. If at any time the Commission
shall issue any stop order suspending the effectiveness of the
Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption from qualification of the Transfer Restricted Securities under
state securities or Blue Sky laws, the Company shall use its best efforts
to obtain the withdrawal or lifting of such order at the earliest possible
time;
(iv) furnish to the Initial Purchaser(s), each selling Holder
named in any Registration Statement or Prospectus and each of the
underwriter(s) in connection with such sale, if any, before filing with
the Commission, copies of any Registration Statement or any Prospectus
included therein or any amendments or supplements to any such Registration
Statement or Prospectus (including all documents incorporated by reference
after the initial filing of such Registration Statement), which documents
shall be subject to the review and comment of such Holders and
underwriter(s) in connection with such sale, if any, for a period of at
least five Business Days, and the Company shall not file any such
Registration Statement or Prospectus or any amendment or supplement to any
such Registration Statement or Prospectus (including, without limitation,
all such documents incorporated by reference) to which the selling Holders
of the Transfer Restricted Securities covered by such Registration
Statement or the underwriter(s) in connection with such sale, if any,
shall reasonably object within five Business Days after the receipt
thereof. A selling Holder or underwriter, if any, shall be deemed to have
reasonably objected to such filing if such Registration Statement,
amendment, Prospectus or supplement, as applicable, as proposed to be
filed, contains a material misstatement or omission or fails to comply
with the applicable requirements of the Act;
(v) promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus,
provide copies of such document to the selling Holders and to the
underwriter(s) in connection with such sale, if any, make the Company's
representatives available for discussion of such document and other
customary due diligence matters, and include such information in such
document prior to the filing thereof as such selling Holders or
underwriter(s), if any, reasonably may request;
(vi) subject to the entry of appropriate confidentiality
agreements, make available at reasonable times for inspection by the
selling Holders, any managing underwriter participating in any disposition
pursuant to such Registration Statement and any attorney or accountant
retained by such
<PAGE>
selling Holders or any of such underwriter(s), all financial and other
records, pertinent corporate documents and properties of the Company and
cause the Company's officers, directors and employees to supply all
information reasonably requested by any such Holder, underwriter, attorney
or accountant in connection with such Registration Statement or any
post-effective amendment thereto subsequent to the filing thereof and
prior to its effectiveness;
(vii) if requested by any selling Holders or the underwriter(s)
in connection with such sale, if any, promptly include in any Registration
Statement or Prospectus, pursuant to a supplement or post-effective
amendment if necessary, such information as such selling Holders and
underwriter(s), if any, may reasonably request to have included therein,
including, without limitation, information relating to the "Plan of
Distribution" of the Transfer Restricted Securities, information with
respect to the principal amount of Transfer Restricted Securities being
sold to such underwriter(s), the purchase price being paid therefor and
any other terms of the offering of the Transfer Restricted Securities to
be sold in such offering; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after the
Company is notified of the matters to be included in such Prospectus
supplement or post-effective amendment;
(viii) furnish to each selling Holder and each of the
underwriter(s) in connection with such sale, if any, without charge, at
least one copy of the Registration Statement, as first filed with the
Commission, and of each amendment thereto, including all documents
incorporated by reference therein and all exhibits (including, without
limitation, all exhibits incorporated therein by reference);
(ix) deliver to each selling Holder and each of the
underwriter(s), if any, without charge, as many copies of the Prospectus
(including, without limitation, each preliminary prospectus) and each
amendment or supplement thereto as such Persons reasonably may request;
the Company hereby consents to the use (in accordance with law) of the
Prospectus and any amendment or supplement thereto by each of the selling
Holders and each of the underwriter(s), if any, in connection with the
offering and the sale of the Transfer Restricted Securities covered by the
Prospectus or any amendment or supplement thereto;
(x) enter into such agreements (including, without limitation,
an underwriting agreement) and make such representations and warranties
and take all such other actions in connection therewith in order to
expedite or facilitate the disposition of the Transfer Restricted
Securities pursuant to any Registration Statement contemplated by this
Agreement as may be reasonably requested by any Holder of Transfer
Restricted Securities or underwriter in connection with any sale or resale
pursuant to any Registration Statement contemplated by this Agreement, and
in such connection, whether or not an underwriting agreement is entered
into and whether or not the registration is an Underwritten Registration,
the Company shall:
(A) furnish (or in the case of paragraphs (2) and (3) below, use
its best efforts to furnish) to each selling Holder and each
underwriter, if any, upon the effectiveness of the Shelf Registration
Statement and to each Restricted Broker-Dealer upon Consummation of
the Exchange Offer:
(1) a certificate, dated the date of Consummation of the
Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, signed on behalf of
the Company by (x) the President and (y) the Secretary, any Vice
President or any Assistant
<PAGE>
Secretary of the Company, confirming, as of the date thereof,
the matters set forth in paragraphs (a), (b), (c) and (d) of
Section 8 of the Purchase Agreement and such other similar
matters as the Holders, underwriter(s) and/or Restricted Broker
Dealers may reasonably request;
(2) an opinion, dated the date of Consummation of the
Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, of counsel for the
Company covering matters similar to those set forth in
paragraphs (f) and (g) of Section 8 of the Purchase Agreement
and such other matter as the Holders, underwriters and/or
Restricted Broker Dealers may reasonably request, and in any
event including a statement to the effect that such counsel has
participated in conferences with officers and other
representatives of the Company, representatives of the
independent public accountants for the Company and have
considered the matters required to be stated therein and the
statements contained therein, although such counsel has not
independently verified the accuracy, completeness or fairness of
such statements; and that such counsel advises that, on the
basis of the foregoing (relying as to materiality to a large
extent upon facts provided to such counsel by officers and other
representatives of the Company and without independent check or
verification), no facts came to such counsel's attention that
caused such counsel to believe that the applicable Registration
Statement, at the time such Registration Statement or any
post-effective amendment thereto became effective and, in the
case of the Exchange Offer Registration Statement, as of the
date of Consummation of the Exchange Offer, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus
contained in such Registration Statement as of its date and, in
the case of the opinion dated the date of Consummation of the
Exchange Offer, as of the date of Consummation, contained an
untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made,
not misleading. Without limiting the foregoing, such counsel may
state further that such counsel assumes no responsibility for,
and has not independently verified, the accuracy, completeness
or fairness of the financial statements, notes and schedules and
other financial data included in any Registration Statement
contemplated by this Agreement or the related Prospectus; and
(3) a customary comfort letter, dated as of the date of
effectiveness of the Shelf Registration Statement or the date of
Consummation of the Exchange Offer, as the case may be, from the
Company's independent accountants, in the customary form and
covering matters of the type customarily covered in comfort
letters to underwriters in connection with primary underwritten
offerings, and affirming the matters set forth in the comfort
letters delivered pursuant to Section 8(j) of the Purchase
Agreement.
(B) set forth in full or incorporate by reference in the
underwriting agreement, if any, in connection with any sale or resale
pursuant to any Shelf Registration Statement the indemnification
provisions and procedures of Section 8 hereof with respect to all
parties to be indemnified pursuant to said Section; and
(C) deliver such other documents and certificates as may be
reasonably requested by the selling Holders, the underwriter(s), if
any, and Restricted Broker Dealers, if any, to evidence
<PAGE>
compliance with clause (A) above and with any customary conditions
contained in the underwriting agreement or other agreement entered
into by the Company pursuant to this clause (x).
The above shall be done at each closing under such underwriting or
similar agreement, as and to the extent required thereunder, and if at any
time the representations and warranties of the Company contemplated in
(A)(1) above cease to be true and correct, the Company shall so advise the
underwriter(s), if any, the selling Holders and each Restricted
Broker-Dealer promptly and if requested by such Persons, shall confirm
such advice in writing;
(xi) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the underwriter(s), if
any, and their counsel in connection with the registration and
qualification of the Transfer Restricted Securities under the securities
or Blue Sky laws of such jurisdictions as the selling Holders or
underwriter(s), if any, may request and do any and all other acts or
things necessary or advisable to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by the
applicable Registration Statement; provided, however, that the Company
shall not be required to register or qualify as a foreign corporation
where it is not now so qualified or to take any action that would subject
it to the service of process in suits or to taxation, other than as to
matters and transactions relating to the Registration Statement, in any
jurisdiction where it is not now so subject;
(xii) issue, upon the request of any Holder of Series A Notes
covered by any Shelf Registration Statement contemplated by this
Agreement, Series B Notes having an aggregate principal amount equal to
the aggregate principal amount of Series A Notes surrendered to the
Company by such Holder in exchange therefor or being sold by such Holder;
such Series B Notes to be registered in the name of such Holder or in the
name of the purchaser(s) of such Senior Notes, as the case may be; in
return, the Series A Notes held by such Holder shall be surrendered to the
Company for cancellation;
(xiii) in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the selling Holders and the
underwriter(s), if any, to facilitate the timely preparation and delivery
of certificates representing Transfer Restricted Securities to be sold and
not bearing any restrictive legends; and to register such Transfer
Restricted Securities in such denominations and such names as the Holders
or the underwriter(s), if any, may request at least two Business Days
prior to such sale of Transfer Restricted Securities;
(xiv) use their respective best efforts to cause the disposition
of the Transfer Restricted Securities covered by the Registration
Statement to be registered with or approved by such other governmental
agencies or authorities as may be necessary to enable the seller or
sellers thereof or the underwriter(s), if any, to consummate the
disposition of such Transfer Restricted Securities, subject to the proviso
contained in clause (xi) above;
(xv) subject to Section 6(c)(i), if any fact or event
contemplated by Section 6(c)(iii)(D) above shall exist or have occurred,
prepare a supplement or post-effective amendment to the Registration
Statement or related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities,
<PAGE>
the Prospectus does not contain an untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading;
(xvi) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of a Registration Statement
covering such Transfer Restricted Securities and provide the Trustee under
the Indenture with printed certificates for the Transfer Restricted
Securities which are in a form eligible for deposit with the Depository
Trust Company;
(xvii) cooperate and assist in any filings required to be made
with the NASD and in the performance of any due diligence investigation by
any underwriter (including, without limitation, any "qualified independent
underwriter") that is required to be retained in accordance with the rules
and regulations of the NASD, and use their respective best efforts to
cause such Registration Statement to become effective and approved by such
governmental agencies or authorities as may be necessary to enable the
Holders selling Transfer Restricted Securities to consummate the
disposition of such Transfer Restricted Securities;
(xviii) otherwise use their respective best efforts to comply
with all applicable rules and regulations of the Commission, and make
generally available to its security holders with regard to any applicable
Registration Statement, as soon as practicable, a consolidated earnings
statement meeting the requirements of Rule 158 (which need not be audited)
covering a twelve-month period beginning after the effective date of the
Registration Statement (as such term is defined in paragraph (c) of Rule
158 under the Act);
(xix) cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement required
by this Agreement and, in connection therewith, cooperate with the Trustee
and the Holders of Senior Notes to effect such changes to the Indenture as
may be required for such Indenture to be so qualified in accordance with
the terms of the TIA; and execute and use its best efforts to cause the
Trustee to execute, all documents that may be required to effect such
changes and all other forms and documents required to be filed with the
Commission to enable such Indenture to be so qualified in a timely manner;
and
(xx) provide promptly to each Holder upon request each document
filed with the Commission pursuant to the requirements of Section 13 or
Section 15(d) of the Exchange Act.
(d) Restrictions on Holders. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of notice from the Company of
the existence of any fact of the kind described in Section 6(c)(iii)(D) hereof,
such Holder shall forthwith discontinue disposition of Transfer Restricted
Securities pursuant to the applicable Registration Statement until such Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 6(c)(xv) hereof, or until it is advised in writing by the Company that
the use of the Prospectus may be resumed, and has received copies of any
additional or supplemental filings that are incorporated by reference in the
Prospectus (the "Advice"). If so directed by the Company, each Holder shall
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Transfer Restricted Securities that was current at the time of
receipt of either such notice. In the event the Company shall give any such
notice, the time period regarding the effectiveness of such Registration
Statement set
<PAGE>
forth in Section 3 or 4 hereof, as applicable, shall be extended by the number
of days during the period from and including the date of the giving of such
notice pursuant to Section 6(c)(i) or Section 6(c)(iii)(D) hereof to and
including the date when each selling Holder covered by such Registration
Statement shall have received the copies of the supplemented or amended
Prospectus contemplated by Section 6(c)(xv) hereof or shall have received the
Advice.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's performance of or
compliance with this Agreement shall be borne by the Company, regardless of
whether a Registration Statement becomes effective, including without
limitation: (i) all registration and filing fees and expenses (including,
without limitation, with respect to filings made by any Initial Purchaser or
Holder with the NASD (and, if applicable, the fees and expenses of any
"qualified independent underwriter") and its counsel that may be required by the
rules and regulations of the NASD); (ii) all fees and expenses of compliance
with federal securities and state Blue Sky or securities laws; (iii) all
expenses of printing (including printing certificates for the Series B Notes to
be issued in the Exchange Offer and printing of Prospectuses), messenger and
delivery services and telephone; (iv) all fees and disbursements of counsel for
the Company and the Holders of Transfer Restricted Securities; (v) all
application and filing fees in connection with listing the Senior Notes on a
national securities exchange or automated quotation system pursuant to the
requirements hereof; and (vi) all fees and disbursements of independent
certified public accountants of the Company (including the expenses of any
special audit and comfort letters required by or incident to such performance).
The Company shall, in any event, bear its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expenses of any annual
audit and the fees and expenses of any Person, including special experts,
retained by the Company.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company shall reimburse the
Initial Purchasers and the Holders of Transfer Restricted Securities being
tendered in the Exchange Offer and/or resold pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or
registered pursuant to the Shelf Registration Statement, as applicable, for the
reasonable fees and disbursements of not more than one counsel, who shall be
chosen by the Holders of a majority in principal amount of the Transfer
Restricted Securities for whose benefit such Registration Statement is being
prepared.
<PAGE>
SECTION 8. INDEMNIFICATION
(a) The Company and its Subsidiaries agree, jointly and severally, to
indemnify and hold harmless (i) each Holder and (ii) each person, if any, who
controls (within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act) any Holder (any of the persons referred to in this clause (ii)
being hereinafter referred to as a "controlling person") and (iii) the
respective officers, directors, partners, employees, representatives and agents
of any Holder or any controlling person (any of the persons referred to in this
clause (i), (ii) or (iii) may hereinafter be referred to as an "Indemnified
Holder") to the fullest extent lawful, from and against any and all losses,
liabilities, claims, damages and expenses whatsoever (including but not limited
to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any investigation or litigation,
commenced or threatened, or any claim whatsoever, and any and all amounts paid
in settlement of any claim or litigation), joint or several, to which they or
any of them may become subject under the Act, the Exchange Act or otherwise,
insofar as such losses, liabilities, claims, damages or expenses (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, as
originally filed or any amendment thereof, or any related preliminary prospectus
or the Prospectus, or in any supplement thereto or amendment thereof, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided that the Company and its Subsidiaries shall not be liable
in any such case to the extent, but only to the extent, that any such loss,
liability, claim, damage or expense arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Holder expressly for use
therein.
(b) Each Holder, severally and not jointly, agrees to indemnify and
hold harmless the Company and its Subsidiaries and any of their respective
directors, officers, and any person controlling (within the meaning of Section
15 of the Act or Section 20 of the Exchange Act) the Company, and the officers,
directors, partners, employees, representatives and agents of each such person,
to the same extent as the foregoing indemnity from the Company and its
Subsidiaries to each of the indemnified Holders, but only with respect to claims
and actions based on information relating to such Holder furnished in writing by
such Holder expressly for use in any Registration Statement. In case any action
or proceeding shall be brought against the Company or its Subsidiaries or any of
their respective directors or officers or any such controlling person in respect
of which indemnity may be sought against a Holder, such Holder shall have the
rights and duties given the Company and its Subsidiaries and the Company, such
Subsidiaries, such directors or officers or such controlling person shall have
the rights and duties given to each Holder by the preceding paragraph. In no
event shall any Holder be liable or responsible for any amount in excess of the
dollar amount of the proceeds received by such Holder upon its sale of the
Transfer Restricted Securities giving rise to such indemnification obligation.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent that it
has been prejudiced in any material respect by such failure or from any
liability which it may otherwise have). In case
<PAGE>
any such action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein, and to the extent it may elect by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party. Notwithstanding the
foregoing, the indemnified party or parties shall have the right to employ its
or their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such indemnified party or parties unless (i) the
employment of such counsel shall have been authorized in writing by the
indemnifying parties in connection with the defense of such action, (ii) the
indemnifying parties shall not have employed counsel reasonably satisfactory to
the indemnified party to take charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii) such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying party or parties shall not have the right to direct the defense of
such action on behalf of the indemnified party or parties), in any of which
events such fees and expenses of counsel shall be borne by the indemnifying
parties. The indemnifying party under subsection (a) or (b) above, shall only be
liable for the legal expenses of one counsel (in addition to any local counsel)
for all indemnified parties in each jurisdiction in which any claim or action is
brought; provided that the indemnifying party shall be liable for separate
counsel for any indemnified party in a jurisdiction, if counsel to the
indemnified parties shall have reasonably concluded that there may be defenses
available to such indemnified party that are difference from or additional to
those available to one or more of the other indemnified parties and that
separate counsel for such indemnified party is prudent under the circumstances.
Anything in this subsection to the contrary notwithstanding, an indemnifying
party shall not be liable for any settlement of any claim or action effected
without its prior written consent; provided that such consent was not
unreasonably withheld.
(d) In order to provide for contribution in circumstances in which
the indemnification provided for in this Section 8 is for any reason held to be
unavailable from the Company or is insufficient to hold harmless a party
indemnified thereunder, the Company and each Holder shall contribute to the
aggregate losses, claims, damages, liabilities and expenses of the nature
contemplated by such indemnification provision (including, without limitation,
any investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claims
asserted, but after deducting in the case of losses, claims, damages,
liabilities and expenses suffered by the Company, any contribution received by
the Company from persons, other than the Holder, who may also be liable for
contribution, including, without limitation, persons who control the Company
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act) to which the Company and one or more of the Holders may be subject, in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Holder or, if such allocation is not permitted by applicable law
or indemnification is not available as a result of the indemnifying party not
having received notice as provided in this Section 8, in such proportion as is
appropriate to reflect not only the relative benefits referred to above but also
the relative fault of the Company and the Holder in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The Company and the Holders agree that it would not be just and equitable if
contribution pursuant to this Section 8 were determined by pro rata allocation
or by any other method of allocation which does not take into account the
equitable considerations referred to above. Notwithstanding the provisions of
this Section 8, (i) no Holder or its related indemnified Holders shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the total proceeds received by such Holder with respect to the sale of its
<PAGE>
Transfer Restricted Securities pursuant to a Registration Statement exceeds the
sum of (A) the amount paid by such Holder for such Transfer Restricted
Securities plus (B) the amount of any damages which such Holder has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Holders' obligations to contribute pursuant to this
Section 8(c) are several in proportion to the respective principal amount of
Series A Notes held by each of the Holders hereunder and not joint.
For purposes of this Section 8(d), (A) each person, if any, who
controls any Holder within the meaning of Section 15 of the Act or Section 20(a)
of the Exchange Act and (B) the respective officers, directors, partners,
employees, representatives and agents of any Holder or any controlling person
shall have the same rights to contribution as such Holder, and each person, if
any, who controls the Company within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act shall have the same rights to contribution as
the Company, subject in each case to clauses (i) and (ii) of this Section 8(d).
Any party entitled to contribution shall, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties
under this Section 8, notify such party or parties from whom contribution may be
sought, but the failure to so notify such party or parties shall not relieve the
party or parties from whom contribution may be sought from any obligation it or
they may have under this Section 8 or otherwise. No party shall be liable for
contribution with respect to any action or claim settled without its prior
written consent; provided that such written consent was not unreasonably
withheld.
SECTION 9. RULE 144A
The Company hereby agrees with each Holder, for so long as any
Transfer Restricted Securities remain outstanding and during any period in which
the Company is not subject to Section 13 or 15(d) of the Securities Exchange
Act, to make available, upon request of any Holder of Transfer Restricted
Securities, to any Holder or beneficial owner of Transfer Restricted Securities
in connection with any sale thereof and any prospective purchaser of such
Transfer Restricted Securities designated by such Holder or beneficial owner,
the information required by Rule 144A(d)(4) under the Act in order to permit
resales of such Transfer Restricted Securities pursuant to Rule 144A.
SECTION 10. UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in customary underwriting arrangements entered
into in connection therewith and (b) completes and executes all reasonable
questionnaires, powers of attorney, and other documents required under the terms
of such underwriting arrangements.
<PAGE>
SECTION 11. SELECTION OF UNDERWRITERS
For any Underwritten Offering, the investment banker or investment
bankers and manager or managers for any Underwritten Offering that will
administer such offering will be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities included in
such offering. Such investment bankers and managers are referred to herein as
the "underwriters."
SECTION 12. MISCELLANEOUS
(a) Remedies. Each Holder, in addition to being entitled to exercise
all rights provided herein, in the Indenture, the Purchase Agreement or granted
by law, including recovery of liquidated or other damages, will be entitled to
specific performance of its rights under this Agreement. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by them of the provisions of this Agreement and hereby agree
to waive the defense in any action for specific performance that a remedy at law
would be adequate.
(b) No Inconsistent Agreements. The Company shall not, on or after
the date of this Agreement, enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Holders in this
Agreement or otherwise conflicts with the provisions hereof. The Company has not
previously entered into any agreement granting any registration rights with
respect to its securities to any Person other than pursuant to (i) the MCI
Preferred Provider Agreement (as defined in the Offering Memorandum, dated
August 21, 1997, relating to the Series A Notes (the "Offering Memorandum")),
(ii) that certain Equity and Contribution Agreement between the Company and
Lenfest Telephony, dated August 4, 1997 and (iii) as set forth in the Offering
Memorandum. The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the holders of
the Company's securities under any agreement in effect on the date hereof.
(c) Adjustments Affecting the Senior Notes. The Company shall not
take any action, or voluntarily permit any change to occur, with respect to the
Senior Notes that would materially and adversely affect the ability of the
Holders to Consummate any Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given unless (i) in the case of Section 5
hereof and this Section 12(d)(i), the Company has obtained the written consent
of Holders of all outstanding Transfer Restricted Securities and (ii) in the
case of all other provisions hereof, the Company has obtained the written
consent of Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities. Notwithstanding the foregoing, a waiver or consent to
departure from the provisions hereof that relates exclusively to the rights of
Holders whose securities are being tendered pursuant to the Exchange Offer and
that does not affect directly or indirectly the rights of other Holders whose
securities are not being tendered pursuant to such Exchange Offer may be given
by the Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities subject to such Exchange Offer.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex,
<PAGE>
telecopier, or air courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of
the Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and
(ii) if to the Company:
Hyperion Telecommunications, Inc.
Main at Water Street
P.O. Box 472
Coudersport, Pennsylvania 16915
Attention: Daniel R. Milliard
<PAGE>
With a copy to:
Buchanan Ingersoll
One Oxford Centre
301 Grant Street
20th Floor
Pittsburgh, PA 15219-1410
Attention: Carl E. Rothenberger, Jr.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next business day, if timely delivered
to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders of Transfer Restricted Securities; provided, however, that
this Agreement shall not inure to the benefit of or be binding upon a successor
or assign of a Holder unless and to the extent such successor or assign acquired
Transfer Restricted Securities directly from such Holder.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICT OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
HYPERION TELECOMMUNICATIONS, INC.
By: /s/ Daniel R. Milliard
----------------------
Name: Daniel R. Milliard
Title: President and COO
BEAR, STEARNS & CO. INC.
By: /s/ Pierce J. Roberts, Jr.
--------------------------
Name: Pierce J. Roberts, Jr.
Title: Senior Managing Director
CHASE SECURITIES INC.
By: /s/ Jeffrey Blumin
-------------------------
Name: Jeffrey Blumin
Title: Vice President
TD SECURITIES (USA) INC.
By: /s/ Mark Bush
-------------------------
Name: Mark Bush
Title:Vice President
CIBC WOOD GUNDY SECURITIES CORP.
By: /s/ Walter McCabbe
--------------------------
Name: Walter McCabbe
Title: Managing Director
SCOTIA CAPITAL MARKETS (USA) INC.
<PAGE>
By:/s/ Nelson Ng
-----------------------------
Name: Nelson Ng
Title: Associate Director
<PAGE>
EXHIBIT 4.05
PLEDGE, ESCROW AND DISBURSEMENT AGREEMENT
by and among
HYPERION TELECOMMUNICATIONS, INC.,
BANK OF MONTREAL TRUST COMPANY
as Trustee
and
BANK OF MONTREAL TRUST COMPANY
as Escrow Agent
m
August 27, 1997
<PAGE>
PLEDGE, ESCROW AND DISBURSEMENT AGREEMENT
THIS PLEDGE, ESCROW AND DISBURSEMENT AGREEMENT (this
"Agreement"), dated as of August 27, 1997, is by and among HYPERION
TELECOMMUNICATIONS, INC. (the "Company"), Bank of Montreal Trust Company, as
trustee under the Indenture referred to below (the "Trustee"), and Bank of
Montreal Trust Company, in its capacity as collateral agent for the Trustee and
the Holders of the Notes hereinafter described (the "Escrow Agent").
RECITALS
A. The Notes. Pursuant to that certain Indenture (the "Indenture")
dated as of August 27, 1997, by and between the Company and the Trustee, the
Company will issue $250,000,000 in aggregate principal amount of 12 1/4% Senior
Secured Notes due 2004 (collectively, the "Notes"). Immediately after receipt of
payment for the Notes (the "Deposit Time"), the Company will deposit $83,400,000
of the net proceeds from the sale of the Notes (the "Escrow Proceeds") into a
segregated cash collateral trust account with the Escrow Agent at its office at
77 Water Street, New York, New York, in the name of Bank of Montreal Trust
Company, as Escrow Agent, "Collateral Account for Hyperion Telecommunications,
Inc." (the "Escrow Account"). The Escrow Account and all balances and
investments from time to time therein shall be under the sole dominion and
control of the Escrow Agent for the benefit of the Holders of the Notes.
Capitalized terms used but not defined herein shall have the meanings assigned
to them in the Indenture.
B. Purpose. The parties hereto desire to set forth their
agreement with regard to the administration of the Escrow Account, the creation
of a security interest in the Collateral (as defined herein) and the conditions
upon which funds will be released from the Escrow Account and the conditions
upon which the security interest and Lien described herein will be released.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Security Interest.
1.1 Pledge and Assignment. The Company hereby irrevocably
pledges, assigns and sets over to the Trustee, and grants to the Trustee, for
the benefit of the Holders of the Notes, a first priority continuing security
interest in all of the Company's right, title and interest to all of the
following, whether now owned or existing or hereafter acquired or created
(collectively, the "Collateral"):
1.1.1 the Escrow Account;
1.1.2 all funds from time to time held in the Escrow
Account, including, without limitation, the Escrow Proceeds and all
certificates and instruments, if any, from time to time, representing
or evidencing the Escrow Account or the Escrow Proceeds;
1.1.3 all Allowable Investments (as defined herein),
whether the same shall constitute certificated securities,
uncertificated securities, investment property, instruments, general
intangibles or otherwise held by or registered in the name of the
Escrow Agent or the Trustee and all certificates and instruments, if
any, from time to time representing or
<PAGE>
evidencing the Allowable Investments;
1.1.4 all notes, certificates of deposit, deposit
accounts, checks and other instruments from time to time hereafter
delivered to or otherwise possessed by the Trustee or the Escrow Agent
for or on behalf of the Company in substitution for or in addition to
any or all of the then existing Collateral;
1.1.5 all interest, dividends, cash, instruments and
other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the then
existing Collateral; and
1.1.6 all proceeds of the foregoing including,
without limitation, cash proceeds.
The Company and the Trustee hereby appoint the Escrow Agent to act as the
Trustee's agent, on behalf of the Holders of the Notes, for purposes of
perfecting the foregoing pledge, assignment and security interest in the
Collateral, and the Escrow Agent hereby accepts such appointment. The Escrow
Agent hereby acknowledges the security interest in the Collateral granted by the
Company in favor of the Trustee hereunder. Escrow Agent further acknowledges
that it is holding the Collateral for the Company subject to the pledge and
security interest granted to the Trustee hereunder. Without prejudice to the
Trustee's rights under Section 7.07 of the Indenture, for so long as the
foregoing pledge, assignment and security interest remains in effect, the Escrow
Agent hereby waives any right of setoff or banker's lien that it, in its
individual capacity, may have with respect to any or all of the Collateral.
1.2 Secured Obligations. This Agreement secures the due and
punctual payment and performance of all obligations and indebtedness of the
Company, whether now or hereafter existing, under the Notes and the Indenture
including, without limitation, interest accrued thereon after the commencement
of a bankruptcy, reorganization or similar proceeding involving the Company to
the extent permitted by applicable law (collectively, the "Secured
Obligations").
1.3 Delivery of Collateral. All certificates or instruments,
if any, representing or evidencing the Collateral shall be held by or on behalf
of the Escrow Agent pursuant hereto and shall be in suitable form for transfer
by delivery, or shall be accompanied by duly executed instruments of transfer or
assignments in blank, all in form and substance reasonably satisfactory to the
Trustee and the Escrow Agent. All securities in uncertificated or book-entry
form, if any, representing or evidencing the Collateral shall be registered in
the name of the Trustee or any of its nominees by book-entry or as otherwise
appropriate so as to properly identify the interest of the Trustee therein. In
addition, the Trustee shall have the right, at any time following the occurrence
of an Event of Default, and only for so long as such Event of Default is
continuing, to transfer to or to register in the name of the Trustee or any of
its nominees any or all other Collateral. Except as otherwise provided herein,
all Collateral shall be deposited and held in the Escrow Account. The Trustee
shall have the right at any time to exchange certificates or instruments
representing or evidencing all or any portion of the Collateral for certificates
or instruments of smaller or larger denominations in the same aggregate amount.
1.4 Further Assurances. Prior to, contemporaneously herewith,
and at any time and from time to time hereafter, the Company shall, at the
Company's expense, execute and deliver to the Trustee or the Escrow Agent such
other instruments and documents, and shall take all further action as it deems
necessary or advisable or as the Trustee or the Escrow Agent may reasonably
requests, including, without limitation, an Opinion of Counsel, upon which the
Trustee or the Escrow Agent, as the case may be, may conclusively rely, to
confirm or perfect the security interest of the Trustee granted or purported to
be granted
<PAGE>
hereby or to enable the Trustee to exercise and enforce its rights and remedies
hereunder with respect to any Collateral, and the Company shall take all
necessary action to preserve and protect the security interest created hereby as
a first priority, perfected lien and encumbrance upon the Collateral. The
Company shall pay all costs incurred in connection with any of the foregoing.
1.5 Maintaining the Escrow Account. So long as this
Agreement is in full force and effect:
1.5.1 the Company shall establish and maintain the
Escrow Account with the Escrow Agent in New York, New York, and the
Escrow Account shall at all times remain under the exclusive dominion
and control of the Escrow Agent for the benefit of the Holders of the
Notes; and
1.5.2 it shall be a term and condition of the Escrow
Account, notwithstanding any term or condition to the contrary in any
other agreement relating to the Escrow Account and except as otherwise
provided by the provisions of Article 3 of this Agreement, that no
amount (including, without limitation, interest on or other proceeds of
the Escrow Account or on any Allowable Investments held therein) shall
be paid or released to or for the account of, or withdrawn by or for
the account of, the Company or any other person or entity other than
the Trustee from the Escrow Account.
1.6 Transfers and Other Liens. Until termination of this
Agreement pursuant to Section 8, the Company agrees that it shall not (i) sell,
assign (by operation of law or otherwise) or otherwise dispose of, or grant any
option with respect to, any of the Collateral or (ii) create or permit to exist
any Lien upon or with respect to any of the Collateral, except for the security
interest under this Agreement.
1.7 Attorneys-in-Fact. In addition to all of the powers
granted to the Trustee pursuant to Article 6 of the Indenture, the Company
hereby irrevocably appoints each of the Trustee and the Escrow Agent as the
Company's attorney-in-fact, coupled with an interest, with full authority in the
place and stead of the Company and in the name of the Company or otherwise, from
time to time in the Trustee's or the Escrow Agent's discretion to, so long as
any Event of Default has occurred and is continuing, take any action and to
execute any instrument which the Trustee or the Escrow Agent may deem necessary
or advisable to accomplish the purposes of this Agreement, including, without
limitation, to receive, endorse and collect all instruments made payable to the
Company representing any interest payment, dividend or other distribution in
respect of the Collateral or any part thereof and to give full discharge for the
same, and the expenses of the Trustee incurred in connection therewith shall be
payable by the Company.
1.8 Trustee May Perform. Without limiting the authority
granted under Section 1.7 and except with respect to the failure of the Company
to deliver investment instructions, which shall be governed by the second
paragraph of Section 2.1 hereof, if the Company fails to perform any agreement
contained herein, the Trustee or the Escrow Agent may, but shall not be
obligated to, itself perform, or cause performance of, such agreement, and the
expenses of the Trustee or the Escrow Agent incurred in connection therewith
shall be payable by the Company. In the event that the Trustee or the Escrow
Agent perform pursuant to this Section 1.8, the Company shall compensate,
reimburse and indemnify the Trustee or the Escrow Agent, as the case may be, in
the manner provided in Section 7.07 of the Indenture.
1.9 Escrow Account Statement. Each month, the Escrow
Agent shall deliver to the Company and the Trustee a statement in a form
satisfactory to the Company and the Trustee setting forth with reasonable
particularity the balance of funds then in the Escrow Account and the manner in
which such
<PAGE>
funds are invested. The parties hereto irrevocably instruct the Escrow Agent
that on the first date upon which the balance in the Escrow account is reduced
to zero, the Escrow Agent shall deliver to the Company and to the Trustee a
notice that the balance in the Escrow Account has been reduced to zero.
2. Investment and Liquidation of Funds in Escrow Account. Funds
deposited in the Escrow Account shall be invested and reinvested by the Escrow
Agent on the following terms and conditions:
2.1 Allowable Investments. Subject to the provisions of
Articles 2 and 3, funds held by the Escrow Agent in the Escrow Account may, at
the written direction of the Company, be invested and reinvested solely in the
following ("Allowable Investments"): (i) fixed rate obligations of, or
obligations guaranteed by, the United States of America for the payment of which
guarantee or obligations the full faith and credit of the United States of
America is pledged ("Government Securities") having a maturity date on or before
the date on which the payments of interest on the Notes to which such Government
Securities are pledged to secure occur and (ii) shares of any money market
mutual fund or similar fund, in each case, having assets in excess of $500
million which invests solely in Government Securities.
If the Company fails to give written investment instructions
to the Escrow Agent by 10:00 a.m. (New York time) on any Business Day (other
than the Closing Date) on which there is uninvested cash and/or maturing
Allowable Investments in the Escrow Account, the Trustee is hereby authorized
and directed to direct the Escrow Agent to, and the Escrow Agent shall, invest
any such cash or the proceeds of any maturing Allowable Investments in Allowable
Investments maturing on the next Business Day. On the Closing Date, the Company
may direct the Trustee, who shall direct the Escrow Agent, to invest the
proceeds in the Escrow Account in Allowable Investments until 2:00 p.m., which
instructions shall be executed no later than 12:00 noon on the Business Day
immediately following the Closing Date. The Company's failure to give such
investment instructions shall not constitute a default or an event of default
hereunder.
2.2 Interest. All interest earned on funds invested in
Allowable Investments shall be held in the Escrow Account and reinvested in
accordance with the terms hereof and shall be subject to the security interest
granted hereunder to the Trustee.
2.3 Limitation of Trustee's and Escrow Agent's Liability.
Subject to Section 9.12, in no event shall the Trustee or the Escrow Agent have
any liability to the Company or any other Person for investing the funds from
time to time in the Escrow Account in accordance with the provisions of this
Article 2, regardless of whether greater income or a higher yield could have
been obtained had the Escrow Agent invested such funds in different Allowable
Investments, or for any loss (including breakage costs or loss of principal)
associated with the sale or liquidation of Allowable Investments in accordance
with the terms of this Agreement.
2.4 Liquidation of Funds. In liquidating any Allowable
Investments in accordance with Article 3 of this Agreement, the Company shall
direct the Trustee or the Escrow Agent as to which Allowable Investments shall
be liquidated.
3. Interest Payments.
3.1 Not later than five (5) Business Days prior to the date of
each of the first six scheduled interest payments due on the Notes, the Company
shall, in writing, direct the Escrow Agent to transfer from the Escrow Account
to the Paying Agent funds necessary to provide for payment in full or any
portion of the next scheduled interest payment on the Notes or, if the Company
does not intend to utilize the funds in the Escrow Account for such payment of
interest, then the Company shall comply with Section 3.2
<PAGE>
below. Upon receipt of such written request, the Escrow Agent shall take any
action necessary to provide for the payment of such interest payment on the
Notes directly to the Holders of Notes from proceeds of the Collateral in the
Escrow Account. Concurrently with any release of funds to the Paying Agent
pursuant to this Section 3.1, the Company shall deliver to the Trustee a
certificate substantially in the form of Exhibit A hereto.
3.2 If the Company makes any interest payment or portion of an
interest payment from a source of funds other than the Escrow Account ("Company
Funds"), the Company may, after payment in full of such interest payment, direct
the Trustee in writing to direct the Escrow Agent to release to the Company or
at the direction of the Company an amount of funds from the Escrow Account equal
to the lesser of (i) the amount of Company Funds so expended and (ii) the amount
of funds in the Escrow Account which exceeds the amount sufficient, in the
reasonable opinion of the Trustee, to provide for payment in full of the first
six scheduled interest payments on the Notes less than or equal to the amount of
Company Funds so expended. Upon receipt of the certificate described in the
following sentence, the Trustee shall direct the Escrow Agent to pay over to the
Company the requested amount. Concurrently with any release of funds to the
Company pursuant to this Section 3.2, the Company shall deliver to the Trustee a
certificate substantially in the form of Exhibit A hereto.
3.3 Upon payment in full of the first six scheduled interest
payments on the Notes, the security interest in the Collateral evidenced by this
Agreement shall terminate and be of no further force and effect. Furthermore,
upon the release of any Collateral from the Escrow Account in accordance with
the terms of this Agreement, whether upon release of Collateral to Holders as
payment of interest, to the Company or otherwise, the security interest
evidenced by this Agreement in the Collateral so released shall terminate and be
of no further force and effect.
4. Representations and Warranties. The Company hereby represents
and warrants that:
4.1 The execution, delivery and performance by the Company of
this Agreement are within the Company's corporate powers, have been duly
authorized by all necessary corporate action, and do not contravene, or
constitute a default under, any provision of applicable law or regulation or of
the certificate of incorporation of the Company or of any agreement, judgment,
injunction, order, decree or other instrument binding upon the Company or result
in the creation or imposition of any Lien on any assets of the Company, except
for the security interests granted under this Agreement.
4.2 The Company is the record and beneficial owner of the
Collateral, free and clear of any and all Liens or claims of any person or
entity (except for the security interests granted under this Agreement). No
financing statement covering the Collateral is on file in any public office
other than the financing statements filed pursuant to this Agreement.
4.3 This Agreement has been duly executed and delivered by the
Company and constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally or general principles of equity and commercial
reasonableness.
4.4 Upon the filing of financing statements required by the
Uniform Commercial Code (the "UCC"), the pledge of the Collateral pursuant to
this Agreement creates a valid and perfected first priority security interest in
and to the Collateral, securing the payment of the Secured Obligations for the
benefit of the Trustee and the ratable benefit of the Holders of Notes,
enforceable as such against all creditors of the
<PAGE>
Company and any persons purporting to purchase any of the Collateral from the
Company other than as permitted by the Indenture.
4.5 No consent of any other Person and no consent,
authorization, approval, or other action by, and no notice to or filing with,
any governmental authority or regulatory body is required either (1) for the
pledge by the Company of the Collateral pursuant to this Agreement or for the
execution, delivery or performance of this Agreement by the Company (except for
any filings necessary to perfect Liens on the Collateral) or (2) for the
exercise by the Trustee of the rights provided for in this Agreement or the
remedies in respect of the Collateral pursuant to this Agreement.
4.6 No litigation, investigation or proceeding of or before
any arbitrator or governmental authority is pending or, to the knowledge of the
Company, threatened by or against the Company with respect to this Agreement or
any of the transactions contemplated hereby.
4.7 The pledge of the Collateral pursuant to this Agreement is
not prohibited by any applicable law or governmental regulation, release,
interpretation or opinion of the Board of Governors of the Federal Reserve
System or other regulatory agency (including, without limitation, Regulations G,
T, U and X of the Board of Governors of the Federal Reserve System).
5. Covenants
The Company covenants and agrees with the Escrow Agent, the
Trustee and the Holders of Notes from and after the date of this Agreement until
the earlier of payment in full in cash of (A) each of the first six scheduled
interest payments due on the Notes under the terms of the Indenture or (B) all
obligations (including, but not limited to all Obligations) due and owing under
the Indenture and the Notes in the event such obligations (including, but not
limited to all Obligations) become due and payable prior to the payment of the
first six scheduled interest payments on the Notes:
(i) The Company agrees that it shall not (a) sell or otherwise
dispose of, or grant any option or warrant with respect to, any of the
Collateral or (b) create or permit to exist any Lien upon or with
respect to any of the Collateral (except for the lien created pursuant
to this Agreement) and, except as otherwise provided in this Agreement,
at all times shall be the sole beneficial owner of the Collateral.
(ii) The Company agrees that it shall not (a) enter into any
agreement or understanding that purports to or may restrict or inhibit
the Trustee's rights or remedies hereunder, including, without
limitation, the Trustee's right to sell or otherwise dispose of the
Collateral in accordance with the terms of this Agreement or (b) fail
to pay or discharge any tax, assessment or levy of any nature not later
than five days prior to the date of any proposed sale under any
judgement, writ or warrant of attachment with regard to the Collateral.
6. Remedies upon Default. If any Event of Default shall have
occurred and be continuing:
(i) The Trustee may, without notice to the Company except as
required by law and at any time or from time to time, direct the Escrow
Agent to liquidate all Allowable Investments and transfer all funds in
the Escrow Account to the Trustee or the Paying Agent to apply such
funds in accordance with the provisions of the Indenture.
(ii) The Escrow Agent and/or the Trustee may also exercise
in respect of the Collateral,
<PAGE>
in addition to the other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured
party on default under the Uniform Commercial Code in effect at that
time in the State of New York (the "Code") (whether or not the Code
applies to the affected Collateral), and may also, without notice
except as specified below, sell the Collateral or any part thereof in
one or more parcels at public or private sale, at any of the Trustee's
or the Escrow Agent's offices or elsewhere, for cash, on credit or for
future delivery, and upon such other terms as the Trustee may deem
commercially reasonable. The Company agrees that, to the extent notice
of sale shall be required by law, at least ten days' notice to the
Company of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable
notification. The Trustee and the Escrow Agent shall not be obligated
to make any sale of Collateral regardless of notice of sale having been
given. The Trustee or the Escrow Agent may adjourn any public or
private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned.
(iii) Any cash held by the Escrow Agent as Collateral and all
net cash proceeds received by the Trustee or the Escrow Agent in
respect of any sale or liquidation of, collection from, or other
realization upon all or any part of the Collateral may, in the
discretion of the Trustee, be held by the Trustee or the Escrow Agent
as collateral for, and/or then or at any time thereafter be applied
(after payment of any costs and expenses incurred in connection with
any sale, liquidation or disposition of or realization upon the
Collateral and the payment of any amounts payable to the Trustee or the
Escrow Agent) in whole or in part by the Trustee or the Escrow Agent
for the ratable benefit of the Holders of the Notes against, all or any
part of the Secured Obligations in such order as the Trustee shall
elect. Any surplus of such cash or cash proceeds held by the Trustee or
the Escrow Agent and remaining after payment in full of all the Secured
Obligations and the costs and expenses incurred by and amounts payable
to the Trustee or the Escrow Agent hereunder or under the Indenture
shall be paid over to the Company or to whomsoever shall be lawfully
entitled to receive such surplus.
7. Indemnity and Authority of the Escrow Agent.
7.1 The Escrow Agent shall have and be entitled to
exercise all powers hereunder that are specifically granted to the
Escrow Agent by the terms hereof, together with such powers as are
reasonably incident thereto. The Escrow Agent may perform any of its
duties hereunder or in connection with the Escrow Account by or through
agents or employees and shall be entitled to retain counsel of its
choice and to act in reliance upon the advice of such counsel
concerning all such matters. Neither the Escrow Agent nor any director,
officer, employee, attorney or agent of the Escrow Agent (each, an
"Indemnified Person") shall be responsible for the validity,
effectiveness or sufficiency hereof or of any document or security
furnished pursuant hereto. The Escrow Agent and its directors,
officers, employees, attorneys and agents shall be entitled to rely on
any communication, instrument or document believed by it or them to be
genuine and correct and to have been signed or sent by the proper
person or persons. The Company agrees to indemnify and hold harmless
the Escrow Agent and each Indemnified Person from and against any and
all costs, expenses (including the reasonable fees and disbursements of
counsel (including the reasonably allocated costs of inside counsel)),
claims and liabilities incurred by the Escrow Agent or such Indemnified
Person hereunder, unless such claim or liability shall be due to
willful misconduct or gross negligence on the part of the Escrow Agent
or such Indemnified Person.
7.2 The Company acknowledges that the rights and
responsibilities of the Escrow Agent under this Agreement with respect
to any action taken by the Escrow Agent or the exercise or non-exercise
by the Escrow Agent of any option, right, request, judgment or other
right
<PAGE>
or remedy provided for herein or resulting or arising out of this
Agreement shall be governed by the Indenture and, as between the Escrow
Agent and the Company, the Escrow Agent shall be conclusively presumed
to be acting as agent for the Trustee with full and valid authority so
to act or refrain from acting, and the Company shall not be obligated
or entitled to make any inquiry respecting such authority.
7.3 No provision of this Agreement shall require the
Trustee to expend or risk its own funds or incur any liability. The
Trustee shall be under no obligation to exercise any of its rights and
powers under this Agreement at the request of any Holders, unless such
Holder shall have offered to the Trustee security and indemnity
satisfactory to it against any loss, liability or expense.
8. Termination.
8.1 This Agreement shall create a continuing security interest
in and to the Collateral and such security interest shall, unless otherwise
provided in the Indenture or in this Agreement, remain in full force and effect
until the earlier of payment in full in cash of (A) each of the first six
scheduled interest payments due on the Notes under the terms of the Indenture or
(B) all obligations (including, but not limited to, all Obligations) due and
owing under the Indenture and the Notes in the event such obligations become
payable prior to the payment of the first six scheduled interest payments on the
Notes. This Agreement shall be binding upon the Company, its successors and
assigns, and shall inure, together with the rights and remedies of the Trustee
hereunder, to the benefit of the Trustee, the Escrow Agent, the Holders of Notes
and their respective successors, transferees and assigns.
8.2 Subject to the provisions of Section 9.3 hereof, this
Agreement shall terminate upon the earlier of payment in full in cash of (A)
each of the first six scheduled interest payments due on the Notes under the
terms of the Indenture or (B) all obligations (including, but not limited to,
all Obligations) due and owing under the Indenture and the Notes in the event
such obligations (including, but not limited to all Obligations) become payable
prior to the payment of the first six scheduled interest payments on the Notes.
At such time, the Trustee shall, at the written request of the Company, reassign
and redeliver to the Company all of the Collateral hereunder that has not been
sold, disposed of, retained or applied by the Trustee in accordance with the
terms of this Agreement and the Indenture. Such reassignment and redelivery
shall be without warranty (either express or implied) by or recourse to the
Trustee, except as to the absence of any prior assignments by or encumbrances
created by the Trustee on its interest in the Collateral, and shall be at the
expense of the Company.
9. Miscellaneous.
9.1 Waiver. Either party hereto may specifically waive any
breach of this Agreement by any other party, but no such waiver shall be deemed
to have been given unless such waiver is in writing, signed by the waiving
party, and specifically designates the breach waived, nor shall any such waiver
constitute a continuing waiver of similar or other breaches.
9.2 Invalidity. If, for any reason whatsoever, any one or more
of the provisions of this Agreement shall be held or deemed to be inoperative,
unenforceable or invalid in a particular case or in all cases, such
circumstances shall not have the effect of rendering any of the other provisions
of this Agreement inoperative, unenforceable or invalid, and the inoperative,
unenforceable or invalid provision shall be construed as if it were written so
as to effectuate, to the maximum extent possible, the parties' intent.
9.3 Survival of Provisions. All representations,
warranties and covenants of the
<PAGE>
Company contained herein shall survive the execution and delivery of this
Agreement, and shall terminate only upon the termination of this Agreement;
provided, however, that the Company's obligations pursuant to Section 7 hereof
shall survive the termination of this Agreement (including any termination under
applicable bankruptcy laws) or the resignation or removal of the Trustee or the
Escrow Agent.
9.4 Assignment. This Agreement shall inure to and be binding
upon the parties and their respective successors and permitted assigns;
provided, however, that the Company may not assign its rights or obligations
hereunder without the express prior written consent of the Trustee, acting at
the direction of the Holders as provided in the Indenture.
9.5 Entire Agreement; Amendments. This Agreement and the
Indenture contain the entire agreement among the parties with respect to the
subject matter hereof and supersede any and all prior agreements, understandings
and commitments with respect thereto, whether oral or written; provided,
however, that this Agreement is executed and accepted by the Trustee and the
Escrow Agent subject to all terms and conditions of its acceptance of the trust
under the Indenture, as fully as if said terms and conditions were set forth at
length herein. This Agreement may be amended only by a writing signed by duly
authorized representatives of all parties. The Trustee and the Escrow Agent may
execute an amendment to this Agreement only if the requisite consent of the
Holders of the Notes required by Section 9.02 of the Indenture has been
obtained, unless no such consent is required by such Section 9.02 of the
Indenture.
9.6 Notices. All notices and other communications required or
permitted to be given or made under this Agreement to any party hereto shall be
delivered in writing by hand delivery or overnight delivery, or shall be
delivered by facsimile or telephonically with confirmation in writing not more
than twenty-four hours following such telephonic notice. A notice given in
accordance with the preceding sentence shall be deemed to have been duly given
upon the sending thereof, except for notice to the Trustee or the Escrow Agent,
which shall be deemed given only when received. Notices should be addressed as
follows:
To the Company:
Hyperion Telecommunications, Inc.
Main at Water Street
P.O. Box 472
Coudersport, Pennsylvania 16915
Attention: Daniel R. Milliard
Facsimile number: (814) 274-7098
Telephone number: (814) 274-9830
<PAGE>
With copies to:
Carl Rothenberger
Buchanan Ingersoll Professional Corporation
301 Grant Street
Pittsburgh, PA 15219
Facsimile number: (412) 562-1041
Telephone number: (412) 562-8826
To the Trustee:
Bank of Montreal Trust Company
77 Water Street
New York, New York 10005
Attention: Therese Gaballah
Facsimile number: (212) 701-7684
Telephone number: (212) 701-7650
To the Escrow Agent:
Bank of Montreal Trust Company
77 Water Street
New York, New York 10005
Attention: Therese Gaballah
Facsimile number : (212) 701-7684
Telephone number: (212) 701-7650
or at such other address, facsimile number or phone number as the specified
entity most recently may have designated in writing in accordance with this
paragraph to the other parties.
9.7 Expenses. The Company shall from time to time pay to the
Trustee and the Escrow Agent their reasonable fees and expenses and any
reasonable fees and expenses of their counsel, that the Trustee and Escrow Agent
may incur in connection with (a) the administration of this Agreement, (b) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (c) the exercise or enforcement of any
of the rights of the Trustee and Escrow Agent and the Holders of Notes hereunder
or (d) the failure by the Company to perform or observe any of the provisions
hereof, in each case other than any such expenses that arise from the gross
negligence or willful misconduct of the Trustee or Escrow Agent.
9.8 Security Interest Absolute. All rights of the Trustee and
the Holders of Notes and security interests hereunder, and all obligations of
the Company hereunder, shall be absolute and unconditional irrespective of (a)
any lack of validity or enforceability of the Indenture or any other agreement
or instrument relating thereto; (b) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Secured Obligations, or
any other amendment or waiver of or any consent to any departure from the
Indenture; (c) any exchange, surrender, release or non-perfection of any Liens
on any other collateral for all or any of the Secured Obligations; or (d) to the
extent permitted by applicable law, any other circumstance which might otherwise
constitute a defense available to, or a discharge of, the Company in respect of
the Secured Obligations or of this Agreement.
<PAGE>
9.9 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. Delivery of an executed
counterpart of a signature page to this Agreement by facsimile shall be
effective as delivery of a manually executed counterpart of this Agreement.
9.10 Limitation by Law. All rights, remedies and powers
provided herein may be exercised only to the extent that they shall not render
this Agreement not entitled to be recorded, registered or filed under provisions
of any applicable law.
9.11 Rights of Holders of Notes. No Holder of Notes shall have
any independent rights hereunder other than those rights granted to individual
Holders of Notes pursuant to Section 6.06 of the Indenture; provided that
nothing in this subsection shall limit any rights granted to the Trustee under
the Indenture.
9.12 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF
DAMAGES.
(i) THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED UNDER
THE LAWS OF THE STATE OF NEW YORK, AND ANY DISPUTE ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THE
COMPANY, THE TRUSTEE AND THE HOLDERS OF NOTES IN CONNECTION WITH THIS AGREEMENT,
AND WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE RESOLVED IN
ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAWS
PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.
(ii) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH AND IN PARAGRAPH
(vi) BELOW, THE COMPANY, THE TRUSTEE, THE ESCROW AGENT AND THE HOLDERS OF NOTES
AGREE THAT ALL DISPUTES BETWEEN OR AMONG THEM ARISING OUT OF, CONNECTED WITH,
RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY,
OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE OR FEDERAL COURTS LOCATED IN NEW
YORK, NEW YORK, BUT THE COMPANY, THE TRUSTEE, THE ESCROW AGENT AND THE HOLDERS
OF NOTES ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY
A COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK. THE COMPANY WAIVES IN ALL
DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING
THE DISPUTE INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS.
(iii) THE COMPANY AGREES THAT THE TRUSTEE SHALL, IN ITS
CAPACITY AS TRUSTEE OR IN THE NAME AND ON BEHALF OF ANY HOLDER OF NOTES, HAVE
THE RIGHT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST THE
COMPANY OR ITS PROPERTY IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD
FAITH (AND HAVING PERSONAL OR IN REM JURISDICTION OVER THE COMPANY OR ITS
PROPERTY, AS THE CASE MAY BE) TO ENABLE THE TRUSTEE TO REALIZE ON SUCH PROPERTY,
OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE TRUSTEE.
THE COMPANY AGREES THAT IT SHALL NOT ASSERT ANY COUNTERCLAIMS, SETOFFS OR CROSS
CLAIMS IN ANY PROCEEDING BROUGHT BY THE TRUSTEE TO REALIZE ON SUCH PROPERTY OR
TO ENFORCE A JUDGEMENT OR OTHER COURT ORDER IN FAVOR OF THE TRUSTEE, EXCEPT FOR
SUCH COUNTERCLAIMS, SETOFFS OR CROSSCLAIMS WHICH, IF NOT
<PAGE>
ASSERTED IN ANY SUCH PROCEEDING, COULD NOT OTHERWISE BE BROUGHT OR ASSERTED. THE
COMPANY WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN
WHICH THE TRUSTEE HAS COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH,
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS.
(iv) THE COMPANY, THE TRUSTEE AND THE ESCROW AGENT EACH WAIVE
ANY AND ALL RIGHTS TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, IN CONNECTION WITH, OR
RELATING OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM PURSUANT TO,
UNDER OR IN CONNECTION WITH THIS AGREEMENT. INSTEAD, ALL DISPUTES RESOLVED IN
COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
(v) THE COMPANY HEREBY IRREVOCABLY DESIGNATES CT CORPORATION
AS THE DESIGNEE, APPOINTEE AND AGENT OF THE COMPANY TO RECEIVE, FOR AND ON
BEHALF OF THE COMPANY, SERVICE OF PROCESS IN ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT. IT IS UNDERSTOOD THAT NOTICE AND A COPY OF SUCH
PROCESS SERVED ON SUCH AGENT, WILL BE FORWARDED PROMPTLY TO THE COMPANY, BUT THE
FAILURE OF THE COMPANY TO RECEIVE SUCH NOTICE AND COPY SHALL NOT AFFECT IN ANY
WAY THE SERVICE OF SUCH PROCESS. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO THE COMPANY AT ITS ADDRESS SET FORTH IN SECTION 11.02 OF THE
INDENTURE, SUCH SERVICE TO BECOME EFFECTIVE FIVE (5) BUSINESS DAYS AFTER SUCH
MAILING.
(vi) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ESCROW
AGENT, THE TRUSTEE OR ANY HOLDER OF NOTES TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
THE COMPANY IN ANY OTHER JURISDICTION.
(vii) THE COMPANY AGREES THAT NEITHER THE TRUSTEE, THE ESCROW
AGENT NOR ANY HOLDER OF NOTES SHALL HAVE ANY LIABILITY TO THE COMPANY (WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE) FOR LOSSES SUFFERED BY THE COMPANY IN
CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATING OR INCIDENTAL TO, THE
TRANSACTIONS CONTEMPLATED AND THE RELATIONSHIP ESTABLISHED BY THIS AGREEMENT, OR
ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH, UNLESS IT IS
DETERMINED BY A FINAL AND NONAPPEALABLE JUDGMENT OF A COURT THAT IS BINDING ON
THE TRUSTEE OR SUCH HOLDER OF NOTES, AS THE CASE MAY BE, THAT SUCH LOSSES WERE
THE RESULT OF ACTS OR OMISSIONS ON THE PART OF THE TRUSTEE OR SUCH HOLDER OF
NOTES, AS THE CASE MAY BE, CONSTITUTING BAD FAITH, GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.
(viii) TO THE EXTENT PERMITTED BY APPLICABLE LAW, AND EXCEPT
AS OTHERWISE PROVIDED IN THIS AGREEMENT, THE COMPANY WAIVES ALL RIGHTS OF NOTICE
AND HEARING OF ANY KIND PRIOR TO THE EXERCISE BY THE TRUSTEE OR ANY HOLDER OF
NOTES OF ITS RIGHTS DURING THE CONTINUANCE OF AN EVENT OF DEFAULT TO REPOSSESS
THE COLLATERAL WITH JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR
<PAGE>
LEVY UPON THE COLLATERAL OR OTHER SECURITY FOR THE SECURED OBLIGATIONS. TO THE
EXTENT PERMITTED BY APPLICABLE LAW, THE COMPANY WAIVES THE POSTING OF ANY BOND
OTHERWISE REQUIRED OF THE TRUSTEE OR ANY HOLDER OF NOTES IN CONNECTION WITH ANY
JUDICIAL PROCESS OR PROCEEDING TO OBTAIN POSSESSION OF, REPLEVY, ATTACH OR LEVY
UPON THE COLLATERAL OR OTHER SECURITY FOR THE SECURED OBLIGATIONS, TO ENFORCE
ANY JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE TRUSTEE OR ANY HOLDER
OF NOTES, OR TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING ORDER OR
PRELIMINARY OR PERMANENT INJUNCTION, THIS AGREEMENT OR ANY OTHER AGREEMENT OR
DOCUMENT BETWEEN THE COMPANY ON THE ONE HAND AND THE TRUSTEE AND/OR THE HOLDERS
OF NOTES ON THE OTHER HAND.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Pledge, Escrow and Disbursement Agreement as of the day first
written above.
COMPANY: HYPERION TELECOMMUNICATIONS, INC.
By: /s/ Daniel R. Milliard
Name: Daniel R. Milliard
Title: President and COO
TRUSTEE: BANK OF MONTREAL TRUST COMPANY
By :/s/ Therese Gaballah
Name: Therese Gaballah
Title: Vice President
ESCROW AGENT: BANK OF MONTREAL TRUST COMPANY
By /s/ Therese Gaballah
Name: Therese Gaballah
Title: Vice President
<PAGE>
EXHIBIT A
[Form of Certificate for Release of Funds to [Company][Paying Agent]]
HYPERION TELECOMMUNICATIONS, INC.
Date:__________
The undersigned officer of Hyperion Telecommunications, Inc.,
a Delaware corporation (the "Company"), hereby certifies, pursuant to Section
[3.1][3.2] of the Pledge, Escrow and Disbursement Agreement dated as of August
__, 1997 (the "Escrow and Disbursement Agreement") by and among the Company,
Bank of Montreal Trust , as trustee (the "Trustee"), and , as escrow agent (the
"Escrow Agent"), under the Indenture dated as of August __, 1997 (the
"Indenture"), between the Company and the Trustee, that:
The release of funds has been duly authorized by all necessary
corporation action and does not contravene, or constitute a default
under, any provision of applicable law or regulation or the certificate
of incorporation of the Company or of any agreement, judgment,
injunction, order, decree or other instrument binding upon the Company
or result in the creation or imposition of any Lien on any assets of
the Company.
The Company hereby requests the Trustee to direct the Escrow
Agent to liquidate $_________ worth of Allowable Investments in the Escrow
Account by not later than 12:00 noon (New York time) on _________ __, 199_ and
to transfer $________ in immediately available funds to [the Company][the Paying
Agent].
Capitalized terms used herein without definition shall have
the meanings set forth in the Escrow and Disbursement Agreement.
By: _______________________________
Name: ____________________________
A-1
<PAGE>
Title: ____________________________
A-2
<PAGE>
EXHIBIT 4.06
SECOND SUPPLEMENTAL INDENTURE, dated as of August 27, 1997 (the "Second
Supplemental Indenture"), to the Indenture, dated as of April 15, 1996, as
supplemented by the First Supplemental Indenture dated as of September 12, 1996
(the "Indenture") between HYPERION TELECOMMUNICATIONS, INC., a Delaware
corporation (the "Company"), and BANK OF MONTREAL TRUST COMPANY, a trust company
organized under the laws of the State of New York (the "Trustee").
WHEREAS, the Company desires and has requested the Trustee to join it
in the execution and delivery of this Second Supplemental Indenture in order to
amend certain provisions of the Indenture to permit the Company's proposed
issuance of certain Senior Secured Notes due 2004 and to grant a first priority
security interest in certain of the Company's assets to the holders of such
Senior Secured Notes due 2004; and
WHEREAS, Section 9.02 of the Indenture provides that a supplemental
indenture may be entered into by the Company and the Trustee with the consent of
at least a majority of the holders of the Senior Notes issued pursuant thereto,
provided certain conditions are met; and
WHEREAS, at least the minimum number of the holders of the Senior Notes
required by Section 9.02 of the Indenture have consented to the proposed
amendments to the Indenture and the conditions set forth in the Indenture for
the execution and delivery of this Second Supplemental Indenture have been
complied with; and
WHEREAS, all things necessary to make this Second Supplemental
Indenture a valid agreement of the Company and the Trustee, in accordance with
its terms, and a valid amendment of, and supplement to, the Indenture, have been
done;
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein, the Company agrees with the Trustee that the Indenture is
supplemented and amended, solely to the extent and for the purposes expressed
herein, as follows:
Section 1. Definitions.
(a) Any capitalized term used herein and not otherwise defined
herein shall have the meaning given in the Indenture.
(b) The definition of "Disqualified Stock" in Section
1.01 of the Indenture is hereby amended and restated as follows:
"Disqualified Stock" means any Capital Stock 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 redeemable at the option of the holder thereof, in whole
or in part, on or prior to the date that is 91 days after the date on
which the Senior Notes mature; provided, however, that any Capital
Stock which would not constitute Disqualified Stock but for provisions
thereof giving holders thereof the right to require the Company to
repurchase or redeem such Capital Stock upon the occurrence of a Change
of Control occurring prior to the final maturity of the Senior Notes
shall not constitute Disqualified Stock if the change of control
provisions applicable to such Capital Stock are no more favorable to
the holders of such Capital Stock than the provisions applicable to the
Senior Notes contained in the covenant described in Section 4.15 and
such Capital Stock specifically provides that the Company will not
repurchase or redeem any such stock pursuant to such provisions prior
to the Company's repurchase of such Senior Notes as are required to be
repurchased pursuant to the covenant described in Section 4.15.
(c) The definition of "Permitted Investments" in Section
1.01 shall be amended and restated in its entirety to read as follows:
"Permitted Investments" means
(a) any Investment in a Wholly Owned Subsidiary of the Company
that is engaged, either directly or indirectly through a Qualified
Subsidiary or Joint Venture, in the Telecommunications Business;
(b) any Investment in a Qualified Subsidiary of the Company
that is directly engaged in the Telecommunications Business;
(c) any Investment in Cash Equivalents;
(d) any Investment in a Person that is not a Subsidiary of the
Company, if as a result of such Investment (i)(A) such Person becomes a
Qualified Subsidiary or Wholly Owned Subsidiary of the Company or (B)
such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is
liquidated into, the Company or a Qualified Subsidiary and (ii)(A) such
Wholly Owned Subsidiary, either directly or indirectly through a
Qualified Subsidiary or a Joint Venture, is engaged in the
Telecommunications Business or (B) such Qualified Subsidiary is
directly engaged in the Telecommunications Business;
(e) any Permitted Joint Venture Investment;
(f) any Investment made as a result of the receipt of non-cash
consideration (whether or not such non-cash consideration is deemed to
be cash for the purposes of Section 4.10) from an Asset Sale that was
made pursuant to and in compliance with Section 4.10 hereof; or
(g) any Investment in an Enhanced Services Venture; or
(h) any Investment made pursuant to the terms of the Escrow
and Disbursement Agreement (as defined in the Secured Notes Indenture).
(d) The definition of "Permitted Liens" in Section 1.01
shall be amended and restated as follows:
"Permitted Liens" means
(i) Liens on the property of the Company, any Subsidiary or
any Permitted Joint Venture securing Obligations under Indebtedness
that may be incurred pursuant to clause (i) of Section 4.09 hereof;
(ii) Liens in favor of the Company;
(iii) Liens on property of a Person existing at the time such
Person is merged into or consolidated with the Company, any Subsidiary
or any Permitted Joint Venture; provided that such Liens were in
existence prior to the contemplation of such merger or consolidation
and do not extend to any assets other than those of the Person merged
into or consolidated with the Company;
(iv) Liens on property existing at the time of acquisition
thereof by the Company, any Subsidiary or any Permitted Joint Venture,
provided that such Liens were in existence prior to the contemplation
of such acquisition;
(v) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a
like nature incurred in the ordinary course of business;
(vi) Liens existing on the date of this Indenture;
(vii) Liens on property of Subsidiaries and Permitted Joint
Ventures securing Obligations under Indebtedness incurred pursuant to
clause (viii) of Section 4.09 hereof but only to the extent that (a) in
the case of Subsidiaries and Permitted Joint Ventures that are
incurring Indebtedness other than Related Network Debt, such Liens
secure only such Indebtedness incurred by such Subsidiary or such Joint
Venture; and (b) in the case of subsidiaries and Joint Ventures that
are incurring Related Network Debt, such Liens secure only such Related
Network Debt;
(viii) Liens securing Obligations under the Senior Notes and
this Indenture;
(ix) Liens securing Obligations under Vendor Debt pursuant to
clause (ii) of Section 4.09 hereof; provided that the principal amount
at maturity of such Vendor Debt secured by such Lien does not exceed
100% of the purchase price or cost of acquisition, construction or
improvement of the Telecommunications Related Assets subject to such
Liens;
(x) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good
faith by appropriate proceedings promptly instituted and diligently
concluded, provided that any reserve or other appropriate provision as
shall be required in conformity with GAAP shall have been made
therefor;
(xi) Liens incurred in the ordinary course of business of the
Company, any Subsidiary or any Permitted Joint Venture with respect to
obligations that do not exceed $5.0 million at any one time outstanding
and that (a) are not incurred in connection with the borrowing of money
or the obtaining of advances or credit (other than trade credit in the
ordinary course of business) and (b) do not in the aggregate materially
detract from the value of the property or materially impair the use
thereof in the operation of business by the Company, such Subsidiary or
such Permitted Joint Venture;
(xii) Liens securing Refinancing Indebtedness, but only if,
and to the extent, that such Liens that are incurred in connection with
such Refinancing Indebtedness are at least as favorable to the Holders
of Senior Notes as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; or
(xiii) Liens securing Obligations under the Secured Notes,
the Secured Notes Indenture and the Secured Notes Security Documents.
(e) The definition of "Pro Forma EBITDA" in Section 1.01 shall
be amended and restated as follows:
"Pro Forma EBITDA" means, for any Person, for any period, the
EBITDA of such Person as determined on a consolidated basis in
accordance with GAAP consistently applied, after giving effect to the
following: (i) if, during or after such period, such Person or any of
its Subsidiaries shall have made any Asset Sale, Pro Forma EBITDA for
such Person and its Subsidiaries for such period shall be reduced by an
amount equal to the Pro Forma EBITDA (if positive) directly
attributable to the assets which are the subject of such Asset Sale for
the period or increased by an amount equal to the Pro Forma EBITDA (if
negative) directly attributable thereto for such period, (ii) if,
during or after such period, such Person or any of its Subsidiaries
completes an acquisition of any Person or business which immediately
after such acquisition is a Subsidiary of such Person, Pro Forma EBITDA
shall be computed so as to give pro forma effect to such Asset Sale or
the acquisition of such Person or business, as the case may be, as if
such acquisition had been completed as of the beginning of such period,
and (iii) if, during or after such period, such Person or any of its
Subsidiaries incurs any Indebtedness (including without limitation, any
Acquired Indebtedness) or issues any Disqualified Stock, Pro Forma
EBITDA shall be computed so as to give pro forma effect (including pro
forma application of the proceeds therefrom) thereto as if such
Indebtedness or Disqualified Stock had been incurred as of the
beginning of such period.
(f) The following definitions are hereby added to
Section 1.01 of the Indenture:
"Investment Grade" means BBB- or higher by Standard & Poor's
Ratings Group (or any successor rating agency) or Baa3 or higher by
Moody's Investors Service, Inc. (or any successor rating agency).
"Non-Qualified Debt" means Indebtedness (other than Vendor
Debt or Indebtedness incurred under a Credit Agreement) which (i) is
rated below Investment Grade or is unrated and (ii) was originally
issued in (A) a private placement transaction exempt from registration
under the Securities Act in which the initial purchaser(s) of such
Indebtedness at the time of such incurrence intend to immediately
resell such Indebtedness in transactions which are exempt from
registration under the Securities Act pursuant to Rule 144A, Regulation
S or other applicable exemption thereunder or (B) a registered offering
under the Securities Act.
"Permitted Indebtedness" means Indebtedness which may be
incurred by the Company, its Subsidiaries or its Joint Ventures
pursuant to clauses (i) through (x) of the second paragraph of Section
4.09 hereof.
"Secured Notes" means the Company's 12-1/4% Senior Secured
Notes due 2004.
"Secured Notes Indenture" means the indenture pursuant to
which the Secured Notes shall be issued.
"Secured Notes Security Documents" mean the Pledge Agreement
(as defined in the Secured Notes Indenture) and the Escrow and
Disbursement Agreement (as defined in the Secured Notes Indenture).
"Stock Collateral" means all of the Company's Capital Stock in
Hyperion of Florida, Inc., Hyperion of Kentucky, Inc., Hyperion of New
York, Inc, Hyperion of Tennessee, Inc. and Hyperion of Vermont, Inc.
pledged pursuant to the Secured Notes Security Documents.
Section 2. Offer To Purchase By Application Of Excess Proceeds.
Section 3.09 of the Indenture is hereby amended and restated as
follows:
In the event that, pursuant to Section 4.10 hereof, the
Company shall be required to commence an Asset Sale Offer, it shall
follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20
Business Days following its commencement and no longer, except to the
extent that a longer period is required by applicable law (the "Offer
Period"). No later than five Business days after the termination of the
Offer Period (the "Purchase Date"), the Company shall purchase the
principal amount of Senior Notes required to be purchased pursuant to
Section 4.10 hereof or, if Senior Notes tendered in response to the
Asset Sale Offer are less than the amount required to be purchased
pursuant to Section 4.10, all Senior Notes tendered in response to the
Asset Sale Offer. Payment for any Senior Notes so purchased shall be
made in the same manner as interest payments are made.
The Company shall comply with any tender offer rules under the
Exchange Act which may then be applicable, including Rule 14e-1, in
connection with any offer required to be made by the Company to
repurchase the Senior Notes as a result of an Asset Sale Offer. To the
extent that the provisions of any securities laws or regulations
conflict with provisions of this Section 3.09, the Company shall comply
with the applicable securities laws or regulations and shall not be
deemed to have breached it obligations hereunder by virtue thereof.
If the Purchase Date is on or after an interest record date
and on or before the related interest payment date, any accrued and
unpaid interest shall be paid to the Person in whose name a Senior Note
is registered at the close of business on such record date, and no
additional interest shall be payable to Holders who tender Senior Notes
pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company
shall send, by first class mail, a notice to the Trustee and each of
the Holders, with a copy to the Trustee. The notice shall contain all
instructions and materials necessary to enable such Holders to tender
Senior Notes pursuant to the Asset Sale Offer. The Asset Sale Offer
shall be made to all Holders. The notice, which shall govern the terms
of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this
Section 3.09 and Section 4.10 hereof and the length of time the Asset
Sale Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase
Date;
(c) that any Senior Note not tendered or accepted for
payment shall continue to accrete or accrue interest;
(d) that, unless the Company defaults in making such payment,
any Senior Note accepted for payment pursuant to the Asset Sale Offer
shall cease to accrete or accrue interest after the Purchase Date;
(e) that Holders electing to have a Senior Note purchased
pursuant to an Asset Sale Offer may only elect to have all of such
Senior Note purchased and may not elect to have only a portion of such
Senior Note purchased;
(f) that Holders electing to have a Senior Note purchased
pursuant to any Asset Sale Offer shall be required to surrender the
Senior Note with the form entitled "Operation of Holder to Elect
Purchase" on the reverse of the Senior Note completed, or transfer by
book-entry transfer, to the Company, a depositary, if appointed by the
Company, or a Paying Agent at the address specified in the notice at
least three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election
if the Company, the depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a
telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Senior Note the Holder
delivered for purchases and a statement that such Holder is withdrawing
his election to have such Senior Note purchased;
(h) that, if the aggregate principal amount or Accreted Value,
as applicable, of Senior Notes surrendered by Holders exceeds the
amount required to be purchased pursuant to Section 4.10 hereof, the
Company shall select the Senior Notes to be purchased on a pro rata
basis (with such adjustments as may be deemed appropriate by the
Company so that only Senior Notes in denominations of $1,000, or
integral multiples thereof, shall be purchased); and
(i) that Holders whose Senior Notes were purchased only in
part shall be issued new Senior Notes equal in principal amount to the
unpurchased portion of the Senior Notes surrendered (or transferred by
book-entry transfer).
On or before the Purchase Date, the Company shall, to the
extent lawful, accept for payment, on a pro rata basis to the extent
necessary, the Senior Notes or portions thereof tendered or required to
be purchased pursuant to the Asset Sale Offer, or, if less than the
amount so required to be purchased has been tendered, all Senior Notes
tendered, and shall deliver to the Trustee an Officers' Certificate
stating that such Senior Notes or portions thereof were accepted for
payment by the Company in accordance with the terms of Section 4.10
hereof and this Section 3.09. The Company, the Depository or the Paying
Agent, as the case may be, shall promptly (but in any case not later
than five days after the Purchase Date) mail or deliver to each
tendering Holder an amount equal to the purchase price of the Senior
Notes tendered by such Holder and accepted by the Company for purchase,
and the Company shall promptly issue a new Senior Note, and the
Trustee, upon written request from the Company shall authenticate and
mail or deliver such new Senior Note to such Holder, in a principal
amount equal to any unpurchased portion of the Senior Note surrendered.
Any Senior Note not so accepted shall be promptly mailed or delivered
by the Company to the Holder thereof. The Company shall publicly
announce the results of the Asset Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 shall be made pursuant to the
provisions of Section 3.01 through 3.06 hereof.
Section 3. Dividend and Other Payment Restrictions Affecting
Subsidiaries. Section 4.08 of the Indenture shall be amended and
restated as follows:
The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on
the ability of any Subsidiary to:
(i) (a) pay any dividends or make any other distributions to the
Company or any of its Subsidiaries (1) on its Capital Stock or
(2) with respect to any other interest or participation in, or
measured by, its profits, or (b) pay any indebtedness owed to
the Company or any of its Subsidiaries;
(ii) make loans or advances to the Company or any of its Subsidiaries;
(iii)grant liens or grant security interests on its assets in favor of
the Holders of Senior Notes or guarantee the payment of the Senior
Notes; or
(iv) transfer any of its properties or assets to the Company or any of
its Subsidiaries, except for such encumbrances or restrictions
existing under or by reason of:
(a) Existing Indebtedness as in effect on the date of this
Indenture;
(b) any Credit Agreement creating or evidencing Indebtedness
permitted by clause (i) of Section 4.09 and any amendments,
modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings thereof;
(c) the Indenture and the Senior Notes;
(d) applicable law;
(e) by reason of customary non-assignment provisions in leases
entered into in the ordinary course of business and consistent
with past practices;
(f) purchase money obligations or Vendor Debt for property
acquired in the ordinary course of business that impose
restrictions of the nature described in clause (iv) above on the
property so acquired;
(g) Indebtedness incurred pursuant to clause (viii) of Section
4.09; provided that such encumbrance or restriction only relates
to the Subsidiary or Permitted Joint Venture incurring such
Indebtedness;
(h) Refinancing Indebtedness, provided that such encumbrances or
restrictions are no more restrictive than those contained in the
documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and
(i) the Secured Notes Indenture, the Secured Notes Security
Documents and the Secured Notes.
Section 4. Incurrence of Indebtedness and Issuance of Preferred Stock.
Section 4.09 of the Indenture shall be amended and restated as follows:
The Company shall not, and shall not permit any of its
Subsidiaries or Joint Ventures to, directly or indirectly, create,
incur, issue, assume, guaranty or otherwise become directly or
indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including, without
limitation, Acquired Indebtedness) and that the Company will not issue
any Disqualified Stock and will not permit any of its Subsidiaries or
Joint Ventures to issue any shares of Preferred Stock; provided that
the Company may incur Indebtedness (including Acquired Indebtedness) or
issue shares of Disqualified Stock if the Company's Consolidated
Leverage Ratio as of the last day of the Company's most recently ended
fiscal quarter for which internal financial statements are available
immediately preceding the date on which such Indebtedness is incurred,
or such Disqualified Stock is issued, as the case may be, would have
been (a) greater than zero and less than 5.5 to 1.0, if such incurrence
or issuance is on or prior to March 31, 1999, and (b) greater than zero
and less than 5.0 to 1.0, if such incurrence or issuance is after March
31, 1999, determined on a pro forma basis (including pro forma
application of the net proceeds therefrom) as if such Indebtedness had
been incurred, or such Disqualified Stock has been issued, as the case
may be, at the beginning of such fiscal quarter.
The foregoing provisions shall not apply to:
(i) the incurrence of Indebtedness by the Company, any Subsidiary (other
than a General Partner Subsidiary) or any Permitted Joint Venture
pursuant to Credit Agreement(s), provided that the aggregate principal
amount at maturity of such Credit Agreement(s) at any one time
outstanding under this clause (i) does not exceed $50.0 million for the
Company, all of its Subsidiaries (other than a General Partner
Subsidiary) and all of its Permitted Joint Ventures combined;
(ii) the incurrence of Vendor Debt by the Company, any Subsidiary (other
than a General Partner Subsidiary) or any Permitted Joint Venture,
provided that the aggregate principal amount at maturity of such Vendor
Debt does not exceed 80% of the purchase price or cost of the
construction, acquisition or improvement of the applicable
Telecommunications Related Assets;
(iii) Refinancing Indebtedness;
(iv) the incurrence of Indebtedness by the Company not to exceed, at any one
time outstanding, 2.0 times the net cash proceeds received by the
Company from the issuance and sale of its Capital Stock (other than
Disqualified Stock) to a Person other than a Subsidiary or a Joint
Venture of the Company, provided that such Indebtedness (y) does not
mature prior to the Stated Maturity of the Senior Notes and has a
Weighted Average Life to Maturity longer than the Senior Notes and (z)
is subordinated to the Senior Notes;
(v) the incurrence by the Company of Indebtedness (in addition to
Indebtedness permitted by any other clause of this paragraph) in an
aggregate principal amount at maturity (or accreted value, as
applicable) at any time outstanding not to exceed $10.0 million;
(vi) the incurrence by any Restricted Joint Venture of Non-Recourse Debt,
provided that if any Non-Recourse Debt of a Restricted Joint Venture
ceases to be Non-Recourse Debt, such event shall be deemed to
constitute an incurrence of Indebtedness as of the dates such
Indebtedness ceases to be Non-Recourse Debt;
(vii) the guarantee of Indebtedness by a General Partner Subsidiary in
connection with the incurrence of Indebtedness by the Restricted Joint
Venture of which such General Partner Subsidiary is a general partner;
(viii)the incurrence by the Company's Subsidiaries (other than General
Partner Subsidiaries) and Permitted Joint Ventures of Indebtedness
(including Acquired Indebtedness) so long as all of the net proceeds of
such incurrence are used by such Subsidiary or Permitted Joint Venture,
as the case may be, directly in connection with the design,
construction, development or acquisition of a Telecommunication Service
Market; provided that, as of the last day of the Company's most
recently ended fiscal quarter for which internal financial statements
are available immediately preceding the date on which such Indebtedness
is incurred, either: (a)(1) the aggregate principal amount at maturity
of all Indebtedness outstanding of such Subsidiary or such Permitted
Joint Venture does not exceed (x) the product of (I) 1.75 times (II)
the total amount of Invested Equity Capital of the Subsidiary or
Permitted Joint Venture incurring such Indebtedness minus (y) the
product of (I) the quotient obtained by dividing (A) the total amount
of Invested Equity Capital of the Subsidiary or Permitted Joint Venture
incurring such Indebtedness by (B) the aggregate amount of Invested
Equity Capital of all of the Company's Subsidiaries and Permitted Joint
Ventures times (II) the quotient obtained by dividing (A) the aggregate
principal amount of the then outstanding Secured Notes by (B) 1.75 and
(2) the aggregate principal amount at maturity of all Non-Qualified
Debt outstanding of such Subsidiary or such Permitted Joint Venture
does not exceed (x) the product of (I) 1.50 times (II) the total amount
of Invested Equity Capital of the Subsidiary or Permitted Joint Venture
incurring such Non-Qualified Debt minus (y) the product of (I) the
quotient obtained by dividing (A) the total amount of Invested Equity
Capital of the Subsidiary or Permitted Joint Venture incurring such
Non-Qualified Debt by (B) the aggregate amount of Invested Equity
Capital of all of the Company's Subsidiaries and Permitted Joint
Ventures times (II) the quotient obtained by dividing (A) the aggregate
principal amount of the then outstanding Secured Notes by (B) 1.50; or
(b) the Consolidated Leverage Ratio of such Subsidiary or such
Permitted Joint Venture would not have been greater than 3.5 to 1.0;
provided that for purposes of this clause (viii)(b) the product of (I)
the quotient obtained by dividing (A) the total amount of Invested
Equity Capital of the Subsidiary or Permitted Joint Venture incurring
such Indebtedness by (B) the aggregate amount of Invested Equity
Capital of all of the Company's Subsidiaries and Permitted Joint
Ventures times (II) the aggregate principal amount of the then
outstanding Secured Notes shall be added to clause (i) of the
definition of Consolidated Leverage Ratio solely for purposes of the
calculation thereof for purposes hereof, in each case, determined on a
pro forma basis (including pro forma application of the net proceeds
therefrom) as if such Indebtedness had been incurred at the beginning
of such fiscal quarter; provided, further, any Indebtedness incurred by
any Subsidiary of the Company or any Permitted Joint Venture (other
than Related Networks) pursuant to this clause (viii) shall be
non-recourse with respect to the Company or any other Subsidiary of the
Company or any other Joint Venture;
(ix) the incurrence by the Company of the Existing Indebtedness; and
(x) the incurrence of Indebtedness by the Company with respect to the
Secured Notes.
For purposes of this Section 4.09, in the event that the
Company proposes to incur Indebtedness pursuant to clause (iv) above,
the Company shall, simultaneously with the incurrence of such
Indebtedness, deliver to the Trustee a resolution of the Board of
Directors set forth in an Officers' Certificate stating that the sale
or sales of Capital Stock forming the basis for the incurrence of such
Indebtedness (i) constitutes a long term investment in the Company and
(ii) has not been made for the purpose of circumventing this Section
4.09. In the event that the Company rescinds, reverses or unwinds such
sale of Capital Stock or otherwise returns or refunds all or any
portion of the net cash proceeds of such sale of Capital Stock (whether
by dividend, distribution or otherwise) within 270 days of the date of
the incurrence of such Indebtedness, such Indebtedness will be deemed
to be incurred on the date of, and immediately after giving effect to,
such rescission, reversal, unwinding, return or refund.
For purposes of this Section 4.09, in the event that a
Restricted Joint Venture becomes a Permitted Joint Venture or otherwise
ceases to be a Restricted Joint Venture, all of the then outstanding
Indebtedness of such entity shall be deemed to have been incurred as of
the date that such Restricted Joint Venture becomes a Permitted Joint
Venture or otherwise ceases to be a Restricted Joint Venture.
Section 5. Asset Sales. Section 4.10 of the Indenture shall be amended
and restated as follows:
The Company shall not, and shall not permit any Subsidiary to,
directly or indirectly, whether in a single transaction or a series of
related transactions occurring within any twelve-month period, make any
Asset Sale, unless
(i) the Company or the Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the fair
market value (as determined in good faith by the Board of Directors)
for the shares or assets sold or otherwise disposed of; and
(ii) at least 90% of such consideration consists of cash,
provided that
(A) an amount equal to the fair market value (as determined in good faith
by the Board of Directors) of:
(1) Telecommunications Related Assets received by the Company or any
Subsidiary from the transferee that will be used by the Company or such
Subsidiary in the operation of a Telecommunications Business;
(2) the Voting Stock of any Person engaged in a Telecommunications Business
received by the Company or any Subsidiary; provided that on the date
such Voting Stock is received, such Investment in Voting Stock
constitutes a Permitted Joint Venture Investment; or
(3) the publicly tradable Voting Stock of any person engaged in the
Telecommunications Business received by the Company or any Subsidiary
as consideration for a sale of an Equity Interest in any Restricted
Joint Venture, shall, for the purposes of this Section 4.10, be deemed
to be cash which was applied in accordance with the first sentence of
the penultimate paragraph of this Section 4.10; and
(B) in the event that any of Hyperion Telecommunications of Pennsylvania,
Inc., Hyperion Telecommunications of Tennessee, Inc. or Hyperion
Telecommunications of New York, Inc. sell their respective partnership
interests in the partnerships to which each is a partner to the
respective partnerships in the manner specified by the applicable
partnership agreement, (1) the principal amount at maturity of any
seller note issued to the Company or any of its Wholly Owned
Subsidiaries shall be deemed to be cash for purposes of this Section
4.10 and (2) the payments of principal pursuant to such seller note
shall be deemed to be Net Cash Proceeds (for purposes of the
penultimate paragraph of this Section 4.10) as and when such payments
are received.
For purposes of this Section 4.10, the first $1.0 million of
Net Cash Proceeds received from Asset Sales (other than Asset Sales of
Stock Collateral) in any fiscal year shall not be subject to the
restrictions contained in this section.
In determining the fair market value with respect to any Asset
Sale or series of related Asset Sales involving aggregate consideration
in excess of $10.0 million, the Board of Directors of the Company must
obtain an opinion as to the fairness to the Holders of Senior Notes of
such Asset Sales from a financial point of view issued by a nationally
recognized investment banking firm with total assets in excess of $1.0
billion; provided that no such opinion shall be required if such Asset
Sale is in accordance with the terms of any Local Partnership Agreement
to which the Company or any of its Subsidiaries is a party on the date
hereof.
The Company may apply the Net Cash Proceeds from any Asset
Sale to an investment in Telecommunications Related Assets in a
Telecommunications Service Market within 180 days after such Asset
Sale; provided that if the Company determines to make such investment
in a New Telecommunications Service Market, the Company shall be deemed
to have complied with the first clause of this sentence if, the Company
(y) within 180 days of such Asset Sale, delivers to the Trustee a
resolution adopted by a majority of the Board of Directors set forth in
an Officer's Certificate certifying that the Company intends to utilize
the Net Cash Proceeds of such Asset Sale to invest in a specific new
Telecommunications Service Market and (z) completes such investment
within 360 days of such Asset Sale. The Company shall be deemed to have
completed its investment for purposes of the preceding clause (z), so
long as the Company has (i) a business plan that sets forth the
Company's investment plans for the applicable Telecommunications
Service Market and (ii) issued all material purchase orders to the
appropriate parties that are necessary to complete such business plan.
Any Net Cash Proceeds from an Asset Sale that are not invested as
provided in the two preceding sentences shall constitute Excess
Proceeds. When the aggregate amount of Excess Proceeds exceeds $2.5
million, the Company shall commence to purchase (an "Asset Sale Offer")
the maximum principal amount of Senior Notes and Senior Secured Notes
(on a pro rata basis based upon the relative aggregate principal amount
of Senior Notes (or, prior to April 15, 2001, the aggregate Accreted
Value of Senior Notes) and Secured Notes then outstanding) that may be
purchased out of the Excess Proceeds, at an offer price in cash equal
to 100% of aggregate principal amount thereof, plus accrued and unpaid
interest to the date of repurchase (or, in the case of repurchases of
Senior Notes prior to April 15, 2001, at a purchase price equal to 100%
of the Accreted Value thereof as of the date of repurchase) in
accordance with the procedures set forth in this Indenture, provided,
that, in the event of an Asset Sale Offer as a result (in whole or in
part) of an Asset Sale of Stock Collateral, the Company shall, purchase
(i) first, all Secured Notes tendered pursuant to such Asset Sale Offer
in an aggregate principal amount equal to the portion of such Excess
Proceeds resulting from such Asset Sale of Stock Collateral and (ii)
second, all Secured Notes and Senior Notes on a pro rata basis (in the
same manner as described above) in an aggregate principal amount (or,
with respect to Senior Notes prior to April 15, 2001, an aggregate
Accreted Value) equal to the Excess Proceeds not used to purchase
Secured Notes pursuant to clause (i) of this proviso. To the extent
that the aggregate principal amount at maturity thereof, plus accrued
and unpaid interest to the date of repurchase (or, in the case of
repurchases of Senior Notes prior to April 15, 2001, the Accreted Value
thereof as of the date of repurchase) of the Senior Notes and the
Secured Notes tendered pursuant to an Asset Sale Offer is less than the
Excess Proceeds, the Company may use such remaining Excess Proceeds for
any purpose not prohibited by this Indenture. If the aggregate
principal amount at maturity thereof, plus accrued and unpaid interest
to the date of repurchase (or, in the case of repurchases of Senior
Notes prior to April 15, 2001, the Accreted Value thereof as of the
date of repurchase) of Senior Notes and of Secured Notes surrendered by
their respective holders exceeds the amount of Excess Proceeds, the
Trustee shall select the Senior Notes and Secured Notes to be purchased
on a pro rata basis. Upon completion of such offers, the amount of
Excess Proceeds shall be reset at zero. Pending application of the Net
Cash Proceeds as set forth above from Asset Sales, all such Net Cash
Proceeds shall be placed in escrow for the benefit of the Holders of
Senior Notes and Secured Notes.
Notwithstanding the foregoing, the Company shall not, and
shall not permit any Subsidiary to, directly or indirectly, make any
Asset Sale of any Equity Interests of any Subsidiary (at least 80% of
the voting power of the Capital Stock of which is owned by the Company)
except pursuant to an Asset Sale of all of the Equity Interests of such
Subsidiary; provided that any sale of any Equity Interest of any such
Subsidiary to a Strategic Investor shall be deemed not be an Asset Sale
for purposes of this Section 4.10, so long as such sale of such Equity
Interests does not result in such Subsidiary ceasing to be a Subsidiary
of the Company.
Section 6. Confirmation of Indenture. Except as supplemented by this
Second Supplemental Indenture, the Indenture is hereby ratified and confirmed in
all respects and made applicable in all respects to the Senior Notes and the
holders thereof. The Indenture and this Second Supplemental Indenture shall be
read and construed as one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed, and attested, all as of the date and
first year above written.
ATTEST: HYPERION TELECOMMUNICATIONS, INC.
/s/ Edward Babcock, Jr. By: /s/ Daniel R. Milliard
- ----------------------- ---------------------------
ATTEST: BANK OF MONTREAL TRUST COMPANY,
as Trustee
______________________________ By: /s/ Therese Gaballah
--------------------------
EXHIBIT 10.01
HYPERION TELECOMMUNICATIONS, INC.
$250,000,000 of
12 1/4% Series A Senior Secured Notes due 2004
Purchase Agreement
BEAR, STEARNS & CO. INC.
CHASE SECURITIES INC.
TD SECURITIES (USA) INC.
CIBC WOOD GUNDY SECURITIES CORP.
SCOTIA CAPITAL MARKETS (USA) INC.
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
HYPERION TELECOMMUNICATIONS, INC.
$250,000,000 of
12 1/4% Series A Senior Secured Notes due 2004
PURCHASE AGREEMENT
August 21, 1997
New York, New York
BEAR, STEARNS & CO. INC.
CHASE SECURITIES INC.
TD SECURITIES (USA) INC.
CIBC WOOD GUNDY SECURITIES CORP.
SCOTIA CAPITAL MARKETS (USA) INC.
c/o Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Ladies & Gentlemen:
Hyperion Telecommunications, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to Bear, Stearns & Co. Inc. ("Bear
Stearns"), TD Securities (USA) Inc., CIBC Wood Gundy Securities Corp. and Scotia
Capital Markets (USA) Inc. (together, the "Initial Purchasers") $250,000,000 in
aggregate principal amount of 12 1/4% Series A Senior Secured Notes due 2004
(the "Series A Notes"), subject to the terms and conditions set forth herein.
The Series A Notes will be issued pursuant to an indenture (the "Indenture"), to
be dated the Closing Date (as defined below), between the Company and Bank of
Montreal Trust Company, as trustee (the "Trustee"). The Series A Notes are more
fully described in the Offering Memorandum referred to below. The Series A Notes
and the Series B Notes (as defined below) issuable in exchange therefor are
collectively referred to herein as the "Senior Notes." Capitalized terms used
but not otherwise defined herein shall have the meanings given to such terms in
the Indenture.
1. Issuance of Series A Notes. The Company proposes to, upon the
terms and subject to the conditions set forth herein, issue and sell to the
Initial Purchasers $250,000,000 in aggregate principal amount of Series A Notes.
Upon original issuance thereof, and until such time as the
same is no longer required under the applicable requirements of the Securities
Act of 1933, as amended (the "Act"), the Series A Notes, (and all securities
issued in exchange therefor or in substitution thereof) shall bear the following
legend:
<PAGE>
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. BY ITS ACQUISITION HEREOF, THE HOLDER
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS ACQUIRING
THE SECURITY IN AN OFFSHORE TRANSACTION WITHIN THE MEANING OF
REGULATION S. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR
THE BENEFIT OF THE COMPANY THAT (Y) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT), IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE
UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, (d) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE (A)(1), (2),
(3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT THAT, PRIOR TO SUCH
TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE OR
(e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY, (3) 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 APPLICABLE JURISDICTION AND (Z)
IT WILL NOTIFY ANY PURCHASER OF THE SECURITY EVIDENCED HEREBY, PRIOR TO
CLOSING OF ANY SALE, OF THE RESALE RESTRICTIONS SET FORTH IN (Y)
ABOVE."
2. Offering. The Series A Notes will be offered and sold to the Initial
Purchasers pursuant to an exemption from the registration requirements under the
Act. The Company has prepared a preliminary Offering Memorandum, dated August
13, 1997 (the "Preliminary Offering Memorandum") and a final offering
memorandum, dated August 21, 1997 (the "Offering Memorandum"), relating to the
Series A Notes.
The Initial Purchasers have advised the Company that the Initial
Purchasers will make offers (the "Exempt Resales") of the Series A Notes on the
terms set forth in the Offering Memorandum, as amended or supplemented, solely
to (i) persons whom the Initial Purchasers reasonably believe to be "qualified
institutional buyers," as defined in Rule 144A under the Act ("QIBs") and (ii)
to non-U.S. persons outside
<PAGE>
the United States in reliance upon Regulation S under the Securities Act. The
persons specified in clauses (i) and (ii) above are referred to herein as the
"Eligible Purchasers." The Initial Purchasers will offer the Series A Notes to
such Eligible Purchasers initially at the price set forth herein. Such price may
be changed at any time without notice.
Holders (including subsequent transferees) of the Series A Notes will
have the registration rights set forth in the registration rights agreement
relating thereto (the "Registration Rights Agreement") to be dated the Closing
Date, in substantially the form of Exhibit A hereto for so long as such Series A
Notes constitute "Transfer Restricted Securities" (as defined in such
agreement). Pursuant to the Registration Rights Agreement, the Company will
agree to file with the Securities and Exchange Commission (the "Commission"),
under the circumstances set forth therein, (i) a registration statement under
the Act (the "Exchange Offer Registration Statement") relating to the Company's
12 1/4% Series B Senior Secured Notes due 2004 (the "Series B Notes") to be
offered in exchange for the Series A Notes (the "Exchange Offer") and (ii) a
shelf registration statement pursuant to Rule 415 under the Act (the "Shelf
Registration Statement") relating to the resale by certain holders of the Series
A Notes, and to use its best efforts to cause such registration statements to be
declared effective and consummate the Exchange Offer.
This Agreement, the Indenture, the Senior Notes, the Escrow and
Disbursement Agreement, the Pledge Agreement and the Registration Rights
Agreement are hereinafter sometimes referred to collectively as the "Operative
Documents."
3. Purchase, Sale and Delivery. (a) On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to its terms and conditions, the Company agrees to issue and sell to the
Initial Purchasers, and each Initial Purchaser agrees severally and not jointly
to purchase from the Company, the aggregate principal amount of Series A Notes
set forth opposite its name on Schedule I hereto. The purchase price to be paid
by the Initial Purchasers for the Series A Notes shall be 97.50% of the
aggregate principal amount thereof.
(b) Delivery of the Series A Notes shall be made, against payment of
the purchase price therefor, at the offices of Latham & Watkins at 885 Third
Avenue, New York, New York or such other location as may be mutually acceptable.
Such delivery and payment shall be made at 10:00 a.m., New York time, on August
27, 1997 (the "Closing") or at such other time as shall be agreed upon by the
Initial Purchasers and the Company. The time and date of such delivery and
payment are herein called the "Closing Date."
(c) One or more Series A Notes in definitive form, registered in the
name of Cede & Co., as nominee of The Depository Trust Company ("DTC"), having
an aggregate amount corresponding to the aggregate amount of the Series A Notes
(the "Global Note"), shall be delivered by the Company to the Initial Purchasers
(or as the Initial Purchasers direct), against payment by the Initial Purchasers
of the purchase price therefor, by wire transfer of immediately available funds
to the Company's account, provided that the Company shall give at least two
business days' prior written notice to the Initial Purchasers of the information
required to effect such wire transfers. The Global Note shall be made available
to the Initial Purchasers for inspection not later than 9:30 a.m. on the
business day immediately preceding the Closing Date.
4. Agreements of the Company. The Company covenants and agrees
with the Initial Purchasers as follows:
<PAGE>
(a) To advise the Initial Purchasers promptly and, if
requested by the Initial Purchasers, confirm such advice in writing of,
(i) the issuance by any state securities commission of any stop order
suspending the qualification or exemption from qualification of any
Series A Notes for offering or sale in any jurisdiction, or the
initiation of any proceeding for such purpose by any state securities
commission or other regulatory authority; and (ii) the happening of any
event that, in the reasonable opinion of either counsel to the Company
or counsel to the Initial Purchasers, makes any statement of a material
fact made in the Preliminary Offering Memorandum or the Offering
Memorandum untrue or that requires the making of any additions to or
changes in the Preliminary Offering Memorandum or the Offering
Memorandum in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading. The Company
shall use its best efforts to prevent the issuance of any stop order or
order suspending the qualification or exemp-
tion of any Series A Notes under any state securities or Blue Sky laws
and, if at any time any state securities commission or other regulatory
authority shall issue an order suspending the qualification or
exemption of any Series A Notes under any state securities or Blue Sky
laws, the Company shall use its best efforts to obtain the withdrawal
or lifting of such order at the earliest possible time.
(b) To furnish the Initial Purchasers and those persons
identified by the Initial Purchasers to the Company, without charge, as
many copies of the Preliminary Offering Memorandum and the Offering
Memorandum, and any amendments or supplements thereto, as the Initial
Purchasers may reasonably request. The Company consents to the use of
the Preliminary Offering Memorandum and the Offering Memorandum, and
any amendments and supplements thereto required pursuant hereto, by the
Initial Purchasers in connection with Exempt Resales.
(c) Not to amend or supplement the Preliminary Offering
Memorandum or the Offering Memorandum prior to the Closing Date unless
the Initial Purchasers shall previously have been advised thereof and
shall not have objected thereto within a reasonable time after being
furnished a copy thereof. The Company shall promptly prepare, upon the
Initial Purchasers' request, any amendment or supplement to the
Preliminary Offering Memorandum or the Offering Memorandum that may be
necessary or reasonably requested by the Initial Purchasers in
connection with Exempt Resales.
(d) If, after the date hereof and prior to consummation of any
Exempt Resale, any event shall occur as a result of which, in the
judgment of the Company or in the reasonable opinion of either counsel
to the Company or counsel to the Initial Purchasers, it becomes
necessary or advisable to amend or supplement the Preliminary Offering
Memorandum or Offering Memorandum in order to make the statements
therein, in the light of the circumstances when such Offering
Memorandum is delivered to an Eligible Purchaser which is a prospective
purchaser, not misleading, or if it is necessary or advisable to amend
or supplement the Preliminary Offering Memorandum or Offering
Memorandum to comply with applicable law, (i) notify the Initial
Purchasers and (ii) forthwith to prepare an appropriate amendment or
supplement to such Offering Memorandum so that the statements therein
as so amended or supplemented will not, in the light of the
circumstances when it is so delivered, be misleading, or so that such
Offering Memorandum will comply with applicable law.
(e) To cooperate with the Initial Purchasers and counsel to
the Initial Purchasers in connection with the qualification or
registration of the Series A Notes under the securities or Blue
<PAGE>
Sky laws of such jurisdictions as the Initial Purchasers may reasonably
request and to continue such qualification in effect so long as
required for the Exempt Resales; provided that the Company shall not be
required to take any action that would subject it to service of process
in suits or taxation, other than as to matters and transactions
relating to the Preliminary Offering Memorandum, the Offering
Memorandum or Exempt Resales, in any jurisdiction where it is not now
so subject.
(f) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement becomes effective or is
terminated, to pay all costs, expenses, fees and taxes incident to the
performance of the obligations of the Company hereunder, including in
connection with: (i) the preparation, printing, filing and distribution
of the Preliminary Offering Memorandum and the Offering Memorandum
(including, without limitation, financial statements) and all
amendments and supplements thereto required pursuant hereto, (ii) the
preparation (including, without limitation, duplication costs) and
delivery of all preliminary and final Blue Sky memoranda prepared and
delivered in connection herewith and with the Exempt Resales, (iii) the
issuance, transfer and delivery by the Company of the Series A Notes to
the Initial Purchasers, (iv) the qualification or registration of the
Series A Notes for offer and sale under the securities or Blue Sky laws
of the several states (including, without limitation, the cost of
printing and mailing a preliminary and final Blue Sky Memorandum and
the reasonable fees and disbursements of counsel to the Initial
Purchasers relating to such qualification or registration), (v)
furnishing such copies of the Preliminary Offering Memorandum and the
Offering Memorandum, and all amendments and supplements thereto, as may
be requested for use in connection with Exempt Resales, (vi) the
preparation of certificates for the Series A Notes (including, without
limitation, printing and engraving thereof), (vii) the fees,
disbursements and expenses of the Company's counsel and accountants,
(viii) all expenses and listing fees in connection with the application
for quotation of the Securities in the National Association of
Securities Dealers, Inc. ("NASD") Automated Quotation System - PORTAL
("PORTAL"), (ix) all fees and expenses (including fees and expenses of
counsel to the Company) of the Company in connection with the approval
of the Series A Notes by DTC for "book-entry" transfer, (x) the rating
of the Senior Notes by rating agencies, (xi) the reasonable fees and
expenses of the Trustee and its counsel in connection with the
Indenture and the Senior Notes, (xii) performance by the Company of its
other obligations under this Agreement and the other Operative
Documents and (xiii) "roadshow" travel and other expenses incurred in
connection with the marketing and sale of the Senior Notes.
(g) To use the proceeds from the sale of the Series A Notes in
the manner described in the Offering Memorandum under the caption "Use
of Proceeds."
(h) Not to voluntarily claim, and to resist actively any
attempts to claim, the benefit of any usury laws against the holders of
any Senior Notes.
(i) To do and perform all things required to be done and
performed under this Agreement by it prior to or after the Closing Date
and to satisfy all conditions precedent on its part to the deliv-
ery of the Series A Notes.
(j) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act)
that would be integrated with the sale of the Series A Notes in a
manner that would require the registration under the Act of the sale to
the Initial Purchasers or the
<PAGE>
Eligible Purchasers of the Series A Notes or to take any other action
that would result in the Exempt Resales not being exempt from
registration under the Act.
(k) For so long as any of the Senior Notes remain outstanding
and during any period in which the Company is not subject to Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), to make available to any Eligible Purchaser or
beneficial owner of Series A Notes in connection with any sale thereof
and any prospective purchaser of such Series A Notes from such Eligible
Purchasers or beneficial owner, the information required by Rule
144A(d)(4) under the Act.
(l) To cause the Exchange Offer to be made in the appropriate
form to permit registered Series B Notes to be offered in exchange for
the Series A Notes and to comply with all applicable federal and state
securities laws in connection with the Exchange Offer.
(m) To comply with all of its agreements set forth in the
Registration Rights Agreement and all agreements set forth in the
representation letters of the Company to DTC relating to the approval
of the Series A Notes by DTC for "book-entry" transfer.
(n) To use its best efforts to effect the inclusion of the
Series A Notes in PORTAL and to obtain approval of the Series A Notes
by DTC for "book-entry" transfer.
(o) During a period of five years following the Closing Date,
to deliver without charge to each of the Initial Purchasers, as they
may reasonably request, promptly upon their becoming available, copies
of (i) all reports or other publicly available information that the
Company shall mail or otherwise make available to its securityholders
and (ii) all reports, financial statements and proxy or information
statements filed by the Company with the Commission or any national
securities exchange and such other publicly available information
concerning the Company or its subsidiaries, including without
limitation, press releases.
(p) Prior to the Closing Date, to furnish to each of the
Initial Purchasers, as soon as they have been prepared in the ordinary
course by the Company, copies of any unaudited interim financial
statements for any period subsequent to the periods covered by the
financial statements appearing in the Offering Memorandum.
(q) Neither the Company nor any of its Subsidiaries nor any of
the Joint Ventures (as defined) will take, directly or indirectly, any
action designed to, or that might reasonably be expected to, cause or
result in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Series A Notes.
Except as permitted by the Act, the Company will not distribute any
preliminary offering memorandum, offering memorandum or other offering
material in connection with the offering and sale of the Series A
Notes.
(r) Not to issue, offer, sell, contract to sell or grant any
option to purchase or otherwise transfer or dispose of any Series A
Notes or other debt securities of the Company or any securities
convertible into or exchangeable or exercisable for any debt securities
of the Company, and to cause its stockholders and other affiliates not
to sell, contract to sell or grant any option to purchase or otherwise
transfer or dispose of any Series A Notes or other debt securities of
the Company or any
<PAGE>
securities convertible into or exchangeable or exercisable for any debt
securities of the Company for a period of 180 days from the date
hereof, without the prior written consent of Bear Stearns, except for
the issue and exchange of Series B Notes for Series A Notes in the
Exchange Offer.
(s) To comply with the agreements in the Indenture, the
Registration Rights Agreement and each other Operative Document.
(t) To use its best efforts to do and perform all things
necessary to perfect, to the extent permitted by law, a first priority
security interest in the Stock Collateral (as such term is defined in
the Pledge Agreement) and the Collateral (as such term is defined in
the Escrow and Disbursement Agreement).
5. Representations and Warranties.
(a) The Company represents and warrants to each of the Initial
Purchasers that:
(i) The Preliminary Offering Memorandum and the Offering
Memorandum (and each supplement and amendment thereto) have been
prepared in connection with the Exempt Resales. The Preliminary
Offering Memorandum and the Offering Memorandum do not, and any
supplement or amendment to them will not, contain any untrue statement
of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the
representations and warranties contained in this paragraph shall not
apply to statements in or omissions from the Preliminary Offering
Memorandum and the Offering Memorandum (or any supplement or amendment
thereto) made in reliance upon and in conformity with information
relating to the Initial Purchasers furnished to the Company in writing
by or on behalf of the Initial Purchaser expressly for use therein. No
stop order preventing the use of the Preliminary Offering Memorandum or
the Offering Memorandum, or any amendment or supplement thereto, or any
order asserting that any of the transactions contemplated by this
Agreement are subject to the registration requirements of the Act, has
been issued.
(ii) When the Series A Notes are issued and delivered pursuant
to this Agreement, no Senior Note will be of the same class (within the
meaning of Rule 144A under the Act) as securities of the Company that
are listed on a national securities exchange registered under Section 6
of the Exchange Act or that are quoted in a United States automated
inter-dealer quotation system.
(iii) Each of the Company and its Subsidiaries (as defined)
(A) has been duly organized, is validly existing as a corporation in
good standing under the laws of its respective jurisdiction of
incorporation, (B) has all requisite corporate power and authority to
carry on its business as it is currently being conducted and as
described in the Offering Memorandum and to own, lease and operate its
properties and (C) is duly qualified and in good standing as a foreign
corporation authorized to do business in each jurisdiction in which the
nature of its business or its ownership or leasing of property requires
such qualification except, with respect to this clause (C), where the
failure of the Company and its Subsidiaries to be so qualified or in
good standing does not and could not reasonably be expected to (x)
individually or in the aggregate, result in a material adverse effect
on the assets, liabilities, business, results of operations, condition
(financial or otherwise), cash flows, affairs or prospects of the
Company and the Subsidiaries, taken as a whole, (y) interfere with
<PAGE>
or adversely affect the issuance or marketability of the Series A Notes
or (z) in any manner draw into question the validity of this Agreement
or any other Operative Document or the ability to conduct its business
in the manner set forth in the Offering Memorandum (any of the events
set forth in clauses (x), (y) or (z), a "Material Adverse Effect"). The
Company has no direct or indirect subsidiaries as of the Closing Date
other than those set forth on Schedule II hereto (referred to herein
collectively as "Subsidiaries" and individually as a "Subsidiary").
(iv) Each of the Joint Ventures (as defined) (A) has been duly
formed as a partnership or corporation, as applicable, under the laws
of its respective jurisdiction of formation, (B) has all requisite
partnership or corporate power and authority, as applicable, to carry
on its business as it is currently being conducted and as described in
the Offering Memorandum and to own, lease and operate its properties
and (C) is duly qualified and in good standing as a foreign partnership
authorized to do business in each jurisdiction in which the nature of
its business or its ownership or leasing of property requires such
qualification except, with respect to this clause (C), where the
failure to be so qualified or in good standing does not and could not
reasonably be expected to result in a Material Adverse Effect. Neither
the Company nor its Subsidiaries has any ownership interest in any
Joint Venture other than those set forth on Schedule III hereto
(referred to herein collectively as "Joint Ventures" and individually a
"Joint Venture").
(v) All of the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid
and nonassessable and were not issued in violation of any preemptive or
similar rights. At June 30, 1997, on a combined basis, after giving
effect to the issuance and sale of the Series A Notes pursuant hereto,
the Company had an authorized and outstanding consolidated
capitalization as set forth in the Offering Memorandum under the
caption "Capitalization."
(vi) All of the outstanding capital stock of each Subsidiary
is owned by the Company, free and clear of any security interest,
claim, lien, limitation on voting rights or other charge or
encumbrance. Except as disclosed in the Offering Memorandum, there are
not currently, and will not be as a result of the Offering, any
outstanding subscriptions, rights, warrants, calls, commitments of sale
or options to acquire, or instruments convertible into or exchangeable
for, any capital stock or other equity interest of the Company or any
Subsidiary.
(vii) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement, the Indenture, the Escrow and Disbursement Agreement, the
Pledge Agreement, the Registration Rights Agreement and any other
Operative Documents and to consummate the transactions contemplated
hereby and thereby, including, without limitation, the corporate power
and authority to issue, sell and deliver the Series A Notes as provided
herein and therein.
(viii) This Agreement has been duly and validly authorized,
executed and delivered by Company and is the legal, valid and binding
agreement of the Company, enforceable against the Company in accordance
with its terms, except insofar as indemnification and contribution
provisions may be limited by applicable law or public policy or
equitable principles and subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization or similar laws affecting the
rights of creditors generally and subject to general principles of
equity.
<PAGE>
(ix) The Indenture has been duly and validly authorized by the
Company and, when duly executed and delivered by the Company, will be
the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization or
similar laws affecting the rights of creditors generally and subject to
general principles of equity.
(x) The Series A Notes have been duly and validly authorized
for issuance and sale to the Initial Purchasers by the Company pursuant
to this Agreement and, when issued and authenticated in accordance with
the terms of the Indenture and delivered against payment therefor in
accordance with the terms hereof and thereof, will be the legal, valid
and binding obligations of the Company, enforceable against the Company
in accordance with their terms and entitled to the benefits of the
Indenture, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization or similar laws affecting the rights of
creditors generally and subject to general principles of equity. The
description of the Series A Notes in the Offering Memorandum is
accurate in all material respects.
(xi) The Series B Notes have been duly and validly authorized
for issuance by the Company and, when issued and authenticated in
accordance with the terms of the Exchange Offer and the Indenture, will
be the legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms and entitled to the
benefits of the Indenture, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization or similar laws
affecting the rights of creditors generally and subject to general
principles of equity. The description of the Series B Notes in the
Offering Memorandum is accurate in all material respects.
(xii) The Registration Rights Agreement has been duly and
validly authorized by the Company and, when duly executed and delivered
by the Company, will be the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity. The description
of the Registration Rights Agreement in the Offering Memorandum is
accurate in all material respects.
(xiii) The Escrow and Disbursement Agreement has been duly and
validly authorized by the Company and, when duly executed and delivered
by the Company, will be the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity. The description
of the Escrow and Disbursement Agreement in the Offering Memorandum is
accurate in all material respects.
(xiv) The Pledge Agreement has been duly and validly
authorized by the Company and, when duly executed and delivered by the
Company, will be the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity. The description
of the Pledge Agreement in the Offering Memorandum is accurate in all
material respects.
<PAGE>
(xv) None of the Company, the Subsidiaries or the Joint
Ventures is and, after giving effect to the Offering will be (A) in
violation of its charter and bylaws or partnership agreement, as
applicable, (B) in default in the performance of any bond, debenture,
note, indenture, mortgage, deed of trust or other agreement or
instrument to which it is a party or by which it is bound or to which
any of its properties is subject, or (C) in violation of any local,
state or Federal law, statute, ordinance, rule, regulation,
requirement, judgment or court decree (including, without limitation,
the Communications Act of 1934, as amended by the Telecommunications
Act of 1996 (the "Telecommunications Act"), and the rules and
regulations of the Federal Communications Commission (the "FCC") and
environmental laws, statutes, ordinances, rules, regulations, judgments
or court decrees) applicable to the Company, any Subsidiary, any Joint
Venture or any of their respective assets or properties (whether owned
or leased) other than, in the case of clauses (B) and (C), any default
or violation that could not reasonably be expected to have a Material
Adverse Effect. There exists no condition that, with notice, the
passage of time or otherwise, would constitute a default under any such
document or instrument that could reasonably be expected to have a
Material Adverse Effect.
(xvi) None of (A) the execution, delivery or performance by
the Company and the Subsidiaries, as the case may be, of this Agreement
and the other Operative Documents, (B) the issuance and sale of the
Senior Notes and (C) consummation by the Company, the Subsidiaries and
the Joint Ventures of the transactions described in the Offering
Memorandum violate, conflict with or constitute a breach of any of the
terms or provisions of, or a default under (or an event that with
notice or the lapse of time, or both, would constitute a default), or
require consent under, or result in the imposition of a lien or
encumbrance on any properties of the Company, any Subsidiary or any
Joint Venture, or an acceleration of any indebtedness of the Company,
any Subsidiary or any Joint Venture pursuant to, (i) the charter or
bylaws of the Company or any Subsidiary or the partnership agreement
governing any Joint Venture, (ii) any bond, debenture, note, indenture,
mortgage, deed of trust or other agreement or instrument to which the
Company, any Subsidiary or any Joint Venture is a party or by which any
of them or their property is or may be bound, (iii) any local, state or
Federal law, statute, ordinance, rule, regulation or requirement
(including, without limitation, the Telecommunications Act and the
rules and regulations of the FCC and environmental laws, statutes,
ordinances, rules or regulations) applicable to the Company, any
Subsidiary, any Joint Venture or any of their respective assets or
properties or (iv) any judgment, order or decree of any court or
governmental agency or authority having jurisdiction over the Company,
the Subsidiaries, the Joint Ventures or any of their assets or
properties, except in the case of clauses (ii), (iii) and (iv) for such
violations conflicts, breaches, defaults, consents, impositions of
liens or accelerations that would not singly, or in the aggregate, have
a Material Adverse Effect. Other than as described in the Offering
Memorandum, no consent, approval, authorization or order of, or filing,
registration, qualification, license or permit of or with, (A) any
court or governmental agency, body or administrative agency (including,
without limitation, the FCC) or (B) any other person is required for
(1) the execution, delivery and performance by the Company of this
Agreement and the other Operative Documents or (2) the issuance and
sale of the Senior Notes and the transactions contemplated hereby and
thereby, except (x) such as have been obtained and made (or, in the
case of the Registration Rights Agreement, will be obtained and made)
under the Act, the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act") and state securities or Blue Sky laws and regulations
or such as may be required by the NASD or (y) where the failure to
obtain any such
<PAGE>
consent, approval, authorization or order of, or filing registration,
qualification, license or permit would not reasonably be expected to
result in a Material Adverse Effect.
(xvii) There is (i) no action, suit or proceeding before or by
any court, arbitrator or governmental agency, body or official,
domestic or foreign, now pending or threatened or contemplated to which
the Company, any of the Subsidiaries or any of the Joint Ventures is or
may be a party or to which the business or property of the Company, any
Subsidiary or any Joint Venture is subject, (ii) no local, state or
Federal law, statute, ordinance, rule, regulation, requirement,
judgment or court decree (including, without limitation, the
Telecommunications Act and the rules and regulations of the FCC) or
order that has been enacted, adopted or issued by any governmental
agency or, to the best of the Company's knowledge, that has been
proposed by any governmental body or (iii) no injunction, restraining
order or order of any nature by a federal or state court or foreign
court of competent jurisdiction to which the Company, any Subsidiary or
any Joint Venture is or could reasonably be expected to be subject or
to which the business, assets, or property of the Company, any
Subsidiary or any Joint Venture are could reasonably be expected to be
subject, that, in the case of clauses (i), (ii) and (iii) above, (y) is
required to be disclosed in the Preliminary Offering Memorandum and the
Offering Memorandum and that is not so disclosed, or (z) could
reasonably be expected to individually or in the aggregate, result in a
Material Adverse Effect.
(xviii) No action has been taken and no local, state or
Federal law, statute, ordinance, rule, regulation, requirement,
judgment or court decree has been enacted, adopted or issued by any
governmental agency that prevents the issuance of the Senior Notes or
prevents or suspends the use of the Offering Memorandum; no injunction,
restraining order or order of any nature by a federal or state court of
competent jurisdiction has been issued that prevents the issuance of
the Senior Notes or prevents or suspends the sale of the Senior Notes
in any jurisdiction referred to in Section 4(e) hereof; and every
request of any securities authority or agency of any jurisdiction for
additional information has been complied with in all material respects.
(xix) There is (i) no unfair labor practice complaint pending
against the Company, any Subsidiary or any Joint Venture or threatened,
before the National Labor Relations Board, any state or local labor
relations board or any foreign labor relations board, and no
significant grievance or significant arbitration proceeding arising out
of or under any collective bargaining agreement is so pending against
the Company, any Subsidiary or any Joint Venture threatened, (ii) no
significant strike, labor dispute, slowdown or stoppage pending against
the Company, any Subsidiary or any Joint Venture threatened against the
Company, any Subsidiary or the Joint Venture and (iii) no union
representation question existing with respect to the employees of the
Company, any Subsidiary or any Joint Venture that, in the case of
clauses (i), (ii) or (iii), could reasonably be expected to result in a
Material Adverse Effect. To the best of the Company's knowledge, no
collective bargaining organizing activities are taking place with
respect to the Company, the Subsidiaries or the Joint Ventures. None of
the Company, any Subsidiary or any Joint Venture has violated (A) any
federal, state or local law or foreign law relating to discrimination
in hiring, promotion or pay of employees, (B) any applicable wage or
hour laws or (C) any provision of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or the rules and
regulations thereunder, which in the case of clause (A), (B) or (C)
above could reasonably be expected to result in a Material Adverse
Effect.
<PAGE>
(xx) None of the Company, any Subsidiary or any Joint Venture
has violated any environmental, safety or similar law or regulation
applicable to it or its business or property relating to the protection
of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental
Laws"), lacks any permit, license or other approval required of it
under applicable Environmental Laws is violating any term or condition
of such permit, license or approval which could reasonably be expected
to, either individually or in the aggregate, have a Material Adverse
Effect.
(xxi) Each of the Company, the Subsidiaries and the Joint
Ventures has (i) good and marketable title to all of the properties and
assets described in the Offering Memorandum as owned by it, free and
clear of all liens, charges, encumbrances and restrictions, except such
as are described in the Offering Memorandum or as would not have a
Material Adverse Effect, (ii) peaceful and undisturbed possession under
all leases to which any of them is a party as lessee, (iii) all
licenses, certificates, permits, authorizations, approvals, franchises
and other rights from, and has made all declarations and filings with,
all federal, state and local authorities (including, without
limitation, the FCC), all self-regulatory authorities and all courts
and other tribunals (each an "Authorization") necessary to engage in
the business as presently conducted by any of them in the manner
described in the Offering Memorandum, except as described in the
Offering Memorandum or where failure to hold such Authorizations would
not, individually or in the aggregate, have a Material Adverse Effect
and (iv) no reason to believe that any governmental body or agency is
considering limiting, suspending or revoking any such Authorization.
Except where the failure to be in full force and effect would not have
a Material Adverse Effect, all such Authorizations are valid and in
full force and effect and each of the Company, the Subsidiaries and the
Joint Ventures is in compliance with the terms and conditions of all
such Authorizations and with the rules and regulations of the
regulatory authorities having jurisdiction with respect thereto. All
leases to which the Company, the Subsidiaries and the Joint Ventures is
a party are valid and binding and no default by the Company, any
Subsidiary or any Joint Venture has occurred and is continuing
thereunder and no defaults by the landlord are existing under any such
lease that could reasonably be expected to result in a Material Adverse
Effect.
(xxii) Each of the Company, the Subsidiaries and the Joint
Ventures owns, possesses or has the right to employ all patents, patent
rights, licenses (including all FCC, state, local or other
jurisdictional regulatory licenses), inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, software, systems or
procedures), trademarks, service marks and trade names, inventions,
computer programs, technical data and information (collectively, the
"Intellectual Property") presently employed by the Company, its
Subsidiaries or the Joint Ventures in connection with the businesses
now operated by it or which are proposed to be operated by the Company,
its Subsidiaries or the Joint Ventures free and clear of and without
violating any right, claimed right, charge, encumbrance, pledge,
security interest, restriction or lien of any kind of any other person
and none of the Company, any Subsidiary or any Joint Venture has
received any notice of infringement of or conflict with asserted rights
of others with respect to any of the foregoing except as could not
reasonably be expected to have a Material Adverse Effect. The use of
the Intellectual Property in connection with the business and
operations of the Company, the Subsidiaries and the Joint Ventures does
not infringe on the rights of any person, except would not have a
Material Adverse Effect.
<PAGE>
(xxiii) None of the Company, any Subsidiary, any Joint Venture
or any of their respective officers, directors, partners, employees,
agents or affiliates or any other person acting on behalf of the
Company, any Subsidiary or any Joint Venture, as the case may be, has,
directly or indirectly, given or agreed to give any money, gift or
similar benefit (other than legal price concessions to customers in the
ordinary course of business) to any customer, supplier, employee or
agent of a customer or supplier, official or employee of any
governmental agency (domestic or foreign), instrumentality of any
government (domestic or foreign) or any political party or candidate
for office (domestic or foreign) or other person who was, is or may be
in a position to help or hinder the business of the Company, any
Subsidiary or any Joint Venture (or assist the Company, any Subsidiary
or any Joint Venture in connection with any actual or proposed
transaction) which (i) might subject the Company, any Subsidiary, or
any other individual or entity to any damage or penalty in any civil,
criminal or governmental litigation or proceeding (domestic or
foreign), (ii) if not given in the past, could reasonably be expected
to have had a Material Adverse Effect on the assets, business or
operations of the Company, any Subsidiary or any Joint Venture or (iii)
if not continued in the future, could reasonably be expected to have a
Material Adverse Effect.
(xxiv) All tax returns required to be filed by the Company,
each of the Subsidiaries and each of the Joint Ventures in all
jurisdictions have been so filed. All taxes, including withholding
taxes, penalties and interest, assessments, fees and other charges due
or claimed to be due from such entities or that are due and payable
have been paid, other than those being contested in good faith and for
which adequate reserves have been provided or those currently payable
without penalty or interest. There are no proposed additional tax
assessments against the Company, any Subsidiary, any Joint Venture or
the assets or property of the Company, any Subsidiary or any Joint
Venture.
(xxv) None of the Company, the Subsidiaries or the Joint
Ventures is (i) an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended (the "Investment Company Act"), or (ii) a "holding
company" or a "subsidiary company" or an "affiliate" of a holding
company within the meaning of the Public Utility Holding Company Act of
1935, as amended (the "PUC Act").
(xxvi) There are no holders of securities of the Company, the
Subsidiaries or the Joint Ventures who, by reason of the execution by
the Company of this Agreement or any other Operative Document to which
it is a party or the consummation by the Company of the transactions
contemplated hereby and thereby, have the right to request or demand
that the Company, any of the Subsidiaries or any of the Joint Ventures
register any of its securities under the Act.
(xxvii) Each of the Company, the Subsidiaries and the Joint
Ventures maintains a system of internal accounting controls sufficient
to provide reasonable assurance that: (i) transactions are executed in
accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect thereto.
(xxviii) Each of the Company, the Subsidiaries and the Joint
Ventures maintains insurance
<PAGE>
covering its properties, operations, personnel and businesses. Such
insurance insures against such losses and risks as are adequate in
accordance with customary industry practice to protect the Company, the
Subsidiaries, the Joint Ventures and their respective businesses. None
of the Company, any Subsidiary or any Joint Venture has received notice
from any insurer or agent of such insurer that substantial capital
improvements or other expenditures will have to be made in order to
continue such insurance. All such insurance is outstanding and duly in
force on the date hereof.
(xxix) None of the Company, any Subsidiary or any Joint
Venture has (i) taken, directly or indirectly, any action designed to,
or that might reasonably be expected to, cause or result in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Series A Notes (ii)
since the date of the Preliminary Offering Memorandum (A) sold, bid
for, purchased or paid any person any compensation for soliciting
purchases of the Senior Notes or (B) paid or agreed to pay to any
person any compensation for soliciting another to purchase any other
securities of the Company.
(xxx) No registration under the Act of the Series A Notes is
required for the sale of the Series A Notes to the Initial Purchasers
as contemplated hereby or for the Exempt Resales assuming (i) that the
purchasers who buy the Series A Notes in the Exempt Resales are
Eligible Purchasers and (ii) the accuracy of the Initial Purchasers'
representations regarding the absence of general solicitation in
connection with the sale of Series A Notes to the Initial Purchasers
and the Exempt Resales contained herein. No form of general
solicitation or general advertising was used by the Company or any of
its representatives (other than the Initial Purchasers, as to which the
Company makes no representation or warranty) in connection with the
offer and sale of the Series A Notes in connection with Exempt Resales,
including, but not limited to, articles, notices or other
communications published in any newspaper, magazine, or similar medium
or broadcast over television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or general
advertising. No securities of the same class as the Series A Notes have
been issued and sold by the Company within the six-month period
immediately prior to the date hereof.
(xxxi) Set forth on Exhibit C hereto is a list of each
employee pension or benefit plan with respect to which the Company or
any corporation considered an affiliate of the Company within the
meaning of Section 407(d)(7) of ERISA (an "ERISA Affiliate") is a party
in interest or disqualified person. The execution and delivery of this
Agreement, the other Operative Documents and the sale of the Series A
Notes to be purchased by the QIBs will not involve any prohibited
transaction within the meaning of Section 406 of ERISA or Section 4975
of the Internal Revenue Code of 1986, as amended. The representation
made by the Company in the preceding sentence is made in reliance upon
and subject to the accuracy of, and compliance with, the
representations and covenants made or deemed made by the QIBs as set
forth in the Offering Memorandum under the caption "Notice to
Investors."
(xxxii) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its date, and each amendment or supplement
thereto, as of its date, contains the information specified in, and
meets the requirements of, Rule 144A(d)(4) under the Act.
(xxxiii) Subsequent to the respective dates as of which
information is given in the Offering Memorandum and up to the Closing
Date, except as set forth in the Offering Memorandum, (i) none
<PAGE>
of the Company, any Subsidiary or any Joint Venture has incurred any
liabilities or obligations, direct or contingent, which are material,
individually or in the aggregate, to the Company, the Subsidiaries and
the Joint Ventures taken as a whole, nor entered into any transaction
not in the ordinary course of business, (ii) there has not been, singly
or in the aggregate, any change or development which could reasonably
be expected to result in a Material Adverse Effect, (iii) there has
been no dividend or distribution of any kind declared, paid or made by
the Company or its Subsidiaries on any class of capital stock and (iv)
there has been no distribution of profits or return of capital
contribution by any Joint Venture.
(xxxiv) None of (A) the execution, delivery and performance of
this Agreement or any of the Operative Documents, (B) the purchase of
the Pledged Securities pursuant to the Escrow and Disbursement
Agreement, (C) the pledge of the Stock Collateral pursuant to the
Pledge Agreement, (D) the issuance and sale of the Series A Notes, (E)
the application of the proceeds from the issuance and sale of the
Series A Notes or (F) the consummation of the transactions contemplated
in connection with any of the foregoing as set forth in the Offering
Memorandum, will violate Regulations G, T, U or X promulgated by the
Board of Governors of the Federal Reserve System or analogous foreign
laws and regulations.
(xxxv) The accountants who have certified or will certify the
financial statements included or to be included as part of the Offering
Memorandum are independent accountants. The historical financial
statements of the Company and each of the Subsidiaries comply as to
form in all material respects with the requirements applicable to
registration statements on Form S-4 under the Act and present fairly in
all material respects the financial position and results of operations
of the Company and each of its Subsidiaries, at the respective dates
and for the respective periods indicated. Such financial statements
have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods
presented. The other financial information and data included in the
Offering Memorandum, historical and pro forma, are accurately presented
in all material respects and prepared on a basis consistent with the
financial statements, historical and pro forma, included in the
Offering Memorandum and the books and records of the Company, each of
its Subsidiaries and each of its Joint Ventures, as applicable. The
statistical information and data included in the Offering Memorandum
are accurately presented in all material respects.
(xxxvi) On and after the Closing Date, the Company is and will
be the sole beneficial owner of the Pledged Securities and no Lien will
exist upon any such Pledged Securities (and no right or option to
acquire the same will exist in favor of any other person or entity),
except for the pledge and security interest in favor of the Trustee to
be created or provided for in the Escrow and Disbursement Agreement,
which pledge and security interest constitute a first priority
perfected pledge and security interest in and to all of the Pledged
Securities.
(xxxvii) Subject to the terms and conditions of this
Agreement, the execution by the Company of the Pledge Agreement and
delivery to the Trustee of the Stock Collateral pursuant thereto, shall
cause the Trustee, for the ratable benefit of the holders of the Senior
Notes, to have, as security for the payment of the obligations under
the Indenture and the Senior Notes, a valid, duly perfected security
interest (as to the creation of which no consent is required by a third
party or such consents have been obtained, except as set forth in the
Offering Memorandum, solely with respect to the Additional Collateral
(as such term is defined in the Pledge Agreement)) in the Stock
<PAGE>
Collateral and the actions described in this section (xxxvii) are the
only actions, recordings and filings necessary to establish the
validity of such security interest in the Stock Collateral (except as
set forth in the Offering Memorandum, solely with respect to the
Additional Collateral and as required by the Pledge Agreement). From
and after the date hereof (except as set forth in the Offering
Memorandum, solely with respect to the Additional Collateral and as
required by the Pledge Agreement) the liens or security interests
created by the Stock Collateral will be duly perfected, creating a
first priority interest in the Trustee for the ratable benefit of the
holders of the Senior Notes in the Stock Collateral over all other
liens and security interests in respect of the Stock Collateral,
whether now existing or hereafter created.
(xxxviii) Each of the Pledge Agreement and the Escrow and
Disbursement Agreement will secure the obligations of the Company under
the Senior Notes and the Indenture.
(xxxix) The Company does not intend to, nor does it believe
that it will, incur debts beyond its ability to pay such debts as they
mature. The present fair saleable value of the assets of the Company on
a consolidated basis exceeds the amount that will be required to be
paid on or in respect of the existing debts and other liabilities
(including contingent liabilities) of the Company on a consolidated
basis as they become absolute and matured. The assets of the Company on
a consolidated basis do not constitute unreasonably small capital to
carry out the business of the Company, the Subsidiaries and the Joint
Ventures, taken as a whole, as conducted or as proposed to be
conducted. Upon the issuance of the Series A Notes, the present fair
saleable value of the assets of the Company on a consolidated basis
will exceed the amount that will be required to be paid on or in
respect of the existing debts and other liabilities (including
contingent liabilities) of the Company on a consolidated basis as they
become absolute and matured. Upon the issuance of the Series A Notes,
the assets of the Company on a consolidated basis will not constitute
unreasonably small capital to carry out its businesses as now
conducted, including the capital needs of the Company on a consolidated
basis, taking into account the projected capital requirements and
capital availability.
(xl) Except pursuant to this Agreement, there are no
contracts, agreements or understandings between the Company, any of its
Subsidiaries or any of its Joint Ventures and any other person that
would give rise to a valid claim against the Company or any of the
Initial Purchasers for a brokerage commission, finder's fee or like
payment in connection with the issuance, purchase and sale of the
Series A Notes.
(xli) Each of the Company, the Subsidiaries and the Joint
Ventures has complied with all provisions of Section 517.075, Florida
Statutes, relating to doing business with the Government of Cuba or
with any affiliate located in Cuba.
(xlii) Except as disclosed in the Offering Memorandum, there
are no business relationships or related party transactions required to
be disclosed therein pursuant to Item 404 of Regulation S-K of the
Commission (assuming for purposes of this paragraph 5(xlii) only that
Regulation S-K is applicable to the Offering Memorandum).
(xliii) None of the Company, the Subsidiaries, the Joint
Ventures nor any of their respective affiliates or any person acting on
their behalf has engaged or will engage in any directed
<PAGE>
selling efforts within the meaning of Regulation S with respect to the
Series A Notes, and each of the Company, the Subsidiaries, the Joint
Ventures and their respective affiliates and all persons acting on its
or their behalf have complied with and will comply with the offering
restrictions of Regulation S in connection with the offering of the
Series A Notes outside the United States.
(xliv) The Series A Notes offered an sold in reliance on
Regulation S have been and will be offered and sold only in offshore
transactions and such securities have been and will be represented upon
issuance by a global security that may not be exchanged for definitive
securities until the expiration of the restricted period (as defined in
Regulation S) and only upon certification of beneficial ownership of
the securities by a non-U.S. person or a U.S. person who purchased such
securities in a transaction that was exempt from the registration
requirements of the Act, which U.S. person will acquire an interest in
a Transfer Restricted Security (as defined in the Registration Rights
Agreement).
(xlv) The sale of the Series A Notes pursuant to Regulation S
is not part of a plan or scheme to evade the registration provisions of
the Act.
Each certificate signed by any officer of the Company and
delivered to the Initial Purchasers or counsel for the Initial Purchasers
pursuant to this Agreement shall be deemed to be a representation and warranty
by the Company to the Initial Purchasers as to the matters covered thereby.
The Company acknowledges that each of the Initial Purchasers
and, for purposes of the opinions to be delivered to the Initial Purchasers
pursuant to Section 8 hereof, counsel to the Company and counsel to the Initial
Purchasers, will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.
(b) Each of the Initial Purchasers severally and not jointly
represents, warrants and covenants to the Company and agrees that:
(i) Such Initial Purchaser is a QIB, with such knowledge and
experience in financial and business matters as are necessary in order
to evaluate the merits and risks of an investment in the Series A
Notes.
(ii) Such Initial Purchaser (A) is not acquiring the Series A
Notes with a view to any distribution thereof that would violate the
Act or the securities laws of any state of the United States or any
other applicable jurisdiction and (B) will be reoffering and reselling
the Series A Notes only to QIBs in reliance on the exemption from the
registration requirements of the Act provided by Rule 144A and to
non-U.S. persons outside the United States in offshore transactions in
reliance upon Regulation S under the Act.
(iii) No form of general solicitation or general advertising
has been or will be used by any of the Initial Purchasers or any of
their representatives in connection with the offer and sale of any of
the Series A Notes, including, but not limited to, articles, notices or
other communications published in any newspaper, magazine, or similar
medium or broadcast over television or radio, or any seminar or meeting
whose attendees have been invited by any general solicitation or
general advertising.
<PAGE>
(iv) In connection with the Exempt Resales, such Initial
Purchaser will solicit offers to buy the Series A Notes only from, and
will offer to sell the Series A Notes only to, Eligible Purchasers.
Such Initial Purchaser further agrees (A) that it will offer to sell
the Series A Notes only to, and will solicit offers to buy the Series A
Notes only from (1) QIBs who in purchasing such Series A Notes will be
deemed to have represented and agreed that they are purchasing the
Series A Notes for their own accounts or accounts with respect to which
they exercise sole investment discretion and that they or such accounts
are QIBs and (B) that such QIBs acknowledge and agree that such Series
A Notes will not have been registered under the Act and may be resold,
pledged or otherwise transferred only (x)(I) to a person who the seller
reasonably believes is a QIB in a transaction meeting the requirements
of Rule 144A or (II) in a transaction meeting the requirements of Rule
144 or (III) outside the United States in a transaction meeting the
requirements of Rule 903 or 904 of Regulation S under the Securities
Act, (IV) to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act
that prior to such transfer, furnishes to the Trustee a signed letter
containing certain representations and agreements relating to the
transfer of the Notes or (V) in accordance with another exemption from
the registration requirements of the Act (and based upon an opinion of
counsel if the Company so requests), (y) to the Company or (z) pursuant
to an effective registration statement under the Act and, in each case,
in accordance with any applicable securities laws of any state of the
United States or any other applicable jurisdiction and (C) that the
holder will, and each subsequent holder is required to, notify any
purchaser of the security evidenced thereby of the resale restrictions
set forth in (B) above.
(v) Such Initial Purchaser agrees that it has offered the
Series A Notes and will offer and sell the Series A Notes (i) as part
of its distribution at any time and (ii) otherwise until 40 days after
the later of the commencement of the offering of the Series A Notes and
the Closing Date, only in accordance with Rule 903 of Regulation S or
another exemption from the registration requirements of the Act.
Accordingly, neither such Initial Purchaser, its affiliates nor any
persons acting on its or their behalf has engaged or will engage in any
directed selling efforts within the meaning of Rule 901(b) of
Regulation S with respect to the Series A Notes, and such Initial
Purchaser, its affiliates and all persons acting on its or their behalf
have complied and will comply with the offering restrictions
requirements of Regulation S.
(vi) Such Initial Purchaser agrees that the Series A Notes
offered and sold in reliance on Regulation S have been and will be
offered and sold only in offshore transactions and that such securities
have been and will be represented upon issuance by a global security
that may not be exchanged for definitive securities until the
expiration of the restricted period (as defined in Regulation S) and
only upon certification of beneficial ownership of the securities by a
non-U.S. person or a U.S. person who purchased such securities in a
transaction that was exempt from the registration requirements of the
Act, which U.S. person will acquire an interest in a Registrable
Security (as defined in the Registration Rights Agreement).
(vii) Such Initial Purchaser agrees that, at or prior to
confirmation of a sale of Series A Notes, it will have sent to each
distributor, dealer or person receiving a selling concession, fee or
other remuneration that purchases Series A Notes from it during the
restricted period (as defined in Regulation S) a confirmation or notice
to substantially the following effect:
A The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933, as
<PAGE>
amended (the ASecurities Act@), and may not be offered and sold within
the United States or to, or for the account or benefit of, U.S. persons
(i) as part of their distribution at any time or (ii) otherwise until
40 days after the later of the commencement of the Offering and the
Closing Date, except in either case in accordance with Regulation S (or
Rule 144A or in transactions that are exempt from the registration
requirements of the Securities Act) under the Securities Act. Terms
used above have the meanings assigned to them in Regulation S.@
Such Initial Purchaser further agrees that it has not entered and will
not enter into any contractual arrangement with respect to the
distribution or delivery of the Series A Notes, except with its
affiliates or with the prior consent of the Company.
(viii) Such Initial Purchaser further represents and agrees
that (1) it has not offered or sold and will not offer or sell any
Series A Notes to persons in the United Kingdom prior to the expiry of
the period of six months from the issue date of the Series A Notes,
except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent)
for the purposes of their business or otherwise in circumstances which
have not resulted and will not result in an offer to the public in the
United Kingdom within the meaning of the Public Offers of Securities
Regulations 1995, (ii) it has complied and will comply with all
applicable provisions of the Financial Services Act 1986 with respect
to anything done by it in relation to the Series A Notes in, from or
otherwise involving the United Kingdom and (iii) it has only issued or
passed on and will only issue or pass on in the United Kingdom any
document received by it in connection with the issuance of the
Securities to a person who is of a kind described in Article 11(3) of
the Financial Services Act of 1986 (Investment Advertisements)
(Exemptions) Order 1996 or is a person to whom the document may
otherwise lawfully be issued or passed on.
(ix) Such Initial Purchaser agrees that it will not offer,
sell or deliver any of the Series A Notes in any jurisdiction outside
the United States except under circumstances that will result in
compliance with the applicable laws thereof, and that it will take at
its own expense whatever action is required to permit its purchase and
resale of the Series A Notes in such jurisdictions. Such Initial
Purchaser understands that no action has been taken to permit a public
offering in any jurisdiction outside the United States where action
would be required for such purpose.
(x) Such Initial Purchaser agrees not to cause any
advertisement of the Series A Notes to be published in any newspaper or
periodical or posted in any public place and not to issue any circular
relating to the Series A Notes, except such advertisements as include
the statements required by Regulation S.
(xi) The sale of the Series A Notes in offshore transactions
pursuant to Regulation S is not part of a plan or scheme to evade the
registration provisions of the Act.
Each of the Initial Purchasers understands that the Company and, for purposes of
the opinions to be delivered to the Initial Purchasers pursuant to Section 8
hereof, counsel to the Company and counsel to the Initial Purchasers will rely
upon the accuracy and truth of the foregoing representations and hereby
expressly consents to such reliance.
<PAGE>
6. Indemnification.
(a) The Company and its Subsidiaries, jointly and severally,
agree to indemnify and hold harmless (i) each Initial Purchaser, (ii)
each person, if any, who controls an Initial Purchaser within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act
and (iii) the respective officers, directors, partners, employees,
representatives and agents of any Initial Purchaser or any controlling
person to the fullest extent lawful, from and against any and all
losses, liabilities, claims, damages and expenses whatsoever (including
but not limited to attorneys' fees and any and all expenses whatsoever
incurred in investigating, preparing or defending against any
investigation or litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Preliminary
Offering Memorandum or the Offering Memorandum, or in any supplement
thereto or amendment thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided that the Company will not be liable in any such
case to the extent, but only to the extent, that (i) any such loss,
liability, claim, damage or expense arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with
written information furnished to the Company by or on behalf of the
Initial Purchasers expressly for use therein and (ii) the foregoing
indemnity with respect to any untrue statement contained in or omitted
from the Preliminary Offering Memorandum shall not inure to the benefit
of any Initial Purchaser (or any person controlling such Initial
Purchasers), from whom the person asserting any such loss, liability,
claim, damage or expense purchased any of the Series A Notes which are
the subject thereof if it is finally judicially determined that such
loss, liability, claim, damage or expense resulted solely from the fact
that such Initial Purchaser sold Series A Notes to the person asserting
such loss, liability, claim, damage or expense, who was not sent or
given, at or prior to the written confirmation of such sale, a copy of
the Offering Memorandum, as amended or supplemented, and (x) the
Company shall have previously and timely furnished sufficient copies of
the Offering Memorandum, as so amended or supplemented, to such Initial
Purchaser in accordance with this Agreement and (y) the Offering
Memorandum, as so amended or supplemented, would have completely
corrected such untrue statement or omission of a material fact. This
indemnity agreement will be in addition to any liability which the
Company may otherwise have, including, under this Agreement.
(b) Each Initial Purchaser, severally and not jointly, agrees
to indemnify and hold harmless the Company and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, against any losses, liabilities,
claims, damages and expenses whatsoever (including but not limited to
attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any investigation or
litigation, commenced or threatened, or any claim whatsoever and any
and all amounts paid in settlement of any claim or litigation), joint
or several, to which they or any of them may become subject under the
Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue
<PAGE>
statement of a material fact contained in the Preliminary Offering
Memorandum or the Offering Memorandum, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, in each
case to the extent, but only to the extent, that any such loss,
liability, claim, damage or expense arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Initial
Purchaser expressly for use therein; provided that in no case shall any
Initial Purchaser be liable or responsible for any amount in excess of
the discounts and commissions received by such Initial Purchasers, as
set forth on the cover page of the Offering Memorandum. This indemnity
will be in addition to any liability which any of the Initial
Purchasers may otherwise have, including under this Agreement.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection, notify
each party against whom indemnification is to be sought in writing of
the commencement thereof (but the failure so to notify an indemnifying
party shall not relieve it from any liability which it may have under
this Section 6 except to the extent that it has been actually
prejudiced in any material respect by such failure or from any
liability which it may otherwise have). In case any such action is
brought against any indemnified party, and it notifies an indemnifying
party of the commencement thereof, the indemnifying party will be
entitled to participate therein, and to the extent it may elect by
written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume
the defense thereof with counsel reasonably satisfactory to such
indemnified party. Notwithstanding the foregoing, the indemnified party
or parties shall have the right to employ its or their own counsel in
any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless (i) the
employment of such counsel shall have been authorized in writing by the
indemnifying parties in connection with the defense of such action,
(ii) the indemnifying parties shall not have employed counsel to take
charge of the defense of such action within a reasonable time after
notice of commencement of the action, or (iii) such indemnified party
or parties shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying party or parties shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties),
in any of which events such fees and expenses of counsel shall be borne
by the indemnifying parties. The indemnifying party under subsection
(a) or (b) above, shall only be liable for the legal expenses of one
counsel (in addition to any local counsel) for all indemnified parties
in each jurisdiction in which any claim or action is brought; provided
that the indemnifying party shall be liable for separate counsel for
any indemnified party in a jurisdiction, if counsel to the indemnified
parties shall have reasonably concluded that there may be defenses
available to such indemnified party that are difference from or
additional to those available to one or more of the other indemnified
parties and that separate counsel for such indemnified party is prudent
under the circumstances. Anything in this subsection to the contrary
notwithstanding, an indemnifying party shall not be liable for any
settlement of any claim or action effected without its prior written
consent; provided that such consent was not unreasonably withheld.
<PAGE>
7. Contribution. In order to provide for contribution in circumstances
in which the indemnification provided for in Section 6 is for any reason held to
be unavailable from the Company or is insufficient to hold harmless a party
indemnified thereunder, the Company and the Initial Purchasers shall contribute
to the aggregate losses, claims, damages, liabilities and expenses of the nature
contemplated by such indemnification provision (including any investigation,
legal and other expenses incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted, but after
deducting in the case of losses, claims, damages, liabilities and expenses
suffered by the Company, any contribution received by the Company from persons,
other than the Initial Purchasers, who may also be liable for contribution,
including persons who control the Company within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act) to which the Company and one or
more of the Initial Purchasers may be subject, in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Initial Purchasers from the offering of the Series A Notes or, if such
allocation is not permitted by applicable law or indemnification is not
available as a result of the indemnifying party not having received notice as
provided in Section 6, in such proportion as is appropriate to reflect not only
the relative benefits referred to above but also the relative fault of the
Company and the Initial Purchasers in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Initial Purchasers shall be deemed to
be in the same proportion as (x) the total proceeds from the offering of Series
A Notes (net of discounts but before deducting expenses) received by the Company
and (y) the discounts received by the Initial Purchasers, respectively, in each
case as set forth in the table on the cover page of the Offering Memorandum. The
relative fault of the Company and of the Initial Purchasers shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or the Initial
Purchasers and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Initial Purchasers agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
or by any other method of allocation which does not take into account the
equitable considerations referred to above. Notwithstanding the provisions of
this Section 7, (i) in no case shall any Initial Purchaser be required to
contribute any amount in excess of the amount by which the discount applicable
to the Series A Notes purchased by such Initial Purchaser pursuant to this
Agreement exceeds the amount of any damages which such Initial Purchaser has
otherwise been required to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission and (ii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 7, (A) each person,
if any, who controls any Initial Purchaser within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act and (B) the respective officers,
directors, partners, employees, representatives and agents of any Initial
Purchaser or any controlling person shall have the same rights to contribution
as such Initial Purchaser, and each person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act
shall have the same rights to contribution as the Company, subject in each case
to clauses (i) and (ii) of this Section 7. Any party entitled to contribution
will, promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this Section 7, notify such party
or parties from whom contribution may be sought, but the failure to so notify
such party or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may have under this
Section 7 or otherwise. No party shall be liable for contribution with respect
to any action or claim settled without its prior written consent; provided that
such written consent was not unreasonably withheld.
<PAGE>
8. Conditions of Initial Purchasers' Obligations. The several
obligations of the Initial Purchasers to purchase and pay for the Series A
Notes, as provided herein, shall be subject to the satisfaction of the following
conditions:
(a) All of the representations and warranties of the Company
contained in this Agreement shall be true and correct on the date
hereof and on the Closing Date with the same force and effect as if
made on and as of the date hereof and the Closing Date, respectively.
The Company shall have performed or complied with all of the agreements
herein contained and required to be performed or complied with by it at
or prior to the Closing Date.
(b) The Offering Memorandum shall have been printed and copies
distributed to the Initial Purchasers not later than 10:00 a.m., New
York City time, on the day following the date of this Agreement or at
such later date and time as to which the Initial Purchasers may agree,
and no stop order suspending the qualification or exemption from
qualification of the Series A Notes in any jurisdiction referred to in
Section 4(e) shall have been issued and no proceeding for that purpose
shall have been commenced or shall be pending or threatened.
(c) No action shall have been taken and no local, state or
Federal law, statute, ordinance, rule, regulation, requirement,
judgment or court decree shall have been enacted, adopted or issued by
any governmental agency which would, as of the Closing Date, prevent
the issuance of the Series A Notes; no action, suit or proceeding shall
have been commenced and be pending against or affecting or, to the best
knowledge of the Company, threatened against, the Company, the
Subsidiaries or the Joint Ventures before any court or arbitrator or
any governmental body, agency or official (including, but not limited
to the FCC or any state regulatory authority or body) that, if
adversely determined, could reasonably be expected to result in a
Material Adverse Effect; and no stop order shall have been issued
preventing the use of the Offering Memorandum, or any amendment or
supplement thereto, or which could reasonably be expected to have a
Material Adverse Effect.
(d) Since the dates as of which information is given in the
Offering Memorandum or as otherwise disclosed therein, (i) there shall
not have been any material adverse change, or any development that is
reasonably likely to result in a material adverse change, in the
capital stock or the long-term debt, or material increase in the
short-term debt, of the Company, the Subsidiaries or the Joint Ventures
from that set forth in the Offering Memorandum, (ii) no dividend or
distribution of any kind shall have been declared, paid or made by the
Company or any Subsidiary on any class of its capital stock, (iii)
neither the Company nor any Subsidiary nor any Joint Venture shall have
incurred any liabilities or obligations, direct or contingent, that are
material, individually or in the aggregate, to the Company, the
Subsidiaries and the Joint Ventures taken as a whole, and that are
required to be disclosed on a balance sheet or notes thereto in
accordance with generally accepted accounting principles and are not
disclosed on the latest balance sheet or notes thereto included in the
Offering Memorandum. Since the date hereof and since the dates as of
which information is given in the Offering Memorandum, there shall not
have occurred any Material Adverse Change.
(e) The Initial Purchasers shall have received a certificate,
dated the Closing Date, signed on behalf of the Company by (i) the
President and (ii) a Vice President, Secretary or Assistant Secretary,
in form and substance reasonably satisfactory to the Initial
Purchasers, confirming, as of
<PAGE>
the Closing Date, the matters set forth in paragraphs (a), (b), (c) and
(d) of this Section 8, certain incumbency matters and that, as of the
Closing Date, the obligations of the Company to be performed hereunder
on or prior thereto have been duly performed.
(f) The Initial Purchasers shall have received on the Closing
Date an opinion, dated the Closing Date, in form and substance
satisfactory to the Initial Purchasers and counsel to the Initial
Purchasers, of Buchanan Ingersoll, counsel for the Company, to the
effect set forth in Exhibit C hereto.
(g) The Initial Purchasers shall have received on the Closing
Date an opinion, dated the Closing Date, in form and substance
satisfactory to the Initial Purchasers and counsel to the Initial
Purchasers, of Swidler & Berlin, special regulatory counsel to the
Company, to the effect set forth in Exhibit D hereto.
(h) The Initial Purchasers shall have received on the Closing
Date an opinion, dated the Closing Date, in form and substance
satisfactory to the Initial Purchasers and counsel to the Initial
Purchasers, of Downs Rachlin & Martin, special state regulatory counsel
for the Company in the State of Vermont, to the effect set forth in
Exhibit D hereto.
(i) The Initial Purchasers shall have received an opinion,
dated the Closing Date, in form and substance reasonably satisfactory
to the Initial Purchasers, of Latham & Watkins, counsel to the Initial
Purchasers, covering such matters as are customarily covered in such
opinions.
(j) At the time this Agreement is executed and at the Closing
Date the Initial Purchasers shall have received from Deloitte & Touche,
independent public accountants for the Company dated as of the date of
this Agreement and as of the Closing Date, a customary comfort letter
addressed to the Initial Purchasers and in form and substance
satisfactory to the Initial Purchasers and counsel to the Initial
Purchasers with respect to the financial statements and certain
financial information of the Company, the Subsidiaries and the Joint
Ventures contained in the Offering Memorandum.
(k) Latham & Watkins shall have been furnished with such
documents, in addition to those set forth above, as they may reasonably
require for the purpose of enabling them to review or pass upon the
matters referred to in this Section 8 and in order to evidence the
accuracy, completeness or satisfaction in all material respects of any
of the representations, warranties or conditions herein contained.
(l) Prior to the Closing Date, the Company, the Subsidiaries
and the Joint Ventures shall have furnished to the Initial Purchasers
such further information, certificates and documents as the Initial
Purchasers may reasonably request.
(m) The Company and the Trustee shall have entered into each
of the Indenture and the Registration Rights Agreement and the Initial
Purchasers shall have received counterparts, conformed as executed,
thereof.
(n) On or prior to the Closing, the holders of not less than a
majority of the aggregate outstanding principal amount at maturity of
the Company's outstanding 13% Senior Discount Notes
<PAGE>
due 2003 (the "13% Notes") shall have consented (which consents shall
not have been revoked) to the amendments (the "Amendments") to the
indenture governing the 13% Notes (the "13% Notes Indenture"), set
forth in the Company's Consent Solicitation Statement dated August 13,
1997, as amended, relating to the 13% Notes and, prior to the Closing,
the Company and the Trustee shall have executed a delivered a
supplemental indenture to the 13% Notes Indenture (the "Supplemental
Indenture") giving effect to the Amendments, and the Supplemental
Indenture shall be in full force and effect.
(o) The Company has delivered to the Initial Purchasers true
and correct executed copies of (i) that certain Equity Contribution and
Exchange Agreement dated as of August 4, 1997 by and between the
Company and Lenfest Telephony, Inc., that certain Partnership Agreement
dated as of September 24, 1995 by and between Hyperion
Telecommunications of Pennsylvania, Inc. and Lenfest Telephony, Inc.,
as amended, and that certain Amended and Restated Lease Agreement dated
as of August 4, 1997 by and between Hyperion Telecommunications of
Harrisburg and Lenfest Telephony, Inc. (collectively, the "Lenfest
Agreements") and (ii) that certain Purchase Agreement dated as of
August 11, 1997 by and between Hyperion Telecommunications of New York,
Inc. and Digital Direct Inc. and that certain Purchase Agreement dated
as of August 11, 1997 by and between Hyperion Telecommunications of
Kentucky, Inc. and TKR Cable of Kentucky, Inc. (collectively, the "TCI
Agreements") and there have been no material amendments, alterations,
modifications or waivers thereto (other than those as to which the
Initial Purchasers shall previously have been advised). Each of the TCI
Agreements and the Lenfest Agreements constitute the valid and legally
binding obligation of the Company, enforceable against the Company, and
to the best of the Company's knowledge, each of the other parties
thereto, in accordance with its terms, except as such enforceability
may be limited by the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws relating
to or affecting creditors' rights generally, and to general equitable
principles (regardless of whether enforcement is considered in a
proceeding at equity or at law).
All opinions, certificates, letters and other documents required by
this Section 8 to be delivered by the Company will be in compliance with the
provisions hereof only if they are reasonably satisfactory in form and substance
to the Initial Purchasers. The Company will furnish the Initial Purchasers with
such conformed copies of such opinions, certificates, letters and other
documents as it shall reasonably request.
9. Initial Purchasers' Information. For the purposes of Sections 4(a)
and 6(b) herein and otherwise, the Company and the Initial Purchasers severally
acknowledge that the statements with respect to the offering of the Series A
Notes set forth in the last paragraph of the cover page and the third sentence
of the fourth paragraph, the fifth paragraph, the sixth paragraph and the eighth
paragraph under the caption "Plan of Distribution" in such Offering Memorandum
constitute the only information furnished in writing by or on behalf of the
Initial Purchasers expressly for use in the Offering Memorandum.
10. Survival of Representations and Agreements. All representations and
warranties, covenants and agreements of the Initial Purchasers and the Company
contained in this Agreement, including, without limitation, the representations
and warranties and agreements contained in Sections 4(f) and 11(d), the
indemnity agreements contained in Section 6 and the contribution agreements
contained in Section 7, shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of the Initial Purchasers
any controlling person thereof or by or on behalf of the Company or any
controlling person
<PAGE>
thereof, and shall survive delivery of and payment for the Series A Notes to and
by the Initial Purchasers. The representations contained in Section 5 and the
agreements contained in Sections 4(f), 6, 7 and 11(d) shall survive the
termination of this Agreement, including any termination pursuant to Section 11.
11. Effective Date of Agreement; Termination
(a) This Agreement shall become effective upon execution and
delivery of a counterpart hereof by each of the parties hereto.
(b) The Initial Purchasers shall have the right to terminate
this Agreement at any time prior to the Closing Date by notice to the
Company from the Initial Purchasers, without liability (other than with
respect to Sections 6 and 7) on the Initial Purchasers' part to the
Company if, on or prior to such date, (i) the Company shall have
failed, refused or been unable to perform in any material respect any
agreement on its part to be performed hereunder, (ii) any other
condition to the obligations of the Initial Purchasers hereunder as
provided in Section 8 is not fulfilled when and as required in any
material respect, (iii) in the reasonable judgment of the Initial
Purchasers any material adverse change shall have occurred since the
respective dates as of which information is given in the Offering
Memorandum in the condition (financial or otherwise), business,
properties, assets, liabilities, prospects, net worth, results of
operations or cash flows of the Company and the Subsidiaries taken as a
whole, other than as set forth in the Offering Memorandum, or (iv)(A)
any domestic or international event or act or occurrence has materially
disrupted, or in the opinion of the Initial Purchasers will in the
immediate future materially disrupt, the market for the Company's
securities or for securities in general; or (B) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange
or the Nasdaq National Market shall have been suspended or materially
limited, or minimum or maximum prices for trading shall have been
established, or maximum ranges for prices for securities shall have
been required, on such exchange, or by such exchange or other
regulatory body or governmental authority having jurisdiction; or (C) a
banking moratorium shall have been declared by Federal or state
authorities, or a moratorium in foreign exchange trading by major
international banks or persons shall have been declared; or (D) there
is an outbreak or escalation of armed hostilities involving the United
States on or after the date hereof, or there has been a declaration by
the United States of a national emergency or war, the effect of which
shall, in the Initial Purchasers' judgment, make it inadvisable or
impracticable to proceed with the offering or delivery of the Series A
Notes on the terms and in the manner contemplated in the Offering
Memorandum; or (E) there has been a material adverse change in general
economic, political or financial conditions in the United States, or
the effect of international conditions on the financial markets in the
United States shall be such that, it is, in the Initial Purchasers'
judgment, inadvisable or impracticable to proceed with the delivery of
the Series A Notes as contemplated hereby.
(c) Any notice of termination pursuant to this Section 11
shall be by telephone, telex, telephonic facsimile, or telegraph,
confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to any of
the provisions hereof (otherwise than pursuant to any of clauses (iii)
or (iv) of Section 11(b), in which case each party will be responsible
for its own expenses), or if the sale of the Series A Notes provided
for herein is not consummated because any condition to the obligations
of the Initial Purchasers set forth herein is
<PAGE>
not satisfied or because of any refusal, inability or failure on the
part of the Company to perform any agreement herein or comply with any
provision hereof, the Company will, subject to demand by the Initial
Purchasers, reimburse the Initial Purchasers for all out-of-pocket
expenses (including the reasonable fees and expenses of Initial
Purchasers' counsel), incurred by the Initial Purchasers in connection
herewith.
12. Notice. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and, if sent to the Initial
Purchasers shall be mailed, delivered, or telexed, telegraphed or telecopied and
confirmed in writing to Bear, Stearns & Co. Inc., 245 Park Avenue, New York, New
York 10167, Attention: Corporate Finance Department, telecopy number: (212)
272-3092; and if sent to the Company, shall be mailed, delivered or telexed,
telegraphed or telecopied and confirmed in writing to Hyperion
Telecommunications, Inc., 5 West 3rd Street, Coudersport, Pennsylvania 16915,
Attention: Daniel Milliard, telecopy number: (814) 274-8631, with a copy to
Buchanan Ingersoll, One Oxford Centre, 301 Grant street, 20th Floor, Pittsburgh,
Pennsylvania 15219-1410, Attention: Carl E. Rothenberger, Jr.; provided that any
notice pursuant to Section 7 shall be mailed, delivered or telexed, telegraphed
or telecopied and confirmed in writing.
13. Parties. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the Initial Purchasers and the Company and the
controlling persons and agents referred to in Sections 6 and 7, and their
respective successors and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained. The
term "successors and assigns" shall not include a purchaser, in its capacity as
such, of Series A Notes from the Initial Purchasers.
14. Construction. This Agreement shall be construed in accordance
with the internal laws of the State of New York. TIME IS OF THE ESSENCE IN THIS
AGREEMENT.
15. Captions. The captions included in this Agreement are
included solely for convenience of reference and are not to be considered a part
of this Agreement.
16. Counterparts. This Agreement may be executed in various
counterparts which together shall constitute one and the same instrument.
[Signature pages follow]
<PAGE>
If the foregoing correctly sets forth the understanding among
the Initial Purchasers, the Company, please so indicate in the space provided
below for that purpose, whereupon this letter shall constitute a binding
agreement between us.
Very truly yours,
HYPERION TELECOMMUNICATIONS, INC.
By:/s/ Daniel R Milliard
------------------------
Name: Daniel R. Milliard
Title: President & COO
Accepted and agreed to as of the date first above written:
BEAR, STEARNS & CO. INC.
By:/s/ Pierce J. Roberts, Jr.
- ----------------------------
Name:Pierce J. Roberts, Jr.
Title: Senior Managing Director
CHASE SECURITIES INC.
By:/s/ Jeffrey Blumin
- ---------------------
Name: Jeffrey Blumin
Title: Vice President
TD SECURITIES (USA) INC.
By: /s/ Mark Bush
- -----------------
Name: Mark Bush
Title: Vice President
<PAGE>
CIBC WOOD GUNDY SECURITIES CORP
By:/s/ Walter McCabbe
- ---------------------
Name: Walter McCabbe
Title: Managing Director
SCOTIA CAPITAL MARKETS (USA) INC.
By: /s/ Nelson Ng
- -----------------
Name: Nelson Ng
Title: Associate Director
<PAGE>
SCHEDULE I
Aggregate Principal
Amount of Series
A Notes
Initial Purchasers to be Purchased
Bear, Stearns & Co. Inc. $162,500,000
Chase Securities Inc. 25,000,000
TD Securities (USA) Inc. 25,000,000
CIBC Wood Gundy Securities Corp. 18,750,000
Scotia Capital Markets (USA) Inc. 18,750,000
- -------------------------
Total $250,000,000
<PAGE>
SCHEDULE II
Subsidiaries
Hyperion Enhanced Networks of Virginia, Inc.
Hyperion Telecommunications of Florida, Inc.
Hyperion Telecommunications of Kansas, Inc.
Hyperion Telecommunications of Kentucky, Inc.
Hyperion Telecommunications of Massachusetts, Inc.
Hyperion Telecommunications of Michigan, Inc.
Hyperion Telecommunications of New Jersey, Inc.
Hyperion Telecommunications of New York, Inc.
Hyperion Telecommunications of North Carolina, Inc.
Hyperion Telecommunications of Ohio, Inc.
Hyperion Telecommunications of Pennsylvania, Inc.
Hyperion Telecommunications of South Carolina, Inc.
Hyperion Telecommunications of Tennessee, Inc.
Hyperion Telecommunications of Vermont, Inc.
Hyperion Telecommunications of Virginia, Inc.
Hyperion Telecommunications of Arkansas, Inc.
Hyperion Telecommunications of Louisiana, Inc.
Hyperion Telecommunications of Mississippi, Inc.
<PAGE>
SCHEDULE III
Joint Ventures
Alternet of Virginia
AVR of Tennessee, L.P., d/b/a Hyperion of Tennessee, L.P.
MediaOne Fiber Technologies, Inc.
Hyperion Telecommunications of Harrisburg
Louisville Lightwave
Multimedia Hyperion Telecommunications
NewChannels Hyperion Telecommunications of New York
New Jersey Fiber Technologies
NHT Partnership
PECO Hyperion Telecommunications
Susquehanna Hyperion Telecommunications
<PAGE>
EXHIBIT A
Form of Registration Rights Agreement
<PAGE>
EXHIBIT B
List of Employee Pension and Benefit Plans
of Hyperion Telecommunications, Inc.
and its Subsidiaries
Adelphia Communications Corporation Employee Benefit Plan
Adelphia Communications Corporation 401(k) Savings and Protection Profit
Sharing Plan
<PAGE>
EXHIBIT C
Form of Opinion of Buchanan Ingersoll
1. Each of the Company and the Subsidiaries is duly organized
and validly existing as a corporation in good standing under the laws
of its jurisdiction of incorporation, and has all requisite corporate
power and authority to carry on its business as it is being conducted
and as described in the Offering Memorandum and to own, lease and
operate its properties, and is duly qualified and in good standing as a
foreign corporation authorized to do business in each jurisdiction in
which the nature of its business or its ownership or leasing of
property requires such qualification, except where the failure to be so
qualified would not, singly or in the aggregate, have a material
adverse effect on the business, financial condition or results of
operations of the Company and the Subsidiaries, taken as a whole.
2. Each of the Joint Ventures is duly formed and valid
existing as a partnership in good standing under the laws of its
jurisdiction of incorporation, and has all requisite corporate power
and authority to carry on its business as it is being conducted and as
described in the Offering Memorandum and to own, lease and operate its
properties, and is duly qualified and in good standing as a partnership
authorized to do business in each jurisdiction in which the nature of
its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not,
singly or in the aggregate, have a material adverse effect on the
business, financial condition or results of operations of the Company
and the Subsidiaries, taken as a whole.
3. All of the outstanding shares of capital stock of the
Company have been duly authorized, validly issued, and are fully paid
and nonassessable and were not issued in violation of any preemptive or
similar rights. All of the outstanding shares of capital stock of the
Company is set forth in the Offering Memorandum under the caption
"Capitalization."
4. All of the partnership interests owned the Company
and each Subsidiary have been duly authorized and validly issued.
5. All of the outstanding capital stock of each Subsidiary is
owned by the Company, free and clear of any security interest, claim,
lien, limitation on voting rights or encumbrance. There are not, to our
knowledge, other than as set forth in the Offering Memorandum,
currently, and will not be following the Offering, any outstanding
subscriptions, rights, warrants, calls, commitments of sale or options
to acquire, or instruments convertible into or exchangeable for, any
capital stock or other equity interest of the Company or any
Subsidiary.
6. When the Series A Notes are issued and delivered pursuant
to this Agreement, no Series A Note will be of the same class (within
the meaning of Rule 144A under the Act) as securities of the Company
that are listed on a national securities exchange registered under
Section 6 of the Exchange Act or that are quoted in a United States
automated inter-dealer quotation system.
7. The Company has all requisite corporate power and
authority to execute, deliver and
<PAGE>
perform its obligations under this Agreement, the Indenture, the Escrow
and Disbursement Agreement, the Pledge Agreement, the Registration
Rights Agreement and the other Operative Documents, as applicable, and
to consummate the transactions contemplated thereby, including, without
limitation, the corporate power and authority to issue, sell and
deliver the Securities as provided herein and therein.
8. This Agreement has been duly and validly authorized,
executed and delivered by the Company.
9. Each of the Indenture, the Escrow and Disbursement
Agreement, the Pledge Agreement and the Registration Rights Agreement,
the Warrant Registration Rights Agreement and the Company Pledge
Agreement has been duly and validly authorized, executed and delivered
by the Company and is the valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except
that (a) such enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium (whether general or
specific) or similar laws now or hereafter in effect relating to or
affecting creditors' rights and remedies generally, (b) such
enforceability may be limited by the effects of general principals of
equity and by the discretion of the court before which any proceeding
therefor may be brought (whether such proceeding is at law or in equity
or in a bankruptcy proceeding), (c) rights to contribution or
indemnification may be limited by the laws, rules or regulations of any
governmental authority or agency thereof or by public policy, and (d)
waivers as to usury, stay or extension laws may be unenforceable.
10. The Series A Notes have been duly and validly authorized
for issuance and sale to the Initial Purchasers by the Company pursuant
to this Agreement and, when issued and authenticated in accordance with
the terms of the Indenture and delivered against payment therefor in
accordance with the terms of this Agreement and the Indenture, will be
the valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms and entitled to the benefits
of the Indenture, except that (a) such enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium (whether general or specific) or similar laws now or
hereafter in effect relating to or affecting creditors' rights and
remedies generally, (b) such enforceability may be limited by the
effects of general principals of equity and by the discretion of the
court before which any proceeding therefor may be brought (whether such
proceeding is at law or in equity or in a bankruptcy proceeding), (c)
rights to contribution or indemnification may be limited by the laws,
rules or regulations of any governmental authority or agency thereof or
by public policy, and (d) waivers as to usury, stay or extension laws
may be unenforceable.
11. The Series B Notes have been duly and validly authorized
for issuance by the Company and, when issued and authenticated in
accordance with the terms of the Exchange Offer and the Indenture, will
be the valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms and entitled to the
benefits of the Indenture, except that (a) such enforceability may be
limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium (whether general or specific) or similar
laws now or hereafter in effect relating to or affecting creditors'
rights and remedies generally, (b) such enforceability may be limited
by the effects of general principals of equity and by the discretion of
the court before which
<PAGE>
any proceeding therefor may be brought (whether such proceeding is at
law or in equity or in a bankruptcy proceeding), (c) rights to
contribution or indemnification may be limited by the laws, rules or
regulations of any governmental authority or agency thereof or by
public policy, and (d) waivers as to usury, stay or extension laws may
be unenforceable.
12. The Offering Memorandum contains a fair summary of each of
the Series A Notes, the Indenture, the Escrow and Disbursement
Agreement, the Pledge Agreement and the Registration Rights Agreement.
13. No registration under the Act of the Series A Notes is
required for the sale of the Series A Notes to the Initial Purchasers
as contemplated by this Agreement or for the Exempt Resales assuming
(i) that the Initial Purchasers are Qualified Institutional Buyers, as
defined in Rule 144A under the Act ("QIBs") or that the Series A Notes
are purchased in an offshore transaction within the meaning of
Regulation S, (ii) that the purchasers who buy the Units in the Exempt
Resales are QIBs, (iii) the accuracy of the Initial Purchasers'
representations regarding the absence of general solicitation in
connection with the sale of the Series A Notes to the Initial
Purchasers and the Exempt Resales contained in this Agreement and (iv)
the accuracy of the Company's representations in Sections 5(a)(ii),
(xxi), (xxix) and (xxxiii) (other than with respect to the first
sentence) of this Agreement.
14. The Offering Memorandum, as of its date (except for the
financial statements, including the notes thereto, and supporting
schedules and other financial, statistical and accounting data included
therein or omitted therefrom, as to which no opinion need be
expressed), and each amendment or supplement thereto, as of its date,
contains all the information specified in, and meets the requirements
of, Rule 144A(d)(4) under the Act.
15. Prior to the Registered Exchange Offer or the
effectiveness of the Shelf Registration Statement, the Indenture is not
required to be qualified under the Trust Indenture Act.
16. None of (A) the execution, delivery or performance by the
Company of this Agreement and the other Operative Documents, (B) the
issuance and sale of the Series A Notes or (C) consummation by the
Company and the Subsidiaries of the transactions described in the
Offering Memorandum violates, conflicts with or constitutes a breach of
any of the terms or provisions of, or a default under (or an event that
with notice or the lapse of time, or both, would constitute a default),
or require consent under, or result in the imposition of a lien or
encumbrance on any properties of the Company or any Subsidiary, or an
acceleration of any indebtedness of the Company or any Subsidiary
pursuant to, (i) the charter or bylaws of the Company or any
Subsidiary, (ii) any bond, debenture, note, indenture, mortgage, deed
of trust or other agreement or instrument to which the Company or any
Subsidiary is a party or by which it or its property is or may be bound
identified to such counsel as material (assuming all of such agreements
are governed by Pennsylvania law), (iii) any local, state or Federal
law, statute, ordinance, requirement, administrative statute, rule or
regulation applicable to the Company or any Subsidiary or its assets or
properties (except with respect to the matters set forth in the opinion
of Swidler & Berlin, as to which no opinion need be expressed) or (iv)
any judgment, order or decree of any court or governmental agency or
authority having jurisdiction over the Company or any Subsidiary or its
assets or properties known to such
<PAGE>
counsel, except in the case of clauses (ii), (iii) and (iv) for such
violations, conflicts, breaches, defaults, consents, impositions of
liens or accelerations that (x) would not, singly or in the aggregate,
have a Material Adverse Effect or (y) are disclosed in the Offering
Memorandum. Assuming compliance with applicable state securities and
Blue Sky laws, as to which such counsel need express no opinion, and
except for the filing of a registration statement under the Act and
qualification of the Indenture under the Trust Indenture Act of 1939,
as amended, in connection with the Registration Rights Agreement, no
consent, approval, authorization or order of, or filing, registration,
qualification, license or permit of or with, any court or governmental
agency, body or administrative agency is required for (1) the
execution, delivery and performance by the Company of this Agreement
and the other Operative Documents, as applicable, (2) the issuance and
sale of the Series A Notes or (3) consummation by the Company, the
Subsidiaries and the Joint Ventures of the transactions described in
the Offering Memorandum, except such as have been obtained and made or
have been disclosed in the Offering Memorandum, and except where the
failure to obtain such consents or waivers would not, singly or in the
aggregate, have a Material Adverse Effect. To the best of such
counsel's knowledge, no consents or waivers from any other person are
required for the execution, delivery and performance by the Company,
the Subsidiaries and the Joint Ventures of this Agreement and the other
Operative Documents or the issuance and sale of the Series A Notes, as
applicable, other than such consents and waivers as have been obtained.
17. None of the Company, its Subsidiaries or the Joint
Ventures is (i) an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended, or (ii) a "holding company" or a "subsidiary
company" or an "affiliate" of a holding company within the meaning of
the Public Utility Holding Company Act of 1935, as amended.
18. Except as set forth in this Agreement or the Registration
Rights Agreement, there are no holders of securities of the Company
who, by reason of the execution by the Company of this Agreement or any
other Operative Document to which it is a party or the consummation by
the Company of the transactions contemplated thereby, have the right to
request or demand that the Company register under the Act securities
held by them.
19. None of (A) the execution, delivery and performance of
this Agreement or any of the Operative Documents, (B) the purchase of
the Pledged Securities pursuant to the Escrow and Disbursement
Agreement, (C) the pledge of the Stock Collateral pursuant to the
Pledge Agreement, (D) the issuance and sale of the Series A Notes, (E)
the application of the proceeds from the issuance and sale of the
Series A Notes or (F) the consummation of the transactions contemplated
in connection with any of the foregoing as set forth in the Offering
Memorandum, will violate Regulations G, T, U or X promulgated by the
Board of Governors of the Federal Reserve System.
20. The provisions of the Escrow and Disbursement Agreement
are effective to create valid security interests in favor of the
Trustee for the benefit of the holders of the Senior Notes in that
portion of the collateral described in the Escrow and Disbursement
Agreement that is subject to Article 9 of the Uniform Commercial Code
of the State of New York (such collateral, the "Collateral" and such
statute the "New York UCC") as security for the payment of the Secured
Obligations (as defined in the Escrow and Disbursement Agreement) to
the extent set forth in the Escrow and Disbursement Agreement.
<PAGE>
21. To the extent that the Escrow Account (as defined in the
Escrow and Disbursement Agreement) is a "deposit account" (as defined
in Section 9-105(1)(e) of the New York UCC) that (a) is duly
established and maintained in the name of "[__________________], as
collateral agent, for the benefit of Hyperion Telecommunications, Inc.
Senior Note Holders" with [____________________________________], in
its capacity as collateral agent for the Trustee and the holders of the
Notes (the "Escrow Agent"), in New York, New York, (b) remains at all
times subject to the sole dominion and control of the Trustee, and (c)
is not evidenced at any time by an indispensable instrument, the
provisions of the Escrow and Disbursement Agreement, together with such
dominion and control, are effective under the laws of the State of New
York to create in favor of the Trustee, for the benefit of the Trustee
and the holders of the Senior Notes, a security interest in, and a lien
on, such deposit account to secure the Secured Obligations to the
extent set forth in the Escrow and Disbursement Agreement. Such
security interest and lien will be prior to the interest of a judgment
lien creditor subsequently attaching or levying against the Escrow
Account or a bankruptcy trustee claiming the rights of a hypothetical
lien creditor pursuant to Section 544 of the Bankruptcy Code.
22. The financing statements naming the Company as debtor and
the Trustee as secured party, together with all schedules and exhibits
thereto (together, the "Financing Statements"), to be filed in each of
the filing offices (collectively, the "Filing Offices"), are in
appropriate form for filing with the appropriate jurisdictions. Upon
the proper filing of the Financing Statements in the Filing Offices,
the security interest in favor of the Trustee in the Collateral
described in the Financing Statements will be perfected to the extent a
security interest in such Collateral can be perfected by filing a
financing statement under the provisions of the New York UCC or the
other applicable UCCs (to the extent the UCC as in effect in a
jurisdiction in which the opinion giver is not admitted to practice,
the opinion given may rely exclusively on the CCH Secured Transactions
Guide, or similar publication by service, as applicable).
23. The provisions of the Escrow and Disbursement Agreement,
together with (i) delivery to the Escrow Agent in the State of New York
of the certificates or instruments representing those Government
Securities (as defined in the Escrow and Disbursement Agreement) that
constitute "certificated securities" (as defined in Section 8-102 of
the New York U.C.C.) or "negotiable instruments" (as defined in Section
3-104 of the New York U.C.C.) and related executed blank instruments of
transfer, and (ii) registration in the name of the Escrow Agent, as
pledgee, of those Government Securities that constitute "uncertificated
securities" (as defined in Article 8 of the New York U.C.C.) are
sufficient to create in favor of the Escrow Agent a valid and perfected
security interest in all right, title and interest of the Company in
such Government Securities to the extent such creation and perfection
are governed by the New York U.C.C. Upon such delivery or registration
and assuming that the Escrow Agent acquires its security interest in
those Government Securities that constitute "securities" (as defined in
Section 8-102 of the New York U.C.C.) in good faith without knowledge
of adverse claims, the Escrow Agent will acquire its security interest
in those Government Securities that constitute securities free of
adverse claims (including other consensual security interests). The
security interest in the Government Securities will be a valid,
perfected security interest (with priority over (i) other consensual
security interests, (ii) interests of judgment lien creditors
subsequently attaching or levying against such collateral or (iii) the
interests of a bankruptcy trustee claiming the rights of a hypothetical
lien creditor pursuant to Section 544 of the Bankruptcy Code) if such
Government Securities are registered in the name of the Escrow
<PAGE>
Agent on the records of the Federal Reserve Bank of New York. No
governmental filings or recordings are required in order to perfect (or
maintain the perfection of) the security interests created in
Government Securities.
24. The provisions of the Pledge Agreement, together with
delivery to the Collateral Agent in the State of New York of the
certificates representing the shares identified on Schedule I to the
Pledge Agreement ( the "Pledged Shares") and blank stock powers with
respect thereto signed by the Company, are sufficient to create in
favor of the Collateral Agent a valid and perfected security interest
under the New York U.C.C. in all right, title and interest of the
Company in the Pledged Shares. Upon such delivery and assuming that the
Collateral Agent acquires its security interest in the Pledged Shares
without knowledge of any adverse claims, the Collateral Agent will
acquire its security interest in the Pledged Shares free of adverse
claims (including other consensual security interests). No governmental
filings or recordings are required in order to perfect (or maintain the
perfection of) the security interests created in the Pledged Shares.
25. To the knowledge of such counsel, there is (i) no action,
suit, investigation or proceeding before or by any court, arbitrator or
governmental agency, body or official, domestic or foreign, now
pending, or threatened or contemplated to which any of the Company or
any Subsidiary is or may be a party or to which the business or
property of any of the Company or any Subsidiary is or may be subject,
(ii) no statute, rule, regulation or order that has been enacted,
adopted or issued by any governmental agency, or (iii) no injunction,
restraining order or order of any nature by a federal or state court of
competent jurisdiction to which any of the Company or any Subsidiary is
or may be subject has been issued that, in the case of clauses (i),
(ii) and (iii) above, (x) is required to be disclosed in the
Preliminary Offering Memorandum and the Offering Memorandum and that is
not so disclosed and, (y) could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect, it being
understood that for purposes of this opinion, such counsel need express
no opinion with respect to (i) actions, suits investigation or
proceedings before the FCC or any similar state regulatory commission
or body, (ii) statutes, rules, regulations or orders by any FCC or any
similar state regulatory commission or (iii) injunctions, restraining
orders or other orders by the FCC or any similar state regulatory
commission or body.
We have participated in conferences with officers and other
representatives of the Company, representatives of the independent
certified public accountants of the Company and the Initial Purchasers
and its representatives at which the contents of the Preliminary
Offering Memorandum and the Offering Memorandum and related matters
were discussed and, although we have not undertaken to investigate or
verify independently, and do not assume any responsibility for, the
accuracy, completeness or fairness of the statements contained in the
Preliminary Offering Memorandum or the Offering Memorandum (except as
indicated above), on the basis of the foregoing, no facts have come to
our attention which led us to believe that the Preliminary Offering
Memorandum or the Offering Memorandum, as of its date or the Closing
Date, contained an untrue statement of a material fact or omitted to
state any fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading (except as to financial statements and
related notes, the financial statement schedules and other financial
and statistical data included therein).
<PAGE>
Exhibit D
Form of Opinion of Regulatory Counsel
1. Each of the Company, the Subsidiaries and the Joint Ventures has all
of the licenses, permits and authorizations, if any, required by the
FCC and the State Regulatory Agencies for the provision of
telecommunications services except where the failure to obtain or hold
such license, permit or authority would not have a Material Adverse
Effect on the Company, the Subsidiaries and the Joint Ventures, taken
as a whole.
2. Neither the Company, any Subsidiaries nor any Joint Ventures is
subject to any pending complaint or investigation before the FCC or, to
the best knowledge of counsel, to any threatened complaint or
investigation before the FCC, or, any pending or threatened complaint
or investigation before any State Regulatory Agencies based on any
alleged violation by the Company, the Subsidiaries or the Joint
Ventures in connection with their provision of or failure to provide
telecommunications services.
3. The statements in the Offering Memorandum under the heading of ARisk
Factors - Regulation@ and ABusiness - Government Regulation@ fairly and
accurately summarize the matters therein described.
4. The Company, the Subsidiaries and the Joint Ventures have the
consents, approvals, authorizations, licenses, certificates, permits,
or orders of the FCC or any State Regulatory Agency (including, without
limitation, the pledge of the Stock Collateral) if any, for the
consummation of the transactions contemplated in the Purchase Agreement
except where the failure to obtain the consents, approvals,
authorizations, licenses, certificates, permits or orders would not
have a Material Adverse Effect on the Company, the Subsidiaries and the
Joint Ventures, taken as a whole.
5. Neither the execution and delivery of the Purchase Agreement and the
Operative Documents nor the sale of the Series A Notes and the related
pledges of the Stock Collateral contemplated thereby will conflict with
or result in a violation of any order or regulation of the FCC or any
State Regulatory Agency applicable to the Company, its Subsidiaries or
the Joint Ventures except where the conflict with or the violation of
which would not have a material adverse impact on the Company, the
Subsidiaries and the Joint Ventures, taken as a whole.
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