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) October 09, 1997
HYPERION TELECOMMUNICATIONS, INC.
(Exact name of registrant as specified in charter)
Delaware 000-21605 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
3.01 Certificate of Incorporation, as amended (Filed herewith)
4.01 Certificate of Designations for 12-7/8% Series A and Series B
Senior Exchangeable Redeemable Preferred Stock due 2007
(contained in Exhibit 3.01 filed herewith)
4.02 Form of Certificate for 12-7/8% Senior Exchangeable
Redeemable Preferred Stock due 2007 (Filed herewith)
4.03 Form of Indenture, with respect to the Registrant's 12-7/8%
Senior Subordinated Exchange Debentures due 2007 (set forth as
Annex A to Exhibit 4.01 which is contained in Exhibit 3.01
filed herewith)
4.04 Registration Rights Agreement between the Registrant and the
Initial Purchaser dated October 9, 1997, regarding the 12-7/8%
Senior Exchangeable Redeemable Preferred Stock due 2007 (Filed
herewith)
10.01 Purchase Agreement among the Registrant and Bear Stearns &
Co. Inc. (the "Initial Purchaser") dated October 1, 1997
regarding the 12-7/8% Senior Exchangeable Redeemable Preferred
Stock due 2007 (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: October 23, 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
3.01 Certificate of Incorporation, as amended (Filed herewith)
4.01 Certificate of Designations for 12-7/8% Series A and Series B
Senior Exchangeable Redeemable Preferred Stock due 2007
(contained in Exhibit 3.01 filed herewith)
4.02 Form of Certificate for 12-7/8% Senior Exchangeable Redeemable
Preferred Stock due 2007 (Filed herewith)
4.03 Form of Indenture, with respect to the Registrant's 12-7/8%
Senior Subordinated Exchange Debentures due 2007 (set forth as
Annex A to Exhibit 4.01 which is contained in Exhibit 3.01
filed herewith)
4.04 Registration Rights Agreement between the Registrant and the
Initial Purchaser dated October 9, 1997, regarding the 12-7/8%
Senior Exchangeable Redeemable Preferred Stock due 2007 (Filed
herewith)
10.01 Purchase Agreement among the Registrant and Bear Stearns &
Co. Inc. (the "Initial Purchaser") dated October 1, 1997
regarding the 12-7/8% Senior Exchangeable Redeemable Preferred
Stock due 2007 (Filed herewith)
EXHIBIT 4.02
[Front]
INCORPORATED UNDER THE LAWS OF
THE STATE OF DELAWARE
NUMBER SHARES
HYPERION TELECOMMUNICATIONS, INC.
12-7/8% SENIOR EXCHANGEABLE REDEEMABLE PREFERRED STOCK
CUSIP:
This Certifies that _______________________________________________________ is
the registered holder of ______________________________________________________
Shares of 12-7/8% Senior Exchangeable RedeemablePreferred Stock transferable
only on the books of the Corporation by the holder hereof in person or by
Attorney upon surrender of
this Certificate properly endorsed.
IN WITNESS WHEREOF, the said Corporation has caused this Certificate to
be signed by its duly authorized officers and its Corporate Seal to be hereunto
affixed
this _____________ day of ___________________ A.D. 19__
/s/ /s/
[Vice Chairman and Chief
Executive Officer] [Assistant Secretary and Vice
President, Finance]
<PAGE>
[Reverse}
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR A SECURITY IN
DEFINITIVE FORM, THIS SECURITY 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. THE DEPOSITARY TRUST COMPANY SHALL ACT AS THE DEPOSITARY UNTIL A
SUCCESSOR SHALL BE APPOINTED BY THE COMPANY AND THE TRANSFER AGENT. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY 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. 1
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO (A)
OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY ONLY (1) TO THE COMPANY,
(2) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT, (3) TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A, (4) PURSUANT TO OFFERS AND SALES
TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 904 OF REGULATION S UNDER THE SECURITIES ACT,
(5) 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 TRANFER AGENT A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS SECURITY
(THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRANSFER AGENT) OR (6)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
UNDER THE SECURITIES ACT (AND BASED ON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), SUBJECT IN EACH OF THE FOREGOING CASES TO APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTIONS AND (B)
THAT IT WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN
(A) ABOVE.
For Value Received, _______hereby sell, assign and transfer unto
______________Shares represented by the within Certificate, and do hereby
irrevocably constitute and appoint ___________________________________Attorney
to transfer the said Shares on the books of the within named Corporation with
full power of substitution in the premises.
Dated _________________ 19__
In presence of
- ------------------------------
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1 [For Global Certificate Only]
EXHIBIT 4.04
REGISTRATION RIGHTS AGREEMENT
Dated as of October 9, 1997
by and among
HYPERION TELECOMMUNICATIONS, INC.,
and
BEAR, STEARNS & CO. INC.
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This Registration Rights Agreement (this "Agreement") is
made and entered into as of October 9, 1997, by and between Hyperion
Telecommunications, Inc., a Delaware corporation (the "Company"), and Bear,
Stearns & Co. Inc. (the "Initial Purchaser"), who has agreed to purchase
$200,000,000 in aggregate liquidation preference of the Company's 127/8% Senior
Exchangeable Redeemable Preferred Stock due 2007, pursuant to the Purchase
Agreement (as defined below). Pursuant to the terms of the Certificate of
Designations (as defined below), the Preferred Stock is exchangeable under
certain circumstances for the Company's 127/8% Senior Subordinated Debentures
due 2007.
This Agreement is made pursuant to the Purchase Agreement
dated as of October 1, 1997 (the "Purchase Agreement"), by and among the Company
and the Initial Purchaser. In order to induce the Initial Purchaser to purchase
the Preferred Stock, 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 Purchaser 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.
Broker-Dealer: Any broker or dealer registered under the Exchange
Act.
Broker-Dealer Transfer Restricted Securities: Preferred Stock that is
acquired by a Broker-Dealer in the Exchange Offer in exchange for Preferred
Stock that such Broker-Dealer acquired for its own account as a result of market
making activities or other trading activities (other than Preferred Stock
acquired by such Broker-Dealer directly from the Company or any of its
affiliates).
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.
Certificate of Designations: The Certificate of Designations,
Preferences and Relative, Participating, Optional and Other Special Rights of
Preferred Stock and Qualifications, Limitations and Restrictions Thereof of
127/8% Senior Exchangeable Redeemable Preferred Stock of the Company dated as of
October [8], 1997.
Certificated Securities: As defined in the Certificate
of Designations.
Closing Date: The date hereof.
Commission: The Securities and Exchange Commission.
Company: Hyperion Telecommunications, Inc.
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 New Preferred Stock, or if the Preferred Stock has been
exchanged for the Exchange Debentures, the New Exchange Debentures to be issued
in the Exchange Offer, (b) the maintenance of such Registration Statement
continuously effective and the keeping of the Exchange Offer
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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 Transfer Agent of shares
of New Preferred Stock with the same aggregate Liquidation Preference as the
aggregate Liquidation Preference of the shares of Preferred Stock that were
tendered by Holders thereof pursuant to the Exchange Offer, or, if the Preferred
Stock has been exchanged for Exchange Debentures, the delivery by the Company to
the Trustee of New Exchange Debentures in the same aggregate principal amount as
the aggregate principal amount of Exchange Debentures tendered by Holders
thereof pursuant to the Exchange Offer.
Damages Payment Date: Each Dividend Payment Date or Interest Payment
Date, as the case may be.
Debentures: The Exchange Debentures and the New Exchange
Debentures.
Dividend Payment Date: As defined in the Certificate of
Designations.
Effectiveness Target Date: As defined in Section 5 hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Debentures: The Company's 127/8% Senior Subordinated
Debentures due 2007, including, without limitation, all such debentures issued
in lieu of payment of cash interest thereon.
Exchange Offer: The registration by the Company under the Act of the
New Preferred Stock or, if the Preferred Stock has been exchanged for Exchange
Debentures, the New Exchange Debentures 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 New Preferred Stock with the
same aggregate Liquidation Preference as the Preferred Stock tendered in such
exchange by such Holders, or New Exchange Debentures in an aggregate principal
amount equal to the aggregate principal amount of the Exchange Debentures
tendered in such exchange offer by such Holders, as the case may be.
Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
Exchangeable Preferred Stock: The Preferred Stock and the New
Preferred Stock.
Exempt Resales: The transactions in which the Initial Purchaser
proposes to sell the Preferred Stock 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 Security Holder: As defined in the Certificate of
Designations.
Holder: As defined in Section 2 hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Indenture: The Indenture, to be entered into by the Company and the
Trustee upon the exchange of the Exchangeable Preferred Stock for Debentures in
accordance with the Certificate of Designations, Debentures are to be issued, as
such Indenture is amended or supplemented from time to time in accordance with
the terms thereof.
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Interest Payment Date: As defined in the Indenture and the Exchange
Debentures.
Liquidation Preference: As defined in the Certificate of
Designations.
NASD: National Association of Securities Dealers, Inc.
New Exchange Debentures: The Company's 127/8% Series B Senior
Subordinated Debentures due 2007 to be issued pursuant to the Indenture (i) in
the Exchange Offer or (ii) upon the request of any Holder of Exchange Debentures
covered by a Shelf Registration Statement, in exchange for such Exchange
Debentures, including, without limitation, all such debentures issued in lieu of
payment of cash interest thereon.
New Preferred Stock: The Company's 127/8% Series B Exchangeable
Redeemable Preferred Stock due 2007 to be issued pursuant to the Certificate of
Designations (i) in the Exchange Offer or (ii) upon the request of any Holder of
Preferred Stock covered by a Shelf Registration Statement, in exchange for such
Preferred Stock, including without limitation, all such Preferred Stock issued
in lieu of payment of cash thereon.
Offering Memorandum: The final offering memorandum, dated October 1,
1997, relating to the Company and the Preferred Stock.
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 Preferred Stock or Exchange Debentures on the record date
with respect to the Interest Payment Date or Dividend Payment Date, as
applicable, on which such Damages Payment Date shall occur.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Company
relating to (a) an offering of New Preferred Stock or New Exchange Debentures
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.
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.
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Transfer Restricted Securities: Each share of Exchangeable Preferred
Stock or each Debenture until the earliest to occur of (a) the date on which
such share of Exchangeable Preferred Stock or Debenture 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 share of Exchangeable Preferred Stock or Debenture has been
disposed of in accordance with a Shelf Registration Statement, (c) the date on
which such share of Exchangeable Preferred Stock or Debenture 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 share of Exchangeable Preferred
Stock or Debenture 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
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 New Preferred Stock or the New Exchange Debentures, as the
case may be, 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 New Preferred Stock or the New Exchange
Debentures, as the case may be, to be offered in exchange for the Preferred
Stock or the Exchange Debentures, as the case may be, 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, 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 Exchangeable
Preferred Stock and the Debentures 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.
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(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 Preferred Stock or
Exchange Debentures 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 Preferred Stock or Exchange Debentures 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 share of
New Preferred Stock or New Exchange Debenture received by such Broker-Dealer 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
Exchangeable Preferred Stock or Debentures 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.
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 New Preferred Stock or
the New Exchange Debentures 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
New Preferred Stock or New Exchange Debentures 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
Preferred Stock or Exchange Debentures 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
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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 60 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 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 liquidation preference or the principal amount of the Transfer
Restricted Securities, as applicable, as of the immediately preceding Dividend
Payment Date, in the case of Preferred Stock, and Interest Payment Date, in the
case of the Debentures. Such dividend rate or interest rate, as the case may be,
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 1.0% per annum
until all Registration Defaults have been cured, at which time the dividend
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rate or interest rate, as the case may be, borne by the Transfer Restricted
Securities will be reduced to the original dividend rate or interest rate, as
the case may be. 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 shall be paid by the Company on each
Damages Payment Date to the Global Security 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 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 Preferred
Stock or Exchange Debentures, as the case may be. 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 New Preferred
Stock or the New Exchange Debentures, as the case may be, to
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<PAGE>
be issued in the Exchange Offer and (C) it is acquiring such New Preferred
Stock or the New Exchange Debentures 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 no-action 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 New Preferred Stock or New Exchange Debentures, as the case
may be, obtained by such Holder in exchange for Preferred Stock, or
Exchange Debentures, as the case may be, 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), K-III Communications Corporation (available
May 14, 1993), 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 New Preferred Stock or the New Exchange Debentures, as the
case may be, 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 New Preferred Stock or New Exchange
Debentures in its ordinary course of business and has no arrangement or
understanding with any Person to participate in the distribution of the
New Preferred Stock or New Exchange Debentures 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
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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 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
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<PAGE>
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 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
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<PAGE>
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 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 the extent
such counsel deemed appropriate 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
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<PAGE>
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 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, 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 Preferred Stock
or Exchange Debentures, as the case may be, covered by any Shelf
Registration Statement contemplated by this Agreement, New Preferred Stock
or New Exchange Debentures, as the case may be, having an aggregate
Liquidation Preference or an aggregate principal amount, as the case may
be equal to the aggregate Liquidation Preference of Preferred Stock or the
aggregate principal amount of Exchange Debentures surrendered to the
Company by such Holder in exchange therefor or being sold by such Holder;
such New Preferred Stock or New Exchange Debentures to be registered in
the name of such Holder or in the name of the purchaser(s) of such
Preferred Stock or such Exchange Debentures, as the case may be; in
return, the Preferred Stock or Exchange Debentures, as the case may be,
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;
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<PAGE>
(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, 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) if Debentures are being included in a Registration
Statement, 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 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
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<PAGE>
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 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 New Preferred
Stock or the New Exchange Debentures 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 Exchangeable Preferred Stock or Debentures, as the
case may be, 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 Purchaser 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.
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)
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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 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
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<PAGE>
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
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 Liquidation Preference
or principal amount of Exchangeable Preferred Stock or Debentures 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
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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.
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.
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(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), (ii) that
certain Equity and Contribution Agreement between the Company and Lenfest
Telephony, dated August 4, 1997, (iii) Class B Warrants, (iv) 12 1/4 Senior
Secured Notes due 2004, (v) 13% Senior Discount Notes due 2003 and (vi) 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 Exchangeable Preferred Stock or
Debentures. The Company shall not take any action, or voluntarily permit any
change to occur, with respect to the Preferred Stock or Debentures 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, 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
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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, 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.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
HYPERION TELECOMMUNICATIONS, INC.
By: /s/ James P. Rigas
Name: James P. Rigas
Title: Vice Chairman and Chief Executive Officer
BEAR, STEARNS & CO. INC.
By: /s/ John Andrew Bugas
Name: John Andrew Bugas
Title: Senior Managing Director
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EXHIBIT 10.01
HYPERION TELECOMMUNICATIONS, INC.
$200,000,000 of
12 7/8% Senior Exchangeable Redeemable Preferred Stock due 2007
Purchase Agreement
BEAR, STEARNS & CO. INC.
HYPERION TELECOMMUNICATIONS, INC.
$200,000,000 of
12 7/8% Senior Exchangeable Redeemable Preferred Stock due 2007
PURCHASE AGREEMENT
October 1, 1997
New York, New York
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") (the "Initial Purchaser") 200,000 shares of its 127/8% Senior
Exchangeable Redeemable Preferred Stock due 2007, liquidation preference $1,000
per share, (the "Preferred Stock") subject to the terms and conditions set forth
herein. The Preferred Stock is to be authorized and issued pursuant to the
provisions of a Certificate of Designation of the Voting Power, Designation
Preferences and Relative, Participating, Optional or Other Special Rights and
Qualifications, Limitations and Restrictions (the "Certificate of Designation")
to be filed with the Secretary of State of the State of Delaware. The Transfer
Agent for the Preferred Stock will be American Stock Transfer & Trust Company.
The Preferred Stock and the New Preferred Stock (as defined below) issuable in
exchange therefor are collectively referred to herein as the "Securities." Under
certain circumstances set forth in the Certificate of Designation, the
Securities may be exchanged for the Company's 127/8% Senior Subordinated
Debentures due 2007 (the "Exchange Debentures"). The Exchange Debentures and the
New Exchange Debentures (as defined below) issuable in exchange therefor are
collectively referred to herein as the "Debentures." The Preferred Stock is more
fully described in the Offering Memorandum referred to below. Capitalized terms
used but not otherwise defined herein shall have the meanings given to such
terms in the Indenture.
1. Issuance of Securities. The Company proposes to, upon the terms and
subject to the conditions set forth herein, issue and sell to the Initial
Purchaser $200,000,000 in aggregate liquidation preference of Securities.
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 Preferred Stock, (and all securities
issued in exchange therefor or in substitution thereof) shall bear the following
legend:
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"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 Preferred Stock will be offered and sold to the
Initial Purchaser pursuant to an exemption from the registration requirements
under the Act. The Company has prepared a final Offering Memorandum, dated
October 1, 1997 (the "Offering Memorandum"), relating to the Securities.
The Initial Purchaser has advised the Company that they will make
offers (the "Exempt Resales") of the Preferred Stock on the terms set forth in
the Offering Memorandum, as amended or supplemented, solely to (i) persons whom
the Initial Purchaser reasonably believes to be "qualified institutional
buyers," as defined in Rule 144A under the Act ("QIBs") and (ii) to non-U.S.
persons outside the United States in
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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 Purchaser will offer the Preferred Stock 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 Preferred Stock 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
Preferred Stock constitutes "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
127/8% Series B Preferred Stock due 2007 (the "New Preferred Stock") to be
offered in exchange for the Preferred Stock (the "Exchange Offer") or, if the
Preferred Stock has been exchanged for the Exchange Debentures, the Company's
127/8% Senior Subordinated Debentures due 2007 (the "New Exchange Debentures")
to be offered in exchange for the Exchange Debentures (in either case such offer
to exchange being referred to as the "Exchange Offer") and, if necessary, (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
Preferred Stock or Exchange Debentures, as the case may be, and to use its best
efforts to cause such registration statements to be declared effective and
consummate the Exchange Offer.
This Agreement, Certificate of Designation, the indenture pursuant to
which the Exchange Debentures will be issued (the "Indenture"), the Securities,
the Debentures 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 Purchaser, and the Initial Purchaser agrees to purchase from the Company
200,000 shares of Preferred Stock. The purchase price to be paid by the Initial
Purchaser for the Preferred Stock shall be $975.00 per share (the "Purchase
Price").
(b) Delivery of the Preferred Stock 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 October
9, 1997 (the "Closing") or at such other time as shall be agreed upon by the
Initial Purchaser and the Company. The time and date of such delivery and
payment are herein called the "Closing Date."
(c) The Preferred Stock shall initially be issued in the form of one or
more Global Securities (the "Global Securities"), registered in the name of Cede
& Co., as nominee of the Depository Trust Company ("DTC"), having a liquidation
preference corresponding to the aggregate liquidation preference of the
Preferred Stock. The Global Securities shall be delivered by the Company to the
Initial Purchaser (or as the Initial Purchaser directs) in each case with any
transfer taxes payable upon initial issuance thereof duly paid by the Company
against payment of the Purchase Price by wire transfer of same-day funds to the
order of the Company. The Global Securities shall be made available to the
Initial Purchaser for inspection not later than 9:30 a.m., New York City time,
on the business day immediately preceding the Closing Date.
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<PAGE>
4. Agreements of the Company. The Company covenants and agrees
with the Initial Purchaser as follows:
(a) To advise the Initial Purchaser promptly and, if requested
by the Initial Purchaser, 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 of
the Preferred Stock 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 Purchaser, makes any statement of a material
fact made in the Offering Memorandum untrue or that requires the making
of any additions to or changes in 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 exemption of any shares of Preferred Stock under
any state securi ties 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 shares of
Preferred Stock 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 Purchaser and those persons
identified by the Initial Purchaser to the Company, without charge, as
many copies of the Offering Memorandum, and any amendments or
supplements thereto, as the Initial Purchaser may reasonably request.
The Company consents to the use of the Offering Memorandum and any
amendments and supplements thereto required pursuant hereto, by the
Initial Purchaser in connection with Exempt Resales.
(c) Not to amend or supplement the Offering Memorandum prior
to the Closing Date unless the Initial Purchaser 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 Purchaser's request, any amendment
or supplement to the Offering Memorandum that may be necessary or
reasonably requested by the Initial Purchaser 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 Purchaser, it becomes
necessary or advisable to amend or supplement the 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 Offering Memorandum
to comply with applicable law, (i) notify the Initial Purchaser 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 Purchaser and counsel to the
Initial Purchaser in connection with the qualification or registration
of the Preferred Stock under the securities or Blue
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Sky laws of such jurisdictions as the Initial Purchaser 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 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 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 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 Preferred Stock
and, if issued, the Debentures to the Initial Purchaser, (iv) the
qualification or registration of the Securities 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 final Blue Sky
Memorandum and the reasonable fees and disbursements of counsel to the
Initial Purchaser relating to such qualification or registration), (v)
furnishing such copies of 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 Securities
(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 Preferred Stock 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 Preferred Stock, New Preferred Stock and, if
issued the Debentures by DTC for "book-entry" transfer, (x) the rating
of the Securities by rating agencies, (xi) the reasonable fees and
expenses of the Transfer Agent and its counsel in connection with the
Certificate of Designation, (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 Securities.
(g) To use the proceeds from the sale of the Preferred Stock
in the manner described in the Offering Memorandum under the caption
"Use of Proceeds."
(h) If the Debentures are issued, not to voluntarily claim,
and to resist actively any attempts to claim, the benefit of any usury
laws against the holders of any Debentures.
(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 delivery of
the Preferred Stock.
(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 Preferred Stock in a
manner that would require the registration under the Act of the sale to
the Initial Purchaser
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<PAGE>
or the Eligible Purchasers of the Preferred Stock 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 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 of 1934, as amended (the
"Exchange Act"), to make available to any Eligible Purchaser or
beneficial owner of Securities in connection with any sale thereof and
any prospective purchaser of such Preferred Stock 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 New Preferred Stock or New Exchange
Debentures to be offered in exchange for the Preferred Stock or
Exchange Debentures, as the case may be, 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 Securities by DTC for "book-entry" transfer.
(n) To use its best efforts to effect the inclusion of the
Preferred Stock in PORTAL and to obtain approval of the Securities by
DTC for "book-entry" transfer.
(o) During a period of five years following the Closing Date,
to deliver without charge to the Initial Purchaser, 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 the Initial
Purchaser, 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 Preferred Stock.
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 Preferred
Stock.
(r) To comply with the agreements in the Certificate of
Designation, Indenture, the Registration Rights Agreement and each
other Operative Document.
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5. Representations and Warranties. (a) The Company
represents and warrants to the Initial Purchaser that:
(i) The Offering Memorandum (and each supplement and amendment
thereto) have been prepared in connection with the Exempt Resales. The
Offering Memorandum does 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 Offering Memorandum (or any supplement or amendment
thereto) made in reliance upon and in conformity with information
relating to the Initial Purchaser 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 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 Preferred Stock 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 or
adversely affect the issuance or marketability of the Preferred Stock
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 I 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
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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 II 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 Preferred Stock 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, limitations on voting rights or other charge or
encumbrance, other than security interests, claims, liens, limitation
on voting rights or other charges or encumbrances arising from the
pledge of the capital stock of certain Subsidiaries as security for the
Company's 12 1/4 Senior Secured Notes due 2004. 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 and the 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 Securities 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.
(ix) The shares of Preferred Stock have been duly and validly
authorized for issuance and sale to the Initial Purchaser by the
Company pursuant to this Agreement and, when issued, delivered and paid
for in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable and entitled to the rights,
privileges and preferences set forth in the Certificate of Designation,
and the issuance of such shares of Preferred Stock will not be subject
to any preemptive or similar rights. The Preferred Stock will conform
in all material respects with the description thereof in the Offering
Memorandum.
(x) The shares of New Preferred Stock have been duly and
validly authorized by the Company and, when issued and delivered in
accordance with the terms of the Certificate of Designation and the
Exchange Offer, will be validly issued, fully paid and non-assessable
and
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<PAGE>
entitled to the rights, privileges and preferences set forth in the
Certificate of Designation, and the issuance of such shares of New
Preferred Stock will not be subject to any preemptive or similar
rights. The New Preferred Stock will conform in all material respects
to the description thereof in the Offering Memorandum.
(xi) The Exchange Debentures have been duly and validly
authorized by the Company and, if and when issued by the Company will
conform in all material respects to the description thereof in the
Offering Memorandum. When the Exchange Debentures are issued and
delivered in accordance with the Indenture, the Exchange Debentures
will constitute 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 Exchange Debentures will conform in
all material respects to the description thereof in the Offering
Memorandum.
(xii) The New Exchange Debentures have been duly and validly
authorized by the Company and, if and when issued and delivered by the
Company in accordance with the terms of the Indenture and the Exchange
Offer, will constitute 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 New Exchange Debentures will conform
in all material respects to the description thereof in the Offering
Memorandum.
(xiii) The Certificate of Designation has been duly authorized
by all necessary corporate and any necessary stockholder action and, on
the Closing Date will have been duly executed by the Company and filed
with the Secretary of State of the State of Delaware and will conform
in all material respects to the description thereof in the Offering
Memorandum.
(xiv) 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.
(xv) 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.
(xvi) 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,
9
<PAGE>
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.
(xvii) 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
Preferred Stock, (C) the issuance of the New Preferred Stock in
exchange for the Preferred Stock, and (D) 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 Securities 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 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.
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(xviii) 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 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.
(xix) 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 Preferred Stock 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
Preferred Stock or prevents or suspends the sale of the Preferred Stock
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.
(xx) 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.
(xxi) 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
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<PAGE>
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.
(xxii) 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.
(xxiii) 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.
(xxiv) 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
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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.
(xxv) 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.
(xxvi) 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").
(xxvii) 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.
(xxviii) 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.
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(xxix) Each of the Company, the Subsidiaries and the Joint
Ventures maintains insurance 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.
(xxx) 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 Preferred Stock (ii) since the date of the
Offering Memorandum (A) sold, bid for, purchased or paid any person any
compensation for soliciting purchases of the Preferred Stock or (B)
paid or agreed to pay to any person any compensation for soliciting
another to purchase any other securities of the Company.
(xxxi) No registration under the Act of the Preferred Stock is
required for the sale of the Preferred Stock to the Initial Purchaser
as contemplated hereby or for the Exempt Resales assuming (i) that the
purchasers who buy the Preferred Stock in the Exempt Resales are
Eligible Purchasers and (ii) the accuracy of the Initial Purchaser's
representations regarding the absence of general solicitation in
connection with the sale of Preferred Stock to the Initial Purchaser
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 Purchaser, as to which the
Company makes no representation or warranty) in connection with the
offer and sale of the Preferred Stock 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 Preferred Stock
have been issued and sold by the Company within the six-month period
immediately prior to the date hereof.
(xxxii) Set forth on Exhibit B 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 Preferred
Stock 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."
(xxxiii) 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.
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(xxxiv) 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 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.
(xxxv) None of (A) the execution, delivery and performance of
this Agreement or any of the Operative Documents, (B) the issuance and
sale of the Securities, (C) the application of the proceeds from the
issuance and sale of the Securities or (D) 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.
(xxxvi) 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.
(xxxvii) 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 Preferred Stock, 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 Preferred Stock,
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
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of the Company on a consolidated basis, taking into account the
projected capital requirements and capital availability.
(xxxviii) 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 Purchaser for a brokerage commission, finder's fee or like
payment in connection with the issuance, purchase and sale of the
Preferred Stock.
(xxxix) 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.
(xl) 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(xl) only that
Regulation S-K is applicable to the Offering Memorandum).
(xli) 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 selling efforts
within the meaning of Regulation S with respect to the Preferred Stock,
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 Preferred Stock
outside the United States.
(xlii) The Preferred Stock 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).
(xliii) The sale of the Preferred Stock pursuant to Regulation
S is not part of a plan or scheme to evade the registration provisions
of the Act.
(xliv) Each of the Company and Hyperion Telecommunications of
New York, Inc. have been released from all of their obligations under
the partnership agreement governing the NewChannels Hyperion
Telecommunications of New York joint venture pursuant to agreements
that dissolved such joint venture on September 12, 1997.
Each certificate signed by any officer of the Company and
delivered to the Initial Purchaser or counsel for the Initial Purchaser pursuant
to this Agreement shall be deemed to be a representation and warranty by the
Company to the Initial Purchaser as to the matters covered thereby.
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The Company acknowledges that the Initial Purchaser and, for
purposes of the opinions to be delivered to the Initial Purchaser pursuant to
Section 8 hereof, counsel to the Company and counsel to the Initial Purchaser,
will rely upon the accuracy and truth of the foregoing representations and
hereby consents to such reliance.
(b) The Initial Purchaser 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 Preferred
Stock.
(ii) Such Initial Purchaser (A) is not acquiring the Preferred
Stock 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 Preferred Stock 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 the Initial Purchaser or any of its
representatives in connection with the offer and sale of any of the
Preferred Stock, 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.
(iv) In connection with the Exempt Resales, such Initial
Purchaser will solicit offers to buy the Preferred Stock only from, and
will offer to sell the Preferred Stock only to, Eligible Purchasers.
Such Initial Purchaser further agrees (A) that, with respect to QIBs,
it will offer to sell the Preferred Stock only to, and will solicit
offers to buy the Preferred Stock only from QIBs who in purchasing such
Preferred Stock will be deemed to have represented and agreed that they
are purchasing the Preferred Stock 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 Preferred Stock 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 Preferred Stock 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.
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(v) Such Initial Purchaser agrees that it has offered the
Preferred Stock and will offer and sell the Preferred Stock (i) as part
of its distribution at any time and (ii) otherwise until one year after
the later of the commencement of the offering of the Preferred Stock
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 Preferred Stock, 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 Preferred Stock
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 Preferred Stock, it will have sent to each
distributor, dealer or person receiving a selling concession, fee or
other remuneration that purchases Preferred Stock from it during the
restricted period (as defined in Regulation S) a confirmation or notice
to substantially the following effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933, as amended (the "Securities 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 one year 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 Preferred Stock, 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
Preferred Stock to persons in the United Kingdom prior to the expiry of
the period of six months from the issue date of the Preferred Stock,
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 Preferred Stock 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
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<PAGE>
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 Preferred Stock 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 Preferred Stock 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 Preferred Stock to be published in any newspaper
or periodical or posted in any public place and not to issue any
circular relating to the Preferred Stock, except such advertisements as
include the statements required by Regulation S.
(xi) The sale of the Preferred Stock in offshore transactions
pursuant to Regulation S is not part of a plan or scheme to evade the
registration provisions of the Act.
The Initial Purchaser understands that the Company and, for purposes of the
opinions to be delivered to the Initial Purchaser pursuant to Section 8 hereof,
counsel to the Company and counsel to the Initial Purchaser will rely upon the
accuracy and truth of the foregoing representations and hereby expressly
consents to such reliance.
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 the 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 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 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
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<PAGE>
the Company by or on behalf of the Initial Purchaser expressly for use
therein. This indemnity agreement will be in addition to any liability
which the Company may otherwise have, including, under this Agreement.
(b) The Initial Purchaser 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 statement of a material fact
contained in 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 the Initial
Purchaser expressly for use therein; provided that in no case shall the
Initial Purchaser be liable or responsible for any amount in excess of
the discounts and commissions received by the Initial Purchaser in
connection with the Offering. This indemnity will be in addition to any
liability which the Initial Purchaser 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
20
<PAGE>
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.
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 Purchaser 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 Purchaser, 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 the
Initial Purchaser may be subject, in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Initial Purchaser
from the offering of the Preferred Stock 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 Purchaser 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 Purchaser shall be deemed to be in the same proportion as (x) the total
proceeds from the offering of Preferred Stock (net of discounts but before
deducting expenses) received by the Company and (y) the discounts received by
the Initial Purchaser. The relative fault of the Company and of the Initial
Purchaser 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 Purchaser and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Initial Purchaser agree that it would not be just and
equitable if contribution pursuant to this Section 7 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 the Initial Purchaser be required to
contribute any amount in excess of the amount by which the discount applicable
to the Preferred Stock purchased by the Initial Purchaser pursuant to this
Agreement exceeds the amount of any damages which the 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
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this Section 7, (A) each person, if any, who controls the 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 the 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.
8. Conditions of Initial Purchaser's Obligations. The obligation
of the Initial Purchaser to purchase and pay for the Preferred Stock, 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 Purchaser not later than 5:00 p.m., New York
City time, on the second day following the date of this Agreement or at
such later date and time as to which the Initial Purchaser may agree,
and no stop order suspending the qualification or exemption from
qualification of the Preferred Stock 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 Preferred Stock; 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
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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 Purchaser shall have received a certificate,
dated the Closing Date, signed on behalf of the Company by (i) the
President or a Vice Chairman and (ii) a Vice President, Vice Chairman,
Secretary or Assistant Secretary, in form and substance reasonably
satisfactory to the Initial Purchaser, confirming, as of 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 Purchaser shall have received on the Closing
Date an opinion, dated the Closing Date, in form and substance
satisfactory to the Initial Purchaser and counsel to the Initial
Purchaser, of Buchanan Ingersoll, counsel for the Company, to the
effect set forth in Exhibit C hereto.
(g) The Initial Purchaser shall have received on the Closing
Date an opinion, dated the Closing Date, in form and substance
satisfactory to the Initial Purchaser and counsel to the Initial
Purchaser, of Swidler & Berlin, special regulatory counsel to the
Company, to the effect set forth in Exhibit D hereto.
(h) The Initial Purchaser shall have received on the Closing
Date an opinion, dated the Closing Date, in form and substance
satisfactory to the Initial Purchaser and counsel to the Initial
Purchaser, 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 Purchaser shall have received an opinion,
dated the Closing Date, in form and substance reasonably satisfactory
to the Initial Purchaser, of Latham & Watkins, counsel to the Initial
Purchaser, covering such matters as are customarily covered in such
opinions.
(j) At the Closing Date the Initial Purchaser shall have
received from Deloitte & Touche, independent public accountants for the
Company dated as of the Closing Date, a customary comfort letter
addressed to the Initial Purchaser and in form and substance
satisfactory to the Initial Purchaser and counsel to the Initial
Purchaser with respect to the financial statements and certain
financial information of the Company, the Subsidiaries and the Joint
Ventures contained in the Offering Memorandum.
23
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(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 Purchaser
such further information, certificates and documents as the Initial
Purchaser may reasonably request.
(m) The Company shall have entered into the Registration
Rights Agreement and the Initial Purchaser shall have received
counterparts, conformed as executed, thereof.
(n) The Company shall have authorized, executed and filed the
Certificate of Designation in accordance with Delaware law and the
Initial Purchaser shall have received an original, duly executed by the
Company.
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 Purchaser. The Company will furnish the Initial Purchaser with
such conformed copies of such opinions, certificates, letters and other
documents as it shall reasonably request.
9. Initial Purchaser's Information. For the purposes of Sections 4(a)
and 6(b) herein and otherwise, the Company and the Initial Purchaser severally
acknowledge that the statements with respect to the offering of the Preferred
Stock 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 Purchaser expressly for use in the Offering Memorandum.
10. Survival of Representations and Agreements. All representations and
warranties, covenants and agreements of the Initial Purchaser 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 Purchaser
any controlling person thereof or by or on behalf of the Company or any
controlling person thereof, and shall survive delivery of and payment for the
Preferred Stock to and by the Initial Purchaser. 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.
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(b) The Initial Purchaser shall have the right to terminate
this Agreement at any time prior to the Closing Date by notice to the
Company from the Initial Purchaser, without liability (other than with
respect to Sections 6 and 7) on the Initial Purchaser's 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 Purchaser 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
Purchaser 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 Purchaser 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 Purchaser's judgment, make it inadvisable or
impracticable to proceed with the offering or delivery of the Preferred
Stock 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 Purchaser's
judgment, inadvisable or impracticable to proceed with the delivery of
the Preferred Stock 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 Preferred Stock provided
for herein is not consummated because any condition to the obligations
of the Initial Purchaser set forth herein is 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 Purchaser, reimburse the
Initial Purchaser for all out-of-pocket expenses (including the
reasonable fees and expenses of Initial Purchaser's counsel), incurred
by the Initial Purchaser 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 Purchaser shall be mailed, delivered, or telexed, telegraphed or
telecopied and confirmed in writing to Bear, Stearns & Co. Inc., 245 Park
Avenue, New
25
<PAGE>
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., Main at Water 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 Purchaser 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
Preferred Stock from the Initial Purchaser.
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 page follows]
26
<PAGE>
If the foregoing correctly sets forth the understanding among
the Initial Purchaser, 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/ James P. Rigas
Name: James P. Rigas
Title: Vice Chairman and Chief Executive Officer
Accepted and agreed to as of the date first above written:
BEAR, STEARNS & CO. INC.
By: /s/ John Andrew Bugas
Name: John Andrew Bugas
Title: Senior Manging Director
<PAGE>
SCHEDULE I
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.
Hyperion Telecommunications of Syracuse, Inc.
Hyperion Telecommunications of Buffalo, Inc.
Hyperion Telecommunications of Albany, Inc.
Hyperion Telecommunications of Louisville, Inc.
Hyperion Telecommunications of Lexington, Inc.
Hyperion Telecommunications of Harrisburg, Inc.
Hyperion Telecommunications of Scranton
Hyperion Telecommunications of Coudersport, Inc.
<PAGE>
SCHEDULE II
Joint Ventures
MediaOne 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
New Jersey Fiber Technologies
NHT Partnership
PECO Hyperion Telecommunications
Susquehanna Hyperion Telecommunications
Entergy Hyperion Telecommunications of Arkansas, L.L.C.
Entergy Hyperion Telecommunications of Louisiana, L.L.C.
Entergy Hyperion Telecommunications of Mississippi, L.L.C.
<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 shares of Preferred Stock are issued and delivered
pursuant to this Agreement, no such shares 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 perform its obligations under this
Agreement and each of the Operative Documents, as
<PAGE>
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 Operative Documents 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 shares of Preferred Stock have been duly and validly
authorized for issuance and sale to the Initial Purchaser by the
Company pursuant to this Agreement and, when issued, delivered and paid
for in accordance with the terms of the Certificate of Designation and
delivered against payment therefor in accordance with the terms of this
Agreement, will be validly issued, fully paid and nonassessable and
entitled to the rights, privileges and preferences set forth in the
Certificate of Designation, and the issuance of such shares of
Preferred Stock will not be subject to any preemptive or similar
rights.
11. The shares of Series B Preferred Stock have been duly and
validly authorized for issuance by the Company and, when issued and
delivered in accordance with the terms of the Exchange Offer and the
Certificate of Designation, will be validly issued, fully paid and
non-assessable and entitled to the rights, privileges and preferences
set forth in the Certificate of Designation, and the issuance of such
shares of Series B Preferred Stock will not be subject to any
preemptive or similar rights.
12. The Exchange Debentures have been duly and validly
authorized for issuance and, if and when issued and delivered by the
Company in accordance with the terms of the Indenture and the
Certificate of Designation, the Exchange Debentures 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.
<PAGE>
13. The New Exchange Debentures have been duly and validly
authorized for issuance and, if and when issued and delivered by the
Company in accordance with the terms of the Indenture and the
Certificate of Designation, the Exchange Debentures 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.
14. The Offering Memorandum contains a fair summary of
each of the Securities, the Debentures and each of the Operative
Documents.
15. No registration under the Act of the Preferred Stock is
required for the sale of the Preferred Stock to the Initial Purchaser
as contemplated by this Agreement or for the Exempt Resales assuming
(i) that the Initial Purchaser is a Qualified Institutional Buyer, as
defined in Rule 144A under the Act ("QIBs") or that the Preferred Stock
are purchased in an offshore transaction within the meaning of
Regulation S, (ii) that the purchasers who buy the Preferred Stock in
the Exempt Resales are QIBs, (iii) the accuracy of the Initial
Purchaser's representations regarding the absence of general
solicitation in connection with the sale of the Preferred Stock to the
Initial Purchaser 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.
16. 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.
17. 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.
18. 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 Preferred Stock 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
<PAGE>
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 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 Preferred Stock 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 Preferred Stock, as applicable, other than such consents
and waivers as have been obtained.
19. 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.
20. 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.
21. None of (A) the execution, delivery and performance of
this Agreement or any of the Operative Documents, (B) the issuance and
sale of the Securities the application of the proceeds from the
issuance and sale of the Preferred Stock or (C) 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.
22. 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,
<PAGE>
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 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 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 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 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 "Risk
Factors Regulation" and "Business - 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 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 Preferred Stock 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.
<PAGE>
EXHIBIT 3.01
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
HYPERION TELECOMMUNICATIONS, INC.
(Original Certificate of Incorporation filed October 9, 1991)
HYPERION TELECOMMUNICATIONS, INC. (the "Corporation"), a corporation
organized and existing under and by virtue of the General Corporation Law of the
State of Delaware (the "Law"), does hereby certify:
A. That the Board of Directors of the Corporation adopted a resolution
setting forth the Amended and Restated Certificate of Incorporation set forth
below, declaring it advisable and submitting it to the stockholders entitled to
vote in respect thereof for their consideration of such Amended and Restated
Certificate of Incorporation.
B. The holders of a majority of the outstanding stock entitled to
vote thereon voted in favor of the adoption of the Amended and Restated
Certificate of Incorporation as set forth below.
C. That the original Certificate of Incorporation of the
Corporation, as amended, is hereby superseded in its entirety by the Amended and
Restated Certificate of Incorporation set forth below.
D. That the Amended and Restated Certificate of Incorporation of
the Corporation set forth
below as been duly adopted in accordance with Sections 242 and 245 of the Law.
ARTICLE I
The name of the corporation is Hyperion Telecommunications, Inc.
ARTICLE II
The address of its registered office in the State of Delaware is 1013
Centre Road, City of Wilmington, County of New Castle. The name of its
registered agent at such address is The Prentice Hall Corporation System, Inc.
ARTICLE III
The nature of the business or purpose to be conducted or promoted is:
to engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.
ARTICLE IV
The total number of shares of capital stock of all classes which the
Corporation shall have authority to issue is 455,000,000 shares which shall be
divided as follows: (i) 300,000,000 shares of the Class A Common Stock, par
value $0.01 per share (the "Class A Common Stock"); (ii) 150,000,000 shares of
the Class B Common Stock, par value $0.01 per share (the "Class B Common Stock")
(collectively the Class A Common Stock and the Class B Common Stock is referred
to herein as the "Common Stock"); and (iii) 5,000,000 shares of the Preferred
Stock, par value $0.01 per share (the "Preferred Stock"). The
-1-
<PAGE>
designations and the powers, preferences, and relative, participating, optional
or other rights of the capital stock and the qualifications, limitations or
restrictions thereof are as follows:
Each share of common stock of the Corporation, par value $0.01 per
share, outstanding immediately prior to the filing of this Amended and Restated
Certificate of Incorporation ("Original Common Stock") shall, upon the filing of
this Amended and Restated Certificate of Incorporation, and without any action
required by the holder be converted into one (1) share of Class B Common Stock.
On or after the date of the filing of this Amended and Restated Certificate of
Incorporation, and in any event within 10 days after receipt of notice, by mail,
postage prepaid from the Corporation of the occurrence of such event, each
holder of record of shares of Original Common Stock shall surrender such
holder's certificates evidencing such shares at the principal office of the
Corporation or at such other place as the Corporation shall designate, and shall
thereupon be entitled to receive certificates representing the number of shares
of Class B Common Stock, as applicable, into which such shares of Original
Common Stock have been converted. Upon the filing of this Amended and Restated
Certificate of Incorporation, each holder of record of Original Common Stock
shall be deemed to be the holder of record of the Class B Common Stock, as
applicable, issuable upon such conversion, notwithstanding that the certificates
representing such shares of Original Common Stock have not been surrendered at
the office of the Corporation, that notice from the corporation shall not have
been received by any holder of record of shares of Original Common Stock, or
that the certificates evidencing such shares of Class B Common Stock, as
applicable, shall not then be actually delivered to such holder.
A. COMMON STOCK PROVISIONS
(1) Voting Rights. Holders of the Class A Common Stock
and holders of the Class B Common Stock shall have the following voting
rights:
(a) Except as required by law, the holders of the
Class A Common Stock and the holders of the Class B Common Stock shall
in all matters vote together as a single class, provided that the
holders of shares of the Class A Common Stock shall have one vote per
share and the holders of shares of the Class B Common Stock shall have
ten votes per share. If any series of Preferred Stock is issued or any
new series of capital stock is authorized in the future, any voting
rights granted to such stock shall not exceed ten votes per share in
connection with any matter and will not limit the voting rights of the
Class A Common Stock or the Class B Common Stock.
(b) There shall be no cumulative voting of any
shares of either class of Common Stock.
(2) Conversion Rights.
(a) Shares of Class B Common Stock shall be
convertible, at the option of the respective holders thereof, at any
time, and from time to time, into fully paid and nonassessable shares
of the Class A Common Stock on the basis of one share of the Class A
Common Stock for each share of the Class B Common Stock. Any holder of
shares of the Class B Common Stock
-2-
<PAGE>
may elect to convert any or all of such shares at one time or at
various times, in such holder's discretion.
(b) No payment or adjustment with respect to
dividends on shares of the Class A Common Stock or on the Class B
Common Stock shall be made in connection with any conversion of shares
of the Class B Common Stock into shares of Class A Common Stock;
provided, however, that if any shares of the Class B Common Stock shall
be converted subsequent to the record date for the payment of a stock
or cash dividend or other distribution on the shares of the Class B
Common Stock but prior to such payment, the stock or cash dividend or
other distribution shall be paid on the Class B Common Stock to the
registered holder of such shares as of the close of business on the
record date as if no conversion has been made.
(c) The holders of a certificate or certificates for
the Class B Common Stock, in order to effect the conversion of shares
represented thereby, shall surrender the certificate or certificates to
the corporation or to the transfer agent for the shares of the Class A
Common Stock, with (i) a written notice to the Corporation stating that
such holder elects to convert such share or shares and stating the name
and addresses in which each certificate for the shares of the Class A
Common Stock issued upon such conversion is to be issued and (ii) any
transfer tax stamps or funds therefor required to be paid in connection
with the transfer. If the shares of the Class A Common Stock issuable
upon conversion are to be issued in a name other than that in which the
shares of the Class B Common Stock to be converted are registered, the
certificate or certificates shall be duly endorsed for the transfer or
accompanied by a duly executed stock transfer power.
Upon the surrender of the certificate or certificates, the
Corporation shall issue and deliver or cause to be issued and delivered
to the person entitled thereto a certificate or certificates for the
number of full shares of the Class A Common Stock issuable upon
conversion. The conversion shall be deemed to have been effected on the
date of the surrender of the certificate or certificates of shares of
the Class B Common Stock, and the person in whose name the certificate
or certificates of the shares of the Class A Common Stock issuable upon
conversion are to be issued shall be deemed to be the holder of record
of the shares as of that date.
(d) If there should be any capital reorganization or
any reclassification of the Class A Common Stock, the shares of the
Class B Common Stock shall thereafter have the right to be converted
into the number of shares of stock or other securities or property of
the Corporation to which outstanding shares of the Class A Common Stock
would have been entitled upon the effective date of the reorganization
or reclassification. The Board of Directors shall make an appropriate
adjustment in the application of the provision of this paragraph (d)
with respect to the conversion rights of the
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holders of the shares of the Class B Common Stock after the
reorganization or reclassification, to the end that the provision shall
be applicable, as nearly as reasonably may be, in respect to any shares
or other securities or property thereafter issuable or deliverable upon
the conversion of shares of the Class B Common Stock. The provision of
this paragraph shall not apply to a reorganization or reclassification
involving merely a subdivision or combination of outstanding shares of
the Class A Common Stock, which shall be governed by paragraph (f)
hereof.
(e) The Corporation shall at all times have
authorized but unissued, or in its treasury, a number of shares of the
Class A Common Stock sufficient for the conversion of all shares of the
Class B Common Stock from time to time outstanding.
(f) If the shares of the Class A Common Stock or the
Class B Common Stock at any time outstanding shall, by reclassification
or otherwise, be subdivided into a greater number of shares or combined
in to a lesser number of shares, the shares of the Class B Common Stock
or the Class A Common Stock, respectively, then outstanding shall, at
the same time, be subdivided or combined, as the case may be, on the
same basis.
(g) The Corporation covenants that if any shares of
the Class A Common Stock, required to be reserved for purposes of
conversion hereunder, require registration with or approval of any
governmental authority under any federal or state law before such
shares may be issued upon conversion, the corporation will cause such
shares to be duly registered or approved.
(3) Dividend Rights. Whenever there shall have been paid, or
declared and set aside for payment, to the holders of shares of any
class of stock having preference over the Common Stock as to the
payment of dividends, the full amount of dividends and of sinking fund
or retirement payments, if any, to which such holders are respectively
entitled in preference to the Common Stock, then the holders of record
of the Class A Common Stock and the Class B Common Stock, and any class
or series of stock entitled to participate therewith as to dividends,
shall be entitled to receive dividends, when, as, and if declared by
the Board of Directors, out of any assets legally available for the
payment of dividends thereon, provided that no dividend may be declared
and paid to the holders of the Class A Common Stock unless at the same
time the Board of Directors shall also declare and pay to the holders
of the Class B Common Stock a per share dividend equal to and, subject
to the next sentence, in the same form as the dividend declared and
paid to the holders of the Class A Common Stock, and vice versa. Common
Stock dividends declared on the Class A Common Stock shall be payable
in the Class A Common Stock; Common Stock dividends declared on the
Class B Common Stock shall be payable in the Class B Common Stock.
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(4) Liquidation Rights. In the event of any dissolution,
liquidation or winding up of the Corporation, whether voluntary or
involuntary, the holders of record of the Class A Common Stock then
outstanding and the holders of record of the Class B Common Stock then
outstanding, and all holders of any class or series of stock entitled
to participate therewith, in whole or in part, as to distribution of
assets, shall become entitled to participate equally on a per share
basis in the distribution of any assets of the Corporation remaining
after the Corporation shall have paid or provided for payment of all
debts and liabilities of the Corporation, and shall have paid, or set
aside of repayment, to the holders of any class of stock having
preference over the Common Stock in the event of dissolution,
liquidation or winding up, the full preferential amounts (if any) to
which they are entitled.
B. PREFERRED STOCK PROVISIONS.
The Board of Directors is hereby expressly authorized, at any
time or from time to time, to divide any or all of the shares of the
Preferred Stock into one or more series, and in the resolution or
resolutions establishing a particular series, before issuance of any of
the shares thereof, to fix and determine the number of shares and the
designation of such series, so as to distinguish it from the shares of
all other series and to fix and determine the voting rights (which may
be full, limited, multiple or fractional or none), designations,
preferences, qualifications, privileges, limitations, options,
conversion rights, restrictions and other special or relative rights of
the Preferred Stock of such series, to the fullest extent now or
hereafter permitted by the laws of the State of Delaware; provided,
however that neither the terms of the class nor any such series shall
be established by the Board of Directors without the approval of the
holders of the series of the Preferred Stock then outstanding, voting
separately as a class, if such approval would then be required by law
to authorize a class or series of stock having such terms, and until
such approval shall have been obtained the class or any such series of
Preferred Stock shall not be deemed to be authorized. The Board of
Directors may in its discretion, at any time or from time to time,
issue or cause to be issued all or any part of the authorized and
unissued shares of the Preferred Stock, issue or cause to be issued all
or any part of the authorized and unissued shares of the Preferred
Stock for consideration of such character and value as the Board of
Directors shall from time to time fix or determine.
ARTICLE V
The Corporation is to have perpetual existence.
ARTICLE VI
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director for any act or omission; provided,
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however, that the foregoing shall not eliminate or limit the liability of a
director (a) for any breach of the director's duty or loyalty to the Corporation
or its stockholders, (b) for any act or omission not in good faith or which
involves intentional misconduct or a knowing violation of law, (c) under Section
174 of the General Corporation Law of the State of Delaware, or (d) for any
transaction from which the director derived an improper personal benefit. Any
repeal or modification of this article by the stockholders of the Corporation
shall be prospective only, and shall not adversely affect any limitation on the
personal liability of a director of the Corporation existing at the time of such
repeal or modification.
ARTICLE VII
In furtherance and not in limitation of the powers conferred by the
General Corporation Law of the State of Delaware, the Board of Directors of the
Corporation is expressly authorized to make, alter, or repeal the Bylaws of the
Corporation.
ARTICLE VIII
Elections of directors need not be by written ballot except and to the
extent provided in the Bylaws of the Corporation.
ARTICLE IX
The certificate of incorporation of the Corporation, as herein amended,
shall constitute a restatement of and shall supersede the Certificate of
Incorporation of the Corporation, as previously amended.
ARTICLE X
Section 203 of the General Corporation Law of Delaware, as amended,
shall not apply to the Corporation.
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<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Amended and
Restated Certificate of Incorporation to be signed by the undersigned authorized
officer effective as of October 9, 1996.
HYPERION TELECOMMUNICATIONS, INC.
By: /s/ James P. Rigas
Title: Chief Executive Officer
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CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL AND
OTHER SPECIAL RIGHTS OF PREFERRED
STOCK AND QUALIFICATIONS, LIMITATIONS
AND RESTRICTIONS THEREOF
OF
127/8% SENIOR EXCHANGEABLE
REDEEMABLE PREFERRED STOCK
OF
HYPERION TELECOMMUNICATIONS, INC.
-------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
-------------------------
Hyperion Telecommunications, Inc. (the "Company"), a
corporation organized and existing under the General Corporation Law of the
State of Delaware, certifies that pursuant to the authority contained in Article
IV of its Amended and Restated Certificate of Incorporation (the "Certificate of
Incorporation") and in accordance with the provisions of Section 151 of the
General Corporation Law of the State of Delaware, a duly constituted committee
of the Board of Directors of the Company, acting within the scope of the
authority delegated to it by the Board of Directors, by unanimous written
consent dated October 8, 1997 duly approved and adopted the following resolution
(this "Certificate of Designations") which resolution remains in full force and
effect on the date hereof:
RESOLVED, that pursuant to the authority vested in the 1997
Debt Offering Committee by the Board of Directors, and pursuant to the authority
vested in the Board of Directors by the Certificate of Incorporation, the Board
of Directors, through the 1997 Debt Offering Committee, does hereby (i)
designate, create, authorize and provide for the issue of 127/8% Series A Senior
Exchangeable Redeemable Preferred Stock due 2007 (the "Series A Preferred
Stock") and 127/8% Series B Senior Exchangeable Redeemable Preferred Stock due
2007 (the "Series B Preferred Stock" and, together with the Series A Preferred
Stock, the "Exchangeable Preferred Stock"), par value $0.01 per share, with a
liquidation preference of $1,000 per share, consisting of 200,000 shares,
provided that no shares of Series B Preferred Stock may be issued, except upon
the surrender and cancellation of such number of shares of Series A Preferred
Stock having an aggregate Liquidation Preference equal to the aggregate
Liquidation Preference of the shares of Series B Preferred Stock so issued and
(ii) designate and reserve Exchangeable Preferred Stock consisting of 180,000
shares for future issuance if the Company elects to pay dividends on the
Exchangeable Preferred Stock in additional shares of Exchangeable Preferred
Stock on or prior to October 15, 2002 in accordance with the terms of the
Certificate of Designations. The Exchangeable Preferred
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<PAGE>
Stock shall have the following powers, preferences and relative, participating,
optional and other special rights, and qualifications, limitations and
restrictions thereof as follows:
1. Certain Definitions
Unless the context otherwise requires, the terms defined in
this Section 1 shall have, for all purposes of this resolution, the meanings
herein specified (with terms defined in the singular having comparable meanings
when used in the plural).
"Acquired Indebtedness" means, with respect to any specified
Person, (i) Indebtedness of any other Person existing at the time such other
Person is 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 Certificate of Designations, beneficial ownership of 10% or
more of the Voting Stock of a Person shall be deemed to be control; provided
that no Local Partner shall 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.
"Annualized Pro Forma EBITDA" means with respect to any
Person, such Person's Pro Forma EBITDA for the latest fiscal quarter for which
internal financial statements are then available multiplied by four.
"Applicable Redemption Price" means a price per share equal to
the following redemption prices specified below (expressed as percentages of the
Liquidation Preference thereof), plus, in each case, without duplication,
accumulated and unpaid dividends (including an amount in cash equal to a
prorated dividend for any partial dividend period) and Liquidated Damages, if
any, thereon to the date of redemption if redeemed during the 12-month period
commencing on October 15 of each of the years set forth below:
2002..........................................106.438%
2003..........................................104.292%
2004..........................................102.146%
2005 and thereafter...........................100.000%
"Asset Sale" means (i) the sale, lease, conveyance or other
disposition of any assets (including, without limitation, by way of a sale and
leaseback transaction) other (a) than 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 and (ii) the issuance or sale by the Company or
any of its Subsidiaries or Equity Interests of any of the Company's Subsidiaries
or Joint Ventures, in the case of either clause (i) or (ii),
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<PAGE>
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, the following
transactions will not be deemed to be Asset Sales: (i) a transfer of assets by
the Company to a Wholly Owned Restricted Subsidiary or by a Subsidiary to the
Company or to another Wholly Owned Restricted Subsidiary and (ii) an issuance of
Equity Interests by a Subsidiary to the Company or to another Wholly Owned
Restricted Subsidiary.
"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 than one year from the date of acquisition, (iii) certificates of
deposit and eurodollar time deposits with maturities of six months or less from
the date of acquisition, bankers' acceptances with maturities not exceeding six
months and overnight bank deposits, in each case, with any domestic commercial
bank having capital and surplus in excess of $500 million and a Keefe Bank Watch
Rating of "B" or better, (iv) repurchase obligations with a term of not more
than seven days or on demand 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 at acquisition obtainable from Moody's Investors
Service, Inc. or Standard & Poor's Corporation and in each case maturing within
six months after the date of acquisition.
"Certificated Securities" has the meaning set forth in
Section 15(d) below.
"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" (as defined above) becomes the "beneficial owner" (as such term is
defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that a
person shall be deemed to have "beneficial ownership" of all securities that
such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time, upon the happening of an event or
otherwise), directly or indirectly, of more than 50% of the voting power of the
Capital Stock of
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<PAGE>
the Company or (iv) the first day on which a majority of the members of the
Board of Directors 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.
"Change of Control Offer" has the meaning set forth in
Section 8(a) below.
"Change of Control Payment" has the meaning set forth in
Section 8(a) below.
"Change of Control Payment Date" has the meaning set forth in
Section 8(d)(ii) below.
"Common Stock" of any Person means Capital Stock of such
Person that does not rank 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.
"Closing Date" means the date on which shares of Series A
Preferred Stock are first issued.
"Commission" means the Securities and Exchange Commission.
"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, without limitation, 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.
"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
Restricted 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
Restricted 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
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<PAGE>
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 Closing Date 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.
"Credit Agreement" means, with respect to any such 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, without limitation, any
related notes, Guarantees, collateral documents, instruments 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.
"Depositary" has the meaning set forth in Section 15(a) below.
"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.
"Disqualified Stock" means any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable, in each case at the option of the holder thereof), or upon
the happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or is 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 Mandatory Redemption Date of Preferred Stock; provided 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 Mandatory Redemption date of Preferred Stock shall not constitute
Disqualified Stock if the change in control provisions applicable to such
Capital Stock are no
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<PAGE>
more favorable to the holders of such Capital Stock than the provisions
applicable to the Exchangeable Preferred Stock contained in Section 8 hereof
below 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 Preferred Stock as are required to be repurchased
pursuant to Section 8; and provided, further, that the Exchangeable Preferred
Stock shall not be, and shall not be deemed to be, Disqualified Stock.
"Dividend Payment Date" has the meaning set forth in
Section 3(a) below.
"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.
"Enhanced Services Provider" means (i) !NTERPRISE, a wholly
owned subsidiary of US West, (ii) any nationally recognized Person which
provides enhanced telecommunications services, including, without limitation,
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).
"Exchange Act" means the Securities and Exchange Act of 1934,
as amended.
"Exchange Debentures" means the Company's 127/8% Senior
Subordinated Debentures due 2007 issuable in exchange for the Company's
Exchangeable Preferred Stock pursuant to Section 6.
"Exchange Debenture Indenture" means that certain indenture
under which the Exchange Debentures would be issued and which shall be
substantially in the form attached as Annex A hereto.
"Exchange Debenture Trustee" means the trustee under the
Exchange Debenture Indenture.
"Executive Officer" means any officer of the Company that
would be deemed to be an "executive officer" within meaning of the rules and
regulations of the Commission.
"Existing Indebtedness" means the Senior Notes, the Senior
Secured Notes and any other Indebtedness of the Company and its Subsidiaries in
existence on the Closing Date.
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"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 Closing Date.
"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 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 (A) as a result of the
guarantee by such General Partner Subsidiary's guarantee of Indebtedness
incurred by the Restricted Joint Venture of which such General Partner
Subsidiary is a general partner or (B) 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 Closing Date.
"Global Securities" has the meaning set forth in
Section 15(a) below.
"Global Security Holder" has the meaning set forth in
Section 15(a) below.
"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, co-borrowing
arrangements, letters of credit and reimbursement agreements in respect
thereof), of all or any part of any Indebtedness.
"Holder" means the record holder of one or more shares of
Exchangeable Preferred Stock, as shown on the books and records of the Transfer
Agent.
"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, (ii) evidenced by a bond, note, debenture
or similar instrument (including, without limitation, a purchase money
obligation), (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 such 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.
"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.
"Invested Equity Capital" means, with respect to any 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,
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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 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 interest 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, without limitation,
Affiliates) in the forms of direct or indirect loans (including, without
limitation, 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 and all other 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) to 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 Investments in Joint
Ventures.
"Junior Securities" has the meaning set forth in Section 2
below.
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"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.
"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, without limitation, 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).
"Local Partner" means, with respect to any Joint Venture, (i)
the Joint Venture partners set forth on Schedule B to the Senior Indenture, 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, (i) 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).
"Liquidation Preference" means $1,000 per share of
Exchangeable Preferred Stock.
"Mandatory Redemption Date" has the meaning set forth in
Section 5(a) below.
"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 or nonrecurring gain or loss, together with any related
provision for taxes on such extraordinary or nonrecurring gain or loss.
"Non-Recourse Debt" means Indebtedness (i) as to which neither
the Company nor any of its Subsidiaries or Permitted Joint Ventures (a) provides
credit support of any kind (including, without limitation, any undertaking,
agreement or instrument that would constitute Indebtedness), (b) is directly or
indirectly liable (as a guarantor or otherwise) or (c) constitutes the lender;
(ii) no default with respect to which (including, without limitation, 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 other condition or event or any
combination thereof) any holder of any other Indebtedness of the Company, any of
its Subsidiaries or any of the 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
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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, any Assistant Secretary or any Vice-President of
such Person.
"Officers' Certificate" means a certificate signed on behalf
of the Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 10 hereof.
"Parity Securities" has the meaning set forth in Section 2
below.
"Paying Agent" has the meaning set forth in Section 11(c)
below.
"Payment Default" has the meaning set forth in
Section 7(b)(v).
"Permitted Joint Venture" means any Joint Venture in which the
Company has, directly or indirectly, a 45% or greater Equity Interest.
"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.
"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
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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.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or agency or political subdivision thereof (including, without
limitation, any subdivision or ongoing business of any such entity or
substantially all of the assets of any such entity, subdivision or business).
"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 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 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 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.
"Qualified Subsidiary" means any Subsidiary of the Company 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 the Certificate of
Designations.
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"Qualified Junior Securities" means Junior Securities that do
not constitute Disqualified Stock.
"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; and (iii) 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.
"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.
"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 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 fails 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 the Certificate of Designations 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 9(a) hereof (and if
such Indebtedness is not permitted to be incurred as of such date under such
covenant, the Company shall be in default of such covenant).
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indenture" means the indenture relating to the Senior
Notes.
"Senior Notes" means the Company's 13% Senior Discount Notes
due 2003.
"Senior Secured Indenture" means the indenture relating to the
Senior Secured Notes.
"Senior Secured Notes" means the Company's 12 1/4% Senior
Secured Notes due 2004.
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"Senior Securities" has the meaning set forth in Section 2
below.
"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 Closing Date.
"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.
"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 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 partnerships'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.
"Transfer Agent" means the entity designated from time to time
by the Company to act as the registrar and transfer agent for the Exchangeable
Preferred Stock.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
"Vendor Debt" means any purchase money Indebtedness of the
Company or any Subsidiary incurred in connection with the acquisition of
Telecommunications Related Assets.
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"Voting Rights Triggering Event" has the meaning set forth in
Section 7(b).
"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 (i) the sum
of the products obtained by multiplying (a) 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 (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) 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 (other than Qualified
Subsidiary Stock) or other ownership interests of which (other than directors'
qualifying shares) shall at the time be owned by such Person and/or by one or
more Wholly Owned Subsidiaries of such Person.
2. Ranking
The Exchangeable Preferred Stock will, with respect to dividends and
rights on the liquidation, winding-up and dissolution of the Company, rank (i)
senior to each class of capital stock of the Company outstanding or established
after October 1, 1997 by the Board of Directors the terms of which do not
expressly provide that it ranks senior to, or on a parity with, the Exchangeable
Preferred Stock as to dividends and rights on the liquidation, winding-up and
dissolution of the Company (collectively referred to, together with the common
stock of the Company, as "Junior Securities"), (ii) on a parity with each other
class of preferred stock established after October 1, 1997 by the Board of
Directors of the Company the terms of which expressly provide that such class or
series ranks on a parity with the Exchangeable Preferred Stock as to dividends
and rights on the liquidation, winding-up and dissolution of the Company
(collectively referred to as the "Parity Securities") and (iii) junior to each
class of preferred stock established after October 1, 1997 by the Board of
Directors the terms of which expressly provide that such class or series ranks
senior to the Exchangeable Preferred Stock as to dividends and rights on
liquidation, winding-up and dissolution of the Company (collectively referred to
as the "Senior Securities").
3. Dividends
(a) The Holders of shares of the Exchangeable Preferred Stock
shall be entitled to receive, when, as and if dividends are declared by the
Board of Directors out of funds of the Company legally available therefor,
cumulative preferential dividends from the issue date of the Series A Preferred
Stock accruing at the rate of 127/8% per annum, payable quarterly in arrears on
each January 15, April 25, July 15 and October 15 or, if any such date is not a
Business Day, on the next succeeding Business Day (each, a "Dividend Payment
Date"), to the Holders of record as of the next preceding January 1, April 1,
July 1 and October 1 (each, a "Record Date"). The first dividend payment shall
be payable, and, accordingly, the first Dividend Payment Date shall be, January
15, 1998. Dividends shall be payable in cash, except that on each Dividend
Payment Date occurring on or prior to October 15, 2002, dividends may be paid,
at the Company's option, by the issuance of additional shares of Exchangeable
Preferred Stock (including fractional shares) having an aggregate Liquidation
Preference equal to the amount of such
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<PAGE>
dividends. The issuance of such additional shares of Exchangeable Preferred
Stock shall constitute "payment" of the related dividend for all purposes of
this Certificate of Designations. After October 15, 2002, dividends are payable
in cash. Dividends payable on the Exchangeable Preferred Stock shall be computed
on the basis of a 360-day year consisting of twelve 30-day months and shall be
deemed to accumulate on a daily basis.
(b) Dividends on the Exchangeable Preferred Stock shall accrue
whether or not the Company has earnings or profits, whether or not there are
funds legally available for the payment of such dividends and whether or not
dividends are declared. Dividends shall accumulate to the extent they are not
paid on the Dividend Payment Date for the period to which they relate. The
Company shall take all actions required or permitted under the Delaware General
Corporation Law (the "DGCL") to permit the payment of dividends on the
Exchangeable Preferred Stock, including, without limitation, through the
revaluation of its assets in accordance with the DGCL, to make or keep funds
legally available for the payment of dividends.
(c) No dividend whatsoever shall be declared or paid upon, or
any sum set apart for the payment of dividends upon, any outstanding share of
the Exchangeable Preferred Stock with respect to any dividend period unless all
dividends for all preceding dividend periods have been declared and paid, or
declared and a sufficient sum set apart for the payment of all such dividends,
upon all outstanding shares of Exchangeable Preferred Stock. No full dividends
may be declared or paid or funds set apart for the payment of dividends on any
Parity Securities for any period unless full cumulative dividends shall have
been or contemporaneously are declared and paid (or are deemed declared and
paid) in full or declared and, if payable in cash, a sum in cash sufficient for
such payment set apart for such payment on the Exchangeable Preferred Stock. If
full cumulative dividends are not so declared and paid, the Exchangeable
Preferred Stock shall share dividends pro rata with the Parity Securities so
long as any Exchangeable Preferred Stock is outstanding. Unless and until full
cumulative dividends have been declared and paid (or deemed paid) in full on the
Exchangeable Preferred Stock, (i) no dividend (other than a dividend payable
solely in Junior Securities) shall be declared or paid upon, or any sum set
apart for the payment of dividends upon, any shares of Junior Securities, (ii)
no other distribution shall be declared or made upon, or any sum set apart for
the payment of any distribution upon, any shares of Junior Securities, other
than a distribution consisting solely of Junior Securities, (iii) no shares of
Parity Securities or Junior Securities shall be purchased, redeemed or otherwise
acquired or retired for value (excluding an exchange for shares of Junior
Securities) by the Company or any of its Subsidiaries and (iv) no monies shall
be paid into or set apart or made available for a sinking or other like fund for
the purchase, redemption or other acquisition or retirement for value of any
shares of Parity Securities or Junior Securities by the Company or any of its
Subsidiaries. Holders of the Exchangeable Preferred Stock shall not be entitled
to any dividends, whether payable in cash, property or stock, in excess of the
full cumulative dividends as herein described.
4. Distributions Upon Liquidation, Dissolution or
Winding Up
Upon any voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the Company or reduction or decrease in its capital stock
resulting in a distribution of assets to the holders of any class or series of
the Company's capital stock, each Holder of shares of the Exchangeable Preferred
Stock shall be entitled to payment out of the assets of the Company available
for distribution of an amount equal to the Liquidation Preference per share of
Exchangeable Preferred Stock held by such Holder plus, without duplication,
accumulated and unpaid dividends (including an amount in cash equal to a
prorated
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dividend for any partial Dividend Period) and Liquidated Damages, if any,
thereon to the date fixed for liquidation, dissolution, winding up or reduction
or decrease in capital stock, before any distribution is made on any Junior
Securities, including, without limitation, common stock of the Company. After
payment in full of the Liquidation Preference plus, without duplication, all
accrued dividends and Liquidated Damages, if any, thereon to which Holders of
Exchangeable Preferred Stock are entitled, such Holders shall not be entitled to
any further participation in any distribution of assets of the Company. If, upon
any voluntary or involuntary liquidation, dissolution or winding-up of the
Company, the amounts payable with respect to the Exchangeable Preferred Stock
and all other Parity Securities are not paid in full, the holders of the
Exchangeable Preferred Stock and the Parity Securities shall share equally and
ratably in any distribution of assets of the Company in proportion to the full
liquidation preference plus, without duplication, accumulated and unpaid
dividends (including an amount in cash equal to a prorated dividend for any
partial Dividend Period) and Liquidated Damages, if any, thereon to which each
is entitled. However, neither the voluntary sale, conveyance, exchange or
transfer (for cash, shares of stock, securities or other consideration) of all
or substantially all of the property or assets of the Company nor the
consolidation or merger of the Company with or into one or more corporations
shall be deemed to be a voluntary or involuntary liquidation, dissolution or
winding up of the Company or reduction or decrease in capital stock, unless such
sale, conveyance, exchange or transfer shall be in connection with a
liquidation, dissolution or winding up of the business of the Company or
reduction or decrease in its capital stock.
5. Redemption by the Company
(a) On October 15, 2007 (the "Mandatory Redemption Date"), the
Company shall be required to redeem (subject to the legal availability of funds
therefor) all outstanding shares of Exchangeable Preferred Stock at a price in
cash equal to the Liquidation Preference thereof plus, without duplication,
accumulated and unpaid dividends (including an amount in cash equal to a
prorated dividend for any partial Dividend Period) and Liquidated Damages, if
any, thereon to the date of redemption. The Company shall not be required to
make sinking fund payments with respect to the Exchangeable Preferred Stock. The
Company shall take all actions required or permitted under the DGCL to permit
such redemption, including, without limitation, through the revaluation of its
assets in accordance with the DGCL, to make or keep funds legally available for
such redemption.
(b) The Exchangeable Preferred Stock may not be redeemed at
the option of the Company prior to October 15, 2002. The Exchangeable Preferred
Stock may be redeemed, in whole or in part, at the option of the Company on or
after October 15, 2002 at the Applicable Redemption Price. Notwithstanding the
first sentence of this Section 5(b), the Company may, at its option, use the net
proceeds from (x) an Initial Public Offering of the Common Stock of the Company
or (y) a sale of the Capital Stock (other than the 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 (x) and (y) together,
collectively referred to herein as "Qualified Equity Offerings") to redeem
shares of Exchangeable Preferred Stock then outstanding (whether initially
issued or issued in lieu of the payment of cash dividends) having an aggregate
Liquidation Preference of up to $70.0 million for cash at a redemption price
equal to 112.875% of the Liquidation Preference per share of the Exchangeable
Preferred Stock, plus, without duplication, accumulated and unpaid dividends
(including an amount in cash equal to a prorated dividend for any partial
Dividend Period) and Liquidated Damages, if any, thereon to the date of
redemption; provided, that, in either case, immediately after any such
redemption, shares of Exchangeable Preferred Stock having an aggregate
Liquidation Preference of at least $130.0 million shall remain outstanding; and
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provided, further, that such redemption shall occur within 90 days of the
closing of such Qualified Equity Offering.
(c) In case of redemption of fewer than all of the shares of
Exchangeable Preferred Stock at the time outstanding, the shares to be redeemed
shall be selected pro rata or by lot as determined by the Company in its sole
discretion.
(d) Notice of any redemption shall be sent by or on behalf of
the Company not less than 30 nor more than 60 days prior to the date specified
for redemption in such notice (including the Mandatory Redemption Date, the
"Redemption Date"), by first class mail, postage prepaid, to all Holders of
record of the Exchangeable Preferred Stock at their last addresses as they shall
appear on the books of the Company; provided that the failure to give such
notice or any defect therein or in the mailing thereof shall not affect the
validity of the proceedings for the redemption of any shares of Exchangeable
Preferred Stock except as to the Holder to whom the Company has failed to give
notice or except as to the Holder to whom notice was defective. In addition to
any information required by law or by the applicable rules of any exchange upon
which Exchangeable Preferred Stock may be listed or admitted to trading, such
notice shall state: (i) whether such redemption is being made pursuant to the
optional or the mandatory redemption provisions hereof; (ii) the Redemption
Date; (iii) the Applicable Redemption Price; (iv) the number of shares of
Exchangeable Preferred Stock to be redeemed and, if fewer than all shares held
by such Holder are to be redeemed, the number of such shares to be redeemed; (v)
the place or places where certificates for such shares are to be surrendered for
payment of the Applicable Redemption Price, including any procedures applicable
to redemptions to be accomplished through book-entry transfers; and (vi) that
dividends on the shares to be redeemed shall cease to accumulate on the
Redemption Date. Upon the mailing of any such notice of redemption, the Company
shall become obligated to redeem at the time of redemption specified thereon all
shares called for redemption.
(e) If notice has been mailed in accordance with Section 5(d)
above and provided that on or before the Redemption Date specified in such
notice, all funds necessary for such redemption shall have been set aside by the
Company, separate and apart from its other funds by depositing such funds with
the Paying Agent or other commercial bank or trust company having capital and
surplus in excess of $500 million in trust for the pro rata benefit of the
Holders of the shares so called for redemption, so as to be, and to continue to
be available therefor, then, from and after the Redemption Date, dividends on
the shares of the Exchangeable Preferred Stock so called for redemption shall
cease to accumulate, and said shares shall no longer be deemed to be outstanding
and shall not have the status of shares of Exchangeable Preferred Stock, and all
rights of the Holders thereof as stockholders of the Company (except the right
to receive from the Company the Applicable Redemption Price) shall cease. Upon
surrender, in accordance with said notice, of the certificates for any shares so
redeemed (properly endorsed or assigned for transfer, if the Company shall so
require and the notice shall so state), such shares shall be redeemed by the
Company at the Applicable Redemption Price. In case fewer than all the shares
represented by any such certificate are redeemed, a new certificate or
certificates shall be issued representing the unredeemed shares without cost to
the Holder thereof.
(f) Any funds deposited with the Paying Agent or other bank on
trust company specified in Section 5(e) for the purpose of redeeming
Exchangeable Preferred Stock shall be irrevocable, except that:
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(i) upon the redemption of such Exchangeable
Preferred Stock, the Company shall be entitled to receive from the
Paying Agent or such other bank or trust company the interest or other
earnings, if any, earned on any money so deposited in trust, and the
Holders of any shares redeemed shall have no claim to such interest or
other earnings; and
(ii) any balance of monies so deposited by the
Company and unclaimed by the Holders of the Exchangeable Preferred
Stock entitled thereto at the expiration of two years from the
applicable Redemption Date shall be repaid, together with any interest
or other earnings earned thereon, to the Company, and after any such
repayment, the Holders of the shares entitled to the funds so repaid to
the Company shall look only to the Company for payment without interest
or other earnings.
(g) No Exchangeable Stock may be redeemed except with funds
legally available for redemption. The Company shall take all actions required or
permitted under the DGCL to permit any such redemption, including, without
limitation, through the revaluation of its assets in accordance with the DGCL,
to make or keep funds legally available for such redemption.
(h) Notwithstanding the foregoing provisions of this Section
5, unless the full cumulative dividends on all outstanding shares of
Exchangeable Preferred Stock shall have been declared and paid, or,
contemporaneously with such redemption, are declared and paid, for all past
dividend periods, none of the shares of Exchangeable Preferred Stock shall be
redeemed unless all outstanding shares of Exchangeable Preferred Stock are
simultaneously redeemed.
(i) All shares of Exchangeable Preferred Stock redeemed
pursuant to this Section 5 shall be restored to the status of authorized and
unissued shares of preferred stock, without designation as to series, and may
thereafter be reissued as shares of any series of preferred stock other than
shares of Exchangeable Preferred Stock.
6. Exchange
(a) The Company may, at its option on any Dividend Payment
Date, exchange, in whole, but not in part, the then outstanding shares of
Exchangeable Preferred Stock for Exchange Debentures; provided that: (i) on the
date of such exchange there are no accumulated and unpaid dividends and
Liquidated Damages, if any, on the Exchangeable Preferred Stock (including the
dividends payable on such date) or other contractual impediments to such
exchange; (ii) there shall be legally available funds sufficient therefor; (iii)
immediately after giving effect to such exchange, no default or event of default
would exist under the Exchange Debentures or the Exchange Debenture Indenture
immediately after such exchange and no default or event of default exists under
the Senior Indenture or the Senior Secured Indenture immediately prior to such
exchange or would be caused thereby; (iv) each of the Senior Indenture, the
Senior Secured Indenture and the Exchange Debenture Indenture, as the case may
be, has been qualified under the Trust Indenture Act, if such qualification is
required at the time of exchange; and (v) the Company shall have delivered a
written opinion to the Exchange Debenture Trustee to the effect that all
conditions to be satisfied on or prior to such exchange have been satisfied.
(b) The Exchange Debentures shall be issuable in principal
amounts of $1,000 and integral multiples thereof to the extent possible, and
shall also be issuable in principal amounts less than $1,000 so that each Holder
of Exchangeable Preferred Stock shall receive certificates representing the
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entire amount of Exchange Debentures to which such Holder's shares of
Exchangeable Preferred Stock entitle such Holder. Notice of the intention to
exchange shall be sent by or on behalf of the Company not more than 60 days nor
less than 30 days prior to the date fixed for the exchange (the "Exchange
Date"), by first class mail, postage prepaid, to each Holder of record of
Exchangeable Preferred Stock at its registered address. In addition to any
information required by law or by the applicable rules of any exchange upon
which the Exchangeable Preferred Stock may be listed or admitted to trading,
such notice shall state: (i) the Exchange Date; (ii) the place or places where
certificates for such shares are to be surrendered for exchange, including any
procedures applicable to exchanges to be accomplished through book-entry
transfers; and (iii) that dividends on the shares of Exchangeable Preferred
Stock to be exchanged shall cease to accumulate on the Exchange Date.
(c) A Holder delivering Exchangeable Preferred Stock for
exchange shall not be required to pay any taxes or duties in respect of the
issue or delivery of Exchange Debentures on exchange but shall be required to
pay any tax or duty that may be payable in respect of any transfer involved in
the issue or delivery of the Exchange Debentures in a name other than that of
the Holder of the Exchangeable Preferred Stock. Certificates representing
Exchange Debentures shall not be issued or delivered unless all taxes and
duties, if any, payable by the Holder have been paid.
(d) If notice of any exchange has been properly given, and if
on or before the Exchange Date the Exchange Debentures have been duly executed
and authenticated and an amount in additional shares of Exchangeable Preferred
Stock equal to all accumulated and unpaid dividends, if any, thereon to the
Exchange Date has been deposited with the Transfer Agent, then on and after the
close of business on the Exchange Date, the shares of Exchangeable Preferred
Stock to be exchanged shall no longer be deemed to be outstanding and all rights
of the Holders thereof as stockholders of the Company shall cease, except the
right of the Holders to receive upon surrender of their certificates the
Exchange Debentures and all accumulated and unpaid dividends, if any, thereon to
the Exchange Date. All shares of Exchangeable Preferred Stock exchanged pursuant
to this Section 6 and any authorized and reserved but unissued Preferred Stock
after October 15, 2002 shall be restored to the status of authorized and
unissued shares of preferred stock, without designation as to series, and may
thereafter be reissued as shares of any series of preferred stock other than
shares of Exchangeable Preferred Stock.
(e) As a condition to the exercise of the exchange rights
described in this Section 6, the Company shall deliver an opinion to the
Exchange Debenture Trustee as to the due authorization, execution and delivery
of, and as to the valid and binding and enforceable nature of, both the Exchange
Debentures and the Exchange Debenture Indenture and as to the compliance by the
Company with the provisions hereof.
7. Voting Rights; Amendment; Waiver
(a) The Holders of record of shares of the Exchangeable
Preferred Stock shall be entitled to one vote per share on all matters to be
voted on generally by stockholders.
(b) In addition, upon:
(i) the accumulation of accrued and unpaid dividends
(and, if after October 15, 2002, such dividends are not paid in cash)
on the outstanding Exchangeable Preferred Stock in an amount equal to
six (6) quarterly dividends (whether or not consecutive);
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(ii) the failure of the Company to satisfy any
repurchase obligation (including, without limitation, pursuant to any
required Change of Control Offer) with respect to the Exchangeable
Preferred Stock;
(iii) the failure of the Company to make a Change of
Control Offer on the terms and in accordance with the provisions
described below in Section 8 hereof;
(iv) the failure of the Company to comply with any of
the other covenants or agreements set forth in this Certificate of
Designations and the continuance of such failure for 30 consecutive
days or more after receipt of notice of such failure from the holders
of at least 25% of the Exchangeable Preferred Stock then outstanding;
or
(v) default 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 Closing Date, which
default (1) 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 (2) 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, at any time, in each case, after a
10-day period during which such Payment Default shall not have been
cured or such acceleration rescinded (each of the events described in
clauses (i), (ii), (iii), (iv) and (v) being referred to herein as a
"Voting Rights Triggering Event");
then the number of members of the Company's Board of Directors shall be
immediately and automatically increased by two, and the Holders of a majority of
the outstanding shares of Exchangeable Preferred Stock, voting as a separate
class, shall be entitled to elect two members to the Board of Directors of the
Company. The voting rights provided for in this Section 7 shall be the exclusive
remedy for the holders of the Exchangeable Preferred Stock for any violation by
the Company of its obligations under this Certificate of Designations that
constitutes a Voting Rights Triggering Event.
(c) Whenever such voting right shall have vested, such right
may be exercised initially either at a special meeting of the Holders of
Exchangeable Preferred Stock, called as hereinafter provided, or at any annual
meeting of stockholders held for the purpose of electing directors, and
thereafter at such annual meetings or by the written consent of the Holders of
Exchangeable Preferred Stock. Such right of the Holders of Exchangeable
Preferred Stock to elect directors may be exercised until (i) all dividends in
arrears shall have been declared and paid in full and (ii) all other Voting
Rights Triggering Events have been cured or waived, at which time the right of
the Holders of Exchangeable Preferred Stock to elect such number of directors
shall cease, the term of such directors previously elected shall thereupon
terminate, and the authorized number of directors of the Company shall thereupon
return to the number of authorized directors otherwise in effect, but subject
always to the same provisions for the renewal and divestment of such special
voting rights in the case of any Voting Rights Triggering Event.
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(d) At any time when such voting rights shall have vested in
the Holders of Exchangeable Preferred Stock and if such rights shall not already
have been initially exercised, a proper officer of the Company shall, upon the
written request of Holders of record of 10% or more of the Exchangeable
Preferred Stock then outstanding, addressed to the Secretary of the Company,
call a special meeting of Holders of Exchangeable Preferred Stock. Such meeting
shall be held at the earliest practicable date upon the notice required for
annual meetings of stockholders at the place for holding annual meetings of
stockholders of the Company or, if none, at a place designated by the Secretary
of the Company. If such meeting shall not be called by the proper officers of
the Company within 30 days after the personal service of such written request
upon the Secretary of the Company, or within 30 days after mailing the same
within the United States, by registered mail, addressed to the Secretary of the
Company at its principal office (such mailing to be evidenced by the registry
receipt issued by the postal authorities), then the Holders of record of 10% of
the shares of Exchangeable Preferred Stock then outstanding may designate in
writing a Holder of Exchangeable Preferred Stock to call such meeting at the
expense of the Company, and such meeting may be called by such person so
designated upon the notice required for annual meetings of stockholders and
shall be held at the place for holding annual meetings of the Company or, if
none, at a place designated by such Holder. Any Holder of Exchangeable Preferred
Stock that would be entitled to vote at such meeting shall have access to the
stock books of the Company for the purpose of causing a meeting of stockholders
to be called pursuant to the provisions of this Section 7. Notwithstanding the
provisions of this paragraph, however, no such special meeting shall be called
if any such request is received less than 90 days before the date fixed for the
next ensuing annual or special meeting of stockholders.
(e) If any director so elected by the Holders of Exchangeable
Preferred Stock shall cease to serve as a director before his or her term shall
expire, the Holders of Exchangeable Preferred Stock then outstanding may, at a
special meeting of the Holders called as provided above, elect a successor to
hold office for the unexpired term of the director whose place shall be vacant.
(f) The Company shall not, without the affirmative vote or
consent of the Holders of a majority of the shares of Exchangeable Preferred
Stock then outstanding (with shares held by the Company or any of its Affiliates
not being considered to be outstanding for this purpose);
(i) authorize, create (by way of reclassification or
otherwise) or issue any Parity Securities or any Obligation or security
convertible into or evidencing the right to purchase any Parity Securities
(other than additional Exchangeable Preferred Stock issued as dividends on the
Exchangeable Preferred Stock) if, after giving effect to the issuance of such
Parity Securities, Obligations or other securities, the aggregate liquidation
preference of outstanding Parity Securities, other than the Exchangeable
Preferred Stock (including, without limitation, the aggregate Liquidation
Preference of the Parity Securities issuable upon the conversion of such
Obligations or other securities), would exceed the sum of (x) $25 million and
(y) the aggregate amount of gross proceeds received after the Closing Date and
on or prior to the date of issuance of such Parity Securities from the issuance
of Qualified Junior Securities. For the purposes of the immediately preceding
sentence, gross proceeds from the issuance of Qualified Junior Securities shall
be deemed received by the Company and shall be included for purposes of
calculating the amount of Parity Securities that may be issued only if and to
the extent that such Qualified Junior Securities are outstanding on the date of
issuance of such Parity Securities; or
(ii) modify or amend Sections 8 or 9 hereof;
provided that following the mailing of any Change of Control Offer and until the
Expiration Date of that Change of Control Offer, no such
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modification or amendment may, without the consent of the holder of each
outstanding share of Exchangeable Preferred Stock affected thereby, modify any
Change of Control Offer for the Exchangeable Preferred Stock required under
Section 8 hereof in a manner materially adverse to the holders of outstanding
Preferred Stock.
(g) The Company shall not, without the affirmative vote or
consent of at least two-thirds of the then outstanding shares of Exchangeable
Preferred Stock (with shares held by the Company or its Affiliates not being
considered to be outstanding for this purpose):
(i) authorize, create (by way of reclassification or
otherwise) or issue any Senior Securities or any Obligation or security
convertible into or evidencing a right to purchase any Senior Securities; or
(ii) amend, or otherwise alter its by-laws or
Certificate of Incorporation (including this Certificate of Designations) so as
to affect adversely the powers, preferences or rights of the holders of the
Exchangeable Preferred Stock or reduce the time for any notice to which the
Holders of the Exchangeable Preferred Stock may be entitled.
For purposes of this Section 7(g), (A) an amendment to the
Certificate of Incorporation or this Certificate of Designations to authorize or
create, or to increase the amount of, Junior Securities, Parity Securities or
Senior Securities shall not be deemed to affect adversely the powers,
preferences or rights of the holders of the Exchangeable Preferred Stock and (B)
amendments or modifications to Sections 8 and 9 hereof shall be governed by
Section 7(f)(ii) and not by this paragraph (g).
(h) The Company in its sole discretion may, without the vote
or consent of any Holders of the Exchangeable Preferred Stock, amend or
supplement this Certificate of Designations:
(i) to cure any ambiguity, defect or inconsistency;
(ii) to provide for uncertificated Exchangeable
Preferred Stock in addition to or in place of certificated Exchangeable
Preferred Stock; or
(iii) to make any change that would provide any
additional rights or benefits to the Holders of the Exchangeable
Preferred Stock or that does not adversely affect the legal rights
under this Certificate of Designations of any such Holder.
(i) Holders of a majority of the outstanding shares of the
Exchangeable Preferred Stock may waive compliance by the Company with the
provisions of Section 9 hereof and may waive any past default of the provisions
of Sections 8 and 9 hereof, except a default arising from failure to purchase
any Exchangeable Preferred Stock tendered pursuant to a Change of Control Offer.
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8. 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 shares of
Exchangeable Preferred Stock to repurchase all or any part of such Holder's
Exchangeable Preferred Stock at an offer price in cash equal to 101% of the
aggregate Liquidation Preference thereof plus, without duplication, accumulated
and unpaid dividends (including an amount in cash equal to a prorated dividend
for any partial Dividend Period) and Liquidated Damages, if any, thereon to the
date of purchase (the "Change of Control Payment").
(b) The Change of Control Offer shall include all instructions
and materials necessary to enable Holders to tender their shares of Exchangeable
Preferred Stock.
(c) 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 the Exchangeable Preferred Stock as a result of a Change
of Control.
(d) Within 30 days following any Change of Control, the
Company shall mail a notice to each Holder stating:
(i) that the Change of Control Offer is being made
pursuant to this Section 8 and that all shares of Exchangeable
Preferred Stock tendered will be accepted for payment;
(ii) the purchase price and the purchase date, which
shall be no earlier than 30 days nor later than 40 days from the date
such notice is mailed (the "Change of Control Payment Date");
(iii) that any share of Exchangeable Preferred
Stock not tendered will continue to accrue dividends;
(iv) that, unless the Company fails to pay the Change
of Control Payment, all shares of Exchangeable Preferred Stock accepted
for payment pursuant to the Change of Control Offer shall cease to
accumulate dividends after the Change of Control Payment Date;
(v) that Holders electing to have any shares of
Exchangeable Preferred Stock purchased pursuant to a Change of Control
Offer will be required to surrender the shares of Exchangeable
Preferred Stock, with the form entitled "Option of Holder to Elect
Purchase" which shall be included with the Notice of Change of Control
completed, to the Paying Agent at the address specified in such notice
prior to the close of business on the third Business Day preceding the
Change of Control Payment Date;
(vi) 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 number of shares of
Exchangeable Preferred Stock delivered for purchase, and a statement
that such Holder is withdrawing his election to have such shares
purchased; and
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(vii) the circumstances and relevant facts regarding
such Change of Control (including, but not limited to, information with
respect to pro forma historical financial information after giving
effect to such Change of Control and information regarding the Person
or Persons acquiring control).
(e) On the Change of Control Payment Date, the Company shall,
to the extent lawful, (i) accept for payment all shares of Exchangeable
Preferred Stock or portions thereof properly tendered and not withdrawn pursuant
to the Change of Control Offer, (ii) deposit with the Paying Agent an amount
equal to the Change of Control Payment in respect of all shares of Exchangeable
Preferred Stock or portions thereof so tendered and (iii) deliver or cause to be
delivered to the Transfer Agent the shares of Exchangeable Preferred Stock so
accepted together with an Officers' Certificate stating the aggregate
Liquidation Preference of the shares of Exchangeable Preferred Stock or portions
thereof being purchased by the Company. The Paying Agent shall promptly mail to
each Holder of Exchangeable Preferred Stock so tendered the Change of Control
Payment for such Exchangeable Preferred Stock, and the Transfer Agent shall
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new certificate representing the shares of Exchangeable Preferred
Stock equal in Liquidation Preference to any unpurchased portion of the shares
of Exchangeable Preferred Stock surrendered, if any. 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.
(f) Prior to complying with the provisions of this Section 8,
but in any event within 90 days following a Change of Control, the Company shall
either repay all outstanding Indebtedness or obtain the requisite consents, if
any, under all agreements governing outstanding Indebtedness to permit the
repurchase of Exchangeable Preferred Stock required by this Section 8.
(g) The Company shall not be required to make a Change of
Control Offer upon a Change of Control if a third party makes the Change of
Control Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Section 8 applicable to a Change of Control Offer
made by the Company and purchases all shares of Exchangeable Preferred Stock
validly tendered and not withdrawn under such Change of Control Offer.
9. Certain Covenants
(a) Incurrence of Indebtedness and Issuance of Preferred
Stock
(i) The Company shall not, and shall not permit any
of its Subsidiaries or Joint Ventures to, directly or indirectly,
create, incur, issue, assume, guarantee or otherwise become directly or
indirectly liable, contingently or otherwise, for the payment of
(collectively, "incur" and correlatively, "incurred" and "incurrence")
any Indebtedness (including, without limitation, Acquired Indebtedness)
and shall not issue any Disqualified Stock and shall 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 as issuance is on or
prior to March 31, 1999, and (b) greater than zero and less
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than 5.0 to 1.0, if such incurrence or issuance is after March 31,
1999, in each case determined on a pro forma basis (including a pro
forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred, or the Disqualified Stock had been
issued, as the case may be, as of the date of such calculation.
(ii) The provisions of Section 9(a)(i) shall not
apply to:
(A) 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 (A) 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;
(B) the incurrence of Vendor Debt by the
Company, any Subsidiary (other than a General Partner
Subsidiary) or any Permitted Joint Venture; provided the
aggregate principal amount 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 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);
(C) Refinancing Indebtedness;
(D) the incurrence of Indebtedness by the
Company not to exceed, at any one time outstanding, 2.0 times
the sum of (1) the net cash proceeds received by the Company
from the issuance and sale of its Capital Stock (other than
Disqualified Stock) (including, without limitation, the net
cash proceeds received from the issuance and sale of the
Series A Preferred Stock) plus (2) the fair market value at
the time of issuance of Equity Interests (other than
Disqualified Stock) issued 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 does not mature prior
to the Mandatory Redemption Date of the Exchangeable Preferred
Stock and has a Weighted Average Life to Maturity longer than
the Exchangeable Preferred Stock or the New Preferred Stock;
(E) 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;
(F) 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;
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(G) 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;
(H) the issuance by the Company of the
Exchange Debentures pursuant to the Exchange Debenture
Indenture in accordance with the terms of the Certificate of
Designations; and
(I) 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 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 recent 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; and provided, further, that
any Indebtedness incurred by any Subsidiary or any Permitted
Joint Venture (other than Related Networks) pursuant to this
paragraph shall be non-recourse with respect to the Company or
any other Subsidiary or any other Joint Venture.
(iii) If an item of Indebtedness is permitted to be
incurred on the basis of one or more of clauses (A) through (I) of
Section 9(a)(ii) hereof, or is permitted to be incurred on the basis of
Section 9(a)(i) hereof, then the Company shall classify such item in
any manner that complies with Section 9(a) and such item shall be
treated as having been incurred pursuant to only one of such clauses of
Section 9(a)(ii) or pursuant to Section 9(a)(i). Accrual of interest or
dividends, the accretion of accreted value or liquidation preference
and the payment of interest or dividends in the form of additional
Indebtedness or Preferred Stock shall not be deemed to be an incurrence
of Indebtedness for purposes of this Section 9(a).
(iv) For purposes of this Section 9(a), in the event
that the Company proposes to incur Indebtedness pursuant to Section
9(a)(ii)(D) hereof, the Company shall, simultaneously with the
incurrence of such Indebtedness, deliver to each Holder a resolution of
the Board of Directors set forth in an Officer's 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 Section 9(a) hereof. 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 shall be deemed to be incurred on the date of, and
immediately after giving effect to, such recission, reversal,
unwinding, return or refund.
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(v) For purposes of this Section 9(a), 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.
(b) Merger, Consolidation or Sale of Assets. The Company shall
not, without the affirmative vote of the Holders of a majority of the issued and
outstanding Exchangeable Preferred Stock, voting or consenting as a separate
class, 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
Exchangeable Preferred Stock shall be converted into or exchanged for, and shall
become shares of, such successor, transferee or resulting Person, having in
respect of such successor, transferee or resulting Person the same powers,
preferences and relative participating, optional or other special rights and the
qualifications, limitations or restrictions thereon, that the Exchangeable
Preferred Stock had with respect to the Company immediately prior to such
transaction; (iii) immediately after such transaction no Voting Rights
Triggering Event exists; and (iv) except in the case of a merger of the Company
with or into a Wholly Owned Subsidiary, 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) shall 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) shall, 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 pursuant to
Section 9(a)(i) hereof.
(c) 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) (1) pay dividends or make any other
distributions to the Company or any of its
Subsidiaries (A) on its Capital Stock or (B)
with respect to any other interest or
participation in, or measured by, its
profits, or (2) 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) 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
34
<PAGE>
(1) Existing Indebtedness as in effect on the Closing Date;
(2) any Credit Agreement creating or evidencing Indebtedness
permitted by Section 9(a)(ii)(A) and any amendments,
modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings thereof;
(3) this Certificate of Designations, the Exchangeable Preferred
Stock, the Exchange Debenture Indenture or the Exchange
Debentures;
(4) applicable law;
(5) customary non-assignment provisions in leases entered into in
the ordinary course of business and consistent with past
practices;
(6) purchase money obligations or Vendor Debt for property
acquired in the ordinary course of business that impose
restrictions of the nature described in Section 9(c)(iii) on
the property so acquired;
(7) Indebtedness incurred pursuant to Section 9(a)(ii)(I),
provided that such encumbrance or restriction only relates to
the Subsidiary or Permitted Joint Venture incurring such
Indebtedness; and
(8) 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.
(d) Reports
Whether or not required by the rules and regulations of the
Commission, so long as any shares of Exchangeable Preferred Stock are
outstanding, the Company shall furnish to the Holders of Exchangeable Preferred
Stock, (i) all quarterly and annual financial information that would be required
to be contained in a filing with the Commission on Forms 10-Q and 10-K,
respectively, if the Company were required to file such Forms, including,
without limitation, 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 Commission on
Form 8-K if the Company were required to file such reports with the Commission
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 A hereto. In
addition, whether or not required by the rules and regulations of the
Commission, the Company shall file a copy of all such information and reports
with the Commission for public availability (unless the Commission shall not
accept such a filing) and shall make such information available to securities
analysts and prospective investors upon request. In addition, the Company has
agreed that, for so long as any Exchangeable Preferred Stock shall remain
outstanding, it shall furnish to the holders and to securities analysts and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144(d)(4) under the Securities Act.
10. Officers' Certificate
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<PAGE>
Each Officers' Certificate provided for in this Certificate of
Designations shall include:
(a) a statement that the Officers making such certificate
or opinion have 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 each such Officer, 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
each such Officer, such condition or covenant has been satisfied.
11. Payment
(a) All amounts payable in cash with respect to the
Exchangeable Preferred Stock shall be payable in United States dollars at the
office or agency of the Company maintained for such purpose within the City and
State of New York or, at the option of the Company, payment of dividends (if
any) may be made by check mailed to the Holders of the Exchangeable Preferred
Stock at their respective addresses set forth in the register of Holders of
Exchangeable Preferred Stock maintained by the Transfer Agent; provided that all
cash payments with respect to the Global Shares (as defined below) and shares of
Exchangeable Preferred Stock the Holders of which have given wire transfer
instructions to the Company shall be required to be made by wire transfer of
immediately available funds to the accounts specified by the Holders thereof.
(b) Any payment on the Exchangeable Preferred Stock due on any
day that is not a Business Day need not be made on such day, but may be made on
the next succeeding Business Day with the same force and effect as if made on
such due date.
(c) The Company has initially appointed the Transfer Agent to
act as the "Paying Agent." The Company may at any time terminate the appointment
of any Paying Agent and appoint additional or other Paying Agents; provided that
until the Exchangeable Preferred Stock has been delivered to the Company for
cancellation, or moneys sufficient to pay the Liquidation Preference of the
Exchangeable Preferred Stock plus, without duplication, accumulated and unpaid
dividends (including an amount in cash equal to a prorated dividend for any
partial Dividend Period) and Liquidated Damages, if any, on the Exchangeable
Preferred Stock shall have been made available for payment and either paid or
returned to the Company as provided in this Certificate of Designations, the
Company shall maintain an office or agency in the Borough of Manhattan, The City
of New York for surrender of Exchangeable Preferred Stock for payment and
exchange.
(d) Dividends payable on the Exchangeable Preferred Stock on
any redemption date or repurchase date that is a Dividend Payment Date shall be
paid to the Holders of record as of the immediately preceding Record Date.
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<PAGE>
(e) All moneys and shares of Exchangeable Preferred Stock
deposited with any Paying Agent or then held by the Company in trust for the
payment of the Liquidation Preference and accumulated and unpaid dividends and
Liquidation Damages, if any, on any shares of Exchangeable Preferred Stock which
remain unclaimed at the end of two years after such payment has become due and
payable shall be repaid to the Company, and the Holder of such shares of
Exchangeable Preferred Stock shall thereafter look only to Company for payment
thereof.
12. Exclusion of Other Rights
Except as may otherwise be required by law, the shares of
Exchangeable Preferred Stock shall not have any powers, preferences and
relative, participating, optional or other special rights, other than those
specifically set forth in this Certificate of Designations (as this Certificate
of Designations may be amended from time to time) and in the Certificate of
Incorporation. The shares of Exchangeable Preferred Stock shall have no
preemptive or subscription rights.
13. Headings of Subdivisions
The headings of the various subdivisions hereof are for
convenience of reference only and shall not affect the interpretation of any of
the provisions hereof.
14. Severability of Provisions
If any powers, preferences and relative, participating,
optional and other special rights of the Exchangeable Preferred Stock and the
qualifications, limitations and restrictions thereof set forth in this
Certificate of Designations (as it may be amended from time to time) is invalid,
unlawful or incapable of being enforced by reason of any rule of law or public
policy, all other powers, preferences and relative, participating, optional and
other special rights of the Exchangeable Preferred Stock and the qualifications,
limitations and restrictions thereof set forth in this Certificate of
Designations (as so amended) which can be given effect without the invalid,
unlawful or unenforceable powers, preferences and relative, participating,
optional and other special rights of the Exchangeable Preferred Stock and the
qualifications, limitations and restrictions thereof shall, nevertheless, remain
in full force and effect, and no powers, preferences and relative,
participating, optional or other special rights of the Exchangeable Preferred
Stock and the qualifications, limitations and restrictions thereof herein set
forth shall be deemed dependent upon any other such powers, preferences and
relative, participating, optional or other special rights of Exchangeable
Preferred Stock and qualifications, limitations and restrictions thereof unless
so expressed herein.
15. Form of Exchangeable Preferred Stock
(a) The Exchangeable Preferred Stock shall initially be issued in the
form of one or more Global Securities ("Global Securities"). The Global
Securities shall be deposited on the Closing Date with, or on behalf of, The
Depository Trust Company (the "Depositary") and registered in the name of Cede &
Co., as nominee of the Depositary (such nominee being referred to as the "Global
Security Holder").
(b) The Exchangeable Preferred Stock offered and sold in reliance on
Rule 144A shall be issued initially in the form of a Rule 144A Global Security
(the "Rule 144A Global Security"). Exchangeable Preferred Stock offered and sold
in reliance on Regulation S shall be issued initially in the
37
<PAGE>
form of a Regulation S Temporary Global Security (the "Regulation S Temporary
Global Security"), which shall be deposited on behalf of the purchasers with the
Transfer Agent, at its New York office, as custodian for the Depositary, and
registered in the name of the Depositary or the nominee of the Depositary.
Following the termination of the 40-day Restricted Period (as defined in Rule
144A), beneficial interests in the Regulation S Temporary Global Security shall
be exchanged for benefical interests in a Regulation S Permanent Global Security
pursuant to the applicable procedures of the Depositary.
(c) So long as the Global Security Holder is the registered owner of
any Exchangeable Preferred Stock, the Global Security Holder shall be considered
the sole holder under this Certificate of Designations of the shares of
Exchangeable Preferred Stock evidenced by the Global Security. Beneficial owners
of shares of Exchangeable Preferred Stock evidenced by the Global Security shall
not be considered the owners or holders thereof under this Certificate of
Designations for any purpose.
(d) Payments in respect of the Liquidation Preference of and
accumulated and unpaid dividends and Liquidated Damages, if any, on any
Exchangeable Preferred Stock registered in the name of the Global Security
Holder on the applicable record date shall be payable by the Company to or at
the direction of the Global Security Holder in its capacity as the registered
holder under this Certificate of Designations. The Company may treat the persons
in whose names Exchangeable Preferred Stock, including, without limitation, the
Global Security, are registered as the owners thereof for the purpose of
receiving such payments.
(e) Any person having a beneficial interest in a Global Security may,
upon request to the Company, exchange such beneficial interest for Exchangeable
Preferred Stock in the form of registered definitive certificates (the
"Certificated Securities"). Upon any such issuance, the Company shall register
such Certificated Securities in the name of, and cause the same to be delivered
to, such person or persons (or the nominee of any thereof). If (i) the Company
notifies the holders in writing that the Depositary is no longer willing or able
to act as a depositary and the Company is unable to locate a qualified successor
within 90 days or (ii) the Company, at its option, notifies the holders in
writing that it elects to cause the issuance of Exchangeable Preferred Stock in
the form of Certificated Securities under this Certificate of Designations,
then, upon surrender by the Global Security Holder of its Global Security,
Exchangeable Preferred Stock in such form will be issued to each person that the
Global Security Holder and the Depositary identify as being the beneficial owner
of the related Exchangeable Preferred Stock.
(f) (i) Each Global Security shall bear a legend in
substantially the following form:
"UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
FOR A SECURITY IN DEFINITIVE FORM, THIS SECURITY 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.
THE DEPOSITARY TRUST COMPANY SHALL ACT AS THE
DEPOSITARY UNTIL A SUCCESSOR SHALL BE APPOINTED BY
THE COMPANY AND THE TRANSFER AGENT. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY TRUST COMPANY (55
WATER STREET, NEW YORK, NEW
38
<PAGE>
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.
(ii) In addition, the Regulation S Temporary Global Security
shall bear a legend in substantially the following form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY
GLOBAL SECURITY, AND THE CONDITIONS AND PROCEDURES
GOVERNING ITS EXCHANGE FOR CERTIFICATED SECURITIES
ARE AS SPECIFIED IN THE CERTIFICATE OF DESIGNATIONS,
PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL AND
OTHER SPECIAL RIGHTS OF PREFERRED STOCK AND
QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF
OF 127/8 SENIOR EXCHANGEABLE REDEEMABLE PREFERRED
STOCK OF HYPERION TELECOMMUNICATIONS, INC. DATED AS
OF OCTOBER 8, 1997. NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY
GLOBAL SECURITY SHALL BE ENTITLED TO RECEIVE CASH
DIVIDEND PAYMENTS HEREON. NOTHING IN THIS LEGEND
SHALL BE DEEMED TO PREVENT DIVIDENDS FROM ACCRUING
AND ACCUMULATING ON THIS SECURITY."
(g) All shares of Exchangeable Preferred Stock and the Debentures
issuable upon exchange thereof will bear a legend to the following effect,
unless the Company determines otherwise in compliance with applicable law:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY
BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION."
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF
AGREES TO (A) OFFER, SELL, PLEDGE OR OTHERWISE
TRANSFER THIS SECURITY ONLY (1) TO THE COMPANY, (2)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (3) TO A
PERSON IT REASONABLY
39
<PAGE>
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A, (4) PURSUANT TO OFFERS AND
SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE
UNITED STATES IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (5) 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
TRANFER AGENT A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE
TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM THE TRANSFER AGENT) OR (6)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT
(AND BASED ON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), SUBJECT IN EACH OF THE FOREGOING CASES TO
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTIONS AND (B)
THAT IT WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH
IN (A) ABOVE."
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this certificate to be duly
executed by James P. Rigas, Vice Chairman and Chief Executive Officer of the
Company, and attested by Edward E.
Babcock, its Assistant Secretary, this 8th day of October, 1997.
HYPERION TELECOMMUNICATIONS, INC.
By: /s/ James P. Rigas
Name: James P. Rigas
Title: Vice Chairman and Chief Executive Officer
ATTEST:
By: /s/ Edward E. Babcock
Name: Edward E. Babcock
41
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE A
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
FINANCIAL DATA
<S> <C> <C> <C> <C>
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>
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<PAGE>
INDENTURE dated as of __________ between HYPERION TELECOMMUNICATIONS,
INC., a Delaware corporation (the "Company") and ______________________________,
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 127/8% Series A Senior Subordinated Debentures due 2007 (the "Exchange
Debentures") and the 127/8% Series B Senior Subordinated Debentures due 2007
(the "New Exchange Debentures" and, together with the Series A Debentures, the
"Debentures"):
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 shall 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 latest fiscal quarter for which internal
financial statements are then available multiplied by four.
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<PAGE>
"Applicable Procedures" means applicable procedures of the
Depository, Euroclear or Cedel Bank, as the case may be.
"Asset Sale" means
(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
44
<PAGE>
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, (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.
"Certificate of Designations" The Certificate of Designations,
Preferences and Relative, Participating, Optional and Other Special Rights of
Preferred Stock and Qualifications, Limitations and Restrictions Thereof of
127/8% Senior Exchangeable Redeemable Preferred Stock of the Company dated as of
October 8, 1997.
"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, or (iv) 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.
"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.
"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
45
<PAGE>
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 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
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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.
"Debenture Custodian" means the Trustee, as custodian with respect to
the Debentures in global form, or any successor entity thereto.
"Debentures" means the Exchange Debentures and the New Exchange
Debentures.
"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 Debentures" means Restricted Definitive Debentures and
Unrestricted Debentures.
"Depository" means, with respect to any Global Debenture, the Person
specified in Section 2.03 hereof as the Depositary with respect to such
Debenture, until a successor shall have been appointed and become such pursuant
to the applicable provision of this Indenture, and, thereafter, "Depository"
shall mean or include such successor.
"Designated Senior Debt" means (i) all Obligations outstanding under
each Credit Agreement permitted pursuant to Section 4.09(i) hereof, (ii) the
Senior Notes, (iii) the Senior Secured Notes and (iv) any other Senior Debt
permitted under Section 4.09 hereof, the principal amount of which is $20
million or more and that has been designated by the Company as "Designated
Senior Debt."
"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, in each case at the option of the holder thereof), 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 Debentures 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 Debentures 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
Debentures 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 Debentures as are
required to be repurchased pursuant to Section 4.15 hereof; and provided,
further, that the Preferred Stock and New Preferred Stock shall not be, and
shall not be deemed to be, Disqualified Stock.
"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
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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.
"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).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Debentures" means the Exhange Debentures described above
issued under this Indenture.
"Exchange Offer" means the offer that may be made by the Company
pursuant to the Registration Rights Agreement to exchange the Preferred Stock
issued in the Offering for the New Preferred Stock or the Exchange Debentures
for the New Exchange Debentures, as the case may be.
"Existing Indebtedness" means (i) the Senior Notes, (ii) the Senior
Secured Notes and (iii) any other Indebtedness of the Company and its
Subsidiaries (a) in existence on October 9, 1997 or (b) incurred by the Company,
its Subsidiaries and its Joint Ventures after October 9, 1997 and on or prior to
the Issue Date in accordance with the Certificate of Designations.
"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.
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"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 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 Debenture" means, individually and collectively, the
Regulation S Global Debenture, the Rule 144A Global Debenture and the
Unrestricted Global Debenture.
"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 Debenture 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
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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 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.
"Issue Date" means the date on which the Exchange Debentures are
originally issued under the Indenture.
"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
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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).
"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, (a) 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 (b) 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
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(ii) any extraordinary gain or loss, together with any related provision for
taxes on such extraordinary gain or loss.
"New Preferred Stock" means the Series B Preferred Stock authorized
by the Certificate of Designation that may be issued pursuant to the Exchange
Offer pursuant to the Registration Rights Agreement.
"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 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.
"Offering" means the Company's offering of 127/8% Senior Exchangeable
Redeemable Preferred Stock due 2007.
"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.
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"Pari Passu Notes" means any notes issued by the Company which, by
their terms and the terms of any indenture governing such notes, have an
obligation to be repurchased by the Company upon the occurrence of an Asset
Sale.
"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.
"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 Junior Securities" means Equity Interests in the Company
or debt securities that are subordinated to all Senior Debt (and any debt
securities issued in exchange for Senior Debt) to substantially the same extent
as, or to a greater extent than, the Debentures are subordinated to Senior Debt
pursuant to Article 10 hereof.
"Permitted Liens" means
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(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 Indenture,
the Senior Notes, the Senior Secured Indenture, the Senior Secured
Notes, this Indenture and the Debentures;
(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 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
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the use thereof in the operation of business by the Company, such
Subsidiary or such Permitted Joint Venture; and
(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 Debentures 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).
"Private Placement Legend" means the legend set forth in Section
2.06(g)(i)(A) to be placed on all Exchange Debentures 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 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, Pro Forma EBITDA shall be computed so as to give pro forma effect
to such 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.
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"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 Debentures, such Refinancing
Indebtedness has a final maturity date later than the final maturity date of the
Debentures, and is subordinated in right of payment to the Debentures on terms
at least as favorable to the Holders of Debentures 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 Debentures 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 October 9, 1997, by and among the Company and the other
parties named on the signature pages thereof, as such agreement may be amended,
modified or supplemented from time to time.
"Regulation S" means Regulation S promulgated under the Securities
Act.
"Regulation S Global Debenture" means a Regulation S Temporary Global
Debenture or Regulation S Permanent Global Debenture, as appropriate.
"Regulation S Permanent Global Debenture" means a Permanent Global
Debenture in the form of Exhibit A-1 hereto bearing the Global Debenture 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 Debenture upon expiration of the Restricted Period.
"Regulation S Temporary Global Debenture" means a Temporary Global
Debenture 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 Exchange Debentures 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.
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"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.
"Representative" means the indenture trustee, agent or representative
for any Senior Debt.
"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 Debentures" means Exchange Debentures that are
in the form of the Exchange Debentures attached hereto as Exhibit A-1, that do
not include the information called for by footnotes 1 and 2 thereof.
"Restricted Global Debentures" means the Regulation S Global
Debentures and the Rule 144A Global Debentures.
"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 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.
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"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 144A Global Debenture" means a permanent global debenture that
contains the paragraph referred to in footnote 1 and the additional schedule
referred to in footnote 2 to the form of the Exchange Debenture attached hereto
as Exhibit A-1, and that is deposited with and registered in the name of the
Depository, representing Exchange Debentures 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 Debt" means any Indebtedness permitted to be incurred by the
Company under the terms of this Indenture, unless the instrument under which
such Indebtedness is incurred expressly provides that it is subordinated in
right of payment to the Debentures. Notwithstanding anything to the contrary in
the foregoing, Senior Debt shall not include (i) any liability for federal,
state, local or other taxes owed or owing by the Company, (ii) any Indebtedness
of the Company to any of its Subsidiaries or other Affiliates, (iii) any trade
payables or (iv) any Indebtedness that is incurred in violation of the
Indenture.
"Senior Indenture" means the indenture relating to the Senior Notes.
"Senior Notes" means the Company's 13% Senior Discount Notes
due 2003.
"Senior Secured Indenture" means the indenture relating to the Senior
Secured Notes.
"Senior Secured Notes" means the Company's 12 1/4% Senior Secured
Notes due 2004.
"Series A Preferred Stock" means the Company's 127/8% Series A Senior
Exchangeable Redeemable Preferred Stock due 2007.
"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.
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"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.
"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.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. SS
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"Transfer Restricted Securities" means securities that bear or are
required to bear the legend set forth in Section 2.06 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
Debentures.
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"Unrestricted Global Debenture" means a permanent global Debenture
that contains the paragraph referred to in footnote 1 and the additional
schedule referred to in footnote 2 to the form of the Debenture 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 Debenture" means Exchange Debentures that
are in the form of the Exchange Debentures attached hereto as Exhibit A-3 that
do not include the information called for by footnotes 1 and 2 thereof.
"Unrestricted Debentures" means the Unrestricted Global Debentures
and Unrestricted Definitive Debentures.
"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.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
"Affiliate Transaction"........................................ 4.11
"Asset Sale"................................................... 4.10
"Excess Proceeds 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
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"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 Debentures;
"indenture security Holder" means a Holder of a Debenture;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Debentures means the Company and any successor
obligor upon the Debentures.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
SECTION 1.04. 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
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(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 DEBENTURES
[This Article is subject to change, as necessary, to reflect
circumstances and/or applicable rules and regulations in effect at the time of
the execution of the Indenture.]
SECTION 2.01. FORM AND DATING.
The Debentures 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
Debentures may have notations, legends or endorsements required by law, stock
exchange rule or usage, as designated by the Company or its counsel.
Each Debenture shall be dated the date of its authentication.
The Exchange Debentures issued and sold in reliance on Rule 144A
shall be issued initially in the form of a Rule 144A Global Debenture. Exchange
Debentures 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
Debentures. Exchange Debentures offered and sold in reliance on Regulation S
shall be issued initially in the form of the Regulation S Temporary Global
Debenture, which shall be deposited on behalf of the purchasers of the
Exchangers Debentures 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 Debenture 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 Debenture, 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 Debenture shall be exchanged for
beneficial interests in Regulation S Permanent Global Debentures pursuant to the
Applicable Procedures. Simultaneously with the authentication of Regulation S
Permanent Global Debentures, the Trustee shall cancel the Regulation S Temporary
Global Debenture.
Debentures issued in global form shall be substantially in the form
of Exhibits A-1, A-2 or A-3 attached hereto (including the Global Debenture
Legend and the "Schedule of Exchanges in the Global Debenture" attached
thereto). Debentures issued in definitive form shall be substantially in the
form of Exhibit A-1 or A-3 attached hereto (but without the Global Debenture
Legend and without the "Schedule of Exchanges of Interests in the Global
Debenture" attached thereto). Each Global Debenture shall represent such of the
outstanding Debentures as shall be specified therein and each shall provide that
it shall represent the aggregate principal amount of outstanding Debentures from
time to time endorsed thereon and that the aggregate principal amount of
outstanding Debentures represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges and redemptions. Any endorsement
of
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a Global Debenture to reflect the amount of any increase or decrease in the
aggregate principal amount of outstanding Debentures represented thereby shall
be made by the Trustee or the Debenture 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 "Operating Procedures of the Euroclear System"
and "Terms and Conditions Governing Use of Euroclear" and the "General Terms and
Conditions of Cedel Bank" and "Customer Handbook" of Cedel Bank shall be
applicable to transfers of beneficial interests in the Regulation S Temporary
Global Debenture and the Regulation S Permanent Global Debentures that are held
by the Agent Members through Euroclear or Cedel Bank.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Debentures for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Debenture no longer holds that
office at the time a Debenture is authenticated, the Debenture shall
nevertheless be valid.
A Debenture shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Debenture has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by two
Officers, authenticate Debentures for original issue up to the aggregate
principal amount stated in paragraph 4 of the Debentures. The aggregate
principal amount of Debentures 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 Debentures. An authenticating agent may authenticate
Debentures 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 Debentures
may be presented for registration of transfer or for exchange ("Registrar") and
(ii) an office or agency where Debentures may be presented for payment ("Paying
Agent"). The Registrar shall keep a register of the Debentures 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 Debentures.
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The Company initially appoints the Trustee to act as the Registrar
and Paying Agent and to act as Debenture Custodian with respect to the Global
Debentures.
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 Debentures,
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 Debentures.
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 S 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 Debentures
and the Company shall otherwise comply with TIA S 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Global Debentures. A Global Debenture
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
Debentures will be exchanged by the Company for Definitive Debentures 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 Debentures (in whole but not in part) should be
exchanged for Definitive Debentures and delivers a written notice to such effect
to the Trustee; provided that in no event shall the Regulation S Temporary
Global Debenture be exchanged by the Company for Definitive Debentures 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 Debentures shall be issued
in such names as the Depositary shall instruct the Trustee. Global Debentures
also may be exchanged or replaced, in whole or in part, as provided in Sections
2.07 and 2.10 hereof. Every Debenture authenticated and delivered in exchange
for, or in lieu of, a Global Debenture 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 Debenture. A Global Debenture may not be exchanged
for another Debenture
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other than as provided in this Section 2.06(a), however, beneficial interests in
a Global Debenture 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
Debentures. The transfer and exchange of beneficial interests in the Global
Debentures shall be effected through the Depositary, in accordance with the
provisions of this Indenture and the Applicable Procedures. Beneficial interests
in the Restricted Global Debentures 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 Debentures 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 Debenture.
Beneficial interests in any Restricted Global Debenture may be transferred
to Persons who take delivery thereof in the form of a beneficial interest
in the same Restricted Global Debenture 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 Debenture 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 Debenture may be transferred only to Persons who take
delivery thereof in the form of a beneficial interest in an Unrestricted
Global Debenture. 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 Debentures. In connection with all transfers and exchanges of
beneficial interests (other than a transfer of a beneficial interest in a
Global Debenture to a Person who takes delivery thereof in the form of a
beneficial interest in the same Global Debenture), the transferor of such
beneficial interest must deliver to the Registrar either (A) (1) a 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 Debenture 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 Debenture 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 Debenture
shall be registered to effect the transfer or exchange referred to in (1)
above; provided that in no event shall Definitive Debentures be issued
upon the transfer or exchange of beneficial interests in the Regulation S
Temporary Global Debenture 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 Debentures.
Upon satisfaction of all of the requirements for transfer or exchange of
beneficial interests in Global Debentures contained in this Indenture, the
Debentures and otherwise applicable under the Securities Act, the Trustee
shall adjust the principal amount of the relevant Global Debenture(s)
pursuant to Section 2.06(h) hereof.
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(iii)Transfer of Beneficial Interests to Another Restricted Global
Debenture. A beneficial interest in any Restricted Global Debenture may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Debenture 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 Debenture, 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 Debenture or
the Regulation S Global Debenture, 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 Debenture for Beneficial Interests in the Unrestricted Global
Debenture. A beneficial interest in any Restricted Global Debenture may be
exchanged by any holder thereof for a beneficial interest in an
Unrestricted Global Debenture or transferred to a Person who takes
delivery thereof in the form of a beneficial interest in an Unrestricted
Global Debenture 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 Debentures 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 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 Debenture proposes to exchange such beneficial
interest for a beneficial interest in an Unrestricted Global
Debenture, 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 Debenture 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 Debenture, 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
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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 Debenture 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 Debentures 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 Debenture cannot
be exchanged for, or transferred to, Persons who take delivery thereof in
the form of a beneficial interest in a Restricted Global Debenture.
(c) Transfer or Exchange of Beneficial Interests in Global
Debentures for Definitive Debentures.
(i) If any holder of a beneficial interest in a Restricted Global
Debenture proposes to exchange such beneficial interest for a Restricted
Definitive Debenture or to transfer such beneficial interest to a Person
who takes delivery thereof in the form of a Restricted Definitive
Debenture, 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
Debenture, 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 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
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(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 Debenture 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 Debenture in the appropriate principal amount. Any
Restricted Definitive Debenture issued in exchange for a beneficial
interest in a Restricted Global Debenture 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
Debentures to the Persons in whose names such Debentures are so
registered. Any Restricted Definitive Debenture issued in exchange for a
beneficial interest in a Restricted Global Debenture 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 Debenture may not
be (A) exchanged for a Definitive Debenture 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 Debenture 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 Debenture may exchange such beneficial
interest for an Unrestricted Definitive Debenture or may transfer such
beneficial interest to a Person who takes delivery thereof in the form of
an Unrestricted Definitive Debenture if:
(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
New Exchange Debentures 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 Debenture proposes to exchange such beneficial
interest for an Unrestricted Definitive Debenture, a certificate from
such holder in the form of Exhibit C hereto, including the
certifications in item (1)(b) thereof;
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(2) if the holder of such beneficial interest in a
Restricted Global Debenture proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form of
an Unrestricted Definitive Debenture, 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
Debenture proposes to exchange such beneficial interest for an
Unrestricted Definitive Debenture or to transfer such beneficial interest
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Debenture, 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 Debenture 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 Debenture in the
appropriate principal amount. Any Unrestricted Definitive Debenture 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
Debentures to the Persons in whose names such Debentures are so
registered. Any Unrestricted Definitive Debenture 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 Debenture cannot be exchanged for a Restricted Definitive Debenture
or transferred to a Person who takes delivery thereof in the form of a
Restricted Definitive Debenture.
(d) Transfer and Exchange of Definitive Debentures for Beneficial
Interests in Global Debenture.
(i) If any Holder of a Restricted Definitive Debenture proposes to
exchange such Exchange Debenture for a beneficial interest in a Restricted
Global Debenture or to transfer such Restricted Definitive Debentures to a
Person who takes delivery thereof in the form of a beneficial interest in
a Restricted Global Debenture, then, upon receipt by the Registrar of the
following documentation:
(A) if the Holder of such Restricted Definitive Debenture
proposes to exchange such Debenture for a beneficial interest in a
Restricted Global Debenture, 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 Debenture 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 Debenture 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
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certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (2) thereof;
the Trustee shall cancel the Restricted Definitive Debenture, increase or
cause to be increased the aggregate principal amount of, in the case of
clause (A) above, the appropriate Restricted Global Debenture, in the case
of clause (B) above, the 144A Global Debenture, and in the case of clause
(C) above, the Regulation S Global Debenture.
(ii) A Holder of a Restricted Definitive Debenture may exchange such
Exchange Debenture for a beneficial interest in an Unrestricted Global
Debenture or transfer such Restricted Definitive Debenture to a Person who
takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Debenture 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 New Exchange Debentures
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 Debentures
proposes to exchange such Debentures for a beneficial interest in the
Unrestricted Global Debenture, 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 Debentures
proposes to transfer such Debentures to a Person who shall take
delivery thereof in the form of a beneficial interest in the
Unrestricted Global Debenture, 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 Debentures 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
Debentures and increase or cause to be increased the aggregate principal
amount of the Unrestricted Global Debenture.
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(iii)A Holder of an Unrestricted Definitive Debenture may exchange
such Exchange Debenture for a beneficial interest in an Unrestricted
Global Debenture or transfer such Unrestricted Definitive Debentures to a
Person who takes delivery thereof in the form of a beneficial interest in
an Unrestricted Global Debenture at any time. Upon receipt of a request
for such an exchange or transfer, the Trustee shall cancel the applicable
Unrestricted Definitive Debenture and increase or cause to be increased
the aggregate principal amount of the Unrestricted Global Debenture.
If any such exchange or transfer from a Definitive Debenture to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or
(iii) above at a time when an Unrestricted Global Debenture 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 Debentures 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 Debentures for Definitive
Debentures. Upon request by a Holder of Definitive Debentures and such Holder's
compliance with the provisions of this Section 2.06(e), the Registrar shall
register the transfer or exchange of Definitive Debentures. Prior to such
registration of transfer or exchange, the requesting Holder shall present or
surrender to the Registrar the Definitive Debentures 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 Debentures 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
(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 Debenture may be exchanged by the
Holder thereof for an Unrestricted Definitive Debenture or transferred to
a Person or Persons who take delivery thereof in the form of an
Unrestricted Definitive Debenture 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
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of the New Exchange Debentures 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 Debentures
proposes to exchange such Debentures for an Unrestricted Definitive
Debenture, 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 Debentures
proposes to transfer such Debentures to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive Debenture,
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 Debenture 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 Debentures may transfer such
Debentures to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Debenture. Upon receipt of a request for such a
transfer, the Registrar shall register the Unrestricted Definitive
Debentures pursuant to the instructions from the Holder thereof.
Unrestricted Definitive Debentures cannot be exchanged for or transferred
to Persons who take delivery thereof in the form of a Restricted
Definitive Debenture.
(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 accordance with Section 2.02, the
Trustee shall authenticate (i) one or more Unrestricted Global Debentures in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Debentures tendered for acceptance by persons
that are not (x) Broker-Dealers, (y) Persons participating in the distribution
of the New Exchange Debentures 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 Debentures in an
aggregate principal amount equal to the principal amount of the Restricted
Definitive Debentures accepted for exchange in the Exchange Offer. Concurrent
with the issuance of such Debentures, the Trustee shall cause the aggregate
principal amount of the applicable Restricted Global Debentures 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 Debentures so
accepted Unrestricted Definitive Debentures in the appropriate principal amount.
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(g) Legends. The following legends shall appear on the face of all Global
Debentures and Definitive Debentures 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
Debenture and each Definitive Debenture (and all Debentures issued in
exchange therefor or substitution thereof) shall bear the legend in
substantially the following form:
"THIS DEBENTURE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS DEBENTURE NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS DEBENTURE BY ITS ACCEPTANCE HEREOF AGREES TO
(A) OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS DEBENTURE
ONLY (1) TO THE COMPANY, (2) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (3) TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A, (4) PURSUANT TO
OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE
UNITED STATES IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
904 OF REGULATION S UNDER THE SECURITIES ACT, (5) 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 DEBENTURE (THE FORM
OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE) OR (6)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS UNDER THE SECURITIES ACT (AND BASED ON AN OPINION
OF COUNSEL IF THE COMPANY SO REQUESTS), SUBJECT IN EACH OF THE
FOREGOING CASES TO APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTIONS AND (B)
THAT IT WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY
ANY PURCHASER FROM IT OF THE DEBENTURE EVIDENCED HEREBY OF THE
RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
(B) Notwithstanding the foregoing, any Unrestricted Global
Debenture or Unrestricted Definitive Debenture 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 Debentures issued in
exchange therefor or substitution thereof) shall not bear the Private
Placement Legend.
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(ii) Global Debenture Legend. Each Global Debenture shall bear a
legend in substantially the following form:
"THIS GLOBAL DEBENTURE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS DEBENTURE) 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 DEBENTURE MAY BE EXCHANGED IN WHOLE BUT NOT IN
PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL
DEBENTURE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL DEBENTURE MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF
THE COMPANY."
(iii)Regulation S Temporary Global Debenture Legend. The Regulation
S Temporary Global Debenture shall bear a legend in substantially the
following form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL DEBENTURE, AND
THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED
DEBENTURES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER
THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL
DEBENTURE SHALL BE ENTITLED TO RECEIVE CASH PAYMENTS OF INTEREST DURING
THE PERIOD WHICH SUCH HOLDER HOLDS THIS DEBENTURE. NOTHING IN THIS LEGEND
SHALL BE DEEMED TO PREVENT INTEREST FROM ACCRUING ON THIS DEBENTURE."
(h) Cancellation and/or Adjustment of Global Debentures. At such time
as all beneficial interests in a particular Global Debenture have been exchanged
for Definitive Debentures or a particular Global Debenture has been redeemed,
repurchased or cancelled in whole and not in part, each such Global Debenture
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 Debenture is exchanged for or transferred to a Person who
will take delivery thereof in the form of a beneficial interest in another
Global Debenture or for Definitive Debentures, the principal amount of
Debentures represented by such Global Debenture shall be reduced accordingly and
an endorsement shall be made on such Global Debenture, 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 Debenture, such other Global Debenture shall be increased accordingly and
an endorsement shall be made on such Global Debenture, 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 Debentures and
Definitive Debentures upon receipt of a Company Order or at the
Registrar's request.
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(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Debenture or to a Holder of a Definitive Debenture
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 Debenture selected for redemption in whole or in part,
except the unredeemed portion of any Debenture being redeemed in part.
(iv) All Global Debentures and Definitive Debentures issued upon any
registration of transfer or exchange of Global Debentures or Definitive
Debentures shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the
Global Debentures or Definitive Debentures 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 Debentures during a period beginning at the
opening of business 15 days before the day of any selection of Debentures
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 Debenture so selected for redemption in whole or in part,
except the unredeemed portion of any Debenture being redeemed in part or
(C) to register the transfer of or to exchange a Debenture between a
record date and the next succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of a transfer of
any Debenture, the Trustee, any Agent and the Company may deem and treat
the Person in whose name any Debenture is registered as the absolute owner
of such Debenture for the purpose of receiving payment of principal of and
interest on such Debentures 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 Debentures and Definitive
Debentures 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.
SECTION 2.07. REPLACEMENT DEBENTURES.
If any mutilated Debenture is surrendered to the Trustee, or the
Company and the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Debenture, 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 Debenture 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 Debenture is
replaced. The Company may charge for its expenses in replacing a Debenture.
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Every replacement Debenture 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 Debentures duly issued hereunder.
SECTION 2.08. OUTSTANDING DEBENTURES.
The Debentures outstanding at any time are all the Debentures
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation, those reductions in the interest in a Global Debenture
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 Debenture does not cease to be outstanding because the Company or
an Affiliate of the Company holds the Debenture.
If a Debenture is replaced pursuant to Section 2.07 hereof, it ceases
to be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Debenture is held by a bona fide purchaser.
If the principal amount of any Debenture 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 Debentures payable on that date, then on and after that date
such Debentures shall be deemed to be no longer outstanding and shall cease to
accrete or accrue interest.
SECTION 2.09. TREASURY DEBENTURES.
In determining whether the Holders of the required principal amount
of Debentures have concurred in any direction, waiver or consent, Debentures
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
Debentures that a Trustee knows are so owned shall be so disregarded.
SECTION 2.10. TEMPORARY DEBENTURES.
Until definitive Debentures are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Debentures upon a written
order of the Company signed by two Officers of the Company. Temporary Debentures
shall be substantially in the form of definitive Debentures but may have
variations that the Company considers appropriate for temporary Debentures and
as shall be reasonably acceptable to the Trustee. Without unreasonable delay,
the Company shall prepare and the Trustee shall authenticate definitive
Debentures in exchange for temporary Debentures.
Holders of temporary Debentures shall be entitled to all of the
benefits of this Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Debentures to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Debentures surrendered to them for registration of transfer, exchange or
payment. The Trustee and no one else shall cancel all Debentures surrendered for
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registration of transfer, exchange, payment, replacement or cancellation and
shall destroy cancelled Debentures (subject to the record retention requirement
of the Exchange Act). Certification of the destruction of all cancelled
Debentures shall be delivered to the Company. The Company may not issue new
Debentures to replace Debentures 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 Debentures 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 S 316 (c).
SECTION 2.13. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Debentures,
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 Debentures 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 Debenture 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 Debentures 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 Debentures to be redeemed and (iv) the redemption price.
SECTION 3.02. SELECTION OF DEBENTURES TO BE REDEEMED.
If less than all of the Debentures are to be redeemed at any time,
the Trustee shall select the Debentures to be redeemed among the Holders of the
Debentures in compliance with the requirements of the principal national
securities exchange, if any, on which the Debentures are listed or, if the
Debentures 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 Debentures 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 Debentures
not previously called for redemption.
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The Trustee shall promptly notify the Company in writing of the
Debentures selected for redemption and, in the case of any Debenture selected
for partial redemption, the principal amount thereof to be redeemed. Debentures
and portions of Debentures selected shall be in amounts of $1,000 or whole
multiples of $1,000; except that if all of the Debentures of a Holder are to be
redeemed, the entire outstanding amount of Debentures 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 Debentures called
for redemption also apply to portions of Debentures 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 Debentures are to be redeemed at its registered address.
The notice shall identify the Debentures to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) if any Debenture is being redeemed in part, the portion of the
principal amount of such Debenture to be redeemed and that, after the
redemption date upon surrender of such Debenture, a new Debenture or
Debentures in principal amount equal to the unredeemed portion shall be
issued upon cancellation of the original Debenture;
(d) the name and address of the Paying Agent;
(e) that Debentures 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 Debentures called for redemption ceases to accrue on
and after the redemption date;
(g) the paragraph of the Debentures and/or Section of this Indenture
pursuant to which the Debentures called for redemption are being redeemed;
and
(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
Debentures.
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.
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SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Debentures 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 Debentures 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 Debentures 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 Debentures or the portions of Debentures called for redemption. If a
Debenture 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
Debenture was registered at the close of business on such record date. If any
Debenture 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
Debentures and in Section 4.01 hereof.
SECTION 3.06. DEBENTURES REDEEMED IN PART.
Upon surrender of a Debenture 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 Debenture equal
in principal amount to the unredeemed portion of the Debenture surrendered.
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 Debentures prior to October 15,
2002. Thereafter, the Company shall have the option to redeem the Debentures, 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 October 15 of the years indicated below:
Year Percentage
2002...................................... 106.438%
2003...................................... 104.292%
2004...................................... 102.146%
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2005 and thereafter....................... 100.000%
(b) Notwithstanding the foregoing, the Company, prior to October 15,
2000, may redeem Debentures having an aggregate principal amount of up to $70.0
million for cash at a redemption price equal to 112.875% of the principal amount
thereof, plus accrued and unpaid interest and Liquidated Damages, if any, to the
date of redemption, 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 $130.0
million in aggregate principal amount of the Debentures 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 Debentures.
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 Excess Proceeds Offer, it shall follow the procedures
specified below.
The Excess Proceeds 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 Debentures
required to be purchased pursuant to Section 4.10 hereof or, if Debentures
tendered in response to the Excess Proceeds Offer are less than the amount
required to be purchased pursuant to Section 4.10 hereof, all Debentures
tendered in response to the Excess Proceeds Offer. Payment for any Debentures 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 Debentures
as a result of an Excess Proceeds 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 Debenture is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Debentures pursuant to the Excess Proceeds Offer.
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Upon the commencement of an Excess Proceeds 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 Debentures pursuant to the Excess
Proceeds Offer. The Excess Proceeds Offer shall be made to all Holders. The
notice, which shall govern the terms of the Excess Proceeds Offer, shall state:
(a) that the Excess Proceeds Offer is being made pursuant to
this Section 3.09 and Section 4.10 hereof and the length of time the
Excess Proceeds Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase
Date;
(c) that any Debenture not tendered or accepted for payment
shall continue to accrete or accrue interest;
(d) that, unless the Company defaults in making such payment,
any Debenture accepted for payment pursuant to the Excess Proceeds Offer
shall cease to accrete or accrue interest after the Purchase Date;
(e) that Holders electing to have a Debenture purchased pursuant
to an Excess Proceeds Offer may only elect to have all of such Debenture
purchased and may not elect to have only a portion of such Debenture
purchased;
(f) that Holders electing to have a Debenture purchased pursuant
to any Excess Proceeds Offer shall be required to surrender the Debenture,
with the form entitled "Option of Holder to Elect Purchase" on the reverse
of the Debenture 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 Debenture the Holder delivered for
purchase and a statement that such Holder is withdrawing his election to
have such Debenture purchased;
(h) that, if the aggregate principal amount of Debentures
surrendered by Holders exceeds the amount required to be purchased
pursuant to Section 4.10 hereof, the Company shall select the Debentures
to be purchased on a pro rata basis (with such adjustments as may be
deemed appropriate by the Company so that only Debentures in denominations
of $1,000, or integral multiples thereof, shall be purchased); and
(i) that Holders whose Debentures were purchased only in part
shall be issued new Debentures equal in principal amount to the
unpurchased portion of the Debentures 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
Debentures or portions thereof tendered or required to be purchased pursuant to
the Excess Proceeds Offer, or if less than the amount so required to be
purchased
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has been tendered, all Debentures tendered, and shall deliver to the Trustee an
Officers' Certificate stating that such Debentures 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 Debentures tendered by such Holder and
accepted by the Company for purchase, and the Company shall promptly issue a new
Debenture, and the Trustee, upon written request from the Company shall
authenticate and mail or deliver such new Debenture to such Holder, in a
principal amount equal to any unpurchased portion of the Debenture surrendered.
Any Debenture 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 Excess Proceeds 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 DEBENTURES.
The Company shall pay or cause to be paid the principal of, premium,
if any, and interest on the Debentures (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 Debentures. 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 Debentures
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 (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 Debentures may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Debentures 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.
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The Company may also from time to time designate one or more other
offices or agencies where the Debentures 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 Debentures are outstanding, the Company shall furnish to the
Holders of Debentures (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 S 314(a).
(b) For so long as any Debentures 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 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 Debentures 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.
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(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 Debentures 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 Debentures.
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
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
Debentures 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:
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(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 pursuant
to the first paragraph 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; or
(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.
(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.
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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 Debentures or guarantee the payment of the
Debentures; 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 Issue Date;
(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 Debentures;
(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;
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(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, 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, or such Disqualified Stock had 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
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 from the
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issuance and sale of its Capital Stock (other than
Disqualified Stock) (including, without limitation, the
net cash proceeds received from the issuance and sale of
the Series A Preferred Stock) plus (b) the fair market
value at the time of issuance of Equity Interests (other
than Disqualified Stock) issued 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
Debentures and has a Weighted Average Life to Maturity
longer than the Debentures;
(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; and
(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 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.
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
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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,
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
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(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 Debentures 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 (A)
to permanently reduce Senior Debt (including, without limitation, the Senior
Notes and the Senior Secured Notes) or (B) 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, but only to the extent then
permitted by the terms of the Senior Debt (including, without limitation, the
Senior Notes and the Senior Secured Notes), commence an offer to purchase (an
"Excess Proceeds Offer") the maximum principal amount of Debentures and Pari
Passu Notes that may be purchased out of the Excess Proceeds, at an offer price
in cash equal to 100% of the outstanding principal amount of the Debentures and
100% of the outstanding principal amount (or accreted value) of the Pari Passu
Notes, plus accrued and unpaid interest and Liquidated Damages, if any thereon,
to the date fixed for the closing of such offer, in accordance with the
procedures set forth in this Indenture. To the extent that the aggregate
principal amount of the Debentures tendered pursuant to an Excess Proceeds
Offer, plus accrued and unpaid interest thereon to the date of repurchase
thereof, 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
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amount of the Debentures tendered pursuant to an Excess Proceeds Offer, plus
accrued and unpaid interest thereon to the date of repurchase thereof, exceeds
the amount of Excess Proceeds, the Company shall select the Debentures 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 Debentures.
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.
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 Debentures 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 Senior
Indenture, and through the term thereof as in effect on the date of the Senior
Indenture; (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
of the Senior Indenture and through the current term thereof as in effect on the
date of the Senior Indenture; (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
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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
herefrom, 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.
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 (char ter 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 Debentures.
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 Debentures to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of
such Holder's Debentures 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
Debentures 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 Debenture
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 Debentures
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 Debentures purchased pursuant to a Change of
Control Offer will be required to surrender the Debentures, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Debentures
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
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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 Debentures
delivered for purchase, and a statement that such Holder is withdrawing his
election to have the Debentures purchased; and (7) that Holders whose Debentures
are being purchased only in part will be issued new Debentures equal in
principal amount to the unpurchased portion of the Debentures 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 Debentures 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 Debentures 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
Debentures or portions thereof so tendered and (3) deliver or cause to be
delivered to the Trustee the Debentures so accepted together with an Officers'
Certificate stating the aggregate principal amount of Debentures or portions
thereof being purchased by the Company. The Paying Agent shall promptly mail to
each Holder of Debentures so tendered payment in an amount equal to the purchase
price for the Debentures, and the Trustee shall promptly authenticate and mail
(or cause to be transferred by book entry) to each Holder a new Debenture equal
in principal amount to any unpurchased portion of the Debentures surrendered by
such Holder, if any; provided, that each such new Debenture 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
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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.
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
Debentures 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 pursuant to the first paragraph of Section 4.09 hereof.
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
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obligation to pay the principal of and interest on the Debentures 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 Debentures 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 Debentures 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 clause (8) 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
Debentures for 30 days after notice to the Company by the Trustee or
the Holders of at least 25% in principal amount of the Debentures
then outstanding;
(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;
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(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) 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 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.
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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 Debentures may declare all the
Debentures to be due and payable immediately (an "Acceleration"); provided,
that, no such Acceleration shall be permitted until a date which is at least 92
days after all of the Senior Notes and Senior Secured Notes have been repaid in
full. 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 Debentures shall be due and payable immediately
without further action or notice; provided, that such Acceleration shall not,
and shall not be deemed to, occur until the date which is 92 days after all of
the Senior Notes and the Senior Secured Notes have been paid in full. If each of
the Senior Indenture and the Senior Secured Indenture is modified or amended
such that the immediate acceleration of the Debentures upon the occurrence and
during the continuation of an Event of Default would not cause the Preferred
Stock issued pursuant to the Offering to be classified as "Disqualified Stock"
under each such indenture, then, within 30 days after such modification of
amendment of each such indenture, the Company shall, and shall cause the Trustee
to, amend the Indenture and the Debentures to delete to proviso to each of the
two immediately preceding sentences. Holders of the Debentures may not enforce
this Indenture or the Debentures except as provided in this Indenture. The
Holders of a majority in aggregate principal amount of the then outstanding
Debentures 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.
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 Debentures
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 Debentures. If an Event of Default occurs prior to October 15, 2002 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 Debentures prior to October 15, 2002, 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 __________% 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 Debentures or to enforce the performance of any
provision of the Debentures or this Indenture.
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The Trustee may maintain a proceeding even if it does not possess any
of the Debentures or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Debenture 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 Debentures by notice to the Trustee may on behalf of the
Holders of all of the Debentures 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 Debentures (including in connection with an offer to purchase)
(provided, however, that the Holders of a majority in aggregate principal amount
of the then outstanding Debentures 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.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding
Debentures may direct the time, method and place of conducting any proceeding
for exercising any remedy available to the Trustee or exercising any trust or
power conferred on it. However, the Trustee may refuse to follow any direction
that conflicts with law or this Indenture that the Trustee determines may be
unduly prejudicial to the rights of other Holders of Debentures or that may
involve the Trustee in personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Debenture may pursue a remedy with respect to this
Indenture or the Debentures only if:
(a) the Holder of a Debenture 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 Debentures make a written request to the Trustee to pursue the
remedy;
(c) such Holder of a Debenture or Holders of Debentures 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 Debentures do not give the Trustee a
direction inconsistent with the request.
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A Holder of a Debenture may not use this Indenture to prejudice the rights of
another Holder of a Debenture or to obtain a preference or priority over another
Holder of a Debenture.
SECTION 6.07. RIGHTS OF HOLDERS OF DEBENTURES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Debenture to receive payment of principal, premium and
Liquidated Damages, if any, and interest on the Debenture, on or after the
respective due dates expressed in the Debenture (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.
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 Debentures 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 Debentures allowed in any judicial proceedings relative to the
Company (or any other obligor upon the Debentures), 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 reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Debentures
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:
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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 Debentures for amounts due and unpaid on the
Debentures 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 Debentures 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.
The Trustee may fix a record date and payment date for any payment to
Holders of Debentures 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
Debenture pursuant to Section 6.07 hereof, or a suit by Holders of more than 10%
in principal amount of the then outstanding Debentures.
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 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 Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
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(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.
(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
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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 Debentures 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.
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 or the Debentures, it shall not
be accountable for the Company's use of the proceeds from the Debentures or any
money paid to the Company or upon the Company's direction under any provision of
this Indenture, it shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the
Debentures or any other document in connection with the sale of the Debentures
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 Debentures 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 Debenture, 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
Debentures.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE DEBENTURES.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Debentures remain outstanding,
the Trustee shall mail to the Holders of the Debentures a brief report dated as
of such reporting date that complies with TIA S 313(a) (but if no event
described in TIA S 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also shall comply
with TIA S 313(b)(2). The Trustee shall also transmit by mail all reports as
required by TIA S 313(c).
A copy of each report at the time of its mailing to the Holders of
Debentures shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Debentures are listed in accordance with TIA S 313(d). The
Company shall promptly notify the Trustee when the Debentures are listed on any
stock exchange.
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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 compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee promptly upon request for all reasonable disbursements,
advances and expenses incurred or made by it in addition to the compensation for
its services. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, including the
costs and expenses of enforcing this Indenture against the Company (including
this Section 7.07) 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 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 Debentures on all money or property held
or collected by the Trustee, except that held in trust to pay principal and
interest on particular Debentures. 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 S 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 Debentures
of a majority in principal amount of the then outstanding Debentures may remove
the Trustee by so notifying the Trustee and the Company in writing.
The Company may remove the Trustee if:
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(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Debentures 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 Debentures of at least 10% in principal amount of the then
outstanding Debentures 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 Debenture
who has been a Holder of a Debenture for at least six months, fails to comply
with Section 7.10, such Holder of a Debenture 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 Debentures. 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
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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 S 310(a)(1), (2) and (5). The Trustee is subject to TIA S
310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee is subject to TIA S 311(a), excluding any creditor
relationship listed in TIA S 311(b). A Trustee who has resigned or been removed
shall be subject to TIA S 311(a) to the extent indicated therein.
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 Debentures 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 Debentures 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 Debentures, 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 Debentures 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 Debentures to receive payments in respect of the principal of,
premium, if any, and interest on such Debentures when such payments are due, (b)
the Company's obligations with respect to such Debentures 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,
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4.13, 4.15, 4.16 and 4.17 hereof with respect to the outstanding Debentures on
and after the date the conditions set forth below are satisfied (hereinafter,
"Covenant Defeasance"), and the Debentures 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 Debentures shall not be deemed
outstanding for accounting purposes). For this purpose, Covenant Defeasance
means that, with respect to the outstanding Debentures, 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 Debentures shall be unaffected thereby. In
addition, upon 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 Debentures:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(i) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders of the Debentures, 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 Debentures on the
stated maturity or on the applicable redemption date, as the case may be, and
the Company must specify whether the Debentures are being defeased to maturity
or to a particular redemption date;
(ii) 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 Debentures 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;
(iii) 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 Debentures 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;
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(iv) 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 Debentures 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;
(v) 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;
(vi) 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 bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally;
(vii) 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 Debentures over the other creditors of the Company
with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Company; and
(viii) 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 Debentures shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Debentures 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
Debentures 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 Debentures.
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
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thereof that would then be required to be deposited to effect an equivalent
Legal Defeasance or Covenant Defeasance.
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 Debenture 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 Debenture 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
Debentures 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 Debenture following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Debentures 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 DEBENTURES.
Notwithstanding Section 9.02 of this Indenture, the Company and the
Trustee may amend or supplement this Indenture or the Debentures, without the
consent of any Holder of a Debenture:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Debentures in addition to or in
place of certificated Debentures;
(c) to provide for the assumption of the Company's obligations to
the Holders of the Debentures
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 Debentures or that does not adversely
affect the legal rights hereunder of any Holder of the Debenture; or
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
9.06 hereof, the Trustee shall join with the Company in the execution of any
amended or supplemental Indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations that
may be therein contained, but the Trustee shall not be obligated to enter into
such amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF DEBENTURES.
Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture and the Debentures may be amended
or supplemented with the consent of the Holders of at least a majority in
principal amount of the Debentures then outstanding (including consents obtained
in connection with a purchase of or a tender offer or exchange offer for the
Debentures), 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 Debentures, except a
payment default resulting from an acceleration that has been rescinded) or
compliance with any provision of this Indenture or the Debentures may be waived
with the consent of the Holders of a majority in aggregate principal amount of
the then outstanding Debentures (including consents obtained in connection with
a purchase of or a tender offer or exchange offer for the Debentures).
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 Debentures 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
Debentures 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 Debenture affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Debentures then
outstanding may waive compliance in a particular instance by the Company with
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any provision of this Indenture or the Debentures. However, without the consent
of each Holder affected, an amendment, supplement or waiver may not (with
respect to any Debentures held by a non-consenting Holder):
(a) reduce the principal amount of Debentures whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any
Debenture or alter or waive any of the provisions with respect to the
redemption of the Debentures 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 Debenture;
(d) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Debentures
(except a rescission of acceleration of the Debentures by the Holders
of at least a majority in aggregate principal amount of the then
outstanding Debentures and a waiver of the payment default that
resulted from such acceleration);
(e) make any Debenture payable in money other than that stated
in the Debentures;
(f) make any change in the provisions of this Indenture relating
to waivers of past Defaults or the rights of Holders of Debentures to
receive payments of principal of or premium, if any, or interest on
the Debentures;
(g) waive a redemption payment with respect to any Debenture
(other than a payment required by Sections 3.09, 4.10 and 4.15
hereof); or
(h) make any change in the foregoing amendment and waiver
provisions.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Debentures
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 Debenture is a continuing consent by the Holder and every
subsequent Holder of a Debenture or portion of a Debenture that evidences the
same debt as the consenting Holder's Debenture, even if notation of the consent
is not made on any Debenture. However, any such Holder or subsequent Holder of a
Debenture may revoke the consent as to its Debenture 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.
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SECTION 9.05. NOTATION ON OR EXCHANGE OF DEBENTURES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Debenture thereafter authenticated. The Company in
exchange for all Debentures may issue and the Trustee shall authenticate new
Debentures that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Debenture
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.
ARTICLE 10
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder by accepting a Debenture agrees,
that the Indebtedness evidenced by the Debentures is subordinated in right of
payment, to the extent and in the manner provided in this Article 10, to the
prior payment in full of all Senior Debt (whether outstanding on the date hereof
or hereafter created, incurred, assumed or guaranteed), and that the
subordination is for the benefit of the holders of Senior Debt.
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, in
an assignment for the benefit of creditors or any marshalling of the Company's
assets and liabilities:
(1) holders of Senior Debt shall be entitled to receive payment in
full of all Obligations due in respect of such Senior Debt (including
interest after the commencement of any such proceeding at the rate
specified in the applicable Senior Debt) before Holders of the Debentures
shall be entitled to receive any payment with respect to the Debentures
(except that Holders may receive (i) Permitted Junior Securities and (ii)
payments and other distributions made from any defeasance trust created
pursuant to Article 8 hereof); and
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(2) until all Obligations with respect to Senior Debt (as provided in
subsection (1) above) are paid in full, any distribution to which Holders
would be entitled but for this Article 10 shall be made to holders of
Senior Debt (except that Holders of Debentures may receive (i) Permitted
Junior Securities and (ii) payments and other distributions made from any
defeasance trust created pursuant to Article 8 hereof), as their interests
may appear.
SECTION 10.03. DEFAULT ON DESIGNATED SENIOR DEBT.
The Company may not make any payment or distribution to the Trustee
or any Holder in respect of Obligations with respect to the Debentures and may
not acquire from the Trustee or any Holder any Debentures for cash or property
(other than (i) Permitted Junior Securities and (ii) payments and other
distributions made from any defeasance trust created pursuant to Article 8
hereof) until all principal and other Obligations with respect to the Senior
Debt have been paid in full if:
(i) a default in the payment of the principal of, premium or
Liquidated Damages, if any, or interest on Designated Senior Debt occurs
and is continuing beyond any applicable grace period in the agreements,
indentures or other documents governing such Designated Senior Debt; or
(ii) a default on Designated Senior Debt occurs and is continuing
that then permits holders of the Designated Senior Debt to accelerate its
maturity and the Trustee receives a notice of the default (a "Payment
Blockage Notice") from a Person who may give it pursuant to Section 10.12
hereof. If the Trustee receives any such Payment Blockage Notice, no
subsequent Payment Blockage Notice shall be effective for purposes of this
Section unless and until (1) at least 360 days shall have elapsed since
the effectiveness of the immediately prior Payment Blockage Notice and
(ii) all scheduled payments of principal, premium, if any, and interest on
the Debentures that have come due have been paid in full in cash.
The Company may and shall resume payments on and distributions in
respect of the Debentures and may acquire them upon the earlier of:
(1) in the case of a payment default, the date upon which the
default is cured or waived, or
(2) in the case of a nonpayment default, 179 days pass after notice
is received if the maturity of such Designated Senior Debt has not been
accelerated,
if this Article 10 otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition.
SECTION 10.04. ACCELERATION OF DEBENTURES.
If payment of the Debentures is accelerated because of an Event of
Default, the Company shall promptly notify holders of Senior Debt of the
acceleration.
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives any payment of
any Obligations with respect to the Debentures at a time when the Trustee or
such Holder, as applicable, has actual knowledge that such
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payment is prohibited by Section 10.03 hereof, such payment shall be held by the
Trustee or such Holder, in trust for the benefit of, and shall be paid forthwith
over and delivered, upon written request, to, the holders of Senior Debt as
their interests may appear or their Representative under the indenture or other
agreement (if any) pursuant to which Senior Debt may have been issued, as their
respective interests may appear, for application to the payment of all
Obligations with respect to Senior Debt remaining unpaid to the extent necessary
to pay such Obligations in full in accordance with their terms, after giving
effect to any concurrent payment or distribution to or for the holders of Senior
Debt.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically set
forth in this Article 10, and no implied covenants or obligations with respect
to the holders of Senior Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders or the Company
or any other Person money or assets to which any holders of Senior Debt shall be
entitled by virtue of this Article 10, except if such payment is made as a
result of the willful misconduct or gross negligence of the Trustee.
SECTION 10.06. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of any Obligations
with respect to the Debentures to violate this Article 10, but failure to give
such notice shall not affect the subordination of the Debentures to the Senior
Debt as provided in this Article 10.
SECTION 10.07. SUBROGATION.
After all Senior Debt is paid in full and until the Debentures are
paid in full, Holders of Debentures shall be subrogated (equally and ratably
with all other Indebtedness pari passu in right of payment with the Debentures)
to the rights of holders of Senior Debt to receive distributions applicable to
Senior Debt to the extent that distributions otherwise payable to the Holders of
Debentures have been applied to the payment of Senior Debt. A distribution made
under this Article 10 to holders of Senior Debt that otherwise would have been
made to Holders of Debentures is not, as between the Company and Holders, a
payment by the Company on the Debentures.
SECTION 10.08. RELATIVE RIGHTS.
This Article 10 defines the relative rights of Holders of Debentures
and holders of Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders of Debentures, the
obligation of the Company, is absolute and unconditional, to pay principal
of and interest on the Debentures in accordance with their terms;
(2) affect the relative rights of Holders of Debentures and creditors
of the Company other than their rights in relation to holders of Senior
Debt; or
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(3) prevent the Trustee or any Holder of Debentures from exercising
its available remedies upon a Default or Event of Default, subject to the
rights of holders and owners of Senior Debt to receive distributions and
payments otherwise payable to Holders of Debentures.
If the Company fails because of this Article 10 to pay principal of
or interest or Liquidated Damages on a Debenture on the due date, the failure is
still a Default or Event of Default.
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Debt to enforce the subordination of
the Indebtedness evidenced by the Debentures shall be impaired by any act or
failure to act by the Company or any Holder or by the failure of the Company or
any Holder to comply with this Indenture.
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred to
in this Article 10, the Trustee and the Holders of Debentures shall be entitled
to rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
of Debentures for the purpose of ascertaining the Persons entitled to
participate in such distribution, the holders of the Senior Debt and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article 10.
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Debentures, unless the Trustee shall have received at
its Corporate Trust Office at least five Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
with respect to the Debentures to violate this Article 10. Only the Company or a
Representative may give such notice. Nothing in this Article 10 shall impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any Agent may do
the same with like rights.
SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of Debentures, by the Holder's acceptance thereof,
authorizes and directs the Trustee on such Holder's behalf to take such action
as may be necessary or appropriate to effectuate the subordination as provided
in this Article 10, and appoints the Trustee to act as such Holder's
attorney-in-fact for any and all such purposes. If the Trustee does not file a
proper proof of claim or proof of debt in the form required in any proceeding
referred to in Section 6.09 hereof at least 30 days before the expiration
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of the time to file such claim, a Representative of the Senior Debt is hereby
authorized to file an appropriate claim for and on behalf of the Holders of the
Debentures.
SECTION 10.13. AMENDMENTS.
The provisions of this Article 10 shall not be amended or modified
without the written consent of the holders of all Senior Debt.
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 ss.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: [__________________]
With a copy to:
Buchanan Ingersoll
One Oxford Centre
301 Grant Street
20th Floor
Pittsburgh, Pennsylvania 15219-1410
Attention: [____________________]
If to the Trustee:
[---------------------]
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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 regis tered, 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 S 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 DEBENTURES WITH OTHER HOLDERS
OF DEBENTURES.
Holders may communicate pursuant to TIA S 312(b) with other Holders
with respect to their rights under this Indenture or the Debentures. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA S 312(c).
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 S 314(a)(4)) shall comply with the provisions of TIA S
314(e) and shall include:
116
<PAGE>
(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 Debentures or the Indenture or for any claim based on, in respect of,
or by reason of, such obligations or their creation. Each Holder of Debentures
by accepting a Debenture waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Debentures. 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.
SECTION 11.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE AND THE Debentures.
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 Debentures
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors.
SECTION 11.11. SEVERABILITY.
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<PAGE>
In case any provision in this Indenture or in the Debentures 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]
118
<PAGE>
SIGNATURES
Dated as of [_____________], 1997 HYPERION TELECOMMUNICATIONS, INC.
ISSUER
By:
Name:
Title:
Attest:
Dated as of [____________], 1997 [_____________________________]
TRUSTEE
By:
Name:
Title:
Attest:
119
<PAGE>
EXHIBIT A-1
(Face of Debenture)
127/8% Series A/B Senior Subordinated Debentures due 2007
No. $_______________
CUSIP NO. __________
HYPERION TELECOMMUNICATIONS, INC.
promises to pay to _____________________________________
or registered assigns,
the principal sum of $
dollars on [_____], 2007.
Interest Payment Dates: _________ and ________, of each year,
commencing ____________.
Record Dates: _______ and _______
Dated: __________, 1997
HYPERION TELECOMMUNICATIONS, INC.
By:______________________________
Name:
Title:
By:______________________________
Name:
Title:
This is one of the Global Debentures referred to in the within-mentioned
Indenture:
[-----------------------------]
as Trustee
By:__________________________________
Name:
Title:
A-1-1
<PAGE>
(Back of Debenture)
127/8% Series A/B Senior Subordinated Debentures due 2007
Unless and until it is exchanged in whole or in part for Debentures in
definitive form, this Debenture 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.1/
THIS DEBENTURE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS DEBENTURE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS DEBENTURE BY ITS ACCEPTANCE HEREOF AGREES TO (A)
OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS DEBENTURE ONLY (1) TO
THE COMPANY, (2) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (3) TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A, (4) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT
OCCUR OUTSIDE THE UNITED STATES IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (5)
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 DEBENTURE (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM THE TRUSTEE) OR (6) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE
SECURITIES ACT (AND BASED ON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), SUBJECT IN EACH OF THE FOREGOING CASES TO APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTIONS AND (B) THAT IT WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE DEBENTURE
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
- --------
1. This paragraph should be included only if the Debenture is issued in
global form.
A-2
<PAGE>
1. INTEREST. Hyperion Telecommunications, Inc., a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this
Debenture at the rate of 127/8% per annum from __________________ until maturity
(including any Liquidated Damages required to be paid pursuant to the provisions
of the Registration Rights Agreement) and will be payable semi-annually on April
15 and October 15 of each year to the holders of record on the immediately
preceding April 1 and October 1, or if any such day is not a Business Day, on
the next succeeding Business Day (each an "Interest Payment Date"). Interest
payable on or before October 15, 2002 may be paid in the form of additional
Debentures valued at the principal amount thereof. Interest payable after
October 15, 2002 will be required to be paid in cash. Interest on the Debentures
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 Debenture 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 _____________. 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 Debentures
(except defaulted interest) to the Persons who are registered Holders of
Debentures at the close of business on the April 1 and October 1 next preceding
the Interest Payment Date, even if such Debentures 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 Debentures
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 Debentures and all other Debentures 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, [_____________________], 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. The Company issued the Debentures under an Indenture
dated as of ___________ (the "Indenture") between the Company and the Trustee.
The terms of the Debentures 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 SS 77aaa-77bbbb) (the "TIA"). The Debentures are subject
to all such terms, and Holders are referred to the Indenture and the TIA for a
statement of such terms. The Debentures are obligations of the Company limited
to $[380.0] million in aggregate principal amount at maturity.
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 Debentures prior to October 15,
2000. Thereafter, the Company shall have the option to redeem the Debentures, in
whole or in part, upon not less than 30 nor more than 60 days' notice, at the
A-3
<PAGE>
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 October 15 of the years indicated below:
Year Percentage
2002......................................... 106.438%
2003......................................... 104.292%
2004......................................... 102.146%
2005 and thereafter.......................... 100.000%
(b) Notwithstanding the foregoing, the Company, prior to October 15,
2000, may redeem Debentures having an aggregate principal amount of up to $70.0
million for cash at a redemption price equal to 112.875% of the principal amount
thereof, plus accrued and unpaid interest and Liquidated Damages, if any, to the
date of redemption, 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 $130.0
million in aggregate principal amount of the Debentures 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 Debentures.
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
Debentures to repurchase all or any part (equal to $1,000 or an integral
multiple thereof) of such Holder's Debentures 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, but only to the extent then permitted
by the terms of the Senior Debt (including, without limitation, the Senior Notes
and the Senior Secured Notes) commence an offer to purchase (an "Excess Proceeds
Offer") the maximum principal amount of Debentures and Pari Passu Notes that may
be purchased out of the Excess Proceeds at an offer price in cash equal to 100%
of the outstanding principal amount thereof of the Debentures and 100% of the
outstanding principal amount (or accreted value) of the Pari Passu Notes, plus
accrued and unpaid interest to the date fixed for the closing of such offer, in
accordance with the procedures set forth in the Indenture.
8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed by first
class mail at least 30 days but not more than 60 days before the redemption date
to each Holder whose Debentures are to be redeemed
A-4
<PAGE>
at its registered address. Debentures may be redeemed in part but only in whole
multiples of $1,000 unless all of the Debentures held by a Holder of Debentures
are to be redeemed. If any Debenture is to be redeemed in part only, the notice
of redemption that relates to such Debenture shall state the portion of the
principal amount to be redeemed. On and after the redemption date, interest
ceases to accrue on Debentures called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Debentures are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of the Debentures may be registered and the Debentures 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 Debenture or portion of a Debenture
selected for redemption, except for the unredeemed portion of any Debenture
being redeemed in part. Also, it need not exchange or register the transfer of
any Debentures for a period of 15 days before a selection of Debentures 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 Debenture may be
treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Debentures may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the then outstanding
Debentures, and any existing default or compliance with any provision of the
Indenture or the Debentures may be waived with the consent of the Holders of a
majority in aggregate principal amount of the then outstanding Debentures.
Without the consent of any Holder of a Debenture. Debentures may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Debentures in addition to or in place of certificated Debentures,
to provide for the assumption of the Company's obligations to Holders of the
Debentures in case of a merger or consolidation, to make any change that would
provide any additional rights or benefits to the Holders of the Debentures 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 Debentures; (ii) default in payment when due of principal of or premium,
if any, on the Debentures 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 Debentures then outstanding to comply
with certain other agreements in the Indenture or the Debentures; (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; and (viii) 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,
A-5
<PAGE>
the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Debentures may declare all the Debentures to be due and payable
immediately provided, that such acceleration shall not, and shall not be deemed
to, occur until the date which is 92 days after all of the Senior Notes have
been paid in full. 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 Debentures shall become due and payable
without further action or notice; provided, that no such acceleration shall be
permitted until a date which is at least 92 days after all of the Senior Notes
and the Senior Secured Notes have been paid in full. If each of the Senior
Indenture and the Senior Secured Indenture is modified or amended such that the
immediate acceleration of the Debentures upon the occurrence and during the
continuation of an Event of Default would not cause the Preferred Stock issued
in the Offering to be classified as "Disqualified Stock" under each such
indenture, then, within 30 days after such modification or amendment of such
indenture, the Company shall, and shall cause the Trustee to amend the Indenture
and the Debentures to delete the proviso to each of the two immediately
preceding sentences. Holders of the Debentures may not enforce the Indenture or
the Debentures except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Debentures may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders of the Debentures 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 Debentures then outstanding by notice to the Trustee may on behalf of the
Holders of all of the Debentures 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 Debentures.
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 Debentures 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 Debenture waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Debentures.
15. AUTHENTICATION. This Debenture 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 Debentures under the
Indenture, Holders of Transferred Restricted Securities shall have all the
rights set forth in the Registration Rights Agreement dated as of October 9,
1997,
A-6
<PAGE>
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 Debentures 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 Debentures 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: [________________________]
A-7
<PAGE>
ASSIGNMENT FORM
To assign this Debenture, fill in the form below: (I) or (we) assign and
transfer this Debenture 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 Debenture 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 Debenture)
Signature Guarantee.
A-8
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Debenture 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 Debenture 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 Debenture)
Tax Identification No.:
Signature Guarantee.
A-9
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL DEBENTURE2/
The following exchanges of a part of this Global Debenture for an
interest in another Global Debenture or for a Definitive Debenture, or exchanges
of a part of another Global Debenture or Definitive Debenture for an interest in
this Global Debenture, have been made:
Amount of increase in Principal Amount
Amount of decrease in Principal Amount of this Signature of
Principal Amount of this Global Debenture authorized officer of
of this Global Debenture following such decrease Trustee or Debenture
Date of Exchange Global Debenture (or increase) Custodian
- ---------------------- ------------------------- ----------------------- ----------------
<S> <C> <C> <C> <C>
- --------
<FN>
2. This should be included only if the Note is a Global Debenture.
</FN>
</TABLE>
A-10
<PAGE>
EXHIBIT A-2
(Face of Regulation S Temporary Global Debenture)
127/8% Senior Subordinated Debentures due 2007
No. $_______________
CUSIP NO. __________
HYPERION TELECOMMUNICATIONS, INC.
promises to pay to _____________________________________
or registered assigns,
the principal sum of $
dollars on [_____], 2007.
Interest Payment Dates: _________ and ________, of each year, commencing
__________.
Record Dates: _______ and _______
Dated: __________, 1997
HYPERION TELECOMMUNICATIONS, INC.
By:______________________________
Name:
Title:
By:______________________________
Name:
Title:
This is one of the Global Debentures referred to in the within-mentioned
Indenture:
[-------------------------]
as Trustee
By:__________________________________
Name:
Title:
A-2-1
<PAGE>
(Back of Regulation S Temporary Global Debenture)
127/8% Senior Subordinated Debentures due 2007
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL DEBENTURE, AND
THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED
DEBENTURES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER
THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS
REGULATION S TEMPORARY GLOBAL DEBENTURE SHALL BE ENTITLED TO RECEIVE CASH
PAYMENTS OF INTEREST DURING THE PERIOD WHICH SUCH HOLDER HOLDS THIS
DEBENTURE. NOTHING IN THIS LEGEND SHALL BE DEEMED TO PREVENT INTEREST FROM
ACCRUING ON THIS DEBENTURE.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR DEBENTURES IN
DEFINITIVE FORM, THIS DEBENTURE 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) ("DTC"),
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.
THIS DEBENTURE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
DEBENTURE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS DEBENTURE BY ITS ACCEPTANCE HEREOF AGREES TO (A) OFFER, SELL,
PLEDGE OR OTHERWISE TRANSFER THIS DEBENTURE ONLY (1) TO THE COMPANY, (2)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (3) TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A, (4) PURSUANT TO OFFERS AND SALES
TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 904 OF REGULATION S UNDER THE SECURITIES ACT,
(5) 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 DEBENTURE (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE) OR (6) PURSUANT TO ANY
OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE
SECURITIES ACT (AND BASED ON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS),
SUBJECT IN EACH OF THE FOREGOING CASES TO APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTIONS AND (B) THAT IT
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF
THE DEBENTURE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE.
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<PAGE>
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
Debenture at the rate of 127/8% per annum from __________________ until maturity
(including any Liquidated Damages required to be paid pursuant to the provisions
of the Registration Rights Agreement) and will be payable semi-annually on April
15 and October 15 of each year to the holders of record on the immediately
preceding April 1 and October 1, or if any such day is not a Business Day, on
the next succeeding Business Day (each an "Interest Payment Date"). Interest
payable on or before October 15, 2002 may be paid in the form of additional
Debentures valued at the principal amount thereof. Interest payable after
October 15, 2002 will be required to be paid in cash. Interest on the Debentures
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 Debenture 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 _____________. 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 Debentures
(except defaulted interest) to the Persons who are registered Holders of
Debentures at the close of business on the April 1 and October 1 next preceding
the Interest Payment Date, even if such Debentures 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 Debentures
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 Debentures and all other Debentures 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, [_____________________], 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. The Company issued the Debentures under an Indenture dated
as of ___________ (the "Indenture") between the Company and the Trustee. The
terms of the Debentures 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 SS 77aaa-77bbbb) (the "TIA"). The Debentures are subject
to all such terms, and Holders are referred to the Indenture and the TIA for a
statement of such terms. The Debentures are obligations of the Company limited
to $[380.0] million in aggregate principal amount at maturity.
5. OPTIONAL REDEMPTION.
A-3
<PAGE>
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Company shall not have the option to redeem the Debentures prior to October 15,
2000. Thereafter, the Company shall have the option to redeem the Debentures, 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 October 15 of the years indicated below:
Year Percentage
2002........................................ 106.438%
2003........................................ 104.292%
2004........................................ 102.146%
2005 and thereafter......................... 100.000%
(b) Notwithstanding the foregoing, the Company, prior to October 15,
2000, may redeem Debentures having an aggregate principal amount of up to $70.0
million for cash at a redemption price equal to 112.875% of the principal amount
thereof, plus accrued and unpaid interest and Liquidated Damages, if any, to the
date of redemption, 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 $130.0
million in aggregate principal amount of the Debentures 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 Debentures.
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
Debentures to repurchase all or any part (equal to $1,000 or an integral
multiple thereof) of such Holder's Debentures 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, but only to the extent then permitted
by the terms of the Senior Debt (including, without limitation, the Senior Notes
and the Senior Secured Notes) commence an offer to purchase (an "Excess Proceeds
Offer") the maximum principal amount of Debentures and Pari Passu Notes that may
be purchased out of the Excess Proceeds at an offer price in cash equal to 100%
of the outstanding principal amount thereof of the Debentures and 100% of the
outstanding principal amount (or accreted value) of the Pari Passu Notes, plus
accrued and unpaid interest to the date fixed for the closing of such offer, in
accordance with the procedures set forth in the Indenture.
A-4
<PAGE>
8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed by first
class mail at least 30 days but not more than 60 days before the redemption date
to each Holder whose Debentures are to be redeemed at its registered address.
Debentures may be redeemed in part but only in whole multiples of $1,000 unless
all of the Debentures held by a Holder of Debentures are to be redeemed. If any
Debenture is to be redeemed in part only, the notice of redemption that relates
to such Debenture shall state the portion of the principal amount to be
redeemed. On and after the redemption date, interest ceases to accrue on
Debentures called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Debentures are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of the Debentures may be registered and the Debentures 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 Debenture or portion of a Debenture
selected for redemption, except for the unredeemed portion of any Debenture
being redeemed in part. Also, it need not exchange or register the transfer of
any Debentures for a period of 15 days before a selection of Debentures 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 Debenture may be
treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Debentures may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the then outstanding
Debentures, and any existing default or compliance with any provision of the
Indenture or the Debentures may be waived with the consent of the Holders of a
majority in aggregate principal amount of the then outstanding Debentures.
Without the consent of any Holder of a Debenture. Debentures may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Debentures in addition to or in place of certificated Debentures,
to provide for the assumption of the Company's obligations to Holders of the
Debentures in case of a merger or consolidation, to make any change that would
provide any additional rights or benefits to the Holders of the Debentures 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 Debentures; (ii) default in payment when due of principal of or premium,
if any, on the Debentures 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 Debentures then outstanding to comply
with certain other agreements in the Indenture or the Debentures; (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; and (viii) certain events of bankruptcy or
insolvency with
A-5
<PAGE>
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 Debentures
may declare all the Debentures to be due and payable immediately provided, that
such acceleration shall not, and shall not be deemed to, occur until the date
which is 92 days after all of the Senior Notes have been paid in full.
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 Debentures shall become due and payable without further action
or notice; provided, that no such acceleration shall be permitted until a date
which is at least 92 days after all of the Senior Notes and the Senior Secured
Notes have been paid in full. If each of the Senior Indenture and the Senior
Secured Indenture is modified or amended such that the immediate acceleration of
the Debentures upon the occurrence and during the continuation of an Event of
Default would not cause the Preferred Stock issued in the Offering to be
classified as "Disqualified Stock" under each such indenture, then, within 30
days after such modification or amendment of such indenture, the Company shall,
and shall cause the Trustee to amend the Indenture and the Debentures to delete
the proviso to each of the two immediately preceding sentences. Holders of the
Debentures may not enforce the Indenture or the Debentures except as provided in
the Indenture. Subject to certain limitations, Holders of a majority in
principal amount of the then outstanding Debentures may direct the Trustee in
its exercise of any trust or power. The Trustee may withhold from Holders of the
Debentures 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 Debentures then outstanding by
notice to the Trustee may on behalf of the Holders of all of the Debentures
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 Debentures. 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 Debentures 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 Debenture waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Debentures.
15. AUTHENTICATION. This Debenture 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 Debentures under the
Indenture, Holders of Transferred Restricted Securities
A-6
<PAGE>
shall have all the rights set forth in the Registration Rights Agreement dated
as of October 9, 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 Debentures 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 Debentures 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: [___________________]
A-7
<PAGE>
ASSIGNMENT FORM
To assign this Debenture, fill in the form below: (I) or (we) assign and
transfer this Debenture 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 Debenture 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 Debenture)
Signature Guarantee.
A-8
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL DEBENTURE
The following exchanges of a part of this Regulation S Temporary Global
Debenture for an interest in another Global Debenture, or of other Restricted
Global Debentures for an interest in this Regulation S Temporary Global
Debenture, have been made:
Amount of increase in Principal Amount
Amount of decrease in Principal Amount of this Signature of
Principal Amount of this Global Debenture authorized officer of
of this Global Debenture following such decrease Trustee or Debenture
Date of Exchange Global Debenture (or increase) Custodian
<S> <C> <C> <C> <C>
</TABLE>
A-9
<PAGE>
EXHIBIT A-3
(Face of Unrestricted Debenture)
127/8% Senior Subordinated Debentures due 2007
No. $_______________
CUSIP NO. __________
HYPERION TELECOMMUNICATIONS, INC.
promises to pay to _____________________________________
or registered assigns,
the principal sum of $
dollars on [_____], 2007.
Interest Payment Dates: _________ and ________, of each year, commencing
__________.
Record Dates: _______ and _______
Dated: __________, 1997
HYPERION TELECOMMUNICATIONS, INC.
By:______________________________
Name:
Title:
By:______________________________
Name:
Title:
This is one of the Global Debentures referred to in the within-mentioned
Indenture:
[------------------]
as Trustee
By:__________________________________
Name:
Title:
A-3-1
<PAGE>
(Back of Unrestricted Debenture)
127/8% Senior Subordinated Debentures due 2007
[Unless and until it is exchanged in whole or in part for Debentures in
definitive form, this Debenture 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.]1/
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 Debenture
at the rate of 127/8% per annum from __________________ until maturity
(including any Liquidated Damages required to be paid pursuant to the provisions
of the Registration Rights Agreement) and will be payable semi-annually on April
15 and October 15 of each year to the holders of record on the immediately
preceding April 1 and October 1, or if any such day is not a Business Day, on
the next succeeding Business Day (each an "Interest Payment Date"). Interest
payable on or before October 15, 2002 may be paid in the form of additional
Debentures valued at the principal amount thereof. Interest payable after
October 15, 2002 will be required to be paid in cash. Interest on the Debentures
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 Debenture 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 _____________. 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 Debentures (except
defaulted interest) to the Persons who are registered Holders of Debentures at
the close of business on the April 1 and October 1 next preceding the Interest
Payment Date, even if such Debentures 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 Debentures 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,
- --------
1. This paragraph should be included only if the Note is a Global Note.
A-2
<PAGE>
all Global Debentures and all other Debentures 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, [_____________________], 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. The Company issued the Debentures under an Indenture dated as of
___________ (the "Indenture") between the Company and the Trustee. The terms of
the Debentures 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 SS 77aaa-77bbbb) (the "TIA"). The Debentures are subject to all such
terms, and Holders are referred to the Indenture and the TIA for a statement of
such terms. The Debentures are obligations of the Company limited to $[380.0]
million in aggregate principal amount at maturity.
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 Debentures prior to October
15, 2000. Thereafter, the Company shall have the option to redeem the
Debentures, 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 October 15 of the years indicated below:
Year Percentage
2002........................................ 106.438%
2003........................................ 104.292%
2004........................................ 102.146%
2005 and thereafter......................... 100.000%
(b) Notwithstanding the foregoing, the Company, prior to October 15,
2000, may redeem Debentures having an aggregate principal amount of up to $70.0
million for cash at a redemption price equal to 112.875% of the principal amount
thereof, plus accrued and unpaid interest and Liquidated Damages, if any, to the
date of redemption, 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 $130.0
million in aggregate principal amount of the Debentures 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 Debentures.
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
Debentures to repurchase all or any part (equal to $1,000 or an integral
multiple thereof) of such Holder's Debentures 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, but only to the extent then permitted
by the terms of the Senior Debt (including, without limitation, the Senior Notes
and the Senior Secured Notes) commence an offer to purchase (an "Excess Proceeds
Offer") the maximum principal amount of Debentures and Pari Passu Notes that may
be purchased out of the Excess Proceeds at an offer price in cash equal to 100%
of the outstanding principal amount thereof of the Debentures and 100% of the
outstanding principal amount (or accreted value) of the Pari Passu Notes, plus
accrued and unpaid interest to the date fixed for the closing of such offer, in
accordance with the procedures set forth in the Indenture.
8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed by first
class mail at least 30 days but not more than 60 days before the redemption date
to each Holder whose Debentures are to be redeemed at its registered address.
Debentures may be redeemed in part but only in whole multiples of $1,000 unless
all of the Debentures held by a Holder of Debentures are to be redeemed. If any
Debenture is to be redeemed in part only, the notice of redemption that relates
to such Debenture shall state the portion of the principal amount to be
redeemed. On and after the redemption date, interest ceases to accrue on
Debentures called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Debentures are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of the Debentures may be registered and the Debentures 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 Debenture or portion of a Debenture
selected for redemption, except for the unredeemed portion of any Debenture
being redeemed in part. Also, it need not exchange or register the transfer of
any Debentures for a period of 15 days before a selection of Debentures 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 Debenture may be
treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Debentures may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the then outstanding
Debentures, and any existing default or compliance with any provision of the
Indenture or the Debentures may be waived with the consent of the Holders of a
majority in aggregate principal amount of the then outstanding Debentures.
Without the consent of any Holder of a Debenture. Debentures may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Debentures in addition to or in place of certificated Debentures,
to provide for the assumption of the Company's obligations to Holders of the
Debentures in case of a merger or
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consolidation, to make any change that would provide any additional rights or
benefits to the Holders of the Debentures 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 Debentures; (ii) default in payment when due of principal of or premium,
if any, on the Debentures 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 Debentures then outstanding to comply
with certain other agreements in the Indenture or the Debentures; (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; and (viii) 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 Debentures may declare all the Debentures to be due and payable
immediately provided, that such acceleration shall not, and shall not be deemed
to, occur until the date which is 92 days after all of the Senior Notes have
been paid in full. 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 Debentures shall become due and payable
without further action or notice; provided, that no such acceleration shall be
permitted until a date which is at least 92 days after all of the Senior Notes
and the Senior Secured Notes have been paid in full. If each of the Senior
Indenture and the Senior Secured Indenture is modified or amended such that the
immediate acceleration of the Debentures upon the occurrence and during the
continuation of an Event of Default would not cause the Preferred Stock issued
in the Offering to be classified as "Disqualified Stock" under each such
indenture, then, within 30 days after such modification or amendment of such
indenture, the Company shall, and shall cause the Trustee to amend the Indenture
and the Debentures to delete the proviso to each of the two immediately
preceding sentences. Holders of the Debentures may not enforce the Indenture or
the Debentures except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Debentures may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders of the Debentures 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 Debentures then outstanding by notice to the Trustee may on behalf of the
Holders of all of the Debentures 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 Debentures.
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.
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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 Debentures 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 Debenture waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Debentures.
15. AUTHENTICATION. This Debenture 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 Debentures under the
Indenture, Holders of Transferred Restricted Securities shall have all the
rights set forth in the Registration Rights Agreement dated as of October 9,
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 Debentures 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 Debentures 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: [_________________]
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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: [_____________________]
[Trustee]
Re: 127/8% Senior Subordinated Debentures due 2007
Reference is hereby made to the Indenture, dated as of ___________, 1997
(the "Indenture"), between Hyperion Telecommunications, Inc., as issuer (the
"Company"), and _____________________________, as trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.
______________, (the "Transferor") owns and proposes to transfer the
Debenture[s] or interest in such Debenture[s] specified in Annex A hereto, in
the principal amount of $___________ in such Debenture[s] or interests (the
"Transfer"), to __________ (the "Transferee"), as further specified in Annex A
hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1.oCheck if Transferee will take delivery of a beneficial interest in the 144A
Global Debenture or a Restricted Definitive Debenture 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 "Securities Act"),
and, accordingly, the Transferor hereby further certifies that the beneficial
interest or Restricted Definitive Debenture is being transferred to a Person
that the Transferor reasonably believed and believes is purchasing the
beneficial interest or Restricted Definitive Debenture 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 "qualified
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
Debenture will be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the 144A Global Debenture and/or the
Restricted Definitive Debenture and in the Indenture and the Securities Act.
2.oCheck if Transferee will take delivery of a beneficial interest in the
Temporary Regulation S Global Debenture, the Regulation S Global Debenture or a
Restricted Definitive Debenture 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
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Transferee was outside the United 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 Debenture will be subject to the restrictions on Transfer enumerated
in the Private Placement Legend printed on the Regulation S Global Debenture,
the Temporary Regulation S Global Debenture and/or the Definitive Debenture and
in the Indenture and the Securities Act.
3.oCheck and complete if Transferee will take delivery of a Restricted
Definitive Debenture 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 Debentures 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)osuch Transfer is being effected pursuant to and in accordance with
Rule 144 under the Securities Act;
or
(b)osuch Transfer is being effected to the Company or a Subsidiary
thereof;
or
(c)osuch 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)osuch 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 Debentures 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 Debentures 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
Debenture will be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Definitive Debentures and in
the Indenture and the Securities Act.
4.oCheck if Transferee will take delivery of a beneficial interest in an
Unrestricted Global Debenture or of an Unrestricted Definitive Debenture.
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(a)oCheck 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 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 Debenture will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Debentures, on Restricted Definitive Debentures and in the Indenture.
(b)oCheck 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 Debenture will no longer be subject to the restrictions
on transfer enumerated in the Private Placement Legend printed on the Restricted
Global Debentures, on Restricted Definitive Debentures and in the Indenture.
(c)oCheck 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 Debenture will not be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Debentures or Restricted Definitive Debentures 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: ,
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<PAGE>
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a)oa beneficial interest in the:
(i) o 144A Global Debenture (CUSIP ), or
(ii) o Regulation S Global Debenture (CUSIP/CINS ), or
(b)oa Restricted Definitive Debenture.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a)oa beneficial interest in the:
(i) o 144A Global Debenture (CUSIP ), or
(ii) o Regulation S Global Debenture (CUSIP/CINS ), or
(iii)o Unrestricted Global Debenture (CUSIP ); or
(b)oa Restricted Definitive Debenture; or
(c)oan Unrestricted Definitive Debenture,
in accordance with the terms of the Indenture.
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<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: [____________________]
[Trustee]
Re: 127/8% Senior Subordinated Debentures due 2007 (CUSIP )
---------------------------------------------------------------------------
Reference is hereby made to the Indenture, dated as of ____________,
1997 (the "Indenture"), between Hyperion Telecommunications, Inc., as issuer
(the "Company"), and _____________________, as trustee. Capitalized terms used
but not defined herein shall have the meanings given to them in the Indenture.
, (the "Owner") owns and proposes to exchange the
Debenture[s] or interest in such
Debenture[s] specified herein, in the principal amount of $____________ in such
Debenture[s] or interests (the "Exchange"). In connection with the Exchange, the
Owner hereby certifies that:
1.Exchange of Restricted Definitive Debentures or Beneficial Interests in a
Restricted Global
Debenture for Unrestricted Definitive Debentures or Beneficial Interests in an
Unrestricted Global Debenture
(a)oCheck if Exchange is from beneficial interest in a Restricted
Global Debenture to beneficial interest in an Unrestricted Global Debenture. In
connection with the Exchange of the Owner's beneficial interest in a Restricted
Global Debenture for a beneficial interest in an Unrestricted Global Debenture
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 Debentures and pursuant to and in accordance
with the United States Securities Act of 1933, as amended (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 in an Unrestricted Global
Debenture is being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.
(b)oCheck if Exchange is from beneficial interest in a Restricted
Global Debenture to Unrestricted Definitive Debenture. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Debenture for
an Unrestricted Definitive Debenture, the Owner hereby certifies (i)
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<PAGE>
the Definitive Debenture 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 Debentures 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 Debenture is being acquired in compliance with any applicable blue
sky securities laws of any state of the United States.
(c)oCheck if Exchange is from Restricted Definitive Debenture to
beneficial interest in an Unrestricted Global Debenture. In connection with the
Owner's Exchange of a Restricted Definitive Debenture for a beneficial interest
in an Unrestricted Global Debenture, 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 Debentures 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)oCheck if Exchange is from Restricted Definitive Debenture to
Unrestricted Definitive Debenture. In connection with the Owner's Exchange of a
Restricted Definitive Debenture for an Unrestricted Definitive Debenture, the
Owner hereby certifies (i) the Unrestricted Definitive Debenture 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 Debentures 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
Debenture is being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.
2.Exchange of Restricted Definitive Debentures or Beneficial Interests in
Restricted Global Debentures for Restricted Definitive Debentures or Beneficial
Interests in Restricted Global Debentures
(a)oCheck if Exchange is from beneficial interest in a Restricted
Global Debenture to Restricted Definitive Debenture. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Debenture for
a Restricted Definitive Debenture with an equal principal amount, the Owner
hereby certifies that the Restricted Definitive Debenture 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 Debenture issued will continue to be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Definitive Debenture and in the Indenture and the Securities Act.
(b)oCheck if Exchange is from Restricted Definitive Debenture to
beneficial interest in a Restricted Global Debenture. In connection with the
Exchange of the Owner's Restricted Definitive Debenture for a beneficial
interest in the [CHECK ONE] o 144A Global Debenture or o Regulation S Global
Debenture, with an equal principal amount, the Owner hereby certifies (i) such
Owner acquired such Restricted Definitive Debenture 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 Debentures 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
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<PAGE>
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 Debenture 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.
[Insert Name of Owner]
By:
Name:
Title:
Dated: ,
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<PAGE>
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Re: 127/8% Senior Secured Debentures due 2007
Reference is hereby made to the Indenture, dated as of _______________,
1997 (the "Indenture"), between Hyperion Telecommunications, Inc., as issuer
(the "Company"), 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 Debentures we confirm that:
1. We understand that any subsequent transfer of the Debentures 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 Debentures or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the Debentures have not been registered under the
Securities Act, and that the Debentures 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 Debentures
(for which are acting as hereinafter stated), that such Debentures may be
offered, resold, pledged or otherwise transferred only (i) to a person whom we
reasonably believe to be a "qualified 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 Debenture or a beneficial interest in a Global
Debenture 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 Debentures 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 Debentures purchased
by us will bear a legend to the foregoing effect. We further understand that any
subsequent transfer by us of the Debentures or beneficial interest therein
acquired by us must be effected through one of the Placement Agents.
4. We are an institutional "accredited 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
D-1
<PAGE>
business matters as to be capable of evaluating the merits and risks of our
investment in the Debentures, and we and any accounts for which we are acting
are each able to bear the economic risk of our or its investment.
5. We are acquiring the Debentures 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 "accredited 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: ,
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<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
<PAGE>
SCHEDULE A
Fiber Lease Agreements
[To be completed upon execution of the Indenture]
<PAGE>
SCHEDULE B
Local Partners
[To be completed upon execution of the Indenture.]
<PAGE>
SCHEDULE C
Local Partner Agreements
[To be completed upon execution of the Indenture.]
<PAGE>
SCHEDULE D
Management Agreements
[To be completed upon execution of the Indenture.]
<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
FINANCIAL DATA
<S> <C> <C> <C> <C>
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>
<PAGE>
$---------------------
HYPERION TELECOMMUNICATIONS, INC.
SERIES A AND SERIES B
127/8% SENIOR SUBORDINATED DEBENTURES DUE 2007
-----------------
INDENTURE
Dated as of [__________________]
-----------------
-----------------
[-------------------------]
-----------------
Trustee
<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.
*This Cross-Reference Table is not part of the Indenture.
</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 DEBENTURES
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 DEBENTURES............................................ 33
Section 2.08. Outstanding Debentures............................................ 34
Section 2.09. Treasury Debentures............................................... 34
Section 2.10. Temporary Debentures.............................................. 34
Section 2.11. Cancellation...................................................... 34
Section 2.12. Record Date....................................................... 35
Section 2.13. Defaulted Interest................................................ 35
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee................................................ 35
Section 3.02. Selection of Debentures 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. Debentures 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 Debentures............................................. 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
i
<PAGE>
Section 4.08. Dividend and Other Payment Restrictions Affecting
Subsidiaries...................................................... 44
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred
Stock............................................................. 45
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.......................... 51
Section 4.18. Limitation on Status as Investment Company........................ 52
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.......................... 52
Section 5.02. Successor Corporation Substituted................................. 52
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default................................................. 53
Section 6.02. Acceleration...................................................... 54
Section 6.03. Other Remedies.................................................... 55
Section 6.04. Waiver of Past Defaults........................................... 56
Section 6.05. Control by Majority............................................... 56
Section 6.06. Limitation on Suits............................................... 56
Section 6.07. Rights of Holders of Debentures to Receive Payment................ 57
Section 6.08. Collection Suit by Trustee........................................ 57
Section 6.09. Trustee May File Proofs of Claim.................................. 57
Section 6.10. Priorities........................................................ 58
Section 6.11. Undertaking for Costs............................................. 58
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee................................................. 58
Section 7.02. Rights of Trustee................................................. 59
Section 7.03. Individual Rights of Trustee...................................... 60
Section 7.04. Trustee's Disclaimer.............................................. 60
Section 7.05. Notice of Defaults................................................ 60
Section 7.06. Reports by Trustee to Holders of the Debentures................... 60
Section 7.07. Compensation and Indemnity........................................ 61
Section 7.08. Replacement of Trustee............................................ 62
Section 7.09. Successor Trustee by Merger, etc.................................. 62
Section 7.10. Eligibility; Disqualification..................................... 63
Section 7.11. Preferential Collection of Claims Against The
Company........................................................... 63
ARTICLE 8
ii
<PAGE>
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant
Defeasance........................................................ 63
Section 8.02. Legal Defeasance and Discharge.................................... 63
Section 8.03. Covenant Defeasance............................................... 64
Section 8.04. Conditions to Legal or Covenant Defeasance........................ 64
Section 8.05. Deposited Money and Government Securities to be
Held in Trust; Other Miscellaneous Provisions..................... 65
Section 8.06. Repayment to The Company.......................................... 66
Section 8.07. Reinstatement..................................................... 66
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of the Debentures...................... 67
Section 9.02. With Consent of Holders of Debentures............................. 67
Section 9.03. Compliance with Trust Indenture Act............................... 68
Section 9.04. Revocation and Effect of Consents................................. 69
Section 9.05. Notation on or Exchange of Debentures............................. 69
Section 9.06. Trustee to Sign Amendments, etc................................... 69
ARTICLE 10
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.......................................... 69
Section 10.02. Liquidation; Dissolution; Bankruptcy.............................. 69
Section 10.03. Default on Designated Senior Debt................................. 70
Section 10.04. Acceleration of Debentures........................................ 71
Section 10.05. When Distribution Must Be Paid Over............................... 71
Section 10.06. Notice By Company................................................. 71
Section 10.07. Subrogation....................................................... 71
Section 10.08. Relative Rights................................................... 72
Section 10.09. Subordination May Not Be Impaired by Company...................... 72
Section 10.10. Distribution or Notice to Representative.......................... 72
Section 10.11. Rights of Trustee and Paying Agent................................ 72
Section 10.12. Authorization to Effect Subordination............................. 73
Section 10.13. Amendments........................................................ 73
ARTICLE 11
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls...................................... 73
Section 11.02. Notices........................................................... 73
Section 11.03. Communication by Holders of Debentures with Other
Holders of Debentures............................................. 74
Section 11.04. Certificate and Opinion as to Conditions Precedent................ 74
Section 11.05. Statements Required in Certificate or Opinion..................... 75
Section 11.06. Rules by Trustee and Agents....................................... 75
iii
<PAGE>
Section 11.07. No Personal Liability of Directors, Officers,
Employees and Stockholders........................................ 75
Section 11.08. Governing Law..................................................... 75
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.................................. 76
</TABLE>
EXHIBITS
Exhibit A-1 Form of Restricted Definitive Debenture, Regulation S
Permanent Global Debenture and Rule 144A Global Debenture
Exhibit A-2 Form of Regulation S Temporary Global Debenture Exhibit A-3
Form of Unrestricted Debenture 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
iv
<PAGE>
