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) May 1, 1997
ADELPHIA COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-16014 23-2417713
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
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
<PAGE>
Item 5. Other Events
On February 26, 1997 Adelphia Communications Corporation ("Adelphia") issued
$350,000,000 aggregate principal amount of 9 7/8% Senior Notes due 2007, in a
private placement primarily to Institutional Investors. Adelphia is filing
documents related to the private placement as Exhibits 4.01, 10.01 and 10.02
hereto.
Item 7. Financial Statements and Exhibits
Exhibit 4.01 Indenture, dated as of February 26,
1997, between Adelphia Communications
Corporation and Bank of Montreal Trust
Company.
Exhibit 10.01 Registration Rights Agreement, dated as of
February 26, 1997 between Adelphia
Communications Corporation and Smith
Barney Inc.
Exhibit 10.02 Purchase Agreement, dated as of
February 21, 1997 between Adelphia
Communications Corporation and Smith
Barney Inc.
Exhibit 10.03 Employment Agreement between Hyperion
Telecommunications, Inc. and Daniel
R. Milliard dated as of March 4, 1997.
Exhibit 10.04 Extension Agreement dated as of
January 8, 1997, among Hyperion
Telecommunications, Inc., Adelphia
Communications Corporation, Charles R.
Drenning, Paul D. Fajerski, Randolph S.
Fowler, and six Trusts named therein.
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: May 1, 1997 ADELPHIA COMMUNICATIONS CORPORATION
(Registrant)
By: /s/Timothy J. Rigas
Timothy J. Rigas
Executive Vice President, Treasurer
and Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
Exhibit 4.01 Indenture, dated as of February 26, 1997, between
Adelphia Communications Corporation and Bank of Montreal
Trust Company.
Exhibit 10.01 Registration Rights Agreement, dated as of February
26, 1997 between Adelphia Communications Corporation and
Smith Barney Inc.
Exhibit 10.02 Purchase Agreement, dated as of February 21, 1997
between Adelphia Communications Corporation and Smith
Barney Inc.
Exhibit 10.03 Employment Agreement between Hyperion Telecommunications,
Inc. and Daniel R. Milliard dated as of March 4, 1997.
Exhibit 10.04 Extension Agreement dated as of January 8, 1997, among
Hyperion Telecommunications, Inc., Adelphia Communications
Corporation, Charles R. Drenning, Paul D. Fajerski,
Randolph S. Fowler, and six Trusts named therein.
<PAGE>
Exhibit 4.01
ADELPHIA COMMUNICATIONS CORPORATION
Up To $600,000,000
9 7/8% Senior Notes Due 2007
INDENTURE
Dated as of February 26, 1997
BANK OF MONTREAL TRUST COMPANY,
Trustee
<PAGE>
<TABLE>
<CAPTION>
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
<S> <C>
310(a)(1)--------------------------------------------------------------------------------------------------7.10
(a)(2-----------------------------------------------------------------------------------------------7.10
(a)(3)-------------------------------------------------------------------------------------------N.A.
(a)(4)-------------------------------------------------------------------------------------------N.A.
(b)-------------------------------------------------------------------------------------------------7.08;7.10;11.02
(b)(1)----------------------------------------------------------------------------------------------7.10
(b)(9)----------------------------------------------------------------------------------------------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)----------------------------------------------------------------------------------------------7.06
(b)(2)----------------------------------------------------------------------------------------------7.06
(c)-------------------------------------------------------------------------------------------------7.06, 11.02
(d)-------------------------------------------------------------------------------------------------7.06
314(a) 4.02;11.02
(b)----------------------------------------------------------------------------------------------N.A.
(c)(1)---------------------------------------------------------------------------------------------11.04;11.05
(c)(2)---------------------------------------------------------------------------------------------11.04;11.05
(c)(3)-------------------------------------------------------------------------------------------N.A.
(d)----------------------------------------------------------------------------------------------N.A.
(e)------------------------------------------------------------------------------------------------11.05
(f)----------------------------------------------------------------------------------------------N.A.
315(a) 7.01;7.02
(b)-------------------------------------------------------------------------------------------------7.05;11.02
(c)-------------------------------------------------------------------------------------------------7.01
(d)-------------------------------------------------------------------------------------------------6.05;7.01;7.02
(e)-------------------------------------------------------------------------------------------------6.11
316(a) (last sentence)------------------------------------------------------------------------------------11.06
(a)(1)(A)-------------------------------------------------------------------------------------------6.05
(a)(1)(B)-------------------------------------------------------------------------------------------6.04
(a)(2)----------------------------------------------------------------------------------------------8.02
(b)-------------------------------------------------------------------------------------------------6.07
317(a)(1)--------------------------------------------------------------------------------------------------6.08
(a)(2)----------------------------------------------------------------------------------------------6.09
(b)-------------------------------------------------------------------------------------------------2.04
318(a) 11.01
N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a 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..........................................................................................11
Section 1.03. Incorporation by Reference of Trust Indenture..............................................................12
Section 1.04. Rules of Construction......................................................................................12
Section 1.05. Acts of Holders............................................................................................13
ARTICLE 2
THE NOTES
Section 2.01. Form And Dating............................................................................................14
Section 2.02. Execution and Authentication...............................................................................16
Section 2.03. Registrar and Paying Agent.................................................................................16
Section 2.04. Paying Agent to Hold Money in Trust........................................................................17
Section 2.05. Holder Lists...............................................................................................17
Section 2.06. Transfer and Exchange......................................................................................17
Section 2.07. Replacement Notes..........................................................................................26
Section 2.08. Outstanding Notes..........................................................................................27
Section 2.09. Treasury Notes.............................................................................................27
Section 2.10. Temporary Notes............................................................................................27
Section 2.11. Cancellation...............................................................................................27
Section 2.12. Defaulted Interest.........................................................................................28
ARTICLE 3
CHANGE OF CONTROL OFFER
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes...........................................................................................30
Section 4.02. SEC Reports................................................................................................30
Section 4.03. Waiver of Stay, Extension or Usury Laws....................................................................31
Section 4.04. Limitation on Transactions with Affiliates.................................................................31
Section 4.05. Limitation on Indebtedness.................................................................................31
Section 4.06. Limitation on Restricted Payments..........................................................................32
Section 4.07. Reports to Holders.........................................................................................32
Section 4.08. Notice of Defaults Or Events of Default....................................................................33
Section 4.09. Compliance Certificates....................................................................................33
Section 4.10. Covenant to Secure Notes Equally...........................................................................33
Section 4.11. Limitation on Investment in Affiliates and Unrestricted Subsidiaries.......................................33
Section 4.12. Limitation on Sale of Assets...............................................................................33
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.01. Mergers and Consolidations.................................................................................34
Section 5.02. Successor Person Substituted...............................................................................35
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default..........................................................................................35
Section 6.02. Acceleration...............................................................................................37
Section 6.03. Other Remedies.............................................................................................37
Section 6.04. Waiver of Past Defaults and Events of Default..............................................................38
Section 6.05. Control by Majority........................................................................................38
Section 6.06. Limitation on Suits........................................................................................38
Section 6.07. Rights of Holders to Receive Payment.......................................................................39
Section 6.08. Collection Suit by Trustee.................................................................................39
Section 6.09. Trustee May File Proofs of Claim...........................................................................39
Section 6.10. Priorities.................................................................................................40
Section 6.11. Undertaking for Costs......................................................................................40
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee..........................................................................................40
Section 7.02. Rights of Trustee..........................................................................................41
Section 7.03. Individual Rights of Trustee...............................................................................42
Section 7.04. Trustee's Disclaimer.......................................................................................42
Section 7.05. Notice of Defaults.........................................................................................43
Section 7.06. Reports by Trustee to Holders..............................................................................43
Section 7.07. Compensation and Indemnity.................................................................................43
Section 7.08. Replacement of Trustee.....................................................................................44
Section 7.09. Successor Trustee by Consolidation, Merger or Conversion...................................................45
Section 7.10. Eligibility; Disqualification..............................................................................45
Section 7.11. Preferential Collection of Claims Against Company..........................................................45
Section 7.12. Paying Agents..............................................................................................45
ARTICLE 8
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 8.01. Without Consent of Holders.................................................................................46
Section 8.02. With Consent of Holders....................................................................................46
Section 8.03. Compliance with Trust Indenture Act........................................................................47
Section 8.04. Revocation and Effect of Consents..........................................................................48
Section 8.05. Notation on or Exchange of Notes...........................................................................48
Section 8.06. Trustee to Sign Amendments, etc............................................................................48
ARTICLE 9
SATISFACTION AND DISCHARGE OF
INDENTURE: UNCLAIMED MONEYS
Section 9.01. Satisfaction and Discharge of Indenture....................................................................49
Section 9.02. Funds Deposited for Payment of Notes.......................................................................50
Section 9.03. Moneys Held by Paying Agent................................................................................50
Section 9.04. Moneys Held by Trustee.....................................................................................50
Section 9.05. Reinstatement..............................................................................................50
ARTICLE 10
DEFEASANCE AND COVENANT DEFEASANCE
Section 10.01. Applicability of Article; Company Option to Effect Defeasance.............................................51
Section 10.02. Defeasance and Discharge..................................................................................51
Section 10.03. Covenant Defeasance.......................................................................................51
Section 10.04. Conditions to Defeasance or Covenant Defeasance...........................................................52
Section 10.05. Deposited Money and U.S. Government Obligations to be Held in Trust; Other Miscellaneous
Provisions...............................................................................................................53
ARTICLE 11
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls..............................................................................54
Section 11.02. Notices...................................................................................................54
Section 11.03. Communications by Holders with Other Holders..............................................................55
Section 11.05. Statements Required in Certificate and Opinion............................................................56
Section 11.06. When Treasury Notes Disregarded...........................................................................56
Section 11.07. Rules by Trustee and Agents...............................................................................56
Section 11.08. Business Days; Legal Holidays.............................................................................57
Section 11.09. Governing Law.............................................................................................57
Section 11.10. No Adverse Interpretation of Other Agreements.............................................................57
Section 11.11. No Recourse against Others................................................................................57
Section 11.12. Successors................................................................................................57
Section 11.13. Multiple Counterparts.....................................................................................58
Section 11.14. Table of Contents, Headings, etc..........................................................................58
Section 11.15. Separability..............................................................................................58
</TABLE>
<PAGE>
EXHIBITS
Exhibit A-1 FORM OF NOTE
Exhibit A-2 FORM OF REGULATION S TEMPORARY GLOBAL NOTE
Exhibit B-1 FORM OF CERTIFICATE FOR EXCHANGE FOR OR REGISTRATION OF
TRANSFER FROM RULE 144A GLOBAL NOTE TO REGULATION S
GLOBAL NOTE
Exhibit B-2 FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF
TRANSFER FROM REGULATION S GLOBAL NOTE TO RULE 144A GLOBAL
NOTE
Exhibit B-3 FORM OF CERTIFICATE FOR EXCHANGE
Exhibit B-4 FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF
TRANSFER FROM RULE 144A GLOBAL NOTE OR REGULATION S
PERMANENT GLOBAL NOTE TO DEFINITIVE NOTE
Exhibit B-5 FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF
TRANSFER FROM DEFINITIVE NOTE TO RULE 144A GLOBAL NOTE OR
REGULATION S PERMANENT GLOBAL NOTE
<PAGE>
THIS INDENTURE, dated as of February 26, 1997, is by and
between ADELPHIA COMMUNICATIONS CORPORATION, a Delaware
corporation (the "Company"), and BANK OF MONTREAL TRUST COMPANY, a trust company
organized under the laws of the State of New York (the "Trustee").
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions
"Act", when used with respect to any Holder, has the
meaning specified in Section 1.05 hereof.
"Affiliate" means a Person (i) which directly or indirectly
through one or more intermediaries controls, or is
controlled by, or is under common control with, the Company, (ii) which
beneficially owns or holds 10% or more of any class of the voting Capital Stock
of the Company, or (iii) of which 10% or more of the voting Capital Stock is
beneficially owned or held by the Company, a Restricted Subsidiary or an
Unrestricted Subsidiary of the Company. Without a limitation, an Affiliate also
includes any director or executive officer of the Company. As used herein,
"Affiliate" shall not include a Restricted Subsidiary.
"Agent" means any Registrar, Paying Agent,
co-registrar or agent for service of notices and demands. See
Section 2.03 hereof.
"Agent Members" means members of, or participants in, the
Depository.
"Aggregate Excess Restricted Investments" means for any
fiscal quarter the aggregate of Excess Restricted
Investments with respect to the Restricted Investments in all of the
Unrestricted Subsidiaries and Affiliates of the Company.
"Allowable Securities" means (i) cash equivalents,
(ii) common or preferred Capital Stock in a Person which (x)
has Investment Grade Senior Debt or (y) whose ratio of Indebtedness plus
Preferred Stock to Annualized Pro Forma EBITDA is less than 7.75:1, or (iii)
debt securities issued by a Person which (x) has Investment Grade Senior Debt or
(y) whose Leverage Ratio is less than 7.75:1, provided that the securities in
(ii)(y) and (iii)(y) above shall only be deemed to be Allowable Securities if
the principal business of the Person is owning and operating cable television
systems.
"Annualized Pro Forma EBITDA" means, with respect to
any Person, (i) such Person's Pro Forma EBITDA for the
latest fiscal quarter multiplied by four, minus (ii) in the case of the Company
only, the Company's Aggregate Excess Restricted Investments for such fiscal
quarter.
"Asset Sale" means the sale, transfer or other
disposition (other than to the Company or any of its Restricted
Subsidiaries) in any single transaction or series of related transactions of (a)
any Capital Stock of or other equity interest in any Restricted Subsidiary, (b)
all or substantially all of the assets of the Company or of any Restricted
Subsidiary or (c) all or substantially all of the assets of a Company System or
part thereof serving at least 5,000 basic subscribers, a division, line of
business or comparable business segment of the Company or any Restricted
Subsidiary.
"Applicable Procedures" means applicable procedures of the
Depository, Euroclear or Cedel Bank, as the case may be.
"Board of Directors" means the Board of Directors of the
Company or any committee authorized to act therefor.
"Board Resolution" means a copy of a resolution certified
pursuant to an Officers' Certificate to have been duly adopted by the Board of
Directors and to be in full force and effect, and delivered to the Trustee.
"Capital Stock" means, with respect to any Person, any and
all shares or other equivalents (however designated)
of corporate stock, partnership interests or any other participation, right or
other interest in the nature of any equity interest in such Person or any
option, warrant or other security convertible into any of the foregoing.
"Capital Stock Sale Proceeds" means the aggregate net
sale proceeds (including the fair market value of
property, other than cash, as determined by an independent appraisal firm)
received by the Company from the issue or sale (other than to a Subsidiary) by
the Company of any class of its Capital Stock on or after January 1, 1993
(including Capital Stock of the Company issued after January 1, 1993 upon
conversion of or in exchange for other securities of the Company).
"Capitalized Lease Obligations" means Indebtedness
represented by obligations under a lease that is required to
be capitalized for financial reporting purposes in accordance with GAAP and the
amount of such Indebtedness shall be the capitalized amount of such obligations
determined in accordance with GAAP.
"Change of Control" means such time as (i) (a) a "person"
or "group" (within the meaning of Sections 13(d) and
14(d)(2) of the Exchange Act), other than the Rigas Family and its Affiliates,
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act)
of more than 35% of the total voting power required to elect or designate for
election a majority of the Company's Board of Directors and attaching to the
then outstanding voting Capital Stock of the Company and (b) the Rigas Family,
together with its Affiliates, is not at such time the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act) of more than 35% of the total
voting power required to elect or designate for election a majority of the
Company's Board of Directors and attaching to the then outstanding voting
Capital Stock of the Company, or (ii) during any period of two consecutive
calendar years, individuals who at the beginning of such period constituted the
Company's Board of Directors (together with any new directors whose election by
the Company's Board of Directors or whose nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of
such period or whose election or nomination for election was previously so
approved or approved by the Rigas Family and its Affiliates at a time when they
had the right or ability by voting right, contract or otherwise to elect or
designate for election a majority of the Company's Board of Directors) cease for
any reason to constitute a majority of the directors then in office.
"Change of Control Triggering Event" means the occurrence
of both a Change of Control and a Rating Decline.
"Company" means the party named as such in the first
paragraph of this Indenture until a successor replaces such
party pursuant to Article 5 of this Indenture and thereafter means the successor
and any other obligor on the Notes.
"Company Request" means any written request signed in the
name of the Company by the Chairman, the President or
a Vice President of the Company and attested to by a Secretary or an Assistant
Secretary or the Treasurer or an Assistant Treasurer of the Company.
"Consolidated Fixed Charge Ratio" means, for any Person,
for any period, the ratio of (i) Annualized Pro Forma
EBITDA to (ii) Consolidated Interest Expense for such period multiplied by four.
"Consolidated Interest Expense" means, for any Person,
for any period, 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 after taking into
account the effect of elections made under any Interest Rate Agreement, however
denominated, with respect to such Indebtedness), the amount of Redeemable
Dividends and the interest component of rentals in respect of any Capitalized
Lease Obligation paid, accrued or scheduled to be paid or accrued by such Person
during such period, determined on a consolidated basis in accordance with GAAP.
For purposes of this definition, interest on a Capitalized 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 Capitalized Lease Obligation
in accordance with GAAP consistently applied.
"Corporate Trust Office" means the office of the Trustee
at which at any particular time its corporate trust
business shall be principally administered, which office at the date of
execution of this Indenture is located at 77 Water Street,
New York, New York 10005.
"Cumulative Credit" means the sum of (i) Capital Stock
Sale Proceeds plus (ii) cumulative EBITDA of the Company
from and after January 1, 1993 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.
"Cumulative Interest Expense" means the aggregate amount
of Consolidated Interest Expense paid, accrued or
scheduled to be paid or accrued by the Company from January 1, 1993 to the end
of the fiscal quarter immediately preceding a proposed Restricted Payment,
determined on a consolidated basis in accordance with GAAP.
"Default" means any event which is, or after notice or
passage of time or both would be, an Event of Default.
"Definitive Notes" means Notes that are in the form of the
Notes attached hereto as Exhibit A-1, that do not
include the information called for by footnotes 1 and 2 thereof.
"Depository" means The Depository Trust Company and its
successors.
"EBITDA" means, for any Person, for any period, an
amount equal to (A) the sum of (i) consolidated net income
for such period (exclusive of any gain or loss realized in such period upon an
Asset Sale), 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 such Person and its Subsidiaries determined in accordance with GAAP
consistently applied, except that with respect to the Company, each of the
foregoing items shall be determined on a consolidated basis with respect to the
Company and its Restricted Subsidiaries only.
"Excess Restricted Investment" means, with respect to any
particular Unrestricted Subsidiary or Affiliate of the
Company for a fiscal quarter, the lesser of the amounts described in the
following clauses (i) and (ii), or if such amounts are equal, such amount:
(i) the aggregate amount of any Restricted
Investments (other than the Initial
Investment) made by the Company or any
Restricted Subsidiary with respect to
such Unrestricted Subsidiary or
Affiliate and during the twelve-month
period ending on the last day of such
fiscal quarter;
(ii) cash income received during such
quarter by the Company with respect to
its Restricted Investments in such
Unrestricted Subsidiary or Affiliate
multiplied by four;
and provided that cash income from a particular Restricted Investment shall be
included only (x) if cash income has been received by the Company with respect
to such Restricted Investment during each of the previous two fiscal quarters,
or (y) if the cash income derived from such Restricted Investment is
attributable to Allowable Securities.
"Exchange Act" means the Securities Exchange Act of 1934,
as amended.
"Exchange Offer" means the Exchange Offer as defined in the
Registration Rights Agreement.
"GAAP" means generally accepted accounting principles as in
effect in the United States from time to time.
"Global Note" means individually and collectively, the
Regulation S Temporary Global Note, the Regulation S
Permanent Global Note and the Rule 144A Global Note.
"Holder" or "Noteholder" means the Person in whose name a
Note is registered on the Registrar's books.
"Indebtedness" is defined to mean (without duplication),
with respect to any Person, any indebtedness, secured
or unsecured, contingent or otherwise, which is for borrowed money (whether or
not the recourse of the lender is to the whole of the assets of such Person or
only to a portion thereof), or evidenced by bonds, notes, debentures or similar
instruments or representing the balance deferred and unpaid of the purchase
price of any property (excluding, without limitation, any balances that
constitute subscriber advance payments and deposits, accounts payable or trade
payables, and other accrued liabilities arising in the ordinary course of
business) if and to the extent any of the foregoing indebtedness would appear as
a liability upon a balance sheet of such Person prepared in accordance with
GAAP, and shall also include, to the extent not otherwise included, (i) any
Capitalized Lease Obligations, (ii) obligations secured by a lien to which the
property or assets owned or held by such Person is subject, whether or not the
obligation or obligations secured thereby shall have been assumed, (iii)
guaranties of items of other Persons which would be included within this
definition for such other Persons (whether or not such items would appear upon
the balance sheet of the guarantor), (iv) in the case of the Company, Preferred
Stock of its Restricted Subsidiaries and (v) obligations of any such Person
under any Interest Rate Agreement applicable to any of the foregoing.
Notwithstanding the foregoing, Indebtedness shall not include any interest or
accrued interest until due and payable.
"Indenture" means this Indenture as amended, restated or
supplemented from time to time.
"Initial Investment" means the Restricted Investment in a
Person made by the Company or a Restricted Subsidiary
that first results in such Person becoming an Unrestricted Subsidiary or
Affiliate of the Company, except that in the case of Olympus, "Initial
Investment" shall mean any Restricted Investment made in Olympus since February
22, 1994, but only to the extent that such Restricted Investment when aggregated
with the other Restricted Investments made in Olympus since such date does not
exceed $25,000,000.
"Interest Payment Date" means the stated maturity of an
installment of interest on the Notes.
"Interest Rate Agreement" means, for any Person, any
interest rate swap agreement, interest rate cap agreement,
interest rate collar agreement or other similar agreement designed to protect
the party indicated therein against fluctuations in interest rates.
"Investment Grade Senior Debt" means, with respect to
any Person, Indebtedness of such Person which has been
rated with an investment grade rating by Moody's or Standard & Poor's
Corporation.
"Leverage Ratio" is defined as the ratio of (i) the
outstanding Indebtedness of a Person and its Subsidiaries
(or in the case of the Company, its Restricted Subsidiaries) divided by (ii) the
Annualized Pro Forma EBITDA of such Person.
"Lien" means with respect to any property or assets of the
Company (it being understood that for the purposes of
this definition property or assets of the Company do not include property or
assets of any Subsidiary of the Company) any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, security interest, lien, charge,
easement (other than any easement not materially impairing usefulness or
marketability), encumbrance, preference, priority, or other security agreement
or preferential arrangement of any kind or nature whatsoever on or with respect
to such property or assets (including without limitation, any Capitalized Lease
Obligation, conditional sale, or other title retention agreement having
substantially the same economic effect as any of the foregoing) except for (i)
liens for taxes, assessments or governmental charges or levies on property if
the same shall not at the time be delinquent or thereafter can be paid without
penalty, or are being contested in good faith and by appropriate proceedings;
(ii) liens imposed by law such as carriers', warehousemen's and mechanics' liens
and other similar liens arising in the ordinary course of business which secure
payment of obligations not more than sixty (60) days past due or are being
contested in good faith and by appropriate proceedings; (iii) other liens
incidental to the conduct of its business or the ownership of its property and
assets which were not incurred in connection with the borrowing of money or the
obtaining of advances or credit and which do not in the aggregate materially
detract from the value of its property or assets or materially impair the use
thereof in the operation of its business; (iv) utility easements, building
restrictions and such other encumbrances or charges against real property as are
of a nature generally existing with respect to properties of a similar
character; or (v) liens arising upon entry of a confession of judgment in
Pennsylvania courts in connection with borrowings not in excess of $1,000,000 in
the aggregate.
"Notes" means the securities that are issued under this
Indenture, as amended or supplemented from time to time
pursuant to this Indenture.
"Officer" means the Chairman of the Board, the President,
any Vice President, the Chief Financial Officer, the
Treasurer, the Secretary or any Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed by two
Officers. See Sections 11.04 and 11.05 hereof.
"Olympus" means Olympus Communications, L.P., a Delaware
limited partnership.
"Opinion of Counsel" means a written opinion from legal
counsel who is acceptable to the Trustee. The counsel
may be an employee of or counsel to the Company or the Trustee. See
Sections 11.04 and 11.05 hereof.
"Permitted Investments" means, for any Person,
Restricted Investments made on or after February 22, 1994
consisting of (i) advances for less than one year issued in the ordinary course
of business for working capital purposes or for the purchase of property, plant
and equipment in an amount not to exceed $5,000,000 in the aggregate
outstanding, (ii) with respect to a Restricted Investment in Olympus,
$25,000,000 plus the aggregate amount of cash income received by the Company
from Olympus, minus the aggregate amount of all Restricted Investments made
since February 22, 1994 with respect to Olympus, (iii) $20,000,000 plus the cash
proceeds from the sale or redemption of, or income from, any Restricted
Investments made on or after January 1, 1993, minus the aggregate amount of all
Restricted Investments (excluding Restricted Investments made with respect to
Olympus) since January 1, 1993, (iv) non-cash Restricted Investments made with
the non-cash proceeds from the sale or redemption of, or income from, any
Restricted Investments, or (v) an amount which, at the time of such Restricted
Investment, does not exceed the amount of Restricted Payments that could then be
made by the Company and its Restricted Subsidiaries under Section 4.06; provided
further that no Restricted Investments may be made under (ii), (iii), (iv) or
(v) unless pro forma for such Restricted Investment the Company could incur $1
of debt under the first paragraph of Section 4.05.
"Permitted Refinancing Indebtedness" means any renewals,
extensions, substitutions, refinancings or replacements
of any Indebtedness, including any successive extensions, renewals,
substitutions, refinancings or replacements so long as (i) the aggregate amount
of Indebtedness represented thereby is not increased by such renewal, extension,
substitution, refinancing or replacement, (ii) in the case of Indebtedness of
the Company, the average life and the date such Indebtedness is scheduled to
mature is not shortened and (iii) in the case of Indebtedness of the Company,
the new Indebtedness shall not be senior in right of payment to the Indebtedness
that is being extended, renewed, substituted, refinanced or replaced.
"Person" means any individual, corporation, partnership,
joint venture, association, joint-stock company, trust,
unincorporated organization or government (including any agency or political
subdivision thereof).
"Preferred Stock" means any Capital Stock of a Person,
however designated, which entitles the holder thereof to
a preference with respect to dividends, distributions or liquidation proceeds of
such Person over the holders of other Capital Stock issued by such Person.
"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 of 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 and (ii) if, during or after such period, such Person or any of its
Subsidiaries completes an acquisition of any Person or business which
immediately after such acquisition is a Subsidiary of such Person or whose
assets are held directly by such Person or a Subsidiary of such Person, Pro
Forma EBITDA shall be computed so as to give pro forma effect to the acquisition
of such Person or business; and provided further that with respect to the
Company, all of the foregoing references to "Subsidiary" or "Subsidiaries" shall
be deemed to refer only to a "Restricted Subsidiary" or "Restricted
Subsidiaries" of the Company.
"QIB" means a "qualified institutional buyer" as defined
in Rule 144A.
"Rating Date" means the date which is 90 days prior to
the earlier of (i) a Change of Control and (ii) public
notice of the occurrence of a Change of Control or of the intention of the
Company to effect a Change of Control.
"Rating Decline" means the occurrence of the following on,
or within 90 days after, the date of public notice of
the occurrence of a Change of Control or of the intention by the Company to
effect a Change of Control (which period shall be extended so long as the rating
of the Notes is under publicly announced consideration for possible downgrade by
Moody's or Standard & Poor's Corporation): (a) in the event the Notes are rated
by either Moody's or Standard & Poor's on the Rating Date as Investment Grade
Senior Debt, the rating of the Notes by both Moody's and Standard & Poor's shall
be below Investment Grade Senior Debt; or (b) in the event the Notes are rated
below Investment Grade Senior Debt by both Moody's and Standard & Poor's on the
Rating Date, the rating of the Notes by either Moody's or Standard & Poor's
shall be decreased by one or more gradations (including gradations within rating
categories as well as between rating categories).
"Redeemable Dividend" means, for any dividend with
regard to Redeemable Stock, the quotient of the dividend
divided by the difference between one and the maximum statutory federal income
tax rate (expressed as a decimal number between 1 and 0) then applicable to the
issuer of such Redeemable Stock.
"Redeemable Stock" means with respect to any Person,
any Capital Stock that by its terms or otherwise is
required to be redeemed or is redeemable at the option of the holder at any time
prior to the maturity of the Notes.
"Registration Rights Agreement" means the Registration
Rights Agreement, dated as of February 26, 1997, by and
between the Company and Smith Barney Inc. with respect to the Notes.
"Regulation S" means Regulation S promulgated under the
Securities Act.
"Regulation S Global Note" means the Regulation S Temporary
Global Note or the Regulation S Permanent Global
Note, as applicable.
"Regulation S Permanent Global Note" means a permanent
global note that contains the paragraph referred to in
footnote 1 and the additional schedule referred to in Footnote 2 to the form of
the Note attached hereto as Exhibit A-1, and that is deposited with and
registered in the name of the Depository or its nominee, representing a series
of Notes sold in reliance on Regulation S.
"Regulation S Temporary Global Note" means a single
temporary global note in the form of the Note attached
hereto as Exhibit A-2, and that is deposited with and registered in the name of
the Depository or its nominee, representing a series of Notes sold in reliance
on Regulation S.
"Restricted Investment" means any advance, loan, account
receivable (other than an account receivable arising in
the ordinary course of business), or other extension of credit (excluding,
however, accrued and unpaid interest in respect of any advance, loan or other
extension of credit) or any capital contribution to (by means of transfers of
property to others, payments for property or services for the account or use of
others, or otherwise), any purchase or ownership of any stocks, bonds, notes,
debentures or other securities (including, without limitation, any interests in
any partnership or joint venture) of, or any bank accounts with or guarantee of
any Indebtedness or other obligations of, any Unrestricted Subsidiary or
Affiliate of the Company.
"Restricted Payment" means (i) any dividend or
distribution (whether made in cash, property or securities), on
or with respect to any shares of Capital Stock of the Company or Capital Stock
of any Subsidiary which is consolidated with the Company in accordance with GAAP
consistently applied, except for any dividend or distribution which is made
solely to the Company or another Subsidiary or dividends or distributions
payable solely in shares of Common Stock of the Company, or (ii) any redemption,
repurchase, retirement or other direct or indirect acquisition of (a)
Indebtedness of the Company which is subordinate in right of payment to the
Notes, except by exchange for or out of the proceeds of the substantially
concurrent issuance of Permitted Refinancing Indebtedness or from proceeds of a
sale of Capital Stock by the Company, or (b) shares of Capital Stock of the
Company or any warrants, rights or options to directly or indirectly purchase or
acquire any such Capital Stock of the Company or any securities exchangeable for
or convertible into any such shares, other than options issued or shares
purchased or granted under the Company's Stock Option Plan of 1986 or the
Company's Restricted Stock Bonus Plan, from any employee of the Company or any
of its Subsidiaries who, together with any Person that, directly or indirectly,
controls (other than by virtue of being directly or indirectly the employer of
such employee), is controlled by or is under common control with such employee,
owns less than 1% of the outstanding Capital Stock of the Company, except for
the purchase, redemption, retirement or other acquisition of any shares of the
Company's Capital Stock by exchange for, or out of the proceeds of the
substantially concurrent sale of, other shares of its Capital Stock other than
any capital stock which, by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable), or upon the happening
of any event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder thereof, in
whole or in part, on or prior to March 1, 2007.
"Restricted Subsidiary" means (a) any Subsidiary of the
Company, whether existing on or after the date of this
Indenture, unless such Subsidiary is an Unrestricted Subsidiary or shall have
been classified as an Unrestricted Subsidiary by a resolution adopted by the
Board of Directors of the Company and (b) an Unrestricted Subsidiary which is
reclassified as a Restricted Subsidiary by a resolution adopted by the Board of
Directors of the Company, provided that on and after the date of such
reclassification such Unrestricted Subsidiary shall not incur Indebtedness other
than that permitted to be incurred by a Restricted Subsidiary under the
provisions of this Indenture.
"Rigas Family" means collectively 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.
"Rule 144A" means Rule 144A promulgated under the
Securities Act.
"Rule 144A Global Note" means a permanent global note that
contains the paragraph referred to in footnote 1 and
the additional schedule referred to in footnote 2 to the form of the Note
attached hereto as Exhibit A-1, and that is deposited with and registered in the
name of the Depository, representing a series of Notes sold in reliance on Rule
144A.
"SEC" means the United States Securities and Exchange
Commission as constituted from time to time or any
successor performing substantially the same functions.
"Securities Act" means the Securities Act of 1933, as
amended.
"Series A Notes" and "Series B Notes" mean the Notes as
described and in the forms contemplated herein, and as
authenticated and issued under this Indenture.
"Subsidiary" of any specified Person means any
corporation, partnership, joint venture, association or other
business entity, whether now existing or hereafter organized or acquired, (i) in
the case of a corporation, of which more than 50% of the total voting power of
the Capital Stock entitled (without regard to the occurrence of any contingency)
to vote in the election of directors, officers or trustees thereof is held by
such first-named Person or any of its Subsidiaries; or (ii) in the case of a
partnership, joint venture, association or other business entity, with respect
to which such Person or any of its Subsidiaries has the power to direct or cause
the direction of the management and policies of such entity by contract or
otherwise if in accordance with GAAP such entity is consolidated with the
first-named Person for financial statement purposes.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.
Code SS-77aaa-77bbbb) as in effect on the date of this Indenture (except as
provided in Section 8.03 hereof).
"Trustee" means the party named as such in this
Indenture until a successor replaces it pursuant to this
Indenture and thereafter means the successor.
"Trust Officer" means any officer or assistant officer of
the Trustee.
"U.S. Government Obligations" means (a) securities that
are direct obligations of the United States of America
for the payment of which its full faith and credit are pledged or (b)
obligations of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America, the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, which, in either case, are not callable or redeemable at the
option of the issuer thereof, and shall also include a depository receipt issued
by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as
amended) as custodian with respect to any such U.S. Government Obligation or a
specific payment of principal of or interest on any such U.S. Government
Obligation held by such custodian for the account of the holder of such
depository receipt; provided, that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the U.S. Government Obligation or a specific payment of principal or interest on
any such U.S. Government Obligation held by such custodian for the account of
the holder of such depository receipt.
"Unrestricted Subsidiary" means (a) any Subsidiary of an
Unrestricted Subsidiary, (b) any Subsidiary of the
Company which is classified after the date of this Indenture as an Unrestricted
Subsidiary by a resolution adopted by the Board of Directors of the Company and
(c) any subsidiary which as of the date of the Indenture has been declared an
Unrestricted Subsidiary by a resolution adopted by the Board of Directors of the
Company (such Unrestricted Subsidiaries being Hyperion Telecommunications, Inc.,
Global Cablevision, Inc., Orchard Park Cablevision, Inc. and Global Acquisition
Partners, L.P. on the date hereof); provided that a Subsidiary organized or
acquired after the date of this Indenture may be so classified as an
Unrestricted Subsidiary only if immediately after the date of such
classification, any investment by the Company and its Restricted Subsidiaries in
any such Subsidiary made at the time of the organization or acquisition of such
Subsidiary would be a Restricted Investment permissible under this Indenture.
The Trustee shall be given prompt notice by the Company of each resolution
adopted by its Board of Directors under this provision, together with a copy of
each such resolution adopted.
Section 1.02. Other Definitions.
The definitions of the following terms may be found in the
sections indicated as follows:
Term Defined in Section
"Accredited Investor"......................................................2.01
"Act"......................................................................1.05
"Agent Members"............................................................2.13
"Bankruptcy Law"...........................................................6.01
"Business Day"............................................................11.08
"Cedel Bank"...............................................................2.01
"Certificated Notes".......................................................2.01
"Change of Control Offer"..................................................3.00
"Change of Control Purchase Price".........................................3.00
"Covenant Defeasance".....................................................10.03
"Custodian"................................................................6.01
"Defeasance"..............................................................10.02
"DTC"......................................................................2.03
"Euroclear"................................................................2.01
"Event of Default".........................................................6.01
"Legal Holiday"...........................................................11.08
"Non-Global Purchasers"....................................................2.01
"Paying Agent".............................................................2.03
"Private Placement Legend".................................................2.13
"Proposed Change of Control Response Date".................................3.00
"QIBs".....................................................................2.01
"Reclassification".........................................................4.12
"Registrar"................................................................2.03
Section 1.03.........Incorporation by Reference of Trust Indenture
Whenever this Indenture refers to a provision of the
TIA, the portion of such provision required to be
incorporated herein in order for this Indenture to be qualified under the TIA is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Notes.
"indenture noteholder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" means the Company or any other obligor on the indenture notes.
All other terms used in this Indenture that are defined by
the TIA, defined in the TIA by reference to another
statute or defined by SEC rule have the meanings therein assigned to them.
Section 1.04.........Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it
herein, whether defined expressly or by reference;
(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; and
(5) words used herein implying any gender
shall apply to every gender.
Section 1.05. Acts of Holders.
(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such Holders
in person or by an agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee and, where it is hereby
expressly required, to the Company. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing an agent therefor
shall be sufficient for any purpose of this Indenture and (subject to Section
7.01 hereof) conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any
Person of any such instrument may be proved by the
affidavit of a witness of such execution or by a certificate of a notary public
or other officer authorized by law to take acknowledgments of deeds, certifying
that the individual signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by a signer acting in a capacity
other than his individual capacity, such certificate or affidavit shall also
constitute sufficient proof of his authority. The fact and date of the execution
of any such instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner which the Trustee deems sufficient.
(c) The ownership of Notes shall be proved by the
register of Notes maintained by the Registrar pursuant to Section
2.03 hereof.
(d) Any request, demand, authorization,
direction notice, consent, waiver or other Act of the Holder of
any Note shall bind every future Holder of the same Note and the Holder of every
Note issued upon the registration of transfer thereof or in exchange therefor or
in lieu thereof in respect of anything done, omitted or suffered to be done by
the Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Note.
ARTICLE 2
THE NOTES
Section 2.01. Form And Dating.
The Notes and the Trustee's certificate of authentication
shall be substantially in the form of (i) in the case
of the Notes other than a Regulation S Temporary Global Note, Exhibit A-1
attached hereto and (ii) in the case of a Regulation S Temporary Global Note,
Exhibit A-2 attached hereto. The Notes may have notations, legends or
endorsements required by law, stock exchange rule or usage. Each Note shall be
dated the date of its authentication. The Notes shall be in denominations of
$1,000 and integral multiples thereof (subject to a minimum initial purchase
requirement of $100,000 for Notes sold other than in reliance on Rule 144A or
Regulation S).
The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this
Indenture and the Company and the Trustee, by their execution and delivery of
this Indenture, expressly agree to such terms and provisions and to be bound
thereby.
(a) Global Notes. Notes offered and sold to
qualified institutional buyers as defined in Rule 144A
("QIBs") in reliance on Rule 144A, shall be issued initially in the form of Rule
144A Global Notes, which shall be deposited on behalf of the purchasers of the
Notes represented thereby with the Depository at its New York office, and
registered in the name of the Depository or a nominee of the Depository, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of the Rule 144A Global Notes may from
time to time be increased or decreased by adjustments made on the records of the
Trustee and the Depository or its nominee as hereinafter provided.
Notes offered and sold in reliance on Regulation S
shall be issued initially in the form of the Regulation
S Temporary Global Note, which shall be deposited on behalf of the purchasers of
the Notes represented thereby with the Trustee, at its New York office, as
custodian for the Depository, and registered in the name of the Depository or
the nominee of the Depository for the accounts of designated agents holding on
behalf of the Euroclear System ("Euroclear") or Cedel Bank, S.A. ("Cedel Bank"),
duly executed by the Company and authenticated by the Trustee as hereinafter
provided. The "40-day restricted period" (as defined in Regulation S) shall be
terminated upon the receipt by the Trustee of (i) a written certificate from the
Depository, together with copies of certificates from Euroclear and Cedel Bank
certifying that they have received certification of non-United States beneficial
ownership of 100% of the aggregate principal amount of the Regulation S
Temporary Global Note (except to the extent of any beneficial owners thereof who
acquired an interest therein pursuant to another exemption from registration
under the Securities Act and who will take delivery of a beneficial ownership
interest in a Rule 144A Global Note, all as contemplated by Section 2.06(a)(ii)
hereof), and (ii) an Officers' Certificate. Following the termination of the
40-day restricted period, beneficial interests in the Regulation S Temporary
Global Note shall be exchanged for beneficial interests in Regulation S
Permanent Global Notes pursuant to the Applicable Procedures. Simultaneously
with the authentication of Regulation S Permanent Global Notes, the Trustee
shall cancel the Regulation S Temporary Global Note. The aggregate principal
amount of the Regulation S Temporary Global Note and the Regulation S Permanent
Global Notes may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depository or its nominee, as the case may
be, in connection with transfers of interest as hereinafter provided.
Each Global Note shall represent such of the outstanding
Notes as shall be specified therein and each shall
provide that it shall represent the aggregate amount of outstanding Notes from
time to time endorsed thereon and that the aggregate amount of outstanding Notes
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the amount of
outstanding Notes represented thereby shall be made by the Trustee or the Note
Custodian (as hereinafter defined), 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 "Management Regulations" and "Instructions to Participants"
of Cedel Bank shall be applicable to interests in the Regulation S Temporary
Global Note and the Regulation S Permanent Global Notes that are held by the
Agent Members through Euroclear or Cedel Bank.
Except as set forth in Section 2.06 hereof, the Global
Notes may be transferred, in whole and not in part, only to another nominee of
the Depository or to a successor of the Depository or its nominee.
(b) Book-Entry Provisions. This Section 2.01(b)
shall apply only to 144A Global Notes and the Regulation S Permanent Global
Notes deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in
accordance with this Section 2.01(b), authenticate and
deliver the Global Notes that (i) shall be registered in the name of the
Depository or the nominee of the Depository and (ii) shall be delivered by the
Trustee to the Depository or pursuant to the Depository's instructions or held
by the Note Custodian.
Agent Members shall have no rights either under this
Indenture with respect to any Global Note held on their
behalf by the Depository or by the Note Custodian or under such Global Note, and
the Depository may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of such Global Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depository or impair, as between the Depository and its Agent Members, the
operation of customary practices of such Depository governing the exercise of
the rights of an owner of a beneficial interest in any Global Note.
(c) Definitive Notes. Notes issued in
certificated form shall be substantially in the form of Exhibit A-1
attached hereto (but without including the text referred to in footnotes 1
and 2 thereto). Except as provided in Section 2.06, owners of beneficial
interests in Global Notes will not be entitled to receive physical delivery of
certificate Securities. Purchasers of Securities who are not QIB's and did not
purchase Securities sold in reliance on Regulation S under the Securities Act
(referred to herein as the "Non-Global Purchasers") will receive Definitive
Notes.
Section 2.02. Execution and Authentication.
An Officer shall sign the Notes for the Company by
manual or facsimile signature. The Company's seal shall be
reproduced on the Notes and may be in facsimile form. If an Officer whose
signature is on a Note no longer holds that office at the time a Note is
authenticated, the Note shall nevertheless be valid. A Note shall not be valid
until authenticated by the manual signature of the Trustee. The signature shall
be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee shall, upon a written order of the Company
signed by an Officer, authenticate Series A Notes for
original issue up to the aggregate principal amount stated in paragraph 4 of the
Notes, in the case of Series A Notes other than a Regulation S Temporary Global
Note, and the second paragraph of the Notes, in the case of a Regulation S
Temporary Global Note. The Trustee shall, upon a written order of the Company
signed by an Officer, authenticate Series B Notes for original issue up to the
aggregate principal amount of Series A Notes exchanged in the Exchange Offer or
otherwise exchanged for Series A Notes pursuant to the terms of the Registration
Rights Agreement. The aggregate principal amount of Notes outstanding at any
time may not exceed such amounts except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent
acceptable to the Company to authenticate Notes. An
authenticating agent may authenticate Notes whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with the Company or an Affiliate of the Company.
Section 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where Notes
may be presented for registration of transfer or for
exchange ("Registrar") and an office or agency where Notes may be presented for
payment ("Paying Agent"). The Registrar shall keep a register of the Notes and
of their transfer and exchange. The Company may appoint one or more
co-registrars and one or more additional paying agents. The term "Registrar"
includes any co-registrar and the term "Paying Agent" includes any additional
paying agent. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company shall notify the Trustee in writing of the
name and address of any Agent not a party to this Indenture. If the Company
fails to appoint or maintain another entity as Registrar or Paying Agent, the
Trustee shall act as such. The Company or any of its Subsidiaries may act as
Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company
("DTC") to act as Depository with respect to the
Global Notes.
The Company initially appoints the Trustee to act as the Registrar and Paying
Agent respect to the Global Notes.
Section 2.04. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent
will hold in trust for the benefit of Holders or the Trustee all money held by
the Paying Agent for the payment of principal, premium or Liquidated Damages, if
any, or interest on the Notes, and will notify the Trustee of any default by the
Company in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee.
The Company at any time may require a Paying Agent to pay all money held by it
to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other
than the Company or a Subsidiary) shall have no further liability for the money.
If the Company or a Subsidiary acts as Paying Agent, it shall segregate and hold
in a separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the
Company, the Trustee shall serve as Paying Agent for the Notes.
Section 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to
it of the names and addresses of all Holders and shall otherwise comply with TIA
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 Notes and the Company shall otherwise comply with TIA
S-312(a).
Section 2.06. Transfer and Exchange.
(a) Transfer and Exchange of Global Notes.
The transfer and exchange of Global Notes or beneficial
interests therein shall be effected through the Depository, in accordance with
this Indenture and the procedures of the Depository therefor, which shall
include restrictions on transfer comparable to those set forth herein to the
extent required by the Securities Act. Beneficial interests in a Global Note may
be transferred to Persons who take delivery thereof in the form of a beneficial
interest in the same Global Note in accordance with the transfer restrictions
set forth in the legend in subsection (g) of this Section 2.06. Transfers of
beneficial interests in the Global Notes to Persons required to take delivery
thereof in the form of an interest in another Global Note shall be permitted as
follows:
(i) Rule 144A Global Note to Regulation S
Global Note. If, at any time, an owner of
a beneficial interest in a Rule 144A
Global Note deposited with the Depository
(or the Note Custodian) wishes to transfer
its interest in such Rule 144A Global Note
to a Person who is required or permitted
to take delivery thereof in the form of an
interest in a Regulation S Global Note,
such owner shall, subject to the
Applicable Procedures, exchange or cause
the exchange of such interest for an
equivalent beneficial interest in a
Regulation S Global Note as provided in
this Section 2.06(a)(i). Upon receipt by
the Trustee of (1) instructions given in
accordance with the Applicable Procedures
from an Agent Member directing the Trustee
to credit or cause to be credited a
beneficial interest in the Regulation S
Global Note in an amount equal to the
beneficial interest in the Rule 144A
Global Note to be exchanged, (2) a written
order given in accordance with the
Applicable Procedures containing
information regarding the participant
account of the Depository and the
Euroclear or Cedel Bank account to be
credited with such increase, and (3) a
certificate in the form of Exhibit B-1
hereto given by the owner of such
beneficial interest stating that the
transfer of such interest has been made in
compliance with the transfer restrictions
applicable to the Global Notes and
pursuant to and in accordance with Rule
903 or Rule 904 of Regulation S, then the
Trustee, as Registrar, shall instruct the
Depository to reduce or cause to be
reduced the aggregate principal amount at
maturity of the Rule 144A Global Note and
to increase or cause to be increased the
aggregate principal amount at maturity of
the applicable Regulation S Global Note by
the principal amount at maturity of the
beneficial interest in the Rule 144A
Global Note to be exchanged, to credit or
cause to be credited to the account of the
Person specified in such instructions a
beneficial interest in the Regulation S
Global Note equal to the reduction in the
aggregate principal amount at maturity of
the applicable Rule 144A Global Note, and
to debit, or cause to be debited, from the
account of the Person making such exchange
or transfer the beneficial interest in the
Rule 144A Global Note that is being
exchanged or transferred.
(ii) Regulation S Global Note to Rule 144A
Global Note. If, at any time, an owner of
a beneficial interest in a Regulation S
Global Note deposited with the Depository
or with the Note Custodian wishes to
transfer its interest in such Regulation S
Global Note to a Person who is required or
permitted to take delivery thereof in the
form of an interest in a Rule 144A Global
Note, such owner shall, subject to the
Applicable Procedures, exchange or cause
the exchange of such interest for an
equivalent beneficial interest in a Rule
144A Global Note, as provided in this
Section 2.06(a)(ii). Upon receipt by the
Trustee of (1) instructions from Euroclear
or Cedel Bank, if applicable, and the
Depository, directing the Trustee to
credit or cause to be credited a
beneficial interest in the Rule 144A
Global Note equal to the beneficial
interest in the Regulation S Global Note
to be exchanged, such instructions to
contain information regarding the
participant account with the Depository to
be credited with such increase, (2) a
written order given in accordance with the
Applicable Procedures containing
information regarding the participant
account of the Depository and (3) a
certificate in the form of Exhibit B-2
attached hereto given by the owner of such
beneficial interest stating (A) if the
transfer is pursuant to Rule 144A, that
the Person transferring such interest in a
Regulation S Global Note reasonably
believes that the Person acquiring such
interest in a Rule 144A Global Note is a
QIB and is obtaining such beneficial
interest in a transaction meeting the
requirements of Rule 144A and any
applicable blue sky or securities laws of
any state of the United States, (B) if the
transfer is pursuant to any other
exemption from the registration
requirements of the Securities Act, that
the transfer of such interest has been
made in compliance with the transfer
restrictions applicable to the Global
Notes and pursuant to and in accordance
with the requirements of the exemption
claimed, such statement to be supported by
an Opinion of Counsel from the transferee
or the transferor in form reasonably
acceptable to the Company and to the
Trustee, then the Trustee, as Registrar,
shall instruct the Depository to reduce or
cause to be reduced the aggregate
principal amount at maturity of such
Regulation S Global Note and to increase
or cause to be increased the aggregate
principal amount at maturity of the
applicable Rule 144A Global Note, by the
principal amount at maturity of the
beneficial interest in the Regulation S
Global Note to be exchanged, and the
Trustee, as Registrar, shall instruct the
Depository, concurrently with such
reduction, to credit or cause to be
credited to the account of the Person
specified in such instructions a
beneficial interest in the applicable Rule
144A Global Note, equal to the reduction
in the aggregate principal amount at
maturity of such Regulation S Global Note
and to debit or cause to be debited from
the account of the Person making such
transfer the beneficial interest in the
Regulation S Global Note that is being
transferred.
(b) Transfer and Exchange of Definitive Notes.
When Definitive Notes are presented by a Holder to the Registrar with a
request:
(x) to register the transfer of the
Definitive Notes; or
(y) to exchange such Definitive Notes for
an equal principal amount of
Definitive Notes of other authorized
denominations, the Registrar shall
register the transfer or make the
exchange as requested if its
requirements for such transactions are
met; provided, however, that the
Definitive Notes presented or
surrendered for register of transfer
or exchange:
(i) shall be 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; and
(ii) in the case of a Definitive
Note that is a Transfer
Restricted Security, such
request shall be accompanied
by the following additional
information and documents,
as applicable:
(A) if such Transfer
Restricted
Security is being
delivered to the
Registrar by a
Holder for
registration in
the name of such
Holder, without
transfer, a
certification to
that effect from
such Holder (in
substantially the
form of Exhibit
B-3 hereto); or
(B) if such Transfer
Restricted
Security is being
transferred to a
QIB in accordance
with Rule 144A
under the
Securities Act or
pursuant to an
exemption from
registration in
accordance with
Rule 144 under the
Securities Act or
pursuant to an
effective
registration
statement under
the Securities
Act, a
certification to
that effect from
such Holder (in
substantially the
form of Exhibit
B-3 hereto); or
(C) if such Transfer
Restricted
Security is being
transferred in
reliance on
another exemption
from the
registration
requirements of
the Securities
Act, a
certification to
that effect from
such Holder (in
substantially the
form of Exhibit
B-3 hereto) and an
Opinion of Counsel
from such Holder
or the transferee
reasonably
acceptable to the
Company and to the
Registrar to the
effect that such
transfer is in
compliance with
the Securities
Act.
(c) Transfer of a Beneficial Interest in a Global
Note for a Definitive Note.
(i) Any Person having a benefi-
cial interest in a Global
Note(other than a Regulation
S Temporary Global Note) may
upon request, subject to the
Applicable Procedures,
exchange such beneficial
interest for a Definitive
Note. Upon receipt by the
Trustee of written
instructions or such other
form of instructions as is
customary for the Depository
(or Euroclear or Cedel Bank,
as applicable), from the
Depository or its nominee on
behalf of any Person having
a beneficial interest in a
Global Note, and, in the
case of a Transfer
Restricted Security, the
following additional
information and documents
(all of which may be
submitted by facsimile):
(A) if such beneficial
interest is being
transferred to the
Person designated
by the Depository
as being the
beneficial owner,
a certification to
that effect from
such Person (in
substantially the
form of Exhibit
B-4 hereto); or
(B) if such beneficial
interest is being
transferred to a
QIB in accordance
with Rule 144A
under the
Securities Act or
pursuant to an
exemption from
registration in
accordance with
Rule 144 under the
Securities Act or
pursuant to an
effective
registration
statement under
the Securities
Act, a
certification to
that effect from
the transferor (in
substantially the
form of Exhibit
B-4 hereto); or
(C) if such beneficial
interest
is being transferred
in reliance on
another exemption
from the
registration
requirements of the
Securities Act, a
certification to
that effect from the
transferor (in
substantially the
form of Exhibit B-4
hereto) and an
Opinion of Counsel
from the transferee
or transferor
reasonably
acceptable to the
Company and to the
Registrar to the
effect that such
transfer is in
compliance with the
Securities Act, the
Company shall
execute and, the
Trustee shall
authenticate and
deliver to the
transferee a
Definitive Note in
the appropriate
principal amount.
(ii) Definitive Notes issued in
exchange for a beneficial
interest in a Global Note
(other than a Regulation S
Temporary Global Note)
pursuant to this Section
2.06(c) shall be registered
in such names and in such
authorized denominations as
the Depository, pursuant to
instructions from its direct
or indirect participants or
otherwise, shall instruct
the Trustee. The Trustee
shall deliver such
Definitive Notes to the
Persons in whose names such
Notes are so registered.
(d) Restrictions on Transfer and Exchange of Global
Notes. Notwithstanding any other provision of this
Indenture (other than the provisions set forth in subsection (f) of this Section
2.06), a Global Note may not be transferred as a whole except 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.
(e) Transfer and Exchange of a Definitive Note
for a Beneficial Interest in a Global Note. A Definitive
Note may not be exchanged for a beneficial interest in a Global Note except,
subject to the Applicable Procedures, upon satisfaction of the requirements set
forth below. Upon receipt by the Trustee of a Definitive Note, duly endorsed or
accompanied by appropriate instruments of transfer, in form satisfactory to the
Trustee, and, in the case of a Transfer Restricted Security, the following
additional information and documents (all of which may be submitted by
facsimile):
(i) if such beneficial interest
is being transferred to the
Person designated by the
Depository as being the
beneficial owner, a
certification to that effect
from such Person (in
substantially the form of
Exhibit B-5 hereto);
(ii) if such beneficial interest
is being transferred to a
QIB in accordance with Rule
144A under the Securities
Act or pursuant to an
exemption from registration
in accordance with Rule 144
under the Securities Act or
pursuant to an effective
registration statement under
the Securities Act, a
certification to that effect
from the transferor (in
substantially the form of
Exhibit B-5 hereto); or
(iii) if such beneficial interest
is being transferred in
reliance on any other
exemption from the
registration requirements of
the Securities Act, a
certification to that effect
from the transferor (in
substantially the form of
Exhibit B-5 hereto) and an
Opinion of Counsel from the
transferee or the transferor
reasonably acceptable to the
Company and to the Registrar
to the effect that such
transfer is in compliance
with the Securities Act,
the Trustee shall cancel such Definitive Note in accordance with Section 2.11
hereof and cause, or direct the Note Custodian to cause, in accordance with the
standing instructions and procedures existing between the Depository and the
Note Custodian, the aggregate principal amount of Notes represented by the
applicable Global Note (e.g., the Rule 144A Global Note or the Regulation S
Permanent Global Note, as the case may be) to be increased accordingly. If none
of the applicable Global Notes are then outstanding, the Company shall execute
and the Trustee shall authenticate a new applicable Global Note in the
appropriate principal amount.
(f) Authentication of Definitive Notes in Absence of
Depository. If at any time:
(i) the Depository for the Notes
notifies the Company that
the Depository is unwilling
or unable to continue as
Depository for the Global
Notes and a successor
Depository for the Global
Notes is not appointed by
the Company within 90 days
after delivery of such
notice; or
(ii) the Company at their sole
discretion, notify the
Trustee in writing that they
elect to cause the issuance
of Definitive Notes under
this Indenture,
then the Company shall execute, and the Trustee shall, upon receipt of an
authentication order in accordance with Section 2.02 hereof, authenticate and
deliver, Definitive Notes in an aggregate principal amount equal to the
principal amount of the Global Notes in exchange for such Global Notes.
(g) Legends.
(i) Except as permitted by the
following paragraphs (ii)
and (iii), each Note
certificate evidencing
Global Notes and Definitive
Notes (and all Notes issued
in exchange therefor or
substitution thereof) shall
bear legends in
substantially the following
form:
THE NOTES EVIDENCED HEREBY
HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES
ACT") AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT
(1) TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE
SECURITIES ACT PURCHASING
FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A
TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A,
(2) IN AN OFFSHORE
TRANSACTION COMPLYING WITH
RULE 903 OR RULE 904 OF
REGULATION S UNDER THE
SECURITIES ACT, (3) PURSUANT
TO AN EXEMPTION FROM
REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF
AVAILABLE), (4) PURSUANT TO
AN EFFECTIVE REGISTRATION
STATEMENT THE SECURITIES ACT
OR (5) TO INSTITUTIONAL
ACCREDITED INVESTORS IN A
TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, IN EACH
CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS
OF THE STATES OF THE UNITED
STATES AND OTHER
JURISDICTIONS.
(ii) Upon any sale or transfer of
a Transfer Restricted
Security (including any
Transfer Restricted Security
represented by a Global
Note) pursuant to Rule 144
under the Securities Act or
pursuant to an effective
registration statement under
the Securities Act:
(A) in the case of any
Transfer
Restricted
Security that is a
Definitive Note,
the Registrar
shall permit the
Holder thereof to
exchange such
Transfer
Restricted
Security for a
Definitive Note
that does not bear
the legend set
forth in (i) above
and rescind any
restriction on the
transfer of such
Transfer
Restricted
Security upon
receipt of a
certification from
the transferring
holder
substantially in
the form of
Exhibit B-3
hereto, and;
(B) in the case of any
Transfer Restricted
Security represented
by a Global Note,
such Transfer
Restricted Security
shall not be
required to bear the
legend set forth in
(i) above, but shall
continue to be
subject to the
provisions of
Section 2.06(a) and
(b) hereof;
provided, however,
that with respect to
any request for an
exchange of a
Transfer Restricted
Security that is
represented by a
Global Note for a
Definitive Note that
does not bear the
legend set forth in
(i) above, which
request is made in
reliance upon Rule
144, the Holder
thereof shall
certify in writing
to the Registrar
that such request is
being made pursuant
to Rule 144 (such
certification to be
substantially in the
form of Exhibit B-4
hereto).
(iii) Upon any sale or transfer of a
Transfer Restricted Security
(including any Transfer
Restricted Security
represented by a Global Note)
in reliance on any exemption
from the registration
requirements of the Securities
Act (other than exemptions
pursuant to Rule 144A or Rule
144 under the Securities Act)
in which the Holder or the
transferee provides an Opinion
of Counsel to the Company and
the Registrar in form and
substance reasonably
acceptable to the Company and
the Registrar (which Opinion
of Counsel shall also state
that the transfer restrictions
contained in the legend are no
longer applicable):
(A) in the case of any
Transfer
Restricted
Security that is a
Definitive Note,
the Registrar
shall permit the
Holder thereof to
exchange such
Transfer
Restricted
Security for a
Definitive Note
that does not bear
the legend set
forth in (i) above
and rescind any
restriction on the
transfer of such
Transfer
Restricted
Security; and
(B) in the case of any
Transfer
Restricted
Security
represented by a
Global Note, such
Transfer
Restricted
Security shall not
be required to
bear the legend
set forth in (i)
above, but shall
continue to be
subject to the
provisions of
Section 2.06(a)
and (b) hereof.
(iv) Notwithstanding the foregoing,
upon consummation 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
hereof, the Trustee shall
authenticate Series B Notes in
exchange for Series A Notes
accepted for exchange in the
Exchange Offer, which Series B
Notes shall not bear the
legend set forth in (i) above,
and the Registrar shall
rescind any restriction on the
transfer of such Series B
Notes, in each case unless the
Holder of such Series A Notes
is either (A) a broker-dealer,
(B) a Person participating in
the distribution of the Series
A Notes or (C) a Person who is
an affiliate (as defined in
Rule 144A) of the Company.
(h) Cancellation and/or Adjustment of Global Notes.
At such time as all beneficial interests in Global
Notes have been exchanged for Definitive Notes, redeemed, repurchased or
cancelled, all Global Notes shall be returned to or retained and cancelled by
the Trustee in accordance with Section 2.11 hereof. At any time prior to such
cancellation, if any beneficial interest in a Global Note is exchanged for
Definitive Notes, redeemed, repurchased or cancelled, the principal amount of
Notes represented by such Global Note shall be reduced accordingly and an
endorsement shall be made on such Global Note, by the Trustee or the Note
Custodian, at the direction of the Trustee, to reflect such reduction.
(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 Definitive
Notes and Global Notes at
the Registrar's request.
(ii) No service charge shall be
made to a Holder 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
and 8.05 hereto).
(iii) All Definitive Notes and
Global Notes issued upon any
registration of transfer or
exchange of Definitive Notes
or Global Notes shall be the
valid obligations of the
Company, evidencing the same
debt, and entitled to the
same benefits under this
Indenture, as the Definitive
Notes or Global Notes
surrendered upon such
registration of transfer or
exchange.
(iv) Prior to due presentment for
the registration of a
transfer of any Note, the
Trustee, any Agent and the
Company may deem and treat
the Person in whose name any
Note is registered as the
absolute owner of such Note
for the purpose of receiving
payment of principal of and
interest on such Notes, and
neither the Trustee, any
Agent nor the Company shall
be affected by notice to the
contrary.
(v) The Trustee shall authenticate Definitive Notes and Global Notes in
accordance with the provisions of Section 2.02 hereof.
Section 2.07. Replacement Notes.
If any mutilated Note is surrendered to the Trustee, or
the Company and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Note, the Company shall
issue and the Trustee shall authenticate a replacement 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 Note is
replaced. The Company may charge for any expenses in replacing a Note.
Every replacement Note is an additional obligation of
the Company and shall be entitled to all of the benefits
of this Indenture equally and proportionately with all other Notes duly issued
hereunder.
Section 2.08. Outstanding Notes.
The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation, and those described in this Section as not outstanding.
Except as set forth in Section 2.09 hereof, a Note does not cease to be
outstanding because the Company or an Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid
under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases
to accrue.
If the Paying Agent (other than the Company, a Subsidiary
or an Affiliate of any thereof) holds, on a redemption date or maturity date,
money sufficient to pay Notes payable on that date, then on and after that date
such Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
Section 2.09. Treasury Notes.
In determining whether the Holders of the required
principal amount of Notes have concurred in any direction, waiver or consent,
Notes owned by the Company or by any Person directly or indirectly controlling
or controlled by or under direct or indirect common control with the Company,
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 Notes that a Trustee knows are so owned shall
be so disregarded.
Section 2.10. Temporary Notes.
Until definitive Notes are ready for delivery, the Company
may prepare and the Trustee shall authenticate temporary Notes upon a written
order of the Company signed by an Officer. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate definitive Notes in exchange for temporary
Notes.
Holders of temporary Notes shall be entitled to all of the
benefits of this Indenture.
Section 2.11. Cancellation.
The Company at any time may deliver Notes to the Trustee
for cancellation. The Registrar and Paying Agent shall forward to the Trustee
any Notes surrendered to them for registration of transfer, exchange or payment.
The Trustee and no one else shall cancel all Notes surrendered for registration
of transfer, exchange, payment, replacement or cancellation and shall dispose of
cancelled Notes (subject to the record retention requirement of the Exchange Act
in accordance with its standard disposition policies in effect from time to
time). Certification of the destruction of all cancelled Notes shall be
delivered to the Company. The Company may not issue new Notes to replace Notes
that it has paid or that have been delivered to the Trustee for cancellation.
Section 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the
Notes, it shall pay the defaulted interest in any lawful manner plus, to the
extent lawful, interest payable on the defaulted interest, to the Persons who
are Holders on a subsequent special record date, in each case at the rate
provided in the Notes and in Section 4.01 hereof. The Company shall notify the
Trustee in writing of the amount of defaulted interest proposed to be paid on
each Note and the date of the proposed payment. The Company shall fix or cause
to be fixed each such special record date and payment date, provided that no
such special record date shall be less than 10 days prior to the related payment
date for such defaulted interest. At least 15 days before the special record
date, the Company (or, upon the written request of the Company, the Trustee in
the name and at the expense of the Company) shall mail or cause to be mailed to
Holders a notice that states the special record date, the related payment date
and the amount of such interest to be paid.
ARTICLE 3
CHANGE OF CONTROL OFFER
Within 50 days of (i) the proposed occurrence of a
Change of Control or (ii) the occurrence of a Change of
Control Triggering Event, the Company shall notify the Trustee in writing of
such proposed occurrence or occurrence, as the case may be, and shall make an
offer to purchase (the "Change of Control Offer") the Notes at a purchase price
equal to 100% of the principal amount thereof plus any accrued and unpaid
interest thereon to the Change of Control Payment Date (as hereinafter defined)
(the "Change of Control Purchase Price") in accordance with the procedures set
forth in this covenant.
Within 50 days of (i) the proposed occurrence of a
Change of Control or (ii) the occurrence of a Change of
Control Triggering Event, the Company also shall (a) cause a notice of the
Change of Control Offer to be sent at least once to the Dow Jones News Service
or similar business news service in the United States and (b) send by
first-class mail, postage prepaid, to the Trustee and to each holder of the
Notes, at his address appearing in the register of the Notes maintained by the
Registrar, a notice stating:
(1) that the Change of Control Offer is being
made pursuant to this covenant and that all Notes tendered
will be accepted for payment, provided that a Change of
Control Triggering Event has occurred and otherwise subject
to the terms and conditions set forth herein;
(2) the Change of Control Purchase Price and the
purchase date (which shall be a Business Day no earlier
than 50 days from the date such notice is mailed and no
later than 15 days after the date of the corresponding
Change of Control Triggering Event) (the "Change of Control
Payment Date");
(3) that any Note not tendered will
continue to accrue interest;
(4) that, unless the Company defaults in the
payment of the Change of Control Purchase Price, any Notes
accepted for payment pursuant to the Change of Control
Offer shall cease to accrue interest after the Change of
Control Payment Date;
(5) that holders accepting the offer to have
their Notes purchased pursuant to a Change of Control Offer
will be required to surrender the Notes to the Paying Agent
at the address specified in the notice prior to the close
of business on the Business Day preceding the Change of
Control Payment Date;
(6) that holders will be entitled to withdraw
their acceptance if the Paying Agent receives, not later
than the close of business on the third 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 the Notes
delivered for purchase, and a statement that such holder is
withdrawing his election to have such Notes purchased;
(7) that holders whose Notes are being purchased
only in part will be issued new Notes equal in principal
amount to the unpurchased portion of the Notes surrendered,
provided that each Note purchased and each such new Note
issued shall be in an original principal amount in
denominations of $1,000 and integral multiples thereof; and
(8) any other procedures that a holder must
follow to accept a Change of Control Offer or effect
withdrawal of such acceptance.
Notwithstanding any other provision of this Article 3, in
the case of a notice of a Change of Control Offer that
is being furnished by the Company with respect to a proposed Change of Control
that has not yet actually occurred, the Company may specify in such notice that
holders of the Notes shall be required to notify the Company, by a date not
earlier than the date (the "Proposed Change of Control Response Date") which is
30 days from the date of such notice, as to whether such holders will tender
their Notes for payment pursuant to the Change of Control Offer and to notify
the Company of the principal amount of such Notes to be so tendered (with the
failure of any holder to so notify the Company within such 30-day period to be
deemed an election of such holder not to accept such Change of Control Offer).
In such event, the Company shall have the option, to be exercised by a
subsequent written notice to be sent, no later than 15 days after the Proposed
Change of Control Response Date, to the same Persons to whom the original notice
of the Change of Control Offer was sent, to cancel or otherwise effect the
termination of the proposed Change of Control and to rescind the related Change
of Control Offer, in which case the then outstanding Change of Control Offer
shall be deemed to be null and void and of no further effect.
On the Change of Control Payment Date, the Company shall
(a) accept for payment Notes or portions thereof
tendered pursuant to the Change of Control Offer, (b) deposit with the Paying
Agent money sufficient to pay the purchase price of all Notes or portions
thereof so tendered and (c) deliver or cause to be delivered to the Trustee
Notes so accepted together with an Officers' Certificate stating the Notes or
portions thereof tendered to the Company. The Paying Agent shall promptly mail
to each holder of Notes so accepted payment in an amount equal to the purchase
price for such Notes, and the Trustee shall promptly authenticate and mail to
such holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered; provided that each such new Note shall be issued in an
original principal amount in denominations of $1,000 and integral multiples
thereof.
There shall be no purchase of any Notes pursuant to this
covenant if there has occurred (prior to, on or after,
as the case may be, the tender of such Notes pursuant to the Change of Control
Offer, by the holders of such Notes) and is continuing an Event of Default. The
Paying Agent will promptly return to the respective holders thereof any Notes
(a) the tender of which has been withdrawn in compliance with this Indenture or
(b) held by it during the continuance of an Event of Default (other than a
default in the payment of the Change of Control Purchase Price with respect to
such Notes).
In the event that the Company is required to make a Change
of Control Offer, the Company will comply with all
applicable tender offer rules including Rule 14e-1 under the Exchange Act, to
the extent applicable.
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes.
The Company shall pay the principal of and all interest on
the Notes on the dates and in the manner provided in
the Notes and this Indenture. An installment of principal or interest shall be
considered paid on the date it is due if the Trustee or Paying Agent holds on
that date money designated for and sufficient to pay such installment.
The Company will pay interest on overdue principal
(including post-petition interest in a proceeding under any
Bankruptcy Law) and on overdue interest, to the extent lawful, at the rate borne
by the Notes.
Section 4.02. SEC Reports.
The Company shall file with the Trustee, within 15
days after it files with the SEC, copies of the annual
reports and of the other information, documents and reports (or copies of such
portions of any of the foregoing as the SEC may by rules and regulations
prescribe), if any, which the Company is required to file with the SEC pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended. The
Company shall also comply with the other provisions of TIA S-314(a).
Section 4.03. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully
do so) that it will not at any time insist upon, or
plead (as a defense or otherwise) or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or other law
which would prohibit or forgive the Company from paying all or any portion of
the principal of and/or interest on the Notes as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
Section 4.04. Limitation on Transactions with Affiliates.
The Company shall not, and shall not permit any Restricted
Subsidiary to, engage in any transaction with any
Affiliate upon terms which would be any less favorable than those obtainable by
the Company or a Restricted Subsidiary in a comparable arm's-length transaction
with a Person which is not an Affiliate. The Company shall not, and shall not
permit any Restricted Subsidiary to, engage in any transaction (or series of
related transactions) involving in the aggregate $1,000,000 or more with any
Affiliate except for (i) the making of any Restricted Payment, (ii) any
transaction or series of transactions between the Company and one or more of its
Restricted Subsidiaries or between two or more of its Restricted Subsidiaries
(provided that no more than 5% of the equity interest in any of its Restricted
Subsidiaries is owned by an Affiliate), and (iii) the payment of compensation
(including, without limitation, amounts paid pursuant to employee benefit plans)
for the personal services of officers, directors and employees of the Company or
any of its Restricted Subsidiaries, so long as the Board of Directors of the
Company in good faith shall have approved the terms thereof and deemed the
services theretofore or thereafter to be performed for such compensation or fees
to be fair consideration therefor; and provided further that for any Asset Sale,
or a sale, transfer or other disposition (other than to the Company or any of
its Restricted Subsidiaries) of an interest in a Restricted Investment,
involving an amount greater than $25,000,000, such Asset Sale or transfer of
interest in a Restricted Investment is for fair value as determined by an
opinion of a nationally recognized investment banking firm filed with the
Trustee. Notwithstanding the foregoing, this provision shall not prohibit any
such transaction which is determined by the independent members of the Board of
Directors of the Company, in their reasonable, good faith judgment (as evidenced
by a Board Resolution filed with the Trustee) to be (a) in the best interests of
the Company or such Restricted Subsidiary, and (b) upon terms which would be
obtainable by the Company or a Restricted Subsidiary in a comparable
arm's-length transaction with a Person which is not an Affiliate.
Section 4.05. Limitation on Indebtedness.
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create, incur,
issue, assume or become liable for, contingently or otherwise (collectively an
"incurrence"), any Indebtedness (other than the $350,000,000 of the Notes
originally issued under the Indenture) unless, after giving effect to such
incurrence on a pro forma basis, Indebtedness of the Company and its Restricted
Subsidiaries, on a consolidated basis, shall not be more than the product of the
Annualized Pro Forma EBITDA for the latest fiscal quarter preceding such
incurrence for which financial statements are available, multiplied by 8.75.
Notwithstanding the above, this provision will not limit
the incurrence of Indebtedness which is incurred by the
Company or its Restricted Subsidiaries for working capital purposes or capital
expenditures with respect to plant, property and equipment of the Company and
its Restricted Subsidiaries in an aggregate amount not to exceed $50,000,000.
Further, this provision will not limit Permitted Refinancing Indebtedness,
subject to the provisions of Section 4.06.
Section 4.06. Limitation on Restricted Payments.
So long as any of the Notes remain outstanding, the
Company shall not make, and shall not permit any Restricted
Subsidiary to make, any Restricted Payment if (a) at the time of such proposed
Restricted Payment, a Default or Event of Default shall have occurred and be
continuing or shall occur as a consequence of such Restricted Payment, or (b)
immediately after giving effect to any such Restricted Payment, the aggregate of
all Restricted Payments which shall have been made on or after January 1, 1993
(the amount of any Restricted Payment, if other than cash, to be based upon fair
market value as determined in good faith by the Company's Board of Directors
whose determination shall be conclusive) would exceed an amount equal to the
greater of (i) the sum of $5,000,000 or (ii) the difference between (a) the
Cumulative Credit and (b) the sum of the aggregate amount of all Restricted
Payments, and all Permitted Investments made pursuant to clause (v) of the
definition of "Permitted Investments," made on or after January 1, 1993 plus 1.2
times Cumulative Interest Expense.
Section 4.07. Reports to Holders.
The Company will send to the Trustee and to Noteholders,
within 15 days after the filing thereof with the SEC,
copies of its annual reports on Form 10-K, its Quarterly Reports on Form 10-Q
and its Current Reports on Form 8-K; provided, however, that notwithstanding any
event which results in the Company being relieved of its obligation to file
information, documents and reports with the SEC pursuant to Sections 13 or 15(d)
of the Exchange Act, the Company shall nevertheless continue, so long as any
Note remains outstanding and unpaid, (i) to file with the SEC (at such time as
it would be required to file such reports under the Exchange Act), and to send
to the Trustee and Noteholders (within 15 days thereafter), quarterly and annual
reports and information, documents and other reports substantially equivalent to
those it would have been obligated to file if it had remained subject to such
sections of the Exchange Act, and (ii) so long as the Notes have not been
registered pursuant to the Registration Rights Agreement, upon the request of a
Noteholder, to provide information required to be delivered under Rule
144A(d)(4) under the Securities Act to such Noteholder and its prospective
purchasers designated by such Noteholder.
Section 4.08. Notice of Defaults Or Events of Default.
In the event that any Default or Event of Default shall
occur and be continuing, the Company will, within 10
days of the occurrence thereof, give written notice of such Default or Event of
Default to the Trustee.
Section 4.09. Compliance Certificates.
The Company shall deliver to the Trustee on or before 105
days after the end of its fiscal year and on or before
50 days after the end of its second fiscal quarter in each year an Officers'
Certificate stating whether or not the signers know of any Default or Event of
Default. If they do know of such a Default or Event of Default, the certificate
shall describe such Default or Event of Default and the efforts to remedy or
obtain a waiver of the same. The certificate must comply with Section 11.05
hereof.
Section 4.10. Covenant to Secure Notes Equally.
Except for Liens created or assumed by the
Company in connection with the acquisition of real
property or equipment to be used by the Company in the operation of its business
which do not secure Indebtedness in excess of the purchase price of such real
property or equipment, the Company covenants that, if it shall create or assume
any Lien upon any of its property or assets, whether now owned or hereafter
acquired, it will make or cause to be made effective provisions whereby the
Notes will be secured by such Lien equally and ratably with all other
Indebtedness of the Company secured by such Lien as long as any such other
Indebtedness of the Company shall be so secured. The restriction imposed by this
Section 4.10 shall not apply with respect to a Lien, including a pledge of
Capital Stock of a Subsidiary or an Affiliate, to secure Indebtedness which is
an obligation of such Subsidiary or Affiliate and not an obligation of the
Company.
Section 4.11. Limitation on Investment in Affiliates and Unrestricted
Subsidiaries.
After the date of this Indenture, the Company may not, nor
will the Company allow any Restricted Subsidiary to,
make a Restricted Investment other than by way of Permitted Investments unless
pro forma for such Restricted Investment the Leverage Ratio of the Company does
not exceed 7.75:1.
Section 4.12. Limitation on Sale of Assets.
Neither the Company nor any Restricted Subsidiary of the
Company shall sell an asset (including Capital Stock of
Restricted Subsidiaries) or reclassify a Restricted Subsidiary existing on the
date of this Indenture as an Unrestricted Subsidiary (a "Reclassification")
unless (a) in the case of an asset sale, (i) at least 75% of the net proceeds
received by the Company or such Restricted Subsidiary is in cash, cash
equivalents or common or preferred Capital Stock or debt securities issued by a
Person which has Investment Grade Senior Debt and (ii) cash proceeds from the
asset sale are used to reduce debt and such debt reduction results in the
Company's Leverage Ratio being lower pro forma after such asset sale than prior
to such asset sale, or (b) in the case of an asset sale or Reclassification, pro
forma for such asset sale or Reclassification the Indebtedness of the Company
and its Restricted Subsidiaries, on a consolidated basis, shall not be more than
7.75 multiplied by Annualized Pro Forma EBITDA, provided that in no case under
either clause (a) or (b) shall the Company undertake an asset sale or
Reclassification, if pro forma for such an asset sale or Reclassification the
Company and its Restricted Subsidiaries would be the owners of fewer than 75% of
the cable systems (measured on the basis of basis subscribers as of February 22,
1994) owned by the Company and its Restricted Subsidiaries as of February 22,
1994, provided however, that the Company and its Restricted Subsidiaries may
sell additional assets of up to 10% of assets held as of February 22, 1994 if
the consideration received from such sale is (i) cash which is used within 12
months to purchase additional systems of equivalent value or (ii) other cable
systems of equivalent value.
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.01. Mergers and Consolidations.
The Company may not consolidate with, merge with or into,
or transfer all or substantially all of its assets (as
an entirety or substantially as an entirety in one transaction or a series of
related transactions), to any Person unless: (i) the Company shall be the
continuing Person, or the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or to which the properties and
assets of the Company are transferred shall be a corporation organized and
existing under the laws of the United States or any State thereof or the
District of Columbia and shall expressly assume, by a supplemental indenture,
executed and delivered to the Trustee, in form satisfactory to the Trustee, all
of the obligations of the Company under the Notes and this Indenture, and the
obligations under this Indenture shall remain in full force and effect; (ii)
immediately before and immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing; and (iii)
immediately after giving effect to such transaction on a pro forma basis for the
most recent quarter, the pro forma Consolidated Fixed Charge Ratio of the
surviving entity shall be at least 1:1; provided that, if the Consolidated Fixed
Charge Ratio of the Company for the most recent quarter preceding such
transaction is within the range set forth in Column A below, then the pro forma
Consolidated Fixed Charge Ratio of the surviving entity after giving effect to
such transaction shall be at least equal to the greater of the percentage of the
Consolidated Fixed Charge Ratio of the Company for the most recent quarter
preceding such transaction set forth in Column B below or the ratio set forth in
Column C below:
A B C
1.1111:1 to 1.4999:1 90% 1.00:1
1.5 and higher 80% 1.35:1
and provided, further, that if the pro forma Consolidated Fixed Charge Ratio of
the surviving entity is 2:1 or more, the calculation in the preceding proviso
shall be inapplicable and such transaction shall be deemed to have complied with
the requirements of such proviso.
In connection with any consolidation, merger
or transfer contemplated by this Section 5.01, the
Company shall deliver, or cause to be delivered, to the Trustee, in form and
substance reasonably satisfactory to the Trustee, an Officers' Certificate and
an Opinion of Counsel, each stating that such consolidation, merger or transfer
and the supplemental indenture in respect thereto comply with this Section 5.01
and that all conditions precedent herein provided for relating to such
transaction or transactions have been complied with.
Section 5.02. Successor Person Substituted.
Upon any consolidation or merger, or any transfer of all
or substantially all of the assets of the Company in
accordance with Section 5.01 above, the successor corporation formed by such
consolidation or into which the Company is merged or to which such transfer is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor corporation had been named as the Company herein, and thereafter the
predecessor corporation shall be relieved of all obligations and covenants under
this Indenture and the Notes.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
An "Event of Default" occurs if:
(1) the Company defaults in the payment
of any principal of any Note when the same becomes due
and payable at maturity, upon acceleration or otherwise;
(2) the Company defaults in the payment of
any interest on any Note when the same becomes due and
payable and the default continues for a period of 30 days;
(3) the Company defaults in the observance or
performance of any other covenant in the Notes or this
Indenture for 60 days after written notice from the Trustee
or the Holders of not less than 25% in aggregate principal
amount of the Notes then outstanding;
(4) the Company fails to pay when due principal,
interest or premium aggregating $10,000,000 or more with
respect to any Indebtedness of the Company or any
Restricted Subsidiary, or the acceleration of any such
Indebtedness which default shall not be cured or waived, or
such acceleration shall not be rescinded or annulled,
within ten days after written notice as provided in this
Indenture;
(5) a court of competent jurisdiction enters a
final judgment or judgments for the payment of money in
excess of $10,000,000 against the Company or any Restricted
Subsidiary and such judgment remains undischarged for a
period of 60 consecutive days during which a stay of
enforcement of such judgment shall not be in effect;
(6) the Company, or any Restricted Subsidiary
with liabilities of greater than $10,000,000 under GAAP as
of the date of the event described in this clause (6),
pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry
of an order for relief
against it in an
involuntary case,
(C) consents to the
appointment of a
Custodian of it or for
all or substantially all
of its property, or
(D) makes a general assignment
for the benefit of its
creditors;
(7) a court of competent jurisdiction
enters an order or decree under any Bankruptcy Law that:
(A) is for relief against the
Company, or any Restricted
Subsidiary with
liabilities of greater than
$10,000,000 under GAAP as
of the effective date of
such order or decree, in an
involuntary case,
(B) appoints a Custodian of the
Company, or any Restricted
Subsidiary with liabilities
of greater than
$10,000,000 under GAAP as
of the effective date of
such order or decree, or
for all or substantially
all of its property, or
(C) orders the
liquidation of the
Company, or any Restricted
Subsidiary with
liabilities of greater than
$10,000,000 under GAAP as
of the effective date of
such order or decree, and
the order or decree
remains unstayed and in
effect for 60 days.
The term "Bankruptcy Law" means Title 11, U.S. Code
or any similar Federal or State law for the relief of
debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.
A Default under clauses (3) and (4) is not an Event of
Default until the Trustee notifies the Company, or the
Holders of at least 25% in aggregate principal amount of the Securities notify
the Company and the Trustee, of the Default and the Company does not cure the
Default within (a) 60 days after receipt of such notice in the case of a Default
under clause (3) and (b) 10 days after receipt of such notice in the case of a
Default under clause (4). The notice must specify the Default, demand that it be
remedied and state that the notice is a "Notice of Default." If the Holders of
at least 25% in principal amount of the outstanding Notes request the Trustee to
give such notice on their behalf, the Trustee shall do so.
Subject to Section 7.05 hereof, the Trustee may
withhold notice to the Holders of the Notes of any default
(except in payment of principal or interest on the Notes) if the Trustee
considers it to be in the best interest of the Holders of the Notes to do so.
Section 6.02. Acceleration.
If an Event of Default (other than an Event of Default
resulting from certain events of bankruptcy, insolvency
or reorganization) occurs and is continuing, the Trustee by notice to the
Company, or the Holders of not less than 25% in aggregate principal amount of
the Notes then outstanding may declare to be immediately due and payable the
principal amount of all the Notes then outstanding plus accrued but unpaid
interest to the date of acceleration; provided, however, that after such
acceleration but before a judgment or decree based on such acceleration is
obtained by the Trustee, the Holders of a majority in aggregate principal amount
of outstanding Notes by written notice to the Trustee and the Company may
rescind and annul such acceleration and its consequences if all existing Events
of Default, other than the nonpayment of accelerated principal or interest, have
been cured or waived. In case an Event of Default specified in Section 6.01(6)
or (7) occurs, such amount with respect to all of the Notes shall be due and
payable immediately without any declaration or other act on the part of the
Trustee or the Holders of the Notes.
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the
Trustee may pursue any available remedy by proceeding at
law or in equity to collect the payment of principal of and interest on the
Notes or to enforce the performance of any provision of the Notes or this
Indenture and may take any necessary action requested of it as Trustee to
settle, compromise, adjust or otherwise conclude any proceedings to which it is
a party.
The Trustee may maintain a proceeding even if it does not possess any of the
Notes or does not produce any of them in the proceeding. A delay or omission by
the Trustee or any Noteholder 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. No remedy is exclusive of any other
remedy. All available remedies are cumulative.
Section 6.04. Waiver of Past Defaults and Events of Default.
Subject to Sections 6.02, 6.07 and 8.02 hereof, the
Holders of a majority in principal amount of the Notes then
outstanding have the right to waive any existing default or compliance with any
provision of this Indenture or the Notes and to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee,
subject to certain limitations specified in this Indenture.
Section 6.05. Control by Majority.
The Holders of a majority in principal amount of the
Notes then outstanding may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee by this Indenture. The
Trustee, however, may refuse to follow any direction that conflicts with law or
this Indenture or that the Trustee determines may be unduly prejudicial to the
rights of another Noteholder not taking part in such direction, and the Trustee
shall have the right to decline to follow any such direction if the Trustee,
being advised by counsel, determines that the action so directed may not
lawfully be taken or if the Trustee in good faith shall, by a Trust Officer,
determine that the proceedings so directed would involve it in personal
liability; provided that the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction.
Section 6.06. Limitation on Suits.
Subject to Section 6.07 below, a Noteholder may not
institute any proceeding or pursue any remedy with respect
to this Indenture or the Notes unless:
(1) the Holder gives to the Trustee
written notice of a continuing Event of Default;
(2) the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding
make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the
Trustee indemnity reasonably satisfactory to the
Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the
request within 60 days after receipt of the request
and the offer of indemnity; and
(5) no direction inconsistent with such written
request has been given to the Trustee during such 60 day
period by the Holders of a majority in aggregate principal
amount of the Notes then outstanding.
A Noteholder may not use this Indenture to prejudice the
rights of another Noteholder or to obtain a preference
or priority over another Noteholder.
Section 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture,
the right of any Holder of a Note to receive payment of
principal of and interest on the Note on or after the respective due dates
expressed in the Note, or to bring suit for the enforcement of any such payment
on or after such respective dates, is absolute and unconditional and shall not
be impaired or affected without the consent of the Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default in payment of principal or interest
specified in Section 6.01(1) or (2) hereof occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Company or any other obligor on the Notes for
the whole amount of unpaid principal and accrued interest remaining unpaid,
together with interest on overdue principal and, to the extent that payment of
such interest is lawful, interest on overdue installments of interest, in each
case at the rate then borne by the Notes, and such further amounts 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 may 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 Noteholders allowed in any judicial proceedings relative to
the Company (or any other obligor upon the Notes), its creditors or its property
and shall be entitled and empowered to collect and receive any monies or other
property payable or deliverable on any such claims and to distribute the same
after deduction of its charges and expenses to the extent that any such charges
and expenses are not paid out of the estate in any such proceedings and any
Custodian in any such judicial proceeding is hereby authorized by each
Noteholder 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
Noteholders, 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 or any predecessor 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 or any predecessor
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, monies, securities
and other properties which the Holders of the Notes 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
Noteholder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee to vote in respect of the claim of any Noteholder in any such
proceedings.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article
6, it shall pay out the money in the following order:
FIRST: to the Trustee or any predecessor
trustee for amounts due under Sections 6.09 and 7.07
hereof;
SECOND: to Noteholders for amounts due and
unpaid on the Notes for principal and interest as to
each, ratably, without preference or priority of any kind, according
to the amounts due and payable on the Notes; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any
payment to Noteholders 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 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 6.11 does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.07 hereof or a suit by Holders
of more than 10% in principal amount of the Notes then outstanding.
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 their exercise as a prudent man would exercise or use under
the same circumstances in the conduct of his own affairs.
(b) Except during the continuance of an
Event of Default:
(1) The Trustee need perform only those duties
that are specifically set forth in this Indenture and no
others.
(2) 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. The Trustee, however, shall examine the
certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Trustee may not be relieved
from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(1) This paragraph does not limit the
effect of paragraph (b) of this Section 7.01.
(2) The Trustee shall not be liable for any error
of judgment made in good faith by a Trust Officer, unless
it is proved that the Trustee was negligent in ascertaining
the pertinent facts.
(3) 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.
(4) No provision of this Indenture shall require
the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of
its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for
believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably
assured to it.
(d) Whether or not therein expressly so
provided, paragraphs (a), (b) and (c) of this Section
7.01 shall govern every provision of this Indenture that in any way relates to
the Trustee.
(e) The Trustee may refuse to perform
any duty or exercise any right or power unless it
receives indemnity reasonably satisfactory to it against any loss, liability,
expense or fee.
(f) The Trustee shall not be liable for
interest on any money received by it except as the
Trustee may agree 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.
Subject to Section 7.01 hereof:
(1) The Trustee may rely on any document
reasonably 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.
(2) Before the Trustee acts or refrains from
acting, it may require an Officers' Certificate or an
Opinion of Counsel, or both, which shall conform to the
provisions of Section 11.05 hereof. The Trustee shall not
be liable for any action it takes or omits to take in good
faith in reliance on such Certificate or Opinion.
(3) The Trustee may act through agents and shall
not be responsible for the misconduct or negligence of any
agent appointed with due care.
(4) The Trustee shall not be liable for any
action it takes or omits to take in good faith which it
reasonably believes to be authorized or within its rights
or powers.
(5) The Trustee may consult with counsel, and the
advice or opinion of such counsel as to matters of law
shall be full and complete authorization and protection in
respect of any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice
or opinion of such counsel.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may
become the owner or pledgee of Notes and may otherwise
deal with the Company or its Affiliates with the same rights it would have if it
were not Trustee. Any Agent may do the same with like rights. The Trustee,
however, shall be subject to Sections 7.10 and 7.11 hereof.
Section 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Notes, it shall not be accountable for the Company's use of the
proceeds from the sale of Notes and it shall not be responsible for any
statement in the Notes other than its certificate of authentication.
<PAGE>
Section 7.05. Notice of Defaults.
If a Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to each
Noteholder notice of the Default within 90 days after it occurs. Except in the
case of a Default in payment of the principal of or interest on any Note the
Trustee may withhold the notice if and so long as the board of directors of the
Trustee, the executive committee or any trust committee of such board and/or its
Trust Officers in good faith determine(s) that withholding the notice is in the
interests of the Noteholders.
Section 7.06. Reports by Trustee to Holders.
Within 60 days after May 15 of any year, commencing the
May 15 following the date of this Indenture, the Trustee
shall mail to each Noteholder a brief report dated as of such May 15 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).
Reports pursuant to this Section shall be transmitted by
mail:
(1) to all registered Holders of Notes,
as the names and addresses of such Holders appear on
the Registrar's books;
(2) to such Holders of Notes as have, within the
two years preceding such transmission, filed their names
and addresses with the Trustee for that purpose; and
(3) except in the case of reports pursuant to TIA
S-313(b), to each Noteholder whose name and address is
preserved at the time by the Trustee, as provided in
Section 2.05.
A copy of each report at the time of its mailing to
Noteholders shall be filed with the SEC and each stock
exchange on which the Notes are listed. The Company shall notify the Trustee
when the Notes are listed on any stock exchange.
Section 7.07. Compensation and Indemnity.mnity
The Company shall pay to the Trustee from time to time
reasonable compensation for its services hereunder (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust). The Company shall reimburse the
Trustee upon request for all reasonable disbursements, expenses and advances
incurred or made by it in connection with its duties under this Indenture,
including the reasonable compensation, disbursements and expenses of the
Trustee's agents and counsel.
The Company shall indemnify the Trustee for, and hold it
harmless against, any loss, liability or reasonable
expense incurred by it in connection with the performance of its duties under
this Indenture including the reasonable costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder (including, without limitation, settlement
costs). The Trustee shall notify the Company promptly of any claim asserted
against the Trustee for which it may seek indemnity.
The Company need not reimburse the Trustee for any
expense or indemnify it against any loss or liability
incurred by the Trustee through its negligence or bad faith. To secure the
Company's payment obligations in Sections 6.09 and 7.07, the Trustee shall have
a lien prior to the Notes on all money or property held or collected by the
Trustee except such money or property held in trust to pay principal of and
interest on particular Notes.
When the Trustee incurs expenses or renders services after
an Event of Default specified in Section 6.01(6) or
(7) hereof occurs, the expenses and the compensation for the services are
intended to constitute expenses of administration under any Bankruptcy Law.
However, in the event that such expenses of administration are disallowed by a
final judgment of a court of competent jurisdiction, the expenses thereby, and
all other unreimbursed expenses of the Trustee, shall constitute a general
unsecured claim of the Trustee against the estate.
For purposes of this Section 7.07, the term "Trustee" shall
include any trustee appointed pursuant to Article 10.
Section 7.08. Replacement of Trustee.
The Trustee may resign by so notifying the Company.
The Holders of a majority in principal amount of the
outstanding Notes may remove the Trustee by notifying the removed Trustee and
may appoint a successor Trustee with the Company's written consent. Subject to
the provisions of Section 6.11, any Noteholder who has been a bona fide holder
of Notes for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the removal
of the Trustee, and the appointment of a successor, if the Trustee fails, after
written notice therefor by such Holder, to comply with the provisions of clause
(i) of TIA 310(b). The Company may remove the Trustee at its election if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of
the Trustee or its property;
(4) the Trustee otherwise becomes incapable of acting; or
(5) a successor corporation becomes successor Trustee
pursuant to Section 7.09 below.
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.
If a successor Trustee does not take office within 45 days
after the retiring Trustee resigns or is removed, the
retiring Trustee, the Company or the Holders of a majority in principal amount
of the outstanding Notes may petition any court of competent jurisdiction for
the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10,
any Noteholder 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. Immediately following such delivery, the retiring Trustee shall
transfer all property held by it as Trustee to the successor Trustee, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. A successor Trustee shall mail notice of its succession to
each Noteholder.
Section 7.09. Successor Trustee by Consolidation, Merger or Conversion.
If the Trustee consolidates with, merges or converts
into, or transfers all or substantially all of its
corporate trust assets to, another corporation, subject to Section 7.10 hereof,
the successor corporation without any further act shall be the successor
Trustee.
Section 7.10. Eligibility; Disqualification.cation
This Indenture shall always have a Trustee who satisfies
the requirements of TIA S-310(a)(1) and (2) in every
respect. The Trustee shall have a combined capital and surplus of at least
$5,000,000 as set forth in its most recent published annual report of condition.
The Trustee shall comply with TIA S-310(b), including the provision in
S-310(b)(1).
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA 311(a),
excluding any creditor relationship listed in TIA 311(b).
A Trustee who has resigned or been removed shall be subject to TIA 311(a) to the
extent indicated therein.
Section 7.12. Paying Agents.
The Company shall cause each Paying Agent other than the
Trustee to execute and deliver to it and the Trustee an
instrument in which such agent shall agree with the Trustee, subject to the
provisions of this Section 7.12:
(A) that it will hold
all sums held by
it as agent for
the payment of
principal of or
interest on, the
Notes (whether
such sums have
been paid to it by
the Company or by
any obligor on the
Notes) in trust
for the benefit of
Holders of the
Notes;
(B) that it will at
any time during
the continuance of
any Event of
Default, upon
written request
from the Trustee,
deliver to the
Trustee all sums
so held in trust
by it; and
(C) that it will give
the Trustee
written notice
within three (3)
Business Days of
any failure of the
Company (or by any
obligor on the
Notes) in the
payment of any
installment of the
principal of or
interest on, the
Notes when the
same shall be due
and payable.
ARTICLE 8
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 8.01. Without Consent of Holders.
The Company and the Trustee may amend or supplement this
Indenture or the Notes without notice to or consent of any Noteholder:
(1) to comply with Section 5.01 hereof;
(2) to convey, transfer, assign,
mortgage or pledge any property to the Trustee and
otherwise to comply with Section 4.10 hereof;
(3) to provide for uncertificated Notes in
addition to or in place of certificated Notes;
(4) to issue up to $250,000,000 in
aggregate principal amount of additional Notes pursuant
to this Indenture; or
(5) to cure any ambiguity, defect or
inconsistency, or to make any other change that does not
materially and adversely affect the rights of any
Noteholder.
The Trustee is hereby authorized to join with the
Company in the execution of any supplemental indenture
authorized or permitted by the terms of this Indenture and to make any further
appropriate agreements and stipulations which may be therein contained, but the
Trustee shall not be obligated to enter into any such supplemental indenture
which adversely affects its own rights, duties or immunities under this
Indenture.
Section 8.02. With Consent of Holders.
The Company and the Trustee may modify or supplement
this Indenture or the Notes with the written consent of the
Holders of at least one-half in principal amount of the outstanding Notes
without notice to any Noteholder. The Holders of a majority in aggregate
principal amount of the outstanding Notes may waive compliance in a particular
instance by the Company with any provision of this Indenture or the Notes
without notice to any Noteholder. Subject to Section 8.04, without the consent
of each Noteholder affected, however, an amendment, supplement or waiver,
including a waiver pursuant to Section 6.04, may not:
(1) reduce the amount of Notes whose
Holders must consent to an amendment, supplement or waiver
to this Indenture or the Notes;
(2) reduce the rate of or change the time
for payment of interest on any Note;
(3) reduce the principal of or change the
stated maturity of any Note;
(4) change the amount or time of any
payment required by the Notes or provide for the
redemption of the Notes prior to maturity;
(5) waive a default in the payment of the
principal of, interest on, or redemption payment with
respect to, any Note;
(6) make any Note payable in money other than
that stated in the Note or change the place of payment from
New York, New York; or
(7) make any changes in Sections 6.04,
6.07 hereof or this sentence of Section 8.02.
After an amendment, supplement or waiver under this Section
8.02 becomes effective, the Company shall mail to
the Holders a notice briefly describing the amendment, supplement or waiver.
Upon the request of the Company, accompanied by a Board
Resolution authorizing the execution of any such
supplemental indenture, and upon the filing with the Trustee of evidence of the
consent of the Noteholders as aforesaid, the Trustee shall join with the Company
in the execution of such supplemental indenture unless such supplemental
indenture affects the Trustee's own rights, duties or immunities under this
Indenture, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Holders
under this Section to approve the particular form of
any proposed amendment, supplement or waiver, but it shall be sufficient if such
consent approves the substance thereof.
Section 8.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the
Notes shall comply with the TIA as then in effect.
Section 8.04. Revocation and Effect of Consents.
Until an amendment, supplement, waiver or other action
becomes effective, a consent to it by a Holder of a Note
is a continuing consent conclusive and binding upon such Holder and every
subsequent Holder of the same Note or portion thereof, and of any Note issued
upon the transfer thereof or in exchange therefor or in place thereof, even if
notation of the consent is not made on any such Note. Any such Holder or
subsequent Holder, however, may revoke the consent as to his Note or portion of
a Note, if the Trustee receives the notice of revocation before the date the
amendment, supplement, waiver or other action becomes effective.
The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Holders
entitled to consent to any amendment, supplement, or waiver. If a record date is
fixed, then, notwithstanding the preceding paragraph, those Persons who were
Holders at such record date (or their duly designated proxies), and only such
Persons, shall be entitled to consent to such amendment, supplement, or waiver
or to revoke any consent previously given, whether or not such Persons continue
to be Holders after such record date. No such consent shall be valid or
effective for more than 90 days after such record date unless the consent of the
requisite number of Holders has been obtained.
After an amendment, supplement, waiver or other action
becomes effective, it shall bind every Noteholder, unless
it makes a change described in any of clauses (1) through (7) of Section 8.02
hereof. In that case the amendment, supplement, waiver or other action shall
bind each Holder of a Note who has consented to it and every subsequent Holder
of a Note or portion of a Note that evidences the same debt as the consenting
Holder's Note.
Section 8.05. Notation on or Exchange of Notes.
If an amendment, supplement, or waiver changes the terms
of a Note, the Trustee may request the Holder of the
Note to deliver it to the Trustee. In such case, the Trustee shall place an
appropriate notation on the Note about the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Note shall issue and the Trustee shall authenticate a new
security that reflects the changed terms.
Section 8.06. Trustee to Sign Amendments, etc.
The Trustee shall sign any amendment, supplement or waiver
authorized pursuant to this Article 8 if the
amendment, supplement or waiver does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the Trustee may, but need
not, sign it. In signing or refusing to sign such amendment, supplement or
waiver the Trustee shall be entitled to receive and, subject to Section 7.01
hereof, shall be fully protected in relying upon an Officers' Certificate and an
Opinion of Counsel stating that such amendment, supplement or waiver is
authorized or permitted by this Indenture. The Company may not sign an amendment
or supplement until the Board of Directors approves it.
ARTICLE 9
SATISFACTION AND DISCHARGE OF INDENTURE: UNCLAIMED MONEYS
Section 9.01. Satisfaction and Discharge of Indenture.
If at any time
(a) either
(i) there shall have been cancelled by the
Trustee or delivered to the Trustee
for cancellation all Notes theretofore
authenticated and delivered (other
than any Notes that are asserted to
have been destroyed, lost or stolen
and that shall have been replaced as
provided in Section 2.07 hereof, or
paid, or Notes for whose payment money
has theretofore been deposited in
trust with the Trustee); or
(ii) all such Notes not theretofore
cancelled by the Trustee or delivered
to the Trustee for cancellation shall
have become due and payable, or are by
their terms to become due and payable
within one (1) year, and the Company
has deposited or caused to be
deposited with the Trustee as trust
funds the entire amount sufficient to
pay at maturity the principal of and
accrued interest on all such Notes not
theretofore cancelled by the Trustee
or delivered to the Trustee for
cancellation; and
(b) the Company has paid or caused to be
paid all other sums payable hereunder by the Company;
and
(c) the Company has delivered to the
Trustee an Officers' Certificate stating that all
conditions precedent provided for herein relating to the satisfaction and
discharge of this Indenture have been complied with; and
(d) the Company has delivered to the
Trustee an Opinion of Counsel stating that the documents
and other items that have been or are therewith delivered to the Trustee conform
to the requirements of this Indenture, and that, upon the basis of a Company
Request and the accompanying documents and items specified in this Section 9.01,
all conditions precedent provided for herein relating to the satisfaction and
discharge of this Indenture have been complied with, then, upon Company Request,
this Indenture and the rights and interests hereby created shall cease to be of
further effect (except as to any surviving rights of registration of transfer or
exchange of Notes), and the Trustee, at the cost and expense of the Company,
shall, subject to Section 9.05 hereof, execute and deliver proper instruments
acknowledging satisfaction and discharge of this Indenture.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company in Sections
2.03, 2.04, 2.05, 2.06, 2.07, 4.01, 6.09, 7.07, 7.08, 9.04 and 9.05 shall
survive until the Notes are no longer outstanding. Thereafter, the Company's
obligations to the Trustee under Sections 7.07, 9.04 and 9.05 hereof shall
survive.
Section 9.02. Funds Deposited for Payment of Notes.
All moneys deposited with the Trustee pursuant to
Section 9.01 hereof shall be held in trust and shall be
available for payment when the Notes become due and payable in accordance with
their terms, either directly or through any Paying Agent, to the Holders of the
particular Notes for the payment of which such moneys have been deposited with
the Trustee.
Section 9.03. Moneys Held by Paying Agent.
In connection with the satisfaction and discharge of this
Indenture, all moneys then held by any Paying Agent
under the provisions of this Indenture shall, upon demand of the Company, be
paid to the Trustee, or if sufficient moneys have been deposited pursuant to
Section 9.01 hereof, to the Company, and thereupon such Paying Agent shall be
released from all further liability with respect to such moneys.
Section 9.04. Moneys Held by Trustee.
Any moneys deposited with the Trustee or any Paying Agent
or then held by the Company in trust for the payment
of the principal of or interest on any Note that are not applied but remain
unclaimed by the Holder of such Note for two (2) years after the date upon which
the principal of or interest on such Note shall have respectively become due and
payable shall be repaid to the Company upon Company Request, or (if then held by
the Company) shall be discharged from such trust; and the Holder of such Note
entitled to receive such payment shall thereafter, as an unsecured general
creditor, look only to the Company for the 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 any such Paying Agent, before being required to
make any such repayment, may, at the expense of the Company, either mail to each
Noteholder affected, at the address shown in the register of the Notes
maintained by the Registrar pursuant to Section 2.03 hereof, or cause to be
published once a week for two successive weeks, in a newspaper published in the
English language, customarily published each Business Day and of general
circulation in the City of New York, New York, a 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 mailing or publication, any unclaimed balance of
such moneys then remaining will be repaid to the Company. After payment to the
Company, Noteholders entitled to the money must look only to the Company for
payment as general creditors unless applicable abandoned property law designates
another person.
Section 9.05. Reinstatement.
If the Trustee or Paying Agent is unable to
apply any money in accordance with Section 9.01 hereof by
reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
this Article 9 until such time as the Trustee or Paying Agent is permitted to
apply all such money in accordance with Section 9.01; provided, however, that if
the Company has made any payment of principal of or interest on any Notes
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the holders of such Notes to receive such payment from the
money held by the Trustee or Paying Agent.
ARTICLE 10
DEFEASANCE AND COVENANT DEFEASANCE
Section 10.01. Applicability of Article; Company Option to Effect
Defeasance
The Company may at its option by a Board Resolution at any
time, with respect to the Notes elect to have Section
10.02 or Section 10.03 hereof be applied to the outstanding Notes upon
compliance with the conditions set forth below in this
Article 10.
Section 10.02. Defeasance and Discharge.
Upon the Company's exercise of the option described in
Section 10.01 above applicable to this Section with
respect to the Notes, the Company shall be deemed to have been discharged from
its obligations with respect to the Notes on the date the conditions set forth
in Section 10.04 below are satisfied (hereinafter, "Defeasance"). For this
purpose, such Defeasance means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by the Notes and to have
satisfied all its other obligations under such Notes and this Indenture insofar
as such Notes are concerned (and the Trustee, at the expense of the Company,
shall, subject to Section 10.06 hereof, execute proper instruments acknowledging
the same), except for the following which shall survive until otherwise
terminated or discharged hereunder: (A) the rights of Holders of outstanding
Notes to receive solely from the trust funds described in Section 10.04 hereof
and as more fully set forth in such Section, payments in respect of the
principal of and interest on such Notes when such payments are due, (B) the
Company's obligations with respect to such Notes under Sections 2.03, 2.04,
2.05, 2.06, 2.07 and 2.08 hereof, (C) the rights, powers, trusts, duties, and
immunities of the Trustee hereunder (including claims of, or payments to, the
Trustee under or pursuant to Section 7.07 hereof) and (D) this Article 10.
Subject to compliance with this Article 10, the Company may exercise its option
under this Section 10.02 with respect to the Notes notwithstanding the prior
exercise of its option under Section 10.03 below with respect to the Notes.
Section 10.03. Covenant Defeasance.
Upon the Company's exercise of the option in Section 10.01
above applicable to this Section with respect to the
Notes, the Company shall be released from its obligations under Article III,
Sections 4.04, 4.05, 4.06, 4.10, 4.11 and 4.12, and clause (iii) of Section 5.01
hereof with respect to the outstanding Notes on and after the date the
conditions set forth in Section 10.04 below are satisfied (hereinafter,
"Covenant Defeasance"). For this purpose, such Covenant Defeasance means that
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 specified Section or
portion thereof, whether directly or indirectly by reason of any reference
elsewhere herein to any such specified Section or portion thereof or by reason
of any reference in any such specified Section or portion thereof to any other
provision herein or in any other document, but the remainder of this Indenture
and the Notes shall be unaffected thereby.
Section 10.04. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of
Section 10.02 or Section 10.03 above to the outstanding Notes:
(1) the Company shall irrevocably have deposited
or caused to be deposited with the Trustee (or another
trustee satisfying the requirements of Section 7.10 hereof
who shall agree to comply with the provisions of this
Article 10 applicable to it) as funds in trust for the
purpose of making the following payments, specifically
pledged as security for, and dedicated solely to, the
benefit of the Holders of the Notes, (A) money in an
amount, or (B) U.S. Government Obligations which through
the scheduled payment of principal and interest in respect
thereof in accordance with their terms will provide, not
later than the due date of any payment, money in an amount,
or (C) a combination thereof, sufficient, in the opinion of
a nationally-recognized firm of independent public
accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge, and which
shall be applied by the Trustee (or other qualifying
trustee) to pay and discharge, the principal of and accrued
interest on the outstanding Notes at the maturity date of
such principal or interest;
(2) no Event of Default or Default with respect
to the Notes shall have occurred and be continuing on the
date of such deposit, or shall have occurred and be
continuing at any time during the period ending on the 91st
day after the date of such deposit or, if longer, ending on
the day following the expiration of the longest preference
period under any Bankruptcy Law applicable to the Company
in respect of such deposit (it being understood that this
condition shall not be deemed satisfied until the
expiration of such period);
(3) such Defeasance or Covenant Defeasance shall
not cause the Trustee to have a conflicting interest for
purposes of the TIA with respect to any securities of the
Company;
(4) such Defeasance or Covenant Defeasance shall
not result in a breach or violation of, or constitute
default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it
is bound;
(5) in the case of an election under Section
10.02 above, the Company shall have delivered to the
Trustee an Opinion of Counsel stating that the Company has
received from, or there has been published by, the Internal
Revenue Service a ruling to the effect that, and such
opinion shall confirm that, the Holders of the outstanding
Notes or persons in their positions will not recognize
income, gain or loss for Federal income tax purposes as a
result of such 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
Defeasance had not occurred;
(6) in the case of an election under Section
10.03 hereof, the Company shall have delivered to the
Trustee an Opinion of Counsel to the effect that the
Holders of the outstanding Notes will not recognize income,
gain or loss for Federal income tax purposes as a result of
such Covenant Defeasance and will be subject to Federal
income tax on the same amount, in the same manner and at
the same times as would have been the case if such Covenant
Defeasance had not occurred;
(7) 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 either the Defeasance under Section 10.02 above
or the Covenant Defeasance under Section 10.03 above (as
the case may be) have been complied with; and
(8) the Company shall have delivered to the
Trustee an Officers' Certificate stating its intention to
effect a Defeasance pursuant to the provisions of this
Article 10 at least sixty (60) days prior to such
Defeasance.
Section 10.05. Deposited Money and U.S. Government Obligations to be
Held in Trust; Other Miscellaneous Provisions.
All money and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee pursuant
to Section 10.04 in respect of the outstanding Notes shall be held in trust and
applied by the Trustee, in accordance with the provisions of such Notes and this
Indenture, to the payment, either directly or through any Paying Agent as the
Trustee may determine, to the Holders of such Notes, of all sums due and to
become due thereon in respect of principal and accrued 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 U.S. Government Obligations deposited pursuant to Section 10.04
above 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 Notes.
Anything in this Article 10 to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company
from time to time upon Company Request any money or U.S. Government Obligations
held by it as provided in Section 10.04 above which, in the opinion of a
nationally-recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount thereof which would then be required to be deposited to effect an
equivalent Defeasance or Covenant Defeasance.
Section 10.06. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money
or U.S. Government Obligations in accordance with
Section 10.01 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to this Article 10 until such time as the Trustee or Paying
Agent is permitted to apply all such money or U.S. Government Obligations in
accordance with Section 10.01; provided, however, that if the Company has made
any payment of principal of or accrued interest on any Notes because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent.
ARTICLE 11
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or
conflicts with another provision which is required to be
included in this Indenture by the TIA, the required provision shall control.
Section 11.02. Notices.
Any notice or communication shall be given in
writing and delivered in person, sent by telex or
telephone facsimile, delivered by commercial courier service or mailed by
first-class mail, postage prepaid, addressed as follows:
If to the Company:
Adelphia Communications Corporation
Main at Water Street
Coudersport, Pennsylvania 16195
Attention: Colin Higgin, Esq.
Copy to:
Buchanan Ingersoll Professional Corporation
1 Oxford Center
301 Grant Street, 20th Floor
Pittsburgh, Pennsylvania 15219
Attention: Carl E. Rothenberger, Jr., Esq.
If to the Trustee:
Bank of Montreal Trust Company
77 Water Street
New York, New York 10005
Attention: Corporate Trust Department
Such notices or communications shall be effective when
received and shall be sufficiently given if so given
within the time prescribed in this Indenture.
The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent
notices or communications.
Any notice or communication mailed to a Noteholder shall be
mailed to him by first class mail, postage prepaid,
at his 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 Noteholder
or any defect in it shall not affect its sufficiency
with respect to other Noteholders. If a notice or communication to a Noteholder
is mailed in the manner provided above, it shall be deemed duly given, whether
or not the addressee receives it.
In case by reason of the suspension of regular mail
service, or by reason of any other cause, it shall be
impossible to mail any notice as required by this Indenture, then such method of
notification as shall be made with the approval of the Trustee shall constitute
a sufficient mailing of such notice.
.
Section 11.03.Communications by Holders with Other HoldersHolders
Noteholders may communicate pursuant to TIA S-312(b) with
other Noteholders with respect to their rights under
this Indenture or the Notes. 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.
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:
(1) an Officers' Certificate (which shall include
the statements set forth in Section 11.05 below) stating
that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel (which shall include
the statements set forth in Section 11.05 below) stating
that, in the opinion of such counsel, all such conditions
precedent have been complied with.
Section 11.05. Statements Required in Certificate and Opinion.
Each certificate and 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
include:
(1) a statement that the Person making
such certificate or opinion has read such covenant or
condition;
(2) 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;
(3) a statement that, in the opinion of such
Person, it or he has made such examination or investigation
as is necessary to enable it or him to express an informed
opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the
opinion of such Person, such covenant or condition has been
complied with.
Section 11.06. When Treasury Notes Disregarded.
In determining whether the Holders of the required
aggregate principal amount of Notes have concurred in any
direction, waiver or consent, Notes owned by the Company or any other obligor on
the Notes or by any person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Company or such obligor
shall be disregarded, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes which the Trustee knows are so owned shall be so disregarded. Notes
so owned which have been pledged in good faith shall not be disregarded if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to the Notes and that the pledgee is not the Company or any
other obligor upon the Notes or any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or
such obligor.
Section 11.07. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or
meetings of Noteholders. The Registrar and Paying Agent may make reasonable
rules for their functions.
Section 11.08. Business Days; Legal Holidays.
A "Business Day" is a day that is not a Legal
Holiday. A "Legal Holiday" is a Saturday, a Sunday, a
federally-recognized holiday or a day on which banking institutions are not
required to be open in the State of New York. If a payment date is a Legal
Holiday at a place of payment, payment may be made at that place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
Section 11.09. Governing Law.
The laws of the State of New York shall govern this
Indenture and the Notes without regard to principles of
conflicts of law.
Section 11.10. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another
indenture, loan, security or debt agreement of the Company
or any Subsidiary. No such indenture, loan, security or debt agreement may be
used to interpret this Indenture.
Section 11.11. No Recourse against Others.
No recourse for the payment of the principal of or accrued
interest on any of the Notes, or for any claim based
thereon or otherwise in respect thereof, and no recourse under or upon any
obligation, covenant or agreement of the Company in this Indenture or in any
supplemental indenture, or in any of the Notes, or because of the creation of
any Indebtedness represented thereby, shall be had against any stockholder,
officer, director or employee, as such, past, present or future, of the Company
or of any successor corporation or against the property or assets of any such
stockholder, officer, employee or director, either directly or through the
Company or any successor corporation, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly understood that this Indenture and the Notes are
solely obligations of the Company, and that no such personal liability whatever
shall attach to, or is or shall be incurred by, any stockholder, officer,
employee or director of the Company or any successor corporation because of the
creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or the Notes or
implied therefrom, and that any and all such personal liability of, and any and
all claims against every stockholder, officer, employee and director, are hereby
expressly waived and released as a condition of, and as a consideration for, the
execution of this Indenture and the issuance of the Notes. It is understood that
this limitation on recourse is made expressly for the benefit of any such
shareholder, employee, officer or director and may be enforced by any of them.
Section 11.12. Successors.
All agreements of the Company in this Indenture and the
Notes shall bind its successor. All agreements of the
Trustee, any additional trustee and any Paying Agents in this Indenture shall
bind its successor.
Section 11.13. Multiple Counterparts.
The parties may sign multiple counterparts of this
Indenture. Each signed counterpart shall be deemed an
original, but all of them together represent one and the same agreement.
Section 11.14. Table of Contents, Headings, etc.
The table of contents, cross-reference sheet 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
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
Section 11.15. Separability.
Each provision of this Indenture shall be
considered separable and, if for any reason any provision
which is not essential to the effectuation of the basic purpose of this
Indenture or the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
[The rest of this page has been intentionally left blank.]
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Indenture
to be duly executed, and attested, all as of the date
and year first written above.
ADELPHIA COMMUNICATIONS
CORPORATION
By: _________________________
Name:
Title:
WITNESS:
- ----------------------------
Name:
BANK OF MONTREAL TRUST COMPANY, as Trustee
By: _________________________
Name:
Title:
WITNESS:
- ---------------------------
Name:
Exhibit 10.01
REGISTRATION RIGHTS AGREEMENT
Dated as of February 26, 1997
between
Adelphia Communications Corporation
and
Smith Barney Inc.
<PAGE>
This Registration Rights Agreement (this "Agreement") is made and
entered into as of February 26, 1997 between Adelphia Communications Corporation
(the "Company") and Smith Barney Inc. (the "Initial Purchaser"), who has agreed
to purchase the 9 7/8% Senior Notes due 2007 of the Company (the "Senior Notes")
pursuant to the Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated
February 21, 1997 (the "Purchase Agreement"), between the Company and the
Initial Purchaser. In order to induce the Initial Purchaser to purchase the
Senior Notes, the Company has agreed to provide the registration rights set
forth in this Agreement. The execution and delivery of this Agreement is a
condition to the obligations of the Initial Purchaser set forth in Section 2 of
the Purchase Agreement.
The parties hereby agree as follows:
<PAGE>
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.
Closing Date: The date of this Agreement.
Commission: The Securities and Exchange Commission.
Consummate: A Registered Exchange Offer shall be deemed
"Consummated" for purposes of this Agreement upon the occurrence of (i) the
filing and effectiveness under the Act of the Exchange Offer Registration
Statement relating to the Exchange Notes to be issued in the Exchange Offer,
(ii) the maintenance of such Registration Statement continuously effective and
the keeping of the Exchange Offer open for a period not less than the minimum
period required pursuant to Section 3(b) hereof, and (iii) the delivery by the
Company to the Registrar under the Indenture of Exchange Notes in the same
aggregate principal amount as the aggregate principal amount of Senior Notes
that were tendered by Holders thereof pursuant to the Exchange Offer.
Damages Payment Date: With respect to the Senior Notes, each
Interest Payment Date.
Effectiveness Target Date: As defined in Section 5.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Notes: The 9 7/8% Senior Notes due 2007 of the Company
to be issued pursuant to the Indenture in the Exchange Offer.
Exchange Offer: The registration by the Company under the Act of
the Exchange Notes pursuant to a Registration Statement pursuant to which the
Company offers the Holders of all outstanding Transfer Restricted Securities the
opportunity to exchange all such outstanding Transfer Restricted Securities held
by such Holders for Exchange Notes in an aggregate principal amount equal to the
aggregate principal amount of the Transfer Restricted Securities tendered in
such exchange offer by such Holders.
Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial Purchaser
propose to sell the Senior Notes to certain "qualified institutional buyers," as
such term is defined in Rule 144A under the Act, and to certain institutional
"accredited investors," as such term is defined in Rule 501(a)(1), (2), (3) or
(7) of Regulation D under the Act ("Accredited Institutions") and outside the
United States to non-U.S. persons in reliance on Regulation S under the Act.
Holders: As defined in Section 2(b) hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Indenture: The Indenture, dated as of February 26, 1997, between
the Company and Bank of Montreal Trust Company, as trustee (the "Trustee"),
pursuant to which the Senior Notes are to be issued, as such Indenture is
amended or supplemented from time to time in accordance with the terms thereof.
Initial Purchaser: As defined in the preamble hereto.
Interest Payment Date: As defined in the Indenture and the Notes.
NASD: National Association of Securities Dealers, Inc.
Notes: The Senior Notes and the Exchange Notes.
Person: An individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political
subdivision thereof.
Prospectus: The prospectus included in a Registration Statement, 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 relating to
Notes, each Person who is a Holder of Notes on the record date with respect to
the Interest Payment Date on which such Damages Payment Date shall occur.
Registrar: Means the Registrar of the Notes as defined in the
Indenture.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Company
relating to (a) an offering of Exchange Notes pursuant to an Exchange Offer or
(b) the registration for resale of Transfer Restricted Securities pursuant to
the Shelf Registration Statement, which is filed pursuant to the provisions of
this Agreement, in each case, including the Prospectus included therein, all
amendments and supplements thereto (including post-effective amendments) and all
exhibits and material incorporated by reference therein.
Senior Notes: As defined in the preamble hereto.
Shelf Filing Deadline: As defined in Section 4 hereof.
Shelf Registration Statement: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939
(15 U.S.C. Section 77aaa-77bbbb) as in effect on the date of the Indenture.
---
Transfer Restricted Securities: Each Senior Note, until the
earliest to occur of (a) the date on which such Senior Note is exchanged in the
Exchange Offer and entitled to be resold to the public by the Holder thereof
without complying with the prospectus delivery requirements of the Act, (b) the
date on which such Senior Note has been effectively registered under the Act and
disposed of in accordance with a Shelf Registration Statement and (c) the date
on which such Senior Note is distributed to the public pursuant to Rule 144
under the Act or by a Broker-Dealer pursuant to the "Plan of Distribution"
contemplated by the Exchange Offer Registration Statement (including delivery of
the Prospectus contained therein).
Underwritten Registration or Underwritten Offering: A registration
in which securities of the Company are sold to an underwriter for reoffering to
the public.
2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities entitled
to the benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed
to be a holder of Transfer Restricted Securities (each, a "Holder") whenever
such Person owns Transfer Restricted Securities.
3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permissible under
applicable law or Commission policy (after the procedures set forth in Section
6(a) below have been complied with), the Company shall (i) use its reasonable
efforts to cause to be filed with the Commission as soon as practicable after
the Closing Date, but in no event later than 90 days after the Closing Date, a
Registration Statement under the Act relating to the Exchange Notes and the
Exchange Offer, (ii) use its best efforts to cause such Registration Statement
to become effective no later than 180 days after the Closing Date, (iii) in
connection with the foregoing, file (A) all pre-effective amendments to such
Registration Statement as may be necessary in order to cause such Registration
Statement to become effective, (B) if applicable, a post-effective amendment to
such Registration Statement pursuant to Rule 430A under the Act and (C) cause
all necessary filings in connection with the registration and qualification of
the Exchange Notes to be made under the Blue Sky laws of such jurisdictions as
are necessary to permit Consummation of the Exchange Offer, and (iv) upon the
effectiveness of such Registration Statement, commence the Exchange Offer. The
Exchange Offer Registration Statement shall be on the appropriate form
permitting registration of the Exchange Notes to be offered in exchange for the
Transfer Restricted Securities and to permit resales of Notes held by
Broker-Dealers as contemplated by Section 3(c) below.
(b) The Company shall cause the Exchange Offer Registration
Statement to be effective continuously and shall keep the Exchange Offer open
for a period of not less than the minimum period required under applicable
federal and state securities laws to Consummate the Exchange Offer; provided,
however, that in no event shall such period be less than 20 business days. The
Company shall cause the Exchange Offer to comply with all applicable federal and
state securities laws. No securities other than the Notes shall be included in
the Exchange Offer Registration Statement. The Company shall use its best
efforts to cause the Exchange Offer to be Consummated on the earliest
practicable date after the Exchange Offer Registration Statement has become
effective, but in no event later than 30 business days thereafter.
(c) The Company shall indicate in a "Plan of Distribution" section
contained in the Prospectus contained in the Exchange Offer Registration
Statement that any Broker-Dealer who holds Senior Notes that are Transfer
Restricted Securities and that were acquired for its own account as a result of
market-making activities or other trading activities (other than Transfer
Restricted Securities acquired directly from an Issuer), may exchange such
Senior Notes pursuant to the Exchange Offer; however, such Broker-Dealer may be
deemed to be an "underwriter" within the meaning of the Act and may be required,
therefore, to deliver a prospectus meeting the requirements of the Act in
connection with any sales of the Exchange Notes 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 resales by Broker-Dealers
that the Commission may require in order to permit such resales pursuant
thereto, but such "Plan of Distribution" shall not name any such Broker-Dealer
or disclose the amount of Notes held by any such Broker-Dealer except to the
extent required by the Commission as a result of a change in policy after the
date of this Agreement.
The Company shall use its best efforts to keep the Exchange Offer
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Section 6(c) below to the extent necessary to
ensure that it is available for resales of Notes acquired by Broker-Dealers for
their own accounts as a result of market-making activities or other trading
activities, 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 Registration Statement is declared
effective.
The Company shall promptly provide sufficient copies of the latest
version of such Prospectus to Broker-Dealers promptly upon request, at any time
during such one year period in order to facilitate such sales.
4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Company is not required to
file an Exchange Offer Registration Statement or permitted to Consummate the
Exchange Offer, in either case, because the Exchange Offer is not permitted by
applicable law or Commission policy (after the procedures set forth in Section
6(a) below have been complied with) or (ii) if any Holder of Transfer Restricted
Securities shall notify the Company within 20 business days of the Consummation
of the Exchange Offer (A) that such Holder is prohibited by applicable law or
Commission policy from participating in the Exchange Offer, or (B) that such
Holder may not resell the Exchange Notes acquired by it in the Exchange Offer to
the public without delivering a prospectus and that the Prospectus contained in
the Exchange Offer Registration Statement is not appropriate or available for
such resales by such Holder, or (iii) if any Holder of Transfer Restricted
Securities is a Broker-Dealer and holds Senior Notes acquired directly from the
Company or an affiliate of the Company and shall so notify the Company, then the
Company shall
(x) cause to be filed a shelf registration statement pursuant
to Rule 415 under the Act, which may be an amendment to the Exchange
Offer Registration Statement (in either event, the "Shelf Registration
Statement") on or prior to the earliest to occur of (1) the 30th day
after the date on which the Company is notified by the Commission or
otherwise determine that they are not required to file the Exchange Offer
Registration Statement or permitted to Consummate the Exchange Offer, (2)
the 30th day after the date on which the Company receives notice from a
Holder of Transfer Restricted Securities as contemplated by clauses (ii)
or (iii) above, and (3) the 60th day after the Closing Date (such
earliest date being the "Shelf Filing Deadline"), which Shelf
Registration Statement shall provide for resales of 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 be declared effective by the Commission on or before the
90th day after the Shelf Filing Deadline.
The Company shall use its best efforts to keep such Shelf Registration
Statement continuously effective, supplemented and amended as required by the
provisions of Sections 6(b) and (c) hereof to the extent necessary to ensure
that it is available for resales of Notes by the Holders of Transfer Restricted
Securities 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, until
the third anniversary of the Closing Date or such shorter period that will
terminate when all the Notes covered by the Shelf Registration Statement have
been sold pursuant to the Shelf Registration Statement or become eligible for
resale pursuant to Rule 144 without volume or other restrictions.
(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 business days after receipt of a
request therefor, such information as the Company may reasonably request 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 reasonably
requested 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.
5. LIQUIDATED DAMAGES
If (i) the 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) 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 after 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 immediately declared effective (each such event referred to in clauses
(i) through (iv), a "Registration Default"), the Company hereby jointly and
severally agrees to pay liquidated damages to each Holder of Transfer Restricted
Securities with respect to the first 90-day period immediately following the
occurrence of such Registration Default, in an amount equal to 0.25% per annum
on the principal amount of Transfer Restricted Securities held by such Holder
for the period that the Registration Default continues. The amount of the
liquidated damages shall increase by an additional 0.25% per annum for each
subsequent 90 day period until all Registration Defaults have been cured, up to
a maximum amount of liquidated damages of 2.0% per annum on the principal amount
of Transfer Restricted Securities. All accrued liquidated damages shall be paid
to Record Holders by the Company by wire transfer of immediately available funds
or by federal funds check on each Damages Payment Date, as provided in the
Indenture. Following the cure of all Registration Defaults relating to any
particular Transfer Restricted Securities, the accrual of liquidated damages
with respect to such Transfer Restricted Securities will cease.
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.
6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with
the Exchange Offer, the Company shall comply with all of the provisions of
Section 6(c) below, shall use its best efforts to effect such exchange to permit
the sale of 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:
6.(i) If in the reasonable opinion of counsel to the Company
there is a question as to whether the Exchange Offer is permitted by
applicable 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 Senior Notes. The Company hereby
agrees to pursue the issuance of such a decision to the Commission staff
level but shall not be required to take commercially unreasonable action
to effect a change of Commission policy. The Company hereby agrees,
however, to (A) participate in telephonic conferences with the
Commission, (B) deliver 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 pursue 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 thereof, 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 Exchange Notes to be
issued in the Exchange Offer and (C) it is acquiring the Exchange Notes
in its ordinary course of business. In addition, all such Holders of
Transfer Restricted Securities shall otherwise cooperate in the Company's
preparations for the Exchange Offer. 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 any no-action letter
obtained pursuant to clause (i) above), 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 should 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
Exchange Notes obtained by such Holder in exchange for Senior Notes
acquired by such Holder directly from an Issuer.
(iii) Prior to effectiveness of the Exchange Offer
Registration Statement, the Company shall, provide a supplemental letter
to the Commission stating (A) that the Company is registering the
Exchange Offer in reliance on the position of the Commission enunciated
in Exxon Capital Holdings Corporation (available May 13, 1988), Morgan
Stanley and Co., Inc. (available June 5, 1991) and, if applicable, any
no-action letter obtained pursuant to clause (i) above and (B) including
a representation that the Company has not entered into any arrangement or
understanding with any Person to distribute the Exchange Notes to be
received in the Exchange Offer and that, to the best of the Company's
information and belief, each Holder participating in the Exchange Offer
is acquiring the Exchange Notes in its ordinary course of business and
has no arrangement or understanding with any Person to participate in the
distribution of the Exchange Notes received in the Exchange Offer.
(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, and
pursuant thereto the Company will as expeditiously as possible 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.
(c) General Provisions. In connection with any Registration
Statement and any Prospectus required by this Agreement to permit the sale or
resale of Transfer Restricted Securities (including, without limitation, any
Registration Statement and the related Prospectus required to permit resales of
Notes by Broker-Dealers), the Company shall:
(i) use its best efforts to keep such Registration Statement
continuously effective and provide all requisite financial statements for
the period specified in Section 3 or 4 of this Agreement, as applicable;
upon the occurrence of any event that would cause any such Registration
Statement or the Prospectus contained therein (A) to contain a material
misstatement or omission or (B) not to be effective and usable for resale
of Transfer Restricted Securities during the period required by this
Agreement, the Company shall file promptly an appropriate amendment to
such Registration Statement, in the case of clause (A), correcting any
such misstatement or omission, and, in the case of either clause (A) or
(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 its 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, as applicable 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 the applicable provisions of Rules 424 and 430A 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) advise the underwriter(s), if any, and selling Holders
promptly and, if requested by such Persons, to 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 or the
Prospectus in order to make the statements therein 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 each of the selling Holders and each of the
underwriter(s), 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 will be
subject to the review of such Holders and underwriter(s), if any, for a
period of at least five business days, and the Company will not file any
such Registration Statement or Prospectus or any amendment or supplement
to any such Registration Statement or Prospectus (including all such
documents incorporated by reference) to which a selling Holder of
Transfer Restricted Securities covered by such Registration Statement or
the underwriter(s), 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;
(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), 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) make available at reasonable times for inspection by the
selling Holders, any underwriter participating in any disposition
pursuant to such Registration Statement, and any attorney or accountant
retained by such selling Holders or any of the underwriters, 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 Holders,
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), if any, promptly incorporate 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 incorporated in such
Prospectus supplement or post-effective amendment;
(viii) cause the Transfer Restricted Securities covered by
the Registration Statement to be rated with the appropriate rating
agencies, if so requested by the Holders of a majority in aggregate
principal amount of Notes covered thereby or the underwriter(s), if any;
(ix) furnish to each selling Holder and each of the
underwriter(s), 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 exhibits incorporated therein by
reference);
(x) deliver to each selling Holder and each of the
underwriter(s), if any, without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement
thereto as such Persons reasonably may request; the Company hereby
consents to the use 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;
(xi) enter into such agreements (including 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, all to such
extent as may be requested by the Initial Purchaser or by any Holder of
Transfer Restricted Securities or underwriter in connection with any sale
or resale pursuant to any Registration Statement contemplated by this
Agreement; and whether or not an underwriting agreement is entered into
and whether or not the registration is an Underwritten Registration, the
Company shall:
(A) furnish to the Initial Purchaser, each selling Holder and
each underwriter, if any, in such substance and scope as they may
request and as are customarily made by issuers to underwriters in
primary underwritten offerings, (i) upon the date of the
Consummation of the Exchange Offer, (ii) if applicable, the
effectiveness of the Shelf Registration Statement and (iii) upon
the filing of any amendment or supplement to any Registration
Statement:
(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 by (y) the
President or any Vice President and (z) a principal financial
or accounting officer of the Company confirming, as of the
date thereof, the matters set forth in paragraphs (j) and (k)
of Section 7 of the Purchase Agreement and such other matters
as such parties 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 the matters set forth in paragraphs
(d), (e), (f) and (g) of Section 7 of the Purchase Agreement
and such other matters as such parties 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's
representatives of the independent public accountants for the
Company and the Initial Purchaser's representatives and the
Initial Purchaser's counsel in connection with the
preparation of such Registration Statement and the related
Prospectus and have considered the matters required to be
stated therein and the statements contained therein, although
such counsel has not independently verified the accuracy,
completeness or fairness of such statements; and that such
counsel advises that, on the basis of the foregoing (relying
as to materiality to a certain extent upon facts provided to
such counsel by officers and other representatives of the
Company and without independent check or verification), no
facts came to such counsel's attention that caused such
counsel to believe that the applicable Registration
Statement, at the time such Registration Statement or any
post-effective amendment thereto became effective, and, in
the case of the Exchange Offer Registration Statement, as of
the date of Consummation, 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 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) customary comfort letters, dated as of the date of
Consummation of the Exchange Offer or the date of
effectiveness of the Shelf Registration Statement, as the
case may be, from the Company's independent accountant,
Deloitte & Touche LLP, in the customary form and covering
matters of the type customarily covered in comfort letters by
underwriters in connection with primary underwritten
offerings, and affirming the matters set forth in the comfort
letters delivered pursuant to Section 7(i) of the Purchase
Agreement, without exception;
(B) set forth in full or incorporate by reference in the
underwriting agreement, if any, 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 such parties 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 (xi), if any.
If at any time the representations and warranties of the Company
contemplated in clause (A)(1) above cease to be true and correct, the
Company shall so advise the Initial Purchaser and the underwriters(s), if
any, and each selling Holder promptly and, if requested by such Persons,
shall confirm such advice in writing;
(xii) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the underwriter(s), if
any, and its respective 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) 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 any Registration Statement;
provided, however, that the Company shall not be required to register or
qualify to transact business where they are not now so qualified or to
take any action that would subject them 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 they are not now
so subject;
(xiii) shall issue, upon the request of any Holder of Senior
Notes covered by the Shelf Registration Statement, Exchange Notes, having
an aggregate principal amount equal to the aggregate principal amount of
Senior Notes surrendered to the Company by such Holder in exchange
therefor or being sold by such Holder; such Exchange Notes to be
registered in the name of such Holder or in the name of the purchaser(s)
of such Notes, as the case may be; in return, the Senior Notes held by
such Holder shall be surrendered to the Company for cancellation;
(xiv) 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 enable such Transfer
Restricted Securities to be in such denominations and registered in such
names as the Holders or the underwriter(s), if any, may request at least
two business days prior to any sale of Transfer Restricted Securities
made by such underwriter(s);
(xv) use its best efforts to cause 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 (xii) above;
(xvi) if any fact or event contemplated by clause (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 will not
contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading;
(xvii) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of the Registration
Statement and provide the Trustees under the Indenture with printed
certificates for the Transfer Restricted Securities which are in a form
eligible for deposit with The Depository Trust Company;
(xviii) 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 any "qualified independent
underwriter") that is required to be retained in accordance with the
rules and regulations of the NASD, and use its reasonable 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;
(xix) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make generally
available to its security holders, as soon as practicable, a consolidated
earnings statement meeting the requirements of Rule 158 (which need not
be audited) for the twelve-month period (A) commencing at the end of any
fiscal quarter in which Transfer Restricted Securities are sold to
underwriters in a firm or best efforts Underwritten Offering or (B) if
not sold to underwriters in such an offering, beginning with the first
month of the Company's first fiscal quarter commencing after the
effective date of the Registration Statement;
(xx) cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement
required by this Agreement, and, in connection therewith, cooperate with
the Trustee and the Holders of Notes to effect such changes to the
Indenture as may be required for such Indenture to be so qualified in
accordance with the terms of the TIA; and execute and use its best
efforts to cause the Trustee to execute, all documents that may be
required to effect such changes and all other forms and documents
required to be filed with the Commission to enable such Indenture to be
so qualified in a timely manner;
(xxi) cause all Transfer Restricted Securities covered by the
Registration Statement to be listed on each securities exchange on which
similar securities issued by the Company is then listed if requested by
the Holders of a majority in aggregate principal amount of Senior Notes
or the managing underwriter(s), if any; and
(xxii) provide promptly to each Holder upon request each
document filed with the Commission pursuant to the requirements of
Section 13 and Section 15 of the Exchange Act.
Each Holder agrees by acquisition of a Transfer Restricted Security
that, upon receipt of any notice from the Company of the existence of any fact
of the kind described in Section 6(c)(iii)(D) hereof, such Holder will 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)(xvi) hereof,
or until it is advised in writing (the "Advice") 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. If so
directed by the Company, each Holder will 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 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)(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)(xvi) hereof or
shall have received the Advice.
7. REGISTRATION EXPENSES
(a) All expenses associated with and incident to the
Company's performance of or compliance with this Agreement will 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 filings made by the Initial Purchaser or any Holder with the NASD and
reasonable counsel fees and disbursements in connection therewith (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 reasonable fees and disbursements of compliance with federal securities
and state Blue Sky or securities laws (including all fees and expenses of
counsel to the underwriter(s) in connection with compliance with state Blue Sky
or securities laws); (iii) all expenses of printing (including printing
certificates for the Exchange Notes to be issued in the Exchange Offer and
printing of Prospectuses), messenger and delivery services and telephone; (iv)
all fees and disbursements of counsel for the Company and, subject to Section
7(b) below, the Holders of Transfer Restricted Securities; (v) all application
and filing fees in connection with listing the Notes on a national securities
exchange or automated quotation system pursuant to the requirements hereof; (vi)
all fees and expenses of the Trustee under the Indenture to the extent provided
in the Indenture and of any escrow agent, custodian or exchange agent; and (vii)
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
Latham & Watkins or such other counsel as may 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.
8. INDEMNIFICATION
(a) Indemnification by the Company. Upon any registration of Transfer
Restricted Securities or Broker-Dealer Transfer Restricted Securities, as
applicable, pursuant to Sections 3 and 4 hereof, and in consideration of the
agreements of the Initial Purchaser contained herein, and as an inducement to
the Initial Purchaser to purchase the Notes, the Company, jointly and severally,
shall and hereby agrees to, (i) indemnify and hold harmless each Holder of
Transfer Restricted Securities and Broker-Dealer Transfer Restricted Securities,
as applicable, to be included in such registration and each person who
participates as a placement or sales agent or as an underwriter in any offering
or sale of such Transfer Restricted Securities or Broker-Dealer Transfer
Restricted Securities, as applicable, against any losses, claims, damages or
liabilities, joint or several, to which such Holder, agent or underwriter may
become subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement under which such Transfer Restricted
Securities or Broker-Dealer Transfer Restricted Securities, as applicable, were
registered under the Act, or any preliminary, final or summary Prospectus
contained therein or furnished by the Company to any such Holder, agent or
underwriter, or any amendment 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 not
misleading, and (ii) reimburse such Holder, such agent and such underwriter for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable under (i)
above to any such person in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such
Registration Statement, or preliminary, final or summary Prospectus, or
amendment or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by such person expressly for use therein.
(b) Indemnification by the Holders and any Agents and Underwriters. The
Company may require, as a condition to including any Transfer Restricted
Securities or Broker-Dealer Transfer Restricted Securities, as applicable, in
any Registration Statement filed pursuant to Sections 3 and 4 hereof and to
entering into any underwriting agreement, if any, with respect thereto, that the
Company shall have received an undertaking reasonably satisfactory to it from
the Holders of such Transfer Restricted Securities or Broker-Dealer Transfer
Restricted Securities, as applicable, and from each underwriter named in any
such underwriting agreement, if any, severally and not jointly, to (i) indemnify
and hold harmless the Company, and, in the case of a Shelf Registration
Statement, all other Holders of Transfer Restricted Securities, against any
losses, claims, damages or liabilities to which the Company, or such other
Holders of Transfer Restricted Securities or Broker-Dealer Transfer Restricted
Securities, as applicable, may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in such Registration Statement, or any
preliminary, final or summary Prospectus contained therein or furnished by the
Company to any such Holder, agent or underwriter, if any, or any amendment 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 not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Holder or
underwriter expressly for use therein, and (ii) reimburse the Company for any
legal or other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that no such Holder shall be required to undertake
liability to any person under this Section 8(b) for any amounts in excess of the
dollar amount of the proceeds to be received by such Holder from the sale of
such Holder's Transfer Restricted Securities or Broker-Dealer Transfer
Restricted Securities, as applicable, pursuant to such registration.
(c) Notices of Claims, Etc. Promptly after receipt by an indemnified
party under subsection (a) or (b) above of written notice of the commencement of
any action, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party pursuant to the indemnification provisions of
or contemplated by this Section 8, notify such indemnifying party in writing of
the commencement of such action; but the omission so to notify the indemnifying
party shall not relieve it from any liability which it may have to any
indemnified party other than under the indemnification provisions of or
contemplated by Section 8(a) or 8(b) hereof. In case any such action shall be
brought against any indemnified party and it shall notify an indemnifying party
of the commencement thereof, such indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party, and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, such indemnifying party shall not be liable to such
indemnified party for any legal expenses of other counsel or any other expenses,
in each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation.
Notwithstanding the foregoing, any indemnified party shall have the right to
employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
the indemnified party unless the indemnified party shall have been advised by
counsel that representation of the indemnified party by counsel provided by the
indemnifying party would be inappropriate due to actual or potential conflicting
interests between the indemnifying party and the indemnified party, including
situations in which there are one or more legal defenses available to the
indemnified party that are different from or additional to those available to
the indemnifying party; provided, however, that the indemnifying party shall
not, in connection with any one such action or proceeding or separate but
substantially similar actions or proceedings arising out of the same general
allegations, be liable for the fees and expenses of more than one separate firm
of attorneys at any time for all indemnified parties, except to the extent that
local counsel, in addition to its regular counsel, is required in order to
effectively defend against such action or proceeding. The indemnifying party
shall not be required to indemnify any indemnified party for any amount paid or
payable by such indemnified party in the settlement of any action, proceeding or
investigation without the written consent of the indemnifying party, which
consent shall not be unreasonably withheld. No indemnifying party shall, without
the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is an
actual or potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act by or on behalf of any indemnified party.
(d) Contribution. Each party hereto agrees that, if for any reason the
indemnification provisions contemplated by Section 8(a) or Section 8(b) are
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, claims damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and the
indemnified party in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities (or actions in respect thereof),
as well as any other relevant equitable considerations. It is understood that
contribution under this subsection (d) is unavailable to indemnified parties to
the same extent that indemnification is unavailable under the proviso at the end
of subsection (a) above. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such indemnifying party or by such indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just
and equitable if contributions pursuant to this Section 8(d) were determined by
pro rata allocation (even if the Holders or any agents or underwriters or all of
them were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in this Section 8(d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, or liabilities (or actions in respect
thereof) referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), no Holder shall be required to contribute any
amount in excess of the amount by which the dollar amount of the proceeds
received by such Holder from the sale of any Transfer Restricted Securities
(after deducting any fees, discounts and commissions applicable thereto) or
Broker-Dealer Transfer Restricted Securities, as applicable, exceeds 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 no
underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Transfer Restricted Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. 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'
and any underwriters' obligations in this Section 8(d) to contribute shall be
several in proportion to the principal amount of Transfer Restricted Securities
or Broker-Dealer Transfer Restricted Securities, as applicable, registered or
underwritten, as the case may be, by them and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each officer, director and partner of
each Holder, agent and underwriter and each person, if any, who controls any
Holder, agent or underwriter within the meaning of the Act; and the obligations
of the Holders and any underwriters contemplated by this Section 8 shall be in
addition to any liability which the respective Holder or underwriter may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company (including any person who, with his consent,
is named in any Registration Statement as about to become a director of the
Company and to each person, if any, who controls the Company within the meaning
of the Act.
9. RULE 144A
The Company hereby agrees with each Holder, for so long as any
Transfer Restricted Securities remain outstanding, to make available 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 from 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.
10. PARTICIPATION IN 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 any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all reasonable questionnaires, powers of attorney,
indemnities, underwriting agreements, lock-up letters and other documents
required under the terms of such underwriting arrangements.
11. SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering. In any such Underwritten Offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the holders of a majority in
aggregate principal amount of the Transfer Restricted Securities included in
such offering; provided, that such investment bankers and managers must be
reasonably satisfactory to the Company.
12. MISCELLANEOUS
(a) Remedies. The Company agrees that monetary damages
(including the liquidated damages contemplated hereby) would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Agreement and hereby agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will 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. 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 Notes. The Company shall not
take any action, or permit any change to occur, with respect to the Notes that
would materially and adversely affect the ability of the Holders to Consummate
the 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 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 being tendered or registered.
(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:
Adelphia Communications Corporation
Main at Water Street
Coudersport, PA 16915
Telecopier No.: (814) 274-7098
Attention: Colin Higgin
With a copy to:
Buchanan Ingersoll
1 Oxford Center
301 Grant Street, 20th Floor
Pittsburgh, PA 15219
Telecopier No.: (412) 562-1041
Attention: Lew Davis
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 answered back, if telexed; when receipt acknowledged, if telecopied; and on
the next business day, if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands or other communications shall
be concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities; provided,
however, that this Agreement shall not inure to the benefit of or be binding
upon a successor or assign of a Holder unless and to the extent such successor
or assign acquired Transfer Restricted Securities 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 together with the Notes,
the Indenture and the Purchase 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 by the Company with respect to
the Transfer Restricted Securities. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
[signature page follows]
<PAGE>
21
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
Adelphia Communications Corporation
By:
Name:
Title:
Smith Barney Inc.
By:
Name:
Title:
Exhibit 10.02
$350,000,000 EXECUTION COPY
Adelphia Communications Corporation
9 7/8% Senior Notes due 2007
PURCHASE AGREEMENT
February 21, 1997
SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
Adelphia Communications Corporation, a Delaware corporation (the "Company"),
proposes, upon the terms and conditions set forth herein, to issue and sell to
you, as the initial purchaser (the "Initial Purchaser"), $350,000,000 in
aggregate principal amount of its 9 7/8% Senior Notes due 2007 (the "Senior
Notes"). The Senior Notes will (i) have the terms and provisions which are
summarized in the Offering Memorandum (as defined herein), (ii) be in the forms
specified by the Initial Purchaser pursuant to Section 3 hereof, and (iii) be
issued pursuant to the provisions of an Indenture, to be dated as of February
26, 1997 (the "Indenture"), between the Company and Bank of Montreal Trust
Company, as trustee (the "Trustee").
The Company wishes to confirm as follows their agreement
with you the Initial Purchaser in connection with the
purchase and resale of the Senior Notes.
1. Preliminary Offering Memorandum and Offering
Memorandum. The Senior Notes will be offered and sold
to the Initial Purchaser without registration under the Securities Act of 1933,
as amended (the "Act"), in reliance on an exemption pursuant to Section 4(2)
under the Act. The Company has prepared a preliminary offering memorandum, dated
February 19, 1997, which includes the Company's Quarterly Report on Form 10-Q
for the period ended December 31, 1996 and Annual Report on Form 10-K for the
fiscal year ended March 31, 1996, as amended by Form 10-K/A dated July 29, 1996
(the "Preliminary Offering Memorandum"), and an offering memorandum, dated
February 21, 1997, which includes the Company's Quarterly Report on Form 10-Q
for the period ended December 31, 1996 and Annual Report on Form 10-K for the
fiscal year ended March 31, 1996, as amended by Form 10-K/A dated July 29, 1996
(the "Offering Memorandum"), setting forth information regarding the Company,
the Senior Notes and the Exchange Notes (as defined herein). Any references
herein to the Preliminary Offering Memorandum and the Offering Memorandum shall
be deemed to include all amendments and supplements thereto, if any. The Company
hereby confirms that they have authorized the use of the Preliminary Offering
Memorandum and the Offering Memorandum in connection with the offering and
resale of the Senior Notes by the Initial Purchaser.
The Company understands that the Initial Purchaser proposes
to make offers (the "Exempt Resales") of the Senior
Notes purchased by the Initial Purchaser hereunder only on the terms set forth
in the Offering Memorandum, and Section 2 hereof, as soon as the Initial
Purchaser deems advisable after this Agreement has been executed and delivered,
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) a limited number of other institutional "accredited investors," as
defined in Rule 501(a) (1), (2), (3) and (7) under the Act, that make the
representations and agreements to the Company specified in Annex A to the
Offering Memorandum (each, an "Accredited Institution") (such persons specified
in clauses (i) and (ii) being referred to herein as the "Eligible Purchasers").
It is understood and acknowledged that upon original
issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the Act, the Senior Notes
(and all securities issued in exchange therefor, in substitution thereof) shall
bear the following legend:
"THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT (1) TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES
ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION
COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER
THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), (4) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (5) TO
AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND
OTHER JURISDICTIONS."
It is also understood and acknowledged that holders
(including subsequent transferees) of the Senior Notes will
have the registration rights set forth in the registration rights agreement (the
"Registration Rights Agreement"), to be dated the Closing Date, in substantially
the form of Exhibit A hereto, for so long as such Senior Notes constitute
"Transfer Restricted Securities" (as defined in the Registration Rights
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 relating to the Company's 9 7/8% Senior Notes due 2007 (the "Exchange
Notes") to be offered in exchange for the Senior Notes (the "Registered Exchange
Offer") and (ii) under certain circumstances, a shelf registration statement
pursuant to Rule 415 under the Act relating to the resale by certain holders of
the Senior Notes, and to use its best efforts to cause such registration
statements to be declared effective. As used herein, the Senior Notes and the
Exchange Notes are hereinafter referred to collectively as the "Notes." This
Agreement, the Indenture, the Notes and the Registration Rights Agreement are
hereinafter referred to collectively as the "Operative Documents."
2. Agreements to Sell, Purchase and Resell.
(a) The Company hereby agrees, on the basis of the
representations, warranties and agreements of the Initial Purchaser contained
herein and subject to all the terms and conditions set forth herein, to issue
and sell to the Initial Purchaser and, upon the basis of the representations,
warranties and agreements of the Company herein contained and subject to all the
terms and conditions set forth herein, the Initial Purchaser agrees to purchase
from the Company, at a purchase price of 97.75% of the principal amount thereof,
all of the Senior Notes. The Company shall not be obligated to deliver any of
the Senior Notes to be delivered hereunder except upon payment for all of the
Senior Notes to be purchased as provided herein.
The Initial Purchaser hereby represents and
warrants to the Company that it will offer the Senior
Notes for sale upon the terms and conditions set forth in this Agreement and in
the Offering Memorandum. The Initial Purchaser hereby represents and warrants
to, and agrees with, the Company that such Initial Purchaser (i) is either a QIB
or an Accredited Institution, in either case 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 Senior Notes; (ii) is purchasing the
Senior Notes pursuant to a private sale exempt from registration under the Act;
(iii) in connection with the Exempt Resales, will solicit offers to buy the
Senior Notes only from, and will offer to sell the Senior Notes only to, the
Eligible Purchasers in accordance with this Agreement and on the terms
contemplated by the Offering Memorandum; and (iv) will not offer or sell the
Senior Notes, nor has it offered or sold the Senior Notes by, or otherwise
engaged in, any form of general solicitation or general advertising (within the
meaning of Regulation D; including, but not limited to, advertisements,
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) in connection with the offering of the Senior Notes. The Initial
Purchaser has advised the Company that the Initial Purchaser will initially
offer the Senior Notes to Eligible Purchasers at a price of 99.217% of the
principal amount thereof, plus accrued interest, if any, from the date of
issuance of the Senior Notes. Such price may be changed by the Initial Purchaser
at any time thereafter without notice.
The Initial Purchaser understands that the Company and, for
purposes of the opinions to be delivered to the
Initial Purchaser pursuant to Sections 7(d) and 7(h) hereof, counsel to the
Company and counsel to the Initial Purchaser, will rely upon the accuracy and
truth of the foregoing representations, warranties and agreements and the
Initial Purchaser hereby consents to such reliance.
3. Delivery of the Notes and Payment Therefor.
Delivery to the Initial Purchaser of and payment for
the Senior Notes shall be made at the office of Latham & Watkins, 885 Third
Avenue, Suite 1000, New York, New York 10022 at 9:00 A.M., New York City time,
on February 26, 1997 (the "Closing Date"). The place of closing for the Senior
Notes and the Closing Date may be varied by agreement between the Initial
Purchaser and the Company.
The Senior Notes will be delivered to the Initial Purchaser
against payment of the purchase price therefor in
immediately available funds. The Senior Notes will be evidenced by one or more
global securities in definitive form (the "Global Note") and/or by additional
definitive securities, and will be registered, in the case of the Global Note,
in the name of Cede & Co. as nominee of The Depository Trust Company ("DTC"),
and in the other cases, in such names and in such denominations as the Initial
Purchaser shall request prior to 9:30 A. M., New York City time, on the second
business day preceding the Closing Date. The Senior Notes to be delivered to the
Initial Purchaser shall be made available to the Initial Purchaser in New York
City for inspection and packaging not later than 9:30 A.M., New York City time,
on the business day next preceding the Closing Date.
4. Agreements of the Company. The Company agrees
with the Initial Purchaser as follows:
The Company will furnish to the Initial
Purchaser, without charge, such number of copies of the
Offering Memorandum as the Initial Purchaser may reasonably request.
The Company will not make any amendment or
supplement to the Preliminary Offering Memorandum or to
the Offering Memorandum of which the Initial Purchaser shall not previously have
been advised or to which the Initial Purchaser shall reasonably object after
being so advised, including by way of filing any document with the Commission
that would be incorporated therein by reference.
Prior to the execution and delivery of this
Agreement, the Company shall have delivered or will
deliver to the Initial Purchaser, without charge, in such quantities as the
Initial Purchaser shall have requested or may hereafter reasonably request,
copies of the Preliminary Offering Memorandum. The Company consents to the use,
in accordance with the securities or Blue Sky laws of the jurisdictions in which
the Senior Notes are offered by the Initial Purchaser and by dealers, prior to
the date of the Offering Memorandum, of each Preliminary Offering Memorandum so
furnished by the Company. The Company consents to the use of the Offering
Memorandum in accordance with the securities or Blue Sky laws of the
jurisdictions in which the Senior Notes are offered by the Initial Purchaser and
by all dealers to whom Senior Notes may be sold, in connection with the offering
and sale of the Senior Notes.
If, at any time prior to completion of the
distribution of the Senior Notes by the Initial Purchaser
to Eligible Purchasers, any event shall occur that in the judgment of the
Company, or in the opinion of counsel for the Initial Purchaser, should be set
forth in the Offering Memorandum in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or if it
is necessary to supplement or amend the Offering Memorandum in order to comply
with any law, the Company will forthwith prepare an appropriate supplement or
amendment thereto, and will expeditiously furnish to the Initial Purchaser and
dealers a reasonable number of copies thereof.
The Company will cooperate with the Initial
Purchaser and with its counsel in connection with the
qualification of the Senior Notes for offering and sale by the Initial Purchaser
and by dealers under the securities or Blue Sky laws of such jurisdictions as
the Initial Purchaser may designate and will file such consents to service of
process or other documents necessary or appropriate in order to effect such
qualification; provided, that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so qualified or
to take any action which would subject it to service of process in suits, other
than those arising out of the offering or sale of the Senior Notes, in any
jurisdiction where it is not now so subject.
So long as any of the Notes are outstanding, the
Company will furnish to the Initial Purchaser (i)
as soon as available, a copy of each report of the Company mailed to
stockholders generally or filed with any stock exchange or regulatory body and
(ii) from time to time such other information concerning the Company as the
Initial Purchaser may reasonably request.
If this Agreement shall terminate or shall be
terminated after execution and delivery pursuant to
any provisions hereof (otherwise than by notice given by the Initial Purchaser
terminating this Agreement pursuant to Section 10 hereof) or if this Agreement
shall be terminated by the Initial Purchaser because of any failure or refusal
on the part of the Company to comply with the terms or fulfill any of the
conditions of this Agreement, the Company agrees to reimburse the Initial
Purchaser for all out-of-pocket expenses (including reasonable fees and expenses
of its counsel) reasonably incurred by it in connection herewith, but without
any further obligation on the part of the Company for loss of profits or
otherwise.
The Company will apply the net proceeds from the
sale of the Senior Notes to be sold by it hereunder substantially in accordance
with the description set forth in the Offering Memorandum under the caption
"Use of Proceeds."
Except as stated in this Agreement and in the
Preliminary Offering Memorandum and Offering
Memorandum, the Company has not taken, nor will any of them 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 the Senior Notes to
facilitate the sale or resale of the Senior Notes. Except as permitted by the
Act, the Company will not distribute any offering material in connection with
the Exempt Resales.
The Company will use its best efforts to permit
the Notes to be designated Private Offerings,
Resales and Trading through Automated Linkages ("PORTAL") Market securities in
accordance with the rules and regulations adopted by the National Association of
Securities Dealers, Inc. relating to trading in the PORTAL Market and to permit
the Notes to be eligible for clearance and settlement through DTC.
From and after the Closing Date, so long as any
of the Notes are outstanding and are "restricted
securities" within the meaning of the Rule 144(a)(3) under the Act or, if
earlier, until three years after the Closing Date, 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"), the Company will furnish
to holders of the Notes and prospective purchasers of Notes designated by such
holders, upon request of such holders or such prospective purchasers, the
information (the "Additional Company Information") required to be delivered
pursuant to Rule 144A(d)(4) under the Act to permit compliance with Rule 144A in
connection with resales of the Notes.
The Company has complied and will comply with
all provisions of Florida Statutes Section 517.075
relating to issuers doing business with Cuba.
The Company agrees 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 Senior Notes in a manner that would require the registration
under the Act of the sale to the Initial Purchaser or the Eligible Purchasers of
the Senior Notes.
The Company agrees to comply with all the terms
and conditions of the Registration Rights Agreement
and all agreements set forth in the representation letters of the Company to DTC
relating to the approval of the Notes by DTC for "book entry" transfer.
The Company agrees to cause the Exchange Offer
to be made in the appropriate form, as contemplated
by the Registration Rights Agreement, to permit registration of the Exchange
Notes to be offered in exchange for the Senior Notes, and to comply with all
applicable federal and state securities laws in connection with the Registered
Exchange Offer.
The Company agrees that prior to any
registration of the Senior Notes pursuant to the Registration
Rights Agreement, or at such earlier time as may be required, the Indenture
shall be qualified under the Trust Indenture Act of 1939 (the "1939 Act") and
any necessary supplemental indentures will be entered into in connection
therewith.
The Company will not voluntarily claim, and will
resist actively all attempts to claim, the benefit
of any usury laws against holders of the Notes.
The Company will do and perform all things
required or necessary to be done and performed under this
Agreement by it prior to the Closing Date, and to satisfy all conditions
precedent to the Initial Purchaser's obligations hereunder to purchase the
Senior Notes.
5. Representations and Warranties of the Company.
The Company represents and warrants to the Initial Purchaser that:
The Preliminary Offering Memorandum and the
Offering Memorandum have been prepared in connection
with the offering of the Senior Notes. The Preliminary Offering
Memorandum or the Offering Memorandum, as the case may be, and any
amendments or supplements thereto did not and will not, as of their
respective dates, contain an untrue statement of a material fact or
omit 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; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by the Initial Purchaser
concerning the Initial Purchaser expressly for use therein (the
"Initial Purchaser Information"). Each of the Preliminary Offering
Memorandum and the Offering Memorandum, as of its date, contains all
the information specified in, and meeting the requirements of, Rule
144A(d)(4) under the Act.
The Company has not sustained since
December 31, 1996 any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Offering Memorandum; and, since the respective
dates as of which information is given in the Offering Memorandum,
there has not been any reduction in the consolidated stockholders'
equity or change in the capital stock, as applicable (other than
reductions in the ordinary course of business consistent with prior
periods), material increase in the total amount of short-term debt
(excluding trade payables) and long-term debt of the Company or any
of its material subsidiaries (the "Subsidiaries") or any material
adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, management,
financial position, partners' equity, shareholders' equity or results
of operations of the Company and its Subsidiaries, otherwise than as
set forth or contemplated in the Offering Memorandum;
Each of the Company and its Subsidiaries has
good and marketable title in fee simple to all real
property and good and marketable title to all personal property owned
by them, in each case free and clear of all liens, encumbrances and
defects except such as are described in the Offering Memorandum or
such as do not affect the value of such property and do not interfere
with the use made and proposed to be made of such property by the
Company and its Subsidiaries; and any real property and buildings
held under lease by the Company and its Subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions
as are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company and
its Subsidiaries; except in any case that would not have a material
adverse effect on the business, general affairs, management,
financial position, partners equity or shareholders' equity (other
than reductions in the ordinary course of business consistent with
prior periods), results of operations or prospects of the Company and
its Subsidiaries, taken as a whole a "Material Adverse Effect";
(i) Each of the Subsidiaries that are
partnerships has been duly formed and is validly existing as
a partnership in good standing under the laws of its state of
formation, with full power and authority (partnership and other) to
own its properties and conduct its business as described in the
Offering Memorandum, and has been duly qualified as a foreign
partnership for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability
by reason of the failure to be so qualified in any such jurisdiction
except where the failure to so qualify would not have a Material
Adverse Effect; and (ii) each of the Company and the Subsidiaries
that are corporations has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
state of incorporation, with full power and authority (corporate and
other) to own its properties and conduct its business as described in
the Offering Memorandum, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability
by reason of the failure to be so qualified in any such jurisdiction
except where the failure to so qualify would not have a Material
Adverse Effect;
Each of the Company and its Subsidiaries has the
ownership or authorized capitalizations, as the
case may be, as set forth in the Offering Memorandum, and all of the
partnership interests of the Subsidiaries that are partnerships and
all of the issued shares of capital stock of its Subsidiaries that
are corporations have been duly and validly authorized and issued and
with respect to shares of capital stock are fully paid and
non-assessable; and all of the partnership interests of the
Subsidiaries disclosed in the Offering Memorandum as being owned
directly or indirectly by the Company and all of the issued shares of
capital stock of the Subsidiaries that are corporations have been
duly and validly authorized and issued are fully paid and
non-assessable and are owned directly or indirectly by the Company
free and clear of all liens, encumbrances, equities or claims (other
than liens to secure indebtedness under credit facilities disclosed
in the Offering Memorandum); and ownership of the various interests
and shares of the Company and its Subsidiaries is as described in the
Offering Memorandum;
The Notes have been duly authorized and, when
issued and delivered pursuant to this Agreement, will
have been duly executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the Company
entitled to the benefits provided by the Indenture under which they
are to be issued, which will be substantially in the form previously
delivered to the Initial Purchaser; the Indenture has been duly
authorized by the Company and, when executed and delivered by the
Company and the Trustee, the Indenture will constitute a valid and
legally binding instrument, enforceable in accordance with its terms
against the Company, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; and the Notes and the Indenture will conform to the
descriptions thereof in the Offering Memorandum and will be in
substantially the form previously delivered to the Initial Purchaser;
None of the transactions contemplated by this
Agreement (including, without limitation, the use of
the proceeds from the sale of the Senior Notes) will violate or
result in a violation of Section 7 of the Exchange Act, or any
regulation promulgated thereunder, including, without limitation,
Regulations G, T, U, and X of the Board of Governors of the Federal
Reserve System;
Prior to the date hereof, none of the Company or
any of their affiliates (other than the Initial
Purchaser or any person acting on its behalf as to which the Company
makes no representation) has taken, directly or indirectly, any
action which is designed to or which has constituted or which might
have been expected to cause or result in stabilization or
manipulation of the price of any security of the Company in
connection with the offering of the Senior Notes;
The Registration Rights Agreement has been duly
authorized by the Company and, when executed and
delivered by the Company and the Initial Purchaser, will constitute a
valid and legally binding instrument, enforceable against the Company
in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to
general equity principles; and the Registration Rights Agreement will
conform to the description thereof in the Offering Memorandum and
will be in substantially the form previously delivered to the Initial
Purchaser;
The issue and sale of the Notes and the
compliance by the Company with all of the provisions of the
Notes, the Indenture, the Registration Rights Agreement and this
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, any material indenture, mortgage, deed of trust,
sale/leaseback agreement, loan agreement or other similar financing
agreement or instrument or other agreement or instrument (including,
without limitation, any license or franchise granted to the Company
or one of its Subsidiaries by a local franchising governmental body)
to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries is bound or has rights
under or to which any of the property or assets of the Company or any
of its Subsidiaries is subject, nor will such action result in any
violation of the provisions of the certificate of incorporation or
bylaws of the Company or its Subsidiaries that are corporations or
the certificates of limited partnership or the partnership agreements
of its Subsidiaries that are partnerships or any statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its Subsidiaries or
any of their properties; and no consent, approval, authorization,
order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Notes or the consummation by the Company of the transactions
contemplated by this Agreement, the Indenture or the Registration
Rights Agreement, other than (i) such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the
purchase and distribution of the Senior Notes by the Initial
Purchaser, (ii) the filing of a registration statement by the Company
with the Commission pursuant to the Act pursuant to the Registration
Rights Agreement, and (iii) such other consents, approvals,
authorizations, registrations or qualifications as may be required
under the Act, state or foreign securities or Blue Sky laws in
connection with the exchange, offer or resale registration
contemplated in the Offering Memorandum and described in the
Registration Rights Agreement in connection with the purchase and
resale of the Senior Notes by the Initial Purchaser;
None of the Company or its Subsidiaries is in
violation of its certificate of incorporation or
bylaws, as the case may be, or in default in the performance or
observance of any material obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust,
sale/leaseback agreement, loan agreement or other similar financing
agreement or instrument or other agreement or instrument (including,
without limitation, any license or franchise granted to the Company
or a subsidiary by a local franchising governmental body) to which
the Company or a subsidiary is a party or by which it or any of its
properties may be bound, except for such defaults as would not have
individually or in the aggregate a Material Adverse Effect;
The statements set forth in the Offering
Memorandum under the caption "Description of the Notes,"
insofar as they purport to constitute a summary of the terms of the
Notes, and under the captions "Business," and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations," insofar as they purport to describe the provisions of
the laws and documents referred to therein, are accurate, complete
and fair in all material respects;
When the Senior Notes are issued and delivered
pursuant to this Agreement, the Senior Notes will not
be of the same class (within the meaning of Rule 144 under the Act)
as securities of the Company which are listed on a national
securities exchange registered under Section 6 of the Exchange Act or
quoted in a U.S. automated inter-dealer quotation system;
None of the Company or its Subsidiaries is or,
after giving effect to the offering and sale of the
Notes, will be an "investment company", or an entity "controlled" by
an "investment company", as such terms are defined in the United
States Investment Company Act of 1940, as amended (the "Investment
Company Act");
None of the Company or any person acting on its
or their behalf (other than the Initial Purchaser,
as to which the Company makes no representation or warranty) has
offered or sold the Senior Notes by means of any general solicitation
or general advertising within the meaning of Rule 502(c) under the
Act;
Within the preceding six months, none of the
Company or any other person acting on behalf of the
Company (other than the Initial Purchaser, as to which the Company
makes no representation or warranty) has offered or sold to any
person any Notes, or any securities of the same or a similar class as
the Notes, other than Senior Notes offered or sold to the Initial
Purchaser hereunder. The Company will take reasonable precautions
designed to insure that any offer or sale, direct or indirect, in the
United States or to any U.S. person (as defined in Rule 902 under the
Act) of any Notes or any substantially similar security issued by the
Company, within six months subsequent to the date on which the
distribution of the Notes has been completed (as notified by the
Initial Purchaser), is made under restrictions and other
circumstances reasonably designed not to affect the status of the
offer and sale of the Notes in the United States and to U.S. persons
contemplated by this Agreement as transactions exempt from the
registration provisions of the Act;
None of the Company or any of their affiliates
does business with the government of Cuba or with any person or
affiliate located in Cuba within the meaning of Section 517.075,
Florida Statutes;
Other than as set forth in the Offering
Memorandum (including those matters referred to therein
relating to general rulemakings and similar matters relating
generally to the cable television industry), there are no legal or
governmental proceedings pending to which the Company or any of its
Subsidiaries is a party or of which any property of the Company or
any of its Subsidiaries is the subject which, if determined adversely
to the Company or any of its Subsidiaries, would individually or in
the aggregate have a Material Adverse Effect and, to the best of the
Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or by others; and except
with respect to general rulemakings and similar matters relating
generally to the cable television industry, during the time the
Systems (as defined below) have been owned by the Company or a
subsidiary (i) there has been no adverse judgment, order, or decree
issued by the United States Federal Communications Commission (the
"FCC") relating to any of the Systems that has not been disclosed in
the Offering Memorandum that would be required to be disclosed in a
public offering registered under the Act; (ii) there are no actions,
suits, proceedings, inquiries or investigations by the FCC pending or
threatened in writing against or affecting the Company, any of its
Subsidiaries or any System; and (iii) to the Company's knowledge,
after due inquiry, there is no reasonable basis for any such action,
suit, proceeding or investigation;
Deloitte & Touche LLP, who have reported on the
financial statements of the Company, is an independent public
accountant as required by the Act and the rules and regulations of
the Commission thereunder;
This Agreement has been duly authorized,
executed and delivered by the Company;
Except for matters covered by paragraph
(x) below or with respect to matters that would not
individually or in the aggregate have a Material Adverse Effect, (i)
the Company and its Subsidiaries have made all filings, recordings
and registrations with, and possess all validations or exemptions,
approvals, orders, authorizations, consents, licenses, certificates
and permits from, the FCC, applicable public utilities and other
federal, state and local regulatory or governmental bodies and
authorities or any subdivision thereof, including, without
limitation, cable television franchises, pole attachment agreements,
and cable antenna relay service, broadcast auxiliary, earth station,
business radio, microwave or special safety radio service licenses
issued by the FCC (collectively, the "Authorizations") necessary or
appropriate to own, operate and construct the cable communication
systems owned by them (the "Systems") or otherwise for the operation
of their businesses and are not in violation thereof; (ii) all such
Authorizations are in full force and effect, and no event has
occurred that permits, or after notice or lapse of time could permit,
the revocation, termination or modification of any Authorization
which is necessary or appropriate to own, operate and construct the
Systems or otherwise for the operation of any such business; (iii)
none of the Company or any of its Subsidiaries is in violation of any
duty or obligation required by the United States Communications Act
of 1934, as amended (the "Communications Act"), or any FCC rule or
regulation applicable to the operation of any portion of any of the
Systems; (iv) none of the Company or any of its Subsidiaries is in
violation of any duty or obligation required by state or local laws,
or local rules or regulations applicable to the operation of any
portion of any of the Systems; (v) there is not pending or, to the
best knowledge of the Company or any of its Subsidiaries, threatened,
any action by the FCC or state or local regulatory authority to
modify, revoke, cancel, suspend or refuse to renew any Authorization;
(vi) other than as described in the Offering Memorandum, there is not
now issued or outstanding or, to the best knowledge of the Company or
any of its Subsidiaries, threatened, any notice of any hearing,
material violation or material complaint against the Company or any
of its Subsidiaries with respect to the operation of any portion of
the Systems and none of the Company or its Subsidiaries has any
knowledge that any person intends to contest renewal of any material
Authorization;
(i) (A) The Company and its Subsidiaries
have entered into, or have rights under, all required
programming agreements (including, without limitation, all
non-broadcast affiliation agreements under which the Company and its
Subsidiaries are accorded retransmission rights relating to
programming that the Systems provide to their customers) that are
material to the conduct of their business as described in the
Offering Memorandum; and (B) all such material agreements are in full
force and effect and none of the Company, any of its Subsidiaries or
any of its affiliates has received any written notice of revocation
or material modifications of such material agreements; and (ii) (A)
either the Company or its Subsidiaries has entered into agreements
with the television stations that have notified the Company or its
Subsidiaries that such station's respective consent is required to
carry such stations on the Systems or has ceased carrying such
stations; (B) all such agreements grant the Company or one of its
Subsidiaries retransmission consent in exchange for various non-cash
consideration; and (C) all such agreements are in full force and
effect and are not subject to revocation (except in the case of
material breach by the Company or its Subsidiaries) or material
modifications, and no event has occurred that permits, or after
notice or lapse of time could permit, the revocation, termination or
material modification of any such agreement, except where the failure
of such agreements to be in full force and effect or such revocation
would not, in either case, individually or in the aggregate have a
Material Adverse Effect;
Except for matters that would not individually
or in the aggregate have a Material Adverse Effect,
(i) all registration statements and all other documents (including
but not limited to annual reports) required by the FCC in connection
with the operation of the Systems have been filed with the FCC; (ii)
all frequencies within the restricted aeronautical and navigational
bands (i.e., 108-136 MHz and 225-400 MHz) which are currently being
used in connection with the operation of the Systems have been
authorized for such use by the FCC; (iii) each of the Systems subject
to Equal Employment Opportunity Commission ("EEO") compliance
certification by the FCC has been certified by the FCC for annual EEO
compliance during the time such Systems have been owned by the
Company or its Subsidiaries; and (iv) all towers associated with the
Systems are in compliance with the rules and regulations of the
United States Federal Aviation Administration;
Except for matters that would not individually
or in the aggregate have a Material Adverse Effect,
none of the Company or any of its Subsidiaries is in breach or
violation of, or in default under, any of the terms, conditions or
provisions of the Communications Act or the rules, regulations or
policies of the FCC thereunder;
(i) Except for matters that would not
individually or in the aggregate have a Material Adverse
Effect, all statements of accounts and any other filings that are
required under Section 111 of the United States Copyright Act of
1976, as amended, in connection with the retransmission of any
broadcast television and radio signals on the Systems have been
timely filed with the United States Copyright Office and indicated
royalty payments have been made for each System for each accounting
period during which such Systems have been owned by the Company or
its Subsidiaries; (ii) none of the Company, any of its Subsidiaries
or any System has received any inquiry or request from the United
States Copyright Office or from any other party challenging or
questioning any such statements of account or royalty payments; and
(iii) no claim of copyright infringement has been made or threatened
in writing against the Company, any of its Subsidiaries or any
System;
Neither the execution and delivery of this
Agreement, the Indenture or the Registration Rights
Agreement, nor the consummation of the transactions contemplated
hereby and thereby or by the Offering Memorandum under "Use of
Proceeds," nor compliance with the terms, conditions and provisions
thereof by the Company, will conflict with the Communications Act or
the rules, regulations or policies of the FCC thereunder, or will
cause any suspension, revocation, impairment, forfeiture, nonrenewal
or termination of any material license, permit, franchise,
certificate, consent, authorization, designation, declaration,
filing, registration or qualification;
Neither the execution and delivery of this
Agreement, the Indenture or the Registration Rights
Agreement, nor the execution, delivery, offer, issuance and sale of
the Notes, nor compliance with the terms, conditions and provisions
thereof by the Company, requires any license, permit, franchise,
certificate, consent, authorization, designation, declaration,
filing, registration or qualification by or with the FCC;
6. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the
Initial Purchaser and each person, if any, who controls the Initial Purchaser
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation) arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Preliminary Offering Memorandum or Offering Memorandum, or arising out of or
based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
expenses arise out of or are based upon any untrue statement or omission or
alleged untrue statement or omission which has been made therein or omitted
therefrom in reliance upon and in conformity with the information relating to
the Initial Purchaser furnished in writing to the Company by or on behalf of the
Initial Purchaser expressly for use in connection therewith; provided, however,
that the indemnification contained in this paragraph (a) with respect to the
Preliminary Offering Memorandum shall not inure to the benefit of the Initial
Purchaser (or to the benefit of any person controlling such Initial Purchaser)
on account of any such loss, claim, damage, liability or expense arising from
the sale of the Senior Notes by such Initial Purchaser to any person if the
untrue statement or alleged untrue statement or omission or alleged omission of
a material fact contained in the Preliminary Offering Memorandum was corrected
in the Offering Memorandum and the Initial Purchaser sold Senior Notes to that
person without sending or giving at or prior to the written confirmation of such
sale, a copy of the Offering Memorandum (as then amended or supplemented) if the
Company has previously furnished sufficient copies thereof to the Initial
Purchaser on a timely basis to permit such sending or giving. The foregoing
indemnity agreement shall be in addition to any liability which the Company may
otherwise have.
If any action, suit or proceeding shall be
brought against the Initial Purchaser or any person
controlling the Initial Purchaser in respect of which indemnity may be sought
against the Company, the Initial Purchaser or such controlling person shall
promptly notify the parties against whom indemnification is being sought (the
"indemnifying parties"), and such indemnifying parties shall assume the defense
thereof, including the employment of counsel and payment of all fees and
expenses. The Initial Purchaser or any such controlling person shall have the
right to employ separate counsel in any such action, suit or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of the Initial Purchaser or such controlling person
unless (i) the indemnifying parties have agreed in writing to pay such fees and
expenses, (ii) the indemnifying parties have failed to assume the defense and
employ counsel, or (iii) the named parties to any such action, suit or
proceeding (including any impleaded parties) include both the Initial Purchaser
or such controlling person and the indemnifying parties and the Initial
Purchaser or such controlling person shall have been advised in writing by its
counsel that representation of such indemnified party and any indemnifying party
by the same counsel would be inappropriate under applicable standards of
professional conduct (whether or not such representation by the same counsel has
been proposed) due to actual or potential differing interests between them (in
which case the indemnifying party shall not have the right to assume the defense
of such action, suit or proceeding on behalf of the Initial Purchaser or such
controlling person). It is understood, however, that the indemnifying parties
shall, in connection with any one such action, suit or proceeding or separate
but substantially similar or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel) at any time for the Initial
Purchaser and controlling persons not having actual or potential differing
interests with the Initial Purchaser or among themselves, which firm shall be
designated in writing by Smith Barney Inc., and that all such fees and expenses
shall be reimbursed as they are incurred. The indemnifying parties shall not be
liable for any settlement of any such action, suit or proceeding effected
without their written consent, but if settled with such written consent, or if
there be a final judgment for the plaintiff in any such action, suit or
proceeding, the indemnifying parties agree to indemnify and hold harmless the
Initial Purchaser, to the extent provided in paragraph (a), and any such
controlling person from and against any loss, claim, damage, liability or
expense by reason of such settlement or judgment.
The Initial Purchaser agrees to indemnify and
hold harmless the Company and its directors and
officers, and any person who controls the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act to the same extent as the
indemnity from the Company to the Initial Purchaser set forth in paragraph (a)
hereof, but only with respect to Initial Purchaser Information furnished in
writing by or on behalf of the Initial Purchaser expressly for use in the
Preliminary Offering Memorandum or Offering Memorandum. If any action, suit or
proceeding shall be brought against the Company, any of its directors or
officers, or any such controlling person based on the Preliminary Offering
Memorandum or Offering Memorandum, and in respect of which indemnity may be
sought against the Initial Purchaser pursuant to this paragraph (c), the Initial
Purchaser shall have the rights and duties given to the Company by paragraph (b)
above (except that if the Company shall have assumed the defense thereof, the
Initial Purchaser shall not be required to do so, but may employ separate
counsel therein and participate in the defense thereof, but the fees and
expenses of such counsel shall be at the Initial Purchaser's expense), and the
Company, its directors and officers, and any such controlling person shall have
the rights and duties given to the Initial Purchaser by paragraph (b) above. The
foregoing indemnity agreement shall be in addition to any liability which the
Initial Purchaser may otherwise have.
If the indemnification provided for in this
Section 6 is unavailable (except if inapplicable
according to its terms) to an indemnified party under paragraphs (a) or (c)
hereof in respect of any losses, claims, damages, liabilities or expenses
referred to therein, then an indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Initial Purchaser on
the other hand from the offering of the Senior Notes, or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and the Initial Purchaser on the other in connection with the statements or
omissions that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Initial Purchaser on
the other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company bear to
the total discounts and commissions received by the Initial Purchaser, in each
case as set forth in the table on the cover page of the Offering Memorandum. The
relative fault of the Company on the one hand and the Initial Purchaser on the
other hand 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
on the one hand or by the Initial Purchaser on the other hand 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 6 were determined by a pro rata allocation or by any
other method of allocation that does not take account of the equitable
considerations referred to in paragraph (d) above. The amount paid or payable by
an indemnified party as a result of the losses, claims, damages, liabilities and
expenses referred to in paragraph (d) above shall be deemed to include, subject
to the limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating any claim or
defending any such action, suit or proceeding. Notwithstanding the provisions of
this Section 6, the Initial Purchaser shall not be required to contribute any
amount in excess of the amount by which the total price of the Senior Notes
purchased by it and distributed to the purchasers pursuant to Exempt Resales
exceeds the amount of any damages which the Initial Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. 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.
Any losses, claims, damages, liabilities or
expenses for which an indemnified party is entitled to
indemnification or contribution under this Section 6 shall be paid by the
indemnifying party to the indemnified party as such losses, claims, damages,
liabilities or expenses are incurred but only to the extent that such losses,
claims, damages, liabilities or expenses are required to be paid by an
indemnified party. The indemnity and contribution agreements contained in this
Section 6 and the representations and warranties of the Company set forth in
this Agreement shall remain operative and in full force and effect, regardless
of (i) any investigation made by or on behalf of the Initial Purchaser or any
person controlling the Initial Purchaser, the Company, its directors or officers
or any person controlling the Company, (ii) acceptance of any Senior Notes and
payment therefor hereunder, and (iii) any termination of this Agreement. A
successor to the Initial Purchaser or any person controlling the Initial
Purchaser, or to the Company, its directors or officers or any person
controlling the Company, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 6.
No indemnifying party shall, without the prior
written consent of the indemnified party, effect any
settlement of any pending or threatened action, suit or proceeding in respect of
which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such action, suit or proceeding.
7. Conditions of the Initial Purchaser's
Obligation. The obligation of the Initial Purchaser to
purchase the Senior Notes hereunder is subject to the following conditions:
At the time of execution of this Agreement and
on the Closing Date, no order or decree preventing
the use of the Offering Memorandum, or any order asserting that the transactions
contemplated by this Agreement are subject to the registration requirements of
the Act shall have been issued and no proceedings for that purpose shall have
been commenced or shall be pending or, to the knowledge of the Company, be
contemplated. No stop order suspending the sale of the Senior Notes in any
jurisdiction designated by the Initial Purchaser shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending or,
to the knowledge of the Company, shall be contemplated.
Subsequent to the date as of which information
is given in the Offering Memorandum, except as
otherwise stated in the Offering Memorandum, there shall not have occurred (i)
any change, or any development involving a prospective change, in or affecting
the condition (financial or other), business, properties, net worth, or results
of operations of the Company or its Subsidiaries not contemplated by the
Offering Memorandum, which in the opinion of the Initial Purchaser, would
materially adversely affect the market for the Senior Notes, or (ii) any event
or development relating to or involving the Company, any of its Subsidiaries or
any officer or director of the Company or any of its Subsidiaries which makes
any statement made in the Offering Memorandum untrue or which, in the opinion of
the Company and its counsel or the Initial Purchaser and its counsel, requires
the making of any addition to or change in the Offering Memorandum in order to
state a material fact required by any law to be stated therein or necessary in
order to make the statements therein not misleading, if amending or
supplementing the Offering Memorandum to reflect such event or development
would, in the opinion of the Initial Purchaser, materially adversely affect the
market for the Senior Notes.
The Final Offering Memorandum shall have been
printed and copies thereof distributed to the Initial
Purchaser in such quantities as shall have been previously specified by the
Initial Purchaser not later than 9:00 A.M., New York City time, on February 24,
1997, or at such later date and time as the Initial Purchaser may approve in
writing.
The Initial Purchaser shall have received on the
Closing Date an opinion of Buchanan Ingersoll
Professional Corporation, counsel for the Company, dated the Closing Date and
addressed to the Initial Purchaser, to the effect that:
The Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the state of its formation with full
corporate power and authority to own its properties and conduct its
business as described in the Offering Memorandum;
This Agreement has been duly
authorized, executed and delivered by the Company;
The Registration Rights Agreement
has been duly authorized, executed and delivered by the Company;
The Notes have been duly authorized
and, when issued and delivered pursuant to this
Agreement, will have been duly executed, authenticated, issued and
delivered and will constitute valid and legally binding obligations
of the Company entitled to the benefits provided by the Indenture and
enforceable against the Company in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles and further except that (a) 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
(b) waivers as to usury, stay or extension laws may be unenforceable;
and the Notes and the Indenture conform in all material respects to
the descriptions thereof in the Offering Memorandum;
The Indenture has been duly
authorized, executed and delivered by the Company and will
constitute a valid and legally binding instrument, enforceable in
accordance with its terms against the Company, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium
and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles and further except
that (a) 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 (b) waivers as to usury, stay
or extension laws may be unenforceable;
The Registration Rights Agreement has
been duly authorized by the Company and, when
executed and delivered by the parties thereto, will constitute a
valid and legally binding instrument, enforceable in accordance with
its terms against the Company, subject, as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium and other laws of
general applicability relating to or affecting creditors' rights, to
general equity principles and further except that (a) 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 (b) waivers as to usury, stay or extension laws may
be unenforceable; and the Registration Rights Agreement will conform
in all material respects to the description thereof in the Offering
Memorandum;
The issue and sale of the Notes and
the compliance by the Company with all of the
provisions of the Notes, the Indenture, the Registration Rights
Agreement and this Agreement and the consummation of the transactions
herein and therein contemplated will not contravene the provisions of
the certificate of incorporation and bylaws of the Company, or to the
best of our knowledge, any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company;
The statements set forth in the
Offering Memorandum under the caption "Description of the
Senior Notes," insofar as they purport to constitute a summary of the
terms of the Notes, the statements set forth in the Offering
Memorandum under the caption "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital
Resources--Financing Activities," insofar as they purport to describe
the debt instruments referred to therein and the statements set forth
in the Offering Memorandum under the caption "Certain United States
Federal Tax Considerations for Non-United States Holders," insofar as
they purport to describe the provisions of the laws referred to
therein, are, when taken together with the other information included
in the Offering Memorandum, accurate in all material respects;
No registration of the Senior Notes
under the Act, and no qualification of an indenture
under the 1939 Act with respect thereto, is required for the offer,
sale and initial resale of the Senior Notes by the Initial Purchaser
in the manner contemplated by this Agreement; and
The Company is not an "investment
company" or an entity "controlled" by an "investment
company," as such terms are defined in the Investment Company Act.
In addition, such counsel shall also state that
such counsel has participated in conferences with
officers and representatives of the Company, representatives of the independent
public accountants for the Company and the Initial Purchaser at which the
contents of the Offering Memorandum and related matters were discussed and,
although such counsel is not passing upon and does not assume any responsibility
for and has not verified the accuracy, completeness or fairness of the
statements contained in the Offering Memorandum, and has not made any
independent check or verification thereof, on the basis of the foregoing
(relying as to materiality to the extent such counsel deemed appropriate upon
facts provided by officers and other representatives of the Company), no facts
have come to the attention of such counsel that lead such counsel to believe
that the Offering Memorandum, as of its date or as of the Closing Date,
contained or contains any untrue statement of material fact or omitted or omits
to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading (it being
understood that such counsel need express no belief or opinion with respect to
the financial statements and other financial and statistical data included
therein).
The opinion of such counsel may be limited to the laws of
the State of New York, the General Corporation Law of
the State of Delaware and the federal laws of the United States.
The Initial Purchaser shall have received on the
Closing Date an opinion of Randall D. Fisher, Esq.,
General Counsel of the Company, dated the Closing Date and addressed to the
Initial Purchaser to the effect that:
Except as set forth in the Offering
Memorandum, each of the Company and its Subsidiaries
has all of the licenses, permits, franchises and authorizations, if
any, required by the relevant governmental authorities of each of New
York, Virginia, Pennsylvania, Ohio, New Jersey, Massachusetts, New
Hampshire, Vermont, Michigan and Connecticut and/or its political
subdivisions for the provision of cable television service (as such
counsel understands service to be provided which may be based on a
certificate of an officer of the Company, provided that such counsel
shall state that they believe that both the Initial Purchaser and he
are justified in relying on such certificate), where the failure to
obtain or hold such license, permit, franchise or authorization would
have a Material Adverse Effect;
To the best of such counsel's
knowledge after due inquiry, each of the Company and its
Subsidiaries has made all filings, reports, applications and
submissions required by the laws and ordinances relating to cable
services of each of New York, Virginia, Pennsylvania, Ohio, New
Jersey, Massachusetts, New Hampshire, Vermont, Michigan and
Connecticut, and the ordinances of the state's political subdivisions
relating thereto, and the rules and regulations promulgated
therewith;
Each of the Company and its
Subsidiaries has the consents, approvals, authorizations,
licenses, certificates, permits, or orders of any governmental
authorities of the each of New York, Virginia, Pennsylvania, Ohio,
New Jersey, Massachusetts, New Hampshire, Vermont, Michigan and
Connecticut, and its political subdivisions, if any, required for the
consummations of the transactions contemplated in the Purchase
Agreement where the failure to obtain the consents, approvals,
authorizations, licenses, certificates, permits or orders would have
a Material Adverse Effect;
There are no actions, suits or
proceedings pending or, to the best of such counsel's
knowledge, threatened by or before any court or governmental body
each of New York, Virginia, Pennsylvania, Ohio, New Jersey,
Massachusetts, New Hampshire, Vermont, Michigan and Connecticut,
against or affecting any of the Company or its Subsidiaries, or the
business of the Company and its Subsidiaries;
The statements in the Offering
Memorandum under the headings "Risk Factors - Regulation in
the Telecommunications Industry," "Risk Factors - Competition," and
"Legislation and Regulation," insofar as they relate to the Company
and its Subsidiaries operations each of New York, Virginia,
Pennsylvania, Ohio, New Jersey, Massachusetts, New Hampshire,
Vermont, Michigan and Connecticut, and purport to describe the
provisions of the laws and documents referred to therein, are
accurate, complete and fair in all material respects; and
Neither the execution and delivery of
the Purchase Agreement nor the offering of the
Senior Notes contemplated thereby will conflict with or result in a
violation of any order or regulation of each of New York, Virginia,
Pennsylvania, Ohio, New Jersey, Massachusetts, New Hampshire,
Vermont, Michigan and Connecticut, or its political subdivisions
applicable to the Company and its Subsidiaries, the conflict with or
the violation of which would have a material adverse effect on the
Company and its Subsidiaries.
The Initial Purchaser shall have received on the
Closing Date an opinion of Colin H. Higgin, Deputy
General Counsel to the Company, dated the Closing Date and addressed to the
Initial Purchaser, to the effect that:
None of the Company or its
Subsidiaries is in violation of its certificate of
incorporation, by-laws, certificate of limited partnership or
partnership agreement, as applicable, or in default in the
performance or observance of any material obligation, covenant or
condition contained in any partnership agreement, indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or any of its
properties may be bound;
Each of the Company and its
Subsidiaries has been duly qualified as a foreign corporation
or partnership, as the case may be, for the transaction of business
and is in good standing under the laws of each other jurisdiction in
which it owns or leases properties or conducts any business so as to
require such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such
jurisdiction, except where the failure to so qualify would not have a
Material Adverse Effect (such counsel being entitled to rely in
respect of the opinion in this clause upon opinions of local counsel
and in respect of matters of fact upon certificates of officers of
the Company, provided that such counsel shall state that he believes
that both the Initial Purchaser and he are justified in relying upon
such opinions and certificates);
Each subsidiary of the Company is
owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims (other than
liens to secure indebtedness under credit facilities disclosed in the
Offering Memorandum) (such counsel being entitled to rely in respect
of the opinion in this clause upon opinions of local counsel and in
respect of matters of fact upon certificates of officers of the
Company or its Subsidiaries, provided that such counsel shall state
that he believes that both the Initial Purchaser and he are justified
in relying upon such opinions and certificates);
To the best of such counsel's
knowledge and other than as set forth in the Offering
Memorandum, there are no legal or governmental proceedings pending to
which the Company or any of its Subsidiaries is a party or of which
any property of the Company or any of its Subsidiaries is the subject
which, if determined adversely to the Company or any of its
Subsidiaries, would individually or in the aggregate have a material
adverse effect on the current or future consolidated financial
position, shareholder's equity, partners' equity, or results of
operations of the Company and its Subsidiaries; and, to the best of
such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
The issue and sale of the Notes and
the compliance by the Company with all of the
provisions of the Notes, the Indenture, the Registration Rights
Agreement and this Agreement and the consummation of the transactions
herein and therein contemplated will not, to the best of my knowledge
after due inquiry, conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under
any material indenture, mortgage, deed of trust, sale/leaseback
transaction, loan agreement or other similar financing agreement, or
instrument or other agreement or instrument (including, without
limitation, any license or franchise granted to the Company or a
Subsidiary by a local franchising governmental body) to which the
Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries is bound or to which any of the property
or assets of the Company or any of its Subsidiaries is subject, nor
will such actions result in any violation of the provisions of the
certificate of incorporation, by-laws, the certificate of limited
partnership or the partnership agreements of the Company and its
Subsidiaries, as appropriate, or any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its Subsidiaries or any of
their properties; and
No consent, approval, authorization,
order, registration or qualification of or with any
such court or governmental agency or body is required for the issue
and sale of the Senior Notes or the consummation by the Company of
the transactions contemplated by this Agreement, the Indenture or the
Registration Rights Agreement, except such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the
purchase and resale of the Senior Notes by the Initial Purchaser.
In addition, such counsel shall also state that
such counsel has participated in conferences with
officers and representatives of the Company, representatives of the independent
public accountants for the Company and the Initial Purchaser at which the
contents of the Offering Memorandum and related matters were discussed and,
although such counsel is not passing upon and does not assume any responsibility
for and has not verified the accuracy, completeness or fairness of the
statements contained in the Offering Memorandum, and has not made any
independent check or verification thereof, on the basis of the foregoing
(relying as to materiality to the extent such counsel deemed appropriate upon
facts provided by officers and other representatives of the Company), no facts
have come to the attention of such counsel that lead such counsel to believe
that the Offering Memorandum, as of its date or as of the Closing Date,
contained or contains any untrue statement of material fact or omitted or omits
to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading (it being
understood that such counsel need express no belief or opinion with respect to
the financial statements and other financial and statistical data included
therein).
The Initial Purchaser shall have received on the
Closing Date an opinion of Fleischman & Walsh,
P.C., special regulatory counsel for the Company and its Subsidiaries, dated the
Closing Date, and addressed to the Initial Purchaser to the effect that:
The communities listed in Section A
of Attachment 1 to the opinion have been registered
with the FCC in connection with the operation of the Systems. The
filing of a registration statement constitutes initial FCC
authorization for the commencement of cable television operations in
the community registered.
The Subsidiaries hold certain FCC
licenses, as that term is defined below ("FCC
Licenses"). All FCC Licenses and receive-only earth station
registrations held by the Subsidiaries in connection with the
operation of the Cable Systems are listed on Attachment 1 to the
Opinion. To the best of our knowledge, all such FCC Licenses have
been validly issued or assigned to the present licensee and are
currently in full force and effect. We have no knowledge of any event
which would allow, or after notice or lapse of time which would
allow, revocation or termination of any FCC License held by the
Subsidiaries or would result in any other material impairment of the
rights of the holder of such license. To the best of our knowledge,
no other FCC Licenses are required in connection with the operation
of the Cable Systems by the Subsidiaries in the manner we have
advised they are presently being operated. For the purposes of this
opinion, an FCC License is defined as an authorization, or renewal
thereof, issued by the FCC authorizing the transmission of radio
energy through the airways.
Other than proceedings affecting the
cable television industry generally, there is no
action, suit or proceeding pending before or, to the best of our
knowledge, threatened by the FCC which is reasonably likely to have a
materially adverse impact upon the cable television operations of the
Company and its Subsidiaries taken as a whole.
To the best of our knowledge after
due inquiry, the Company and the Subsidiaries have
filed all current and routine filings, reports, applications and
submissions required under the Communications Act, as amended, and
under the rules and regulations of the FCC.
The Subsidiaries hold all
authorizations and/or have filed all notifications required by
the FCC in connection with their operation on all frequencies in the
108-137 MHz and 225-400 MHz bands which we have been advised are
currently being utilized on the Cable Systems. The geographic and
technical parameters with respect to the authorized use of these
frequencies are listed on Attachment 1 hereto.
The employment units covered by the
Cable Systems and operated by the Subsidiaries have
been certified, where required, by the FCC for compliance with equal
employment opportunity ("EEO") requirements in each of calendar years
1992 through 1996 in which such Cable Systems have been owned and
operated by the Company or the Subsidiaries. Employment certification
records for the years prior to 1992 have been purged from the FCC's
database and are therefore outside the scope of this opinion.
Statements of Account required by
Section 111 of the Copyright Act of 1976, as amended
have been filed, together with royalty payments accompanying said
Statements of Account, with the U.S. Copyright Office for the Cable
Systems covering each of the accounting periods beginning with July 1
through December 31, 1993 accounting period and ending with the
January 1 through June 30, 1996 accounting period during which such
Cable Systems have been operated by the Subsidiaries. We have not
received the information or calculations contained in these
Statements, and express no opinion with respect to the accuracy
thereof. To the best of our knowledge, there are no currently
outstanding inquiries received from the U.S. Copyright Office or any
other party which question the copyright filings or payments made by
the Company or the Subsidiaries with respect to the Cable Systems. It
is possible that there may be matters pending before the U.S.
Copyright Office relating to the Cable Systems, the Company or the
Subsidiaries of which we do not have knowledge because such matters
have not yet been incorporated into the available public files of the
U.S. Copyright Office. However, we are not aware of the pending or
threatened claim, action or demand for copyright infringement or for
non-payment of royalties with respect to the Statements of Account or
related royalty payments filed by the Company and the Subsidiaries
for the Cable Systems.
The Company has obtained all
consents, approvals and authorizations of the FCC, if any,
required for the consummation of the transactions of the transactions
contemplated in the Purchase Agreement where the failure to obtain
the consents, approval, authorizations, licenses, certificates,
permits or orders would reasonably be expected to have a materially
adverse impact on the Company or the Subsidiaries.
Neither the execution and delivery of
the Purchase Agreement nor the offering of the
Senior Notes contemplated thereby will conflict with or result in a
violation of any order or regulation of the FCC applicable to the
Company and the Subsidiaries, the conflict with or the violation of
which would reasonably be expected to have a materially adverse
impact on the Company or the Subsidiaries. However, we call your
attention to the following.
Under the Act as now in effect, the
sale or other disposition of certain pledged
collateral and the exercise of certain other rights and remedies
conferred upon you by any agreement or by applicable law might
constitute an assignment of an FCC licensee, or transfer of control
of an FCC license, requiring for its consummation the prior consent
of the FCC granted upon an appropriate application thereof.
Under the Act as now in effect, and
as now interpreted by the FCC, no valid security
interest may be granted in an FCC license. To the extent that the
Purchase Agreement and/or related financing documents purport to
grant to you a security interest in any FCC licenses, such security
interest may not be legally enforceable.
In the course of our representation
of the Company and its Subsidiaries, no matters have
come to our attention, other than matters affecting the cable
television industry generally, which would reasonable be expected to
have a materially adverse impact upon the cable television operations
of the Company and the Subsidiaries taken as a whole.
In our opinion, the Statements in the
Offering Memorandum under the headings "Risk Factors
- Regulation in the Telecommunications Industry," "Risk Factors -
Competition," and "Legislation and Regulation," insofar as the
purport to describe the provisions of the law referred to therein,
are accurate, complete and fair in all material respects.
The Initial Purchaser shall have received on the
Closing date an opinion, of Latham & Watkins,
counsel for the Initial Purchaser, dated the Closing Date, and addressed to the
Initial Purchaser, with respect to the Offering Memorandum and such other
related matters as the Initial Purchaser may reasonably request, and such
counsel shall have received such certificates, documents and information as they
may reasonably request to enable them to pass upon such matters.
The Initial Purchaser shall have received
letters addressed to the Initial Purchaser, and dated the
date hereof and the Closing Date from Deloitte & Touche LLP, independent
certified public accountants, substantially in the forms heretofore approved by
the Initial Purchaser and its counsel.
(i) There shall not have been any decrease in
stockholders' equity of the Company nor any material
increase in the short-term or long-term debt of the Company (other than in the
ordinary course of business) from that set forth or specifically contemplated in
the Offering Memorandum; (ii) the Company and its Subsidiaries shall not have
any liabilities or obligations, direct or contingent (whether or not in the
ordinary course of business), that are material to the Company and it
subsidiaries, taken as a whole, other than those reflected in the Offering
Memorandum; and (iii) all the representations and warranties of the Company
contained in this Agreement shall be true and correct in all material respects
on and as of the date hereof and on and as of the Closing Date as if made on and
as of the Closing Date, and the Initial Purchaser shall have received a
certificate, dated the Closing Date and signed by the Chief Executive Officer
and the Chief Financial Officer of the Company (or such other officers as are
acceptable to the Initial Purchaser), to the effect set forth in this Section
7(j) and in Section 7(k) hereof.
The Company shall not have failed at or prior to
the Closing Date to have performed or complied in
all material respects with any of its agreements herein contained and required
to be performed or complied with by it hereunder at or prior to the Closing
Date.
There shall not have been any announcement by
any "nationally recognized statistical rating
organization," as defined for purposes of Rule 436(g) under the Act, that (i) it
is downgrading its rating assigned to any class of securities of the Company or
any of its Subsidiaries, or (ii) it is reviewing its ratings assigned to any
class of securities of the Company or any of its Subsidiaries with a view to
possible downgrading, or with negative implications, or direction not
determined.
The Senior Notes shall have been approved for
trading in the PORTAL Market.
The Company shall have obtained, in writing, all
consents and waivers required under the terms of
any of its material agreements necessary to ensure that the transactions
contemplated by this Agreement and the other Operative Documents will not
conflict with or constitute a breach of, or a default under any of such
agreements. The Company shall have furnished photocopies of such waivers and
consents, if any, to the Initial Purchaser.
The Company shall have furnished or caused to be
furnished to the Initial Purchaser such further
certificates and documents as the Initial Purchaser or its counsel shall have
requested.
All such opinions, certificates, letters, consents, waivers
amendments and other documents will be in compliance
with the provisions hereof only if they are reasonably satisfactory in form and
substance to the Initial Purchaser and counsel for the Initial Purchaser. Any
certificate or document signed by any officer of the Company and delivered to
the Initial Purchaser, or to counsel for the Initial Purchaser, shall be deemed
a representation and warranty by the Company to the Initial Purchaser as to the
statements made therein.
8. Expenses. The Company agrees to pay the
following costs, expenses and fees and all other costs and
expenses incident to the performance by it of any of its obligations hereunder:
(i) the preparation and reproduction of the Preliminary Offering Memorandum and
the Final Offering Memorandum (including, without limitation, financial
statements thereto), and each amendment or supplement to any of them, this
Agreement and the Indenture; (ii) the printing (or reproduction) and delivery
(including postage, air freight charges and charges for counting and packaging)
of such copies of the Final Offering Memorandum, the Preliminary Offering
Memorandum, and all amendments or supplements to any of them as may be
reasonably requested for use in connection with the offering and sale of the
Senior Notes; (iii) the preparation, printing, authentication, issuance and
delivery of certificates for the Notes, including any stamp taxes in connection
with the original issuance and sale of the Notes; (iv) the printing (or
reproduction) and delivery of this Agreement, the preliminary and supplemental
Blue Sky Memoranda and all other agreements or documents printed (or reproduced)
and delivered in connection with the offering of the Senior Notes; (v) the
application for quotation of the Notes on the PORTAL Market; (vi) the
qualification of the Senior Notes for offer and sale under the securities or
Blue Sky laws of the several states as provided in Section 4(e) hereof
(including the reasonable fees, expenses and disbursements of counsel for the
Initial Purchaser relating to the preparation, printing or reproduction, and
delivery of the preliminary and supplemental Blue Sky Memoranda and such
qualification); (vii) the performance by the Company of its obligations under
the Registration Rights Agreement; (viii) fees and expenses of the Trustee and
its counsel; (ix) the transportation and other expenses, if any, incurred by or
on behalf of the Company representatives in connection with presentations to
prospective purchasers of the Senior Notes; and (x) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including local and
special counsel, if any) for the Company. The Company hereby agrees that they
will pay in full on the Closing Date the fees and expenses referred to in clause
(vi) of this Section 8 by delivering to counsel for the Initial Purchaser on
such date a check payable to such counsel in the requisite amount.
9. Effective Date of Agreement. This Agreement
shall become effective upon the execution and delivery
hereof by all the parties hereto.
10. Termination of Agreement. This Agreement shall
be subject to termination in the absolute discretion
of the Initial Purchaser, without liability on the part of the Initial Purchaser
to the Company, by notice to the Company, if prior to the Closing Date, (i)
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, (ii) a general moratorium on commercial banking activities
in New York shall have been declared, or (iii) there shall have occurred any
outbreak or escalation of hostilities involving the United States or other
domestic, foreign or international calamity, crisis or change in political,
financial or economic conditions, the effect of which on the financial markets
of the United States is such as to make it, in the judgment of the Initial
Purchaser, impracticable or inadvisable to commence or continue the offering of
the Senior Notes on the terms set forth on the cover page of the Offering
Memorandum or to enforce contracts for the resale of the Senior Notes by the
Initial Purchaser. Notice of such termination may be given to the Company by
telegram, telecopy or telephone and shall be subsequently confirmed by letter.
11. Information Furnished by the Initial Purchaser.
The statements set forth in the last paragraph of
the cover page of the Preliminary Offering Memorandum and the Offering
Memorandum and the second to last paragraph on the inside cover page of the
Preliminary Offering Memorandum and the Offering Memorandum, constitute the only
Initial Purchaser Information furnished by or on behalf of the Initial Purchaser
as such information is referred to in Sections 5(a) and 6 hereof.
12. Miscellaneous. Except as otherwise provided in
Sections 4, 9 and 10 hereof, notice given pursuant
to any provision of this Agreement shall be in writing and shall be delivered
(i) if to the Company, at the office of the Company at Main at Water Street,
Coudersport, PA 16915, Attention: Chief Financial Officer with a copy to
Buchanan Ingersoll Professional Corporation, 1 Oxford Center, 301 Grant Street,
20th Floor, Pittsburgh, PA 15219, Attention: Lew Davis, or (ii) if to the
Initial Purchaser, addressed to Smith Barney Inc., 388 Greenwich Street, New
York, NY 10013, Attention: Manager, Investment Banking Division, with a copy to
Latham & Watkins, 885 Third Avenue, New York, NY 10022, Attention: Kirk A.
Davenport.
This Agreement has been and is made solely for the benefit
of the Initial Purchaser, the Company and their
respective directors, officers and the controlling persons referred to in
Section 6 hereof and their respective successors and assigns, to the extent
provided herein, and no other person shall acquire or have any right under or by
virtue of this Agreement. Neither the term "successor" nor the term "successors
and assigns" as used in this Agreement shall include a purchaser from the
Initial Purchaser of any of the Senior Notes in his status as such purchaser.
13. Applicable Law; Counterparts This Agreement
shall be governed by and construed in accordance with
the laws of the State of New York applicable to contracts made and to be
performed within the State of New York and without regard to the conflicts of
law principles thereof.
This Agreement may be signed in various counterparts which
together constitute one and the same instrument. If
signed in counterparts, this Agreement shall not become effective unless at
least one counterpart hereof shall have been executed and delivered on behalf of
each party hereto.
[signature page follows]
<PAGE>
Please confirm that the foregoing correctly sets forth the
agreement between the Company and the Initial Purchaser.
Very truly yours,
ADELPHIA COMMUNICATIONS CORPORATION
By:
Name:
Title:
Confirmed as of the date first above mentioned.
SMITH BARNEY INC.
By:
Name:
Title:
<PAGE>
Exhibit A
Form of Registration Rights Agreement
Exhibit 10.03
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, made as of the 4th day of March,
1997, by and between HYPERION TELECOMMUNICATIONS, INC., a Delaware corporation
(the "Company"), and DANIEL R. MILLIARD ("Employee"),
WITNESSETH:
WHEREAS, the Company desires to continue to procure the
services of Employee as President and Chief Operating Officer of the Company,
and Employee is willing to continue to be employed as President of the Company,
upon the terms and subject to the conditions hereinafter set forth; and
WHEREAS, Employee possesses valuable knowledge and skills that
will contribute and have contributed to the successful operation of the
Company's business;
NOW, THEREFORE, intending to be legally bound, the Company
agrees to employ Employee, and Employee hereby agrees to be employed by the
Company, upon the following terms and conditions:
ARTICLE I
EMPLOYMENT
1.01 Position. Employee is hereby offered continued employment
as the President and Chief Operating Officer of the Company and in such capacity
shall use his best energies and abilities in the performance of his duties
hereunder and as proscribed in the By-laws of the Company and in the performance
of such other duties as may be assigned to him from time to time by the Board of
Directors of the Company. Prior to a "Change in Control", the Company agrees
that there shall be no change in Employee's title set forth above and Employee
shall not be required to relocate from Coudersport, Pennsylvania.
1.02 Term. Subject to the terms and provisions of Article II
hereof, Employee's employment hereunder shall commence as of the date hereof and
shall continue until March 31, 2001 (the "Initial Term"), unless extended in
accordance with the following sentence. Employee's employment hereunder shall
automatically be extended on each March 31st commencing March 31, 2001, for an
additional one (1) year term to and including the next succeeding March 31
unless the Company shall have given Employee written notice on or before
September 30th next preceding any such March 31 that the term of Employee's
employment hereunder will not be so extended. If Employee's employment hereunder
is not extended beyond the Initial Term, the Company will be obligated to pay
Employee an amount equal to the monthly Base Salary (as hereinafter defined) in
effect at the time of termination of this Agreement (the "Monthly Amount") for a
period of months equal to the number of years Employee was an employee of the
Company or Adelphia Communications Corporation. The Monthly Amount shall be paid
on the first day of each month over said period of months.
1.03 Base Salary. During the term of Employee's employment
hereunder, compensation shall be paid to Employee at the rate of not less than
two hundred and thirty thousand dollars ($230,000) per annum (the "Base
Salary"), payable in accordance with the Company's regular payroll policies,
with such cost of living and other salary adjustments as the Compensation
Committee of the Board of Directors of the Company (the "Compensation
Committee") may from time to time determine. The Base Salary shall be reviewed
by the Compensation Committee from time to time and the Base Salary shall be
increased to be comparable to the base salary of executives in comparable
positions in other comparable competitive local exchange carriers taking into
account relative benefit and stock compensation packages. The Company shall also
reimburse Employee for all reasonable out-of-pocket expenses incurred by
Employee in the lawful and ordinary course of the Company's business and
properly reported to the Company in accordance with its accounting procedures.
The Employee acknowledges that, at all times during the term of this Agreement,
the Compensation Committee may be controlled by John J. Rigas and members of his
family (collectively, the "Rigas Family").
Employee shall also be paid a one-time cash bonus equal to the
difference between (i) the amount of salary that would have been paid to
Employee had Employee been compensated at the rate of the Base Salary set forth
above from January 1, 1996 until the date hereof and (ii) the amount of salary
actually paid to Employee during the same period.
1.04 Additional Incentive Compensation. The Employee shall
also have the opportunity to receive an annual aggregate bonus in the amount of
up to fifty percent (50%) of the Base Salary (the "Cash Bonus"). The payment of
the Cash Bonus will be dependent upon the satisfaction of certain benchmarks to
be determined for each fiscal year by the Compensation Committee. The benchmarks
shall relate to the goals of the Company's business plan. The benchmarks
pursuant to which the Cash Bonus shall be determined for the fiscal year ended
March 31, 1997 are set forth in Schedule I attached hereto. Each fiscal year,
the Compensation Committee shall prepare a new Schedule I, a copy of which shall
be delivered to the Employee on or before June 30th of each year.
1.05 Stock Bonus. The Company hereby grants to Employee a
one-time stock bonus of one hundred four thousand (104,000) shares (the "Bonus
Shares") of the Class A Common Stock, par value $.01 per share, of the Company
(the "Common Stock"). In addition to the restrictions on transfer imposed on the
Bonus Shares by the federal and state securities laws, the Employee agrees that
the Bonus Shares cannot be transferred until the Common Stock is registered
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
is listed for trading on an exchange or on the Nasdaq Stock Market or is
included in Nasdaq's automated quotation system.
1.06 Stock Option Grants.
(a) Annual Grants. On the first day of each of the
fiscal years beginning on April 1, 1997 through April 1, 2000, inclusive, the
Company shall grant to Employee an option to purchase twenty-five thousand
(25,000) shares of Common Stock (each such optionreferred to individually as an
"Annual Option" and collectively referred to as "Annual Options").
(b) Additional Grants. The Employee shall also have
the opportunity to receive, annually for the fiscal year ending March 31, 1997
and for each of the next four (4) fiscal years (fiscal years ending March 31,
1998 through March 31, 2001, inclusive), additional stock options for an
additional 25,000 shares of Common Stock per fiscal year (the "Additional
Options"). The grant of the Additional Options shall be subject to the
satisfaction of certain benchmarks to be determined for each fiscal year by the
Compensation Committee. The parties agree that no Additional Options will be
granted in any given fiscal year until the benchmarks have been met for the
grant of options for twenty-five thousand (25,000) shares of Common Stock. For
example, if in a given fiscal year Employee has earned, pursuant to the
applicable benchmarks, options for thirty thousand (30,000) shares of Common
Stock, that shall result in the issuance to Employee of Additional Options for
five thousand (5,000) shares of Common Stock. If in a given fiscal year,
however, Employee has earned, pursuant to the applicable benchmarks, options for
only twenty thousand (20,000) shares of Common Stock, that shall result in the
issuance to Employee of no Additional Options. If in a given fiscal year
Employee has earned, pursuant to the applicable benchmarks, options for sixty
thousand (60,000) shares of Common Stock, that shall result in the issuance to
Employee of Additional Options for twenty-five thousand (25,000) shares of
Common Stock since the aggregate amount of options required to be issued by the
Company in any given fiscal year pursuant to this provision is for twenty-five
thousand (25,000) shares of Common Stock, excluding the Initial Option and the
Annual Option. Any Additional Options earned by the Employee shall be granted as
of the date that the applicable benchmark had been met.
The benchmarks pursuant to which the Additional Options shall
be earned shall relate to the goals of the Company's business plan. The
benchmarks pursuant to which the grant of the Additional Options shall be
determined for the fiscal year ended March 31, 1997 are set forth in Schedule II
attached hereto. Each fiscal year, the Compensation Committee shall prepare a
new Schedule II, a copy of which shall be delivered to the Employee on or before
June 30th of each year.
(c) Similar Terms of Option Grants. Each Annual
Option and any Additional Options granted to Employee pursuant to this Section
1.06 (i) shall be granted at Fair Market Value (as defined herein) on the date
of grant; (ii) shall be immediately exercisable in full; (iii) shall have a
maximum term of ten (10) years from the date of grant,; (iv) shall not be
transferable except by will, pursuant to the laws of descent and distribution
or, if in compliance with Rule 16b-3 (or any successor rule), pursuant to a
domestic relations order; (v) shall be subject to adjustment in the event of any
stock dividend, stock split, recapitalization or other similar change in the
nature or character of the Common Stock; and (vi) shall be issued pursuant to
and subject to the other general terms and conditions of the Company's 1996
Long-Term Incentive Compensation Plan (the "Plan"). After the completion of the
Company's initial public offering of the Common Stock, the Company agrees to use
commercially reasonable efforts in light of current Company circumstances to
file and obtain and maintain effectiveness of a registration statement on Form
S-8 or similar form covering the Common Stock to be issued to Employee pursuant
to the Plan.
Fair Market Value, as to any date, shall be defined in the
Plan to mean (i) the closing sale price of the Common Stock on the day before
the date in question (or if no sales were reported on such day, on the next
preceding day on which sales were reported) if the Common Stock is listed for
trading on a national securities exchange, the Nasdaq National Market or other
last reported sale system; (ii) if last reported sales information is not
available for the Common Stock, the closing bid price on the day before the date
in question; or (iii) if the Common Stock is not listed for trading or quoted in
a quotations system, a price determined by the Plan Administrator (as defined in
the Plan).
(d) Stock Grants in Lieu of Options. If the Company
would be obligated to grant any Annual Options or Additional Options at a time
when the Company has not completed its initial public offering of the Common
Stock, the Company shall grant and issue to Employee that number of shares of
Common Stock equal to 72% of the number of shares of Common Stock that would
have been covered by the grant of the Annual Option or the Additional Option.
The grant and issuance of such shares of Common Stock shall be in lieu of the
grant of the Applicable Annual Option or Additional Option and shall satisfy the
obligation of the Company to grant said Annual Option or Additional Option.
1.07 Employee Benefits. At all times during the term of
Employee's employment hereunder, the Company: (a) shall provide to Employee such
fringe benefits as are made available to management level employees of the
Company in comparable positions and such other benefits as the Compensation
Committee or the Board of Directors may from time to time, in their discretion,
make to Employee; (b) shall pay all of the Employee's dues, assessments and
expenses incurred on behalf of the Company at luncheon, country or social clubs
which the parties determine to be reasonable and necessary for the purpose of
promoting and maintaining the business of the Company; (c) shall provide the
Employee with full use of an automobile owned or leased by the Company for use
in carrying out his duties for both the Company and for use in such additional
personal business as the Employee may deem appropriate, and shall provide
adequate insurance for the automobile and occupants and to pay all maintenance
and operating costs appropriate or necessary to maintain such automobile in
prime operation condition; (d) will pay $4,500 per year to the Employee to
enable the Employee to maintain a life insurance policy or policies on his life
while he is in the employ of the Company and the Employee shall own and have the
right to designate the beneficiary of such policy or policies and to assign its
incidents of ownership, and the payments described in this Section 1.07(d) shall
be in addition to any payments the Company shall pay with respect to life
insurance on the Employee's life which may be maintained by the Company pursuant
to any other employee benefit plan maintained by the Company; (e) shall be
covered by such major medical or health benefit plans and pensions as are
available generally to employees of the Company; and (f) will pay up to $10,000
per year to enable Employee to maintain a long-term disability policy while he
is in the employ of the Company, such policy to be reasonably acceptable to the
Company. The parties agree that the options and bonuses provided above shall be
in lieu of and Employee shall be ineligible to participate in any other stock
option, stock bonus or profit sharing or similar plans of the Company other than
qualified retirement plans.
1.08 Execution Bonus. Upon execution of this Agreement, the
Company shall pay to Employee a one-time bonus of seventy-five thousand dollars
($75,000). Seventy percent (70%) of such bonus shall be used by Employee to
repay outstanding indebtedness of Employee to Adelphia Communications
Corporation, a Delaware corporation ("Adelphia"), pursuant to the Adelphia Loans
(as defined in Article VI).
1.09 Director Position. Adelphia agrees that it will vote
all shares of the Company over which it exercises voting control to elect
Employee a director of the Company.
ARTICLE II
TERMINATION
2.01 Disability. If during the term of Employee's employment
hereunder, Employee shall become "permanently and totally disabled" as defined
in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the
"Code"), as in effect on the date hereof, then the Company may, on not less than
forty-five (45) days' written notice to Employee, terminate Employee's
employment hereunder. Upon delivery to Employee of such notice, together with
payment of any accrued but unpaid salary under Section 1.03 hereof, Employee's
employment and all obligations of the Company under Article I hereof shall
forthwith terminate. The obligations of Employee under Article IV hereof shall
continue notwithstanding termination of Employee's employment pursuant to this
Section 2.01.
2.02 Death. If Employee dies during the term of his employment
hereunder, Employee's employment hereunder shall terminate and all obligations
of the Company hereunder, other than any obligations with respect to the payment
of any accrued but unpaid amounts under Section 1.03 hereof, shall terminate.
2.03 Company Termination for Cause. The Company may at any
time terminate the Employee's employment hereunder for Cause (as defined
herein). In such event, the Company shall give the Employee prompt written
notice specifying in reasonable detail the conduct which provides the basis for
a termination of Employee for Cause. Within ten (10) business days of the
Employee's receipt of such letter, the Employee shall be provided an
opportunity, together with his counsel, to present and discuss the matter of the
Employee's termination with the Board of Directors. Following such meeting, the
Board of Directors may, by the affirmative vote of a majority of the members of
the full Board of Directors (not including the Employee), terminate the
Employee's employment for Cause.
"Cause" shall mean any of the following by the Employee:
(a) the willful and material breach of this
Agreement by Employee, which breach shall not have been cured by Employee within
thirty (30) days after the Employee's receipt from the Company of written notice
specifying in reasonable detail the nature of Employee's breach;
(b) the conviction of Employee for a crime of moral
turpitude or a felony which is materially injurious to the reputation or
business of the Company; and
(c) any willful act or acts by Employee which is
materially and demonstrably injurious to the Company (excluding any act ratified
or approved by the Board of Directors of the Company and further excluding any
act taken by Employee in good faith with a reasonable belief that such act was
in the best interests of the Company).
The obligations of Employee under Article IV hereof shall
continue notwithstanding termination of Employee's employment pursuant to this
Section 2.03.
2.04 Termination Upon Change-in-Control. In the event of a
"Change-in-Control" (as hereinafter defined) of the Company during the Initial
Term, and in the event that the Buyer (as hereinafter defined) of the Company
does not then assume the obligations to Employee hereunder (whether such
assumption of this Agreement is by express assumption of this Agreement or by
entering into a new Agreement with the Employee that expressly terminates the
obligations to Employee under this Agreement), then Adelphia shall, at its
option, either (i) assume the obligations to Employee hereunder or (ii) cause
the Company to pay to Employee, upon such "Change-in-Control", the Base Salary
and the Annual Options provided for under this Agreement during the remainder of
the Initial Term and this Agreement shall then terminate. For purposes of this
Agreement, a "Change-in-Control" of a person shall mean the sale of all or
substantially all of the assets of the person to, or the acquisition of a
majority of the outstanding equity and voting power of each class of outstanding
stock of such person by, any other person or group of associated persons, other
than in each such case any person or group of persons who is, before any such
transaction, an affiliate (as such term is defined in Rule 144 promulgated under
the Securities Act of 1933, as amended (the "Securities Act")) of the Rigas
Family (the "Buyer").
2.05 Termination Without Cause. If the Company terminates this
Agreement without cause the Company shall pay to Employee the Base Salary and
the Annual Options provided for under this Agreement during the remainder of the
Initial Term and this Agreement shall then terminate. The obligations of
Employee under Article IV hereof shall continue notwithstanding termination of
Employee's employment pursuant to this Section 2.05.
2.06 Employee Termination. Employee agrees to give the Company
sixty (60) days prior written notice of the termination of his employment with
the Company. The obligations of Employee under Article IV hereof shall continue
notwithstanding termination of Employee's employment pursuant to this Section
2.06.
ARTICLE III
EMPLOYEE'S ACKNOWLEDGMENTS
Employee recognizes and acknowledges that: (a) in the course
of Employee's employment by the Company it will be necessary for Employee to
acquire information which could include, in whole or in part, information
concerning the Company's business plan, sales, sales volume, sales methods,
sales proposals, customers and prospective customers, prospective customers,
identity of key purchasing personnel in the employ of customers and identity of
customers and prospective customers, amount or kind of customer's purchases from
the Company, the Company's contracts, identity of the Company's partners and
joint venturers and prospective partners and joint venturers, the Company's
computer programs, system documentation, special hardware, product hardware,
related software development, the Company's manuals, formulae, processes,
methods, machines, compositions, ideas, improvements, inventions or other
confidential or proprietary information belonging to the Company or relating to
the Company's affairs (collectively referred to herein as the "Confidential
Information"); (b) the Confidential Information is the property of the Company;
(c) the use, misappropriation or disclosure of the Confidential Information
would constitute a breach of trust and could cause irreparable injury to the
Company; and (d) it is essential to the protection of the Company's good will
and to the maintenance of the Company's competitive position that the
Confidential Information be kept secret and that Employee not disclose the
Confidential Information to others or use the Confidential Information to
Employee's own advantage or the advantage of others.
Employee further recognizes and acknowledges that it is
essential for the proper protection of the business of the Company that Employee
be restrained (a) from soliciting or inducing any employee of the Company to
leave the employ of the Company, (b) from hiring or attempting to hire any
employee of the Company, (c) from soliciting the trade of or trading with the
customers and suppliers of the Company for any business purpose, and (d) from
competing against the Company for a reasonable period following the termination
of Employee's employment with the Company.
Employee further recognizes and understands that his duties at
the Company may include the preparation of materials, including written or
graphic materials, and that any such materials conceived or written by him shall
be done as "work made for hire" as defined and used in the Copyright Act of
1976, 17 U.S.C. ss. 1 et seq. In the event of publication of such materials,
Employee understands that since the work is a "work made for hire," the Company
will solely retain and own all rights in said materials, including right of
copyright, and that the Company may, at its discretion, on a case-by-case basis,
grant Employee by-line credit on such materials as the Company may deem
appropriate.
ARTICLE IV
EMPLOYEE'S COVENANTS AND AGREEMENTS
4.01 Non-Disclosure of Confidential Information. Employee
agrees to hold and safeguard the Confidential Information in trust for the
Company, its successors and assigns and agrees that he shall not, without the
prior written consent of the Company, misappropriate or disclose or make
available to anyone for use outside the Company's organization at any time,
either during his employment with the Company or subsequent to the termination
of his employment with the Company for any reason, including without limitation
termination by the Company for Cause or without Cause, any of the Confidential
Information, whether or not developed by Employee, except as required in the
performance of Employee's duties to the Company.
4.02 Disclosure of Works and Inventions/Assignment of Patents.
Employee shall disclose promptly to the Company or its nominee any and all
works, inventions, discoveries and improvements authorized, conceived or made by
Employee during the period of employment and related to the business or
activities of the Company, and hereby assigns and agrees to assign all his
interest therein to the Company or its nominee. Whenever requested to do so by
the Company, Employee shall execute any and all applications, assignments or
other instruments which the Company shall deem necessary to apply for and obtain
Letters, Patents, or Copyrights of the United States or any foreign country or
to otherwise protect the Company's interest therein. Such obligations shall
continue beyond the termination of employment with respect to works, inventions,
discoveries and improvements authored, conceived or made by Employee during the
period of employment, and shall be binding upon Employee's assigns, executors,
administrators and other legal representatives.
4.03 Duties. Employee agrees to be a loyal employee of the
Company. Employee agrees to devote his best efforts to the performance of his
duties for the Company, to give proper time and attention to furthering the
Company's business, and to comply with all rules, regulations and instruments
established or issued by the Company. Employee further agrees that during the
term of this Agreement, Employee shall not, directly or indirectly, engage in
any business which would detract from Employee's ability to apply his best
efforts to the performance of his duties hereunder. Employee also agrees that he
shall not usurp any corporate opportunities of the Company.
4.04 Return of Materials. Upon the termination of Employee's
employment with the Company for any reason, including without limitation
termination by the Company for Cause or without Cause, Employee shall promptly
deliver to the Company all correspondence, drawings, blueprints, manuals,
letters, notes, notebooks, reports, flow-charts, programs, proposals and any
documents concerning the Company's customers or concerning products or processes
used by the Company and, without limiting the foregoing, will promptly deliver
to the Company any and all other documents or materials containing or
constituting Confidential Information.
4.05 Restrictions on Competition. Employee covenants and
agrees that during the period of Employee's employment hereunder and following
the termination of Employee's employment, including without limitation
termination by the Company for Cause or without Cause, Employee shall not
engage, directly or indirectly, whether as principal or as agent, officer,
director, employee, consultant, shareholder (other than as a less than 5%
shareholder in a company with a class of equity securities registered under the
Exchange Act and listed for trading on an exchange or with the Nasdaq Stock
Market), or otherwise, alone or in association with any other person,
corporation or other entity, in any Competing Business in the Restricted Area
during the Restricted Period.
For purposes of this Agreement, the term "Competing Business"
shall mean: any person, corporation or other entity engaged in the business of
(a) providing telecommunications alternate access network systems ("networks")
or (b) selling or attempting to sell any product or service which is the same as
or similar to products or services sold by the Company within the last three (3)
years prior to termination of Employee's employment hereunder.
For purposes of this Agreement, the term "Restricted Area
during the Restricted Period" shall mean: (a) for Company networks in operation
prior to Employee's termination, the area served by the network and a fifty (50)
mile area therefrom until such network has been operating for at least three
years; and (b) for Company networks under consideration at the time of
Employee's termination, the area proposed to be served by the network and a
fifty (50) mile area therefrom until such network has been operating for three
(3) years.
4.06 Non-Solicitation of Customers and Suppliers. Employee
agrees that during his employment with the Company he shall not, directly or
indirectly, solicit the trade of, or trade with, any customer or prospective
customer of the Company for any business purpose other than for the benefit of
the Company. Employee further agrees that for three (3) years following
termination of his employment with the Company, including without limitation
termination by the Company for cause or without cause, Employee shall not,
directly or indirectly, solicit the trade of, or trade with, any customers or
prospective customers of the Company.
4.07 Non-Solicitation of Employees. Employee agrees that,
during his employment with the Company and for three (3) years following
termination of Employee's employment with the Company, including without
limitation termination by the Company for cause or without cause, Employee shall
not, directly or indirectly, solicit or induce, or attempt to solicit or induce,
any employee of the Company to leave the Company for any reason whatsoever, or
hire any employee of the Company.
4.08 Work Made for Hire. Employee agrees that in the
event of publication by Employee of written or graphic materials the Company
will retain and own all rights in said materials, including right of copyright.
ARTICLE V
EMPLOYEE'S REPRESENTATIONS AND WARRANTIES
5.01 No Prior Agreements. Employee represents and warrants
that he is not a party to or otherwise subject to or bound by the terms of any
contract, agreement or understanding which in any manner would limit or
otherwise affect his ability to perform his obligations hereunder, including
without limitation any contract, agreement or understanding containing terms and
provisions similar in any manner to those contained in Article IV hereof.
Employee further represents and warrants that his employment with the Company
will not require him to disclose or use any confidential information belonging
to prior employers or other persons or entities.
5.02 Employee's Abilities. Employee represents that his
experience and capabilities are such that the provisions of Article IV will not
prevent him from earning his livelihood, and acknowledges that it would cause
the Company serious and irreparable injury and cost if Employee were to use his
ability and knowledge in competition with the Company or to otherwise breach the
obligations contained in Article IV.
5.03 Remedies. In the event of a breach by Employee of the
terms of this Agreement, the Company shall be entitled, if it shall so elect, to
institute legal proceedings to obtain damages for any such breach, or to enforce
the specific performance of this Agreement by Employee and to enjoin Employee
from any further violation of this Agreement and to exercise such remedies
cumulatively or in conjunction with all other rights and remedies provided by
law. Employee acknowledges, however, that the remedies at law for any breach by
him of the provisions of this Agreement may be inadequate and that the Company
shall be entitled to injunctive relief against him in the event of any breach.
5.04 Securities. In connection with the offer and sale by the
Company to Employee of the Bonus Shares, Annual Options, Additional Options and
the shares of Common Stock issuable upon exercise of each of such options,
except for Common Stock issued upon exercise of such options pursuant to an
effective registration (collectively, the "Restricted Securities"), the Employee
represents and warrants to the Company as follows:
(a) Employee acknowledges that all documents,
records and books pertaining to the Company are available for inspection by him
and his advisor(s).
(b) Employee, by reason of his business or financial
experience, can be reasonably assumed to have the capacity to protect his
interests in connection with the investment in the Restricted Securities
pursuant to this Agreement.
(c) Employee is able to bear the substantial
economic risks of an investment in the Restricted Securities for an indefinite
period of time, has no need for liquidity in such investment and, at the present
time, could afford a complete loss of such investment.
(d) Employee has such knowledge and experience in
financial, tax and business matters so as to enable him to evaluate the merits
and risks of an investment in the Restricted Securities and to make an informed
investment decision with respect thereto.
(e) Employee acknowledges that the issuance of the
Restricted Securities by the Company to Employee has not been registered under
the Securities Act or any state securities law. Employee will not sell or
otherwise transfer the Restricted Securities without registration under the
Securities Act or applicable state securities laws or an exemption therefrom;
Employee represents that he is purchasing the Restricted Securities for his own
account, for investment and not with a view to resale or distribution except in
compliance with the Securities Act; and Employee has not offered or sold any
portion of the Restricted Securities being acquired nor does such Purchaser have
any present intention of dividing such Restricted Securities with others or of
selling, distributing or otherwise disposing of any portion of such Restricted
Securities either currently or after the passage of a fixed or determinable
period of time or upon the occurrence or non-occurrence of any predetermined
event or circumstance.
(f) Employee acknowledges that each certificate
representing the shares of Common Stock that are Restricted Securities shall be
stamped or otherwise imprinted with a legend substantially in the following
form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE FEDERAL OR STATE SECURITIES LAWS AND MAY NOT BE
OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED OR ASSIGNED
FOR VALUE, DIRECTLY OR INDIRECTLY, NOR MAY THE SECURITIES BE
TRANSFERRED ON THE BOOKS OF THE CORPORATION, WITHOUT
REGISTRATION OF SUCH SECURITIES UNDER ALL APPLICABLE FEDERAL
OR STATE SECURITIES LAWS OR COMPLIANCE WITH AN APPLICABLE
EXEMPTION THEREFROM, SUCH COMPLIANCE, AT THE OPTION OF THE
CORPORATION, TO BE EVIDENCED BY AN OPINION OF COUNSEL, IN FORM
ACCEPTABLE TO THE CORPORATION, THAT NO VIOLATION OF SUCH
REGISTRATION PROVISIONS WOULD RESULT FROM ANY PROPOSED
TRANSFER OR ASSIGNMENT.
ARTICLE VI
ADELPHIA LOANS
Reference is hereby made to that Revolving Term Note dated
June 30, 1989 from Employee to Adelphia in the aggregate principal amount of two
hundred five thousand dollars ($205,000), together with other unpaid principal
and any unpaid interest to date (the "Adelphia Loans"). Employee shall apply
fifty percent (50%) of any Cash Bonus received to repay the Adelphia Loans. Any
outstanding Adelphia Loans shall be due and payable on the second anniversary of
the termination of this Agreement or assumption of this Agreement by a Buyer.
ARTICLE VII
MISCELLANEOUS
7.01 Authorization to Modify Restrictions. It is the intention
of the parties that the provisions of Article IV hereof shall be enforceable to
the fullest extent permissible under applicable law, but that the
unenforceability (or modification to conform to such law) of any provision or
provisions hereof shall not render unenforceable, or impair, the remainder
thereof. If any provision or provisions hereof shall be deemed invalid or
unenforceable, either in whole or in part, this Agreement shall be deemed
amended to delete or modify, as necessary, the offending provision or provisions
and to alter the bounds thereof in order to render it valid and enforceable.
7.02 Tolling Period. The non-competition, non-disclosure and
non-solicitation obligations contained in Article IV hereof shall be extended by
the length of time during which Employee shall have been in breach of any of the
provisions of such Article IV.
7.03 Employer Violation Not a Defense. In an action by
the Company to enforce this Agreement, any claims asserted by Employee against
the Company shall not constitute a defense to the Company's action.
7.04 Entire Agreement; Termination of Employment Agreement.
This Agreement represents the entire agreement of the parties and may be amended
only by a writing signed by each of them. That Employment Agreement dated as of
July 1, 1986 by and between Adelphia and Employee is hereby terminated without
further obligation thereunder on the part of either party.
7.05 Governing Law. This Agreement shall be governed by
and construed in accordance with the internal laws of the Commonwealth of
Pennsylvania without regard to its conflict or choice of law provisions.
7.06 Arbitration. Any controversy, dispute or claim arising
out of or relating to this Agreement shall be settled by arbitration conducted
in Pittsburgh, Pennsylvania under the auspices of, and in accordance with the
rules of, the American Arbitration Association, and the decision in such
arbitration shall be final and conclusive on the parties and judgment upon such
decision may be entered in any court having jurisdiction thereof. The parties
retain the right to seek and obtain interim relief pending receipt of an award
in accordance with this Section 7.06, or temporary restraining orders or other
emergency temporary or preliminary equitable injunctive relief to preserve the
status quo by enjoining or restraining a party hereto pending final and binding
arbitration hereunder and the parties hereto acknowledge and agree to the right
to seek such relief.
7.07 Agreement Binding. The obligations of Employee under this
Agreement shall continue after the termination of his employment with the
Company for any reason, with or without cause, and shall be binding on his
heirs, executors, legal representatives and assigns and shall inure to the
benefit of any successors and assigns of the Company.
7.08 Notices. All notices or other communications required or
permitted hereunder will be in writing and will be deemed given or delivered
when delivered personally, by registered or certified mail, by legible facsimile
transmission or by overnight courier (fare prepaid) addressed as follows:
To Company or Adelphia: Main at Water Streets
Coudersport, Pennsylvania 16915
To Employee: Port Allegheny Road
Coudersport, Pennsylvania 16915
or to such address as such party may indicate by a notice delivered to the other
party. Notice will be deemed received the same day (when delivered personally),
5 days after mailing (when sent by registered or certified mail), or the next
business day (when sent by facsimile or delivered by overnight courier). Either
party to this Agreement may change its address to which all communications and
notices may be sent hereunder by addressing notices of such change in the manner
provided.
7.09 Counterparts, Section Headings. This Agreement may
be executed in any number of counterparts, each of which shall be deemed to be
an original, but all of which
<PAGE>
together shall constitute one and the same instrument. The
section headings of this Agreement are for convenience of reference only and
shall not affect the construction or interpretation of any of the provisions
hereof.
EMPLOYEE ACKNOWLEDGES THAT HE HAS READ AND UNDERSTANDS THE
FOREGOING PROVISIONS AND THAT SUCH PROVISIONS ARE REASONABLE AND ENFORCEABLE.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement or caused this Agreement to be executed the day and year first above
written.
WITNESS:
By:/s/ Daniel R. Milliard
- -------------------- -----------------------------------
Daniel R. Milliard
WITNESS: HYPERION
TELECOMMUNICATIONS, INC.
By:/s/ James P. Rigas
- -------------------- -----------------------------------
Authorized Officer
WITNESS: ADELPHIA COMMUNICATIONS
CORPORATION (as to
Sections 1.09 and 2.04 and Articles VI
and VII only)
By: /s/ James P. Rigas
- -------------------- -----------------------------------
Authorized Officer
<PAGE>
SCHEDULE I
TO
EMPLOYMENT AGREEMENT
WITH
DANIEL R. MILLIARD
Cash Bonus Benchmarks
Cash bonuses (not to exceed $115,000) shall be paid to
Employee during the fiscal year ended March 31, 1997 as follows:
1. $15,000 if Company revenues are at least 90% of budget; and
2. An additional $15,000 if Company revenues are at least 100%
of budget; and
3. An additional two cents ($.02) per pop covered by new
operating networks as to which contracts were executed
during the fiscal year ended March 31, 1997 that will
result in the addition of such new operating
networks in which the Company is the manager; and
4. An additional $30,000 for consummation of the initial
public offering of the equity of the Company.
<PAGE>
SCHEDULE II
TO
EMPLOYMENT AGREEMENT
WITH
DANIEL R. MILLIARD
Additional Options Benchmarks
Stock options for an aggregate of not more than 50,000 shares,
including options for 25,000 of the shares covered by the Initial Option, shall
be awarded to Employee during the fiscal year ended March 31, 1997 in the same
proportion as the ratio of the Cash Bonus actually earned in fiscal 1997 to
$115,000 (not to exceed 100%). For example, in the event that Employee earns a
Cash Bonus of $115,000 in fiscal 1997, then Employee shall receive Additional
Options for 25,000 shares of Common Stock ($115,000/$115,000 =100% times 50,000
minus 25,000 = 25,000). In the event that Employee earns a Cash Bonus of $57,500
in fiscal 1997, then Employee shall receive no Additional Options
($57,500/$115,000 = 50% times 50,000 minus 25,000 = 0).
Exhibit 10.04
HYPERION TELECOMMUNICATIONS, INC.
EXTENSION AGREEMENT
THIS AGREEMENT, made as of this 8th day of January, 1997, between
Charles R. Drenning, Paul D. Fajerski and Randolph S. Fowler (each a "Holder"
and collectively, the "Holders"), the six Trusts listed on the signature pages
to this Agreement (the "Trusts"), Adelphia Communications Corporation
("Adelphia") and Hyperion Telecommunications, Inc., a Delaware corporation (the
"Company").
WITNESSETH:
WHEREAS, the Holders, Adelphia and the Company are parties to a
Registration Rights Agreement dated as of October 25, 1996 with respect to the
Shares ("Shares") of Class B Common Stock, par value $.01 per share (the "Class
B Common Stock") of the Company held by the Holders;
WHEREAS, an initial public offering of the Class B Common Stock or the
Class A Common Stock of the Company, par value $.01 per share (the "Class A
Common Stock" and together with the Class B Common Stock, the "Common Stock")
has not yet occurred; and
WHEREAS, the parties which to clarify certain matters and extend the
time periods applicable to other matters agreed to in the Registration Rights
Agreement and the other documents referenced below.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein and intending to be legally bound hereby, the parties hereto
agree as follows:
1. Capitalized terms not otherwise defined in this
Agreement shall have the meanings ascribed to them in the Registration Rights
Agreement.
2. "IPO" shall mean an initial public offering, or a spinout,
of the Class A Common Stock or the Class B Common Stock that results in such
Common Stock being publicly traded and registered under the Securities Exchange
Act of 1934.
3. The aggregate amount of shares permitted to be gifted by a
Holder in Paragraph 3(c) of the Registration Rights Agreement shall be 150,000
shares prior to any stock splits, so long as the transfer of voting rights with
respect to such gifted shares is satisfactory to Adelphia and each donee
executes a joinder agreement to the Shareholder Agreement. The gifts made by
Messrs. Drenning and Fajerski on October 31, 1996, in the respective aggregate
amount of 80,000 shares for each such Holder (which gifts shall count towards
the 150,000 share maximum discussed above), are hereby ratified and approved, so
long as the voting rights with respect to such shares remain vested in the
current Trustees for the Trusts to which such shares were gifted, and provided
that such donee Trusts each execute joinder agreements to the Shareholder
Agreement.
4. The agreements contained in Paragraph 3(d) of the
Registration Rights Agreement are hereby extended to October 7, 1998, such that
if an IPO has been filed and is proceeding on October 7, 1998 or has been
consummated prior to October 7, 1998,
(a) if, as a result of the IPO, the Term Loans are repaid
with the proceeds of margin loans made to each of the Holders at or shortly
following the time of the IPO closing in the amount of $1 million or more, then
an amount equal to the interest that accrues on each such margin loan for a
period of up to 120 days from the date the margin loan was made shall be paid to
each of the Holders as a bonus by the Company on the 120th day of such period
(or such earlier date on which a margin loan is repaid) and the second paragraph
of Paragraph 3(d) regarding Gross-Up Payments shall be applicable to such Bonus
Payments;
(b) if each of the Holders is permitted to sell Common Stock
in the IPO with an aggregate gross sales price of at least $1 million each, then
the Term Loans will each be repaid in full at such IPO closing; and
(c) if the Holders are not permitted to sell Common Stock in
the IPO with an aggregate gross sales price of at least $1 million, then each
Term Loan will be repaid in full upon the earlier to occur of (x) one month
after the date on which the sum of (i) the amount of shares such Holder is then
permitted to sell under Rule 144 multiplied by the higher of the closing sales
or ask price on such date plus (ii) all gross proceeds from sales of Common
Stock by such Holder through and including such date equals at least $1 million,
(y) one day after such Holder on an aggregate basis has sold Common Stock and
received gross proceeds therefor of at least $1 million, or (z) one day after
such Holder is initially permitted to sell Common Stock pursuant to an effective
registration statement under the Registration Rights Agreement.
5. The provisions of Paragraphs 3(a) and 3(b) of the
Registration Rights Agreement shall remain in full force and effect with respect
to any IPO that has been filed and is proceeding on October 7, 1998 or has been
consummated prior to October 7, 1998. Further, the Holders' opportunity to each
sell up to $1 million worth of Common Stock in such an IPO, in the open market
following such an IPO, or in a combination of both, shall satisfy the piggyback
registration requirements of Section 9(i) of the Letter Agreement and Section
20(ii) of the Shareholder Agreement and shall thereby operate to terminate the
Shareholder Agreement effective as of the time of the first closing of such IPO
(without reference to any closing of any over-allotment option in an initial
public offering).
6. In the event that an IPO has been filed and is
proceeding on October 7, 1998,
(a) the Term Loans shall not be payable on October 8, 1998 but
(i) shall be payable as stated above or (ii) in the event such IPO is terminated
after October 7, 1998 without being consummated, shall be payable upon the
earlier of (x) the closing of any put exercised under Section 13 of the
Shareholder Agreement (and in such case the Term Loans will be paid from the put
closing proceeds to the extent possible) or (y) sixty (60) days following the
termination of such IPO;
(b) the Shareholder Agreement shall be automatically amended
such that all references to "October 7, 1998" therein shall be replaced with the
date that such IPO is ultimately consummated or terminated without being
consummated; and
(c) the Employment Agreements shall be automatically amended
such that term thereof shall be extended to terminate on the later of October
20, 1998 or the date the IPO is ultimately consummated or terminated without
being consummated.
7. The last sentence of Section 13(a) of the Shareholder
Agreement is amended to read in its entirety as follows: "An Individual
Shareholder shall have the right to exercise the above described put on a
one-time basis after October 7, 1998 for up to 25% of the shares owned by such
Individual Shareholder."
8. Except as set forth above, the Registration Rights
Agreement, the Employment Agreements, the Term Loans and the Shareholder
Agreement have not been modified and remain in full force and effect.
IN WITNESS WHEREOF, the undersigned have caused this Agreement
to be executed by a duly authorized representative as of the day first above
written.
HOLDERS:
/s/ Paul D. Fajerski
PAUL D. FAJERSKI
/s/ Charles R. Drenning
CHARLES R. DRENNING
/s/ Randolph S. Fowler
RANDOLPH S. FOWLER
ADELPHIA:
ADELPHIA COMMUNICATIONS CORPORATION
By: /s/ James P. Rigas
Name: JAMES P. RIGAS
Title: Executive Vice President
<PAGE>
COMPANY:
HYPERION TELECOMMUNICATIONS, INC.
By: /s/ Daniel R. Milliard
Name: DANIEL R. MILLIARD
Title: President
TRUSTS:
Mellon Bank, N.A., Co-Trustee with Donna Drenning under Deed
of Trust of Charles Drenning dated October 31, 1996 for Ross
Adams Drenning
By: /s/ Donna Drenning
Donna Drenning, Co-Trustee
By: Mellon Bank, N.A., Co-Trustee
By: /s/ John C. Holden
Name: JOHN C. HOLDEN
Title: Vice President
Mellon Bank, N.A., Co-Trustee with Donna Drenning under Deed
of Trust of Charles Drenning dated October 31, 1996 for
Andrea Lee Drenning
By: /s/ Donna Drenning
Donna Drenning, Co-Trustee
By: Mellon Bank, N.A., Co-Trustee
By: /s/ John C. Holden
Name: JOHN C. HOLDEN
Title: Vice President
<PAGE>
Mellon Bank, N.A., Co-Trustee with Michele Fajerski under
Deed of Trust of Paul Fajerski dated October 31, 1996 for
Jason F. Fajerski
By: /s/ Michele Fajerski
Michele Fajerski, Co-Trustee
By: Mellon Bank, N.A., Co-Trustee
By: /s/ John C. Holden
Name: JOHN C. HOLDEN
Title: Vice President
Mellon Bank, N.A., Co-Trustee with Michele Fajerski under
Deed of Trust of Paul Fajerski dated October 31, 1996 for
Michael P. Fajerski
By: /s/ Michele Fajerski
Michele Fajerski, Co-Trustee
By: Mellon Bank, N.A., Co-Trustee
By: /s/ John C. Holden
Name: JOHN C. HOLDEN
Title: Vice President
Mellon Bank, N.A., Co-Trustee with Michele Fajerski under
Deed of Trust of Paul Fajerski dated October 31, 1996 for
Jarred A. Fajerski
By: /s/ Michele Fajerski
Michele Fajerski, Co-Trustee
By: Mellon Bank, N.A., Co-Trustee
By: /s/ John C. Holden
Name: JOHN C. HOLDEN
Title: Vice President
<PAGE>
Mellon Bank, N.A., Co-Trustee with Michele Fajerski under
Deed of Trust of Paul Fajerski dated October 31, 1996 for
Lauren E. Fajerski
By: /s/ Michele Fajerski
Michele Fajerski, Co-Trustee
By: Mellon Bank, N.A., Co-Trustee
By: /s/ John C. Holden
Name: JOHN C. HOLDEN
Title: Vice President
