EXHIBIT 4.03
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement") is made and entered
into as of August 27, 1997 by HYPERION TELECOMMUNICATIONS, INC., a Delaware
corporation ("the Company"), having its principal office at Main at Water
Street, X.X. Xxx 000, Xxxxxxxxxxx, Xxxxxxxxxxxx 00000, in favor of Bank of
Montreal Trust Company having an office at 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, as collateral agent (the ACollateral Agent@) for the holders (the
"Holders") of the Company's 12 1/4% Senior Secured Notes due 2004 (the "Notes").
Capitalized terms used and not defined herein shall have the meanings given to
such terms in the Indenture referred to below.
W I T N E S S E T H:
WHEREAS, the Company is the legal and beneficial owner of (i)
all of the issued and outstanding shares of capital stock set forth in Column
(b) of Schedule I hereto (the APledged Shares@) of each of the entities set
forth in Column (a) of Schedule 1 hereto (collectively the "Pledged Entities");
and
WHEREAS, the Company and Bank of Montreal Trust Company, as
trustee, have entered into that certain indenture dated as of August 27, 1997
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the "Indenture"), pursuant to which the Company issued $250 million in
aggregate principal amount of 12 1/4% Senior Secured Notes due 2004 (together
with any notes issued in replacement thereof or in exchange or substitution
therefor or in addition thereto, the ANotes@); and
WHEREAS, in order to secure the Notes issued pursuant to the
Indenture, the Company has agreed to (i) on the date hereof, pledge to the
Collateral Agent for the ratable benefit of the Holders of Notes, and grant to
the Collateral Agent for the ratable benefit of the Holders of Notes a security
interest in all of the outstanding Capital Stock (collectively, the "Initial
Pledged Shares") of each of Hyperion Telecommunications of Vermont, Inc.
("Hyperion Vermont"), Hyperion Telecommunications of Tennessee, Inc. ("Hyperion
Tennessee") and Hyperion Telecommunications of Florida, Inc. ("Hyperion
Florida," and together with Hyperion Vermont and Hyperion Tennessee, the
"Initial Pledged Entities"); (ii) subsequent to the date hereof, but in no event
later than the first anniversary of the date hereof, upon the earlier of (A)
consummation of each of the New York Rollup (as defined herein) and the Kentucky
Rollup (as defined herein) or, in the alternative, (B) receipt of the Requisite
Consents (as defined herein), pledge to the Collateral Agent for the ratable
benefit of the Holders of Notes, and grant to the Collateral Agent for the
ratable benefit of the Holders of Notes a security interest in all of
outstanding the Capital Stock (collectively, the "Additional Pledged Shares,"
and together with the Initial Pledged Shares, the "Pledged Shares") of each of
Hyperion Telecommunications of New York, Inc. ("Hyperion New York") and Hyperion
Telecommunications of Kentucky, Inc. ("Hyperion Kentucky," and together with
Hyperion New York, the "Additional Pledged Entities"); and (iii) execute and
deliver this Agreement in order to secure the payment and performance by the
Company of all of the Obligations of the Company under the Indenture and the
Notes (the "Obligations").
AGREEMENT
NOW, THEREFORE, in consideration of the premises, and in order
to induce the Holders of Notes to purchase the Notes, the Company hereby agrees
with the Collateral Agent for its benefit and the ratable benefit of the Holders
of Notes as follows:
SECTION 1. Pledge and Creation of Security Interest in the Initial
Collateral. The Company hereby pledges to the Collateral Agent for its benefit
and for the ratable benefit of the Holders of Notes, and grants to the
Collateral Agent for the ratable benefit of the Holders of Notes, a continuing
first priority security interest in all of its right, title and interest in the
following (the "Initial Collateral"):
(a) the Initial Pledged Shares and the certificates representing the
Initial Pledged Shares, and, subject to the provisions of Section 6, all
products and proceeds of any of the Initial Pledged Shares, including,
without limitation, all dividends, cash, options, warrants, rights,
instruments, subscriptions and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Initial Pledged Shares or any of the
foregoing; and
(b) all additional shares of, and all securities convertible into or
exercisable or exchangeable for, and all warrants, options or other rights
to purchase, Capital Stock of or other Equity Interests in the Initial
Pledged Entities from time to time acquired by the Company in any manner,
and the certificates representing such additional Capital Stock and Equity
Interests (any such additional Capital Stock and Equity Interests and
other items shall constitute part of the Initial Pledged Shares under and
as defined in this Agreement), and all products and proceeds of any of the
foregoing, including, without limitation, subject to the provisions of
Section 6, all dividends, cash, options, warrants, rights, instruments,
subscriptions, and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any
or all of the foregoing.
SECTION 1A. Pledge and Creation of Security Interest in the Additional
Collateral.
(a) Immediately upon the earlier of (i) the consummation by the Company of
the New York Rollup (as defined below) and the Kentucky Rollup (as defined
below), (ii) the receipt by the Company of the consent of each of
Advance/Xxxxxxxx Partnership ("Advance"), and TCI Telephony, Inc. ("TCI") to the
pledge by the Company of all of the Capital Stock of Hyperion New York to secure
the Obligations of the Company pursuant to the terms of the Indenture and the
Notes and in accordance with this Agreement (the "New York Consent") and (iii)
the first anniversary of the date hereof, the Company shall pledge to the
Collateral Agent for its benefit and for the ratable benefit of the Holders of
Notes, and grant to the Collateral Agent for the ratable benefit of the Holders
of Notes, a continuing first priority security interest in all of its right,
title and interest in the following (the "HNY Pledged Collateral"):
(A) all of the outstanding Capital Stock of and other Equity
Interests in Hyperion New York (the "HNY Pledged Shares") and the
certificates representing the HNY Pledged Shares, and, subject to the
provisions of Section 6, all products and proceeds of any of the HNY
Pledged Shares, including, without limitation, all dividends, cash,
options, warrants, rights, instruments, subscriptions and other property
or proceeds from time to time received, receivable or otherwise
distributed in respect of or in
exchange for any or all of the HNY Pledged Shares or any of the foregoing;
and
(B) all additional shares of, and all securities convertible into or
exercisable or exchangeable for, and all warrants, options or other rights
to purchase, Capital Stock of or other Equity Interests in Hyperion New
York from time to time acquired by the Company in any manner, and the
certificates representing such additional Capital Stock and Equity
Interests (any such additional Capital Stock and Equity Interests and
other items shall constitute part of the HNY Pledged Shares under and as
defined in this Agreement), and all products and proceeds of any of the
foregoing, including, without limitation, subject to the provisions of
Section 6, all dividends, cash, options, warrants, rights, instruments,
subscriptions, and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any
or all of the foregoing.
(b) Immediately upon the earlier of (i) the consummation by the Company of
the Kentucky Rollup (as defined below), (ii) the receipt by the Company of the
consent of TCI to the pledge by the Company of all of the Capital Stock of
Hyperion Kentucky to secure the Obligations of the Company pursuant to the terms
of the Indenture and the Notes and in accordance with this Agreement (the
"Kentucky Consent," and together with the New York Consent, the "Requisite
Consents") and (iii) the first anniversary of the date hereof, the Company shall
pledge to the Collateral Agent for its benefit and for the ratable benefit of
the Holders of Notes, and grant to the Collateral Agent for the ratable benefit
of the Holders of Notes, a continuing first priority security interest in all of
its right, title and interest in the following (the "HKY Pledged Collateral"):
(A) all of the outstanding Capital Stock of and other Equity
Interests in Hyperion Kentucky (the "HKY Pledged Shares") and the
certificates representing the HKY Pledged Shares, and, subject to the
provisions of Section 6, all products and proceeds of any of the HKY
Pledged Shares, including, without limitation, all dividends, cash,
options, warrants, rights, instruments, subscriptions and other property
or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the HKY Pledged
Shares or any of the foregoing; and
(B) all additional shares of, and all securities convertible into or
exercisable or exchangeable for, and all warrants, options or other rights
to purchase, Capital Stock of or other Equity Interests in Hyperion
Kentucky from time to time acquired by the Company in any manner, and the
certificates representing such additional Capital Stock and Equity
Interests (any such additional Capital Stock and Equity Interests and
other items shall constitute part of the HKY Pledged Shares under and as
defined in this Agreement), and all products and proceeds of any of the
foregoing, including, without limitation, subject to the provisions of
Section 6, all dividends, cash, options, warrants, rights, instruments,
subscriptions, and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any
or all of the foregoing.
(c) In the event that the Company fails to comply with (a) or (b) above,
the sole remedy shall be as set forth in Section 10.08 in the Indenture and the
related provisions of the Notes.
For purposes of this Agreement: (i) the "New York Rollup" means the
consummation by the Company of the transactions contemplated by that certain
Purchase Agreement, dated May 8, 1997 by and between Hyperion New York and
Advance, and certain additional agreements entered into between and among
Hyperion New York, the Company and Advance on the same date; (ii) the "Kentucky
Rollup" means the
consummation by the Company of the transactions contemplated by that certain
Purchase Agreement, dated August 11, 1997 by and between Hyperion Kentucky, TCI
and certain additional agreements entered into between and among Hyperion
Kentucky, the Company and TCI on the same date; and (iii) the New York Rollup
and the Kentucky Rollup are collectively referred to herein as the "Rollups."
The HNY Pledged Collateral and the HKY Pledge Collateral are referred to
herein as the "Additional Collateral." The Initial Collateral and the Additional
Collateral (to the extent that such Additional Collateral is or has been pledged
pursuant to this Section 1A) are referred to herein as the "Pledged Collateral."
SECTION 2. Security for Obligations. This Agreement secures the
prompt and complete payment and performance when due (whether at stated
maturity, by acceleration or otherwise) of all Obligations of the Company under
the Indenture, the Notes, including, without limitation, interest and any other
Obligations accruing after the date of any filing by the Company of any petition
in bankruptcy or the commencement of any bankruptcy, insolvency or similar
proceeding with respect to the Company and the Registration Rights Agreement.
SECTION 3. Delivery of Pledged Collateral. The Company hereby agrees
that all certificates or instruments representing or evidencing the Pledged
Collateral shall be immediately delivered to and held at all times by the
Collateral Agent pursuant hereto in the State of New York and shall be in
suitable form for transfer by delivery, or issued in the name of the Company and
accompanied by instruments of transfer or assignment duly executed in blank and
undated, and in either case having attached thereto all requisite federal or
state stock transfer tax stamps, all in form and substance satisfactory to
create a first priority security interest in the Pledged Collateral.
SECTION 4. Representations and Warranties. The Company hereby makes
all representations and warranties applicable to the Company contained in the
Indenture. The Company further represents and warrants that:
(a) The execution, delivery and performance by the Company of this
Agreement are within the Company's corporate powers, have been duly
authorized by all necessary corporate action, and do not contravene, or
constitute a default under, any provision of applicable law or regulation
or of the certificate of incorporation or bylaws of the Company or of any
agreement, judgment, injunction, order, decree or other instrument binding
upon the Company, or result in the creation or imposition of any Lien on
any assets of the Company, other than the Lien contemplated hereby.
(b) The Pledged Shares have been duly authorized and validly issued
and are fully paid and non-assessable.
(c) The Pledged Shares constitute all of the issued and outstanding
Equity Interests of the Pledged Entities and constitute all of the Equity
Interests of the Pledged Entities beneficially owned by the Company.
(d) The Company is the legal, record and beneficial owner of the
Pledged Collateral, free and clear of any and all Liens or claims of any
Person except (i) with respect to the Initial Collateral, the security
interest created by this Agreement and (ii) with respect to the Additional
Collateral, the Lien contained in the applicable partnership agreement;
provided that upon the pledge by the Company of
the Additional Collateral pursuant to the terms of this Agreement, such
collateral will be free and clear of any and all Liens or claims of any
person except for the security interest created by this Agreement.
(e) The Company has full power and authority to enter into this
Agreement and has the right to vote, pledge and grant a security interest
in the Initial Collateral as provided by this Agreement, and with respect
to the Additional Collateral, upon the consummation of the Rollups, the
Company will have the right to vote, pledge and grant a security interest
in the Additional Collateral as provided by this Agreement.
(f) This Agreement has been duly executed and delivered by the
Company and constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms.
(g) Upon the delivery to the Collateral Agent of the Pledged
Collateral and (as to certain proceeds therefrom, if any) the filing of
Uniform Commercial Code (the AUCC@) financing statements in the
appropriate jurisdictions, the pledge of the Pledged Collateral pursuant
to this Agreement creates a valid and perfected first priority security
interest in the Pledged Collateral, securing the payment of the
Obligations for the benefit of the Collateral Agent and the Holders of
Notes, and enforceable as such against all creditors of the Company and
any Persons purporting to purchase any of the Pledged Collateral from the
Company.
(h) No consent of any other Person and no consent, authorization,
approval, or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required either (i) for the
pledge by the Company of the Pledged Collateral pursuant to this Agreement
or for the execution, delivery or performance of this Agreement by the
Company or (ii) except as set forth on Schedule II hereto with respect to
the Pledged Collateral, for the exercise by the Collateral Agent of the
voting or other rights provided for in this Agreement or the remedies in
respect of the Pledged Collateral pursuant to this Agreement (except, in
each case, as may be required in connection with such disposition by laws
affecting the offering and sale of securities).
(i) Other than proceedings related to obtaining governmental approval
for the Rollups, no litigation, investigation or proceeding of or before
any arbitrator or governmental authority is pending or, to the best
knowledge of the Company, threatened by or against the Company or against
any of its properties or revenues with respect to this Agreement or any of
the transactions contemplated hereby.
(j) The pledge of the Pledged Collateral pursuant to this Agreement
is not prohibited by any applicable law or governmental regulation,
release, interpretation or opinion of the Board of Governors of the
Federal Reserve System or other regulatory agency (including, without
limitation, Regulations G, T, U and X of the Board of Governors of the
Federal Reserve System).
(k) All information set forth herein relating to the Pledged
Collateral is accurate and complete in all respects.
SECTION 5. Further Assurance. The Company shall at all times cause
the security interests granted pursuant to this Agreement to constitute valid
perfected first priority security interests in the Pledged
Collateral, enforceable as such against all creditors of the Company and (except
as otherwise specifically provided herein) any Persons purporting to purchase
any Pledged Collateral from the Company. The Company shall, promptly upon
request by the Collateral Agent, execute and deliver or cause to be executed and
delivered, or use its best efforts to procure, all stock powers, proxies, tax
stamps, assignments, instruments and other documents, all in form and substance
satisfactory to the Collateral Agent, deliver any instruments to the Collateral
Agent and take any other actions that are necessary or, in the reasonable
opinion of the Collateral Agent, desirable to perfect, continue the perfection
of, or protect the first priority of the Collateral Agent's security interest
in, the Pledged Collateral, to protect the Pledged Collateral against the
rights, claims, or interests of third persons, to enable the Collateral Agent to
exercise or enforce its rights and remedies hereunder, or otherwise to effect
the purposes of this Agreement. The Company also hereby authorizes the
Collateral Agent to file any financing or continuation statements with respect
to the Pledged Collateral without the signature of the Company to the extent
permitted by applicable law. The Company shall pay all costs incurred in
connection with any of the foregoing.
SECTION 6. Voting Rights; Dividends; Etc.
(a) So long as no Event of Default shall have occurred and be
continuing, the Company shall be entitled to exercise any and all voting
and other consensual rights pertaining to the Pledged Shares or any part
thereof for any purpose not inconsistent with the terms of this Agreement
or the Indenture; provided, however, that the Company shall not exercise
or shall refrain from exercising any such right if such action or omission
would be inconsistent with or violate any provisions of this Agreement or
the Indenture.
(b) So long as no Event of Default shall have occurred and be
continuing, and subject to the other terms and conditions of the
Indenture, the Company shall be entitled to receive, and to utilize
(subject to the provisions of the Indenture) free and clear of the Lien of
this Agreement, all regular cash dividends, interest, principal and other
payments and distributions paid from time to time in respect of the
Pledged Shares, provided that upon the occurrence and during the
continuance of an Event of Default, any and all (i) dividends, other
distributions, interest and principal payments paid or payable in the form
of instruments and/or other property received, receivable or otherwise
distributed in respect of, or in exchange for, any Pledged Collateral,
(ii) dividends and other distributions paid or payable in cash in respect
of any Pledged Shares in connection with a partial or total liquidation or
dissolution or in connection with a reduction of capital, capital surplus
or paid-in-surplus, and (iii) cash paid, payable or otherwise distributed
in redemption of, or in exchange for, any Pledged Collateral, shall in
each case be forthwith delivered to the Collateral Agent to hold as
Pledged Collateral and shall, if received by the Company, be received in
trust for the benefit of the Collateral Agent and the Holders of Notes, be
segregated from the other property and funds of the Company and be
forthwith delivered to the Collateral Agent as Pledged Collateral in the
same form as so received (with any necessary endorsements).
(c) The Collateral Agent shall execute and deliver (or cause to be
executed and delivered) to the Company all such proxies and other
instruments as the Company may reasonably request in writing for the
purpose of enabling the Company to exercise the voting and other rights
that it is entitled to exercise pursuant to Sections 6(a) and 6(b) above.
(d) Upon the occurrence and during the continuance of an Event of
Default, (i) all rights of the
Company to exercise the voting and other consensual rights that it would
otherwise be entitled to exercise pursuant to Section 6(a) shall
immediately and automatically cease, and all such rights shall thereupon
become vested in the Collateral Agent, which, to the extent permitted by
law, shall thereupon have the sole right to exercise such voting and other
consensual rights, and (ii) all dividends and other distributions payable
in respect of the Pledged Collateral shall be paid to the Collateral Agent
and the Company's right to receive such cash payments pursuant to Section
6(b) hereof shall immediately cease.
(e) Upon the occurrence and during the continuance of an Event of
Default, the Company shall execute and deliver (or cause to be executed
and delivered) to the Collateral Agent all such proxies, dividend and
interest payment orders and other instruments as are necessary or
desirable to enable the Collateral Agent to exercise the voting and other
rights that it is entitled to exercise pursuant to Section 6(d) above.
(f) All payments of interest, principal or premium and all dividends
and other distributions that are received by the Company contrary to the
provisions of this Section 6 shall be received in trust for the benefit of
the Collateral Agent and the Holders, shall be segregated from the other
property or funds of the Company and shall be forthwith delivered to the
Collateral Agent as Pledged Collateral in the same form as so received
(with any necessary endorsements).
SECTION 7. Covenants. The Company hereby covenants and agrees with
the Collateral Agent and the Holders of Notes that it shall comply with all of
the obligations, requirements and restrictions applicable to the Company
contained in the Indenture. The Company further covenants and agrees, from and
after the date of this Agreement and until the Obligations have been paid in
full, as follows:
(a) The Company agrees that it shall not (i) other than as permitted
by and in accordance with the Indenture and Section 18.17(b) hereof, sell,
assign, transfer, convey or otherwise dispose of, or grant any option or warrant
with respect to, any of the Pledged Collateral without the prior written consent
of the Collateral Agent acting in accordance with the directions of the Holders,
(ii) create or permit to exist any Lien upon or with respect to any of the
Pledged Collateral (except for the security interest granted under this
Agreement, and, with respect to the Additional Collateral, until such time as
the Additional Collateral is pledged for the benefit of the Holders of the Notes
pursuant to Section 1A hereof, the Liens contained in the applicable partnership
agreements) and at all times will be the sole beneficial owner of the Pledged
Collateral, (iii) enter into any agreement or understanding that purports to or
that may restrict or inhibit the Collateral Agent's rights or remedies
hereunder, including, without limitation, the Collateral Agent's right to sell
or otherwise dispose of the Pledged Collateral, (iv) take any action, or permit
the taking of any action by the Pledged Entities, with respect to the Pledged
Collateral the taking of which would result in a violation of the Indenture or
this Agreement, including, without limitation, the issuance by the Pledged
Entities of any additional Equity Interests or promissory notes or the
incurrence by the Pledged Entities of any Indebtedness to Persons other than the
Company (except as permitted by the Indenture), (v) permit any of the Pledged
Entities to merge or consolidate with or into another person or entity or sell
or transfer all or substantially all of its assets to another person or entity,
unless (x) the Company shall have delivered to the Collateral Agent an Opinion
of Counsel substantially in the form of Exhibit A-1 hereto and a certificate
executed by the President and Chief Financial Officer of the Company
substantially in the form of Exhibit B hereto and (y) all outstanding capital
stock of the surviving entity in such merger or consolidation or of the entity
to whom such sale or transfer was made, together with any promissory notes
issued by such entity in favor of the Company are, upon such merger or
consolidation, pledged hereunder to and deposited with the Collateral
Agent, or (vi) fail to pay or discharge any tax, assessment or levy of any
nature not later than five days prior to the date of any proposed sale under any
judgement, writ or warrant of attachment with regard to the Pledged Collateral.
(b) The Company agrees that immediately upon becoming the beneficial
owner of any additional shares of Capital Stock or Equity Interests of the
Pledged Entities (including as a result of the merger or consolidation of the
Issuer with or into another entity) it shall pledge and deliver to the
Collateral Agent for its benefit and the ratable benefit of the Holders and
grant to the Collateral Agent for its benefit and the ratable benefit of the
Holders, a continuing first priority security interest in such shares or Equity
Interests (as well as instruments of transfer or assignment duly executed in
blank and undated and any necessary stock transfer tax stamps, all in form and
substance satisfactory to create a first priority security interest in the
Pledged Collateral). The Company further agrees that it shall promptly deliver
to the Collateral Agent a certificate executed by a principal executive officer
of the Company describing such additional shares or Equity Interests and
certifying that the same have been duly pledged and delivered to the Collateral
Agent hereunder.
(b) The Company agrees that, in accordance with the terms of Section
1A hereof, it shall pledge and deliver to the Collateral Agent for its benefit
and the ratable benefit of the Holders and grant to the Collateral Agent for its
benefit and the ratable benefit of the Holders, a continuing first priority
security interest in the Additional Pledged Shares (as well as instruments of
transfer or assignment duly executed in blank and undated and any necessary
stock transfer tax stamps, all in form and substance satisfactory to create a
first priority security interest in the Additional Pledged Collateral). The
Company further agrees that it shall concurrently with such pledge of the
Additional Pledged Collateral, deliver to the Collateral Agent an opinion of
counsel substantially in the form of Exhibit A-2 hereto and certificate executed
by a principal executive officer of the Company certifying that the Additional
Pledged Shares have been duly pledged and delivered to the Collateral Agent
hereunder and constitutes Pledged Collateral for all purposes hereunder and
under the Indenture.
SECTION 8. Power of Attorney. In addition to all of the powers
granted to the Collateral Agent pursuant to Section 10.06 of the Indenture, the
Company hereby appoints and constitutes the Collateral Agent as the Company's
attorney-in-fact to exercise all of the following powers upon and at any time
after the occurrence of an Event of Default for so long as such Event of Default
is continuing: (i) collection of proceeds of any Pledged Collateral; (ii)
conveyance of any item of Pledged Collateral to any purchaser thereof; (iii)
giving of any notices or recording of any Liens under Section 5 hereof; (iv)
making of any payments (upon receipt of funds thereof) or taking any acts under
Section 9 hereof and (v) paying or discharging taxes or Liens levied or placed
upon or threatened against the Pledged Collateral, in the amounts necessary to
discharge the same, and such payments made by the Collateral Agent to become the
obligations of the Company to the Collateral Agent, due and payable immediately
without demand. The Collateral Agent's authority hereunder shall include,
without limitation, the authority to endorse and negotiate, for the Collateral
Agent's own account, any checks or instruments in the name of the Company,
execute and give receipt for any certificate of ownership or any document,
transfer title to any item of Pledged Collateral, sign the Company's name on all
financing statements or any other documents deemed necessary or appropriate to
preserve, protect or perfect the security interest in the Pledged Collateral and
to file the same, prepare, file and sign the Company's name on any notice of
Lien, and prepare, file and sign the Company's name on a proof of claim in
bankruptcy or similar document against any customer of the Company, and to take
any other actions arising from or incident to the powers granted to the
Collateral Agent in this Agreement. This
power of attorney is coupled with an interest and is irrevocable by the Company.
SECTION 9. Collateral Agent May Perform. If the Company fails to
perform any agreement contained herein, the Collateral Agent may itself perform,
or cause performance of, such agreement, and the reasonable expenses of the
Collateral Agent incurred in connection therewith shall be payable by the
Company under Section 14 hereof. No provision of this Agreement shall require
the Collateral Agent to expend or risk its own funds or incur any liability. The
Collateral Agent shall be under no obligation to exercise any of its rights and
powers under this Agreement at the request of the Holders of the Notes, unless
such Holders shall have offered the Collateral Agent security and indemnity
satisfactory to it against any loss, liability or expenses.
SECTION 10. No Assumption of Duties; Reasonable Care. The rights and
powers granted to the Collateral Agent hereunder are being granted in order to
preserve and protect the Collateral Agent's and the Holders' of Notes security
interest in and to the Pledged Collateral granted hereby and shall not be
interpreted to, and shall not, impose any duties on the Collateral Agent in
connection therewith. The Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Pledged Collateral in its
possession if the Pledged Collateral is accorded treatment substantially equal
to that which the Collateral Agent accords its own property, it being understood
that the Collateral Agent shall not have any responsibility for (i) ascertaining
or taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relative to any Pledged Collateral, whether or not the
Collateral Agent has or is deemed to have knowledge of such matters, or (ii)
taking any necessary steps to preserve rights against any parties with respect
to any Pledged Collateral.
SECTION 11. Subsequent Changes Affecting Collateral. The Company
represents to the Collateral Agent and the Holders of Notes that the Company has
made its own arrangements for keeping informed of changes or potential changes
affecting the Pledged Collateral (including, but not limited to, rights to
convert, rights to subscribe, payment of dividends, payments of interest and/or
principal, reorganization or other exchanges, tender offers and voting rights),
and the Company agrees that the Collateral Agent and the Holders of Notes shall
have no responsibility or liability for informing the Company of any such
changes or potential changes or for taking any action or omitting to take any
action with respect thereto. The Company covenants that it shall not, without
the prior written consent of the Collateral Agent, vote to enable, or take any
other action to permit, any Pledged Entity to issue any capital stock or other
securities or to sell or otherwise dispose of, or grant any option with respect
to, any of the Pledged Collateral or create or permit to exist any Lien upon or
with respect to any of the Pledged Collateral, except for the security interests
granted under this Agreement. The Company shall defend the right, title and
interest of the Collateral Agent and the Holders of Notes in and to the Pledged
Collateral against the claims and demands of all Persons.
SECTION 12. Remedies Upon Default.
(a) If any Event of Default shall have occurred and be
continuing, the Collateral Agent and the Holders of Notes shall have, in
addition to all other rights given by law or by this Agreement or the
Indenture, all of the rights and remedies with respect to the Pledged
Collateral of a secured party under the UCC as in effect in the State of
New York at that time. The Collateral Agent may, without notice and at its
option, transfer or register, and the Company shall register or cause to
be registered upon request therefor by the Collateral Agent, the Pledged
Collateral or any part thereof on the books of each
Pledged Entity into the name of the Collateral Agent or the Collateral
Agent's nominee(s), with or without any indication that such Pledged
Collateral is subject to the security interest hereunder. In addition,
with respect to any Pledged Collateral that shall then be in or shall
thereafter come into the possession or custody of the Collateral Agent,
the Collateral Agent may sell or cause the same to be sold at any broker's
board or at public or private sale, in one or more sales or lots, at such
price or prices as the Collateral Agent may deem best, for cash or on
credit or for future delivery, without assumption of any credit risk. The
purchaser of any or all Pledged Collateral so sold shall thereafter hold
the same absolutely, free from any claim, encumbrance or right of any kind
whatsoever. Unless any of the Pledged Collateral threatens to decline
speedily in value or is or becomes of a type sold on a recognized market,
the Collateral Agent shall give the Company reasonable notice of the time
and place of any public sale thereof, or of the time after which any
private sale or other intended disposition is to be made. Any sale of the
Pledged Collateral conducted in conformity with reasonable commercial
practices of banks, insurance companies, commercial finance companies, or
other financial institutions disposing of property similar to the Pledged
Collateral shall be deemed to be commercially reasonable. Any requirements
of reasonable notice shall be met if such notice is mailed to the Company
as provided below in Section 18.1 at least ten days before the time of the
sale or disposition. Any other requirement of notice, demand or
advertisement for sale is, to the extent permitted by law, waived. The
Collateral Agent or any Holder of Notes may, in its own name or in the
name of a designee or nominee, buy any of the Pledged Collateral at any
public sale and, if permitted by applicable law, at any private sale. All
expenses (including court costs and reasonable attorneys' fees and
disbursements) of, or incident to, the enforcement of any of the
provisions hereof shall be recoverable from the proceeds of the sale or
other disposition of the Pledged Collateral.
(b) If the Collateral Agent shall determine to exercise its
right to sell any or all of the Pledged Shares pursuant to Section 12(a)
above, and if in the opinion of counsel for the Collateral Agent it is
necessary, or if in the opinion of the Collateral Agent it is advisable,
to have the Pledged Shares or that portion thereof to be sold, registered
under the provisions of the Securities Act of 1933, as amended (the
ASecurities Act@), the Company shall cause each Pledged Entity to (i)
execute and deliver, and cause its directors and officers to execute and
deliver, all at the expense of the Company, all such instruments and
documents, and to do or cause to be done all such other acts and things as
may be necessary or, in the opinion of the Collateral Agent, advisable to
register such Pledged Shares under the provisions of the Securities Act,
(ii) cause the registration statement relating thereto to become effective
and to remain effective for a period of 180 days from the date of the
first public offering of such Pledged Shares, or that portion thereof to
be sold and (iii) make all amendments thereto and/or to the related
prospectus that, in the opinion of the Collateral Agent, are necessary or
advisable, all in conformity with the requirements of the Securities Act
and the rules and regulations of the Securities and Exchange Commission
applicable thereto; provided that in the event that state regulatory law
prohibits the registration and sale of shares of any particular Pledged
Entity, such Pledged Entity shall not be required to register the shares
of that particular Pledged Entity. The Company agrees to cause each
Pledged Entity to comply with the provisions of the securities or ABlue
Sky@ laws of any jurisdiction that the Collateral Agent shall designate
for the sale of the Pledged Shares and to make available to each such
Pledged Entity's security holders, as soon as practicable, an earnings
statement (which need not be audited) that will satisfy the provisions of
Section 11(a) of the Securities Act. The Company shall cause each such
Pledged Entity to furnish to the Collateral Agent such number of copies as
the Collateral Agent may reasonably request of each registration statement
and preliminary and final prospectus, to notify the Collateral Agent
promptly of the happening of any event as a result of which
any then effective prospectus includes an untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of circumstances
under which they were made, not misleading, and to cause the Collateral
Agent to be furnished with such number of copies as the Collateral Agent
may request of such supplement to or amendment of such prospectus. The
Company shall cause each such Pledged Entity, to the extent permitted by
law, to indemnify, defend and hold harmless the Collateral Agent and the
Holders of Notes from and against all losses, liabilities, expenses or
claims (including reasonable legal expenses and the reasonable costs of
investigation) that the Collateral Agent or the Holders of Notes may incur
under the Securities Act or otherwise, insofar as such losses,
liabilities, expenses or claims arise out of or are based upon any alleged
untrue statement of a material fact contained in such registration
statement (or any amendment thereto) or in any preliminary or final
prospectus (or any amendment or supplement thereto), or arise out of or
are based upon any alleged omission to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, except to the extent that any such losses, liabilities,
expenses or claims arise solely out of or are based upon any such alleged
untrue statement made or such alleged omission to state a material fact
included or excluded on the written direction of the Collateral Agent. The
Company shall cause each such Pledged Entity to bear all costs and
expenses of carrying out their respective obligations hereunder.
(c) In view of the fact that federal and state securities laws
may impose certain restrictions on the method by which a sale of the
Pledged Collateral may be effected after an Event of Default, the Company
agrees that upon the occurrence or existence of any Event of Default, the
Collateral Agent may, from time to time, attempt to sell all or any part
of the Pledged Collateral by means of a private placement, restricting the
prospective purchasers to those who will represent and agree that they are
purchasing for investment only and not for distribution. In so doing, the
Collateral Agent may solicit offers to buy the Pledged Collateral, or any
part of it, for cash, from a limited number of investors who might be
interested in purchasing the Pledged Collateral. The Company acknowledges
and agrees that any such private sale may result in prices and terms less
favorable than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have
been made in a commercially reasonable manner. The Collateral Agent shall
be under no obligation to delay a sale of any of the Pledged Collateral
for the period of time necessary to permit any Pledged Entity to register
such securities for public sale under the Securities Act, or under
applicable state securities laws, even if any such Pledged Entity agrees
to do so.
(d) The Company further agrees to use its best efforts to do or
cause to be done all such other acts as may be necessary to make such sale
or sales of all or any portion of the Pledged Collateral pursuant to this
Section 12 valid and binding and in compliance with any and all other
applicable requirements of law. The Company further agrees that a breach
of any of the covenants contained in this Section 12 will cause
irreparable injury to the Collateral Agent and the Holders of Notes, that
the Collateral Agent and the Holders of Notes have no adequate remedy at
law in respect of such breach and, as a consequence, that each and every
covenant contained in this Section 12 shall be specifically enforceable
against the Company, and the Company hereby waives and agrees not to
assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred under
the Indenture.
(e) Notwithstanding anything contained herein which may be
construed to the contrary, no action shall be taken by the Collateral
Agent which may require the consent or approval of the Federal
Communications Commission (the "FCC") or any applicable state regulatory
agency (a "State Agency," and together with the FCC, the "Regulatory
Authorities") unless and until all provisions of the Telecommunications
Act of 1996 (the "1996 Act") and any applicable state regulatory laws,
rules or regulations requiring the consent or approval of any Regulatory
Authority shall have been satisfied. The Company covenants that, upon the
request of the Collateral Agent, the Company shall promptly cause to be
filed such applications and take all such other action as may be requested
by the Collateral Agent to obtain consent or approval of any Regulatory
Authority to any action contemplated by this Agreement and to give full
effect to the security interest of the Collateral Agent hereunder,
including, without limitation, the execution and processing of an
application to any and all applicable Regulatory Authorities to obtain
consent to an assignment or transfer involving a change in ownership or
control pursuant to the provisions of the 1996 Act or any applicable state
law, rule or regulation. The Company hereby irrevocably appoints the
Collateral Agent its true and lawful attorney-in-fact, effective upon the
occurrence and during the continuance of an Event of Default, in its name
and stead, to executed and file all necessary applications with all
appropriate Regulatory Authorities. The power of attorney granted hereby
is coupled with an interest and shall be irrevocable.
SECTION 13. Irrevocable Authorization and Instruction to the Issuer.
The Company hereby authorizes and instructs such Pledged Entity to comply with
any instruction received by each such Pledged Entity from the Collateral Agent
that (i) states that an Event of Default has occurred and (ii) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from the Company, and the Company agrees that the each such Pledged
Entity shall be fully protected in so complying.
SECTION 14. Fees and Expenses. The Company shall, from time to time,
pay to the Collateral Agent such fees as may be agreed upon in writing and the
amount of any reasonable fees and disbursements of its counsel, of any
investment banking firm, business broker or other selling agent and of any other
experts and agents retained by the Collateral Agent) that the Collateral Agent
may incur in connection with (i) the administration of this Agreement, (ii) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of the Collateral Agent and the Holders of
Notes hereunder or (iv) the failure by the Company to perform or observe any of
the provisions hereof, in each case other than any such expenses that arise from
the gross negligence or willful misconduct of the Trustee or Collateral Agent.
SECTION 15. Note Interest Absolute. All rights of the Collateral
Agent and the Holders of Notes and the security interests created hereunder, and
all obligations of the Company hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of the Indenture or any
other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from the Indenture;
(c) any exchange, surrender, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to
departure from any guarantee, for all or any of the Obligations; or
(d) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Company in respect of the Obligations
or of this Agreement.
SECTION 16. Application of Proceeds. Upon the occurrence and during
the continuance of an Event of Default, the proceeds of any sale of, or other
realization upon, all or any part of the Pledged Collateral and any cash held
shall be applied by the Collateral Agent in the following order of priorities:
first, to payment of the expenses of such sale or other realization,
including reasonable compensation to agents and counsel for the Collateral
Agent, and all expenses, liabilities and advances incurred or made by the
Collateral Agent in connection therewith, and any other unreimbursed fees and
expenses for which the Collateral Agent is to be reimbursed pursuant to Section
14 hereof; and
second, to the Trustee to be paid in accordance with Section 6.10 of
the Indenture.
SECTION 17. Uncertificated Securities. Notwithstanding anything to
the contrary contained herein, if any Pledged Shares (whether now owned or
hereafter acquired) are uncertificated Pledged Shares, the Company shall
promptly notify the Collateral Agent, and shall promptly take all actions
required to perfect the security interest of the Collateral Agent under
applicable law (including, in any event, under Sections 8-313 and 8-321 of the
New York Uniform Commercial Code). The Company further agrees to take such
actions as the Collateral Agent deems necessary or desirable to effect the
foregoing and to permit the Collateral Agent to exercise any of its rights and
remedies hereunder, and agrees to provide an Opinion of Counsel satisfactory to
the Pledgee with respect to any such pledge of uncertificated Pledged Shares
promptly upon request of the Collateral Agent.
SECTION 18. Miscellaneous Provisions.
Section 18.1 Notices. All notices, approvals, consents or other
communications required or desired to be given hereunder shall be in the form
and manner as set forth in Section 11.02 of the Indenture, and delivered to the
addresses set forth in such Section, or, in the case of the Collateral Agent,
to: Bank of Montreal Trust Company, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Corporate Trust Administration, Telecopy No. 000-000-0000.
Section 18.2 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Collateral Agent to take
any action or omit to take any action under this Agreement, the Company shall
deliver to the Collateral Agent an Officer's Certificate and/or an Opinion of
Counsel in accordance with the requirements of Sections 11.04 and 11.05 of the
Indenture.
Section 18.3 No Adverse Interpretation of Other Agreements. This
Agreement may not be used to interpret another pledge, security or debt
agreement of the Company, each Pledged Entity or any subsidiary thereof. No such
pledge, security or debt agreement may be used to interpret this Agreement.
Section 18.4 Severability. The provisions of this Agreement are
severable, and if any clause or provision shall be held invalid or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Agreement in any jurisdiction.
Section 18.5 No Recourse Against Others. No director, officer,
employee, stockholder or affiliate, as such, of the Company or any Pledged
Entity shall have any liability for any obligations of the Company under this
Agreement or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder of Notes, by accepting a Note, waives
and releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.
Section 18.6 Headings. The headings of the Articles and Sections
of this Agreement have been inserted for convenience of reference only, are not
to be considered a part hereof and shall in no way modify or restrict any of the
terms or provisions hereof.
Section 18.7 Counterpart Originals. This Agreement may be signed
in two or more counterparts. Each signed copy shall be an original, but all of
them together represent one and the same agreement. Each counterpart may be
executed and delivered by telecopy, if such delivery is promptly followed by the
original manually signed copy sent by overnight courier.
Section 18.8 Benefits of Agreement. Nothing in this Agreement,
express or implied, shall give to any Person, other than the parties hereto and
their successors hereunder, and the Holders of Notes, any benefit or any legal
or equitable right, remedy or claim under this Agreement.
Section 18.9 Amendments, Waivers and Consents. Any amendment or
waiver of any provision of this Agreement and any consent to any departure by
the Company from any provision of this Agreement shall be effective only if made
or given in compliance with all of the terms and provisions of the Indenture
necessary for amendments or waivers of, or consents to any departure by the
Company from any provision of the Indenture, as applicable, and neither the
Collateral Agent or the Trustee nor any Holder of Notes shall be deemed, by any
act, delay, indulgence, omission or otherwise, to have waived any right or
remedy hereunder or to have acquiesced in any Event of Default or in any breach
of any of the terms and conditions hereof. Failure of the Collateral Agent or
any Holder of Notes to exercise, or delay in exercising, any right, power or
privilege hereunder shall not operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
A waiver by the Collateral Agent or any Holder of Notes of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy that the Collateral Agent or such Holder of Notes would otherwise have on
any future occasion. The rights and remedies herein provided are cumulative, may
be exercised singly or concurrently and are not exclusive of any rights or
remedies provided by law.
Section 18.10 Interpretation of Agreement. Time is of the
essence in each provision of this Agreement of which time is an element. All
terms not defined herein or in the Indenture shall have the meaning set forth in
the applicable UCC, except where the context otherwise requires. To the extent a
term or provision of this Agreement conflicts with the Indenture and is not
dealt with herein with more specificity,
the Indenture shall control with respect to the subject matter of such term or
provision. Acceptance of or acquiescence in a course of performance rendered
under this Agreement shall not be relevant to determine the meaning of this
Agreement even though the accepting or acquiescing party had knowledge of the
nature of the performance and opportunity for objection.
Section 18.11 Continuing Security Interest; Transfer of Notes.
This Agreement shall create a continuing security interest in the Pledged
Collateral and shall (i) remain in full force and effect until the payment in
full of all the Obligations and all the fees and expenses owing to the
Collateral Agent, (ii) be binding upon the Company, its successors and assigns,
and (iii) inure, together with the rights and remedies of the Collateral Agent
hereunder, to the benefit of the Collateral Agent, the Holders of Notes and
their respective successors, transferees and assigns.
Section 18.12 Reinstatement. This Agreement shall continue to be
effective or be reinstated if at any time any amount received by the Collateral
Agent or any Holder of Notes in respect of the Obligations is rescinded or must
otherwise be restored or returned by the Collateral Agent or any Holder of Notes
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
the Company or upon the appointment of any receiver, intervenor, conservator,
trustee or similar official for the Company or any substantial part of its
assets, or otherwise, all as though such payments had not been made.
Section 18.13 Survival of Provisions. All representations,
warranties and covenants of the Company contained herein shall survive the
execution and delivery of this Agreement, and shall terminate only upon the full
and final payment and performance by the Company of the Obligations; except that
the obligations of the Company pursuant to Sections 14 and 18.15 of this
Agreement shall survive the termination or discharge of this Agreement
(including any discharge pursuant to Bankruptcy Law) or the resignation or
removal of the Collateral Agent.
Section 18.14 Waivers. The Company waives presentment and demand
for payment of any of the Obligations, protest and notice of dishonor or default
with respect to any of the Obligations, and all other notices to which the
Company might otherwise be entitled, except as otherwise expressly provided
herein or in the Indenture.
Section 18.15 Authority of the Collateral Agent.
(a) Subject to the provisions of Section 10.06 of the Indenture,
the Collateral Agent shall have and be entitled to exercise all powers
hereunder that are specifically granted to the Collateral Agent by the
terms hereof, together with such powers as are reasonably incident
thereto. The Collateral Agent may perform any of its duties hereunder or
in connection with the Pledged Collateral by or through agents or
employees and shall be entitled to retain counsel of its choice and to act
in reliance upon the advice of such counsel concerning all such matters.
Neither the Collateral Agent nor any director, officer, employee, attorney
or agent of the Collateral Agent shall be responsible for the validity,
effectiveness or sufficiency hereof or of any document or security
furnished pursuant hereto. The Collateral Agent and its directors,
officers, employees, attorneys and agents shall be entitled to rely on any
communication, instrument or document believed by it or them to be genuine
and correct and to have been signed or sent by the proper person or
persons. The Company agrees to indemnify and hold harmless the Collateral
Agent, the Holders of Notes and any other Person from and against any and
all costs, expenses (including the reasonable fees and disbursements of
counsel (including, the allocated costs of inside counsel)), claims and
liabilities incurred by the Collateral Agent, the Holders of Notes or such
Person hereunder, unless such claim or liability shall be due to willful
misconduct or gross negligence on the part of the Collateral Agent, the
Holders of Notes or such Person.
(b) The Company acknowledges that the rights and
responsibilities of the Collateral Agent under this Agreement with respect
to any action taken by the Collateral Agent or the exercise or
non-exercise by the Collateral Agent of any option, right, request,
judgment or other right or remedy provided for herein or resulting or
arising out of this Agreement shall, as between the Collateral Agent and
the Holders of Notes, be governed by the Indenture and by such other
agreements with respect thereto as may exist from time to time among them,
but, as between the Collateral Agent and the Company, the Collateral Agent
shall be conclusively presumed to be acting as agent for the Holders of
Notes with full and valid authority so to act or refrain from acting, and
the Company shall not be obligated or entitled to make any inquiry
respecting such authority.
(c) No provision of this Agreement shall require the Collateral
Agent to expend or risk its own funds or incur any liability. The
Collateral Agent shall be under no obligation to exercise any of its
rights and powers under this Agreement at the request of any Holders,
unless such Holder shall have offered to the Collateral Agent security and
indemnity satisfactory to it against any loss, liability or expense.
Section 18.16 Resignation or Removal of the Collateral Agent.
Until such time as the Obligations shall have been paid in full, the Collateral
Agent may at any time, by giving written notice to the Company and Holders of
Notes, resign and be discharged of the responsibilities hereby created, such
resignation to become effective upon (i) the appointment of a successor
Collateral Agent and (ii) the acceptance of such appointment by such successor
Collateral Agent. As promptly as practicable after the giving of any such
notice, the Holders of Notes shall appoint a successor Collateral Agent, which
successor Collateral Agent shall be reasonably acceptable to the Company. If no
successor Collateral Agent shall be appointed and shall have accepted such
appointment within 60 days after the Collateral Agent gives the aforesaid notice
of resignation, the Collateral Agent may apply to any court of competent
jurisdiction to appoint a successor Collateral Agent to act until such time, if
any, as a successor shall have been appointed as provided in this Section 18.16.
Any successor so appointed by such court shall immediately and without
further act be superseded by any successor Collateral Agent appointed by the
Holders of a majority of the then outstanding Notes, as provided in this Section
18.16. Simultaneously with its replacement as Collateral Agent hereunder, the
Collateral Agent so replaced shall deliver to its successor all documents,
instruments, certificates and other items of whatever kind (including, without
limitation, the certificates and instruments evidencing the Pledged Collateral
and all instruments of transfer or assignment) held by it pursuant to the terms
hereof. The Collateral Agent that has resigned shall be entitled to fees, costs
and expenses to the extent incurred or arising, or relating to events occurring,
before its resignation or removal.
Section 18.17 Release; Termination of Agreement.
(a) Subject to the provisions of Section 18.12 hereof, this
Agreement shall terminate (i) upon full and final payment and performance
of the Obligations (and upon receipt by the Collateral Agent of the
Company's written certification that all such Obligations have been
satisfied) and payment in full of all fees and expenses owing by the
Company to the Collateral Agent or (ii) on the day after the first
anniversary of the Legal Defeasance of all of the Obligations pursuant to
Section 8.02 of the Indenture (other than those surviving Obligations
specified therein). At such time, the Collateral Agent shall, at the
request of the Company, reassign and redeliver to the Company all of the
Pledged Collateral hereunder that has not been sold, disposed of, retained
or applied by the Collateral Agent in accordance with the terms hereof.
Such reassignment and redelivery shall be without warranty by or recourse
to the Collateral Agent, except as to the absence of any prior assignments
by the Collateral Agent of its interest in the Pledged Collateral, and
shall be at the expense of the Company.
(b) The Company agrees that it shall not, except as permitted by
the Indenture, sell or dispose of, or grant any option or warrant with
respect to, any of the Pledged Collateral; provided, however, that if the
Company shall sell any of the Pledged Collateral in accordance with the
terms of the Indenture, including the requirement that the Company apply
the Net Proceeds of such sale in accordance with Section 4.10 of the
Indenture, the Collateral Agent shall, at the request of the Company and
subject to requirements of Section 10.03, 10.04 and 10.05 of the
Indenture, release the Pledged Collateral subject to such sale free and
clear of the Lien and security interest under this Agreement.
Section 18.18 Final Expression. This Agreement, together with
any other agreement executed in connection herewith, is intended by the parties
as a final expression of their Agreement and is intended as a complete and
exclusive statement of the terms and conditions thereof.
Section 18.19 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER
OF JURY TRIAL; WAIVER OF DAMAGES.
(i) THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED UNDER
THE LAWS OF THE STATE OF NEW YORK, AND ANY DISPUTE ARISING OUT OF, IN CONNECTION
WITH OR RELATING OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THE
COMPANY, THE COLLATERAL AGENT AND THE HOLDERS OF NOTES IN CONNECTION WITH THIS
AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE
RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF
LAWS PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.
(ii) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH AND IN PARAGRAPH
(vi) BELOW, THE COMPANY, THE COLLATERAL AGENT AND THE HOLDERS OF NOTES AGREE
THAT ALL DISPUTES BETWEEN OR AMONG THEM ARISING OUT OF, IN CONNECTION WITH OR
RELATING OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY,
OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE OR FEDERAL COURTS LOCATED IN NEW
YORK, NEW YORK, BUT THE COMPANY, THE COLLATERAL AGENT AND THE HOLDERS OF NOTES
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF NEW YORK, NEW YORK. THE COMPANY WAIVES IN ALL DISPUTES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS.
(iii) THE COMPANY AGREES THAT THE COLLATERAL AGENT SHALL, IN
ITS OWN NAME OR IN THE NAME AND ON BEHALF OF ANY HOLDER OF NOTES, HAVE THE
RIGHT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST THE COMPANY
OR ITS PROPERTY IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD FAITH TO
ENABLE THE COLLATERAL AGENT TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE COLLATERAL AGENT. THE
COMPANY AGREES THAT IT SHALL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY
PROCEEDING BROUGHT BY THE COLLATERAL AGENT TO REALIZE ON SUCH PROPERTY, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE COLLATERAL AGENT. THE
COMPANY WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN
WHICH THE COLLATERAL AGENT HAS COMMENCED A PROCEEDING DESCRIBED IN THIS
PARAGRAPH INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR
BASED ON THE GROUNDS OF FORUM NON CONVENIENS.
(iv) THE COMPANY, THE COLLATERAL AGENT AND THE HOLDERS OF
NOTES EACH WAIVE ANY AND ALL RIGHTS TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE ARISING OUT OF, IN
CONNECTION WITH OR RELATING OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT. INSTEAD, ALL DISPUTES RESOLVED
IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
(v) THE COMPANY HEREBY IRREVOCABLY DESIGNATES CT CORPORATION
AS THE DESIGNEE, APPOINTEE AND AGENT OF THE COMPANY TO RECEIVE, FOR AND ON
BEHALF OF THE COMPANY, SERVICE OF PROCESS IN ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT. IT IS UNDERSTOOD THAT NOTICE AND A COPY OF SUCH
PROCESS SERVED ON SUCH AGENT, WILL BE FORWARDED PROMPTLY TO THE COMPANY, BUT THE
FAILURE OF THE COMPANY TO RECEIVE SUCH NOTICE AND COPY SHALL NOT AFFECT IN ANY
WAY THE SERVICE OF SUCH PROCESS. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO THE
COMPANY AT ITS ADDRESS SET FORTH IN SECTION 11.02 OF THE INDENTURE, SUCH SERVICE
TO BECOME EFFECTIVE FIVE (5) BUSINESS DAYS AFTER SUCH MAILING.
(vi) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL
AGENT OR ANY HOLDER OF NOTES TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY IN
ANY OTHER JURISDICTION.
(vii) THE COMPANY HEREBY AGREES THAT NEITHER THE COLLATERAL
AGENT NOR ANY HOLDER OF NOTES SHALL HAVE ANY LIABILITY TO THE COMPANY (WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE) FOR LOSSES SUFFERED BY THE COMPANY IN
CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATING OR INCIDENTAL TO, THE
TRANSACTIONS CONTEMPLATED AND THE RELATIONSHIP ESTABLISHED BY THIS AGREEMENT, OR
ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH, UNLESS IT IS
DETERMINED BY A FINAL AND NONAPPEALABLE JUDGMENT OF A COURT THAT IS BINDING ON
THE COLLATERAL AGENT OR SUCH HOLDER OF NOTES, AS THE CASE MAY BE, THAT SUCH
LOSSES WERE THE RESULT OF ACTS OR OMISSIONS ON THE PART OF THE COLLATERAL AGENT
OR SUCH HOLDER OF NOTES, AS THE CASE MAY BE, CONSTITUTING GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT.
(viii) THE COMPANY WAIVES ALL RIGHTS OF NOTICE AND HEARING OF
ANY KIND PRIOR TO THE EXERCISE BY THE COLLATERAL AGENT OR ANY HOLDER OF NOTES OF
ITS RIGHTS DURING THE CONTINUANCE OF AN EVENT OF DEFAULT TO REPOSSESS THE
COLLATERAL WITH JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY UPON THE
COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS. THE COMPANY WAIVES THE POSTING
OF ANY BOND OTHERWISE REQUIRED OF THE COLLATERAL AGENT OR ANY HOLDER OF NOTES IN
CONNECTION WITH ANY JUDICIAL PROCESS OR PROCEEDING TO OBTAIN POSSESSION OF,
REPLEVY, ATTACH OR LEVY UPON COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS,
TO ENFORCE ANY JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE COLLATERAL
AGENT OR ANY HOLDER OF NOTES, OR TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY
RESTRAINING ORDER OR PRELIMINARY OR PERMANENT INJUNCTION THIS AGREEMENT OR ANY
OTHER AGREEMENT OR DOCUMENT BETWEEN THE COMPANY, THE COLLATERAL AGENT AND THE
HOLDERS OF NOTES.
Section 18.20 Acknowledgments. The Company hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement;
(b) neither the Collateral Agent nor any Holder of Notes has any
fiduciary relationship to the Company, and the relationship between the
Collateral Agent and the Holders of Notes, on the one hand, and the
Company, on the other hand, is solely that of a secured party and a
creditor; and
(c) no joint venture exists among the Company and the Holders
of Notes.
IN WITNESS WHEREOF, the Company and the Collateral Agent have each
caused this Agreement to be duly executed and delivered as of the date first
above written.
THE COMPANY:
HYPERION TELECOMMUNICATIONS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: President and COO
COLLATERAL AGENT:
BANK OF MONTREAL TRUST COMPANY
By: /s/ Xxxxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
SCHEDULE I
PLEDGED SHARES
(A) (B) (C) (D)
Share
Number of Pledged Certificate Percentage of
Issuer Shares Number Outstanding
1. Initial Collateral
Hyperion Telecommunications 1,000 1 100%
of Vermont, Inc.
Hyperion Telecommunications of 100 1 100%
Tennessee, Inc.
Hyperion Telecommunications of 1000 1 100%
Florida, Inc.
2. Additional Collateral
Hyperion Telecommunications of 1000 1 100%
New York, Inc.
Hyperion Telecommunications of 100 1 100%
Kentucky, Inc.
SCHEDULE II
1. With respect to the pledge of the shares of Hyperion of Vermont, before the
Company or the Collateral Agent, as the case may be, takes any action under the
Pledge Agreement to acquire, sell, or exercise voting or other consensual rights
with respect to ten percent or more of the outstanding voting securities of
Hyperion Vermont, it must obtain the approval of the Vermont Public Service
Board as provided in Section 107 of Title 30 of the Vermont Statutes Annotated.
2. With respect to the pledge of the shares of certain or all of the Pledged
Entities, any action that would transfer de facto (actual) or de jure (legal)
control of the Company or any of the Operating Entites (as such term is defined
in the Offering Memorandum, dated August 21, 1997, relating to the Notes) is
subject to the requirement of prior approval from the Federal Communications
Commission and/or state regulatory commissions.
EXHIBIT A-1
FORM OF OPINION OF COUNSEL
i. [New Entity] is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and has the requisite corporate power and authority to own and to
operate its properties and to carry on its business;
ii. all of the outstanding Capital Stock of [New Entity] has been
validly authorized and issued and is fully paid and nonassessable, is owned of
record by the Company, and, to the best knowledge of such counsel, is owned by
the Company free and clear of any security interest, claim, lien or encumbrance,
other than the security interests created by the Pledge Agreement, and, to the
best knowledge of such counsel, there are no outstanding rights, warrants or
options to acquire, or instruments convertible into or exercisable or
exchangeable for, any shares of Capital Stock or other Equity Interests in [New
Entity];
iii. (A) The Company has the requisite corporate power and authority
to create, deliver and perfect the security interests created under the Pledge
Agreement; (B) the Pledge Agreement has been duly authorized, executed and
delivered by the Company and constitutes the valid and binding obligation of the
Company, enforceable against it in accordance with its terms; (C) after giving
effect to the [merger] [consolidation] [sale or transfer of all or substantially
all assets], and assuming the Collateral Agent is holding the certificates and
notes representing the Pledged Collateral in the State of New York, the Pledge
Agreement will create a valid and perfected security interest in the Pledged
Collateral (including, without limitation, all of the Equity Interests of [New
Entity]) in favor of the Collateral Agent, on behalf and for the benefit of the
Holders of Notes, subject to no other consensual security interest in favor of
any other person, and no filings or recordings will be required in order to
perfect or maintain the security interests created under the Pledge Agreement in
such Pledged Collateral; and
iv. the consummation of the [merger] [consolidation] [sale or
transfer of all or substantially all assets] does not (A) conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company, the Pledged
Entities or [New Entity] is a party by which the Company, any of the Pledged
Entities or [New Entity] is bound or to which any of the property or assets of
the Company, the Pledged Entities or [New Entity] is subject except for such
conflicts, breaches, violations or defaults as would not have a material adverse
effect on the business, condition (financial or other), results of operations or
properties of the Company and its Subsidiaries and Joint Ventures taken as a
whole, nor will such action result in any violation of the provisions of the
respective charter or by-laws of the Company, the Pledged Entities or [New
Entity], nor will such action result in any violation of any application law or
statute or any applicable order, rule or regulation known to such counsel of any
court or governmental agency or body having jurisdiction over the Company, its
Subsidiaries or Joint Ventures or any of their respective properties, or (B)
result in the creation of any lien upon any of the properties or assets of the
Company (other than liens created by the Pledge Agreement).
EXHIBIT A-2
FORM OF OPINION OF COUNSEL
i. [Hyperion Telecommunications of New York, Inc.][[Hyperion
Telecommunications of Kentucky, Inc.] (the "Issuer") is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has the requisite corporate power and
authority to own and to operate its properties and to carry on its business;
ii. all of the outstanding capital stock of the Issuer has been
validly authorized and issued and is fully paid and nonassessable, is owned of
record by the Company and to the best knowledge of such counsel, is owned by the
Company free and clear of any security interest, claim, lien or encumbrance,
other than the security interests created by the Pledge Agreement, and, to the
best knowledge of such counsel, there are no outstanding rights, warrants or
options to acquire, or instruments convertible into or exercisable or
exchangeable for, any shares of Capital Stock or other Equity Interests in the
Issuer;
iii. (A) The Company has the requisite corporate power and authority
to create, deliver and perfect the security interests created under the Pledge
Agreement; (B) the Pledge Agreement has been duly authorized, executed and
delivered by the Company and constitutes the valid and binding obligation of the
Company, enforceable against it in accordance with its terms; (C) after giving
effect to the pledge by the Company of all of the outstanding Capital Stock of
the Issuer and assuming the Collateral Agent is holding the certificates and
notes representing the Additional Pledged Collateral in the State of New York,
the Pledge Agreement will create a valid and perfected security interest in the
Additional Pledged Collateral (including, without limitation, all of the Equity
Interests of the Issuer) in favor of the Collateral Agent, on behalf and for the
benefit of the Holders of Notes, subject to no other consensual security
interest in favor of any other person, and no filings or recordings will be
required in order to perfect or maintain the security interests created under
the Pledge Agreement in such Additional Pledged Collateral; and
iv. the consummation of the pledge by the Company of all of the
outstanding Capital Stock of the Issuer does not, to the knowledge of such
counsel, (A) conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company, the Initial Pledged Entities or the Issuer is a party by which the
Company, any of the Initial Pledged Entities or the Issuer is bound or to which
any of the property or assets of the Company, the Initial Pledged Entities or
the Issuer is subject except for such conflicts, breaches, violations or
defaults as would not have a material adverse effect on the business, condition
(financial or other), results of operations or properties of the Company and its
Subsidiaries and Joint Ventures taken as a whole, nor will such action result in
any violation of the provisions of the respective charter or by-laws of the
Company, the Initial Pledged Entities or the Issuer nor will such action result
in any violation of any application law or statute or any applicable order, rule
or regulation known to such counsel of any court or governmental agency or body
having jurisdiction over the Company, its Subsidiaries or Joint Ventures or any
of their respective properties, or (B) result in the creation of any lien upon
any of the properties or assets of the Company (other than liens created by the
Pledge Agreement).
EXHIBIT B
FORM OF SOLVENCY CERTIFICATE
The undersigned, _______________ and ________________, respectively the
President and Chief Financial Officer of Hyperion Telecommunications, Inc., a
Delaware corporation ("the Company"), certify that they are authorized to
execute this Certificate in the name and on behalf of the Company, and further
certify as follows (capitalized terms used but not defined herein have the
respective meanings assigned to them in the Pledge Agreement, dated ____________
__, 1997 (the "Pledge Agreement"), between the Company and Collateral Agent):
a. We are familiar with the historical and current financial
condition of the Company and each Pledged Entity including, after the
[merger] [consolidation] [sale or transfer of all or substantially
all assets] described in Section [7(a)(v)] of the Pledge Agreement.
b. For the purposes of this Certificate, we have reviewed other
financial information and forecasts relating to the Company prepared
by the Company's management, which we believe (as to the historical
financial information) fairly present the historical financial
position and results of operations of the Company as of the dates and
for the periods presented and (in the case of the forecasts) were
based upon reasonable assumptions and provide reasonable estimations
of future performance, although any forecasts are necessarily
uncertain of fulfillment. We know of no facts or circumstances
arising subsequent to the dates as of which such information and
projections were prepared that would materially alter such
conclusions. We have assumed that the fair saleable value of the
Company's assets is the amount for which all the businesses of the
Company could be sold on the date hereof either as an entirety or
separately (including in any such sale all property and assets used
in the business or businesses sold) and, in either case, on a going
concern basis, without potential tax liabilities arising on sale.
c. In addition to such review, we are familiar with and have
considered information, [including the opinions of independent
advisors, if any] as to the fair market values of the Company's
assets and the probable liability, contingent or otherwise, of the
Company to its creditors. We have estimated such values as reliably
and as practicably as possible under the circumstances.
Based upon the foregoing, we have reached the conclusions that, after
giving effect to the transactions contemplated by Section 7(a)(v) of the Pledge
Agreement:
1. The Company does not intend to or believe that it has incurred or
will incur, debts that will be beyond its ability to pay as they mature.
2. The present fair saleable value of the assets of the Company the
amount that will be required to pay the probable liability on its existing debts
(whether matured or unmatured, liquidated or unliquidated, absolute, fixed or
contingent), as they become absolute and matured. In determining "present fair
saleable value," we utilized as a guideline amounts we believe would be reached
by a willing seller and a willing buyer under no compulsion to make the sale.
3. The Company does not have unreasonably small capital for it to
carry on its businesses as proposed to be conducted. "Unreasonably small
capital" is dependent upon the nature of the particular business or businesses
conducted or to be conducted, and the statement made in the preceding sentence
is correct based upon anticipated future conduct of the businesses of the
Company.
4. The Company is not incurring obligations or making transfers under
any evidence of indebtedness with the intent to hinder, delay or defraud any
entity to which it is or will become indebted.
WITNESS the signatures of the undersigned, this _____ day of ______,
199_.
-------------------------
President
-------------------------
Chief Financial Officer
