EXHIBIT 4.01
INDENTURE dated as of August 27, 1997 between HYPERION
TELECOMMUNICATIONS, INC., a Delaware corporation (the "Company") and BANK OF
MONTREAL TRUST COMPANY, as trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the holders (the "Holders") of
the 12 1/4% Series A Senior Secured Notes due 2004 (the "Series A Notes") and
the 12 1/4% Series B Senior Secured Notes due 2004 (the "Series B Notes" and,
together with the Series A Notes, the "Senior Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Accredited Investor" has the meaning set forth in Rule 501(a) (1),
(2), (3) of (7) of the Securities Act.
"Acquired Indebtedness" means, with respect to any specified Person:
(i) Indebtedness of any other Person existing at the time such other Person
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise. For purposes of this
Indenture, beneficial ownership of 10% or more of the Voting Stock of a Person
shall be deemed to be control; provided, that no Local Partner will be deemed an
affiliate of a Subsidiary or a Joint Venture solely as a result of such Local
Partner's ownership of more than 10% of the Voting Stock of such Subsidiary or
Joint Venture.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Agent Members" means members of, or participants in,
the Depository.
"Annualized Pro Forma EBITDA" means with respect to any Person, such
Person's Pro Forma EBITDA for the fiscal quarter with respect to which a
calculation of the Company's Consolidated Leverage Ratio is being made hereunder
multiplied by four.
"Applicable Procedures" means applicable procedures of the
Depository, Euroclear or Cedel Bank, as the case may be.
"Asset Sale" means
(i) the sale, lease, conveyance, disposition or other transfer of any
assets (including, without limitation, by way of a Sale and Leaseback
Transaction) other than (a) sales of inventory in the ordinary course of
business consistent with past practices and (b) issuances and sales by the
Company of its Equity Interests (provided that the sale, lease,
conveyance, disposition or other transfer of all or substantially all of
the assets of the Company and its Subsidiaries taken as a whole shall be
governed by Sections 4.15 and 5.01 of the Indenture), and
(ii) the issuance or sale by the Company or any of its Subsidiaries
of Equity Interests of any of the Company's Subsidiaries or Joint
Ventures, in the case of either clause (i) or (ii), whether in a single
transaction or a series of related transactions (a) that have a fair
market value in excess of $1.0 million or (b) for net proceeds in excess
of $1.0 million.
Notwithstanding the foregoing: (x) a transfer of assets by the Company to a
Wholly Owned Subsidiary or by a Subsidiary to the Company or to another Wholly
Owned Subsidiary, (y) an issuance of Equity Interests by a Subsidiary to the
Company or to a Wholly Owned Subsidiary and (z) a Restricted Payment that is
permitted by Section 4.07 will not be deemed to be Asset Sales.
"Attributable Debt" in respect of a Sale and Leaseback Transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale and leaseback transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company, or
any authorized committee of the Board of Directors.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited) and (iv) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more that one year from the date of acquisition, (iii) certificates of deposit
and eurodollar time deposits with maturities of one year or less from the date
of acquisition, bankers' acceptances with maturities not exceeding one year and
overnight bank deposits, in each case with any domestic commercial bank having
capital and surplus in excess of $500,000,000 and a Xxxxx Bank Watch Rating of
"B" or better,
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(iv) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (ii) and (iii) above
entered into with any financial institution meeting the qualifications specified
in clause (iii) above and (v) commercial paper having the highest rating
obtainable from either Xxxxx'x Investors Service, Inc. or Standard & Poor's
Corporation and, in each case, maturing within six months after the date of
acquisition.
"Change of Control" means the occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Subsidiaries taken as a
whole to any "person" (as such term is used in Section 13(d)(3) of the Exchange
Act) other than the Principals or their Affiliates, (ii) the adoption of a plan
relating to the liquidation or dissolution of the Company, (iii) the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any "person", other than the
Principals and their Affiliates, becomes the "beneficial owner" (as such term is
defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or
indirectly, of more than 50% of the voting power of the Capital Stock of the
Company, (iv) the consummation of the first transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" becomes the "beneficial owner," directly or indirectly, of more of the
voting power of the Capital Stock of the Company than is at the time
"beneficially owned" by the Principals and their Affiliates in the aggregate or
(v) the first day on which a majority of the members of the Board of Directors
of the Company are not Continuing Directors. For purposes of this definition,
any transfer of an Equity Interest of an entity that was formed for the purpose
of acquiring voting power of Capital Stock of the Company shall be deemed to be
a transfer of such portion of such voting power of Capital Stock as corresponds
to the portion of the equity of such entity that has been so transferred.
"Closing Date" means the date on which the Senior Notes are
originally issued under the Indenture.
"Collateral Agent" means Bank of Montreal Trust Company, as
Collateral Agent under the Pledge Agreement or any successor thereto appointed
pursuant to such Agreement.
"Collateral Agreements" mean the Escrow and Disbursement Agreement
and the Pledge Agreement.
"Collateral Documents" means the Pledge Agreement and all related
agreements, instruments, financing statements or other documents that set forth
the Lien of the Trustee in the Pledged Collateral.
"Consolidated Interest Expense" means, for any Person, for any
period, the aggregate of the following for such Person for such period
determined on a consolidated basis in accordance with GAAP: (a) the amount of
interest in respect of Indebtedness (including amortization of original issue
discount, amortization of debt issuance costs and non-cash interest payments on
any Indebtedness and the interest portion of any deferred payment obligation)
and (b) the interest component of rentals in respect of any Capital Lease
Obligation paid, in each case whether accrued or scheduled to be paid or accrued
by such Person during such period to the extent such amounts were deducted in
computing Consolidated Net Income, determined on a consolidated basis in
accordance with GAAP. For purposes of this definition, interest on a Capital
Lease Obligation shall be deemed to accrue at an interest rate reasonably
determined by such Person to be the rate of interest implicit in such Capital
Lease Obligation in accordance with GAAP consistently applied.
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"Company" means Hyperion Telecommunications, Inc. a Delaware
corporation.
"Consolidated Leverage Ratio" means, for any Person, as of any date,
the ratio of (i) the sum of the aggregate outstanding amount of all Indebtedness
of a Person and its Subsidiaries (other than any Indebtedness of a General
Partner Subsidiary to the extent that such Indebtedness has been incurred in
connection with such General Partner Subsidiary's partnership interest in the
Restricted Joint Venture of which such General Partner Subsidiary is a general
partner) determined on a consolidated basis in accordance with GAAP to (ii)
Annualized Pro Forma EBITDA.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP;
provided that (i) the Net Income (but not loss) of any Person that is not a
Subsidiary or that is accounted for by the equity method of accounting shall be
included only to the extent of the amount of dividends or distributions actually
paid in cash to the referent Person or a Wholly Owned Subsidiary thereof, (ii)
the Net Income of any Subsidiary shall be excluded to the extent that the
declaration or payment of dividends or similar distributions by that Subsidiary
of that Net Income is not at the date of determination permitted without any
prior governmental approval (that has not been obtained) or, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary or its stockholders, (iii) the Net Income of any
Person acquired in a pooling of interests transaction for any period prior to
the date of such acquisition shall be excluded and (iv) the cumulative effect of
a change in accounting principles shall be excluded.
"Consolidated Net Worth" means, with respect to any Person as of any
date, the sum of (i) the consolidated equity of the common stockholders of such
Person and its consolidated Subsidiaries as of such date plus (ii) the
respective amounts reported on such Person's balance sheet as of such date with
respect to any series of preferred stock (other than Disqualified Stock) that by
its terms is not entitled to the payment of dividends unless such dividends may
be declared and paid only out of net earnings in respect of the year of such
declaration and payment, but only to the extent of any cash received by such
Person upon issuance of such preferred stock, less (x) all write-ups (other than
write-ups resulting from foreign currency translations and write-ups of tangible
assets of a going concern business made within 12 months after the acquisition
of such business) subsequent to the date of the Indenture in the book value of
any asset owned by such Person or a consolidated Subsidiary of such Person, (y)
all investments as of such date in unconsolidated Subsidiaries and in Persons
that are not Subsidiaries (except, in each case, Permitted Investments) and (z)
all unamortized debt discount and expense and unamortized deferred charges as of
such date, all of the foregoing determined in accordance with GAAP.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date of this Indenture or (ii) was nominated for
election or elected to such Board of Directors with the approval of a majority
of the Continuing Directors who were members of such Board at the time of such
nomination or election.
"Corporate Trust Office of the Trustee" shall be at the address of
the Trustee specified in Section 11.02 hereof or such other address as to which
the Trustee may give notice to the Company.
"Credit Agreement" means, with respect to any Person, any agreement
entered into by and among such Person and one or more commercial banks or
financial institutions, providing for senior term or revolving credit borrowings
of a type similar to credit agreements typically entered into by commercial
banks and financial institutions, including any related notes, Guarantees,
collateral documents, instruments
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and agreements executed in connection therewith, as such credit agreement and
related agreements may be amended, extended, refinanced, renewed, restated,
replaced or refunded from time to time.
"Cumulative Interest Expense" means the aggregate amount of
Consolidated Interest Expense of the Company paid or accrued by the Company from
and after the first day of the first fiscal quarter beginning after the date of
the Indenture to the end of the fiscal quarter immediately preceding a proposed
Restricted Payment, determined on a consolidated basis in accordance with GAAP.
"Cumulative Pro Forma EBITDA" means the cumulative EBITDA of the
Company from and after the first day of the first fiscal quarter beginning after
the date of the Indenture to the end of the fiscal quarter immediately preceding
the date of a proposed Restricted Payment, or, if such cumulative EBITDA for
such period is negative, minus the amount by which such cumulative EBITDA is
less than zero.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Definitive Senior Notes" means Restricted Definitive Notes and
Unrestricted Definitive Notes.
"Depository" means, with respect to any Global Note, the Person
specified in Section 2.03 hereof as the Depositary with respect to such Note,
until a successor shall have been appointed and become such pursuant to the
applicable provision of this Indenture, and, thereafter, ADepository@ shall mean
or include such successor.
"Disqualified Stock" means any Capital Stock which, by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
that is 91 days after the date on which the Senior Notes mature; provided,
however, that any Capital Stock which would not constitute Disqualified Stock
but for provisions thereof giving holders the right to require the Company to
repurchase or redeem such Capital Stock upon the occurrence of a Charge in
Control occurring prior to the final maturity of the Senior Notes shall not
constitute Disqualified Stock if the change of control provisions applicable to
such Capital Stock are no more favorable to the holders of such Capital Stock
than the provisions applicable to the Senior Notes contained in Section 4.15
hereof and such Capital Stock specifically provides that the Company will not
repurchase or redeem any such stock pursuant to such provisions prior to the
Company's repurchase of such Senior Notes as are required to be repurchased
pursuant to Section 4.15 hereof.
"EBITDA" means, for any Person, for any period, an amount equal to
(A) the sum of (i) Consolidated Net Income for such period plus (ii) the
provision for taxes for such period based on income or profits to the extent
such income or profits were included in computing Consolidated Net Income and
any provision for taxes utilized in computing net loss under clause (i) hereof
plus (iii) Consolidated Interest Expense for such period, plus (iv) depreciation
for such period on a consolidated basis plus (v) amortization of intangibles for
such period on a consolidated basis, plus (vi) any other non-cash items reducing
Consolidated Net Income for such period minus (B) all non-cash items increasing
Consolidated Net Income for such period, all for each such Person and its
Subsidiaries determined in accordance with GAAP consistently applied.
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"Enhanced Services Provider" means (i) !NTERPRISE, a wholly owned
subsidiary of US West, (ii) any nationally recognized Person which provides
enhanced telecommunications services, including but not limited to, frame relay,
Asynchronous Transfer Mode data transport, business video conferencing, private
line data interconnect service and LAN connection and monitoring services, or
(iii) any Person that has least 500 existing enhanced data services
installations in the United States.
"Enhanced Services Venture" means any entity in which any Qualified
Subsidiary or Permitted Joint Venture owns at least 50% of the Equity Interests,
provided that the remainder of the Equity Interests are owned by an Enhanced
Services Provider.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Escrow Account" means an escrow account for the deposit of
approximately $83.5 million of the net proceeds from the sale of the Senior
Notes under the Escrow and Disbursement Agreement.
"Escrow Agent" means Bank of Montreal Trust Company, as Escrow Agent
under the Escrow and Disbursement Agreement, or any successor thereto appointed
pursuant to such agreement.
"Escrow and Disbursement Agreement" means the Pledge, Escrow and
Disbursement Agreement, dated as of the date of this Indenture, by and among the
Escrow Agent, the Trustee and the Company, governing the disbursement of funds
from the Escrow Account.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means the offer that may be made by the Company
pursuant to the Registration Rights Agreement to exchange Series A Notes for
Series B Notes.
"Existing Indebtedness" means the Senior Notes and any other
Indebtedness of the Company and its Subsidiaries in existence on the date
hereof.
"Existing Networks" means the telecommunications networks operated by
the Company, its Subsidiaries and Joint Ventures, including, but not limited to,
all networks under construction, on the date hereof.
"Fiber Lease Agreements" means the agreements relating to fiber
leases as set forth on Schedule A hereto.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect on the date of this Indenture.
"General Partner Subsidiary" means a direct or indirect Wholly Owned
Subsidiary of the Company that (i) is a general partner or stockholder of a
Restricted Joint Venture and (ii) (a) is not engaged in any trade or business
other than the holding, voting, disposing of or taking any action with respect
to its Equity Interest
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in such Restricted Joint Venture, (b) has no material assets other than its
Equity Interest in such Restricted Joint Venture, (c) has no material
liabilities other than liabilities arising (1) as a result of the guarantee by
such General Partner Subsidiary of Indebtedness incurred by the Restricted Joint
Venture of which such General Partner Subsidiary is a general partner or (2) by
operation of law; provided that, for purposes of this definition, Hyperion
Telecommunications of Virginia, Inc. shall be deemed to be a General Partner
Subsidiary for all purposes so long as Hyperion Telecommunications of Virginia,
Inc. does not engage in any operations or business that is materially different
from the operations or business engaged in by such company on the date hereof.
"Global Note" means, individually and collectively, the Regulation S
Global Note, the Rule 144A Global Note and the Unrestricted Global Note.
"Guarantee" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any part of
any Indebtedness.
"Holder" means a Person in whose name a Senior Note is registered.
"Indebtedness" means, with respect to any Person, (a) any liability
of any Person, whether or not contingent (i) for borrowed money, or under any
reimbursement obligation relating to a letter of credit, bankers' acceptance or
note purchase facility; or (ii) evidenced by a bond, note, debenture or similar
instrument (including a purchase money obligation); or (iii) for the payment of
money relating to a lease that is required to be classified as a Capitalized
Lease Obligation in accordance with GAAP; (iv) for Disqualified Stock; or (v)
for preferred stock of any Subsidiary (other than preferred stock held by the
Company or any of its Subsidiaries); (b) any liability of others described in
the preceding clause (a) that the Person has guaranteed, that is recourse to
such Person or that is otherwise its legal liability; and (c) any amendment,
supplement, modification, deferral, renewal, extension or refunding of any
liability of the types referred to in clauses (a) and (b) above.
"Indenture" means this Indenture, as amended or supplemented from
time to time.
"Initial Public Offering" means an initial underwritten public
offering of common stock of the Company pursuant to an effective registration
statement under the Securities Act of 1933, as amended.
"Intercompany Notes" means the intercompany notes issued by
Subsidiaries and Joint Ventures of the Company in favor of the Company or its
Subsidiaries to evidence loans by the Company to such Subsidiary or Joint
Venture, in each case, in the form attached as Annex 1 hereto.
"Invested Equity Capital" means, with respect to any of the Company's
Subsidiaries or Joint Ventures as of any date, the sum of (i) the total dollar
amount contributed in cash plus the value of all property contributed (valued at
the lower of fair market value of such property at the time of contribution,
determined in good faith by the Company's Board of Directors, or the book value
of such property at the time of contribution on the books of the Person making
such contribution) to such Subsidiary or Joint Venture, as the case may be,
since the date of its formation in the form of common equity plus, without
duplication, (ii) the total dollar amount contributed in cash plus the value of
all property contributed (valued at the lower of fair market value of such
property at the time of contribution, determined in good faith by the Company's
Board of Directors, or the book value of such property at the time of
contribution on the books of the Person
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making such contribution) to such Subsidiary or Joint Venture, as the case may
be, since the date of its formation by Local Partners (and their Affiliates) in
consideration of the issuance of preferred equity on a basis that is
substantially proportionate to their common equity interests plus, without
duplication, (iii) the total dollar amount contributed in cash plus the value of
all property contributed (valued at the lower of fair market value of such
property at the time of contribution, determined in good faith by the Company's
Board of Directors, or the book value of such property at the time of
contribution on the books of the Person making such contribution) to such
Subsidiary or Joint Venture since the date of its formation by the Company in
consideration of the issuance of preferred equity less (iv) the fair market
value of all dividends and other distributions (in respect of any Equity
Interest and in whatever form and however designated) made by such Subsidiary or
Joint Venture, as the case may be, since the date of its formation to the
holders of its common equity (and their Affiliates); provided that in no event
shall the aggregate amount of such dividends and other distributions made by
such Subsidiary or Joint Venture, as the case may be, to any such Person (or its
Affiliates) reduce the Invested Equity Capital of such Subsidiary or Joint
Venture, as the case may be, by more than the total contributions (per clauses
(i) through (iii) above) to such Subsidiary or Joint Venture, as the case may
be, by such Person (and its Affiliates).
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances (excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business), capital contributions,
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP;
provided that an acquisition of assets, Equity Interests or other securities by
the Company for consideration consisting solely of common equity securities of
the Company shall not be deemed to be an Investment. If the Company or any
Subsidiary of the Company sells or otherwise disposes of any Equity Interests of
any direct or indirect Subsidiary of the Company such that, after giving effect
to any such sale or disposition, such Person is no longer a Subsidiary of the
Company, the Company shall be deemed to have made an Investment on the date of
any such sale or disposition equal to the fair market value of the Equity
Interests of such Subsidiary not sold or disposed of.
"Joint Venture" means a corporation, partnership or other entity
engaged in one or more Telecommunications Businesses (i) in which the Company or
its Subsidiaries owns, directly or indirectly, an Equity Interest with the
balance of the Equity Interest thereof being held by one or more Local Partners
and (ii) that is managed and operated by the Company or any of its Subsidiaries.
"Joint Venture Investment" means any Investment in a Joint Venture.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
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"Liquidated Damages" means all liquidated damages then owing pursuant
to Section 5 of the Registration Rights Agreement.
"Local Partner" means, with respect to any Joint Venture (i) the
Joint Venture partners set forth on Schedule B hereto, and (ii) any other
Person, provided that such other Person (a) is a major cable company or utility
that has a substantial presence within the specific market of such Joint
Venture, which presence shall be evidenced, (1) in the case of a cable company,
by such company having a market share consisting of at least 50% of the total
number of cable subscribers in such market and (2) in the case of a utility
company, by such company having at least 75% of the total customer base of such
market or (b) is a Wholly Owned Subsidiary of a major cable company or utility
that (1) meets the criteria set forth in the immediately preceding clause (a) or
(2) has all of its initial capital contributions under the agreement governing
the Joint Venture fully and unconditionally guaranteed, until such time as all
such contributions have been made, by one or more Persons who meet the criteria
set forth in the immediately preceding clause (a).
"Local Partner Agreements" means the joint venture agreements with
Local Partners, as set forth on Schedule C hereto.
"Management Agreements" means the agreements governing the management
of the networks, as set forth on Schedule D hereto.
"Net Cash Proceeds" means the aggregate cash proceeds received by the
Company or any of its Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale and principal payments on
debt, as and when received), net of the direct costs relating to such Asset Sale
(including, without limitation, legal, accounting and investment banking fees,
and sales commissions) and any relocation expenses incurred as a result thereof,
taxes paid or payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements) and any
reserve for adjustment in respect of the sale price of such asset or assets
established in accordance with GAAP.
"Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain or loss,
together with any related provision for taxes on such gain or loss, realized in
connection with (a) any Asset Sale (including, without limitation, dispositions
pursuant to Sale and Leaseback Transactions), or (b) the disposition of any
securities by such Person or any of its Subsidiaries or the extinguishment of
any Indebtedness of such Person or any of its Subsidiaries, and (ii) any
extraordinary gain or loss, together with any related provision for taxes on
such extraordinary gain or loss.
"New Telecommunications Service Market" means a Telecommunications
Service Market in an area that is not within ten miles of any of the Company's
Existing Networks.
"Non-Recourse Debt" means Indebtedness: (i) as to which neither the
Company nor any of its Subsidiaries nor any of its Permitted Joint Ventures (a)
provides credit support of any kind (including any undertaking, agreement or
instrument that would constitute Indebtedness), (b) is directly or indirectly
liable (as a guarantor, co-obligor or otherwise) or (c) constitutes the lender;
(ii) as to which no default with respect to which (including any rights that the
holders thereof may have to take enforcement action against a Restricted Joint
Venture) would permit (upon notice, lapse of time, the occurrence or failure to
occur, of any
9
other condition or event or any combination thereof) any holder of any other
Indebtedness of the Company, any of its Subsidiaries or any of its Permitted
Joint Ventures to declare a default on such other Indebtedness or cause or
permit the payment thereof to be accelerated prior to its stated maturity; and
(iii) as to which the lenders have been notified in writing that they will not
have any recourse to the stock or assets of the Company, any of its Subsidiaries
or any of its Permitted Joint Ventures; provided that the recourse (if any) of a
holder of such Indebtedness to the General Partner Subsidiary of a Restricted
Joint Venture in which such General Partner Subsidiary is a general partner as a
result of being a general partner of such Restricted Joint Venture will not be
considered credit support or direct or indirect liability of such General
Partner Subsidiary for purposes of clauses (i)(a), (ii)(b) and (iii) above.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 11.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
11.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Permitted Investments" means
(a) any Investment in a Wholly Owned Subsidiary of the Company
that is engaged, either directly or indirectly through a Qualified
Subsidiary or Joint Venture, in the Telecommunications Business;
(b) any Investment in a Qualified Subsidiary of the Company
that is directly engaged in the Telecommunications Business;
(c) any Investment in Cash Equivalents;
(d) any Investment in a Person that is not a Subsidiary of the
Company, if as a result of such Investment (i)(A) such Person becomes
a Qualified Subsidiary or Wholly Owned Subsidiary of the Company or
(B) such Person is merged, consolidated or amalgamated with or into,
or transfers or conveys substantially all of its assets to, or is
liquidated into, the Company or a Qualified Subsidiary and (ii)(A)
such Wholly Owned Subsidiary, either directly or indirectly through a
Qualified Subsidiary or a Joint Venture, is engaged in the
Telecommunications Business or (B) such Qualified Subsidiary is
directly engaged in the Telecommunications Business;
(e) any Permitted Joint Venture Investment;
(f) any Investment made as a result of the receipt of non-cash
consideration (whether or not
10
such non-cash consideration is deemed to be cash for the purposes of
Section 4.10) from an Asset Sale that was made pursuant to and in
compliance with Section 4.10 hereof; or
(g) any Investment in an Enhanced Services Venture; or
(h) any Investment pursuant to the terms of the Escrow and
Disbursement Agreement.
"Permitted Joint Venture" means any Joint Venture in which the
Company has, directly or indirectly, a 45% or greater Equity Interest.
"Permitted Joint Venture Investment" means any Joint Venture
Investment by the Company or a Wholly Owned Subsidiary of the Company if, after
such Joint Venture Investment, the Company has, directly or indirectly, a 45% or
greater Equity Interest in such Joint Venture.
"Permitted Liens" means
(i) Liens on the property of the Company, any Subsidiary or any
Permitted Joint Venture securing Obligations under Indebtedness that
may be incurred pursuant to clause (i) of Section 4.09 hereof;
(ii) Liens in favor of the Company;
(iii) Liens on property of a Person existing at the time such
Person is merged into or consolidated with the Company, any
Subsidiary or any Permitted Joint Venture; provided that such Liens
were in existence prior to the contemplation of such merger or
consolidation and do not extend to any assets other than those of the
Person merged into or consolidated with the Company;
(iv) Liens on property existing at the time of acquisition
thereof by the Company, any Subsidiary or any Permitted Joint
Venture, provided that such Liens were in existence prior to the
contemplation of such acquisition;
(v) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a
like nature incurred in the ordinary course of business;
(vi) Liens existing on the date of this Indenture;
(vii) Liens on property of Subsidiaries and Permitted Joint
Ventures securing Obligations under Indebtedness incurred pursuant to
clause (viii) of Section 4.09 hereof but only to the extent that (a)
in the case of Subsidiaries and Permitted Joint Ventures that are
incurring Indebtedness other than Related Network Debt, such Liens
secure only such Indebtedness incurred by such Subsidiary or such
Joint Venture; and (b) in the case of Subsidiaries and Joint Ventures
that are incurring Related Network Debt, such Liens secure only such
Related Network Debt;
(viii) Liens securing Obligations under the Senior Notes and
this Indenture;
(ix) Liens securing Obligations under Vendor Debt pursuant to
clause (ii) of Section 4.09 hereof; provided that the principal
amount of such Vendor Debt secured by such Lien does not
11
exceed 100% of the purchase price or cost of acquisition,
construction or improvement of the Telecommunications Related Assets
subject to such Liens;
(x) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in
good faith by appropriate proceedings promptly instituted and
diligently concluded, provided that any reserve or other appropriate
provision as shall be required in conformity with GAAP shall have
been made therefor;
(xi) Liens incurred in the ordinary course of business of the
Company, any Subsidiary or any Permitted Joint Venture with respect
to obligations that do not exceed $5.0 million at any one time
outstanding and that (a) are not incurred in connection with the
borrowing of money or the obtaining of advances or credit (other than
trade credit in the ordinary course of business) and (b) do not in
the aggregate materially detract from the value of the property or
materially impair the use thereof in the operation of business by the
Company, such Subsidiary or such Permitted Joint Venture;
(xii) Liens granted in favor of the Holders; and
(xiii) Liens securing Refinancing Indebtedness, but only if, and
to the extent, that such Liens that are incurred in connection with
such Refinancing Indebtedness are at least as favorable to the
Holders of Senior Notes as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or agency or political subdivision thereof (including any subdivision
or ongoing business of any such entity or substantially all of the assets of any
such entity, subdivision or business).
"Pledge Agreement" means the Pledge and Security Agreement, dated as
of August 27, 1997 between the Company and the Trustee.
"Pledged Collateral" means all amounts held by the Collateral Agent
under the terms of the Pledge Agreement.
"Pledged Securities" means the securities purchased by the Company
with a portion of the proceeds from the sale of the Senior Notes, which shall
consist of U.S. Government Obligations.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(i)(A) to be placed on all Notes issued under this Indenture except as
permitted pursuant to Section 2.06(g)(i)(B).
"Preferred Stock" for any Person means Capital Stock of such Person
of any class or classes (however designated) that ranks prior, as to the payment
of dividends or as to the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of such Person, to shares of
Capital Stock of any other class of such Person.
"Principals" means Xxxx X. Xxxxx and members of his immediate family,
any of their respective spouses, estates, lineal descendants, heirs, executors,
personal representatives, administrators, trusts for any
12
of their benefit and charitable foundations to which shares of the Company's
Capital Stock beneficially owned by any of the foregoing have been transferred.
"Pro Forma EBITDA" means, for any Person, for any period, the EBITDA
of such Person as determined on a consolidated basis in accordance with GAAP
consistently applied, after giving effect to the following: (i) if, during or
after such period, such Person or any of its Subsidiaries shall have made any
Asset Sale, Pro Forma EBITDA for such Person and its Subsidiaries for such
period shall be reduced by an amount equal to the Pro Forma EBITDA (if positive)
directly attributable to the assets which are the subject of such Asset Sale for
the period or increased by an amount equal to the Pro Forma EBITDA (if negative)
directly attributable thereto for such period, (ii) if, during or after such
period, such Person or any of its Subsidiaries completes an acquisition of any
Person or business which immediately after such acquisition is a Subsidiary of
such Person or a Subsidiary of such Person, Pro Forma EBITDA shall be computed
so as to give pro forma effect to such Asset Sale or the acquisition of such
Person or business, as the case maybe, as if such acquisition had been completed
as of the beginning of such periods, and (iii) if, during or after such period,
such Person or any of its Subsidiaries incurs any Indebtedness (including
without limitation, any Acquired Indebtedness) or issues any Disqualified Stock,
Pro Forma EBITDA shall be computed so as to give pro forma effect (including pro
forma application of the proceeds therefrom) thereto as if such Indebtedness or
Disqualified Stock had been incurred or issued at the beginning of such period.
"Qualified Subsidiary" means any Subsidiary in which a Local Partner
or Local Partners own at least 5% but less than 50% of the Equity Interests of
such Subsidiary; provided that such Subsidiary remains a Subsidiary of the
Company at all times for purposes of this Indenture.
"Refinancing Indebtedness" means any Indebtedness of the Company, any
of its Subsidiaries or any of its Permitted Joint Ventures issued in exchange
for, or the net proceeds of which are used to extend, refinance, renew, replace,
defease or refund other Indebtedness of the Company, any of its Subsidiaries or
any of its Permitted Joint Ventures; provided that: (i) the principal amount (or
accreted value, if applicable) of such Refinancing Indebtedness does not exceed
the principal amount (or accreted value, if applicable) of the Indebtedness so
extended, refinanced, renewed, replaced, defeased or refunded (plus the amount
of reasonable expenses incurred in connection therewith); (ii) such Refinancing
Indebtedness has a final maturity date later than the final maturity date of,
and has a Weighted Average Life to Maturity equal to or greater than the
Weighted Average Life to Maturity of, the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; (iii) if the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded is
subordinated in right of payment to the Senior Notes, such Refinancing
Indebtedness has a final maturity date later than the final maturity date of the
Senior Notes, and is subordinated in right of payment to the Senior Notes on
terms at least as favorable to the Holders of Senior Notes as those contained in
the documentation governing the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded; (iv) to the extent that the
Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded
was secured by Liens, any Liens being incurred in connection with such
Refinancing Indebtedness are at least as favorable to the Holders of Senior
Notes as those contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; and (v) such
Indebtedness is incurred either by the Company, the Subsidiary or the Permitted
Joint Venture who is the obligor on the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of August 27, 1997, by and among the Company and the other
parties named on the signature pages thereof, as such
13
agreement may be amended, modified or supplemented from time to time.
"Regulation S" means Regulation S promulgated under the Securities
Act.
"Regulation S Global Note" means a Regulation S Temporary Global Note
or Regulation S Permanent Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent global Senior
Note in the form of Exhibit A-1 hereto bearing the Global Note Legend and the
Private Placement Legend and deposited with or on behalf of and registered in
the name of the Depository or its nominee, issued in a denomination equal to the
outstanding principal amount of the Regulation S Temporary Global Note upon
expiration of the Restricted Period.
"Regulation S Temporary Global Note" means a temporary global Senior
Note in the form of Exhibit A-2 hereto bearing the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depository or
its nominee, issued in a denomination equal to the outstanding principal amount
of the Senior Notes initially sold in reliance on Rule 903 of Regulation S.
"Related Networks" means any group of Qualified Subsidiaries or
Permitted Joint Ventures in which the same Local Partner owns, or the same group
of Local Partners own, all the Equity Interests of each such Qualified
Subsidiary or Permitted Joint Venture that comprise such Related Network that
are not owned by the Company.
"Related Network Debt" means any Credit Agreement entered into by and
among the Qualified Subsidiaries and/or Permitted Joint Ventures that comprise a
Related Network.
"Responsible Officer," when used with respect to the Trustee, means
any officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Definitive Notes" means Senior Notes that are in the form
of the Senior Notes attached hereto as Exhibit A-1, that do not include the
information called for by footnotes 1 and 2 thereof.
"Restricted Global Notes" means the Regulation S Global Notes and the
Rule 144A Global Notes.
"Restricted Period" means the 40-day restricted period as defined in
Regulation S.
"Restricted Investment" means any Investment other than a Permitted
Investment.
"Restricted Joint Venture" means any Joint Venture that is not a
Permitted Joint Venture, but only if such Joint Venture: (a) has no Indebtedness
other than Non-Recourse Debt; (b) is not a party to any agreement, contract,
arrangement or understanding with the Company, any of its Subsidiaries or any of
its Permitted Joint Ventures unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the Company, such
Subsidiary or such Permitted Joint Venture than those that might be obtained at
the time from Persons who are not Affiliates of the Company; and (c) has not
guaranteed or
14
otherwise directly or indirectly provided credit support for any Indebtedness of
the Company, any of its Subsidiaries or any of its Permitted Joint Ventures. If,
at any time, a Restricted Joint Venture would fail to meet the requirements of a
Restricted Joint Venture by becoming a Permitted Joint Venture or otherwise, it
shall thereafter cease to be a Restricted Joint Venture for purposes of this
Indenture and (i) all of the then outstanding Indebtedness of such entity shall
be deemed to be incurred as of the date on which such entity becomes a Permitted
Joint Venture or otherwise ceases to be a Restricted Joint Venture for purposes
of Section 4.09 hereof subject to the provisions of Section 6.01(d) hereof(and
if such Indebtedness is not permitted to be incurred as of such date, the
Company shall be in default of such covenant) and (ii) all of the then
outstanding Investments made by such entity since the date of this Indenture
shall be deemed to have been made as of the date that such Restricted Joint
Venture becomes a Permitted Joint Venture or otherwise ceases to be a Restricted
Joint Venture for purposes of Section 4.07 hereof (and if such Investments are
not permitted to be made as of such date under Section 4.07 hereof, the Company
shall be in default of such covenant); provided that if a Restricted Joint
Venture ceases to be a Restricted Joint Venture as a result of (i) the loss of
its Local Partner or (ii) the loss of management control of such Restricted
Joint Venture, then the provisions of Section 4.07 shall not be applied to such
entity.
"Restricted Joint Venture Investment" means any Joint Venture
Investment by a General Partner Subsidiary if, after such Joint Venture
Investment, such Joint Venture is a Restricted Joint Venture.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 144A Global Note" means a permanent global note that contains
the paragraph referred to in footnote 1 and the additional schedule referred to
in footnote 2 to the form of the Senior Note attached hereto as Exhibit A-1, and
that is deposited with and registered in the name of the Depository,
representing Notes sold in reliance on Rule 144A.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated under the Securities Act.
"Sale and Leaseback Transaction" of any Person means an arrangement
with any lender or investor or to which such lender or investor is a party
providing for the leasing by such Person of any property or asset of such Person
which has been or is being sold or transferred by such Person more than 365 days
after the acquisition thereof or the completion of construction or commencement
of operation thereof to such lender or investor or to any Person to whom funds
have been or are to be advanced by lender or investor on the security of such
property or asset. The stated maturity of such arrangement shall be the date of
the last payment of rent or any other amount due under such arrangement prior to
the first date on which such arrangement may be terminated by the lessee without
payment of a penalty.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Note Custodian" means the Trustee, as custodian with respect
to the Senior Notes in global form, or any successor entity thereto.
"Senior Notes" means the Company's 12 1/4% Series A Senior Secured
Notes due 2004 issued
15
pursuant to this Indenture and 12 1/4% Series B Senior Secured Notes due 2004
issued in exchange for 12 1/4% Series A Senior Secured Notes.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date of this Indenture.
"Stated Maturity" means with respect to any debt security, the date
specified in such debt security as the fixed date on which the final installment
of principal of such debt security is due and payable.
"Stock Collateral" means the Capital Stock of Hyperion of Tennessee,
Inc., Hyperion of Florida, Inc., Hyperion of Vermont, Inc., Hyperion of
Kentucky, Inc. and Hyperion of New York, Inc. pledged by the Company to the
Trustee pursuant to the Pledge Agreement.
"Strategic Investor" means a corporation, partnership or other entity
engaged in one or more Telecommunications Businesses that has, or 80% or more of
the voting power of the Capital Stock of which is owned by a Person that has, an
equity market capitalization, at the time (i) of its initial Investment in the
Company or (ii) it purchases an Equity Interest in a Subsidiary or Joint Venture
of the Company, as the case may be, in excess of $2.0 billion.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity (other than a partnership) of which more
than 50% of the total voting power of shares of Capital Stock entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other Subsidiaries
of that Person (or a combination thereof) and (ii) any partnership of which more
than 50% of the partnership's capital accounts, distribution rights or general
or limited partnership interests are owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of that
Person or a combination thereof.
"Telecommunications Business" means the business of (i) transmitting,
or providing services relating to the transmission of, voice, video or data
through owned or leased transmission facilities, (ii) creating, developing or
marketing communications related network equipment, software and other devices
for use in a telecommunications business or (iii) evaluating, participating or
pursuing any other activity or opportunity that is primarily related to those
identified in (i) or (ii) above; provided that the determination of what
constitutes a Telecommunications Business shall be made in good faith by the
Board of Directors of the Company.
"Telecommunications Related Assets" means all assets, rights
(contractual or otherwise) and properties, whether tangible or intangible, used
or intended for use in connection with a Telecommunications Business.
"Telecommunications Service Market" means a network built by the
Company to service a market.
"13% Notes" means the Company's outstanding 13% Senior Discount Notes
due 2004.
"13% Note Indenture" means the indenture governing the 13% Notes.
16
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. "77aaa-77bbbb)
as in effect on the date on which this Indenture is qualified under the TIA.
"Transfer Restricted Securities" means securities that bear or are
required to bear the legend set forth in Section 2.06 hereof.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"U.S. Government Obligations" means fixed rate obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged, which are not callable and which mature (or may be put to the issues
by the holder at no less than par) no later than the maturity date of the Senior
Notes.
"Unrestricted Global Note" means a permanent global Senior Note that
contains the paragraph referred to in footnote 1 and the additional schedule
referred to in footnote 2 to the form of the Senior Note attached hereto as
Exhibit A-3, and that is deposited with or on behalf of and registered in the
name of the Depository.
"Unrestricted Definitive Note" means Senior Notes that are in the
form of the Senior Notes attached hereto as Exhibit A-3 that do not include the
information called for by footnotes 1 and 2 thereof.
"Unrestricted Notes" means the Unrestricted Global Notes and
Unrestricted Definitive Notes.
"Vendor Debt" means any purchase money Indebtedness of the Company or
any Subsidiary incurred in connection with the acquisition of Telecommunications
Related Assets and which purchase money Indebtedness was extended by the vendor
of such Telecommunications Related Assets or an affiliate thereof.
"Voting Stock" of any person means Capital Stock of such person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such person, whether at all times or only so long as no
senior class of securities has voting power by reason of any contingency.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the sum
of the products obtained by multiplying (x) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (y) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (b) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such
Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person or a
combination thereof.
17
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
"Affiliate Transaction"........................................ 4.11
"Asset Sale"................................................... 4.10
"Asset Sale Offer"............................................. 3.09
"Bankruptcy Law"............................................... 4.01
"Change of Control Offer"...................................... 4.15
"Change of Control Payment".................................... 4.15
"Change of Control Payment Date"............................... 4.15
"Covenant Defeasance".......................................... 8.03
"Custodian".................................................... 4.13
"Event of Default"............................................. 6.01
"Excess Proceeds".............................................. 4.10
"incur"........................................................ 4.09
"Legal Defeasance" ............................................ 8.02
"Offer Amount"................................................. 3.09
"Offer Period"................................................. 3.09
"Paying Agent"................................................. 2.03
"Purchase Date"................................................ 3.09
"Qualified Equity Offering" . . . . . . ....................... 3.07
"Registrar".................................................... 2.03
"Restricted Payments".......................................... 4.07
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Senior Notes;
"indenture security Holder" means a Holder of a Senior Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Senior Notes means the Company and any successor
obligor upon the Senior Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
18
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act shall
be deemed to include substitute, replacement of successor sections or
rules adopted by the SEC from time to time.
ARTICLE 2
THE SENIOR NOTES
SECTION 2.01. FORM AND DATING.
The Senior Notes and the Trustee=s certificate of authentication
shall be substantially in the form of Exhibits X-0, X-0 and A-3 attached hereto.
The Senior Notes may have notations, legends or endorsements required by law,
stock exchange rule or usage, as designated by the Company or its counsel. Each
Note shall be dated the date of its authentication. The Senior Notes shall be in
denominations of $1,000 and integral multiples thereof (subject to a minimum
initial purchase requirement of $250,000 for Notes sold to Accredited Investors
other than in reliance on Rule 144A or Regulation S).
The Senior Notes offered and sold in reliance on Rule 144A shall be
issued initially in the form of a Rule 144A Global Note. Notes offered and sold
to Accredited Investors in transactions exempt from registration under the
Securities Act not made in reliance on Rule 144A or Regulation S shall be issued
initially in the form of Restricted Definitive Notes. Notes offered and sold in
reliance on Regulation S shall be issued initially in the form of the Regulation
S Temporary Global Note, which shall be deposited on behalf of the purchasers of
the Senior Notes represented thereby with the Trustee, at its New York office,
as custodian for the Depository, and registered in the name of the Depository or
the nominee of the Depository for the accounts of designated agents holding on
behalf of Euroclear or Cedel Bank, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The Restricted Period
shall be terminated upon the receipt by the Trustee of (i) a written certificate
from the Depository or the Note Custodian, together with copies of certificates
from Euroclear and Cedel Bank certifying that they have received certification
of non-United States beneficial ownership of 100% of the aggregate principal
amount of the Regulation S Temporary Global Note, and (ii) an Officers'
Certificate from the Company to the effect set forth in Section 11.04(a) hereof.
Following the termination of the Restricted Period, beneficial interests in the
Regulation S Temporary Global Note shall be exchanged for beneficial interests
in Regulation S
19
Permanent Global Notes pursuant to the Applicable Procedures. Simultaneously
with the authentication of Regulation S Permanent Global Notes, the Trustee
shall cancel the Regulation S Temporary Global Note.
Notes issued in global form shall be substantially in the form of
Exhibits X-0, X-0 or A-3 attached hereto (including the Global Note Legend and
the ASchedule of Exchanges in the Global Note@ attached thereto). Notes issued
in definitive form shall be substantially in the form of Exhibit A-1 or A-3
attached hereto (but without the Global Note Legend and without the ASchedule of
Exchanges of Interests in the Global Note@ attached thereto). Each Global Note
shall represent such of the outstanding Notes as shall be specified therein and
each shall provide that it shall represent the aggregate principal amount of
outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any increase or
decrease in the aggregate principal amount of outstanding Notes represented
thereby shall be made by the Trustee or the Note Custodian, at the direction of
the Trustee, in accordance with instructions given by the Holder thereof as
required by Section 2.06 hereof.
The provisions of the AOperating Procedures of the Euroclear System@
and ATerms and Conditions Governing Use of Euroclear@ and the AGeneral Terms and
Conditions of Cedel Bank@ and ACustomer Handbook@ of Cedel Bank shall be
applicable to transfers of beneficial interests in the Regulation S Temporary
Global Note and the Regulation S Permanent Global Notes that are held by the
Agent Members through Euroclear or Cedel Bank.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Senior Notes for the Company by manual or
facsimile signature. If an Officer whose signature is on a Senior
Note no longer holds that office at the time a Senior
Note is authenticated, the Senior Note shall nevertheless be valid.
A Senior Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Senior Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by two
Officers, authenticate Senior Notes for original issue up to the aggregate
principal amount stated in paragraph 4 of the Senior Notes. The aggregate
principal amount of Senior Notes outstanding at any time may not exceed such
amount except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Senior Notes. An authenticating agent may authenticate
Senior Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain (i) an office or agency where Senior Notes
may be presented for registration of transfer or for exchange ("Registrar") and
(ii) an office or agency where Senior Notes may
20
be presented for payment ("Paying Agent"). The Registrar shall keep a register
of the Senior Notes and of their transfer and exchange. The Company may appoint
one or more co-registrars and one or more additional paying agents. The term
"Registrar" includes any co-registrar and the term "Paying Agent" includes any
additional paying agent. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company shall notify the Trustee in writing of
the name and address of any Agent not a party to this Indenture. If the Company
fails to appoint or maintain another entity as Registrar or Paying Agent, the
Trustee shall act as such. The Company or any of its Subsidiaries may act as
Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC")
to act as Depository with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar
and Paying Agent and to act as Senior Note Custodian with respect to the Global
Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Senior
Notes, and will notify the Trustee of any default by the Company in making any
such payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee shall serve as Paying Agent for the Senior Notes.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA ' 312(a). If the Trustee is not
the Registrar, the Company shall furnish to the Trustee at least seven Business
Days before each interest payment date and at such other times as the Trustee
may request in writing, a list in such form and as of such date as the Trustee
may reasonably require of the names and addresses of the Holders of Senior Notes
and the Company shall otherwise comply with TIA ' 312(a).
21
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depository to the Depository or to another nominee of the
Depository, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Company for Definitive Notes if (i) the Company delivers to the Trustee
notice from the Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor Depositary is not appointed by the
Company within 120 days after the date of such notice from the Depositary or
(ii) the Company in its sole discretion determines that the Global Notes (in
whole but not in part) should be exchanged for Definitive Notes and delivers a
written notice to such effect to the Trustee; provided that in no event shall
the Regulation S Temporary Global Note be exchanged by the Company for
Definitive Notes prior to (x) the expiration of the Restricted Period and (y)
the receipt by the Registrar of any certificates identified by the Company or
its counsel to be required pursuant to Rule 903 under the Securities Act. Upon
the occurrence of either of the preceding events in (i) or (ii) above,
Definitive Notes shall be issued in such names as the Depositary shall instruct
the Trustee. Global Notes also may be exchanged or replaced, in whole or in
part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and
delivered in exchange for, or in lieu of, a Global Note or any portion thereof,
pursuant to Section 2.07 or 2.10 hereof, shall be authenticated and delivered in
the form of, and shall be, a Global Note. A Global Note may not be exchanged for
another Note other than as provided in this Section 2.06(a), however, beneficial
interests in a Global Note may be transferred and exchanged as provided in
Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in Global Notes.
The transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes shall be subject to restrictions on transfer described in the
Private Placement Legend to the extent required by the Securities Act. Transfers
of beneficial interests in the Global Notes also shall require compliance with
either subparagraph (i) or (ii) below, as applicable, as well as one or more of
the other following subparagraphs as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend; provided, however,
that prior to the expiration of the Restricted Period transfers of
beneficial interests in the Temporary Regulation S Global Note may not be
made to a U.S. Person or for the account or benefit of a U.S. Person
(other than an Initial Purchaser). Beneficial interests in any
Unrestricted Global Note may be transferred only to Persons who take
delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note. No written orders or instructions shall be required to be
delivered to the Registrar to effect the transfers described in this
Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of beneficial
interests (other than a transfer of a beneficial interest in a Global Note
to a Person who takes delivery thereof in the form of a beneficial
interest in the same Global Note), the transferor of such beneficial
interest must deliver to the Registrar either (A) (1) a
22
written order from an Agent Member to the Depositary in accordance with
the Applicable Procedures directing the Depositary to credit or cause to
be credited a beneficial interest in another Global Note in an amount
equal to the beneficial interest to be transferred or exchanged and (2)
instructions given in accordance with the Applicable Procedures containing
information regarding the Agent Member account to be credited with such
increase or (B) (1) a written order from an Agent Member given to the
Depositary in accordance with the Applicable Procedures directing the
Depositary to cause to be issued a Definitive Note in an amount equal to
the beneficial interest to be transferred or exchanged and (2)
instructions given by the Depositary to the Registrar containing
information regarding the Person in whose name such Definitive Note shall
be registered to effect the transfer or exchange referred to in (1) above;
provided that in no event shall Definitive Notes be issued upon the
transfer or exchange of beneficial interests in the Regulation S Temporary
Global Note prior to (x) the expiration of the Restricted Period and (y)
the receipt by the Registrar of any certificates identified by the Company
or its counsel to be required pursuant to Rule 903 under the Securities
Act. Upon an Exchange Offer by the Company in accordance with Section
2.06(f) hereof, the requirements of this Section 2.06(b)(ii) shall be
deemed to have been satisfied upon receipt by the Registrar of the
instructions contained in the Letter of Transmittal delivered by the
Holder of such beneficial interests in the Restricted Global Notes. Upon
satisfaction of all of the requirements for transfer or exchange of
beneficial interests in Global Notes contained in this Indenture, the
Senior Notes and otherwise applicable under the Securities Act, the
Trustee shall adjust the principal amount of the relevant Global Note(s)
pursuant to Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted Global
Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of clause (ii) above and the Registrar
receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof; and
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Temporary Global Note or the
Regulation S Global Note, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof.
(iv) Transfer and Exchange of Beneficial Interests in a Restricted
Global Note for Beneficial Interests in the Unrestricted Global Note. A
beneficial interest in any Restricted Global Note may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of clause (ii) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of the beneficial interest to be transferred, in the
case of an exchange, or the transferee, in the case of a transfer, is
not (1) a Broker-Dealer, (2) a Person participating in the
distribution of the Senior Notes issues in the Exchange Offer or (3)
a Person who is an affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance
23
with the Registration Rights Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement
in accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest
for a beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit C hereto,
including the certifications in item (1)(a) thereof;
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial interest
to a Person who shall take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note, a certificate
from such holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof; and
(3) in each such case set forth in this subparagraph (D),
an Opinion of Counsel in form reasonably acceptable to the Registrar
to the effect that such exchange or transfer is in compliance with
the Securities Act and that the restrictions on transfer contained
herein and in the Private Placement Legend are not required in order
to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or
(D) above at a time when an Unrestricted Global Note has not yet been
issued, the Company shall issue and, upon receipt of an authentication
order in accordance with Section 2.02 hereof, the Trustee shall
authenticate one or more Unrestricted Global Notes in an aggregate
principal amount equal to the principal amount of beneficial interests
transferred pursuant to subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to, Persons who take delivery thereof in the
form of a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests in Global Notes
for Definitive Notes.
(i) If any holder of a beneficial interest in a Restricted Global
Note proposes to exchange such beneficial interest for a Restricted
Definitive Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of a Restricted Definitive Note, then,
upon receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest proposes to
exchange such beneficial interest for a Restricted Definitive Note, a
certificate from such holder in the form of Exhibit C hereto,
including the certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a Non-
U.S. Person in an offshore
24
transaction in accordance with Rule 903 or Rule 904 under the
Securities Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant to
an exemption from the registration requirements of the Securities Act
in accordance with Rule 144 under the Securities Act, a certificate
to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Accredited Investor in reliance on an exemption from the registration
requirements of the Securities Act other than those listed in
subparagraphs (B) through (D) above, a certificate to the effect set
forth in Exhibit B hereto, including the certifications, certificates
and Opinion of Counsel required by item (3)(d) thereof, if
applicable;
(F) if such beneficial interest is being transferred to the
Company or any of its Subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item
(3)(b) thereof; or
(G) if such beneficial interest is being transferred pursuant to
an effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable
Restricted Global Note to be reduced accordingly pursuant to Section
2.06(h) hereof, and the Company shall execute and the Trustee shall
authenticate and deliver to the Person designated in the instructions a
Restricted Definitive Note in the appropriate principal amount. Any
Restricted Definitive Note issued in exchange for a beneficial interest in
a Restricted Global Note pursuant to this Section 2.06(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Agent Member.
The Trustee shall deliver such Restricted Definitive Notes to the Persons
in whose names such Notes are so registered. Any Restricted Definitive
Note issued in exchange for a beneficial interest in a Restricted Global
Note pursuant to this Section 2.06(c)(i) shall bear the Private Placement
Legend and shall be subject to all restrictions on transfer contained
therein.
(ii) Notwithstanding Sections 2.06(c)(i)(A) and (C) hereof, a
beneficial interest in the Regulation S Temporary Global Note may not be
(A) exchanged for a Definitive Note prior to (x) the expiration of the
Restricted Period and (y) the receipt by the Registrar of any certificates
required pursuant to Rule 903(c)(3)(B) under the Securities Act or (B)
transferred to a Person who takes delivery thereof in the form of a
Definitive Note prior to the conditions set forth in clause (A) above or
unless the transfer is pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 903 or Rule 904.
(iii) Notwithstanding 2.06(c)(i) hereof, a holder of a beneficial
interest in a Restricted Global Note may exchange such beneficial interest
for an Unrestricted Definitive Note or may transfer such beneficial
interest to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note if:
25
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of such beneficial interest, in the case of an
exchange, or the transferee, in the case of a transfer, is not (1) a
Broker-Dealer, (2) a Person participating in the distribution of the
Senior Notes issued in the Exchange Offer or (3) a Person who is an
affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement
in accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest
for an Unrestricted Definitive Note, a certificate from such holder
in the form of Exhibit C hereto, including the certifications in item
(1)(b) thereof;
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial interest
to a Person who shall take delivery thereof in the form of an
Unrestricted Definitive Note, a certificate from such holder in the
form of Exhibit B hereto, including the certifications in item (4)
thereof; and
(3) in each such case set forth in this subparagraph (D),
an Opinion of Counsel in form reasonably acceptable to the Company,
to the effect that such exchange or transfer is in compliance with
the Securities Act and that the restrictions on transfer contained
herein and in the Private Placement Legend are not required in order
to maintain compliance with the Securities Act.
(iv) If any holder of a beneficial interest in an Unrestricted Global
Note proposes to exchange such beneficial interest for an Unrestricted
Definitive Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of an Unrestricted Definitive Note,
then, upon satisfaction of the conditions set forth in Section 2.06(b)(ii)
hereof, the Trustee shall cause the aggregate principal amount of the
applicable Unrestricted Global Note to be reduced accordingly pursuant to
Section 2.06(h) hereof, and the Company shall execute and the Trustee
shall authenticate and deliver to the Person designated in the
instructions an Unrestricted Definitive Note in the appropriate principal
amount. Any Unrestricted Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.06(c)(iv) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Agent Member.
The Trustee shall deliver such Unrestricted Definitive Notes to the
Persons in whose names such Notes are so registered. Any Unrestricted
Definitive Note issued in exchange for a beneficial interest pursuant to
this section 2.06(c)(iv) shall not bear the Private Placement Legend. A
beneficial interest in an Unrestricted Global Note cannot be exchanged for
a Restricted Definitive Note or transferred to a Person who takes delivery
thereof in the form of a Restricted Definitive Note.
(d) Transfer and Exchange of Definitive Notes for Beneficial
Interests in Global Note.
26
(i) If any Holder of a Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global Note
or to transfer such Restricted Definitive Notes to a Person who takes
delivery thereof in the form of a beneficial interest in a Restricted
Global Note, then, upon receipt by the Registrar of the following
documentation:
(A) if the Holder of such Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global
Note, a certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred to a
QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (1) thereof; or
(C) if such Restricted Definitive Note is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule
903 or Rule 904 under the Securities Act, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in item
(2) thereof;
the Trustee shall cancel the Restricted Definitive Note, increase or cause
to be increased the aggregate principal amount of, in the case of clause
(A) above, the appropriate Restricted Global Note, in the case of clause
(B) above, the 144A Global Note, and in the case of clause (C) above, the
Regulation S Global Note.
(ii) A Holder of a Restricted Definitive Note may exchange such Note
for a beneficial interest in an Unrestricted Global Note or transfer such
Restricted Definitive Note to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, is not (1) a Broker-Dealer, (2) a Person
participating in the distribution of the Senior Notes issued in the
Exchange Offer or (3) a Person who is an affiliate (as defined in
Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement
in accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in the form
of Exhibit C hereto, including the certifications in item (1)(c)
thereof;
(2) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take delivery
thereof in the form of a beneficial interest in the Unrestricted
Global Note, a certificate from such Holder in the form of Exhibit B
hereto, including the
27
certifications in item (4) thereof; and
(3) in each such case set forth in this subparagraph (D),
an Opinion of Counsel in form reasonably acceptable to the Company to
the effect that such exchange or transfer is in compliance with the
Securities Act, that the restrictions on transfer contained herein
and in the Private Placement Legend are not required in order to
maintain compliance with the Securities Act, and such Restricted
Definitive Notes are being exchanged or transferred in compliance
with any applicable blue sky securities laws of any State of the
United States.
Upon satisfaction of the conditions of any of the subparagraphs in this
Section 2.06(d)(ii), the Trustee shall cancel the Restricted Definitive
Notes and increase or cause to be increased the aggregate principal amount
of the Unrestricted Global Note.
(iii) A Holder of an Unrestricted Definitive Note may exchange such
Note for a beneficial interest in an Unrestricted Global Note or transfer
such Unrestricted Definitive Notes to a Person who takes delivery thereof
in the form of a beneficial interest in an Unrestricted Global Note at any
time. Upon receipt of a request for such an exchange or transfer, the
Trustee shall cancel the applicable Unrestricted Definitive Note and
increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Note.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or
(iii) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an authentication order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of beneficial interests transferred pursuant to subparagraphs
(ii)(B), (ii)(D) or (iii) above.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, pursuant to the provisions of this Section 2.06(e).
(i) Restricted Definitive Notes may be transferred to and registered
in the name of Persons who take delivery thereof if the Registrar receives
the following:
(A) if the transfer will be made pursuant to Rule 144A under the
Securities Act, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item (1)
thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule
904, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2) thereof;
and
28
(C) if the transfer will be made pursuant to any other exemption
from the registration requirements of the Securities Act, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications, certificates and Opinion of
Counsel required by item (3) thereof, if applicable.
(ii) Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person or
Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, is not (1) a Broker-Dealer, (2) a Person
participating in the distribution of the Senior Notes issued in the
Exchange Offer or (3) a Person who is an affiliate (as defined in
Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement
in accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for an Unrestricted Definitive Note,
a certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(d) thereof;
(2) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take delivery
thereof in the form of an Unrestricted Definitive Note, a certificate
from such Holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof; and
(3) in each such case set forth in this subparagraph (D),
an Opinion of Counsel in form reasonably acceptable to the Company to
the effect that such exchange or transfer is in compliance with the
Securities Act, that the restrictions on transfer contained herein
and in the Private Placement Legend are not required in order to
maintain compliance with the Securities Act, and such Restricted
Definitive Note is being exchanged or transferred in compliance with
any applicable blue sky securities laws of any State of the United
States.
(iii) A Holder of Unrestricted Definitive Notes may transfer such
Notes to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note. Upon receipt of a request for such a
transfer, the Registrar shall register the Unrestricted Definitive Notes
pursuant to the instructions from the Holder thereof. Unrestricted
Definitive Notes cannot be exchanged for or transferred to Persons who
take delivery thereof in the form of a Restricted Definitive Note.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue and,
upon receipt of an authentication order in
29
accordance with Section 2.02, the Trustee shall authenticate (i) one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of the beneficial interests in the Restricted Global Notes
tendered for acceptance by persons that are not (x) Broker-Dealers, (y) Persons
participating in the distribution of the Senior Notes issued in the Exchange
Offer or (z) Persons who are Affiliates (as defined in Rule 144) of the Company
and accepted for exchange in the Exchange Offer and (ii) Unrestricted Definitive
Notes in an aggregate principal amount equal to the principal amount of the
Restricted Definitive Notes accepted for exchange in the Exchange Offer.
Concurrent with the issuance of such Notes, the Trustee shall cause the
aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company shall execute and the Trustee shall
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Unrestricted Definitive Notes in the appropriate principal
amount.
(g) Legends. The following legends shall appear on the face of all Global
Notes and Definitive Notes issued under this Indenture unless specifically
stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (b) below, each Global
Note and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear the legend in
substantially the following form:
"THE SENIOR NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER XXXXXXX 0 XX XXX XXXXXX XXXXXX SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND THE SENIOR NOTE EVIDENCED
HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THE SENIOR NOTE EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED
BY RULE 144A THEREUNDER. BY ITS ACQUISITION HEREOF, THE HOLDER
OF THE SENIOR NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF
HYPERION TELECOMMUNICATIONS, INC. (THE "COMPANY") THAT (A) SUCH
SENIOR NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (1) (A) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A
FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
904 UNDER THE SECURITIES ACT, (D) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR
(7) OF REGULATION D UNDER THE SECURITIES ACT (AN "IAI") THAT,
PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO
THE TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM THE TRUSTEE OR (E) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION
30
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH
CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION
AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY PURCHASER OF THE SENIOR NOTE EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH IN (1) ABOVE."
(B) Notwithstanding the foregoing, any Unrestricted Global Note
or Unrestricted Definitive Note issued pursuant to subparagraphs
(b)(iv), (c)(iii), (c)(iv), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or
(f) to this Section 2.06 (and all Notes issued in exchange therefor
or substitution thereof) shall not bear the Private Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
ATHIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON
AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS
GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION
2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE
TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND
(IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH
THE PRIOR WRITTEN CONSENT OF THE COMPANY.@
(iii) Regulation S Temporary Global Note Legend. The Regulation S
Temporary Global Note shall bear a legend in substantially the following
form:
ATHE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES,
ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER
NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL
BE ENTITLED TO RECEIVE CASH PAYMENTS OF INTEREST DURING THE PERIOD WHICH
SUCH HOLDER HOLDS THIS NOTE. NOTHING IN THIS LEGEND SHALL BE DEEMED TO
PREVENT INTEREST FROM ACCRUING ON THIS NOTE.@
(h) Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
cancelled in whole and not in part, each such Global Note shall be returned to
or retained and cancelled by the Trustee in accordance with Section 2.11 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for or transferred to a Person who will
31
take delivery thereof in the form of a beneficial interest in another Global
Note or for Definitive Notes, the principal amount of Notes represented by such
Global Note shall be reduced accordingly and an endorsement shall be made on
such Global Note, by the Trustee or by the Depositary at the direction of the
Trustee, to reflect such reduction; and if the beneficial interest is being
exchanged for or transferred to a Person who will take delivery thereof in the
form of a beneficial interest in another Global Note, such other Global Note
shall be increased accordingly and an endorsement shall be made on such Global
Note, by the Trustee or by the Depositary at the direction of the Trustee, to
reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon receipt of a Company Order or at the Registrar's
request.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.10, 3.08, 4.09, 4.10 and 9.05 hereof).
(iii) The Registrar shall not be required to register the transfer of
or exchange any Note selected for redemption in whole or in part, except
the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Global
Notes or Definitive Notes surrendered upon such registration of transfer
or exchange.
(v) The Company shall not be required (A) to issue, to register the
transfer of or to exchange Notes during a period beginning at the opening
of business 15 days before the day of any selection of Notes for
redemption under Section 3.02 hereof and ending at the close of business
on the day of selection, (B) to register the transfer of or to exchange
any Note so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part or (C) to register
the transfer of or to exchange a Note between a record date and the next
succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of a transfer of
any Note, the Trustee, any Agent and the Company may deem and treat the
Person in whose name any Note is registered as the absolute owner of such
Note for the purpose of receiving payment of principal of and interest on
such Notes and for all other purposes, and none of the Trustee, any Agent
or the Company shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 2.02 hereof.
(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06 to
effect a transfer or exchange may be submitted by facsimile.
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SECTION 2.07. REPLACEMENT SENIOR NOTES.
If any mutilated Senior Note is surrendered to the Trustee, or the
Company and the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Senior Note, the Company shall issue and the
Trustee, upon the written order of the Company signed by two Officers of the
Company, shall authenticate a replacement Senior Note if the Trustee's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Senior Note
is replaced. The Company may charge for its expenses in replacing a Senior Note.
Every replacement Senior Note is an additional obligation of the
Company and shall be entitled to all of the benefits of this Indenture equally
and proportionately with all other Senior Notes duly issued hereunder.
SECTION 2.08. OUTSTANDING SENIOR NOTES.
The Senior Notes outstanding at any time are all the Senior Notes
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation, those reductions in the interest in a Global Note
effected by the Trustee in accordance with the provisions hereof, and those
described in this Section as not outstanding. Except as set forth in Section
2.09 hereof, a Senior Note does not cease to be outstanding because the Company
or an Affiliate of the Company holds the Senior Note.
If a Senior Note is replaced pursuant to Section 2.07 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Senior Note is held by a bona fide purchaser.
If the principal amount of any Senior Note is considered paid under
Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Senior Notes payable on that date, then on and after that date
such Senior Notes shall be deemed to be no longer outstanding and shall cease to
accrete or accrue interest.
SECTION 2.09. TREASURY SENIOR NOTES.
In determining whether the Holders of the required principal amount
of Senior Notes have concurred in any direction, waiver or consent, Senior Notes
owned by the Company, or by any Affiliate thereof shall be considered as though
not outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Senior Notes that a Trustee knows are so owned shall be so disregarded.
SECTION 2.10. TEMPORARY SENIOR NOTES.
Until definitive Senior Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Senior Notes upon a written
order of the Company signed by two Officers of
33
the Company. Temporary Senior Notes shall be substantially in the form of
definitive Senior Notes but may have variations that the Company considers
appropriate for temporary Senior Notes and as shall be reasonably acceptable to
the Trustee. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate definitive Senior Notes in exchange for temporary
Senior Notes.
Holders of temporary Senior Notes shall be entitled to all of the
benefits of this Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Senior Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Senior Notes surrendered to them for registration of transfer, exchange or
payment. The Trustee and no one else shall cancel all Senior Notes surrendered
for registration of transfer, exchange, payment, replacement or cancellation and
shall destroy cancelled Senior Notes (subject to the record retention
requirement of the Exchange Act). Certification of the destruction of all
cancelled Senior Notes shall be delivered to the Company. The Company may not
issue new Senior Notes to replace Senior Notes that it has paid or that have
been delivered to the Trustee for cancellation.
SECTION 2.12. RECORD DATE.
The record date for purposes of determining the identity of Holders
of the Senior Notes entitled to vote or consent to any action by vote or consent
authorized or permitted under this Indenture shall be determined as provided for
in TIA ' 316 (c).
SECTION 2.13. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Senior Notes,
it shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Senior Notes and in Section 4.01 hereof. The Company shall notify the
Trustee in writing of the amount of defaulted interest proposed to be paid on
each Senior Note and the date of the proposed payment. The Company shall fix or
cause to be fixed each such special record date and payment date, provided that
no such special record date shall be less than 10 days prior to the related
payment date for such defaulted interest. At least 15 days before the special
record date, the Company (or, upon the written request of the Company, the
Trustee in the name and at the expense of the Company) shall mail or cause to be
mailed to Holders a notice that states the special record date, the related
payment date and the amount of such interest to be paid.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Senior Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 45 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Senior Notes to be redeemed and (iv) the redemption price.
34
SECTION 3.02. SELECTION OF SENIOR NOTES TO BE REDEEMED.
If less than all of the Senior Notes are to be redeemed at any time,
the Trustee shall select the Senior Notes to be redeemed among the Holders of
the Senior Notes in compliance with the requirements of the principal national
securities exchange, if any, on which the Senior Notes are listed or, if the
Senior Notes are not so listed, on a pro rata basis, by lot or in accordance
with any other method the Trustee considers fair and appropriate. In the event
of partial redemption by lot, the particular Senior Notes to be redeemed shall
be selected, unless otherwise provided herein, not less than 30 nor more than 60
days prior to the redemption date by the Trustee from the outstanding Senior
Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the
Senior Notes selected for redemption and, in the case of any Senior Note
selected for partial redemption, the principal amount thereof to be redeemed.
Senior Notes and portions of Senior Notes selected shall be in amounts of $1,000
or whole multiples of $1,000; except that if all of the Senior Notes of a Holder
are to be redeemed, the entire outstanding amount of Senior Notes held by such
Holder, even if not a multiple of $1,000, shall be redeemed. Except as provided
in the preceding sentence, provisions of this Indenture that apply to Senior
Notes called for redemption also apply to portions of Senior Notes called for
redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.09 hereof, at least 30 days
but not more than 60 days before a redemption date, the Company shall mail or
cause to be mailed, by first class mail, a notice of redemption to each Holder
whose Senior Notes are to be redeemed at its registered address.
The notice shall identify the Senior Notes to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) if any Senior Note is being redeemed in part, the portion of the
principal amount of such Senior Note to be redeemed and that, after the
redemption date upon surrender of such Senior Note, a new Senior Note or
Senior Notes in principal amount equal to the unredeemed portion shall be
issued upon cancellation of the original Senior Note;
(d) the name and address of the Paying Agent;
(e) that Senior Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest on Senior Notes called for redemption ceases to accrue
on and after the redemption date;
(g) the paragraph of the Senior Notes and/or Section of this
Indenture pursuant to which the Senior Notes called for redemption are
being redeemed; and
35
(h) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Senior Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Senior Notes called for redemption become irrevocably due and payable on
the redemption date at the redemption price. A notice of redemption may not be
conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
One Business Day prior to the redemption date, the Company shall
deposit with the Trustee or with the Paying Agent money sufficient to pay the
redemption price of and accrued interest on all Senior Notes to be redeemed on
that date. The Trustee or the Paying Agent shall promptly return to the Company
any money deposited with the Trustee or the Paying Agent by the Company in
excess of the amounts necessary to pay the redemption price of, accrued interest
on and Liquidated Damages, if any, all Senior Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Senior Notes or the portions of Senior Notes called for redemption. If a
Senior Note is redeemed on or after an interest record date but on or prior to
the related interest payment date, then any accrued and unpaid interest and
Liquidated Damages, if any, shall be paid to the Person in whose name such
Senior Note was registered at the close of business on such record date. If any
Senior Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
date until such principal is paid, and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the Senior
Notes and in Section 4.01 hereof.
SECTION 3.06. SENIOR NOTES REDEEMED IN PART.
Upon surrender of a Senior Note that is redeemed in part, the Company
shall issue and, upon the Company's written request, the Trustee shall
authenticate for the Holder at the expense of the Company a new Senior Note
equal in principal amount to the unredeemed portion of the Senior Note
surrendered.
36
SECTION 3.07. OPTIONAL REDEMPTION.
(a) Except as set forth in clause (b) of this Section 3.07, the
Company shall not have the option to redeem the Senior Notes prior to September
1, 2001. Thereafter, the Company shall have the option to redeem the Senior
Notes, in whole or in part, upon not less than 30 nor more than 60 days notice,
at the redemption prices (expressed as percentages of principal amount) set
forth below plus accrued and unpaid interest thereon and Liquidated Damages, if
any, to the applicable redemption date, if redeemed during the twelve-month
period beginning on September 1 of the years indicated below:
Year Percentage
2001............................................. 106.125%
2002............................................. 103.063%
2003 and thereafter.............................. 100.000%
(b) Notwithstanding the foregoing, the Company, on or prior to
September 1, 2000, may redeem up to a maximum of 25% of the aggregate principal
amount of the Senior Notes then outstanding at a redemption price of 112.25% of
the principal amount thereof, with the net proceeds from either (i) an Initial
Public Offering of the common stock of the Company or (ii) a sale of the Capital
Stock (other than Disqualified Stock) of the Company to a Strategic Investor in
a single transaction or a series of related transactions for at least $25.0
million (clauses (i) and (ii) together, collectively referred to herein as
"Qualified Equity Offerings"); provided that, in either case, at least 75% in
aggregate principal amount of the Senior Notes remain outstanding immediately
after the occurrence of such redemption; and provided, further, that such
redemption shall occur within 90 days of the date of the closing of such
Qualified Equity Offering.
(c) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.
SECTION 3.08. MANDATORY REDEMPTION.
Except as set forth under Sections 4.10 and 4.15 hereof, the Company
shall not be required to make mandatory redemption or sinking fund payments with
respect to the Senior Notes.
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Company shall
be required to commence an Asset Sale Offer, it shall follow the procedures
specified below.
The Asset Sale Offer shall remain open for a period of 20 Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law (the "Offer Period"). No later than
five Business Days after the termination of the Offer Period (the "Purchase
Date"), the Company shall purchase the principal amount of Senior Notes required
to be purchased pursuant to Section 4.10 hereof or, if Senior Notes tendered in
response to the Asset Sale Offer are less than the amount required to be
purchased pursuant to Section 4.10 hereof, all Senior Notes tendered in response
to
37
the Asset Sale Offer. Payment for any Senior Notes so purchased shall be made
in the same manner as interest payments are made.
The Company shall comply with any tender offer rules under the
Exchange Act which may then be applicable, including Rule 14e-1, in connection
with any offer required to be made by the Company to repurchase the Senior Notes
as a result of an Asset Sale Offer. To the extent that the provisions of any
securities laws or regulations conflict with provisions of this Section 3.09,
the Company shall comply with the applicable securities laws or regulations and
shall not be deemed to have breached its obligations hereunder by virtue
thereof.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest shall
be paid to the Person in whose name a Senior Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Senior Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company shall send,
by first class mail, a notice to the Trustee and each of the Holders, with a
copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Senior Notes pursuant to the Asset
Sale Offer. The Asset Sale Offer shall be made to all Holders. The notice, which
shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this
Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale
Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase
Date;
(c) that any Senior Note not tendered or accepted for payment
shall continue to accrete or accrue interest;
(d) that, unless the Company defaults in making such payment,
any Senior Note accepted for payment pursuant to the Asset Sale Offer
shall cease to accrete or accrue interest after the Purchase Date;
(e) that Holders electing to have a Senior Note purchased
pursuant to an Asset Sale Offer may only elect to have all of such Senior
Note purchased and may not elect to have only a portion of such Senior
Note purchased;
(f) that Holders electing to have a Senior Note purchased
pursuant to any Asset Sale Offer shall be required to surrender the Senior
Note, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Senior Note completed, or transfer by book-entry transfer,
to the Company, a depositary, if appointed by the Company, or a Paying
Agent at the address specified in the notice at least three days before
the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if
the Company, the depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Senior Note the Holder delivered for
purchase and a statement that such Holder is
38
withdrawing his election to have such Senior Note purchased;
(h) that, if the aggregate principal amount of Senior Notes
surrendered by Holders exceeds the amount required to be purchased
pursuant to Section 4.10 hereof, the Company shall select the Senior Notes
to be purchased on a pro rata basis (with such adjustments as may be
deemed appropriate by the Company so that only Senior Notes in
denominations of $1,000, or integral multiples thereof, shall be
purchased); and
(i) that Holders whose Senior Notes were purchased only in part
shall be issued new Senior Notes equal in principal amount to the
unpurchased portion of the Senior Notes surrendered (or transferred by
book-entry transfer).
On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Senior Notes or portions thereof tendered or required to be purchased pursuant
to the Asset Sale Offer, or if less than the amount so required to be purchased
has been tendered, all Senior Notes tendered, and shall deliver to the Trustee
an Officers' Certificate stating that such Senior Notes or portions thereof were
accepted for payment by the Company in accordance with the terms of Section 4.10
hereof and this Section 3.09. The Company, the Depository or the Paying Agent,
as the case may be, shall promptly (but in any case not later than five days
after the Purchase Date) mail or deliver to each tendering Holder an amount
equal to the purchase price of the Senior Notes tendered by such Holder and
accepted by the Company for purchase, and the Company shall promptly issue a new
Senior Note, and the Trustee, upon written request from the Company shall
authenticate and mail or deliver such new Senior Note to such Holder, in a
principal amount equal to any unpurchased portion of the Senior Note
surrendered. Any Senior Note not so accepted shall be promptly mailed or
delivered by the Company to the Holder thereof. The Company shall publicly
announce the results of the Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 shall be made pursuant to the provisions
of Sections 3.01 through 3.06 hereof.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SENIOR NOTES.
The Company shall pay or cause to be paid the principal of, premium,
if any, and interest on the Senior Notes (including any additional interest
required to be paid pursuant to the provisions of the Registration Rights
Agreement) on the dates and in the manner provided in the Senior Notes.
Principal, premium, if any, and interest shall be considered paid on the date
due if the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 10:00 a.m. Eastern Time on the due date money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate equal
to 1% per annum in excess of the then applicable interest rate on the Senior
Notes to the extent lawful; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest and Liquidated Damages
39
(without regard to any applicable grace period) at the same rate to the extent
lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of
New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Senior Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Senior Notes and this Indenture
may be served. The Company shall give prompt written notice to the Trustee of
the location, and any change in the location, of such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Senior Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York for such purposes. The Company shall
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03 hereof.
SECTION 4.03. REPORTS.
(a) Whether or not required by the rules and regulations of the SEC,
so long as any Senior Notes are outstanding, the Company shall furnish to the
Holders of Senior Notes (i) all quarterly and annual financial information that
would be required to be contained in a filing with the SEC on Forms 10-Q and 10-
K if the Company were required to file such Forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and,
with respect to the annual information only, a report thereon by the Company's
certified independent accountants; (ii) all current reports that would be
required to be filed with the SEC on Form 8-K if the Company were required to
file such reports; and (iii) on a quarterly basis, certain financial information
and operating data with respect to each Subsidiary and Joint Venture engaged in
a Telecommunications Business, in the form specified by Schedule E hereto. In
addition, whether or not required by the rules and regulations of the SEC the
Company shall file a copy of all such information and reports with the SEC for
public availability (unless the SEC will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request. The Company shall at all times comply with TIA ' 314(a).
(b) For so long as any Senior Notes remain outstanding, the Company
shall furnish to all Holders and to securities analysts and prospective
investors, promptly upon their request, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act.
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officers' Certificate stating that a review of
the activities of the Company, its Subsidiaries and Joint Ventures
40
during the preceding fiscal year has been made under the supervision of the
signing Officers with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture, and
further stating, as to each such Officer signing such certificate, that to the
best of his or her knowledge the Company has kept, observed, performed and
fulfilled each and every covenant contained in this Indenture and is not in
default in the performance or observance of any of the terms, provisions and
conditions of this Indenture (or, if a Default or Event of Default shall have
occurred, describing all such Defaults or Events of Default of which he or she
may have knowledge and what action the Company is taking or proposes to take
with respect thereto) and that to the best of his or her knowledge no event has
occurred and remains in existence by reason of which payments on account of the
principal of or interest, if any, on the Senior Notes is prohibited or if such
event has occurred, a description of the event and what action the Company is
taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article Four or Article Five hereof or, if any such violation
has occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Senior Notes are
outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware
of any Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or proposes to
take with respect thereto.
SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries and
Joint Ventures to pay, prior to delinquency, all material taxes, assessments,
and governmental levies, except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of Senior Notes.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants or
the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it shall not, by resort to any such law, hinder, delay
or impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law has
been enacted. SECTION 4.07. RESTRICTED PAYMENTS.
The Company shall not, and (i) shall not permit any of its
Subsidiaries or Joint Ventures to, directly or indirectly: (a) declare or pay
any dividend or make any other payment or distribution on account of the
41
Company's Equity Interests (other than dividends or distributions payable in
Equity Interests (other than Disqualified Stock) of the Company or dividends or
distributions payable to the Company or any Wholly Owned Subsidiary); (b)
purchase, redeem or otherwise acquire or retire for value any Equity Interests
of the Company or any direct or indirect parent of the Company (other than
Equity Interests owned by the Company or any Wholly Owned Subsidiary of the
Company); or (c) purchase, redeem or otherwise acquire or retire for value,
prior to a scheduled mandatory sinking fund payment date or maturity date, any
Indebtedness of the Company which ranks subordinated in right to payment to the
Senior Notes and (ii) shall not permit any of its Subsidiaries or Permitted
Joint Ventures to, make any Investment other than a Permitted Investment (all
such payments and other actions set forth in clauses (i) and (ii) above being
collectively referred to as "Restricted Payments") unless, at the time of and
after giving effect to such Restricted Payment:
(x) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(y) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments (including, without limitation, all
Restricted Payments referred to in clauses (a), (b) and (b)(1) below but
excluding those made under clauses (b)(2) and (c) below) made by the
Company and its Subsidiaries after the date of the Indenture is less than
the sum of: (1) the excess of (A) Cumulative Pro Forma EBITDA over (B) 2.0
times Cumulative Interest Expense plus (2) the aggregate net cash proceeds
received by the Company (other than from a Subsidiary or Joint Venture)
(A) as capital contributions to the Company, (B) from the issuance and
sale of Equity Interest, other than Disqualified Stock, and (C) from the
issuance and sale of Indebtedness that is convertible into Capital Stock
(other than Disqualified Stock), to the extent such Indebtedness is
actually converted into such Capital Stock (clauses (A), (B) and (C)
collectively referred to as "Equity Issuances"), other than any such net
cash proceeds from Equity Issuances that were used as set forth in clause
(b) and (c) below; and
(z) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have
been permitted to incur at least $1.00 of additional Indebtedness other
than indebtedness permitted pursuant to clauses (i) through (ix) of
Section 4.09 hereof.
The foregoing provisions shall not prohibit the following Restricted
Payments:
(a) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment
would have complied with this Section 4.07;
(b) so long as no Default or Event of Default shall have occurred
and be continuing, Restricted Joint Venture Investments, which
at the time any such Restricted Joint Venture Investment was
made, did not cause the aggregate amount of all Restricted Joint
Venture Investments made on or after the date of this Indenture
and then outstanding under this clause (b) to exceed (1) $20.0
million plus (2) the net cash proceeds from Equity Issuances not
used as set forth in clause (y) above and clause (c) below;
(c) so long as no Default or Event of Default shall have occurred
and be continuing, the making of any Investment in a
Telecommunications Business out of the net cash proceeds from
Equity Issuances not used as set forth in clauses (y) and (b)(2)
above; or
42
(d) all payments pursuant to the third sentence of Section 15 of the
Warrant Agreement, dated April 15, 1996, between the Company and
the Bank of Montreal Trust Company, as Warrant Agent.
For purposes of this Section 4.07, in the event that a Restricted
Joint Venture becomes a Permitted Joint Venture or otherwise ceases to be a
Restricted Joint Venture, all of the then outstanding Investments made by such
entity since the date of the Indenture shall be deemed to have been made as of
the date that such Restricted Joint Venture becomes a Permitted Joint Venture or
otherwise ceases to be a Restricted Joint Venture; provided that if a Restricted
Joint Venture ceases to be a Restricted Joint Venture as a result of (i) the
loss of its Local Partner or (ii) the loss of management control of such
Restricted Joint Venture, then the provisions of this paragraph shall not be
applied to such entity.
The amount of all Restricted Payments, other than cash, shall be the
fair market value (evidenced by a resolution of the Board of Directors set forth
in an Officers' Certificate delivered to the Trustee) on the date of such
Restricted Payment of the asset(s) proposed to be transferred by the Company or
such Subsidiary, as the case may be, pursuant to such Restricted Payment. Not
later than the date of making any Restricted Payment, the Company shall deliver
to the Trustee an Officers' Certificate stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations required by
this Section 4.07 were computed, which calculations may be based upon the
Company's latest available financial statements.
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any Subsidiary
to:
(i) (a) pay dividends or make any other distributions to the Company
or any of its Subsidiaries (1) on its Capital Stock or (2) with
respect to any other interest or participation in, or measured
by, its profits, or (b) pay any indebtedness owed to the Company
or any of its Subsidiaries;
(ii) make loans or advances to the Company or any of its
Subsidiaries;
(iii)grant liens or grant security interests on its assets in favor
of the Holders of Senior Notes or guarantee the payment of the
Senior Notes; or
(iv) transfer any of its properties or assets to the Company or any
of its Subsidiaries, except for such encumbrances or
restrictions existing under or by reason of:
(a) Existing Indebtedness as in effect on the date of this Indenture;
provided, that any such encumbrances and restrictions existing in the
13% Note Indenture will be amended as of the date of this Indenture
to permit the activities described in clauses (i) - (iv) above with
respect to Holders of the Senior Notes;
43
(b) any Credit Agreement creating or evidencing Indebtedness permitted by
clause (i) of Section 4.09 and any amendments, modifications,
restatements, renewals, increases, supplements, refundings,
replacements or refinancings thereof;
(c) the Indenture and the Senior Notes;
(d) applicable law;
(e) by reason of customary non-assignment provisions in leases entered
into in the ordinary course of business and consistent with past
practices;
(f) purchase money obligations or Vendor Debt for property acquired in
the ordinary course of business that impose restrictions of the
nature described in clause (iv) above on the property so acquired;
(g) Indebtedness incurred pursuant to clause (viii) of Section 4.09;
provided that such encumbrance or restriction only relates to the
Subsidiary or Permitted Joint Venture incurring such Indebtedness;
and
(h) Refinancing Indebtedness, provided that such encumbrances or
restrictions are no more restrictive than those contained in the
documentation governing the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
The Company shall not, and shall not permit any of its Subsidiaries
or Joint Ventures to, directly or indirectly, create, incur, issue, assume,
guaranty or otherwise become directly or indirectly liable, contingently or
otherwise, with respect to (collectively, "incur") any Indebtedness (including,
without limitation, Acquired Indebtedness) and that the Company will not issue
any Disqualified Stock and will not permit any of its Subsidiaries or Joint
Ventures to issue any shares of Preferred Stock; provided that the Company may
incur Indebtedness (including, without limitation, Acquired Indebtedness) or
issue shares of Disqualified Stock if the Company's Consolidated Leverage Ratio
as of the last day of the Company's most recently ended fiscal quarter for which
internal financial statements are available immediately preceding the date on
which such Indebtedness is incurred, or such Disqualified Stock is issued, as
the case may be, would have been (a) greater than zero and less than 5.5 to 1.0,
if such incurrence or issuance is on or prior to March 31, 1999, and (b) greater
than zero and less than 5.0 to 1.0, if such incurrence or issuance is after
March 31, 1999, determined on a pro forma basis (including pro forma application
of the net proceeds therefrom) as if such Indebtedness had been incurred, or
such Disqualified Stock had been issued, as the case may be, at the beginning of
such fiscal quarter.
44
The foregoing provisions shall not apply to:
(i) the incurrence of Indebtedness by the Company, any
Subsidiary (other than a General Partner Subsidiary) or
any Permitted Joint Venture pursuant to Credit
Agreement(s), provided that the aggregate principal amount
of such Credit Agreement(s) at any one time outstanding
under this clause (i) does not exceed $50.0 million for
the Company, all of its Subsidiaries (other than a General
Partner Subsidiary) and all of its Permitted Joint
Ventures combined;
(ii) the incurrence of Vendor Debt by the Company, any
Subsidiary (other than a General Partner Subsidiary) or
any Permitted Joint Venture, provided that the aggregate
principal amount of such Vendor Debt does not exceed 80%
of the total cost of the Telecommunications Related Assets
financed therewith (or 100% of the total cost of the
Telecommunications Related Assets financed therewith if
such Vendor Debt was extended for the purchase of tangible
physical assets and was so financed by the vendor thereof
or an affiliate of such vendor);
(iii) Refinancing Indebtedness;
(iv) the incurrence of Indebtedness by the Company not to
exceed, at any one time outstanding 2.0 times (a) the net
cash proceeds received by the Company after the date
hereof from the issuance and sale of its Capital Stock
(other than Disqualified Stock) plus (b) the fair market
value at the time of issuance of Equity Interests (other
than Disqualified Stock) issued after the date of this
Indenture in connection with any acquisition of a
Telecommunications Related Business, in each case to a
Person other than a Subsidiary or a Joint Venture of the
Company, provided that such Indebtedness (y) does not
mature prior to the Stated Maturity of the Senior Notes
and has a Weighted Average Life to Maturity longer than
the Senior Notes and (z) is subordinated to the Senior
Notes;
(v) the incurrence by the Company of Indebtedness (in addition
to Indebtedness permitted by any other clause of this
paragraph) in an aggregate principal amount (or accreted
value, as applicable) at any time outstanding not to
exceed $10.0 million;
(vi) the incurrence by any Restricted Joint Venture of
Non-Recourse Debt, provided that if any Non-Recourse Debt
of a Restricted Joint Venture ceases to be Non-Recourse
Debt, such event shall be deemed to constitute an
incurrence of Indebtedness as of the date such
Indebtedness ceases to be Non-Recourse Debt;
(vii) the guarantee of Indebtedness by a General Partner
Subsidiary in connection with the incurrence of
Indebtedness by the Restricted Joint Venture of which such
General Partner Subsidiary is a general partner;
(viii) the incurrence by any Subsidiary (other than a General
Partner Subsidiary) or any Permitted Joint Venture of
Indebtedness (including, without limitation, Acquired
Indebtedness) so long as all of the net proceeds of such
incurrence are used by such
45
Subsidiary or Permitted Joint Venture, as the case may be,
directly in connection with the design, construction,
development or acquisition of a Telecommunications Service
Market; provided that, as of the last day of the Company's
most recently ended fiscal quarter for which internal
financial statements are available immediately preceding
the date on which such Indebtedness is incurred, either:
(a) the aggregate principal amount of all Indebtedness of
such Subsidiary or such Permitted Joint Venture does not
exceed 1.75 times the Invested Equity Capital of such
Subsidiary or such Permitted Joint Venture; or (b) the
Consolidated Leverage Ratio of such Subsidiary or such
Permitted Joint Venture would not have been greater than
3.5 to 1.0, in each case determined on a pro forma basis
(including pro forma application of the net proceeds
therefrom) as if such Indebtedness had been incurred at
the beginning of such fiscal quarter; provided, further
that any Indebtedness incurred by any Subsidiary of the
Company or any Permitted Joint Venture (other than Related
Networks) pursuant to this clause (viii) shall be
non-recourse with respect to the Company or any other
Subsidiary of the Company or any other Joint Venture; and
(ix) the incurrence by the Company of the Existing
Indebtedness.
For purposes of this Section 4.09, in the event that the Company
proposes to incur Indebtedness pursuant to clause (iv) above, the Company shall,
simultaneously with the incurrence of such Indebtedness, deliver to the Trustee
a resolution of the Board of Directors set forth in an Officers' Certificate
stating that the sale or sales of Capital Stock forming the basis for the
incurrence of such Indebtedness (i) constitutes a long term investment in the
Company and (ii) has not been made for the purpose of circumventing this Section
4.09. In the event that the Company rescinds, reverses or unwinds such sale of
Capital Stock or otherwise returns or refunds all or any portion of the net cash
proceeds of such sale of Capital Stock (whether by dividend, distribution or
otherwise) within 270 days of the date of the incurrence of such Indebtedness,
such Indebtedness will be deemed to be incurred on the date of, and immediately
after giving effect to, such rescission, reversal, unwinding, return or refund.
For purposes of this Section 4.09, in the event that a Restricted
Joint Venture becomes a Permitted Joint Venture or otherwise ceases to be a
Restricted Joint Venture, all of the then outstanding Indebtedness of such
entity shall be deemed to have been incurred as of the date that such Restricted
Joint Venture becomes a Permitted Joint Venture or otherwise ceases to be a
Restricted Joint Venture.
SECTION 4.10. ASSET SALES.
The Company shall not, and shall not permit any Subsidiary to,
directly or indirectly, whether in a single transaction or a series of related
transactions occurring within any twelve-month period, make any Asset Sale,
unless:
(i) the Company or the Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at
least equal to the fair market value (as determined in
good faith by the Board of Directors) for the shares or
assets sold or otherwise disposed of; and
(ii) at least 85% of such consideration consists of cash,
46
provided that
(A) an amount equal to the fair market value (as determined in good
faith by the Board of Directors) of:
(1) Telecommunications Related Assets received by the Company
or any Subsidiary from the transferee that will be used by
the Company or such Subsidiary in the operation of a
Telecommunications Business;
(2) the Voting Stock of any Person engaged in a
Telecommunications Business received by the Company or any
Subsidiary; provided that on the date such Voting Stock is
received, such Investment in Voting Stock constitutes a
Permitted Joint Venture Investment; or
(3) the publicly tradeable Voting Stock of any person engaged
in the Telecommunications Business received by the Company
or any Subsidiary as consideration for a sale of an Equity
Interest in any Restricted Joint Venture,
shall, for the purposes of this Section 4.10, be deemed to be cash which
was applied in accordance with the first sentence of the penultimate
paragraph of this Section 4.10; and
(B) in the event that any of Hyperion Telecommunications of
Pennsylvania, Inc., Hyperion Telecommunications of Tennessee,
Inc. or Hyperion Telecommunications of New York, Inc. sell their
respective partnership interests in the partnerships to which
each is a partner to the respective partnerships in the manner
specified by the applicable partnership agreement, (1) the
principal amount of any seller note issued to the Company or any
of its Wholly Owned Subsidiaries shall be deemed to be cash for
purposes of this Section 4.10 and (2) the payments of principal
pursuant to such seller note shall be deemed to be
Net Cash Proceeds (for purposes of the penultimate paragraph of
this Section 4.10) as and when such payments are received.
For purposes of this Section 4.10, the first $1.0 million of Net Cash
Proceeds received from Asset Sales (other than Asset Sales of Stock Collateral)
in any fiscal year shall not be subject to the restrictions contained in this
section.
In determining the fair market value with respect to any Asset Sale
or series of related Asset Sales involving aggregate consideration in excess of
$10.0 million, the Board of Directors of the Company must obtain an opinion as
to the fairness to the Holders of Senior Notes of such Asset Sales from a
financial point of view issued by a nationally recognized investment banking
firm with total assets in excess of $1.0 billion; provided that no such opinion
shall be required if such Asset Sale is in accordance with the terms of any
Local Partner Agreement to which the Company or any of its Subsidiaries is a
party on the date hereof.
The Company may apply the Net Cash Proceeds from any Asset Sale to an
investment in Telecommunications Related Assets in a Telecommunications Service
Market within 180 days after such Asset Sale; provided that if the Company
determines to make such investment in a New Telecommunications Service Market,
the Company shall be deemed to have complied with the first clause of this
sentence if, the Company (y) within 180 days of such Asset Sale, delivers to the
Trustee a resolution adopted by a majority of the Board of Directors set forth
in an Officer's Certificate certifying that the Company intends to utilize
47
the Net Cash Proceeds of such Asset Sale to invest in a specific new
Telecommunications Service Market and (z) completes such investment within 360
days of such Asset Sale. The Company shall be deemed to have completed its
investment for purposes of the preceding clause (z), so long as the Company has
(i) a business plan that sets forth the Company's investment plans for the
applicable Telecommunications Service Market and (ii) issued all material
purchase orders to the appropriate parties that are necessary to complete such
business plan. A first priority security interest securing the Company's
obligations under the Senior Notes shall be granted in all Telecommunications
Related Assets acquired in whole or in part with the proceeds of any Asset Sale
of Stock Collateral and the Company will take or cause to be taken all actions
necessary to cause such first priority security interest to be granted
concurrently with the acquisitions of such Telecommunications Related Assets.
Any Net Cash Proceeds from an Asset Sale that are not invested as provided in
the two preceding sentences shall constitute Excess Proceeds. When the aggregate
amount of Excess Proceeds exceeds $2.5 million, the Company shall commence to
purchase (an "Asset Sale Offer") the maximum principal amount of Senior Notes
and 13% Notes (on a pro rata basis based upon the relative aggregate principal
amount of 13% Notes (or, if prior to April 15, 2001, the aggregate Accreted
Value, as such term is defined in the 13% Note Indenture, of 13% Notes) and
Senior Notes then outstanding) that may be purchased out of the Excess Proceeds,
at an offer price in cash equal to 100% of the aggregate principal amount
thereof, plus accrued and unpaid interest to the date of repurchase (or, in the
case of 13% Notes prior to April 15, 2001, at a purchase price equal to 100% of
the Accreted Value thereof as of the date of purchase) in accordance with the
procedures set forth in this Indenture, provided, that, in the event of an Asset
Sale Offer as a result (in whole or in part) of an Asset Sale of the Stock
Collateral, the Company shall, purchase (i) first, all Senior Notes tendered
pursuant to such Asset Sale Offer in an aggregate principal amount equal to the
portion of such Excess Proceeds resulting from such Asset Sale of Stock
Collateral and (ii) second, all Senior Notes and 13% Notes on a pro rata basis
(in the same manner as described above) in an aggregate principal amount (or,
with respect to 13% Notes prior to April 15, 2001, an aggregate Accreted Value)
equal to the Excess Proceeds not used to purchase Senior Notes pursuant to
clause (i) of this proviso. To the extent that the aggregate principal amount
thereof, plus accrued and unpaid interest to the date of repurchase (or in the
case of repurchases of 13% Notes prior to April 15, 2001, the Accreted Value
thereof as of the date of repurchase) of the Senior Notes (and the 13% Notes)
tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the
Company may use such remaining Excess Proceeds for any purpose not prohibited by
this Indenture. If the aggregate principal amount thereof, plus accrued and
unpaid interest to the date of repurchase, (or in the case of repurchases of 13%
Notes prior to April 15, 2001, the Accreted Value thereof as of the date of
repurchase) of Senior Notes and the 13% Notes surrendered by Holders thereof
exceeds the amount of Excess Proceeds, the Trustee shall select the Senior Notes
and the 13% Notes to be purchased on a pro rata basis. Upon completion of such
offer, the amount of Excess Proceeds shall be reset at zero. Pending application
of the Net Cash Proceeds as set forth above from Asset Sales, all such Net Cash
Proceeds shall be placed in escrow for the benefit of the Holders of Senior
Notes.
Notwithstanding the foregoing, the Company shall not, and shall not
permit any Subsidiary to, directly or indirectly, make any Asset Sale of any
Equity Interests of any Subsidiary (at least 80% of the voting power of the
Capital Stock of which is owned by the Company) except pursuant to an Asset Sale
of all of the Equity Interests of such Subsidiary; provided that any sale of any
Equity Interest of any such Subsidiary to a Strategic Investor shall be deemed
not to be an Asset Sale for purposes of this Section 4.10, so long as such sale
of such Equity Interests does not result in such Subsidiary ceasing to be a
Subsidiary of the Company.
48
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Subsidiaries
to, make any payment to, or sell, lease, transfer or otherwise dispose of any of
its properties or assets to, or purchase any property or assets from, or enter
into or make or amend any contract, agreement, understanding, loan, advance or
guarantee with, or for the benefit of, any Affiliate (each of the foregoing, an
"Affiliate Transaction"), unless
(i) such Affiliate Transaction is on terms that are no less favorable
to the Company or the relevant Subsidiary, other than those that would
have been obtained in a comparable transaction by the Company or such
Subsidiary with an unrelated Person; and
(ii) the Company delivers to the Trustee (a) with respect to any
Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $1.0 million, a resolution
adopted by a majority of the disinterested members of the Board of
Directors and a majority of the Independent Directors of the Company set
forth in an Officers' Certificate certifying that such Affiliate
Transaction complies with clause (i) above; and (b) with respect to any
Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $10.0 million, an opinion
as to the fairness to the Holders of Senior Notes of such Affiliate
Transaction from a financial point of view issued by a nationally
recognized consulting firm, business valuation firm or investment banking
firm;
provided that: (i) all agreements and arrangements with Affiliates, including
without limitation the Local Partner Agreements, the Fiber Lease Agreements, the
Management Agreements, network monitoring agreements and transactions in
connection therewith or pursuant thereto existing on the date of the 13% Note
Indenture and through the current term thereof; (ii) all arrangements and
transactions with Adelphia, including existing intercompany Indebtedness,
overhead charges made in the ordinary course of business, fiber lease
arrangements and similar services existing on the date the 13% Note Indenture
and through the current term thereof; (iii) all employment arrangements approved
by the Board of Directors; (iv) all restricted Payments made pursuant to Section
4.07 hereof; (v) transactions between or among the Company and/or its Wholly
Owned Subsidiaries; (vi) transactions between a General Partner Subsidiary and
the Restricted Joint Venture of which such General Partner Subsidiary is a
general partner; and (vii) management and network monitoring agreements between
the Company and any of its Joint Ventures, shall not be deemed Affiliate
Transactions.
SECTION 4.12. LIENS.
The Company shall not, and shall not permit any of its Subsidiaries
or Permitted Joint Ventures to, directly or indirectly, create, incur, assume or
suffer to exist any Lien on any asset now owned or hereafter acquired, or any
income or profits therefrom or assign or convey any right to receive income
therefrom, except Permitted Liens.
SECTION 4.13. LINE OF BUSINESS.
The Company shall not, and shall not permit any of its Subsidiaries
to, engage in any business other than Telecommunications Business and such
business activities as are incidental or related thereto.
49
SECTION 4.14. CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of the Company or any such
Subsidiary and (ii) the rights (charter and statutory), licenses and franchises
of the Company and its Subsidiaries; provided, that the Company shall not be
required to preserve any such right, license or franchise, or the corporate,
partnership or other existence of any of its Subsidiaries, if the Board of
Directors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and its Subsidiaries, taken as a
whole, and that the loss thereof is not adverse in any material respect to the
Holders of the Senior Notes.
SECTION 4.15. OFFER TO PURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, the Company shall
make an offer (the "Change of Control Offer") to each holder of Senior Notes to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of
such Holder's Senior Notes at a purchase price equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest to the date of
repurchase in accordance with the procedures set forth in this Section 4.15 (the
"Change of Control Payment"). Within ten days following any Change of Control,
the Company shall mail a notice to each Holder stating: (1) that the Change of
Control Offer is being made pursuant to this Section 4.15 and that all Senior
Notes tendered will be accepted for payment; (2) the purchase price and the
purchase date, which shall be no later than 30 business days from the date such
notice is mailed (the "Change of Control Payment Date"); (3) that any Senior
Note not tendered will continue to accrete or accrue interest; (4) that, unless
the Company defaults in the payment of the Change of Control Payment, all Senior
Notes accepted for payment pursuant to the Change of Control Offer shall cease
to accrete or accrue interest after the Change of Control Payment Date; (5) that
Holders electing to have any Senior Notes purchased pursuant to a Change of
Control Offer will be required to surrender the Senior Notes, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Senior Notes
completed, to the Paying Agent at the address specified in the notice prior to
the close of business on the third Business Day preceding the Change of Control
Payment Date; (6) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than the close of business on the second
Business Day preceding the Change of Control Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of Senior Notes delivered for purchase, and a statement that
such Holder is withdrawing his election to have the Senior Notes purchased; and
(7) that Holders whose Senior Notes are being purchased only in part will be
issued new Senior Notes equal in principal amount to the unpurchased portion of
the Senior Notes surrendered, which unpurchased portion must be equal to $1,000
in principal amount or an integral multiple thereof. The Company shall comply
with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of Senior Notes as
a result of a Change of Control.
(b) On the Change of Control Payment Date, the Company shall, to the
extent lawful, (1) accept for payment all Senior Notes or portions thereof
properly tendered pursuant to the Change of Control Offer, (2) deposit with the
Paying Agent an amount equal to the Change of Control Payment in respect of all
Senior Notes or portions thereof so tendered and (3) deliver or cause to be
delivered to the Trustee the Senior Notes so accepted together with an Officers'
Certificate stating the aggregate principal amount of Senior Notes or
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portions thereof being purchased by the Company. The Paying Agent shall promptly
mail to each Holder of Senior Notes so tendered payment in an amount equal to
the purchase price for the Senior Notes, and the Trustee shall promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
a new Senior Note equal in principal amount to any unpurchased portion of the
Senior Notes surrendered by such Holder, if any; provided, that each such new
Senior Note shall be in a principal amount of $1,000 or an integral multiple
thereof. The Company shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date.
SECTION 4.16. LIMITATIONS ON SALE AND LEASEBACK TRANSACTIONS.
The Company shall not, and shall not permit any of its Subsidiaries
to, enter into any Sale and Leaseback Transaction; provided that the Company or
any Subsidiary (other than a General Partner Subsidiary) may enter into a Sale
and Leaseback Transaction if (i) the Company or other entity could have incurred
the Indebtedness relating to such Sale and Leaseback Transaction pursuant to
Sections 4.09 and 4.12 hereof to incur secured Indebtedness in an amount equal
to the Attributable Debt with respect to such transaction, (ii) the net proceeds
of such Sale and Leaseback Transaction are at least equal to the fair market
value of such property as determined in good faith by the Board of Directors of
the Company and (iii) such proceeds are applied in accordance with Section 4.10
hereof.
SECTION 4.17. LOANS TO SUBSIDIARIES AND JOINT VENTURES.
All loans to Subsidiaries or Joint Ventures made by the Company from
time to time after the date of this Indenture shall be evidenced by Intercompany
Notes in favor of the Company. All loans by the Company to any Subsidiary or
Joint Venture outstanding on the date hereof shall be evidenced by an unsecured
Intercompany Note. The Company shall not, and shall not permit any of its
Subsidiaries to, make any loans by Subsidiaries to other Subsidiaries and by
Subsidiaries to Joint Ventures in which such Subsidiary does not have an Equity
Interest, except that such loans may be (i) incurred and maintained between and
among the Company, its Subsidiaries and Permitted Joint Ventures in connection
with the incurrence of Indebtedness pursuant to clause (i) of Section 4.09
hereof or (ii) incurred and maintained between and among Related Networks in
connection with the incurrence of Indebtedness by such Related Networks pursuant
to the proviso in clause (viii) of Section 4.09 hereof. A form of Intercompany
Note is attached as an annex hereto.
SECTION 4.18. LIMITATION ON STATUS AS INVESTMENT COMPANY.
The Company shall not, and shall not permit any of its Subsidiaries
to, conduct its business in a fashion that would cause it to be required to
register as an "investment company" (as that term is defined in the Investment
Company Act of 1940, as amended) or otherwise become subject to regulation under
the Investment Company Act of 1940.
SECTION 4.19. PAYMENTS FOR CONSENT.
Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any holder of any Senior Notes for or as
inducement to any consent, waiver or amendment of any terms or provisions or the
Senior Notes unless such consideration is offered to be paid or agreed to be
paid to all Holders of Senior Notes which so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver
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or agreement.
SECTION 4.20. INDEPENDENT DIRECTORS.
The Company shall, no later than 360 days from the date hereof, have
at least two members of its Board of Directors who are neither officers nor
employees of the Company or its Affiliates (the "Independent Directors"). Any
transaction requiring the approval of the majority of the Independent Directors
shall be prohibited at any time that there are not at least two Independent
Directors on the Company's Board of Directors. If the Company fails to comply
with this Section 4.20, the Company shall pay Liquidated Damages to each Holder
of the Senior Notes (i) with respect to the first 90-day period immediately
following the occurrence of such default at a rate of 0.5% per annum, determined
daily on the principal amount of the Senior Notes) and (ii) at the beginning of
each subsequent 90-day period at a rate increased by an additional 0.25% per
annum up to a maximum aggregate increase of 2.0% per annum until such default
has been cured.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company shall not consolidate or merge with or into (whether or
not the Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions, to another corporation, Person or
entity unless (i) the Company is the surviving corporation or the entity or the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia; (ii) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or Person to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made assumes all the obligations of the Company under the Senior
Notes and the Indenture pursuant to a supplemental indenture in a form
reasonably satisfactory to the Trustee; (iii) immediately after such transaction
no Default or Event of Default exists; and (iv) except in the case of a merger
of the Company with or into a Wholly Owned Subsidiary of the Company, the
Company or the entity or Person formed by or surviving any such consolidation or
merger (if other than the Company), or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made (A) will have
Consolidated Net Worth immediately after the transaction equal to or greater
than the Consolidated Net Worth of the Company immediately preceding the
transaction and (B) will, at the time of such transaction and after giving pro
forma effect thereto as if such transaction had occurred at the beginning of the
applicable four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness (other than the Indebtedness incurred pursuant to
clauses (i) through (ix) thereof) pursuant to Section 4.09 hereof.
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SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.01 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; provided, however, that
the predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Senior Notes except in the case of a sale of
all of the Company's assets that meets the requirements of Section 5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(a) the Company defaults in the payment when due of interest on,
or Liquidated Damages with respect to, the Senior Notes and such
default continues for a period of 30 days;
(b) the Company defaults in the payment when due of principal of
or premium, if any, on the Senior Notes when the same becomes due and
payable at maturity, upon redemption (including in connection with an
offer to purchase) or otherwise;
(c) the Company fails to comply with any of the provisions of
Section 4.07, 4.10, 4.15 or 5.01 hereof;
(d) the Company fails to comply with the provisions described
under Section 4.09; provided that, for purposes of the last paragraph
of Section 4.09, in the event that the Company fails to comply with
such section because Indebtedness is deemed to be incurred by a
Restricted Joint Venture solely as a result of such Restricted Joint
Venture ceasing to be a Restricted Joint Venture as a result of (i)
the loss of a Local Partner or (ii) the loss of management control of
such Restricted Joint Venture, such failure continues for 90 days;
(e) the Company fails to observe or perform any other covenant,
representation, warranty or other agreement in this Indenture or the
Senior Notes for 30 days after notice to the Company by the Trustee
or the Holders of at least 25% in principal amount of the Senior
Notes then outstanding;
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(f) default occurs under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any
of its Subsidiaries (or the payment of which is guaranteed by the
Company or any of its Subsidiaries) whether such Indebtedness or
guarantee now exists, or is created after the date of the Indenture,
which default (a) is caused by a failure to pay principal of or
premium, if any, or interest on such Indebtedness prior to the
expiration of the grace period provided in such Indebtedness on the
date of such default (a "Payment Default") or (b) results in the
acceleration of such Indebtedness prior to its express maturity and,
in each case, the principal amount of any such Indebtedness, together
with the principal amount of any other such Indebtedness under which
there has been a Payment Default or the maturity of which has been so
accelerated, aggregates $5.0 million or more;
(g) a final judgment or final judgments for the payment of money
are entered by a court or courts of competent jurisdiction against
the Company or any of its Significant Subsidiaries or any group of
Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary and such judgment or judgments are not paid within,
discharged by or stayed for a period of 60 days; provided that the
aggregate of all such undischarged, unpaid or unstayed judgments
exceeds $5.0 million;
(h) any breach or default by the Company in the performance of
any covenant set forth in the Collateral Agreements which breach or
default continues for 30 days, or any repudiation by the Company of
its obligations under any of the Collateral Agreements or the
unenforceability of any of the Collateral Agreements, for any reason;
provided that any failure by the Company to comply with the
provisions of Section 1A of the Pledge Agreement shall not be deemed
to be a default under this clause (h) so long as, in the event of
such failure to comply, the Company complies with its obligations
under Section 10.08 hereof;
(i) the Company or any of its Significant Subsidiaries or any of
its Joint Ventures that would, if it were a Subsidiary constitute a
Significant Subsidiary, or any group of Subsidiaries or Joint
Ventures that, taken as a whole, would constitute a Significant
Subsidiary pursuant to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against
it in an involuntary case,
(iii) consents to the appointment of a Custodian of it or
for all or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) generally is not paying its debts as they become due;
or
(j) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against the Company or any of its
Significant Subsidiaries or any of its
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Joint Ventures that would, if it were a Subsidiary constitute a
Significant Subsidiary, or any group of Subsidiaries or Joint
Ventures that, taken as a whole, would constitute a Significant
Subsidiary in an involuntary case;
(ii) appoints a Custodian of the Company or any of its
Significant Subsidiaries or any of its Joint Ventures that
would, if it were a Subsidiary constitute a Significant
Subsidiary, or any group of Subsidiaries or Joint Ventures that,
taken as a whole, would constitute a Significant Subsidiary or
for all or substantially all of the property of the Company or
any of its Significant Subsidiaries or any of its Joint Ventures
that would, if it were a Subsidiary constitute a Significant
Subsidiary, or any group of Subsidiaries or Joint Ventures that,
taken as a whole, would constitute a Significant Subsidiary; or
(iii) orders the liquidation of the Company or any of its
Significant Subsidiaries or any of its Joint Ventures that
would, if it were a Subsidiary constitute a Significant
Subsidiary, or any group of Subsidiaries or Joint Ventures that,
taken as a whole, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days.
SECTION 6.02. ACCELERATION.
If any Event of Default (other than an Event of Default specified in
clause (i) or (j) of Section 6.01 hereof with respect to the Company, any
Significant Subsidiary or any of its Joint Ventures that would, if it were a
Subsidiary constitute a Significant Subsidiary, or any group of Subsidiaries or
Joint Ventures that, taken as a whole, would constitute a Significant
Subsidiary) occurs and is continuing, the Trustee or the Holders of at least 25%
in principal amount of the then outstanding Senior Notes may declare all the
Senior Notes to be due and payable immediately; upon any such declaration, the
Senior Notes shall become due and payable immediately. Notwithstanding the
foregoing, if an Event of Default specified in clause (h) or (i) of Section 6.01
hereof occurs with respect to the Company, any of its Significant Subsidiaries
or any of its Joint Ventures that would, if it were a Subsidiary constitute a
Significant Subsidiary, or any group of Subsidiaries or Joint Ventures that,
taken as a whole, would constitute a Significant Subsidiary, all outstanding
Senior Notes shall be due and payable immediately without further action or
notice. Holders of the Senior Notes may not enforce this Indenture or the Senior
Notes except as provided in this Indenture. The Holders of a majority in
aggregate principal amount of the then outstanding Senior Notes by written
notice to the Trustee may on behalf of all of the Holders rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default (except nonpayment of
principal, interest or premium that has become due solely because of the
acceleration) have been cured or waived.
55
In the case of any Event of Default occurring by reason of any
willful action (or inaction) taken (or not taken) by or on behalf of the Company
with the intention of avoiding payment of the premium that the Company would
have had to pay if the Company then had elected to redeem the Senior Notes
pursuant to Section 3.07 hereof, an equivalent premium shall also become and be
immediately due and payable to the extent permitted by law upon the acceleration
of the Senior Notes. If an Event of Default occurs prior to August 31, 2001 by
reason of any willful action (or inaction) taken (or not taken) by or on behalf
of the Company with the intention of avoiding the prohibition of redemption of
the Senior Notes prior to August 31, 2001, then the premium payable for purposes
of this paragraph for the period beginning of the date hereof and ending on
August 31, 2001 shall be 106.125% of the amount that would otherwise be due but
for the provisions of this paragraph, plus accrued interest, if any, to the date
of payment.
The Company is required to deliver to the Trustee annually a
statement regarding compliance with the Indenture, and the Company is required
upon becoming aware of any Default or Event of Default, to deliver to the
Trustee a statement specifying such Default or Event of Default.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium, if
any, and interest on the Senior Notes or to enforce the performance of any
provision of the Senior Notes, this Indenture, the Escrow and Disbursement
Agreement or the Pledge Agreement.
The Trustee may maintain a proceeding even if it does not possess any
of the Senior Notes or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Holder of a Senior Note in exercising any
right or remedy accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of Default. All
remedies are cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount of
the then outstanding Senior Notes by notice to the Trustee may on behalf of the
Holders of all of the Senior Notes waive an existing Default or Event of Default
and its consequences hereunder, except a continuing Default or Event of Default
in the payment of the principal of, premium and Liquidated Damages, if any, or
interest on, the Senior Notes (including in connection with an offer to
purchase) (provided, however, that the Holders of a majority in aggregate
principal amount of the then outstanding Senior Notes may rescind an
acceleration and its consequences, including any related payment default that
resulted from such acceleration in accordance with Section 6.02 hereof). Upon
any such waiver, such Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
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SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding
Senior Notes may direct the time, method and place of conducting any proceeding
for exercising any remedy available to the Trustee or exercising any trust or
power conferred on it, including, without limitation, the exercise of any remedy
under the Collateral Documents. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture that the Trustee determines
may be unduly prejudicial to the rights of other Holders of Senior Notes or that
may involve the Trustee in personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Senior Note may pursue a remedy with respect to this
Indenture or the Senior Notes only if:
(a) the Holder of a Senior Note gives to the Trustee written notice
of a continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Senior Notes make a written request to the Trustee to pursue
the remedy;
(c) such Holder of a Senior Note or Holders of Senior Notes offer
and, if requested, provide to the Trustee indemnity satisfactory to the
Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Senior Notes do not give the Trustee a
direction inconsistent with the request.
A Holder of a Senior Note may not use this Indenture to prejudice the rights of
another Holder of a Senior Note or to obtain a preference or priority over
another Holder of a Senior Note.
SECTION 6.07. RIGHTS OF HOLDERS OF SENIOR NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Senior Note to receive payment of principal, premium and
Liquidated Damages, if any, and interest on the Senior Note, on or after the
respective due dates expressed in the Senior Note (including in connection with
an offer to purchase), or to bring suit for the enforcement of any such payment
on or after such respective dates, shall not be impaired or affected without the
consent of such Holder.
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SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on the Senior Notes and interest on overdue principal and, to the extent
lawful, interest and such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Senior Notes allowed in any judicial proceedings relative to the
Company (or any other obligor upon the Senior Notes), its creditors or its
property and shall be entitled and empowered to collect, receive and distribute
any money or other property payable or deliverable on any such claims and any
custodian in any such judicial proceeding is hereby authorized by each Holder to
make such payments to the Trustee, and in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 hereof. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorgan-
ization or arrangement or otherwise. Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf of
any Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Senior Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Senior Notes for amounts due and unpaid on the
Senior Notes for principal, premium and Liquidated Damages, if any, and
interest, ratably, without preference or priority of any kind, according to the
amounts due and payable on the Senior Notes for principal, premium and
Liquidated Damages, if any and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
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The Trustee may fix a record date and payment date for any payment to
Holders of Senior Notes pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder of a
Senior Note pursuant to Section 6.07 hereof, or a suit by Holders of more than
10% in principal amount of the then outstanding Senior Notes.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture and the Collateral Documents, and use the same degree of care and
skill in its exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Collateral Documents and the
Trustee need perform only those duties that are specifically set forth in
this Indenture and the Collateral Documents and no others, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture and
the Collateral Documents. However, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
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(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b) and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed by
it to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Senior Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as trustee or resign. Any Agent may do the same with like
rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
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SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture, the Collateral Documents or
the Senior Notes, it shall not be accountable for the Company's use of the
proceeds from the Senior Notes or any money paid to the Company or upon the
Company's direction under any provision of this Indenture or the Collateral
Documents, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Senior
Notes or any other document in connection with the sale of the Senior Notes or
pursuant to this Indenture other than its certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to Holders of Senior Notes a
notice of the Default or Event of Default within 90 days after it occurs. Except
in the case of a Default or Event of Default in payment of principal of,
premium, if any, or interest on any Senior Note, the Trustee may withhold the
notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of the Holders of the
Senior Notes.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE SENIOR NOTES.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Senior Notes remain outstanding,
the Trustee shall mail to the Holders of the Senior Notes a brief report dated
as of such reporting date that complies with TIA ' 313(a) (but if no event
described in TIA ' 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also shall comply
with TIA ' 313(b)(2). The Trustee shall also transmit by mail all reports as
required by TIA ' 313(c).
A copy of each report at the time of its mailing to the Holders of
Senior Notes shall be mailed to the Company and filed with the SEC and each
stock exchange on which the Senior Notes are listed in accordance with TIA '
313(d). The Company shall promptly notify the Trustee when the Senior Notes are
listed on any stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. To the
extent permitted by law, the Trustee's compensa-
tion shall not be limited by any law on compensation of a trustee of an express
trust. The Company shall reimburse the Trustee promptly upon request for all
reasonable disbursements, advances and expenses incurred or made by it in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee's agents and
counsel.
The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, including the
costs and expenses of enforcing this Indenture, the Collateral Documents or the
61
Escrow and Disbursement Agreement against the Company (including this Section
7.07) and defending itself against any claim (whether asserted by the Company or
any Holder or any other person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder or under the Collateral
Documents or the Escrow and Disbursement Agreement except to the extent any such
loss, liability or expense may be attributable to its negligence or bad faith.
The Trustee shall notify the Company promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Company shall not relieve the
Company of its obligations hereunder. The Company shall defend the claim and the
Trustee shall cooperate in the defense. The Trustee may have separate counsel
and the Company shall pay the reasonable fees and expenses of such counsel. The
Company need not pay for any settlement made without its consent, which consent
shall not be unreasonably withheld.
The obligations of the Company under this Section 7.07 shall survive
the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Senior Notes on all money or property
held or collected by the Trustee, except that held in trust to pay principal and
interest on particular Senior Notes. Such Lien shall survive the satisfaction
and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(g) or (h) hereof occurs, the expenses and
the compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA ' 313(b)(2) to
the extent applicable.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of Senior
Notes of a majority in principal amount of the then outstanding Senior Notes may
remove the Trustee by so notifying the Trustee and the Company in writing.
The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respectto the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes
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office, the Holders of a majority in principal amount of the then outstanding
Senior Notes may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Senior Notes of at least 10% in principal amount of the then
outstanding Senior Notes may petition any court of competent jurisdiction for
the appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Senior Note
who has been a Holder of a Senior Note for at least six months, fails to comply
with Section 7.10, such Holder of a Senior Note may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and the duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of its
succession to the Holders of the Senior Notes. The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor Trustee,
provided that all sums owing to the Trustee hereunder have been paid and subject
to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of
the Trustee pursuant to this Section 7.08, the Company's obligations under
Section 7.07 hereof shall continue for the benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities. The Trustee and its direct parent shall at all times have a
combined capital surplus of at least fifty million dollars. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for
purposes of this Section 7.10 the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ' 310(a)(1), (2) and (5). The Trustee is subject to TIA '
310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee is subject to TIA ' 311(a), excluding any creditor
relationship listed in TIA ' 311(b). A Trustee who has resigned or been removed
shall be subject to TIA ' 311(a) to the extent indicated therein.
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ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced by
a resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Senior Notes
upon compliance with the conditions set forth below in this Article Eight.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Senior Notes on
the date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Senior Notes, which shall thereafter be deemed to be "outstanding"
only for the purposes of Section 8.05 hereof and the other Sections of this
Indenture referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Senior Notes and this Indenture (and the Trustee, on
demand of and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Senior Notes to receive payments in respect of the principal of,
premium, if any, and interest on such Senior Notes when such payments are due,
(b) the Company's obligations with respect to such Senior Notes under Article 2
and Section 4.02 hereof, (c) the rights, powers, trusts, duties and immunities
of the Trustee hereunder and the Company's obligations in connection therewith
and (d) this Article Eight. Subject to compliance with this Article Eight, the
Company may exercise its option under this Section 8.02 notwithstanding the
prior exercise of its option under Section 8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10,
4.11, 4.12, 4.13, 4.15, 4.16 and 4.17 hereof with respect to the outstanding
Senior Notes on and after the date the conditions set forth below are satisfied
(hereinafter, "Covenant Defeasance"), and the Senior Notes shall thereafter be
deemed not "outstanding" for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder (it being understood that such Senior Notes
shall not be deemed outstanding for accounting purposes). For this purpose,
Covenant Defeasance means that, with respect to the outstanding Senior Notes,
the Company may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 6.01 hereof, but,
except as specified above, the remainder of this Indenture and such Senior Notes
shall be unaffected thereby. In addition, upon
64
the Company's exercise under Section 8.01 hereof of the option applicable to
this Section 8.03 hereof, subject to the satisfaction of the conditions set
forth in Section 8.04 hereof, Sections 6.01(d) through 6.01(g) hereof shall not
constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Senior Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders of the Senior Notes, cash in U.S. dollars,
non-callable U.S. Government Obligations or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized firm of
independent public accounts, to pay the principal of, premium, if any, and
interest and Liquidated Damages, if any, on the outstanding Senior Notes on the
stated maturity or on the applicable redemption date, as the case may be, and
the Company must specify whether the Senior Notes are being defeased to maturity
or to a particular redemption date;
(b) in the case of an election under Section 8.02 hereof, the Company
shall have delivered to the Trustee an opinion of counsel in the United States
reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of the Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect that, and based
thereon such opinion of counsel shall confirm that, the Holders of the
outstanding Senior Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Legal Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same time
as would have been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the Company
shall have delivered to the Trustee an opinion of counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Senior Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Covenant Defeasance and will be subject
to federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the incurrence of Indebtedness all or a portion of the proceeds
of which will be used to defease the Senior Notes pursuant to this Article Eight
concurrently with such incurrence) or insofar as Sections 6.01(h) and 6.01(i)
hereof are concerned, at any time in the period ending on the 91st day after the
date of deposit;
(e) such Legal Defeasance or Covenant Defeasance will not result in a
breach or violation of, or constitute a default under any material agreement or
instrument (other than this Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its subsidiaries is
bound;
(f) the Company shall have delivered to the Trustee an opinion of
counsel to the effect that after the 91st day following the deposit, the trust
funds will not be subject to the effect of any applicable
65
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders of Senior Notes over the other creditors of the
Company with the intent of defeating, hindering, delaying or defrauding any
other creditors of the Company; and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an opinion of counsel, each stating that all conditions
precedent provided for relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable U.S.
Government Obligations (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of the
outstanding Senior Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Senior Notes and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as Paying Agent) as the Trustee may determine, to the Holders of such
Senior Notes of all sums due and to become due thereon in respect of principal,
premium, if any, and interest, but such money need not be segregated from other
funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or non-callable U.S.
Government Obligations deposited pursuant to Section 8.04 hereof or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of the
outstanding Senior Notes.
Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or non-callable U.S. Government Obligations held by it
as provided in Section 8.04 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
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SECTION 8.06. REPAYMENT TO THE COMPANY.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium, if
any, or interest on any Senior Note and remaining unclaimed for two years after
such principal, and premium, if any, or interest or Liquidated Damages, if any,
has become due and payable shall be paid to the Company on its request or (if
then held by the Company) shall be discharged from such trust; and the Holder of
such Senior Note shall thereafter, as a secured creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining will be repaid to the Company.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Senior
Notes shall be revived and reinstated as though no deposit had occurred pursuant
to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.02 or 8.03
hereof, as the case may be; provided, however, that, if the Company makes any
payment of principal of, premium, if any, or interest or Liquidated Damages, if
any, on any Senior Note following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Senior Notes to
receive such payment from the money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF THE SENIOR NOTES.
Notwithstanding Section 9.02 of this Indenture, the Company and the
Trustee may amend or supplement this Indenture, the Senior Notes, the Escrow and
Disbursement Agreement or the Collateral Documents without the consent of any
Holder of a Senior Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Senior Notes in addition to or in
place of certificated Senior Notes;
(c) to provide for the assumption of the Company's obligations to the
Holders of the Senior Notes in the case of a merger or consolidation
pursuant to Article Five hereof;
67
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Senior Notes or that does not adversely
affect the legal rights hereunder of any Holder of the Senior Note; or
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
(f) to enter into additional or supplemental Collateral Documents.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture or Collateral Documents, and upon receipt by the Trustee of the
documents described in Section 9.06 hereof, the Trustee shall join with the
Company in the execution of any amended or supplemental Indenture or Collateral
Documents authorized or permitted by the terms of this Indenture and to make any
further appropriate agreements and stipulations that may be therein contained,
but the Trustee shall not be obligated to enter into such amended or
supplemental Indenture that affects its own rights, duties or immunities under
this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF SENIOR NOTES.
Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture, the Collateral Documents and the
Senior Notes may be amended or supplemented with the consent of the Holders of
at least a majority in principal amount of the Senior Notes then outstanding
(including consents obtained in connection with a purchase of or a tender offer
or exchange offer for the Senior Notes), and, subject to Sections 6.04 and 6.07
hereof, any existing Default or Event of Default (other than a Default or Event
of Default in the payment of the principal of, premium, if any, or interest on
the Senior Notes, except a payment default resulting from an acceleration that
has been rescinded) or compliance with any provision of this Indenture, the
Collateral Documents or the Senior Notes may be waived with the consent of the
Holders of a majority in aggregate principal amount of the then outstanding
Senior Notes (including consents obtained in connection with a purchase of or a
tender offer or exchange offer for the Senior Notes).
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Senior Notes as aforesaid, and upon
receipt by the Trustee of the documents described in Section 9.06 hereof, the
Trustee shall join with the Company in the execution of such amended or
supplemental Indenture unless such amended or supplemental Indenture affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise, in
which case the Trustee may in its discretion, but shall not be obligated to,
enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Senior
Notes under this Section 9.02 to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of each Senior Note affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
68
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Senior Notes then
outstanding may waive compliance in a particular instance by the Company with
any provision of this Indenture, the Collateral Agreements or the Senior Notes.
However, without the consent of each Holder affected, an amendment, supplement
or waiver may not (with respect to any Senior Notes held by a non-consenting
Holder):
(a) reduce the principal amount of Senior Notes whose Holders
must consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any
Senior Note or alter or waive any of the provisions with respect to
the redemption of the Senior Notes except as provided in clause (g)
below with respect to Sections 3.09, 4.10 and 4.15 hereof;
(c) reduce the rate of or change the time for payment of
interest, including default interest, on any Senior Note;
(d) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Senior Notes
(except a rescission of acceleration of the Senior Notes by the
Holders of at least a majority in aggregate principal amount of the
then outstanding Senior Notes and a waiver of the payment default
that resulted from such acceleration);
(e) make any Senior Note payable in money other than that stated
in the Senior Notes;
(f) make any change in the provisions of this Indenture relating
to waivers of past Defaults or the rights of Holders of Senior Notes
to receive payments of principal of or premium, if any, or interest
on the Senior Notes;
(g) waive a redemption payment with respect to any Senior Note
(other than a payment required by Sections 3.09, 4.10 and 4.15
hereof);
(h) make any change in the provisions of this Indenture relating
to Collateral and Security or the Collateral Agreements that would
adversely affect the holders of the Senior Notes; or
(i) make any change in the foregoing amendment and waiver
provisions.
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SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture, the Collateral
Documents or the Senior Notes shall be set forth in a amended or supplemental
Indenture that complies with the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Senior Note is a continuing consent by the Holder and
every subsequent Holder of a Senior Note or portion of a Senior Note that
evidences the same debt as the consenting Holder's Senior Note, even if notation
of the consent is not made on any Senior Note. However, any such Holder or
subsequent Holder of a Senior Note may revoke the consent as to its Senior Note
if the Trustee receives written notice of revocation before the date the waiver,
supplement or amendment becomes effective. An amendment, supplement or waiver
becomes effective in accordance with its terms and thereafter binds every
Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SENIOR NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Senior Note thereafter authenticated. The Company in
exchange for all Senior Notes may issue and the Trustee shall authenticate new
Senior Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Senior Note
shall not affect the validity and effect of such amendment, supplement or
waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article Nine if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental Indenture until the Board
of Directors approves it. In executing any amended or supplemental indenture,
the Trustee shall be entitled to receive and (subject to Section 7.01) shall be
fully protected in relying upon, an Officer's Certificate and an Opinion of
Counsel stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture.
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ARTICLE 10
COLLATERAL AND SECURITY
SECTION 10.01. PLEDGE AGREEMENT.
The due and punctual payment of the principal of and interest and
Liquidated Damages, if any, on the Senior Notes when and as the same shall be
due and payable, whether on an interest payment date, at maturity, by
acceleration, repurchase, redemption or otherwise, and interest on the overdue
principal of and interest and premium or Liquidated Damages (to the extent
permitted by law), if any, on the Senior Notes and performance of all other
obligations of the Company to the Holders of Senior Notes or the Trustee under
this Indenture and the Senior Notes, according to the terms hereunder or
thereunder, shall be secured as provided in the Pledge Agreement. Each Holder of
Senior Notes, by its acceptance thereof, consents and agrees to the terms of the
Pledge Agreement (including, without limitation, the provisions providing for
foreclosure and release of the Pledged Collateral) as the same may be in effect
or may be amended from time to time in accordance with its terms and authorizes
and directs the Collateral Agent to enter into the Pledge Agreement and to
perform its obligations and exercise its rights thereunder in accordance
therewith. The Company shall deliver to the Trustee copies of all documents
delivered to the Collateral Agent pursuant to the Pledge Agreement, and shall do
or cause to be done all such acts and things as may be necessary or proper, or
as may be required by the provisions of the Pledge Agreement, to assure and
confirm to the Trustee and the Collateral Agent the security interest in the
Pledged Collateral contemplated hereby, by the Pledge Agreement or any part
thereof, as from time to time constituted, so as to render the same available
for the security and benefit of this Indenture and of the Senior Notes secured
hereby, according to the intent and purposes herein expressed. The Company shall
take, or shall cause its Subsidiaries and, if necessary, its Joint Ventures to
take, any and all actions reasonably required to cause the Pledge Agreement to
create and maintain, as security for the Obligations of the Company hereunder, a
valid and enforceable perfected first priority Lien in and on all the Pledged
Collateral, in favor of the Collateral Agent for the benefit of the Holders of
Senior Notes, superior to and prior to the rights of all third Persons and
subject to no other Liens than Permitted Liens.
SECTION 10.02. RECORDING AND OPINIONS.
(a) The Company shall furnish to the Trustee simultaneously with the
execution and delivery of this Indenture an Opinion of Counsel either (i)
stating that in the opinion of such counsel all action has been taken with
respect to the recording, registering and filing of this Indenture, financing
statements (other than the filing of such financing statements, which shall be
completed promptly after the execution of this Indenture but in no event later
than two Business Days after the date hereof) or other instruments necessary to
make effective the Lien intended to be created by the Pledge Agreement, and
reciting with respect to the security interests in the Pledged Collateral, the
details of such action, or (ii) stating that, in the opinion of such counsel, no
such action is necessary to make such Lien effective.
(b) The Company shall furnish to the Collateral Agent and the Trustee on
August 15 in each year beginning with August 15, 1998, an Opinion of Counsel,
dated as of such date, either (i) (A) stating that, in the opinion of such
counsel, action has been taken with respect to the recording, registering,
filing, re-recording, re-registering and refiling of all supplemental
indentures, financing statements, continuation statements or other instruments
of further assurance as is necessary to maintain the Lien of the Pledge
71
Agreement and reciting with respect to the security interests in the Pledged
Collateral the details of such action or referring to prior Opinions of Counsel
in which such details are given, (B) stating that, based on relevant laws as in
effect on the date of such Opinion of Counsel, all financing statements and
continuation statements have been executed and filed that are necessary as of
such date and during the succeeding 12 months fully to preserve and protect, to
the extent such protection and preservation are possible by filing, the rights
of the Holders of Senior Notes and the Collateral Agent and the Trustee
hereunder and under the Pledge Agreement with respect to the security interests
in the Pledged Collateral, or (ii) stating that, in the opinion of such counsel,
no such action is necessary to maintain such Lien and assignment.
(c) The Company shall otherwise comply with the provisions of TIA '314(b).
SECTION 10.03. RELEASE OF COLLATERAL.
(a) Subject to subsections (b), (c) and (d) of this Section 10.03, Pledged
Collateral may be released from the Lien and security interest created by the
Pledge Agreement at any time or from time to time in accordance with the
provisions of the Pledge Agreement or as provided hereby. In addition, upon the
request of the Company pursuant to an Officers' Certificate certifying that all
conditions precedent hereunder have been met and stating whether or not such
release is in connection with an Asset Sale and (at the sole cost and expense of
the Company) the Collateral Agent shall release (i) Pledged Collateral that is
sold, conveyed or disposed of in compliance with the provisions of this
Indenture; provided, that if such sale, conveyance or disposition constitutes an
Asset Sale, the Company shall apply the Net Proceeds in accordance with Section
4.10 hereof. Upon receipt of such Officers' Certificate the Collateral Agent
shall execute, deliver or acknowledge any necessary or proper instruments of
termination, satisfaction or release to evidence the release of any Pledged
Collateral permitted to be released pursuant to this Indenture or the Pledge
Agreement.
(b) No Pledged Collateral shall be released from the Lien and security
interest created by the Pledge Agreement pursuant to the provisions of the
Pledge Agreement unless there shall have been delivered to the Collateral Agent
the certificate required by this Section 10.03.
(c) At any time when an Event of Default shall have occurred and be
continuing and the maturity of the Senior Notes shall have been accelerated
(whether by declaration or otherwise) and the Trustee shall have delivered a
notice of acceleration to the Collateral Agent, no release of Pledged Collateral
pursuant to the provisions of the Pledge Agreement shall be effective as against
the Holders of Senior Notes.
(d) The release of any Pledged Collateral from the terms of this Indenture
and the Pledge Agreement shall not be deemed to impair the security under this
Indenture in contravention of the provisions hereof if and to the extent the
Pledged Collateral is released pursuant to the terms of the Pledge Agreement. To
the extent applicable, the Company shall cause TIA ' 313(c), relating to
reports, and TIA ' 314(b), relating to the release of property or securities
from the Lien and security interest of the Pledge Agreement and relating to the
substitution therefor of any property or securities to be subjected to the Lien
and security interest of the Pledge Agreement, to be complied with. The Trustee
shall comply (to the extent required) with TIA ' 313(b)(1) and 313(d). Any
certificate or opinion required by TIA ' 314(d) may be made by an Officer of the
Company except in cases where TIA ' 314(d) requires that such certificate or
opinion be made by an independent Person, which Person shall be an independent
engineer, appraiser or other expert selected or approved by the Trustee and the
Collateral Agent in the exercise of reasonable care.
72
SECTION 10.04. CERTIFICATES OF THE COMPANY.
(a) The Company shall furnish to the Trustee and the Collateral Agent,
prior to each proposed release of Pledged Collateral pursuant to the Pledge
Agreement or the Escrow and Disbursement Agreement, (i) all documents required
by TIA '314(c) and (d) and (ii) an Opinion of Counsel to the effect that such
accompanying documents constitute all documents required by TIA '314(d). The
Trustee may, to the extent permitted by Sections 7.01 and 7.02 hereof, accept as
conclusive evidence of compliance with the foregoing provisions the appropriate
statements contained in such documents and such Opinion of Counsel.
SECTION 10.05. CERTIFICATES OF THE TRUSTEE.
In the event that the Company wishes to release Pledged Collateral in
accordance with the Pledge Agreement and has delivered the certificates and
documents required by the Pledge Agreement and Sections 10.03 and 10.04 hereof
as well as all documentation required by TIA '314(d) in connection with such
release and the Trustee shall direct the Collateral Agent to effectuate such
release.
SECTION 10.06. AUTHORIZATION OF ACTIONS TO BE TAKEN BY THE TRUSTEE UNDER THE
PLEDGE AGREEMENT.
Subject to the provisions of Section 7.01 and 7.02 hereof, the Trustee
may, in its sole discretion and without the consent of the Holders of Senior
Notes, direct, on behalf of the Holders of Senior Notes, the Collateral Agent
to, take all actions it deems necessary or appropriate in order to (a) enforce
any of the terms of the Pledge Agreement and (b) collect and receive any and all
amounts payable in respect of the Obligations of the Company hereunder. The
Trustee shall have power to institute and maintain such suits and proceedings as
it may deem expedient to prevent any impairment of the Pledged Collateral by any
acts that may be unlawful or in violation of the Pledge Agreement or this
Indenture, and such suits and proceedings as the Trustee may deem expedient to
preserve or protect its interests and the interests of the Holders of Senior
Notes in the Pledged Collateral (including power to institute and maintain suits
or proceedings to restrain the enforcement of or compliance with any legislative
or other governmental enactment, rule or order that may be unconstitutional or
otherwise invalid if the enforcement of, or compliance with, such enactment,
rule or order would impair the security interest hereunder or be prejudicial to
the interests of the Holders of Senior Notes or of the Trustee).
SECTION 10.07. AUTHORIZATION OF RECEIPT OF FUNDS BY THE TRUSTEE UNDER THE PLEDGE
AGREEMENT.
The Trustee is authorized to receive any funds for the benefit of the
Holders of Senior Notes distributed under the Pledge Agreement, and to make
further distributions of such funds to the Holders of Senior Notes according to
the provisions of this Indenture.
SECTION 10.08. COMPLIANCE WITH PLEDGE AGREEMENT.
In the event that the Company fails to comply with Section 1A of the
Pledge Agreement, the interest rate on the Senior Notes shall increase in
accordance with the provisions of the Senior Notes; provided that, upon such
time as the Company complies with Section 1A, if any, the interest shall
decrease in accordance with the provisions of the Senior Notes.
73
SECTION 10.09. TERMINATION OF SECURITY INTEREST.
Upon the payment in full of all Obligations of the Company under this
Indenture and the Senior Notes, or upon Legal Defeasance, the Trustee shall, at
the written request of the Company set forth in an Officers' Certificate,
deliver a certificate to the Collateral Agent stating that such Obligations have
been paid in full, and instruct the Collateral Agent to release the Liens
pursuant to this Indenture and the Pledge Agreement.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by TIA '318(c), the imposed duties shall control.
SECTION 11.02. NOTICES.
Any notice or communication by the Company or the Trustee to the
others is duly given if in writing and delivered in Person or mailed by first
class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:
If to the Company:
Hyperion Telecommunications, Inc.
Main at Xxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxxx, Xxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx
74
With a copy to:
Xxxxxxxx Ingersoll
One Oxford Centre
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxxxxxxxx, Xx.
If to the Trustee:
Bank of Montreal Trust Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Corporate Trust Department
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first
class mail, certified or registered, return receipt requested, or by overnight
air courier guaranteeing next day delivery to its address shown on the register
kept by the Registrar. Any notice or communication shall also be so mailed to
any Person described in TIA ' 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 11.03. COMMUNICATION BY HOLDERS OF SENIOR NOTES WITH OTHER HOLDERS OF
SENIOR NOTES.
Holders may communicate pursuant to TIA ' 312(b) with other Holders
with respect to their rights under this Indenture or the Senior Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA ' 312(c).
75
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 11.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 11.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA ' 314(a)(4)) shall comply with the provisions of TIA '
314(e) and shall include:
(a) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
SECTION 11.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting
of Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 11.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No director, officer, employee, incorporator or stockholder of the
Company, as such, shall have any liability for any obligations of the Company
under the Senior Notes or the Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of Senior
Notes by accepting a Senior Note waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Senior
Notes. Such waiver may not be effective to waive liabilities under the federal
securities laws and it is the view of the SEC that such a wavier is against
public policy.
76
SECTION 11.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE COLLATERAL DOCUMENTS AND THE SENIOR NOTES.
SECTION 11.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 11.10. SUCCESSORS.
All agreements of the Company in this Indenture and the Senior Notes
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors.
SECTION 11.11. SEVERABILITY.
In case any provision in this Indenture or in the Senior Notes shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 11.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 11.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
77
SIGNATURES
Dated as of August 27, 1997 HYPERION TELECOMMUNICATIONS, INC.
ISSUER
By:/s/ Xxxxxx X. Xxxxxxxx
Name:
Title:
Attest: /s/ Xxxxxxxx X. Xxxxxxx
Dated as of August 27, 1997 BANK OF MONTREAL TRUST COMPANY
TRUSTEE
By: /s/ Xxxxxxx Xxxxxxxx
Name:
Title:
Attest:/s/ Xxxxxxxx X. Xxxxxxx
EXHIBIT A-1
(Face of Senior Note)
12 1/4% Series A/B Senior Secured Notes due 2004
No. $_______________
CUSIP NO. __________
HYPERION TELECOMMUNICATIONS, INC.
promises to pay to _____________________________________
or registered assigns,
the principal sum of $
dollars on [_____], 2004.
Interest Payment Dates: _________ and ________, of each year,
commencing __________, 1998.
Record Dates: _______ and _______
Dated: __________, 1997
HYPERION TELECOMMUNICATIONS, INC.
By:______________________________
Name: Xxxxxx X. Xxxxxxxx
Title: President and Secretary
By:______________________________
Name: Xxxxxx X. Xxxxxxx
Title: Vice President, Finance
This is one of the Global Senior Notes referred to in the within-mentioned
Indenture:
BANK OF MONTREAL TRUST COMPANY
as Trustee
By:__________________________________
Name:
Title:
A-1-1
(Back of Senior Note)
12 1/4% Series A/B Senior Secured Notes due 2004
Unless and until it is exchanged in whole or in part for Senior Notes
in definitive form, this Senior Note may not be transferred except as a whole by
the Depository to a nominee of the Depository or by a nominee of the Depository
to the Depository or another nominee of the Depository or by the Depository or
any such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized representative
of The Depository Trust Company (55 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx) ("XXX"),
to the issuer or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or such other
name as may be requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or such other entity as may be requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein..
THE SENIOR NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER
XXXXXXX 0 XX XXX XXXXXX XXXXXX SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND THE SENIOR NOTE EVIDENCED HEREBY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
THE SENIOR NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY
BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. BY ITS ACQUISITION
HEREOF, THE HOLDER OF THE SENIOR NOTE EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF HYPERION TELECOMMUNICATIONS, INC. (THE "COMPANY") THAT (A)
SUCH SENIOR NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY
(1) (A) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN OF RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (B) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT, (C) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, (D) TO
AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1),
(2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN "IAI")
THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM
THE TRUSTEE OR (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR
(3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE,
IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
OF THE SENIOR NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET
FORTH IN (1) ABOVE.
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Hyperion Telecommunications, Inc., a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this Senior
Note at the rate of 12 1/4% per annum from
August 27, 1997 until maturity (including any additional interest required to be
paid pursuant to the provisions of the Registration Rights Agreement) and will
be payable semi-annually in cash on September 1 and March 1 of each year, or if
any such day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"); provided that in the event that the Company does not
comply with Section 1A(a) and (b) of the Pledge Agreement, the interest rate on
the Senior Notes will automatically increase by 0.25% per annum (the "Additional
Interest") to 12 1/2% and the Additional Interest shall continue until such time
as the Company complies with its obligations under Section 1A of the Pledge
Agreement, at which time the Additional Interest shall cease. Interest and
Additional Interest, if any, on the Senior Notes will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the date of issuance; provided that if there is no existing Default in the
payment of interest, and if this Senior Note is authenticated between a record
date referred to on the face hereof and the next succeeding Interest Payment
Date, interest shall accrue from such next succeeding Interest Payment Date,
provided, further, that the first Interest Payment Date shall be March 1, 1998.
The Company will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
from time to time on demand at a rate that is 1% per annum in excess of the rate
then in effect; it will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace periods) from time to
time on demand at the same rate to the extent lawful. Interest will be computed
on the basis of a 360-day year comprised of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Senior Notes
(except defaulted interest) to the Persons who are registered Holders of Senior
Notes at the close of business on the August 15 or February 15 next preceding
the Interest Payment Date, even if such Senior Notes are cancelled after such
record date and on or before such Interest Payment Date, except as provided in
Section 2.13 of the Indenture with respect to defaulted interest. The Senior
Notes shall be payable as to principal, premium and interest at the office or
agency of the Company maintained for such purpose within or without the City and
State of New York, or, at the option of the Company, payment of interest may be
made by check mailed to the Holders at their addresses set forth in the register
of Holders; provided that payment by wire transfer of immediately available
funds shall be required with respect to principal of, and interest and premium
on, all Global Notes and all other Senior Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, Bank of Montreal Trust
Company, the Trustee under the Indenture, shall act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. INDENTURE AND PLEDGE AND SECURITY AGREEMENT. The Company issued the
Senior Notes under an Indenture dated as of August 27, 1997 (the "Indenture")
between the Company and the Trustee. The terms of the Senior Notes include those
stated in the Indenture and those made a part of the Indenture by reference to
the Trust Indenture Act of 1939, as amended (15 U.S. Code " 77aaa-77bbbb) (the
"TIA"). The Senior Notes are subject to all such terms, and Holders are referred
to the Indenture and the TIA for a statement of such terms. The Senior Notes are
senior obligations of the Company limited to $250.0 million in aggregate
principal amount at maturity. The Senior Notes are secured by a pledge of the
Pledged Collateral (as defined in the Indenture) pursuant to the Pledge and
Security Agreement referred to in the Indenture. The Senior Notes are senior
obligations of the Company limited to $250.0 million in aggregate principal
amount at maturity.
A-3
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Company shall not have the option to redeem the Senior Notes prior to September
1, 2001. Thereafter, the Company shall have the option to redeem the Senior
Notes, in whole or in part, upon not less than 30 nor more than 60 days' notice,
at the redemption prices (expressed as percentages of principal amount set forth
below plus accrued and unpaid interest thereon and Liquidated Damages, if any,
to the applicable redemption date, if redeemed during the twelve-month period
beginning on September 1 of the years indicated below:
Year Percentage
2001.................................................... 106.125%
2002 and thereafter..................................... 103.063%
2003 and thereafter..................................... 100.000%
(b) Notwithstanding the foregoing, the Company, on or prior to
September 1, 2000, may redeem up to a maximum of 25% of the aggregate principal
amount of the Senior Notes then outstanding at a redemption price of 112.25% of
the principal amount thereof, with the net proceeds from either (i) an Initial
Public Offering of the common stock of the Company or (ii) a sale of the Capital
Stock (other than Disqualified Stock) of the Company to a Strategic Investor in
a single transaction or a series of related transactions for at least $25.0
million (clauses (i) and (ii) together, collectively referred to herein as
"Qualified Equity Offerings"); provided that, in either case, at least 75% in
aggregate principal amount of the Senior Notes remain outstanding immediately
after the occurrence of such redemption; and provided, further, that such
redemption shall occur within 90 days of the date of the closing of such
Qualified Equity Offering.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall not be
required to make mandatory redemption or sinking fund payments with respect to
the Senior Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, the Company shall be
required to make an offer (a "Change of Control Offer") to each Holder of the
Senior Notes to repurchase all or any part (equal to $1,000 or an integral
multiple thereof) of such Holder's Senior Notes at a purchase price equal to
101% of the aggregate principal amount thereof plus accrued and unpaid interest
and Liquidated Damages, if any, to the date of repurchase (the "Change of
Control Payment"). Within ten days following any Change of Control, the Company
shall mail a notice to each Holder setting forth the procedures governing the
Change of Control Offer as required by the Indenture.
(b) If the Company or any Subsidiary consummates any Asset Sales, within
five Business Days of each date on which the aggregate amount of Excess Proceeds
exceeds $2.5 million, the Company shall offer to purchase (an "Asset Sale
Offer") the maximum principal amount of Senior Notes and 13% Notes (on a pro
rata basis based upon the relative aggregate principal amount of 13% Notes (or,
prior to April 15, 2001, the aggregate Accreted Value of 13% Notes) then
outstanding that may be purchased out of the Excess Proceeds at an offer price
in cash equal to 100% of aggregate principal amount thereof, plus accrued and
unpaid
A-4
interest to the date of repurchase (or, in the case of repurchases of 13% Notes
prior to April 15, 2001, at a purchase price equal to 100% of the Accreted Value
thereof as of the date of repurchase) in accordance with the procedures set
forth in the Indenture, provided, that in the event of an Asset Sale of Stock
Collateral, the Company shall, purchase (i) first, all Senior Notes tendered
pursuant to such Asset Sale Offer in an aggregate principal amount equal to the
portion of such Excess Proceeds resulting from such Asset Sale of Stock
Collateral and (ii) second, all Senior Notes and 13% Notes on a pro rata basis
(in the same manner as described above) in an aggregate principal amount (or,
with respect to 13% Notes prior to April 15, 2001, an aggregate Accreted Value)
equal to the Excess Proceeds not used to purchase Senior Notes pursuant to
clause (i) of this proviso. The Senior Notes are in registered form without
coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of the Senior Notes may be registered and the Senior Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Senior Note or portion of a Senior Note
selected for redemption, except for the unredeemed portion of any Senior Note
being redeemed in part. Also, it need not exchange or register the transfer of
any Senior Notes for a period of 15 days before a selection of Senior Notes to
be redeemed or during the period between a record date and the corresponding
Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Senior Note may be
treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Senior Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the then outstanding
Senior Notes, and any existing default or compliance with any provision of the
Indenture, the Collateral Documents or the Senior Notes may be waived with the
consent of the Holders of a majority in aggregate principal amount of the then
outstanding Senior Notes. Without the consent of any Holder of a Senior Note,
the Indenture, the Collateral Documents or the Senior Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Senior Notes in addition to or in place of certificated Senior
Notes, to provide for the assumption of the Company's obligations to Holders of
the Senior Notes in case of a merger or consolidation, to make any change that
would provide any additional rights or benefits to the Holders of the Senior
Notes or that does not adversely affect the legal rights under the Indenture of
any such Holder, or to comply with the requirements of the SEC in order to
effect or maintain the qualification of the Indenture under the Trust Indenture
Act.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30
days in the payment when due of interest on, or Liquidated Damages with respect
to, the Senior Notes; (ii) default in payment when due of principal of or
premium, if any, on the Senior Notes when the same becomes due and payable at
maturity, upon redemption (including in connection with an offer to purchase) or
otherwise, (iii) failure by the Company to comply with Section 4.07, 4.10, 4.15
or 5.01 of the Indenture; (iv) failure by the Company to comply with Section
4.09 of the Indenture; provided that in the event that the Company fails to
comply with Section 4.09 of the Indenture because indebtedness is deemed to be
incurred by a Restricted Joint Venture solely as a result of such Restricted
Joint Venture ceasing to be a Restricted Joint Venture as a result of (x) the
loss of a Local Partner or (y) the loss of management control of such Restricted
Joint Venture, and such failure continues for 90 days; (v) failure by the
Company for 30 days after notice to the Company by the Trustee or the Holders of
at least 25% in principal amount of the Senior Notes then outstanding to comply
with certain other agreements in the Indenture or the Senior Notes; (vi) default
under certain other agreements relating to Indebtedness of the Company which
default results in the acceleration of such Indebtedness prior to its express
maturity; (vii) certain final judgments for the payment of money that remain
undischarged for a period of 60 days; (viii) any breach or default by the
Company in the performance of any
A-5
covenant set forth in the Collateral Agreements which breach or default
continues for 30 days, or any repudiation by the Company of its obligation under
any of the Collateral Agreements or the unenforceability of any of the
Collateral Agreements, for any reason; and (ix) certain events of bankruptcy or
insolvency with respect to the Company or any of its Significant Subsidiaries or
any of its Joint Ventures that would, if it were a Subsidiary, constitute a
Significant Subsidiary. If any Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Senior Notes may declare all the Senior Notes to be due and payable
immediately. Notwithstanding the foregoing, in the case of an Event of Default
arising from certain events of bankruptcy or insolvency with respect to the
Company, any of its Significant Subsidiaries or any Joint Venture that would, if
it were a Subsidiary constitute a Significant Subsidiary, or any group of
Subsidiaries or Joint Ventures that, taken together, would, constitute a
Significant Subsidiary, all outstanding Senior Notes shall become due and
payable without further action or notice. Holders of the Senior Notes may not
enforce the Indenture or the Senior Notes except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in principal amount of the
then outstanding Senior Notes may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Holders of the Senior Notes notice
of any continuing Default or Event of Default (except a Default or Event of
Default relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. The Holders of a majority in aggregate
principal amount of the Senior Notes then outstanding by notice to the Trustee
may on behalf of the Holders of all of the Senior Notes waive any existing
Default or Event of Default and its consequences under the Indenture, except a
continuing Default or Event of Default in the payment of interest on, or the
principal of, the Senior Notes. The Company is required to deliver to the
Trustee annually a statement regarding compliance with the Indenture, and the
Company is required upon becoming aware of any Default or Event of Default, to
deliver to the Trustee a statement specifying such Default or Event of Default.
13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not the Trustee.
14. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company, as such, shall not have any
liability for any obligations of the Company under the Senior Notes or the
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Senior Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Senior Notes.
15. AUTHENTICATION. This Senior Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES. In
addition to the rights provided to Holders of the Senior Notes under the
Indenture, Holders of Transferred Restricted Securities shall have all the
rights set forth in the Registration Rights Agreement dated as of August 27,
1997, between the Company and the parties named on the signature pages thereof
(the "Registration Rights Agreement").
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Senior
A-6
Notes and the Trustee may use CUSIP numbers in notices of redemption as a
convenience to the Holders. No representation is made as to the accuracy of such
numbers either as printed on the Senior Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers
placed thereon.
The Company shall furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Hyperion Telecommunications, Inc.
Main at Xxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxxx, Xxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx
A-7
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
(Insert assignee's soc. sec. or tax I.D. no.)
(Print or type assignee's name, address and zip code)
and irrevocably appoint
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:
Your Signature:
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee.
A-8
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the box below:
Section 4.10 Section 4.15
If you want to elect to have only part of the Senior Note purchased
by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state
the amount you elect to have purchased: $___________
Date: Your Signature:
(Sign exactly as your name appears on the Senior Note)
Tax Identification No.:
Signature Guarantee.
A-9
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE0
The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note, have
been made:
Date of Exchange Amount of decrease in Amount of increase in Principal Amount Signature of
Principal Amount Principal Amount of this authorized officer of
of this of this Global Note Trustee or Note
Global Note Global Note following such decrease Custodian
(or increase)
--------
0. This should be included only if the Note is a Global Note.
X-00
XXXXXXX X-0
(Face of Regulation S Temporary Global Note)
12 1/4% Series A/B Senior Secured Notes due 2004
No. $_______________
CUSIP NO. __________
HYPERION TELECOMMUNICATIONS, INC.
promises to pay to _____________________________________
or registered assigns,
the principal sum of $
dollars on [_____], 2004.
Interest Payment Dates: _________ and ________, of each year, commencing
__________, 1998.
Record Dates: _______ and _______
Dated: __________, 1997
HYPERION TELECOMMUNICATIONS, INC.
By:______________________________
Name: Xxxxxx X. Xxxxxxxx
Title: President and Secretary
By:______________________________
Name: Xxxxxx X. Xxxxxxx
Title: Vice President, Finance
This is one of the Global Senior Notes referred to in the within-mentioned
Indenture:
BANK OF MONTREAL TRUST COMPANY
as Trustee
By:__________________________________
Name:
Title:
A-2-1
(Back of Regulation S Temporary Global Note)
12 1/4% Senior Secured Notes due 2004
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE CASH PAYMENTS OF INTEREST DURING THE PERIOD WHICH SUCH HOLDER HOLDS
THIS NOTE. NOTHING IN THIS LEGEND SHALL BE DEEMED TO PREVENT INTEREST FROM
ACCRUING ON THIS NOTE.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) (ADTC@), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE SENIOR NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX XXXXXX
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SENIOR NOTE
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SENIOR NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. BY ITS ACQUISITION HEREOF, THE
HOLDER OF THE SENIOR NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF HYPERION
TELECOMMUNICATIONS, INC. (THE "COMPANY") THAT (A) SUCH SENIOR NOTE MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (A) TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
OF RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, (D)
TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN "IAI") THAT, PRIOR TO
SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (THE FORM
OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE OR (E) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY
OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SENIOR NOTE
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (1) ABOVE.
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to
below unless otherwise indicated.
1. INTEREST. Hyperion Telecommunications, Inc., a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this Senior
Note at the rate of 12-1/4% per annum from August 27, 1997 until maturity
(including any additional interest required to be paid pursuant to the
provisions of the Registration Rights Agreement) and will be payable
semi-annually in cash on September 1 and March 1 of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"); provided that in the event that the Company does not
comply with Section 1A(a) and (b) of the Pledge Agreement, the interest rate on
the Senior Notes will automatically increase by 0.25% per annum (the "Additional
Interest") to 12-1/2% and the Additional Interest shall continue until such time
as the Company complies with its obligations under Section 1A of the Pledge
Agreement, at which time the Additional Interest shall cease. Interest and
Additional Interest, if any, on the Senior Notes will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the date of issuance; provided that if there is no existing Default in the
payment of interest, and if this Senior Note is authenticated between a record
date referred to on the face hereof and the next succeeding Interest Payment
Date, interest shall accrue from such next succeeding Interest Payment Date,
provided, further, that the first Interest Payment Date shall be March 1, 1998.
The Company will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
from time to time on demand at a rate that is 1% per annum in excess of the rate
then in effect; it will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace periods) from time to
time on demand at the same rate to the extent lawful. Interest will be computed
on the basis of a 360-day year comprised of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Senior Notes
(except defaulted interest) to the Persons who are registered Holders of Senior
Notes at the close of business on the August 15 or February 15 next preceding
the Interest Payment Date, even if such Senior Notes are cancelled after such
record date and on or before such Interest Payment Date, except as provided in
Section 2.13 of the Indenture with respect to defaulted interest. The Senior
Notes shall be payable as to principal, premium and interest at the office or
agency of the Company maintained for such purpose within or without the City and
State of New York, or, at the option of the Company, payment of interest may be
made by check mailed to the Holders at their addresses set forth in the register
of Holders; provided that payment by wire transfer of immediately available
funds shall be required with respect to principal of, and interest and premium
on, all Global Notes and all other Senior Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, Bank of Montreal Trust Company,
the Trustee under the Indenture, shall act as Paying Agent and Registrar. The
Company may change any Paying Agent or Registrar without notice to any Holder.
The Company or any of its Subsidiaries may act in any such capacity.
4. INDENTURE AND PLEDGE AND SECURITY AGREEMENT. The Company issued the
Senior Notes under an Indenture dated as of August 27, 1997 (the "Indenture")
between the Company and the Trustee. The terms of the Senior Notes include those
stated in the Indenture and those made a part of the Indenture by reference to
the Trust Indenture Act of 1939, as amended (15 U.S. Code " 77aaa-77bbbb) (the
"TIA"). The Senior Notes are subject to all such terms, and Holders are referred
to the Indenture and the TIA for a statement of such terms. The Senior Notes are
secured by a plege of the Pledged Collateral (as defined in the Indenture)
pursuant to the Pledge and Security Agreement referred to in the Indenture. The
Senior Notes are senior obligations of the Company limited to $250.0 million in
aggregate principal amount at maturity.
A-3
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Company shall not have the option to redeem the Senior Notes prior to September
1, 2001. Thereafter, the Company shall have the option to redeem the Senior
Notes, in whole or in part, upon not less than 30 nor more than 60 days' notice,
at the redemption prices (expressed as percentages of principal amount set forth
below plus accrued and unpaid interest thereon and Liquidated Damages, if any,
to the applicable redemption date, if redeemed during the twelve-month period
beginning on September 1 of the years indicated below:
Year Percentage
2001....................................................... 106.125%
2002 and thereafter........................................ 103.063%
2003 and thereafter........................................ 100.000%
(b) Notwithstanding the foregoing, the Company, on or prior to
September 1, 2000, may redeem up to a maximum of 25% of the aggregate principal
amount of the Senior Notes then outstanding at a redemption price of 112.25% of
the principal amount thereof, with the net proceeds from either (i) an Initial
Public Offering of the common stock of the Company or (ii) a sale of the Capital
Stock (other than Disqualified Stock) of the Company to a Strategic Investor in
a single transaction or a series of related transactions for at least $25.0
million (clauses (i) and (ii) together, collectively referred to herein as
"Qualified Equity Offerings"); provided that, in either case, at least 75% in
aggregate principal amount of the Senior Notes remain outstanding immediately
after the occurrence of such redemption; and provided, further, that such
redemption shall occur within 90 days of the date of the closing of such
Qualified Equity Offering.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall not be
required to make mandatory redemption or sinking fund payments with respect to
the Senior Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, the Company shall be
required to make an offer (a "Change of Control Offer") to each Holder of the
Senior Notes to repurchase all or any part (equal to $1,000 or an integral
multiple thereof) of such Holder's Senior Notes at a purchase price equal to
101% of the aggregate principal amount thereof plus accrued and unpaid interest
and Liquidated Damages, if any, to the date of repurchase (the "Change of
Control Payment"). Within ten days following any Change of Control, the Company
shall mail a notice to each Holder setting forth the procedures governing the
Change of Control Offer as required by the Indenture.
(b) If the Company or any Subsidiary consummates any Asset Sales, within
five Business Days of each date on which the aggregate amount of Excess Proceeds
exceeds $2.5 million, the Company shall offer to purchase (an "Asset Sale
Offer") the maximum principal amount of Senior Notes and 13% Notes (on a pro
rata basis based upon the relative aggregate principal amount of 13% Notes (or,
prior to April 15, 2001, the aggregate Accreted Value of 13% Notes) then
outstanding that may be purchased out of the Excess Proceeds at an offer price
in cash equal to 100% of aggregate principal amount thereof, plus accrued and
unpaid
A-4
interest to the date of repurchase (or, in the case of repurchases of 13% Notes
prior to April 15, 2001, at a purchase price equal to 100% of the Accreted Value
thereof as of the date of repurchase) in accordance with the procedures set
forth in the Indenture, provided, that in the event of an Asset Sale of Stock
Collateral, the Company shall, purchase (i) first, all Senior Notes tendered
pursuant to such Asset Sale Offer in an aggregate principal amount equal to the
portion of such Excess Proceeds resulting from such Asset Sale of Stock
Collateral and (ii) second, all Senior Notes and 13% Notes on a pro rata basis
(in the same manner as described above) in an aggregate principal amount (or,
with respect to 13% Notes prior to April 15, 2001, an aggregate Accreted Value)
equal to the Excess Proceeds not used to purchase Senior Notes pursuant to
clause (i) of this proviso. The Senior Notes are in registered form without
coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of the Senior Notes may be registered and the Senior Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Senior Note or portion of a Senior Note
selected for redemption, except for the unredeemed portion of any Senior Note
being redeemed in part. Also, it need not exchange or register the transfer of
any Senior Notes for a period of 15 days before a selection of Senior Notes to
be redeemed or during the period between a record date and the corresponding
Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Senior Note may be
treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Senior Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the then outstanding
Senior Notes, and any existing default or compliance with any provision of the
Indenture, the Collateral Documents or the Senior Notes may be waived with the
consent of the Holders of a majority in aggregate principal amount of the then
outstanding Senior Notes. Without the consent of any Holder of a Senior Note,
the Indenture, the Collateral Documents or the Senior Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Senior Notes in addition to or in place of certificated Senior
Notes, to provide for the assumption of the Company's obligations to Holders of
the Senior Notes in case of a merger or consolidation, to make any change that
would provide any additional rights or benefits to the Holders of the Senior
Notes or that does not adversely affect the legal rights under the Indenture of
any such Holder, or to comply with the requirements of the SEC in order to
effect or maintain the qualification of the Indenture under the Trust Indenture
Act.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30
days in the payment when due of interest on, or Liquidated Damages with respect
to, the Senior Notes; (ii) default in payment when due of principal of or
premium, if any, on the Senior Notes when the same becomes due and payable at
maturity, upon redemption (including in connection with an offer to purchase) or
otherwise, (iii) failure by the Company to comply with Section 4.07, 4.10, 4.15
or 5.01 of the Indenture; (iv) failure by the Company to comply with Section
4.09 of the Indenture; provided that in the event that the Company fails to
comply with Section 4.09 of the Indenture because indebtedness is deemed to be
incurred by a Restricted Joint Venture solely as a result of such Restricted
Joint Venture ceasing to be a Restricted Joint Venture as a result of (x) the
loss of a Local Partner or (y) the loss of management control of such Restricted
Joint Venture, and such failure continues for 90 days; (v) failure by the
Company for 30 days after notice to the Company by the Trustee or the Holders of
at least 25% in principal amount of the Senior Notes then outstanding to comply
with certain other agreements in the Indenture or the Senior Notes; (vi) default
under certain other agreements relating to Indebtedness of the Company which
default results in the acceleration of such Indebtedness prior to its express
maturity; (vii) certain final judgments for the payment of money that remain
undischarged for a period of 60 days; (viii) any breach or default by the
Company in the performance of any
A-5
covenant set forth in the Collateral Agreements which breach or default
continues for 30 days, or any repudiation by the Company of its obligation under
any of the Collateral Agreements or the unenforceability of any of the
Collateral Agreements, for any reason; and (ix) certain events of bankruptcy or
insolvency with respect to the Company or any of its Significant Subsidiaries or
any of its Joint Ventures that would, if it were a Subsidiary, constitute a
Significant Subsidiary. If any Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Senior Notes may declare all the Senior Notes to be due and payable
immediately. Notwithstanding the foregoing, in the case of an Event of Default
arising from certain events of bankruptcy or insolvency with respect to the
Company, any of its Significant Subsidiaries or any Joint Venture that would, if
it were a Subsidiary constitute a Significant Subsidiary, or any group of
Subsidiaries or Joint Ventures that, taken together, would, constitute a
Significant Subsidiary, all outstanding Senior Notes shall become due and
payable without further action or notice. Holders of the Senior Notes may not
enforce the Indenture or the Senior Notes except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in principal amount of the
then outstanding Senior Notes may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Holders of the Senior Notes notice
of any continuing Default or Event of Default (except a Default or Event of
Default relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. The Holders of a majority in aggregate
principal amount of the Senior Notes then outstanding by notice to the Trustee
may on behalf of the Holders of all of the Senior Notes waive any existing
Default or Event of Default and its consequences under the Indenture, except a
continuing Default or Event of Default in the payment of interest on, or the
principal of, the Senior Notes. The Company is required to deliver to the
Trustee annually a statement regarding compliance with the Indenture, and the
Company is required upon becoming aware of any Default or Event of Default, to
deliver to the Trustee a statement specifying such Default or Event of Default.
13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not the Trustee.
14. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company, as such, shall not have any
liability for any obligations of the Company under the Senior Notes or the
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Senior Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Senior Notes.
15. AUTHENTICATION. This Senior Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES. In
addition to the rights provided to Holders of the Senior Notes under the
Indenture, Holders of Transferred Restricted Securities shall have all the
rights set forth in the Registration Rights Agreement dated as of August 27_,
1997, between the Company and the parties named on the signature pages thereof
(the "Registration Rights Agreement").
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Senior
A-6
Notes and the Trustee may use CUSIP numbers in notices of redemption as a
convenience to the Holders. No representation is made as to the accuracy of such
numbers either as printed on the Senior Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers
placed thereon.
The Company shall furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Hyperion Telecommunications, Inc.
Main at Xxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxxx, Xxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx
A-7
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
(Insert assignee's soc. sec. or tax I.D. no.)
(Print or type assignee's name, address and zip code)
and irrevocably appoint
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:
Your Signature:
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee.
A-8
SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL NOTE
The following exchanges of a part of this Regulation S Temporary Global Note for
an interest in another Global Note, or of other Restricted Global Notes for an
interest in this Regulation S Temporary Global Note, have been made:
Date of Exchange Amount of decrease in Amount of increase in Principal Amount Signature of
Principal Amount Principal Amount of this authorized officer of
of this of this Global Note Trustee or Note
Global Note Global Note following such decrease Custodian
(or increase)
X-0
XXXXXXX X-0
(Face of Unrestricted Note)
12 1/4% Series A/B Senior Secured Notes due 2004 No. $_______________
CUSIP NO. __________
HYPERION TELECOMMUNICATIONS, INC.
promises to pay to _____________________________________
or registered assigns,
the principal sum of $
dollars on [_____], 2004.
Interest Payment Dates: _________ and ________, of each year,
commencing __________, 1998.
Record Dates: _______ and _______
Dated: __________, 1997
HYPERION TELECOMMUNICATIONS, INC.
By:______________________________
Name: Xxxxxx X. Xxxxxxxx
Title: President and Secretary
By:______________________________
Name: Xxxxxx X. Xxxxxxx
Title: Vice President, Finance
This is one of the Global Senior Notes referred to in the within-mentioned
Indenture:
BANK OF MONTREAL TRUST COMPANY
as Trustee
By:__________________________________
Name:
Title:
A-3-1
(Back of Unrestricted Note)
12 1/4% Senior Secured Notes due 2004
[Unless and until it is exchanged in whole or in part for Notes in definitive
form, this Note may not be transferred except as a whole by the Depository to a
nominee of the Depository or by a nominee of the Depository to the Depository or
another nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository. Unless this
certificate is presented by an authorized representative of The Depository Trust
Company (55 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx) (ADTC@), to the issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or such other name as may be
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or such other entity as may be requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
Capitalized terms used herein shall have the meanings assigned to them in the
Indenture referred to below.
1. INTEREST. Hyperion Telecommunications, Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Senior Note
at the rate of 12-1/4% per annum from August 27, 1997 until maturity (including
any xxxxxx nal interest required to be paid pursuant to the provisions of the
Registration Rights Agreement) and will be payable semi-annually in cash on
September 1 and March 1 of each year, or if any such day is not a Business Day,
on the next succeeding Business Day (each an "Interest Payment Date"); provided
that in the event that the Company does not comply with Section 1A(a) and (b) of
the Pledge Agreement, the interest rate on the Senior Notes will automatically
increase by 0.25% per annum (the "Additional Interest") to 12-1/2% and the
Additional Interest shall continue until such time as the Company complies with
its obligations under Section 1A of the Pledge Agreement, at which time the
Additional Interest shall cease. Interest and Additional Interest, if any, on
the Senior Notes will accrue from the most recent date to which interest has
been paid or, if no interest has been paid, from the date of issuance; provided
that if there is no existing Default in the payment of interest, and if this
Senior Note is authenticated between a record date referred to on the face
hereof and the next succeeding Interest Payment Date, interest shall accrue from
such next succeeding Interest Payment Date, provided, further, that the first
Interest Payment Date shall be March 1, 1998. The Company will pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue principal and premium, if any, from time to time on demand at a rate
that is 1% per annum in excess of the rate then in effect; it will pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest and Liquidated Damages (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Senior Notes
(except defaulted interest) to the Persons who are registered Holders of Senior
Notes at the close of business on the August 15 or February 15 next preceding
the Interest Payment Date, even if such Senior Notes are cancelled after such
record date and on or before such Interest Payment Date, except as provided in
Section 2.13 of the Indenture with respect to defaulted interest. The Senior
Notes shall be payable as to principal, premium and interest at the office or
agency of the Company maintained for such purpose within or without the City and
State of New York, or, at the option of the Company, payment of interest may be
made by check mailed to the Holders at their addresses set forth in the register
of Holders; provided that payment by wire transfer of immediately available
funds shall be required with respect to principal of, and interest and premium
on, all Global Notes and all other Senior Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, Bank of Montreal Trust Company, the
Trustee under the Indenture, shall act as Paying Agent and Registrar. The
Company may change any Paying Agent or Registrar without notice to any Holder.
The Company or any of its Subsidiaries may act in any such capacity.
4. INDENTURE AND PLEDGE AND SECURITY AGREEMENT . The Company issued the Senior
Notes under an Indenture dated as of August 27, 1997 (the "Indenture") between
the Company and the Trustee. The terms of the Senior Notes include those stated
in the Indenture and those made a part of the Indenture by reference to the
Trust Indenture Act of 1939, as amended (15 U.S. Code " 77aaa-77bbbb) (the
"TIA"). The Senior Notes are subject to all such terms, and Holders are referred
to the Indenture and the TIA for a statement of such terms. The Senior Notes are
senior obligations of the Company limited to $250.0 million in aggregate
principal amount at maturity. The Senior Notes are secured by a pledge of the
Pledged Collateral (as defined in the Indenture) pursuant to the Pledge and
Security Agreement referred to in the Indenture.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the Company
shall not have the option to redeem the Senior Notes prior to September 1, 2001.
Thereafter, the Company shall have the option to redeem the Senior Notes, in
whole or in part, upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed as percentages of principal amount set forth below
plus accrued and unpaid interest thereon and Liquidated Damages, if any, to the
applicable redemption date, if redeemed during the twelve-month period beginning
on September 1 of the years indicated below:
Year Percentage
2001....................................................... 106.125%
2002 and thereafter. ...................................... 103.063%
2003 and thereafter........................................ 100.000%
(b) Notwithstanding the foregoing, the Company, on or prior to
September 1, 2000, may redeem up to a maximum of 25% of the aggregate principal
amount of the Senior Notes then outstanding at a redemption price of 112.25% of
the principal amount thereof, with the net proceeds from either (i) an Initial
Public Offering of the common stock of the Company or (ii) a sale of the Capital
Stock (other than Disqualified Stock) of the Company to a Strategic Investor in
a single transaction or a series of related transactions for at least $25.0
million (clauses (i) and (ii) together, collectively referred to herein as
"Qualified Equity Offerings"); provided that, in either case, at least 75% in
aggregate principal amount of the Senior Notes remain outstanding immediately
after the occurrence of such redemption; and provided, further, that such
redemption shall occur within 90 days of the date of the closing of such
Qualified Equity Offering.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall not be
required to make mandatory redemption or sinking fund payments with respect to
the Senior Notes.
X-0
0. XXXXXXXXXX AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, the Company shall be
required to make an offer (a "Change of Control Offer") to each Holder of the
Senior Notes to repurchase all or any part (equal to $1,000 or an integral
multiple thereof) of such Holder's Senior Notes at a purchase price equal to
101% of the aggregate principal amount thereof plus accrued and unpaid interest
and Liquidated Damages, if any, to the date of repurchase (the "Change of
Control Payment"). Within ten days following any Change of Control, the Company
shall mail a notice to each Holder setting forth the procedures governing the
Change of Control Offer as required by the Indenture.
(b) If the Company or any Subsidiary consummates any Asset Sales, within
five Business Days of each date on which the aggregate amount of Excess Proceeds
exceeds $2.5 million, the Company shall offer to purchase (an "Asset Sale
Offer") the maximum principal amount of Senior Notes and 13% Notes (on a pro
rata basis based upon the relative aggregate principal amount of 13% Notes (or,
prior to April 15, 2001, the aggregate Accreted Value of 13% Notes) then
outstanding that may be purchased out of the Excess Proceeds at an offer price
in cash equal to 100% of aggregate principal amount thereof, plus accrued and
unpaid interest to the date of repurchase (or, in the case of repurchases of 13%
Notes prior to April 15, 2001, at a purchase price equal to 100% of the Accreted
Value thereof as of the date of repurchase) in accordance with the procedures
set forth in the Indenture, provided, that in the event of an Asset Sale of
Stock Collateral, the Company shall, purchase (i) first, all Senior Notes
tendered pursuant to such Asset Sale Offer in an aggregate principal amount
equal to the portion of such Excess Proceeds resulting from such Asset Sale of
Stock Collateral and (ii) second, all Senior Notes and 13% Notes on a pro rata
basis (in the same manner as described above) in an aggregate principal amount
(or, with respect to 13% Notes prior to April 15, 2001, an aggregate Accreted
Value) equal to the Excess Proceeds not used to purchase Senior Notes pursuant
to clause (i) of this proviso. The Senior Notes are in registered form without
coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of the Senior Notes may be registered and the Senior Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Senior Note or portion of a Senior Note
selected for redemption, except for the unredeemed portion of any Senior Note
being redeemed in part. Also, it need not exchange or register the transfer of
any Senior Notes for a period of 15 days before a selection of Senior Notes to
be redeemed or during the period between a record date and the corresponding
Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Senior Note may be
treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Senior Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the then outstanding
Senior Notes, and any existing default or compliance with any provision of the
Indenture, the Collateral Documents or the Senior Notes may be waived with the
consent of the Holders of a majority in aggregate principal amount of the then
outstanding Senior Notes. Without the consent of any Holder of a Senior Note,
the Indenture, the Collateral Documents or the Senior Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Senior Notes in addition to or in place of certificated Senior
Notes, to provide for the assumption of the Company's obligations to Holders of
the Senior Notes in case of a merger or consolidation, to make any change that
would provide any additional rights or benefits to the Holders of the Senior
Notes or that does not adversely affect the legal rights under the Indenture of
any such Holder, or to comply with the requirements of the SEC
A-4
in order to effect or maintain the qualification of the Indenture under the
Trust Indenture Act.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30
days in the payment when due of interest on, or Liquidated Damages with respect
to, the Senior Notes; (ii) default in payment when due of principal of or
premium, if any, on the Senior Notes when the same becomes due and payable at
maturity, upon redemption (including in connection with an offer to purchase) or
otherwise, (iii) failure by the Company to comply with Section 4.07, 4.10, 4.15
or 5.01 of the Indenture; (iv) failure by the Company to comply with Section
4.09 of the Indenture; provided that in the event that the Company fails to
comply with Section 4.09 of the Indenture because indebtedness is deemed to be
incurred by a Restricted Joint Venture solely as a result of such Restricted
Joint Venture ceasing to be a Restricted Joint Venture as a result of (x) the
loss of a Local Partner or (y) the loss of management control of such Restricted
Joint Venture, and such failure continues for 90 days; (v) failure by the
Company for 30 days after notice to the Company by the Trustee or the Holders of
at least 25% in principal amount of the Senior Notes then outstanding to comply
with certain other agreements in the Indenture or the Senior Notes; (vi) default
under certain other agreements relating to Indebtedness of the Company which
default results in the acceleration of such Indebtedness prior to its express
maturity; (vii) certain final judgments for the payment of money that remain
undischarged for a period of 60 days; (viii) any breach or default by the
Company in the performance of any covenant set forth in the Collateral
Agreements which breach or default continues for 30 days, or any repudiation by
the Company of its obligation under any of the Collateral Agreements or the
unenforceability of any of the Collateral Agreements, for any reason; and (ix)
certain events of bankruptcy or insolvency with respect to the Company or any of
its Significant Subsidiaries or any of its Joint Ventures that would, if it were
a Subsidiary, constitute a Significant Subsidiary. If any Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Senior Notes may declare all the Senior
Notes to be due and payable immediately. Notwithstanding the foregoing, in the
case of an Event of Default arising from certain events of bankruptcy or
insolvency with respect to the Company, any of its Significant Subsidiaries or
any Joint Venture that would, if it were a Subsidiary constitute a Significant
Subsidiary, or any group of Subsidiaries or Joint Ventures that, taken together,
would, constitute a Significant Subsidiary, all outstanding Senior Notes shall
become due and payable without further action or notice. Holders of the Senior
Notes may not enforce the Indenture or the Senior Notes except as provided in
the Indenture. Subject to certain limitations, Holders of a majority in
principal amount of the then outstanding Senior Notes may direct the Trustee in
its exercise of any trust or power. The Trustee may withhold from Holders of the
Senior Notes notice of any continuing Default or Event of Default (except a
Default or Event of Default relating to the payment of principal or interest) if
it determines that withholding notice is in their interest. The Holders of a
majority in aggregate principal amount of the Senior Notes then outstanding by
notice to the Trustee may on behalf of the Holders of all of the Senior Notes
waive any existing Default or Event of Default and its consequences under the
Indenture, except a continuing Default or Event of Default in the payment of
interest on, or the principal of, the Senior Notes. The Company is required to
deliver to the Trustee annually a statement regarding compliance with the
Indenture, and the Company is required upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default.
13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not the Trustee.
14. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company, as such, shall not have any
liability for any obligations of the Company under the Senior Notes or the
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Senior Note waives and
releases all such liability. The waiver and release are
A-5
part of the consideration for the issuance of the Senior Notes.
15. AUTHENTICATION. This Senior Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES. In
addition to the rights provided to Holders of the Senior Notes under the
Indenture, Holders of Transferred Restricted Securities shall have all the
rights set forth in the Registration Rights Agreement dated as of August 27,
1997, between the Company and the parties named on the signature pages thereof
(the "Registration Rights Agreement").
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Senior Notes and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to the Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Senior Notes or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
The Company shall furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Hyperion Telecommunications, Inc.
Main at Xxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxxx, Xxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx
A-6
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Hyperion Telecommunications, Inc.
Main at Xxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxxx, Xxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx
Bank of Montreal Trust Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Re: 12 1/4% Senior Secured Notes due 2004
Reference is hereby made to the Indenture, dated as of August 27, 1997
(the AIndenture@), between Hyperion Telecommunications, Inc., as issuer (the
ACompany@), and Bank of Montreal Trust Company, as trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.
______________, (the ATransferor@) owns and proposes to transfer the
Senior Note[s] or interest in such Senior Note[s] specified in Annex A hereto,
in the principal amount of $___________ in such Senior Note[s] or interests (the
ATransfer@), to __________ (the ATransferee@), as further specified in Annex A
hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1.__Check if Transferee will take delivery of a beneficial interest in the 144A
Global Note or a Restricted Definitive Note Pursuant to Rule 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the ASecurities Act@), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Restricted Definitive Note is being transferred to a Person that the
Transferor reasonably believed and believes is purchasing the beneficial
interest or Restricted Definitive Note for its own account, or for one or more
accounts with respect to which such Person exercises sole investment discretion,
and such Person and each such account is a Aqualified institutional buyer@
within the meaning of Rule 144A in a transaction meeting the requirements of
Rule 144A and such Transfer is in compliance with any applicable blue sky
securities laws of any state of the United States. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Restricted Definitive Note will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the 144A Global Note and/or the Restricted Definitive Note and in the Indenture
and the Securities Act.
2.__Check if Transferee will take delivery of a beneficial interest in the
Temporary Regulation S Global Note, the Regulation S Global Note or a Restricted
Definitive Note pursuant to Regulation S. The Transfer is being effected
pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act
and, accordingly, the Transferor hereby further certifies that (i) the Transfer
is not being made to a person in the United States and (x) at the time the buy
order was originated, the Transferee was outside the United
B-1
States or such Transferor and any Person acting on its behalf reasonably
believed and believes that the Transferee was outside the United States or (y)
the transaction was executed in, on or through the facilities of a designated
offshore securities market and neither such Transferor nor any Person acting on
its behalf knows that the transaction was prearranged with a buyer in the United
States, (ii) no directed selling efforts have been made in contravention of the
requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities
Act, (iii) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act and (iv) if the proposed
transfer is being made prior to the expiration of the Restricted Period, the
transfer is not being made to a U.S. Person or for the account or benefit of a
U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed
transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Restricted Definitive Note will be subject to the
restrictions on Transfer enumerated in the Private Placement Legend printed on
the Regulation S Global Note, the Temporary Regulation S Global Note and/or the
Definitive Note and in the Indenture and the Securities Act.
3.__Check and complete if Transferee will take delivery of a Restricted
Definitive Note pursuant to any provision of the Securities Act other than Rule
144A or Regulation S. The Transfer is being effected in compliance with the
transfer restrictions applicable to Restricted Definitive Notes and pursuant to
and in accordance with the Securities Act and any applicable blue sky securities
laws of any state of the United States, and accordingly the Transferor hereby
further certifies that (check one):
(a)__such Transfer is being effected pursuant to and in accordance with
Rule 144 under the Securities Act;
or
(b)__such Transfer is being effected to the Company or a Subsidiary
thereof;
or
(c)__such Transfer is being effected pursuant to an effective registration
statement under the Securities Act and in compliance with the prospectus
delivery requirements of the Securities Act;
or
(d)__such Transfer is being effected to an Accredited Investor and pursuant
to an exemption from the registration requirements of the Securities Act other
than Rule 144A, Rule 144 or Rule 904, and the Transferor hereby further
certifies that the Transfer complies with the transfer restrictions applicable
to Restricted Definitive Notes and the requirements of the exemption claimed,
which certification is supported by (1) a certificate executed by the Transferee
in the form of Exhibit D to the Indenture and (2) if such Transfer is in respect
of a principal amount of Notes at the time of transfer of less than $100,000, an
Opinion of Counsel provided by the Transferor or the Transferee (a copy of which
the Transferor has attached to this certification), to the effect that such
Transfer is in compliance with the Securities Act. Upon consummation of the
proposed transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Restricted Definitive Note will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Definitive Notes and in the Indenture and the Securities Act.
4.__Check if Transferee will take delivery of a beneficial interest in an
Unrestricted Global Note or of an Unrestricted Definitive Note.
(a)__Check if Transfer is pursuant to Rule 144. (i) The Transfer is being
effected pursuant to and in accordance with Rule 144 under the Securities Act
and in compliance with the transfer restrictions contained in the Indenture and
any applicable blue sky securities laws of any state of the United States and
(ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order
to maintain compliance with the Securities Act. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Unrestricted Definitive Note will no longer be subject to
the restrictions on transfer enumerated in the Private Placement Legend printed
on the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.
(b)__Check if Transfer is Pursuant to Regulation S. (i) The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Unrestricted Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.
(c)__Check if Transfer is Pursuant to Other Exemption. (i) The Transfer is
being effected pursuant to and in compliance with an exemption from the
registration requirements of the Securities Act other than Rule 144, Rule 903 or
Rule 904 and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any State of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Unrestricted Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
[Insert Name of Transferor]
By:
Name:
Title:
Dated: ,
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B-3
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a)__a beneficial interest in the:
(i) __ 144A Global Note (CUSIP ), or
(ii) __ Regulation S Global Note (CUSIP/CINS ), or
(b)__a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a)__a beneficial interest in the:
(i) __ 144A Global Note (CUSIP ), or
(ii) __ Regulation S Global Note (CUSIP/CINS ), or
(iii) __ Unrestricted Global Note (CUSIP ); or
(b)__a Restricted Definitive Note; or
(c)__an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
B-4
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Hyperion Telecommunications, Inc.
Main at Xxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxxx, Xxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx
Bank of Montreal Trust Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Re: 12 1/4% Senior Secured Notes due 2004 (CUSIP )
-- ---- ------ ------- ----- --- ---- ------
Reference is hereby made to the Indenture, dated as of August 27, 1997
(the AIndenture@), between Hyperion Telecommunications, Inc., as issuer (the
ACompany@), and Bank of Montreal Trust Company, as trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.
, (the AOwner@) owns and proposes to exchange the Senior
Note[s] or interest in such Senior Note[s] specified herein, in the
principal amount of $____________ in such Note[s] or interests (the AExchange@).
In connection with the Exchange, the Owner hereby certifies that:
0.Xxxxxxxx of Restricted Definitive Notes or Beneficial Interests in a
Restricted Global Note for Unrestricted Definitive Notes or Beneficial
Interests in an Unrestricted Global Note
(a)GCheck if Exchange is from beneficial interest in a Restricted
Global Note to beneficial interest in an Unrestricted Global Note. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the United States
Securities Act of 1933, as amended (the ASecurities Act@), (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the beneficial interest in an Unrestricted Global Note is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(b)GCheck if Exchange is from beneficial interest in a Restricted
Global Note to Unrestricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired
C-1
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for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Unrestricted Definitive Note is being acquired
in compliance with any applicable blue sky securities laws of any state of the
United States.
(c)GCheck if Exchange is from Restricted Definitive Note to beneficial
interest in an Unrestricted Global Note. In connection with the Owner's Exchange
of a Restricted Definitive Note for a beneficial interest in an Unrestricted
Global Note, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d)GCheck if Exchange is from Restricted Definitive Note to
Unrestricted Definitive Note. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
0.Xxxxxxxx of Restricted Definitive Notes or Beneficial Interests in Restricted
Global Notes for Restricted Definitive Notes or Beneficial Interests in
Restricted Global Notes
(a)GCheck if Exchange is from beneficial interest in a Restricted
Global Note to Restricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b)GCheck if Exchange is from Restricted Definitive Note to beneficial
interest in a Restricted Global Note. In connection with the Exchange of the
Owner's Restricted Definitive Note for a beneficial interest in the [CHECK ONE]
G 144A Global Note or G Regulation S Global Note, with an equal principal
amount, the Owner hereby certifies (i) such Owner acquired such Restricted
Definitive Note in a transaction pursuant to Rule 144A or Regulation S, (ii) the
beneficial interest is being acquired for the Owner's own account without
transfer and (iii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any applicable
blue sky securities laws of any state of the United States. Upon consummation of
the proposed Exchange in accordance with the terms of the Indenture, the
beneficial interest issued will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the relevant Restricted
Global Note and in the Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
C-2
B-2
[Insert Name of Owner]
By:
Name:
Title:
Dated: ,
C-3
B-3
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Re: 12 1/4% Senior Secured Notes due 2004
Reference is hereby made to the Indenture, dated as of August 27, 1997
(the AIndenture@), between Hyperion Telecommunications, Inc., as issuer (the
ACompany@), and Bank of Montreal Trust Company, as trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of Restricted Definitive Notes we confirm that:
1. We understand that any subsequent transfer of the Senior Notes or
any interest therein is subject to certain restrictions and conditions set forth
in the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Senior Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the ASecurities Act@).
2. We understand that the Senior Notes have not been registered under
the Securities Act, and that the Senior Notes and any interest therein may not
be offered or sold except as permitted in the following sentence. We agree, on
our own behalf and on behalf of each account for which we acquire any Notes (for
which are acting as hereinafter stated), that such Notes may be offered, resold,
pledged or otherwise transferred only (i) to a person whom we reasonably believe
to be a Aqualified institutional buyer@ (as defined in Rule 144A under the
Securities Act) in a transaction meeting the requirements of Rule 144A, in a
transaction meeting the requirements of Rule 144 under the Securities Act,
outside the United States in a transaction meeting the requirements of Rule 904
under the Securities Act, or in accordance with another exemption from the
registration requirements of the Securities Act (and based upon an opinion of
counsel if the Company so Requests), (ii) to the Company or (iii) pursuant to an
effective registration statement, and, in each case, in accordance with any
applicable securities laws of any State of the United States or any other
applicable jurisdiction. We further agreement to provide to any person
purchasing the Definitive Note or a beneficial interest in a Global Note from us
in a transaction meeting the requirements of (i) or (ii) of this paragraph a
notice advising such purchaser that resales thereof are restricted as stated
herein.
3. We understand that, on any proposed resale of the Senior Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Senior Notes
purchased by us will bear a legend to the foregoing effect. We further
understand that any subsequent transfer by us of the Senior Notes or beneficial
interest therein acquired by us must be effected through one of the Placement
Agents.
4. We are an institutional Aaccredited investor@ (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Senior Notes, and we
and any accounts for which we are acting are each able to bear the economic risk
of our or its investment.
X-0
X-0
5. We are acquiring the Senior Notes without a view to distribution
thereof in violation of the Securities Act for our own account or for one or
more accounts (each of which is an institutional Aaccredited investor@) as to
each of which we exercise sole investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
[Insert Name of Accredited Investor]
By:
Name:
Title:
Dated: ,
ANNEX A
Form of Intercompany Note
FOR VALUE RECEIVED, __________________, a _______________ corporation
(the "Maker"), promises to pay Hyperion Telecommunications, Inc., a Delaware
corporation (the "Lender"), or order to be paid, all cash advanced, from time to
time, together with interest on the unpaid principal amount at a rate per annum
equal to ___%, to the date of payment. All principal and accrued interest under
this Note shall be due and payable on demand][on ____________].
This Note may be prepaid in whole or in part at any time without
penalty or premium.
The right to please any and all statutes of limitations as a defense to
demand hereunder is hereby waived to the extent permitted by law. The Maker, for
itself and its successors and assigns, waives presentment, demand, protest and
notice thereof or of dishonor, and waives the right to be released by reason of
any extension of time or change in the terms of payment or any change,
alteration, or release of any security given for the payment hereof.
This Note shall be governed by and construed in accordance with the
laws of the State of New York.
[MAKER]
By: ____________________________
Name:
Title:
Hyperion Telecommunications, Inc.
By: ____________________
Name:
Title:
X-0
X-0
SCHEDULE A
Fiber Lease Agreements
Lease Agreement, dated as of December 12, 1995, by and between PECO
Energy Company and PECO Hyperion Telecommunications.
Lease Agreement, dated as of September 29, 1995, by and between Capital
Telecommunications, Inc. and Hyperion Telecommunications of Harrisburg.
Facilities Lease Agreement, dated as of June 1, 1995, by and between TKR
Cable Company and New Jersey Fiber Technologies.
Lease Agreement, dated 1993, by and between Multimedia Cablevision, Inc.
and Multimedia Hyperion Telecommunications.
Facilities Agreement, dated as of June 30, 1994, by and between
International Cablevision, Inc. and NHT Partnership.
Fiber Usage Master Agreement, dated as of August 1, 1992, by and between
NewChannels Corp. and NewChannels/Hyperion Telecommunications of New
York.
Fiber Usage Master Agreement, dated as of August 1, 1992, by and between
NewChannels/Hyperion Telecommunications of New York and Ionian
Communications, L.P. d/b/a Adelphia Cable Communications.
License Agreement, dated as of 1992, by and between Continental
Cablevision of Jacksonville, Inc. and Continental Fiber Technologies,
Inc.
Facilities Lease Agreement, dated as of January 30, 1995, by and between
TCI TKR of Jefferson County, Inc. and Louisville Lightwave.
Contract for the Use of Capacity, dated as of May 1, 1994, as amended, by
and between Viacom International, Inc. and AVR of Tennessee, L.P., d/b/a
Hyperion of Tennessee, L.P.
Facilities Agreement dated as of September 20, 1993, between TCI of
New York, Inc. and NHT Partnership.
License Agreement dated November 1, 1992, between Continental Cablevision
of Virginia, Inc. and Alternet of Virginia.
Facilities Agreement dated as of July 10, 1996, between TCI of Lexington,
Inc. and Louisville Lightwave.
D-4
Lease Agreement between Susquehanna Cable Co. and Susquehanna Hyperion
Telecommunications, dated as of August 1, 1996, as amended.
Lease Agreement by and between Multi-Channel T.V. Cable Company d/b/a
Adelphia Cable Communications and Hyperion Telecommunications of Vermont,
Inc.
D-5
SCHEDULE B
Local Partners
PECO Energy Company
Capital Telecommunications, Inc.
Xxxxxx Capital Associates, Inc.
KRC/CCC Investment Partnership
A.C. Communications Inc.
Continental Telecommunications Corp. of Virginia
Multimedia Telecommunications, Inc.
TCI Telephony, Inc.
NewChannels Telecommunications of New York, Inc.
Continental Cablevision Investments, Inc.
TKR Cable of Kentucky, Inc.
Viacom Telecom Inc.
Xxxxx Media Group, Inc.
InterMedia Partners Southeast
CCC-NJFT, Inc.
Advance/Xxxxxxxx Partnership
Digital Direct, Inc.
Xxxxxxx Telephony, Inc.
Entergy Local Fiber Company, a division of Entergy Technology Holding
Company
Susquehanna Fiber Systems, Inc.
MediaOne
KRC-NJFT, Inc.
Any other Local Partners listed under, or who are parties to the Local
Partner Agreements
D-6
listed on, Schedule C.
D-7
SCHEDULE C
Local Partner Agreements
Partnership Agreement of PECO Hyperion Telecommunications, dated as of
October 9, 1995, by and between Hyperion Telecommunications of
Pennsylvania, Inc. and PECO Energy Company.
Partnership Agreement of Hyperion Telecommunications of Harrisburg, dated
as of September 25, 1994 between Hyperion Telecommunications of
Pennsylvania, Inc. and Capital Telecommunications, Inc., as amended.
New Jersey Fiber Technologies Partnership Agreement, dated as of June
1994, by and among Hyperion Telecommunications of New Jersey, Inc.,
Xxxxxx Capital Associates, Inc., KRC/CCC Investment Partnership and A.C.
Communications Inc.
Joint Venture Agreement of Alternet of Virginia, dated as of November 1,
1992, by and between Hyperion Telecommunications of Virginia, Inc. and
Continental Telecommunications Corp. of Virginia.
General Partnership Agreement of Multimedia Hyperion Telecommunications,
dated as of September 1, 1993, by and between Hyperion Telecommunications
of Kansas, Inc., (assignee of Hyperion Telecommunications, Inc.) and
Multimedia Telecommunications, Inc.
NHT Partnership Agreement, dated as of September 20, 1993, by and among
Hyperion Telecommunications of New York, Inc., TCI Telephony, Inc. and
NewChannels Telecommunications of New York, Inc.
NewChannels/Hyperion Telecommunications of New York Agreement of General
Partnership, dated as of August 1, 1992 between Hyperion
Telecommunications of New York, Inc. and NewChannels Telecommunications
of New York, Inc., as amended, including First Addendum and Second
Addendum thereto.
Continental Fiber Technologies, Inc. Stock Purchase and Stockholders'
Agreement, dated as of August 31, 1992, by and among Hyperion
Telecommunications of Florida, Inc., Continental Cablevision Investments,
Inc. and Continental Fiber Technologies, Inc., n/k/a MediaOne Fiber
Technologies, Inc.
Limited Partnership Agreement of AVR of Tennessee, L.P., dated as of
November 15, 1993, by and among Hyperion Telecommunications of Tennessee,
Inc., InterMedia Partners Southeast and Xxxxx Media Group, Inc., as
amended.
Louisville Lightwave General Partnership Agreement, dated as of July 20,
1994, by and between Hyperion Telecommunication of Kentucky, Inc. and TKR
Cable of Kentucky, Inc., as amended.
D-8
Limited Partnership Agreement of Hyperion of Tennessee, L.P., dated as of
July 31, 1996, by and among Hyperion Telecommunications of Tennessee,
Inc., InterMedia Partners Southeast and Xxxxx Media Group, Inc., as
amended.
Partnership Agreement of Susquehanna Hyperion Telecommunications by and
between Hyperion Telecommunications of Pennsylvania, Inc., and
Susquehanna Fiber Systems, Inc., dated as of August 1, 1996.
Operating Agreement of Entergy Hyperion Telecommunications of Louisiana,
L.L.C. dated as of April 24, 1997.
Operating Agreement of Entergy Hyperion Telecommunications of
Mississippi, L.L.C. dated as of April 24, 1997.
Operating Agreement of Entergy Hyperion Telecommunications of Arkansas,
L.L.C. dated as of April 24, 1997.
D-9
SCHEDULE D
Management Agreements
Management Agreement, dated as of October 1995, by and between Hyperion
Telecommunications, Inc. and PECO Hyperion Telecommunications.
Management Agreement, dated as of September 29, 1995, by and between
Hyperion Telecommunications, Inc. and Hyperion Telecommunications of
Harrisburg.
Management Agreement, dated as of June 1995, by and between Hyperion
Telecommunications, Inc. and New Jersey Fiber Technologies.
Management and Consulting Agreement, dated as of November 1, 1992, by and
between Hyperion Telecommunications of Virginia, Inc. and Alternet of
Virginia.
Services Agreement, dated as of November 18, 1993, by and between
Hyperion Telecommunications, Inc. and Multimedia Hyperion
Telecommunications.
Management Agreement, dated as of June 30, 1994, by and between Hyperion
Telecommunications of New York, Inc. and NHT Partnership.
Letter Agreement, dated as of July 13, 1994, by and among Hyperion
Telecommunications, Inc. and NewChannels Hyperion Telecommunications (re:
accounting).
Network Monitoring Agreement, dated as of October 1, 1994, by and among
Hyperion Telecommunications, Inc. and NewChannels Hyperion
Telecommunications.
Network Monitoring Agreement, dated as of August 1, 1993, between EMI
Communications Corp. and NewChannels Hyperion Telecommunications.
Letter Agreement, dated August 16, 1993, as amended November 1994,
between Hyperion Telecommunications, Inc. and NewChannels Hyperion
Telecommunications (re:
accounting).
Letter Agreement, dated February 28, 1995, between Hyperion
Telecommunications, Inc. and NewChannels Hyperion Telecommunications (re:
accounting).
Network Monitoring Agreement, dated as of October 1, 1993, by and between
Hyperion Telecommunications, Inc. and Continental Fiber Technologies
d/b/a AlterNet, n/k/a MediaOne Fiber Technologies, Inc.
Management Agreement, dated as of January 30, 1995, by and between
Hyperion Telecommunications, Inc. and Louisville Lightwave.
- 10 -
D-10
Management Agreement, dated as of November 15, 1993, by and between
Hyperion Telecommunications, Inc. and AVR of Tennessee, L.P., d/b/a
Hyperion of Tennessee, L.P., as amended.
Management Agreement, dated as of January 1, 1995, by and between
Hyperion Telecommunications, Inc. and Hyperion Telecommunications of
Vermont, Inc.
Management Agreement, dated as of June 27, 1995, by and between Hyperion
Telecommunications, Inc. and Hyperion Telecommunications of Virginia,
Inc.
Network Monitoring Agreement, dated as of October 1, 1993, between
Hyperion Telecommunications, Inc. and Alternet of Virginia.
Management and Consulting Agreement, dated as of June 1992, by and
between Hyperion Telecommunications of Florida, Inc. and Continental
Fiber Technologies, Inc.
Network Monitoring Agreement, dated as of December 1, 1994, between
Hyperion Telecommunications, Inc. and NewChannels Hyperion
Telecommunications.
Management Agreement between Hyperion Telecommunications, Inc. and
Entergy Hyperion Telecommunications of Louisiana, L.L.C. dated as of
April 24, 1997.
Management Agreement between Hyperion Telecommunications, Inc. and
Entergy Hyperion Telecommunications of Mississippi, L.L.C. dated as of
April 24, 1997.
Management Agreement between Hyperion Telecommunications, Inc. and
Entergy Hyperion Telecommunications of Arkansas, L.L.C. dated as of April
24, 1997.
Management Agreement between Hyperion Telecommunications, Inc. and
Susquehanna Hyperion Telecommunications, dated as of August 1, 1996, as
amended.
D-11
SCHEDULE E
Form of Financial Information and Operating Data
of the Subsidiaries and the Joint Ventures Presented by Cluster
Data presented for the fiscal period ended ____________:
===========================================================================================================================
NORTH MID- MID-SOUTH OTHER
EAST ATLANTIC NETWORKS
FINANCIAL DATA
---------------------------------------------------------------------------------------------------------------------------
Total Revenue
---------------------------------------------------------------------------------------------------------------------------
Total Capital Expenditures
---------------------------------------------------------------------------------------------------------------------------
Total EBITDA
---------------------------------------------------------------------------------------------------------------------------
Proportional Revenue\*
---------------------------------------------------------------------------------------------------------------------------
Proportional Capital
Expenditures\*
---------------------------------------------------------------------------------------------------------------------------
Proportional EBITDA\*
---------------------------------------------------------------------------------------------------------------------------
STATISTICAL DATA
---------------------------------------------------------------------------------------------------------------------------
Route Miles
---------------------------------------------------------------------------------------------------------------------------
Fiber Miles
---------------------------------------------------------------------------------------------------------------------------
Buildings connected
---------------------------------------------------------------------------------------------------------------------------
LEC-COs collocated\**
---------------------------------------------------------------------------------------------------------------------------
Voice Grade Equivalent
Circuits
===========================================================================================================================
\* Represents portion of revenue attributable to the Company.
\** Local Exchange Carrier's central office.
D-12
SCHEDULE F
Form of Financial Information and Operating
Data of Hyperion of Tennessee, Inc., Hyperion of
Florida, Inc., Hyperion of Vermont, Inc., Hyperion
of Kentucky, Inc. and Hyperion of New York, Inc.
Data presented for the fiscal period ended_________________:
========================================================================================================================
FINANCIAL DATA ($ in thousands)
------------------------------------------------------------------------------------------------------------------------
Total Revenue
------------------------------------------------------------------------------------------------------------------------
Total Capital Expenditures
------------------------------------------------------------------------------------------------------------------------
Total EBITDA
------------------------------------------------------------------------------------------------------------------------
Gross Property, Plant and Equipment
------------------------------------------------------------------------------------------------------------------------
STATISTICAL DATA
------------------------------------------------------------------------------------------------------------------------
Route Miles
------------------------------------------------------------------------------------------------------------------------
Fiber Miles
------------------------------------------------------------------------------------------------------------------------
Buildings connected
------------------------------------------------------------------------------------------------------------------------
LEC-COs collocated\*
------------------------------------------------------------------------------------------------------------------------
Voice Grade Equivalent
Circuits
------------------------------------------------------------------------------------------------------------------------
Access Lines
========================================================================================================================
\* Local Exchange Carrier's central office.
D-13
HYPERION TELECOMMUNICATIONS, INC.
SERIES A AND SERIES B
12 1/4% SENIOR SECURED NOTES DUE 2004
-----------------
INDENTURE
Dated as of August 27, 1997
-----------------
-----------------
BANK OF MONTREAL TRUST COMPANY
-----------------
Trustee
D-14
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310 (a)(1)..................................................................... 7.10
(a)(2).................................................................... 7.10
(a)(3) ................................................................... N.A.
(a)(4).................................................................... N.A.
(a)(5).................................................................... 7.10
(b) ...................................................................... 7.10
(c) ...................................................................... N.A.
311 (a) ....................................................................... 7.11
(b) ...................................................................... 7.11
(c) ...................................................................... N.A.
312 (a)........................................................................ 2.05
(b)....................................................................... 11.03
(c) ...................................................................... 11.03
313 (a) ....................................................................... 7.06
(b)(1) ................................................................... 10.03
(b)(2) ................................................................... 7.06
(c) ...................................................................... 7.06;10.03;11.02
(d)....................................................................... 7.06;10.03
314 (a) ....................................................................... 4.03;11.02;11.05
(b) ...................................................................... 10.02;10.03
(c)(1) ................................................................... 10.04
(c)(2) ................................................................... N.A.
(c)(3) ................................................................... N.A.
(d).......................................................................10.03;10.04;10.05
(e) ..................................................................... 11.05
(f)....................................................................... N.A.
315 (a)........................................................................ 7.01
(b)....................................................................... 7.05,11.02
(c) ..................................................................... 7.01
(d)....................................................................... 7.01
(e)....................................................................... 6.11
316 (a)(last sentence) ........................................................ 2.09
(a)(1)(A)................................................................. 6.05
(a)(1)(B) ................................................................ 6.04
(a)(2) ................................................................... N.A.
(b) ...................................................................... 6.07
(c) ...................................................................... 2.12
317 (a)(1) .................................................................... 6.08
(a)(2).................................................................... 6.09
(b) ...................................................................... 2.04
318 (a)........................................................................ 11.01
(b)....................................................................... N.A.
(c)....................................................................... 11.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions....................................................... 1
Section 1.02. Other Definitions................................................. 18
Section 1.03. Incorporation by Reference of Trust Indenture Act................. 19
Section 1.04. Rules of Construction............................................. 19
ARTICLE 2
THE SENIOR NOTES
Section 2.01. Form and Dating................................................... 20
Section 2.02. Execution and Authentication...................................... 21
Section 2.03. Registrar and Paying Agent........................................ 21
Section 2.04. Paying Agent to Hold Money in Trust............................... 22
Section 2.05. Holder Lists...................................................... 22
Section 2.06. Transfer and Exchange............................................. 22
Section 2.07. Replacement Senior Notes.......................................... 33
Section 2.08. Outstanding Senior Notes.......................................... 33
Section 2.09. Treasury Senior Notes............................................. 34
Section 2.10. Temporary Senior Notes............................................ 34
Section 2.11. Cancellation...................................................... 34
Section 2.12. Record Date....................................................... 34
Section 2.13. Defaulted Interest................................................ 35
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee................................................ 35
Section 3.02. Selection of Senior Notes to Be Redeemed.......................... 35
Section 3.03. Notice of Redemption.............................................. 36
Section 3.04. Effect of Notice of Redemption.................................... 36
Section 3.05. Deposit of Redemption Price....................................... 37
Section 3.06. Senior Notes Redeemed in Part..................................... 37
Section 3.07. Optional Redemption............................................... 37
Section 3.08. Mandatory Redemption.............................................. 38
Section 3.09. Offer to Purchase by Application of Excess Proceeds............... 38
ARTICLE 4
COVENANTS
Section 4.01. Payment of Senior Notes........................................... 40
Section 4.02. Maintenance of Office or Agency................................... 40
Section 4.03. Reports........................................................... 41
Section 4.04. Compliance Certificate............................................ 41
Section 4.05. Taxes............................................................. 42
Section 4.06. Stay, Extension and Usury Laws.................................... 42
Section 4.07. Restricted Payments............................................... 42
Section 4.08. Dividend and Other Payment Restrictions Affecting
Subsidiaries...................................................... 44
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred
Stock............................................................. 45
Section 4.10. Asset Sales....................................................... 47
Section 4.11. Transactions with Affiliates...................................... 49
Section 4.12. Liens............................................................. 50
Section 4.13. Line of Business.................................................. 50
Section 4.14. Corporate Existence............................................... 50
Section 4.15. Offer to Purchase Upon Change of Control.......................... 50
Section 4.16. Limitations on Sale and Leaseback Transactions......................... 51
Section 4.17. Loans to Subsidiaries and Joint Ventures............................... 52
Section 4.18. Limitation on Status as Investment Company............................. 52
Section 4.19. Payments for Consent................................................... 52
Section 4.20. Independent Directors.................................................. 52
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.......................... 53
Section 5.02. Successor Corporation Substituted................................. 53
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default................................................. 54
Section 6.02. Acceleration...................................................... 56
Section 6.03. Other Remedies.................................................... 56
Section 6.04. Waiver of Past Defaults........................................... 57
Section 6.05. Control by Majority............................................... 57
Section 6.06. Limitation on Suits............................................... 57
Section 6.07. Rights of Holders of Senior Notes to Receive Payment.............. 58
Section 6.08. Collection Suit by Trustee........................................ 58
Section 6.09. Trustee May File Proofs of Claim.................................. 58
Section 6.10. Priorities........................................................ 58
Section 6.11. Undertaking for Costs............................................. 59
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee................................................. 59
Section 7.02. Rights of Trustee................................................. 60
Section 7.03. Individual Rights of Trustee...................................... 61
Section 7.04. Trustee's Disclaimer.............................................. 61
Section 7.05. Notice of Defaults................................................ 61
Section 7.06. Reports by Trustee to Holders of the Senior Notes................. 61
Section 7.07. Compensation and Indemnity........................................ 62
Section 7.08. Replacement of Trustee............................................ 62
Section 7.09. Successor Trustee by Merger, etc.................................. 63
Section 7.10. Eligibility; Disqualification..................................... 63
Section 7.11. Preferential Collection of Claims Against The Company............. 64
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant
Defeasance........................................................ 64
Section 8.02. Legal Defeasance and Discharge.................................... 64
2
Section 8.03. Covenant Defeasance............................................... 64
Section 8.04. Conditions to Legal or Covenant Defeasance........................ 65
Section 8.05. Deposited Money and Government Securities to be Held
in Trust; Other Miscellaneous Provisions.......................... 66
Section 8.06. Repayment to The Company.......................................... 67
Section 8.07. Reinstatement..................................................... 67
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of the Senior Notes.................... 67
Section 9.02. With Consent of Holders of Senior Notes........................... 68
Section 9.03. Compliance with Trust Indenture Act............................... 69
Section 9.04. Revocation and Effect of Consents................................. 69
Section 9.05. Notation on or Exchange of Senior Notes........................... 70
Section 9.06. Trustee to Sign Amendments, etc................................... 70
ARTICLE 10
COLLATERAL AND SECURITY
Section 10.01. Pledge Agreement...................................................... 70
Section 10.02. Recording and Opinions................................................ 71
Section 10.03. Release of Collateral................................................. 71
Section 10.04. Certificates of the Company........................................... 72
Section 10.05. Certificates of the Trustee........................................... 72
Section 10.06. Authorization of Actions to Be Taken by the Trustee
Under the Pledge Agreement........................................ 72
Section 10.07. Authorization of Receipt of Funds by the Trustee Under
the Pledge Agreement.............................................. 73
Section 10.09. Termination of Security Interest...................................... 73
ARTICLE 11
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls...................................... 73
Section 11.02. Notices........................................................... 73
Section 11.03. Communication by Holders of Senior Notes with Other
Holders of Senior Notes........................................... 75
Section 11.04. Certificate and Opinion as to Conditions Precedent................ 75
Section 11.05. Statements Required in Certificate or Opinion..................... 75
Section 11.06. Rules by Trustee and Agents....................................... 76
Section 11.07. No Personal Liability of Directors, Officers, Employees
and Stockholders.................................................. 76
Section 11.08. Governing Law..................................................... 76
Section 11.09. No Adverse Interpretation of Other Agreements..................... 76
Section 11.10. Successors........................................................ 76
Section 11.11. Severability...................................................... 76
Section 11.12. Counterpart Originals............................................. 76
Section 11.13. Table of Contents, Headings, etc.................................. 77
EXHIBITS
3
Exhibit A-1 Form of Restricted Definitive Note, Regulation S Permanent
Global Note and Rule 144A Global Note Exhibit A-2 Form of Regulation S
Temporary Global Note Exhibit A-3 Form of Unrestricted Note Exhibit B
Form of Certificate of Transfer Exhibit C Form of Certificate of
Exchange Exhibit D Form of Certificate from Acquiring Institutional
Accredited Investor
ANNEXES
Annex A FORM OF INTERCOMPANY NOTE
SCHEDULES
Schedule A Fiber Lease Agreements
Schedule B Local Partners
Schedule C Local Partner Agreements
Schedule D Management Agreements
Schedule E Form of Financial Information and Operating Data
of the Subsidiaries and the Joint Ventures
Presented by Cluster
Schedule F Form of Financial Information and Operating Data of Hyperion
of Tennessee, Inc., Hyperion of Florida, Inc.,
Hyperion of Vermont, Inc., Hyperion of Kentucky,
Inc. and Hyperion of New York, Inc.
4
