EXHIBIT 10.19
HYPERION TELECOMMUNICATIONS, INC.
REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT, made as of the 25th day of October, 1996, by and
between ADELPHIA COMMUNICATIONS CORPORATION, a Delaware corporation ("Adelphia")
and HYPERION TELECOMMUNICATIONS, INC., a Delaware corporation (the "Company").
WHEREAS, Adelphia is the record and beneficial holder of 8,900,020 shares
of the Company's Class B Common Stock, par value $.01 per share (the "Class B
Common Stock"); and
WHEREAS, Adelphia and the Company contemplate a stock split whereby the
Company's Class B Common Stock will be divided 2-for-1; and
WHEREAS, Adelphia and the Company have reached the agreements set forth
herein and desire to provide the Registrable Securities (as defined herein) held
by Adelphia subject to the rights described herein.
NOW, therefore, in consideration of the mutual promises and covenants
contained herein and intending to be legally bound hereby, the parties hereto
agree as follows:
1. Definitions. For purposes of this Agreement:
-----------
(a) The term "Act" means the Securities Act of 1933, as amended, or
any other statute in effect from time to time corresponding to such act.
(b) The terms "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Act and the declaration or ordering of effectiveness of
such registration statement.
(c) The term "Registrable Securities" means (i) the Class B Common Stock, (ii)
the Class A Common Stock of the Company, par value $.01 per share (the "Class A
Common Stock") into which the Class B Common Stock held by the Holder, or such
additional Class B Common Stock which may be issued as a dividend or
distribution on such Class B Common Stock, shall be converted pursuant to the
Certificate of Incorporation, and (iii) any securities of the Company or a
successor to the Company issued as a dividend or other distribution with respect
to, or in exchange or in replacement of, such Class A Common Stock or Class B
Common Stock. Registrable Securities, if transferred pursuant to an exemption
from registration under the Act, will remain Registrable Securities.
(d) The term "Holder" or "Holders" means (i) Adelphia and (ii) any other
person holding Registrable Securities to whom these registration rights have
been transferred.
2. Request for Registration. If at any time the Company shall receive a
------------------------
written request (specifying that it is being made pursuant to this paragraph 2)
from the Holders holding more than thirty percent (30%) of the Registrable
Securities held by all Holders at that time outstanding that the Company file a
registration statement or similar document under the Act, covering the
registration of Registrable Securities with a market value of not less than
$10,000,000, then the Company shall promptly notify all other Holders of such
request and shall use its best efforts to cause all Registrable Securities that
Holders have requested by so registered to be registered under the Act.
The Company shall be obligated to effect two (2) registrations per calendar
year pursuant to this paragraph 2). At the option of a majority-in-interest of
the selling Holders, any registration under this paragraph 2 must be for an
underwriter or underwriters of recognized national standing reasonably
acceptable to the Company.
Notwithstanding the foregoing, the Company shall not be obligated to cause
a registration statement to be filed and declared effective pursuant to this
Section 2, or if the registration statement is effective, the Company may
request the Holders not to (and upon such request the Holders hereby agree not
to) make any sales pursuant thereto, for up to two periods of ninety (90) days
each, as the Company shall specify, provided that the Company shall furnish to
each such Holder a certificate signed by the President, the Chief Executive
Officer or a Vice President or a Vice Chairman of the Company stating that in
the good faith judgment of the Company it would be detrimental to the Company or
its shareholders for a registration statement to be filed or for sales to occur
under an effective registration statement.
3. Piggyback Registration. Subject to paragraph 7, if at any time or from
----------------------
time to time the Company proposes to register any of its equity securities under
the Act in connection with a primary or secondary public offering of such
securities solely for cash on a form that would also permit the registration of
the Registrable Securities, the Company shall, each such time, promptly give
each Holder written notice of such determination. Upon the written request of
any Holder given within twenty (20) days after mailing of any such notice by the
Company, the Company shall use its best efforts to cause to be registered under
the Act all of the Registrable Securities that each such Holder has requested be
registered.
4. Obligations of the Company. Whenever required under paragraphs 2 or 3
--------------------------
to use its best efforts to effect the registration of any Registrable
Securities, the Company shall, as promptly as practicable:
(a) Prepare and file with the Securities and Exchange Commission ("SEC") a
registration statement with respect to such Registrable Securities and use its
best efforts to cause such registration statement to become and remain effective
until all Registrable Securities to be sold under such registration statement
shall have been sold by Holders, either pursuant to such registration statement
or pursuant to an exemption from the Act.
(b) Prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as
-2-
may be necessary to comply with the provisions of the Act with respect to the
disposition of all securities covered by such registration statement.
(c) Furnish to the Holders and deliver as directed such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably
request in order to facilitate the disposition of Registrable Securities
owned by them.
(d) Use its best efforts to register and qualify the securities covered by such
registration statement under such other securities or Blue Sky laws of such
jurisdictions as shall be reasonably appropriate for the distribution of
the securities covered by the registration statement, provided that the
Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service
of process in any such states or jurisdictions, and further provided that
(anything in this Agreement to the contrary notwithstanding with respect to
the bearing of expenses) if any jurisdiction in which the securities shall
be qualified shall require that expenses incurred in connection with the
qualification of the securities in that jurisdiction be borne by selling
shareholders, then such expenses shall be payable by selling shareholders
pro rata, to the extent required by such jurisdiction.
(e) In the event that Holders of Registrable Securities propose to sell
Registrable Securities pursuant to an underwritten offering, the Company
shall have the right to approve the managing underwriters proposed by the
Holders for such offering; provided, however, that such approval shall not
--------
be unreasonably withheld.
5. Furnish Information. It shall be a condition precedent to the obligations
-------------------
of the Company to take any action pursuant to this Agreement that the Holders
shall furnish to the Company such information regarding them, the Registrable
Securities held by them, and the intended method of disposition of such
securities as the Company shall reasonably request and as shall be required in
connection with the action to be taken by the Company.
6. Expenses of Demand Registration. All expenses incurred in connection with a
-------------------------------
registration pursuant to paragraph 2 (excluding underwriters' discounts and
commissions), including without limitation all registration and qualification
fees, printers' and accounting fees, fees and disbursements of counsel for the
Company, and the reasonable fees and disbursements of one counsel for the
selling Holders shall be borne by the Company; provided, however, that the
Company shall not be required to pay for any expenses of any registration
proceeding begun pursuant to paragraph 2 if the registration request is
subsequently withdrawn, unless the Holders agree to forfeit their right to one
demand registration pursuant to paragraph 2; and provided further that the
Holders may withdraw a request if the audited financial statements of the
Company materially and adversely differ from the information previously
disclosed to the Holders at the time of their request, in which event the
Holders shall not be required to pay any of the expenses and shall retain the
right to require the Company to register Registrable Securities pursuant to
paragraph 2.
-3-
7. Company Registration Expenses. In the case of any registration effected
-----------------------------
pursuant to paragraph 3, the Company shall bear all registration and
qualification fees and expenses (excluding underwriters' discounts and
commissions), including any additional cost and disbursements of counsel for the
Company that result from the inclusion of securities held by the Holders in such
registration; provided, however, that each selling Holder shall bear the fees
and costs of its own counsel.
8. Underwriting Requirements. In connection with any offering involving an
-------------------------
underwriting of shares being issued by the Company, such Registrable Securities
as are requested to be included in such offering pursuant to this Agreement
shall be included in such offering on the same terms as other securities of the
same class as the Registrable Securities included in such offering; provided,
--------
however, that if in the written opinion of the managing underwriter or
underwriters, the total amount of such securities to be so registered, when
added to such Registrable Securities, will exceed the maximum amount of the
Company's securities which can be marketed without otherwise materially and
adversely affecting the entire offering, then the Company shall exclude from
such offering (a) first, all securities other than Registrable Securities held
by the Holders, being sold for the account of persons other than the Company,
(b) next, the minimum number of Registrable Securities held by the Holders, pro
rata to the extent practicable on the basis of the number of Registrable
Securities requested to be registered among the selling Holders as is necessary
in the opinion of the managing underwriter or underwriters to reduce the size of
the offering, and (c) last, the minimum number of securities for the account of
the Company which in the opinion of the managing underwriter or underwriters may
be excluded.
9. Delay of Registration. No Holder shall have any right to take any action to
---------------------
restrain, enjoin, or otherwise delay any registration as the result of any
controversy that might arise with respect to the interpretation or
implementation of this Agreement.
10. Indemnification and Contribution. Subject to paragraph 7 in the event
--------------------------------
any Registrable Securities are included in a registration statement under this
Agreement:
(a) To the extent not prohibited by law the Company will indemnify and hold
harmless each Holder requesting or joining in a registration, any underwriter
(as defined in the Act) for it, and each person, if any, who controls such
Holder or underwriter within the meaning of the Act or the Securities Exchange
Act of 1934 (the "1934 Act") against any losses, claims, damages or liabilities,
joint or several, to which they may become subject under the Act, the 1934 Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based on any untrue or alleged untrue
statement of any material fact contained in such registration statement,
including any preliminary prospectus or final prospectus, or any amendments or
supplements thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading or arise out of any
violation by the Company of any rule or regulation promulgated under the Act or
the 1934 Act applicable to the Company and relating to action or inaction
required of the Company in connection with any such
-4-
registration; and will reimburse each such Holder such underwriter, or such
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnify agreement contained
in this paragraph 10(a) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action to the extent that it arises out
of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in connection with such registration statement,
preliminary prospectus, final prospectus, or amendments or supplements thereto,
in reliance upon and in conformity with written information furnished expressly
for use in connection with such registration by any such Holder, underwriter or
controlling person.
(b) To the extent not prohibited by law, each Holder requesting or joining
in a registration will severally indemnify and hold harmless the Company, each
of its directors, each of its officers who have signed the registration
statement, each person, if any, who controls the Company (within the meaning of
the Act or the ▇▇▇▇ ▇▇▇) against any losses, claims, damages or liabilities,
joint or several, to which the Company or any such director, officer,
controlling person, agent or underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in such registration statement,
including any preliminary prospectus or final prospectus, or any amendments or
supplements thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in such registration
statement, preliminary or final prospectus, or amendments or supplements
thereto, in reliance upon and in conformity with written information furnished
by such Holder expressly for use in connection with such registration; and each
such Holder will reimburse any legal or other expenses reasonably incurred by
the Company or any such director, officer, controlling person, agent or
underwriter in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the indemnity agreement
contained in this paragraph 10(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is affected without the consent of such Holder (which consent shall
not be unreasonably withheld).
(c) Promptly after receipt by an indemnified party under this paragraph of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this
paragraph, notify the indemnifying party in writing of the commencement thereof
and (unless the interest of the indemnifying party conflicts with that of the
indemnified party) the indemnifying party shall have the right to participate
in, and, to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with counsel
mutually satisfactory to the parties. The failure to notify an indemnifying
party promptly of the commencement of any such action, if prejudicial to his
ability to defend such action, shall relieve such indemnifying party, to the
extent that he is prejudiced thereby, of any liability to the
-5-
indemnified party under this paragraph, to the extent that he is prejudiced
thereby, of any liability to the indemnified party under this paragraph, but the
omission so to notify the indemnifying party will not relieve him of any
liability that he may have to any indemnified party otherwise than under this
paragraph.
(d) In order to provide for just and equitable contribution to joint liability
under the Act in any case in which either (i) any Holder exercising rights
under this Agreement, or any controlling person of any such Holder, makes a
claim for indemnification pursuant to this paragraph 10 but it is
judicially determined (by the entry of a final judgment or decree by a
court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this paragraph 10
provides for indemnification in such case, or (ii) contribution under the
Act may be required on the part of any such selling Holder or any such
controlling person in circumstances for which indemnification is provided
under this paragraph 10; then, and in each such case, the Company and
such Holder will contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject (after contribution from others)
in such proportion so that such Holder is responsible for the portion
represented by the percentage that the public offering price of all
securities offered by such registration statement, and the Company is
responsible for the remaining portion; provided, however, that, in any such
case, (A) no such Holder will be required to contribute any amount in
excess of the public offering price of all such Registrable Securities
offered by it pursuant to such registration statement; and (B) no person or
entity guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) will be entitled to contribution from any person
or entity who was not guilty of such fraudulent misrepresentation.
11. Reports Under Securities Exchange Act of 1934. With a view to making
---------------------------------------------
available to the Holders the benefits of Rule 144 promulgated under the Act and
any other rule or regulation of the SEC that may at any time permit a Company
agrees to use its best efforts to:
(a) make and keep public information available, as those terms are understood
and defined in Rule 144, at all times subsequent to ninety (90) days after
the effective date of the first registration statement covering an
underwritten public offering filed by the Company;
(b) file with the SEC in a timely manner all reports and other documents
required of the Company under the 1934 Act; and
(c) furnish to any Holder so long as such Holders own any of the Registrable
Securities forthwith upon request a written statement by the Company that
it has complied with the reporting requirements of Rule 144 (at any time
after ninety (90) days after the effective date of said first registration
statement filed by the Company), and of the Act and the 1934 Act (at any
time after it has become subject to such reporting requirements), a copy of
the most recent annual or quarterly report of the Company, and such other
reports and documents so filed by the Company as may be reasonably
requested in availing any Holder of any rule or regulation of the SEC
permitting the selling of any such securities without registration.
-6-
12. Lockup Agreement. In consideration for the Company agreeing to its
----------------
obligations under this Agreement, each Holder agrees in connection with any
registration of the Company's Class A Common Stock or Class B Common Stock for
sale by the Company to the general public that, upon the request of the Company
or the underwriters managing any underwritten offering by the Company of the
Company's securities, not to sell, make short sale of, loan, grant any option
for the purchase of, or otherwise dispose of any Registrable Securities (other
than those included in the registration) without the prior written consent of
the Company or such underwriters, as the case may be, for such period of time
(not to exceed one hundred twenty (120 days) from the effective date of such
registration as the Company or the underwriters may specify; provided, however,
--------
that the Company may not discriminate among the Holders with respect to any
lockup arrangements pursuant to this Section 12.
13. Certain Limitations in Connection with Future Grants of Registration
--------------------------------------------------------------------
Rights. From an after the date of this Agreement, the Company shall not enter
------
into any agreement with any holder or prospective holder of any securities of
the Company providing for the granting to such holder of registration rights
unless:
(a) such agreement includes the equivalent of paragraph 12 as a term; and
(b) such registration rights, if more favorable than those
granted herein, are extended to the Holders or their transferees permitted under
paragraph 14.
14. Transfer of Demand Registration Rights. The demand registration rights
--------------------------------------
of the Holders under Sections 2 or 3 may be not transferred except to an
affiliate of Adelphia Communications Corporation (without restriction as to a
minimum amount of Registrable Securities transferred), or to a person who
acquires at least 5% of the Registrable Securities originally issued to Adelphia
Communications Corporation. The Company shall be given written notice by the
Holder at the time of such transfer stating the name and address of the
transferee and identifying the securities with respect to which the rights under
this Agreement are being assigned.
15. Entire Agreement. This Agreement and the documents referred to herein
----------------
constitute the entire agreement among the parties with respect to the subject
matter hereof and supersedes all prior agreements and negotiations relating
thereto.
16. Governing Law. This Agreement, together with the rights and obligations of
-------------
the parties hereunder shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware without regard to any
jurisdiction's conflicts of laws provisions.
17. Counterparts. This Agreement may be executed in two or more counterparts,
------------
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
18. Titles and Subtitles. The titles and subtitles used in this Agreement are
--------------------
for convenience only and are not to be considered in construing or interpreting
this Agreement.
-7-
19. Notices. Any notice, request or other communication required or permitted
-------
under this Agreement shall be given in writing and shall be deemed to be
effectively given upon (i) personal delivery, (ii) delivery by U.S. Express Mail
or other overnight courier service which provides evidence of delivery, (iii)
legible facsimile transmission, or (iv) the expiration of three (3) days
following deposit with the United States Postal Service, by registered or
certified mail, postage prepaid, addressed, in each case, as follows:
If to the Company:
Hyperion Telecommunications, Inc.
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Holder:
Adelphia Communications Corporation
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Professional Corporation
One Oxford Centre
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇., Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as any party may designate by ten (10) days advance
written notice to the other party in accordance with the provisions of this
Paragraph.
20. Amendments. This Agreement may not be amended without the written consent
----------
of the Company and the holders of at least a majority in interest of the then
outstanding Registrable Securities.
[remainder of page intentionally left blank]
-8-
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by a duly authorized representative as of the day first above written.
ADELPHIA:
ADELPHIA COMMUNICATIONS
CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Title: Executive Vice President
---------------------------
COMPANY:
HYPERION TELECOMMUNICATIONS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------
Title: President
------------
-9-