EXHIBIT 4.05
PLEDGE, ESCROW AND DISBURSEMENT AGREEMENT
by and among
HYPERION TELECOMMUNICATIONS, INC.,
BANK OF MONTREAL TRUST COMPANY
as Trustee
and
BANK OF MONTREAL TRUST COMPANY
as Escrow Agent
m
August 27, 1997
PLEDGE, ESCROW AND DISBURSEMENT AGREEMENT
THIS PLEDGE, ESCROW AND DISBURSEMENT AGREEMENT (this
"Agreement"), dated as of August 27, 1997, is by and among HYPERION
TELECOMMUNICATIONS, INC. (the "Company"), Bank of Montreal Trust Company, as
trustee under the Indenture referred to below (the "Trustee"), and Bank of
Montreal Trust Company, in its capacity as collateral agent for the Trustee and
the Holders of the Notes hereinafter described (the "Escrow Agent").
RECITALS
A. The Notes. Pursuant to that certain Indenture (the "Indenture")
dated as of August 27, 1997, by and between the Company and the Trustee, the
Company will issue $250,000,000 in aggregate principal amount of 12 1/4% Senior
Secured Notes due 2004 (collectively, the "Notes"). Immediately after receipt of
payment for the Notes (the "Deposit Time"), the Company will deposit $83,400,000
of the net proceeds from the sale of the Notes (the "Escrow Proceeds") into a
segregated cash collateral trust account with the Escrow Agent at its office at
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, in the name of Bank of Montreal Trust
Company, as Escrow Agent, "Collateral Account for Hyperion Telecommunications,
Inc." (the "Escrow Account"). The Escrow Account and all balances and
investments from time to time therein shall be under the sole dominion and
control of the Escrow Agent for the benefit of the Holders of the Notes.
Capitalized terms used but not defined herein shall have the meanings assigned
to them in the Indenture.
B. Purpose. The parties hereto desire to set forth their
agreement with regard to the administration of the Escrow Account, the creation
of a security interest in the Collateral (as defined herein) and the conditions
upon which funds will be released from the Escrow Account and the conditions
upon which the security interest and Lien described herein will be released.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Security Interest.
1.1 Pledge and Assignment. The Company hereby irrevocably
pledges, assigns and sets over to the Trustee, and grants to the Trustee, for
the benefit of the Holders of the Notes, a first priority continuing security
interest in all of the Company's right, title and interest to all of the
following, whether now owned or existing or hereafter acquired or created
(collectively, the "Collateral"):
1.1.1 the Escrow Account;
1.1.2 all funds from time to time held in the Escrow
Account, including, without limitation, the Escrow Proceeds and all
certificates and instruments, if any, from time to time, representing
or evidencing the Escrow Account or the Escrow Proceeds;
1.1.3 all Allowable Investments (as defined herein),
whether the same shall constitute certificated securities,
uncertificated securities, investment property, instruments, general
intangibles or otherwise held by or registered in the name of the
Escrow Agent or the Trustee and all certificates and instruments, if
any, from time to time representing or
evidencing the Allowable Investments;
1.1.4 all notes, certificates of deposit, deposit
accounts, checks and other instruments from time to time hereafter
delivered to or otherwise possessed by the Trustee or the Escrow Agent
for or on behalf of the Company in substitution for or in addition to
any or all of the then existing Collateral;
1.1.5 all interest, dividends, cash, instruments and
other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the then
existing Collateral; and
1.1.6 all proceeds of the foregoing including,
without limitation, cash proceeds.
The Company and the Trustee hereby appoint the Escrow Agent to act as the
Trustee's agent, on behalf of the Holders of the Notes, for purposes of
perfecting the foregoing pledge, assignment and security interest in the
Collateral, and the Escrow Agent hereby accepts such appointment. The Escrow
Agent hereby acknowledges the security interest in the Collateral granted by the
Company in favor of the Trustee hereunder. Escrow Agent further acknowledges
that it is holding the Collateral for the Company subject to the pledge and
security interest granted to the Trustee hereunder. Without prejudice to the
Trustee's rights under Section 7.07 of the Indenture, for so long as the
foregoing pledge, assignment and security interest remains in effect, the Escrow
Agent hereby waives any right of setoff or banker's lien that it, in its
individual capacity, may have with respect to any or all of the Collateral.
1.2 Secured Obligations. This Agreement secures the due and
punctual payment and performance of all obligations and indebtedness of the
Company, whether now or hereafter existing, under the Notes and the Indenture
including, without limitation, interest accrued thereon after the commencement
of a bankruptcy, reorganization or similar proceeding involving the Company to
the extent permitted by applicable law (collectively, the "Secured
Obligations").
1.3 Delivery of Collateral. All certificates or instruments,
if any, representing or evidencing the Collateral shall be held by or on behalf
of the Escrow Agent pursuant hereto and shall be in suitable form for transfer
by delivery, or shall be accompanied by duly executed instruments of transfer or
assignments in blank, all in form and substance reasonably satisfactory to the
Trustee and the Escrow Agent. All securities in uncertificated or book-entry
form, if any, representing or evidencing the Collateral shall be registered in
the name of the Trustee or any of its nominees by book-entry or as otherwise
appropriate so as to properly identify the interest of the Trustee therein. In
addition, the Trustee shall have the right, at any time following the occurrence
of an Event of Default, and only for so long as such Event of Default is
continuing, to transfer to or to register in the name of the Trustee or any of
its nominees any or all other Collateral. Except as otherwise provided herein,
all Collateral shall be deposited and held in the Escrow Account. The Trustee
shall have the right at any time to exchange certificates or instruments
representing or evidencing all or any portion of the Collateral for certificates
or instruments of smaller or larger denominations in the same aggregate amount.
1.4 Further Assurances. Prior to, contemporaneously herewith,
and at any time and from time to time hereafter, the Company shall, at the
Company's expense, execute and deliver to the Trustee or the Escrow Agent such
other instruments and documents, and shall take all further action as it deems
necessary or advisable or as the Trustee or the Escrow Agent may reasonably
requests, including, without limitation, an Opinion of Counsel, upon which the
Trustee or the Escrow Agent, as the case may be, may conclusively rely, to
confirm or perfect the security interest of the Trustee granted or purported to
be granted
hereby or to enable the Trustee to exercise and enforce its rights and remedies
hereunder with respect to any Collateral, and the Company shall take all
necessary action to preserve and protect the security interest created hereby as
a first priority, perfected lien and encumbrance upon the Collateral. The
Company shall pay all costs incurred in connection with any of the foregoing.
1.5 Maintaining the Escrow Account. So long as this
Agreement is in full force and effect:
1.5.1 the Company shall establish and maintain the
Escrow Account with the Escrow Agent in New York, New York, and the
Escrow Account shall at all times remain under the exclusive dominion
and control of the Escrow Agent for the benefit of the Holders of the
Notes; and
1.5.2 it shall be a term and condition of the Escrow
Account, notwithstanding any term or condition to the contrary in any
other agreement relating to the Escrow Account and except as otherwise
provided by the provisions of Article 3 of this Agreement, that no
amount (including, without limitation, interest on or other proceeds of
the Escrow Account or on any Allowable Investments held therein) shall
be paid or released to or for the account of, or withdrawn by or for
the account of, the Company or any other person or entity other than
the Trustee from the Escrow Account.
1.6 Transfers and Other Liens. Until termination of this
Agreement pursuant to Section 8, the Company agrees that it shall not (i) sell,
assign (by operation of law or otherwise) or otherwise dispose of, or grant any
option with respect to, any of the Collateral or (ii) create or permit to exist
any Lien upon or with respect to any of the Collateral, except for the security
interest under this Agreement.
1.7 Attorneys-in-Fact. In addition to all of the powers
granted to the Trustee pursuant to Article 6 of the Indenture, the Company
hereby irrevocably appoints each of the Trustee and the Escrow Agent as the
Company's attorney-in-fact, coupled with an interest, with full authority in the
place and stead of the Company and in the name of the Company or otherwise, from
time to time in the Trustee's or the Escrow Agent's discretion to, so long as
any Event of Default has occurred and is continuing, take any action and to
execute any instrument which the Trustee or the Escrow Agent may deem necessary
or advisable to accomplish the purposes of this Agreement, including, without
limitation, to receive, endorse and collect all instruments made payable to the
Company representing any interest payment, dividend or other distribution in
respect of the Collateral or any part thereof and to give full discharge for the
same, and the expenses of the Trustee incurred in connection therewith shall be
payable by the Company.
1.8 Trustee May Perform. Without limiting the authority
granted under Section 1.7 and except with respect to the failure of the Company
to deliver investment instructions, which shall be governed by the second
paragraph of Section 2.1 hereof, if the Company fails to perform any agreement
contained herein, the Trustee or the Escrow Agent may, but shall not be
obligated to, itself perform, or cause performance of, such agreement, and the
expenses of the Trustee or the Escrow Agent incurred in connection therewith
shall be payable by the Company. In the event that the Trustee or the Escrow
Agent perform pursuant to this Section 1.8, the Company shall compensate,
reimburse and indemnify the Trustee or the Escrow Agent, as the case may be, in
the manner provided in Section 7.07 of the Indenture.
1.9 Escrow Account Statement. Each month, the Escrow
Agent shall deliver to the Company and the Trustee a statement in a form
satisfactory to the Company and the Trustee setting forth with reasonable
particularity the balance of funds then in the Escrow Account and the manner in
which such
funds are invested. The parties hereto irrevocably instruct the Escrow Agent
that on the first date upon which the balance in the Escrow account is reduced
to zero, the Escrow Agent shall deliver to the Company and to the Trustee a
notice that the balance in the Escrow Account has been reduced to zero.
2. Investment and Liquidation of Funds in Escrow Account. Funds
deposited in the Escrow Account shall be invested and reinvested by the Escrow
Agent on the following terms and conditions:
2.1 Allowable Investments. Subject to the provisions of
Articles 2 and 3, funds held by the Escrow Agent in the Escrow Account may, at
the written direction of the Company, be invested and reinvested solely in the
following ("Allowable Investments"): (i) fixed rate obligations of, or
obligations guaranteed by, the United States of America for the payment of which
guarantee or obligations the full faith and credit of the United States of
America is pledged ("Government Securities") having a maturity date on or before
the date on which the payments of interest on the Notes to which such Government
Securities are pledged to secure occur and (ii) shares of any money market
mutual fund or similar fund, in each case, having assets in excess of $500
million which invests solely in Government Securities.
If the Company fails to give written investment instructions
to the Escrow Agent by 10:00 a.m. (New York time) on any Business Day (other
than the Closing Date) on which there is uninvested cash and/or maturing
Allowable Investments in the Escrow Account, the Trustee is hereby authorized
and directed to direct the Escrow Agent to, and the Escrow Agent shall, invest
any such cash or the proceeds of any maturing Allowable Investments in Allowable
Investments maturing on the next Business Day. On the Closing Date, the Company
may direct the Trustee, who shall direct the Escrow Agent, to invest the
proceeds in the Escrow Account in Allowable Investments until 2:00 p.m., which
instructions shall be executed no later than 12:00 noon on the Business Day
immediately following the Closing Date. The Company's failure to give such
investment instructions shall not constitute a default or an event of default
hereunder.
2.2 Interest. All interest earned on funds invested in
Allowable Investments shall be held in the Escrow Account and reinvested in
accordance with the terms hereof and shall be subject to the security interest
granted hereunder to the Trustee.
2.3 Limitation of Trustee's and Escrow Agent's Liability.
Subject to Section 9.12, in no event shall the Trustee or the Escrow Agent have
any liability to the Company or any other Person for investing the funds from
time to time in the Escrow Account in accordance with the provisions of this
Article 2, regardless of whether greater income or a higher yield could have
been obtained had the Escrow Agent invested such funds in different Allowable
Investments, or for any loss (including breakage costs or loss of principal)
associated with the sale or liquidation of Allowable Investments in accordance
with the terms of this Agreement.
2.4 Liquidation of Funds. In liquidating any Allowable
Investments in accordance with Article 3 of this Agreement, the Company shall
direct the Trustee or the Escrow Agent as to which Allowable Investments shall
be liquidated.
3. Interest Payments.
3.1 Not later than five (5) Business Days prior to the date of
each of the first six scheduled interest payments due on the Notes, the Company
shall, in writing, direct the Escrow Agent to transfer from the Escrow Account
to the Paying Agent funds necessary to provide for payment in full or any
portion of the next scheduled interest payment on the Notes or, if the Company
does not intend to utilize the funds in the Escrow Account for such payment of
interest, then the Company shall comply with Section 3.2
below. Upon receipt of such written request, the Escrow Agent shall take any
action necessary to provide for the payment of such interest payment on the
Notes directly to the Holders of Notes from proceeds of the Collateral in the
Escrow Account. Concurrently with any release of funds to the Paying Agent
pursuant to this Section 3.1, the Company shall deliver to the Trustee a
certificate substantially in the form of Exhibit A hereto.
3.2 If the Company makes any interest payment or portion of an
interest payment from a source of funds other than the Escrow Account ("Company
Funds"), the Company may, after payment in full of such interest payment, direct
the Trustee in writing to direct the Escrow Agent to release to the Company or
at the direction of the Company an amount of funds from the Escrow Account equal
to the lesser of (i) the amount of Company Funds so expended and (ii) the amount
of funds in the Escrow Account which exceeds the amount sufficient, in the
reasonable opinion of the Trustee, to provide for payment in full of the first
six scheduled interest payments on the Notes less than or equal to the amount of
Company Funds so expended. Upon receipt of the certificate described in the
following sentence, the Trustee shall direct the Escrow Agent to pay over to the
Company the requested amount. Concurrently with any release of funds to the
Company pursuant to this Section 3.2, the Company shall deliver to the Trustee a
certificate substantially in the form of Exhibit A hereto.
3.3 Upon payment in full of the first six scheduled interest
payments on the Notes, the security interest in the Collateral evidenced by this
Agreement shall terminate and be of no further force and effect. Furthermore,
upon the release of any Collateral from the Escrow Account in accordance with
the terms of this Agreement, whether upon release of Collateral to Holders as
payment of interest, to the Company or otherwise, the security interest
evidenced by this Agreement in the Collateral so released shall terminate and be
of no further force and effect.
4. Representations and Warranties. The Company hereby represents
and warrants that:
4.1 The execution, delivery and performance by the Company of
this Agreement are within the Company's corporate powers, have been duly
authorized by all necessary corporate action, and do not contravene, or
constitute a default under, any provision of applicable law or regulation or of
the certificate of incorporation of the Company or of any agreement, judgment,
injunction, order, decree or other instrument binding upon the Company or result
in the creation or imposition of any Lien on any assets of the Company, except
for the security interests granted under this Agreement.
4.2 The Company is the record and beneficial owner of the
Collateral, free and clear of any and all Liens or claims of any person or
entity (except for the security interests granted under this Agreement). No
financing statement covering the Collateral is on file in any public office
other than the financing statements filed pursuant to this Agreement.
4.3 This Agreement has been duly executed and delivered by the
Company and constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally or general principles of equity and commercial
reasonableness.
4.4 Upon the filing of financing statements required by the
Uniform Commercial Code (the "UCC"), the pledge of the Collateral pursuant to
this Agreement creates a valid and perfected first priority security interest in
and to the Collateral, securing the payment of the Secured Obligations for the
benefit of the Trustee and the ratable benefit of the Holders of Notes,
enforceable as such against all creditors of the
Company and any persons purporting to purchase any of the Collateral from the
Company other than as permitted by the Indenture.
4.5 No consent of any other Person and no consent,
authorization, approval, or other action by, and no notice to or filing with,
any governmental authority or regulatory body is required either (1) for the
pledge by the Company of the Collateral pursuant to this Agreement or for the
execution, delivery or performance of this Agreement by the Company (except for
any filings necessary to perfect Liens on the Collateral) or (2) for the
exercise by the Trustee of the rights provided for in this Agreement or the
remedies in respect of the Collateral pursuant to this Agreement.
4.6 No litigation, investigation or proceeding of or before
any arbitrator or governmental authority is pending or, to the knowledge of the
Company, threatened by or against the Company with respect to this Agreement or
any of the transactions contemplated hereby.
4.7 The pledge of the Collateral pursuant to this Agreement is
not prohibited by any applicable law or governmental regulation, release,
interpretation or opinion of the Board of Governors of the Federal Reserve
System or other regulatory agency (including, without limitation, Regulations G,
T, U and X of the Board of Governors of the Federal Reserve System).
5. Covenants
The Company covenants and agrees with the Escrow Agent, the
Trustee and the Holders of Notes from and after the date of this Agreement until
the earlier of payment in full in cash of (A) each of the first six scheduled
interest payments due on the Notes under the terms of the Indenture or (B) all
obligations (including, but not limited to all Obligations) due and owing under
the Indenture and the Notes in the event such obligations (including, but not
limited to all Obligations) become due and payable prior to the payment of the
first six scheduled interest payments on the Notes:
(i) The Company agrees that it shall not (a) sell or otherwise
dispose of, or grant any option or warrant with respect to, any of the
Collateral or (b) create or permit to exist any Lien upon or with
respect to any of the Collateral (except for the lien created pursuant
to this Agreement) and, except as otherwise provided in this Agreement,
at all times shall be the sole beneficial owner of the Collateral.
(ii) The Company agrees that it shall not (a) enter into any
agreement or understanding that purports to or may restrict or inhibit
the Trustee's rights or remedies hereunder, including, without
limitation, the Trustee's right to sell or otherwise dispose of the
Collateral in accordance with the terms of this Agreement or (b) fail
to pay or discharge any tax, assessment or levy of any nature not later
than five days prior to the date of any proposed sale under any
judgement, writ or warrant of attachment with regard to the Collateral.
6. Remedies upon Default. If any Event of Default shall have
occurred and be continuing:
(i) The Trustee may, without notice to the Company except as
required by law and at any time or from time to time, direct the Escrow
Agent to liquidate all Allowable Investments and transfer all funds in
the Escrow Account to the Trustee or the Paying Agent to apply such
funds in accordance with the provisions of the Indenture.
(ii) The Escrow Agent and/or the Trustee may also exercise
in respect of the Collateral,
in addition to the other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured
party on default under the Uniform Commercial Code in effect at that
time in the State of New York (the "Code") (whether or not the Code
applies to the affected Collateral), and may also, without notice
except as specified below, sell the Collateral or any part thereof in
one or more parcels at public or private sale, at any of the Trustee's
or the Escrow Agent's offices or elsewhere, for cash, on credit or for
future delivery, and upon such other terms as the Trustee may deem
commercially reasonable. The Company agrees that, to the extent notice
of sale shall be required by law, at least ten days' notice to the
Company of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable
notification. The Trustee and the Escrow Agent shall not be obligated
to make any sale of Collateral regardless of notice of sale having been
given. The Trustee or the Escrow Agent may adjourn any public or
private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned.
(iii) Any cash held by the Escrow Agent as Collateral and all
net cash proceeds received by the Trustee or the Escrow Agent in
respect of any sale or liquidation of, collection from, or other
realization upon all or any part of the Collateral may, in the
discretion of the Trustee, be held by the Trustee or the Escrow Agent
as collateral for, and/or then or at any time thereafter be applied
(after payment of any costs and expenses incurred in connection with
any sale, liquidation or disposition of or realization upon the
Collateral and the payment of any amounts payable to the Trustee or the
Escrow Agent) in whole or in part by the Trustee or the Escrow Agent
for the ratable benefit of the Holders of the Notes against, all or any
part of the Secured Obligations in such order as the Trustee shall
elect. Any surplus of such cash or cash proceeds held by the Trustee or
the Escrow Agent and remaining after payment in full of all the Secured
Obligations and the costs and expenses incurred by and amounts payable
to the Trustee or the Escrow Agent hereunder or under the Indenture
shall be paid over to the Company or to whomsoever shall be lawfully
entitled to receive such surplus.
7. Indemnity and Authority of the Escrow Agent.
7.1 The Escrow Agent shall have and be entitled to
exercise all powers hereunder that are specifically granted to the
Escrow Agent by the terms hereof, together with such powers as are
reasonably incident thereto. The Escrow Agent may perform any of its
duties hereunder or in connection with the Escrow Account by or through
agents or employees and shall be entitled to retain counsel of its
choice and to act in reliance upon the advice of such counsel
concerning all such matters. Neither the Escrow Agent nor any director,
officer, employee, attorney or agent of the Escrow Agent (each, an
"Indemnified Person") shall be responsible for the validity,
effectiveness or sufficiency hereof or of any document or security
furnished pursuant hereto. The Escrow Agent and its directors,
officers, employees, attorneys and agents shall be entitled to rely on
any communication, instrument or document believed by it or them to be
genuine and correct and to have been signed or sent by the proper
person or persons. The Company agrees to indemnify and hold harmless
the Escrow Agent and each Indemnified Person from and against any and
all costs, expenses (including the reasonable fees and disbursements of
counsel (including the reasonably allocated costs of inside counsel)),
claims and liabilities incurred by the Escrow Agent or such Indemnified
Person hereunder, unless such claim or liability shall be due to
willful misconduct or gross negligence on the part of the Escrow Agent
or such Indemnified Person.
7.2 The Company acknowledges that the rights and
responsibilities of the Escrow Agent under this Agreement with respect
to any action taken by the Escrow Agent or the exercise or non-exercise
by the Escrow Agent of any option, right, request, judgment or other
right
or remedy provided for herein or resulting or arising out of this
Agreement shall be governed by the Indenture and, as between the Escrow
Agent and the Company, the Escrow Agent shall be conclusively presumed
to be acting as agent for the Trustee with full and valid authority so
to act or refrain from acting, and the Company shall not be obligated
or entitled to make any inquiry respecting such authority.
7.3 No provision of this Agreement 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 Agreement 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.
8. Termination.
8.1 This Agreement shall create a continuing security interest
in and to the Collateral and such security interest shall, unless otherwise
provided in the Indenture or in this Agreement, remain in full force and effect
until the earlier of payment in full in cash of (A) each of the first six
scheduled interest payments due on the Notes under the terms of the Indenture or
(B) all obligations (including, but not limited to, all Obligations) due and
owing under the Indenture and the Notes in the event such obligations become
payable prior to the payment of the first six scheduled interest payments on the
Notes. This Agreement shall be binding upon the Company, its successors and
assigns, and shall inure, together with the rights and remedies of the Trustee
hereunder, to the benefit of the Trustee, the Escrow Agent, the Holders of Notes
and their respective successors, transferees and assigns.
8.2 Subject to the provisions of Section 9.3 hereof, this
Agreement shall terminate upon the earlier of payment in full in cash of (A)
each of the first six scheduled interest payments due on the Notes under the
terms of the Indenture or (B) all obligations (including, but not limited to,
all Obligations) due and owing under the Indenture and the Notes in the event
such obligations (including, but not limited to all Obligations) become payable
prior to the payment of the first six scheduled interest payments on the Notes.
At such time, the Trustee shall, at the written request of the Company, reassign
and redeliver to the Company all of the Collateral hereunder that has not been
sold, disposed of, retained or applied by the Trustee in accordance with the
terms of this Agreement and the Indenture. Such reassignment and redelivery
shall be without warranty (either express or implied) by or recourse to the
Trustee, except as to the absence of any prior assignments by or encumbrances
created by the Trustee on its interest in the Collateral, and shall be at the
expense of the Company.
9. Miscellaneous.
9.1 Waiver. Either party hereto may specifically waive any
breach of this Agreement by any other party, but no such waiver shall be deemed
to have been given unless such waiver is in writing, signed by the waiving
party, and specifically designates the breach waived, nor shall any such waiver
constitute a continuing waiver of similar or other breaches.
9.2 Invalidity. If, for any reason whatsoever, any one or more
of the provisions of this Agreement shall be held or deemed to be inoperative,
unenforceable or invalid in a particular case or in all cases, such
circumstances shall not have the effect of rendering any of the other provisions
of this Agreement inoperative, unenforceable or invalid, and the inoperative,
unenforceable or invalid provision shall be construed as if it were written so
as to effectuate, to the maximum extent possible, the parties' intent.
9.3 Survival of Provisions. All representations,
warranties and covenants of the
Company contained herein shall survive the execution and delivery of this
Agreement, and shall terminate only upon the termination of this Agreement;
provided, however, that the Company's obligations pursuant to Section 7 hereof
shall survive the termination of this Agreement (including any termination under
applicable bankruptcy laws) or the resignation or removal of the Trustee or the
Escrow Agent.
9.4 Assignment. This Agreement shall inure to and be binding
upon the parties and their respective successors and permitted assigns;
provided, however, that the Company may not assign its rights or obligations
hereunder without the express prior written consent of the Trustee, acting at
the direction of the Holders as provided in the Indenture.
9.5 Entire Agreement; Amendments. This Agreement and the
Indenture contain the entire agreement among the parties with respect to the
subject matter hereof and supersede any and all prior agreements, understandings
and commitments with respect thereto, whether oral or written; provided,
however, that this Agreement is executed and accepted by the Trustee and the
Escrow Agent subject to all terms and conditions of its acceptance of the trust
under the Indenture, as fully as if said terms and conditions were set forth at
length herein. This Agreement may be amended only by a writing signed by duly
authorized representatives of all parties. The Trustee and the Escrow Agent may
execute an amendment to this Agreement only if the requisite consent of the
Holders of the Notes required by Section 9.02 of the Indenture has been
obtained, unless no such consent is required by such Section 9.02 of the
Indenture.
9.6 Notices. All notices and other communications required or
permitted to be given or made under this Agreement to any party hereto shall be
delivered in writing by hand delivery or overnight delivery, or shall be
delivered by facsimile or telephonically with confirmation in writing not more
than twenty-four hours following such telephonic notice. A notice given in
accordance with the preceding sentence shall be deemed to have been duly given
upon the sending thereof, except for notice to the Trustee or the Escrow Agent,
which shall be deemed given only when received. Notices should be addressed as
follows:
To the Company:
Hyperion Telecommunications, Inc.
Main at ▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone number: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Ingersoll Professional Corporation
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Facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone number: (▇▇▇) ▇▇▇-▇▇▇▇
To the Trustee:
Bank of Montreal Trust Company
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Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone number: (▇▇▇) ▇▇▇-▇▇▇▇
To the Escrow Agent:
Bank of Montreal Trust Company
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Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile number : (▇▇▇) ▇▇▇-▇▇▇▇
Telephone number: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address, facsimile number or phone number as the specified
entity most recently may have designated in writing in accordance with this
paragraph to the other parties.
9.7 Expenses. The Company shall from time to time pay to the
Trustee and the Escrow Agent their reasonable fees and expenses and any
reasonable fees and expenses of their counsel, that the Trustee and Escrow Agent
may incur in connection with (a) the administration of this Agreement, (b) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (c) the exercise or enforcement of any
of the rights of the Trustee and Escrow Agent and the Holders of Notes hereunder
or (d) the failure by the Company to perform or observe any of the provisions
hereof, in each case other than any such expenses that arise from the gross
negligence or willful misconduct of the Trustee or Escrow Agent.
9.8 Security Interest Absolute. All rights of the Trustee and
the Holders of Notes and security interests hereunder, and all obligations of
the Company hereunder, shall be absolute and unconditional irrespective of (a)
any lack of validity or enforceability of the Indenture or any other agreement
or instrument relating thereto; (b) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Secured Obligations, or
any other amendment or waiver of or any consent to any departure from the
Indenture; (c) any exchange, surrender, release or non-perfection of any Liens
on any other collateral for all or any of the Secured Obligations; or (d) to the
extent permitted by applicable law, any other circumstance which might otherwise
constitute a defense available to, or a discharge of, the Company in respect of
the Secured Obligations or of this Agreement.
9.9 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. Delivery of an executed
counterpart of a signature page to this Agreement by facsimile shall be
effective as delivery of a manually executed counterpart of this Agreement.
9.10 Limitation by Law. All rights, remedies and powers
provided herein may be exercised only to the extent that they shall not render
this Agreement not entitled to be recorded, registered or filed under provisions
of any applicable law.
9.11 Rights of Holders of Notes. No Holder of Notes shall have
any independent rights hereunder other than those rights granted to individual
Holders of Notes pursuant to Section 6.06 of the Indenture; provided that
nothing in this subsection shall limit any rights granted to the Trustee under
the Indenture.
9.12 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF
DAMAGES.
(i) THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED UNDER
THE LAWS OF THE STATE OF NEW YORK, AND ANY DISPUTE ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THE
COMPANY, THE TRUSTEE AND THE HOLDERS OF NOTES IN CONNECTION WITH THIS AGREEMENT,
AND WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE RESOLVED IN
ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAWS
PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.
(ii) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH AND IN PARAGRAPH
(vi) BELOW, THE COMPANY, THE TRUSTEE, THE ESCROW AGENT AND THE HOLDERS OF NOTES
AGREE THAT ALL DISPUTES BETWEEN OR AMONG THEM ARISING OUT OF, CONNECTED WITH,
RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY,
OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE OR FEDERAL COURTS LOCATED IN NEW
YORK, NEW YORK, BUT THE COMPANY, THE TRUSTEE, THE ESCROW AGENT AND THE HOLDERS
OF NOTES ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY
A COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK. THE COMPANY WAIVES IN ALL
DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING
THE DISPUTE INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS.
(iii) THE COMPANY AGREES THAT THE TRUSTEE SHALL, IN ITS
CAPACITY AS TRUSTEE OR IN THE NAME AND ON BEHALF OF ANY HOLDER OF NOTES, HAVE
THE RIGHT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST THE
COMPANY OR ITS PROPERTY IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD
FAITH (AND HAVING PERSONAL OR IN REM JURISDICTION OVER THE COMPANY OR ITS
PROPERTY, AS THE CASE MAY BE) TO ENABLE THE TRUSTEE TO REALIZE ON SUCH PROPERTY,
OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE TRUSTEE.
THE COMPANY AGREES THAT IT SHALL NOT ASSERT ANY COUNTERCLAIMS, SETOFFS OR CROSS
CLAIMS IN ANY PROCEEDING BROUGHT BY THE TRUSTEE TO REALIZE ON SUCH PROPERTY OR
TO ENFORCE A JUDGEMENT OR OTHER COURT ORDER IN FAVOR OF THE TRUSTEE, EXCEPT FOR
SUCH COUNTERCLAIMS, SETOFFS OR CROSSCLAIMS WHICH, IF NOT
ASSERTED IN ANY SUCH PROCEEDING, COULD NOT OTHERWISE BE BROUGHT OR ASSERTED. THE
COMPANY WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN
WHICH THE TRUSTEE HAS COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH,
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS.
(iv) THE COMPANY, THE TRUSTEE AND THE ESCROW AGENT EACH WAIVE
ANY AND ALL RIGHTS TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, IN CONNECTION WITH, OR
RELATING OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM PURSUANT TO,
UNDER OR IN CONNECTION WITH THIS AGREEMENT. INSTEAD, ALL DISPUTES RESOLVED IN
COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
(v) THE COMPANY HEREBY IRREVOCABLY DESIGNATES CT CORPORATION
AS THE DESIGNEE, APPOINTEE AND AGENT OF THE COMPANY TO RECEIVE, FOR AND ON
BEHALF OF THE COMPANY, SERVICE OF PROCESS IN ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT. IT IS UNDERSTOOD THAT NOTICE AND A COPY OF SUCH
PROCESS SERVED ON SUCH AGENT, WILL BE FORWARDED PROMPTLY TO THE COMPANY, BUT THE
FAILURE OF THE COMPANY TO RECEIVE SUCH NOTICE AND COPY SHALL NOT AFFECT IN ANY
WAY THE SERVICE OF SUCH PROCESS. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO THE COMPANY AT ITS ADDRESS SET FORTH IN SECTION 11.02 OF THE
INDENTURE, SUCH SERVICE TO BECOME EFFECTIVE FIVE (5) BUSINESS DAYS AFTER SUCH
MAILING.
(vi) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ESCROW
AGENT, THE TRUSTEE OR ANY HOLDER OF NOTES TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
THE COMPANY IN ANY OTHER JURISDICTION.
(vii) THE COMPANY AGREES THAT NEITHER THE TRUSTEE, THE ESCROW
AGENT NOR ANY HOLDER OF NOTES SHALL HAVE ANY LIABILITY TO THE COMPANY (WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE) FOR LOSSES SUFFERED BY THE COMPANY IN
CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATING OR INCIDENTAL TO, THE
TRANSACTIONS CONTEMPLATED AND THE RELATIONSHIP ESTABLISHED BY THIS AGREEMENT, OR
ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH, UNLESS IT IS
DETERMINED BY A FINAL AND NONAPPEALABLE JUDGMENT OF A COURT THAT IS BINDING ON
THE TRUSTEE OR SUCH HOLDER OF NOTES, AS THE CASE MAY BE, THAT SUCH LOSSES WERE
THE RESULT OF ACTS OR OMISSIONS ON THE PART OF THE TRUSTEE OR SUCH HOLDER OF
NOTES, AS THE CASE MAY BE, CONSTITUTING BAD FAITH, GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.
(viii) TO THE EXTENT PERMITTED BY APPLICABLE LAW, AND EXCEPT
AS OTHERWISE PROVIDED IN THIS AGREEMENT, THE COMPANY WAIVES ALL RIGHTS OF NOTICE
AND HEARING OF ANY KIND PRIOR TO THE EXERCISE BY THE TRUSTEE OR ANY HOLDER OF
NOTES OF ITS RIGHTS DURING THE CONTINUANCE OF AN EVENT OF DEFAULT TO REPOSSESS
THE COLLATERAL WITH JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR
LEVY UPON THE COLLATERAL OR OTHER SECURITY FOR THE SECURED OBLIGATIONS. TO THE
EXTENT PERMITTED BY APPLICABLE LAW, THE COMPANY WAIVES THE POSTING OF ANY BOND
OTHERWISE REQUIRED OF THE TRUSTEE OR ANY HOLDER OF NOTES IN CONNECTION WITH ANY
JUDICIAL PROCESS OR PROCEEDING TO OBTAIN POSSESSION OF, REPLEVY, ATTACH OR LEVY
UPON THE COLLATERAL OR OTHER SECURITY FOR THE SECURED OBLIGATIONS, TO ENFORCE
ANY JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE TRUSTEE OR ANY HOLDER
OF NOTES, OR TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING ORDER OR
PRELIMINARY OR PERMANENT INJUNCTION, THIS AGREEMENT OR ANY OTHER AGREEMENT OR
DOCUMENT BETWEEN THE COMPANY ON THE ONE HAND AND THE TRUSTEE AND/OR THE HOLDERS
OF NOTES ON THE OTHER HAND.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Pledge, Escrow and Disbursement Agreement as of the day first
written above.
COMPANY: HYPERION TELECOMMUNICATIONS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President and COO
TRUSTEE: BANK OF MONTREAL TRUST COMPANY
By :/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
ESCROW AGENT: BANK OF MONTREAL TRUST COMPANY
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
EXHIBIT A
[Form of Certificate for Release of Funds to [Company][Paying Agent]]
HYPERION TELECOMMUNICATIONS, INC.
Date:__________
The undersigned officer of Hyperion Telecommunications, Inc.,
a Delaware corporation (the "Company"), hereby certifies, pursuant to Section
[3.1][3.2] of the Pledge, Escrow and Disbursement Agreement dated as of August
__, 1997 (the "Escrow and Disbursement Agreement") by and among the Company,
Bank of Montreal Trust , as trustee (the "Trustee"), and , as escrow agent (the
"Escrow Agent"), under the Indenture dated as of August __, 1997 (the
"Indenture"), between the Company and the Trustee, that:
The release of funds has been duly authorized by all necessary
corporation action and does not contravene, or constitute a default
under, any provision of applicable law or regulation or the certificate
of incorporation of the Company or of any agreement, judgment,
injunction, order, decree or other instrument binding upon the Company
or result in the creation or imposition of any Lien on any assets of
the Company.
The Company hereby requests the Trustee to direct the Escrow
Agent to liquidate $_________ worth of Allowable Investments in the Escrow
Account by not later than 12:00 noon (New York time) on _________ __, 199_ and
to transfer $________ in immediately available funds to [the Company][the Paying
Agent].
Capitalized terms used herein without definition shall have
the meanings set forth in the Escrow and Disbursement Agreement.
By: _______________________________
Name: ____________________________
A-1
Title: ____________________________
A-2
