EXHIBIT 4.2
SUPPLEMENTAL INDENTURE
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SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
March 26, 1999, by and among Avalon Cable LLC, a Delaware limited liability
company ("Avalon LLC"), Avalon Cable of Michigan Holdings, Inc., a Delaware
corporation ("Michigan Holdings"), Avalon Cable Holdings Finance, Inc., a
Delaware corporation ("Avalon Finance"), Avalon Cable of Michigan, Inc., a
Pennsylvania corporation ("Avalon Michigan Inc."), and The Bank of New York, a
New York banking corporation, as trustee under the indenture referred to below
(the "Trustee").
W I T N E S S E T H
WHEREAS, Avalon LLC, Michigan Holdings and Avalon Finance have
heretofore executed and delivered to the Trustee an indenture (the "Indenture")
dated as of December 10, 1998 providing for the issuance of an aggregate
principal amount at issuance of up to $160.4 million of 11 7/8% Senior Discount
Notes due 2008 (the "Senior Discount Notes");
WHEREAS, the Reorganization (as defined in the Indenture) has
occurred;
WHEREAS, pursuant to the Reorganization, Avalon Michigan Inc. assumed
the obligations of Michigan Holdings under the Indenture and the Senior Discount
Notes;
WHEREAS, immediately thereafter and pursuant to the Reorganization,
Avalon LLC assumed the liabilities and obligations of Avalon Michigan Inc. under
the Indenture and the Senior Discount Notes;
WHEREAS, in connection with the foregoing and as contemplated by the
Indenture, Michigan Holdings and Avalon Michigan Inc. shall guarantee the
obligations of Avalon LLC under the Indenture and Senior Discount Notes after
the Reorganization;
WHEREAS, as a result of a foregoing and as contemplated by the
Indenture, the Issuers for purposes of the Indenture are now Avalon LLC and
Avalon Finance; and
WHEREAS, pursuant to Section 9.1 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
parties hereto mutually covenant and agree for the equal and ratable benefit of
the Holders of the Senior Discount Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. Each of Michigan Holdings and Avalon
Michigan Inc. hereby agrees as follows:
(a) Along with all other Guarantors (if any) named from time to time
in the Indenture, to jointly and severally Guarantee, to the
extent of the obligation of Avalon LLC therefor, to each Holder
of a Senior Discount Note authenticated and delivered by the
Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of the Indenture,
the Senior Discount Notes or the obligations of the Issuers
hereunder or thereunder, that:
(i) the principal of and interest on the Senior Discount Notes
will be promptly paid in full when due, subject to any
applicable grace period, whether at maturity, by
acceleration, redemption or otherwise, and interest on the
overdue principal of and interest on the Senior Discount
Notes, if any, if lawful, and all other obligations of
Avalon LLC to the Holders or the Trustee hereunder or
thereunder will be promptly paid in full or performed, all
in accordance with the terms hereof and thereof, subject to
the limitations set forth in Section 2 (h) below; and
(ii) in case of any extension of time of payment or renewal of
any Senior Discount Notes or any of such other obligations,
that same will be promptly paid in full when due or
performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or
otherwise.
Failing payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason each of
Michigan Holdings and Avalon Michigan Inc., to the extent of
the obligation of Avalon LLC therefor, and the other
Guarantors shall be jointly and severally obligated to pay
the same immediately.
(b) The obligations hereunder shall be unconditional, irrespective of
the validity, regularity or enforceability of the Senior Discount
Notes or the Indenture, the absence of any action to enforce the
same, any waiver or consent by any Holder of the Senior Discount
Notes with respect to any provisions hereof or thereof, the
recovery of any judgment against the Issuers, any action to
enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a
Guarantor.
(c) The following is hereby waived: diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency
or
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bankruptcy of the Issuers, any right to require a proceeding
first against the Issuers, protest, notice and all demands
whatsoever.
(d) This Senior Discount Note Guarantee shall not be discharged
except by complete performance of the obligations contained in
the Senior Discount Notes and the Indenture.
(e) If any Holder or the Trustee is required by any court or
otherwise to return to the Issuers, the Guarantors, or any
custodian, trustee, liquidator or other similar official acting
in relation to any of the Issuers or the Guarantors, any amount
paid by any of them to the Trustee or such Holder, this Senior
Discount Note Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect.
(f) Michigan Holdings and Avalon Michigan Inc. shall not be entitled
to any right of subrogation in relation to the Holders in respect
of any obligations guaranteed hereby until payment in full of all
obligations guaranteed hereby.
(g) As between the Guarantors, on the one hand, and the Holders and
the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in
Article 6 of the Indenture for the purposes of this Senior
Discount Note Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (y) in the event of any
declaration of acceleration of such obligations as provided in
Article 6 of the Indenture, such obligations (whether or not due
and payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Senior Discount Note
Guarantee.
(h) Michigan Holdings and Avalon Michigan Inc., and by its acceptance
hereof each Holder and the Trustee, hereby confirms that it is
the intention of all such parties that each Senior Discount Note
Guarantee not constitute a fraudulent transfer or conveyance for
purposes of Title 11 of the United States Code, as amended, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar U.S. Federal or state or other
applicable law. To effectuate the foregoing intention, the
Holders, Michigan Holdings and Avalon Michigan Inc. hereby
irrevocably agree that the obligations of each Guarantor under
each Senior Discount Note Guarantee shall be limited to the
maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Guarantor and after
giving effect to any collections from or payments made by or on
behalf of any other Guarantor in respect of the obligations of
such other Guarantor pursuant to Section 2(i), result in the
obligations of such Guarantor not constituting such a fraudulent
transfer or conveyance.
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(i) In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any
payment or distribution is made by any Guarantor (a "Funding
Guarantor") under a Senior Discount Note Guarantee, as the case
may be, such Funding Guarantor shall be entitled to a
contribution from all other Guarantors (if any) in a pro rata
amount, based on the net assets of each Guarantor (including the
Funding Guarantor), determined in accordance with GAAP, subject
to Section 2(h), for all payments, damages and expenses incurred
by such Funding Guarantor in discharging the Issuers' obligations
with respect to the Senior Discount Notes or any other
Guarantor's obligations under a Senior Discount Note Guarantee,
as the case may be.
(j) Each Guarantor agrees, and the Trustee and each Holder of the
Senior Discount Notes, whether upon original issue or upon
transfer, assignment or exchange thereof, accepts and agrees that
all claims against an Issuer that arise from payments of the
principal of and interest on the Senior Discount Notes pursuant
to each Senior Discount Note Guarantee made by or on behalf of
each Guarantor shall be subject and subordinated to, and no
payment with respect to any such claim of such Guarantor shall be
made before, the payment in full in cash of all outstanding
Senior Discount Notes in accordance with the provisions provided
therefor in the Indenture.
(k) This Supplemental Indenture shall constitute a Senior Discount
Note Guarantee of each of Michigan Holdings and Avalon Michigan
Inc. for purposes of the Indenture.
(l) This Supplemental Indenture inures to the benefit of and is
enforceable by the Trustee, the Holders and their successors,
transferees and assigns.
3. EXECUTION AND DELIVERY. Each of Michigan Holdings and Avalon
Michigan Inc. agrees that this Senior Discount Note Guarantee shall remain in
full force and effect notwithstanding any failure to endorse on each Senior
Discount Note a notation of such Senior Discount Note Guarantee.
4. RELEASE. In the event of a sale or other disposition of all of
the assets of each of Michigan Holdings or Avalon Michigan Inc., by way of
merger, consolidation or otherwise, or a sale or other disposition of all to the
capital stock thereof, then Michigan Holdings or Avalon Michigan Inc., as
applicable (in the event of a sale or other disposition, by way of merger,
consolidation or otherwise, of all of the capital stock thereof) or the
corporation acquiring the property (in the event of a sale or other disposition
of all or substantially all of the assets thereof) will, upon notice to the
Trustee of its intention to be so released, be released and relieved of any
obligations under its Senior Discount Note Guarantee.
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5. THE ISSUERS. As of the date hereof and after giving effect to the
Reorganization, as contemplated by the Indenture, the Issuers are Avalon LLC and
Avalon Finance.
6. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, manager, member or stockholder of any Person
who is or was an Issuer or Guarantor under the Senior Discount Notes, as such,
shall have any liability for any obligations under the Senior Discount Notes,
the Senior Discount Note Guarantees or the Indenture or any related documents or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder of Senior Discount Notes by accepting a Senior
Discount Note waives and releases all such liability. The waiver and release are
part of the consideration for issuance of the Senior Discount 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 waiver is against public policy.
7. FEES AND EXPENSES. Avalon Holdings and Avalon Michigan Inc.
hereby agrees to pay any and all expenses (including reasonable counsel fees and
expenses) incurred by the Trustee or the Holders in enforcing any rights under
this Senior Discount Note Guarantee.
8. NEW YORK LAW TO GOVERN. THE LAW OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE.
9. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
10. EFFECT ON INDENTURE. Except as expressly supplemented by this
Supplemental Indenture, the provisions of the Indenture shall remain unchanged
and in full force and effect. From and after the date of this Supplemental
Indenture, any reference in the Indenture to the Indenture shall be deemed to be
a reference to the Indenture as supplemented by this Supplemental Indenture.
11. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
12. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by Michigan Holdings, Avalon Michigan Inc. and the
Issuers.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the date first above written.
AVALON CABLE LLC
By: /s/ Joel C. Cohen
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Name: Joel C. Cohen
Title: President
AVALON CABLE HOLDINGS FINANCE, INC.
By: /s/ Joel C. Cohen
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Name: Joel C. Cohen
Title: President
AVALON CABLE OF MICHIGAN
HOLDINGS, INC., as a Guarantor
By: /s/ Joel C. Cohen
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Name: Joel C. Cohen
Title: President
AVALON CABLE OF MICHIGAN, INC., as
a Guarantor
By: /s/ Joel C. Cohen
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Name: Joel C. Cohen
Title: President
THE BANK OF NEW YORK, as Trustee
By: /s/ Mary La Gumina
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Name: Mary La Gumina
Title: Assistant Vice President