EXHIBIT 10.14
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WARRANT REGISTRATION RIGHTS AGREEMENT
Dated as of April 15, 1996
by and among
HYPERION TELECOMMUNICATIONS, INC.
and
BEAR, STEARNS & CO. INC.
CHASE SECURITIES INC.
NATIONSBANC CAPITAL MARKETS, INC.
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This Warrant Registration Rights Agreement (the "Agreement") is made and
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entered into as of April 15, 1996, by and among Hyperion Telecommunications,
Inc., a Delaware corporation (the "Company"), and Bear, Stearns & Co. Inc.,
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Chase Securities Inc. and NationsBanc Capital Markets, Inc. (each an "Initial
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Purchaser" and together, the "Initial Purchasers"), each of whom have agreed to
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purchase an aggregate of 329,000 Units consisting of an aggregate of
$329,000,000 in aggregate principal amount at maturity of the Company's 13%
Series A Senior Discount Notes due 2003 and warrants (the "Warrants") to
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purchase an aggregate of 613,427 shares of the Company's Common Stock, $.01 par
value, pursuant to the Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement (the "Purchase
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Agreement"), dated as of April 10, 1996, by and among the Company and the
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Initial Purchasers. In order to induce the Initial Purchasers to purchase the
Units, the Company has agree to provide the registration rights set forth in
this Agreement. The execution and delivery of this Agreement is a condition to
the obligations of the Initial Purchasers set forth in Section 8 of the Purchase
Agreement. All defined terms used but not defined herein shall have the
meanings ascribed to them in the Indenture (as defined below).
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have the
following meanings:
Act: The Securities Act of 1933, as amended.
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Business Day: Any day except a Saturday, Sunday or other day in the City
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of New York, or in the city of the corporate trust office of the Trustee, on
which banks are authorized to close.
Closing Date: The date hereof.
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Commission: The Securities and Exchange Commission.
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Common Stock: The common stock, $.01 par value, of the Company.
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Exchange Act: The Securities Exchange Act of 1934, as amended from time to
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time.
Exchange Offer: As defined in the Registration Rights Agreement, dated the
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Closing Date, among the Company and the Initial Purchasers.
Holders: As defined in Section 2 hereof.
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Indenture: The Indenture, dated the Closing Date, between the Company Bank
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of Montreal Trust Company, as trustee (the "Trustee"), pursuant to which the
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Units are to be issued, as such Indenture is amended or supplemented from time
to time in accordance with the terms thereof.
NASD: National Association of Securities Dealers, Inc.
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Person: An individual, partnership, corporation, trust, unincorporated
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organization, or a government or agency or political subdivision thereof.
Prospectus: The prospectus included in a Registration Statement at the
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time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.
Registrable Securities: The Warrants, Warrant Shares and any other
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securities issued or issuable with respect to the Warrants or the Warrant Shares
by way of a stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization;
provided that a security ceases to be a Registrable Security when it is no
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longer a Transfer Restricted Security.
Registration Expenses: See Section 6 hereof.
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Registration Statement: Any registration statement of the Company which
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covers Registrable Securities pursuant to the provisions of this Agreement,
including the Prospectus, amendments and supplements to such Registration
Statement, including post-effective amendments, and all exhibits and all
material incorporated by reference in such Registration Statement.
Senior Notes: The 13% Series A Senior Discount Notes due 2003 of the
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Company, being sold and issued pursuant to the Purchase Agreement and the
Indenture, or any notes exchanged therefor as contemplated by the Indenture.
Transfer Restricted Securities: A Warrant or Warrant Share, until such
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Warrant or Warrant Share (i) has been effectively registered under the Act and
disposed of in accordance with the Registration Statement covering it, (ii) is
distributed to the public pursuant to Rule 144 or (iii) may be sold or
transferred pursuant to Rule 144(k) (or any similar provisions then in force)
under the Act or otherwise.
Warrants: The warrants of the Company issued and sold pursuant to the
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Purchase Agreement and the Warrant Agreement, together with any warrants issued
in substitution or replacement therefor.
Warrant Agreement: The Warrant Agreement dated the Closing Date by and
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among the Company and Bank of Montreal Trust Company, as Warrant Agent.
Warrant Shares: The Common Stock or other securities which any Holder may
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acquire upon exercise of a Warrant, together with any other securities which
such Holder may acquire on account of any such securities, including, without
limitation, as the result of any dividend or other distribution on Common Stock
or any split-up of such Common Stock as provided for in the Warrant Agreement.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Registrable Securities. The securities entitled to the benefits of
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this Agreement are the Registrable Securities.
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(b) Holders of Registrable Securities. A Person is deemed to be a Holder
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of Registrable Securities whenever such Person owns Registrable Securities or
has the right to acquire such Registrable Securities, whether or not such
acquisition has actually been effected and disregarding any legal restrictions
upon the exercise of such right.
SECTION 3. SHELF REGISTRATION
(a) The Company shall file a "shelf" registration with respect to all
Registrable Securities on any appropriate form pursuant to Rule 415 (or similar
rule that may be adopted by the Commission) under the Act (the "Shelf
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Registration") (i) covering resales by the Holders of the Warrants, on or prior
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to October 1, 1996 and (ii) covering the issuance of the Warrant Shares by the
Company upon exercise, or if such issuance is not then permitted to be
registered by applicable rule or policy of the Commission, covering resales of
the Warrant Shares, on or prior to January 1, 1997, and shall use its best
efforts to have such Shelf Registration declared effective by the Commission on
or prior to 90 days after the dates specified for such filings. Notwithstanding
the foregoing, the Company shall not be required to file such Shelf Registration
on or prior to the consummation of the Exchange Offer; provided that, in the
event the Exchange Offer is consummated later than the filing time required by
the preceding sentence for each Shelf Registration, the Company shall file such
Shelf Registration(s) within 30 days after the date of the consummation of the
Exchange Offer.
(b) If the Holders of a majority in aggregate principal amount of the
Registrable Securities to be registered in the Shelf Registration so elect, an
offering of Registrable Securities pursuant to the Shelf Registration may be
effected in the form of an underwritten offering. In such event, and if the
managing underwriters advise the Company and the Holders of such Registrable
Securities in writing that in their opinion the amount of Registrable Securities
proposed to be sold in such offering exceeds the amount of Registrable
Securities which can be sold in such offering, there shall be included in such
underwritten offering the amount of such Registrable Securities which in the
opinion of such underwriters can be sold, and such amount shall be allocated pro
rata among the Holders of such Registrable Securities on the basis of the
principal amount of Registrable Securities requested to be included by such
Holders. The Holders of the Registrable Securities to be registered shall pay
all underwriting discounts and commissions of such underwriters.
(c) If any of the Registrable Securities covered by the Shelf Registration
are to be sold in an underwritten offering, the investment banker or investment
bankers and manager or managers that will administer the offering will be
selected by the Holders of a majority in aggregate principal amount of such
Registrable Securities included in such offering; provided that such investment
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bank or manager shall be reasonably satisfactory to the Company.
(d) The Company shall use its best efforts to keep the Shelf Registration
continuously effective until October 1, 1999 for the Warrants and until January
1, 2000 for the Warrant Shares or such shorter period that will terminate when
all the Registrable Securities covered by the Shelf Registration have been sold
pursuant to the terms of the Shelf Registration.
The Company further agrees to use its best efforts to prevent the happening
of any event that would cause the Registration Statement pursuant to Section 3
hereof to contain a material misstatement
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or omission or to be not effective and usable for resale of the Registrable
Securities during the period that such Registration Statement is required to be
effective and usable.
(e) Each Holder of Registrable Securities whose Registrable Securities are
covered by a Registration Statement filed pursuant to this Section 3 agrees, if
requested by the managing underwriters in an underwritten offering, not to
effect any public sale or distribution of securities of the Company of the same
class as any Securities included in such Registration Statement, including a
sale pursuant to Rule 144 under the Act (except as part of such underwritten
registration), during the 10-day period prior to, and during the 90-day period
beginning on, the closing date of each underwritten offering made pursuant to
such Registration Statement, to the extent timely notified in writing by the
Company or the managing underwriters; provided that each Holder of Registrable
Securities shall be subject to the hold-back restrictions of this Section 3(e)
only once during the term of this Agreement.
The foregoing provisions shall not apply to any Holder of Registrable
Securities if such Holder is prevented by applicable statute or regulation from
entering into any such agreement; provided that any such Holder shall undertake,
in its request to participate in any such underwritten offering, not to effect
any public sale or distribution of any applicable class of Registrable
Securities commencing on the date of sale of such applicable class of
Registrable Securities unless it has provided 45 days prior written notice of
such sale or distribution to the underwriter or underwriters.
SECTION 4. LIQUIDATED DAMAGES
If the Registration Statement: (i) is not filed with the Commission on or
prior to the date specified for such filing in Section 3(a) hereof; (ii) has not
been declared effective by the Commission pursuant to Section 3(a) hereof; or
(iii) following the date such Registration Statement is declared effective by
the Commission, shall cease to be effective without being restored to
effectiveness by amendment or otherwise within 30 business days, (each such
event referred to in clauses (i) through (iii), a "Shelf Registration Default")
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to the extent permitted by applicable law, the Company shall pay as liquidated
damages and not as a penalty to each Holder during the first 90-day period
immediately following the occurrence, and during the continuance of such Shelf
Registration Default, an amount equal to $.0025 per week per Warrant (or per
such number of Warrant Shares then issuable upon exercise of or in respect of a
Warrant) held by such Holder for each week or pro rata for a portion of each
week thereof that the Shelf Registration Default continues. To the extent
permitted by applicable law, the amount of the liquidated damages will increase
by an additional $.0025 per week per Warrant (or per such number of Warrant
Shares then issuable upon exercise of or in respect of a Warrant) with respect
to each subsequent 90-day period until all Shelf Registration Defaults have been
cured, up to a maximum amount of liquidated damages of $.0125 per week per
Warrant (or per such number of Warrant Shares then issuable upon exercise of or
in respect of a Warrant).
All accrued liquidated damages shall be paid to record Holders by the
Company by wire transfer of immediately available funds, or by mailing a federal
funds check, on each Interest Payment Date (as defined in the Indenture). All
obligations of the Company set forth in the preceding paragraph that are
outstanding with respect to any Registrable Security at the time such security
has been effectively registered under the Act shall survive until such time as
all such obligations with respect to such security have been satisfied in full.
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SECTION 5. REGISTRATION PROCEDURES
(a) General Provisions. In connection with the Company's registration
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obligations pursuant to Section 3 hereof, the Company will use its best efforts
to effect such registration to permit the sale of such Registrable Securities in
accordance with the intended method or methods of disposition thereof, and
pursuant thereto the Company will as expeditiously as possible:
(1) use its best efforts to keep such Registration Statement
continuously effective and provide or incorporate by reference all
requisite financial statements for the period specified in Section 3 of
this Agreement. Upon the occurrence of any event that would cause any such
Registration Statement or the Prospectus contained therein (A) to contain a
material misstatement or omission or (B) not to be effective and usable for
resale of Registrable Securities during the period required by this
Agreement, the Company shall file promptly an appropriate amendment to such
Registration Statement or file appropriate documents that will be so
incorporated by reference, (1) in the case of clause (A), correcting any
such misstatement or omission, and (2) in the case of either clause (A) or
(B), use its best efforts to cause such amendment to be declared effective
and such Registration Statement and the related Prospectus to become usable
for their intended purpose(s) as soon as practicable thereafter;
(2) prepare and file with the Commission such amendments and post-
effective amendments to the Registration Statement as may be necessary to
keep the Registration Statement effective for the period set forth in
Section 3(d) hereof; cause the Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed pursuant
to Rule 424 under the Act; and comply in all material respects with the
provisions of the Act with respect to the disposition of all securities
covered by such Registration Statement during the applicable period in
accordance with the intended method or methods of distribution by the
sellers thereof set forth in such Registration Statement or supplement to
the Prospectus; the Company shall not be deemed to have used its best
efforts to keep a Registration Statement effective during the applicable
period if it voluntarily takes any action that would result in selling
Holders of the Registrable Securities covered thereby not being able to
sell such Registrable Securities during that period unless such action is
required under applicable law, provided that the foregoing shall not apply
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to actions taken by the Company in good faith and for valid business
reasons, including without limitation the acquisition or divestiture of
assets, so long as the Company promptly thereafter complies with the
requirements of clause (14) below, if applicable;
(3) advise the underwriter(s), if any, and selling Holders promptly
and, if requested by such Persons, confirm such advice in writing, (A) when
the Prospectus or any Prospectus supplement or post-effective amendment has
been filed, and, with respect to any Registration Statement or any post-
effective amendment thereto, when the same has become effective, (B) of any
request by the Commission for amendments to the Registration Statement or
amendments or supplements to the Prospectus or for additional information
relating thereto, (C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement under the Act or
of the suspension by any state securities commission of the qualification
of the Registrable Securities for offering or sale in any jurisdiction, or
the initiation of any proceeding for any of the preceding purposes, (D) of
the existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto or any document
incorporated by reference
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therein untrue, or that requires the making of any additions to or changes
in the Registration Statement in order to make the statements therein not
misleading, or that requires the making of any additions to or changes in
the Prospectus in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If at any time
the Commission shall issue any stop order suspending the effectiveness of
the Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption from qualification of the Registrable Securities under state
securities or Blue Sky laws, the Company shall use its best efforts to
obtain the withdrawal or lifting of such order at the earliest possible
time;
(4) make available to each selling Holder named in any Registration
Statement or Prospectus and each of the underwriter(s) in connection with
such sale, if any, before filing with the Commission, copies of any
Registration Statement or any Prospectus included therein or any amendments
or supplements to any such Registration Statement or Prospectus and the
Company will not file or will correct any such Registration Statement or
Prospectus or any amendment or supplement to any such Registration
Statement or Prospectus (including all such documents incorporated by
reference) to which the selling Holders of the Registrable Securities
covered by such Registration Statement or the underwriter(s) in connection
with such sale, if any, shall reasonably object within five Business Days
after the receipt thereof. A selling Holder or underwriter, if any, shall
be deemed to have reasonably objected to such filing if such Registration
Statement, amendment, Prospectus or supplement, as applicable, as proposed
to be filed, contains a material misstatement or omission or fails to
comply with the applicable requirements of the Act;
(5) promptly upon the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus, make
available copies of such document to the selling Holders and to the
underwriter(s) in connection with such sale, if any, make the Company's
representatives available for discussion of such document and other
customary due diligence matters, and include such information in such
document prior to the filing thereof as such selling Holders or
underwriter(s), if any, reasonably may request;
(6) make available at reasonable times for inspection by the selling
Holders, any underwriter participating in any disposition pursuant to such
Registration Statement and any attorney or accountant retained by such
selling Holders or any of such underwriter(s), all financial and other
records, pertinent corporate documents and properties of the Company and
cause the Company's officers, directors and employees to supply all
information reasonably requested by any such Holder, underwriter, attorney
or accountant in connection with such Registration Statement or any post-
effective amendment thereto subsequent to the filing thereof and prior to
its effectiveness; provided that any person to whom information is provided
under this clause (6) agrees in writing to maintain the confidentiality of
such information to the extent such information is not in the public
domain;
(7) if requested by any selling Holders or the underwriter(s) in
connection with such sale, if any, promptly include in any Registration
Statement or Prospectus, pursuant to a supplement or post-effective
amendment if necessary, such information as such selling Holders and
underwriter(s), if any, may reasonably request to have included therein,
including, without limitation, information relating to the "Plan of
Distribution" of the Registrable Securities, information with respect to
the principal amount of Registrable Securities being sold to such
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underwriter(s), the purchase price being paid therefor and any other terms
of the offering of the Registrable Securities to be sold in such offering;
and make all required filings of such Prospectus supplement or post-
effective amendment as soon as practicable after the Company is notified of
the matters to be included in such Prospectus supplement or post-effective
amendment;
(8) furnish to each selling Holder and each of the underwriter(s) in
connection with such sale, if any, without charge, at least one copy of the
Registration Statement, as first filed with the Commission, and of each
amendment thereto, and make available all documents incorporated by
reference therein and all exhibits (including exhibits incorporated therein
by reference);
(9) deliver to each selling Holder and each of the underwriter(s), if
any, without charge, as many copies of the Prospectus (including each
preliminary prospectus) and any amendment or supplement thereto as such
Persons reasonably may request; the Company hereby consents to the use of
the Prospectus and any amendment or supplement thereto by each of the
selling Holders and each of the underwriter(s), if any, in connection with
the offering and the sale of the Registrable Securities covered by the
Prospectus or any amendment or supplement thereto;
(10) enter into such agreements (including, unless not required
pursuant to Section 3 hereof, an underwriting agreement) and make such
representations and warranties and take all such other actions in
connection therewith in order to expedite or facilitate the disposition of
the Registrable Securities pursuant to any Registration Statement
contemplated by this Agreement as may be reasonably requested by any Holder
of Registrable Securities or underwriter in connection with any sale or
resale pursuant to any Registration Statement contemplated by this
Agreement, and in such connection, whether or not an underwriting agreement
is entered into and whether or not the registration is an Underwritten
Registration, the Company shall:
(A) furnish to each selling Holder and each underwriter, if any,
upon the effectiveness of the Registration Statement:
(1) a certificate, dated the date of effectiveness of the
Registration Statement, signed by (x) the President and (y) any
Vice President, the Secretary or an Assistant Secretary of the
Company, confirming, as of the date thereof, the matters set
forth in paragraphs (a), (b), (c) and (d) of Section 8 of the
Purchase Agreement and such other matters as the Holders and/or
underwriter(s) may reasonably request;
(2) an opinion, dated the date of effectiveness of the
Registration Statement, of counsel for the Company, covering (i)
due authorization and enforceability of the Warrants, (ii) a
statement to the effect that such counsel has participated in
conferences with officers and other representatives of the
Company and representatives of the independent public accountants
for the Company and have considered the matters required to be
stated therein and the statements contained therein, although
such counsel has not independently verified the accuracy,
completeness or fairness of such statements; and that such
counsel advises that, on the basis of the foregoing (relying as
to materiality to a large extent upon facts provided to such
counsel by officers and other representatives
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of the Company and without independent check or verification), no
facts came to such counsel's attention that caused such counsel
to believe that the applicable Registration Statement, at the
time such Registration Statement or any post-effective amendment
thereto became effective, and contained an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or that the Prospectus contained in such Registration
Statement as of its date and, contained an untrue statement of a
material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading and
(iii) such other matters of the type customarily covered in
opinions of counsel for an issuer in connection with similar
securities offerings, as may reasonably be requested by such
parties. Without limiting the foregoing, such counsel may state
further that such counsel assumes no responsibility for, and has
not independently verified, the accuracy, completeness or
fairness of the financial statements, notes and schedules and
other financial, statistical and accounting data included in any
Registration Statement contemplated by this Agreement or the
related Prospectus; and
(3) a customary comfort letter, dated as of the date of
effectiveness of the Registration Statement, from the Company's
independent accountants, in the customary form and covering
matters of the type customarily covered in comfort letters to
underwriters in connection with primary underwritten offerings,
and affirming the matters set forth in the comfort letters
delivered pursuant to Section 8(i) of the Purchase Agreement,
without exception;
(B) set forth in full or incorporate by reference in the
underwriting agreement, if any, in connection with any sale or resale
pursuant to any Registration Statement the indemnification provisions
and procedures of Section 7 hereof with respect to all parties to be
indemnified pursuant to said Section; and
(C) deliver such other documents and certificates as may be
reasonably requested by such parties to evidence compliance with
clause (A) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company
pursuant to this clause (10), if any.
The above shall be done at each closing under such underwriting or
similar agreement, as and to the extent required thereunder, and if at any
time the representations and warranties of the Company contemplated in
(A)(1) above cease to be true and correct, the Company shall so advise the
underwriter(s), if any, and selling Holders promptly and if requested by
such Persons, shall confirm such advice in writing;
(11) prior to any public offering of Registrable Securities,
cooperate with the selling Holders, the underwriter(s), if any, and their
respective counsel in connection with the registration and qualification of
the Registrable Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders or underwriter(s), if any, may request
and do any and all other acts or things necessary or advisable to enable
the disposition in such jurisdictions of the Registrable Securities covered
by the applicable Registration Statement; provided that the Company
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shall not be required to register or qualify as a foreign corporation where
it is not now so qualified or to take any action that would subject it to
the service of process in suits or to taxation, other than as to matters
and transactions relating to the Registration Statement, in any
jurisdiction where it is not now so subject;
(12) in connection with any sale of Registrable Securities that will
result in such securities no longer being Transfer Restricted Securities,
cooperate with the selling Holders and the underwriter(s), if any, to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any restrictive legends;
and to register such Registrable Securities in such denominations and such
names as the Holders or the underwriter(s), if any, may request at least
two Business Days prior to such sale of Registrable Securities;
(13) use its best efforts to cause the Registrable Securities covered
by the Registration Statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable
the seller or sellers thereof or the underwriter(s), if any, to consummate
the disposition of such Registrable Securities, subject to the proviso
contained in clause (11) above;
(14) if any fact or event contemplated by clause (2) above shall
exist or have occurred, prepare a supplement or post-effective amendment to
the Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document so
that, as thereafter delivered to the purchasers of Registrable Securities,
the Prospectus will not contain an untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading;
(15) provide a CUSIP number for all Registrable Securities not later
than the effective date of a Registration Statement covering such
Registrable Securities and provide the Trustee under the Indenture with
printed certificates for the Registrable Securities which are in a form
eligible for deposit with the Depository Trust Company;
(16) cooperate and assist in any filings required to be made with the
NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter") that is
required to be retained in accordance with the rules and regulations of the
NASD, and use its best efforts to cause such Registration Statement to
become effective and approved by such governmental agencies or authorities
as may be necessary to enable the Holders selling Registrable Securities to
consummate the disposition of such Registrable Securities;
(17) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make generally available to
its security holders with regard to any applicable Registration Statement,
as soon as practicable, a consolidated earnings statement meeting the
requirements of Rule 158 (which need not be audited) covering a twelve-
month period beginning after the effective date of the Registration
Statement (as such term is defined in paragraph (c) of Rule 158 under the
Act);
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(18) cause all Registrable Securities covered by the Registration
Statement to be listed on each securities exchange on which similar
securities issued by the Company are then listed if requested by the
Holders of a majority in aggregate principal amount of Registrable
Securities or the managing underwriter(s), if any;
(19) provide promptly to each Holder upon written request each
document filed with the Commission pursuant to the requirements of Section
13 or Section 15(d) of the Exchange Act; and
(20) if the registration is a registration in which securities of the
Company are sold to an underwriter for reoffering to the public, obtain a
customary comfort letter, dated as of the date of effectiveness of each
Registration Statement, addressed to the Board of Directors of the Company
from the Company's independent accountants, in the customary form and
covering matters of the type customarily covered in comfort letters to
boards of directors in underwritten offerings.
(b) Restrictions on Holders. Each Holder agrees by acquisition of a
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Registrable Security that, upon receipt of any notice from the Company of the
existence of any fact of the kind described in Section 5(a)(3)(D) hereof, such
Holder will forthwith discontinue disposition of Registrable Securities pursuant
to the applicable Registration Statement until such Holder's receipt of the
copies of the supplemented or amended Prospectus contemplated by Section
5(a)(14) hereof, or until it is advised in writing (the "Advice") by the Company
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that the use of the Prospectus may be resumed, and has received copies of any
additional or supplemental filings that are incorporated by reference in the
Prospectus. If so directed by the Company, each Holder will deliver to the
Company (at the Company's expense) all copies, other than permanent file copies
then in such Holder's possession, of the Prospectus covering such Registrable
Securities that was current at the time of receipt of such notice. In the event
the Company shall give any such notice, the time period regarding the
effectiveness of such Registration Statement set forth in Section 3 hereof, as
applicable, shall be extended by the number of days during the period from and
including the date of the giving of such notice pursuant to Section 5(a)(3)(D)
hereof to and including the date when each selling Holder covered by such
Registration Statement shall have received the copies of the supplemented or
amended Prospectus contemplated by Section 5(a)(14) hereof or shall have
received the Advice.
SECTION 6. REGISTRATION EXPENSES
(a) All expenses incident to the Company's performance of or compliance
with this Agreement will be borne by the Company, regardless of whether a
Registration Statement becomes effective, including without limitation: (i) all
registration and filing fees and expenses (including filings made by any Holder
with the NASD (and, if applicable, the fees and expenses of any "qualified
independent underwriter") and its counsel, as may be required by the rules and
regulations of the NASD); (ii) all fees and expenses of compliance with federal
securities and state Blue Sky or securities laws; (iii) all expenses of printing
(including, without limitation, expenses of printing or engraving certificates
for the Registrable Securities in a form eligible for deposit with the
Depositary Trust Company and printing of Prospectuses), messenger and delivery
services and telephone; (iv) all fees and disbursements of counsel for the
Company and the Holders of Transfer Restricted Securities; (v) all application
and filing fees in connection with listing the Registrable Securities on a
national exchange or automated quotation system
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pursuant to the requirements hereof; and (vi) all fees and disbursements of
independent certified public accountants of the Company (including the expenses
of any special audit and comfort letters required by or incident to such
performance).
The Company will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Company.
(b) In connection with each Registration Statement required hereunder, the
Company will reimburse the Holders of Registrable Securities being registered
pursuant to such Registration Statement for the fees and disbursements of not
more than one counsel chosen by the Holders of a majority of the principal
amount of such Registrable Securities, or more than one, if, in the reasonable
judgment of counsel for the Holders and counsel for the Company, a conflict
exists among such Holders. Notwithstanding the provisions of this Section 6,
each Holder of Registrable Securities shall pay all registration expenses to the
extent required by applicable law.
SECTION 7. INDEMNIFICATION
(a) The Company and its Subsidiaries, jointly and severally, agree to
indemnify and hold harmless (i) each Holder, (ii) each person, if any, who
controls a Holder within the meaning of Section 15 of the Act or Section 20(a)
of the Exchange Act and (iii) the respective officers, directors, partners,
employees, representatives and agents of any Holder or any controlling person to
the fullest extent lawful, from and against any and all losses, liabilities,
claims, damages and expenses whatsoever (including but not limited to attorneys'
fees and any and all expenses whatsoever incurred in investigating, preparing or
defending against any investigation or litigation, commenced or threatened, or
any claim whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus, or in
any supplement thereto or amendment thereof, 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, in the light of the
circumstances under which they were made, not misleading; provided, that the
Company will not be liable in any such case to the extent, but only to the
extent, that (i) any such loss, liability, claim, damage or expense arises out
of or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company by or on behalf of such Holder
expressly for use therein and (ii) the foregoing indemnity with respect to any
untrue statement contained in or omitted from a Registration Statement or the
Prospectus shall not inure to the benefit of any Holder (or any person
controlling such Holder), from whom the person asserting any such loss,
liability, claim, damage or expense purchased any of the Warrants which are the
subject thereof if it is finally judicially determined that such loss,
liability, claim, damage or expense resulted solely from the fact that the
Holder sold Warrants to a person to whom there was not sent or given, at or
prior to the written confirmation of such sale, a copy of the Registration
Statement and the Prospectus, as amended or supplemented, and (x) the Company
shall have previously and timely furnished sufficient copies of the Registration
Statement or Prospectus, as so amended or supplemented, to such Holder in
accordance with this Agreement and (y)
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the Registration Statement or Prospectus, as so amended or supplemented, would
have corrected such untrue statement or omission of a material fact. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have, including, under this Agreement.
(b) Each Holder, severally and not jointly, agrees to indemnify and hold
harmless the Company and each person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act,
against any losses, liabilities, claims, damages and expenses whatsoever
(including but not limited to attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
investigation or litigation, commenced or threatened, or any claim whatsoever
and any and all amounts paid in settlement of any claim or litigation), joint or
several, to which they or any of them may become subject under the Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus, or in any amendment thereof or
supplement 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, in the light of the circumstances
under which they were made, not misleading, in each case to the extent, but only
to the extent, that any such loss, liability, claim, damage or expense arises
out of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company by or on behalf of such Holder
expressly for use therein. This indemnity will be in addition to any liability
which a Holder may otherwise have, including under this Agreement. In no event,
however, shall the liability of any selling Holder hereunder be greater in
amount than the dollar amount of the proceeds received by such Holder upon its
sale of the Registrable Securities giving rise to such indemnification
obligation.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify each party against whom indemnification is
to be sought in writing of the commencement thereof (but the failure so to
notify an indemnifying party shall not relieve it from any liability which it
may have under this Section 7 except to the extent that it has been prejudiced
in any material respect by such failure or from any liability which it may
otherwise have). In case any such action is brought against any indemnified
party, and it notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and to the extent it
may elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof with counsel reasonably satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless (i) the employment of such counsel shall have been authorized in
writing by the indemnifying parties in connection with the defense of such
action, (ii) the indemnifying parties shall not have employed counsel to take
charge of the defense of such action within a reasonable time after notice of
commencement of the action, or (iii) such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying party or parties shall not
have the right to direct the defense of such action on behalf of the indemnified
party or parties), in any of which events such fees and expenses of counsel
shall be borne by the indemnifying parties. The indemnifying party under
subsection (a) or (b) above, shall only be liable for the legal expenses of one
counsel (in addition to any local counsel) for all indemnified
12
parties in each jurisdiction in which any claim or action is brought; provided
that the indemnifying party shall be liable for separate counsel for any
indemnified party in a jurisdiction, if counsel to the indemnified parties shall
have reasonably concluded that there may be defenses available to such
indemnified party that are different from or additional to those available to
those available to one or more of the other indemnified parties and that
separate counsel for such indemnified party is prudent under the circumstances.
Anything in this subsection to the contrary notwithstanding, an indemnifying
party shall not be liable for any settlement of any claim or action effected
without its prior written consent; provided, that such consent was not
unreasonably withheld.
(d) In order to provide for contribution in circumstances in which the
indemnification provided for in this Section 7 is for any reason held to be
unavailable from the Company or is insufficient to hold harmless a party
indemnified thereunder, the Company and each Holder shall contribute to the
aggregate losses, claims, damages, liabilities and expenses of the nature
contemplated by such indemnification provision (including any investigation,
legal and other expenses incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted, but after
deducting in the case of losses, claims, damages, liabilities and expenses
suffered by the Company, any contribution received by the Company from persons,
other than the Holders, who may also be liable for contribution, including
persons who control the Company within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act) to which the Company and any Holder may be
subject, in such proportion as is appropriate to reflect the relative benefits
received by the Company from the offering of Registrable Securities and any such
Holder from its sale of Registrable Securities or, if such allocation is not
permitted by applicable law or indemnification is not available as a result of
the indemnifying party not having received notice as provided in this Section 7,
in such proportion as is appropriate to reflect not only the relative benefits
referred to above but also the relative fault of the Company and the Holders in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company and any
Holder shall be deemed to be in the same proportion as (x) the total proceeds
from the offering of the Registrable Securities (net of discounts but before
deducting expenses) received by the Company and (y) the total proceeds received
by such Holder upon its sale of Registrable Securities which would otherwise
give rise to the indemnification obligation, respectively. The relative fault
of the Company and of the Holders shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Holders and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and each Holder agree that it would not
be just and equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation or by any other method of allocation which does not take
into account the equitable considerations referred to above. Notwithstanding
the provisions of this Section 7, (i) no Holder shall be required to contribute,
in the aggregate, any amount in excess of the amount by which the total received
by such Holder with respect to the sale of its Registrable Securities exceeds
the sum of (A) the amount paid by such Holder for such Registrable Security plus
(B) the amount of any damages which such Holder has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission and (ii) no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 7, (A) each person, if any, who controls a Holder within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and (B)
the respective officers, directors, partners, employees, representatives and
agents of a Holder or any controlling person shall have the same rights to
contribution as such Holder, and each person, if any, who
13
controls the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act shall have the same rights to contribution as the
Company, subject in each case to clauses (i) and (ii) of this Section 7(d). Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties
under this Section 7, notify such party or parties from whom contribution may be
sought, but the failure to so notify such party or parties shall not relieve the
party or parties from whom contribution may be sought from any obligation it or
they may have under this Section 7 or otherwise. No party shall be liable for
contribution with respect to any action or claim settled without its prior
written consent; provided, however, that such written consent was not
unreasonably withheld.
SECTION 8. RULE 144A
The Company hereby agrees with each Holder, for so long as any Registrable
Securities remain outstanding, to make available, upon request of any Holder of
Registrable Securities, to any Holder or beneficial owner of Registrable
Securities in connection with any sale thereof and any prospective purchaser of
such Registrable Securities designated by such Holder or beneficial owner, the
information required by Rule 144A(d)(4) under the Act in order to permit resales
of such Registrable Securities pursuant to Rule 144A.
SECTION 9. MISCELLANEOUS
(a) Remedies. Each Holder of Registrable Securities, in addition to being
---------
entitled to exercise all rights provided herein, and as provided in the Purchase
Agreement and the Warrant Agreement and granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this
Agreement. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Agreement and hereby agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will not on or after the date
---------------------------
of this Agreement enter into any agreement with respect to its securities that
conflicts with the rights granted to the Holders of Registrable Securities in
this Agreement or otherwise conflicts with the provisions hereof. The Company
has not previously entered into any agreement granting any registration rights
of its securities to any Person except as set forth in Schedule I hereto. The
rights granted to the Holders of Registrable Securities hereunder do not in any
way conflict with and are not inconsistent with the rights granted to the
holders of the Company's securities under any other agreement in effect on the
date hereof, except where a waiver with respect thereto has been obtained prior
to the date of effectiveness of any Registration Statement required under this
Agreement.
(c) Adjustments Affecting the Registrable Securities. The Company will not
-------------------------------------------------
take any action, or permit any change to occur, with respect to the Registrable
Securities which would (i) adversely affect the ability of any of the Holders of
Registrable Securities to include such Registrable Securities in a registration
undertaken pursuant to this Agreement or (ii) materially adversely affect the
marketability of the Registrable Securities in any such registration.
14
(d) Amendments and Waivers. The provisions of this Agreement, including
-----------------------
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given unless the Company has obtained the written consent of Holders of a
majority of the outstanding Registrable Securities. Notwithstanding the
foregoing, a waiver or consent to departure from the provisions hereof that
relates exclusively to the rights of Holders of Registrable Securities whose
securities are being sold pursuant to a Registration Statement and that does not
directly or indirectly affect the rights of other Holders of Registrable
Securities may be given by the Holders of at least a majority of the Registrable
Securities being sold.
(e) Notices. All notices and other communications provided for or
--------
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the
Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and
(ii) if to the Company:
Hyperion Telecommunications, Inc.
5 West Third Street
Suite 720
Coudersport, Pennsylvania
Telecopier No.: (814) 274-8631
Attention: Daniel R. Milliard
With a copy to:
Buchanan Ingersoll
301 Grant Street
Oxford Centre
Pittsburgh, Pennsylvania
Telecopier No.: (412) 272-1041
Attention: Carl Rothenberger, Esq.
All such notices and communications 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 on the
next business day, if timely delivered to an air courier guaranteeing overnight
delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the benefit of
-----------------------
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders of Registrable Securities.
15
(g) Counterparts. This Agreement may be executed in any number of
-------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
---------
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
--------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the provisions
-------------
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement together with the other Documents (as
-----------------
defined in the Purchase Agreement) is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Company with respect to
the securities sold pursuant to the Purchase Agreement. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
[Signature Page Follows]
16
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
HYPERION TELECOMMUNICATIONS, INC.
By: /s/ Daniel R. Milliard
______________________________________
Name: Daniel R. Milliard
Title: President and Secretary
BEAR, STEARNS & CO. INC.
By: /s/ Donald R. Mullen Jr.
_____________________________________________
Name: Donald R. Mullen Jr.
Title: Senior Managing Director
CHASE SECURITIES INC.
By: /s/ S. Culsky
_____________________________________________
Name: S. Culsky
Title: Managing Director
NATIONSBANC CAPITAL MARKETS, INC.
By: /s/ Tom Mooney
_____________________________________________
Name: Tom Mooney
Title: Senior Vice President
SCHEDULE I
Existing
--------
Registration Rights
-------------------
Shareholder Agreement amont the Company, Adelphia Communications
Corporation, Charles R. Drenning, Paul D. Fajerski and Randolph S. Fowler, dated
October 7, 1991, as amended.
18