SUPPLEMENTAL INDENTURE
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SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
March 26, 1999, by and among Avalon Cable of Michigan LLC, a Delaware limited
liability company ("Avalon Michigan LLC"), Avalon Cable of New England LLC, a
Delaware limited liability company ("Avalon New England"), Avalon Cable 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 Michigan Inc., Avalon New England 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 of up to $200.0 million of 9 3/8% Senior Subordinated
Notes due 2008 (the "Senior Subordinated Notes");
WHEREAS, the Reorganization (as defined in the Indenture) has
occurred;
WHEREAS, pursuant to the Reorganization, Avalon Cable LLC, a Delaware
limited liability company ("Avalon Holdings"), assumed the liabilities and
obligations of Avalon Michigan Inc. under the Indenture and the Senior
Subordinated Notes;
WHEREAS, immediately thereafter and pursuant to the Reorganization,
Avalon Michigan LLC assumed the liabilities and obligations of Avalon Holdings
under the Indenture and the Senior Subordinated Notes;
WHEREAS, in connection with the foregoing and as contemplated by the
Indenture, Avalon Michigan Inc. shall guarantee the obligations of Avalon
Michigan LLC under the Indenture and Senior Subordinated 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 Michigan
LLC, Avalon New England 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 Subordinated 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. 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 Michigan LLC therefor, to each
Holder of a Senior Subordinated 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 Subordinated Notes or the obligations of the Issuers
hereunder or thereunder, that:
(i) the principal of and interest on the Senior Subordinated
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 Subordinated
Notes, if any, if lawful, and all other obligations of Avalon
Michigan 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 Subordinated 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 Avalon Michigan
Inc., to the extent of the obligation of Avalon Michigan 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 Subordinated Notes
or the Indenture, the absence of any action to enforce the same, any waiver
or consent by any Holder of the Senior Subordinated 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.
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(c) The following is hereby waived: diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency
or bankruptcy of the Issuers, any right to require a proceeding
first against the Issuers, protest, notice and all demands
whatsoever.
(d) This Senior Subordinated Note Guarantee shall not be discharged
except by complete performance of the obligations contained in the
Senior Subordinated 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 Subordinated Note
Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect.
(f) 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
Subordinated 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 Subordinated Note
Guarantee.
(h) 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 Subordinated 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 and Avalon
Michigan Inc. hereby irrevocably agree that the obligations of
each Guarantor under each Senior Subordinated 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
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other Guarantor pursuant to Section 2(i), result in the
obligations of such Guarantor not constituting such a fraudulent
transfer or conveyance.
(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 Subordinated 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 Subordinated Notes or any other
Guarantor's obligations under a Senior Subordinated Note
Guarantee, as the case may be.
(j) Each Guarantor agrees, and the Trustee and each Holder of the
Senior Subordinated 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 Subordinated Notes
pursuant to each Senior Subordinated 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 Subordinated Notes in accordance with the provisions
provided therefor in the Indenture.
(k) This Supplemental Indenture shall constitute a Senior Subordinated
Note Guarantee of 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. Avalon Michigan Inc. agrees that this
Senior Subordinated Note Guarantee shall remain in full force and effect
notwithstanding any failure to endorse on each Senior Subordinated Note a
notation of such Senior Subordinated Note Guarantee.
4. RELEASE. In the event of a sale or other disposition of all of the
assets of Avalon Michigan Inc., by way of merger, consolidation or otherwise, or
a sale or other disposition of all to the capital stock of Avalon Michigan Inc.,
then Avalon Michigan Inc. (in the event of a sale or other disposition, by way
of merger, consolidation or otherwise, of all of the capital stock of Avalon
Michigan Inc.) or the corporation acquiring the property (in the event of a sale
or other disposition of all or substantially all of the assets of Avalon
Michigan Inc.) will, upon notice to the
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Trustee of its intention to be so released, be released and relieved of any
obligations under its Senior Subordinated Note Guarantee.
5. THE ISSUERS. As of the date hereof and after giving effect to the
Reorganization, as contemplated by the Indenture, the Issuers are Avalon
Michigan LLC, Avalon New England 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 Subordinated Notes, as
such, shall have any liability for any obligations under the Senior Subordinated
Notes, the Senior Subordinated 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 Subordinated Notes by
accepting a Senior Subordinated Note waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Senior
Subordinated 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 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
Subordinated 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 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 OF MICHIGAN LLC
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Title: President
AVALON CABLE OF NEW ENGLAND LLC
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Title: President
AVALON CABLE FINANCE, INC.
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Title: President
AVALON CABLE OF MICHIGAN, INC., as a
Guarantor
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Title: President
THE BANK OF NEW YORK, as Trustee
By: /s/ Xxxx Xx Xxxxxx
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Name: Xxxx Xx Xxxxxx
Title: Assistant Vice President
