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Exhibit 10.53
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE
STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE
EXEMPTION TO THE REGISTRATION REQUIREMENTS OF SUCH
ACT AND SUCH LAWS.
CORECOMM LIMITED
SENIOR UNSECURED NOTE
DUE SEPTEMBER 29, 2003
$16,843,639 New York, New York
September 29, 2000
CoreComm Limited, a Delaware corporation (the "Company"), for value
received, hereby promises to pay to the order of Xxxxx Xxxxxxxxx and its heirs,
personal representative or permitted assigns (the "Holder") the principal sum of
Sixteen Million, Eight Hundred Forty-Three, Six Hundred Thirty-Nine Dollars
($16,843,639), and interest thereon, in each case, as provided herein.
1. Interest Payments.
(a) Interest on all amounts outstanding from time to time
under this Senior Unsecured Note (this "Note") and each other Senior Unsecured
Note (together with this Note, the "Notes") issued under the Note Purchase
Agreement shall be payable in arrears on each Interest Payment Date. As used
herein, "Interest Payment Date" means October 1, and April 1, of each year,
commencing on April 1, 2001.
(b) Interest shall be paid on the unpaid principal amount of
the Notes at the rate of 6.47% per annum. All interest on the Notes shall be
calculated on the basis of a 360 day year and the actual number of days elapsed.
This Note shall continue to accrue interest at the applicable rate provided for
herein or in the Note Purchase Agreement (hereinafter defined) even after an
Event of Default, maturity, acceleration, judgment, bankruptcy, insolvency
proceedings of any kind or any other event or occurrence, whether similar or
dissimilar.
(c) Interest on this Note may be paid, in the sole discretion
of the Company, in cash or in shares of Common Stock (calculated based on the
Common Stock having a value equal to the product of (i) .98 and (ii) the volume
weighted average sale price
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for the Company's Common Stock during the five (5) Trading Day period ending on
the Trading Date immediately prior to the relevant Interest Payment Date);
provided, however, that, with respect to any interest payment, the Company may
not elect to make such interest payment on the Note to a Holder that is a
"Stockholder" (as that term is defined in the Registration Rights Agreement, as
defined in the Merger Agreement) (as defined in the Note Purchase Agreement) in
the form of shares of Common Stock unless either (x) such shares of Common Stock
are issued under an effective Securities Act registration statement, or (y) in
accordance with the terms of the Registration Rights Agreement (a) on or prior
to the date of such interest payment, the Company shall have filed with the
Securities and Exchange Commission a registration statement under the Securities
Act registering for resale by such Stockholders the shares of Common Stock
received by them as an interest payment (the "Resale Registration Statement"),
and (b) on the date of such interest payment, the Resale Registration Statement
shall be effective under the Securities Act.
(d) Notwithstanding anything herein to the contrary, the
interest payable by the Company with respect to this Note shall not exceed the
maximum amount permitted by applicable law and, to the extent that any payments
in excess of such permitted amount are received, such excess shall be considered
payments in respect of the principal amount of this Note.
2. Principal Payments and Prepayments.
(a) Maturity Date. The unpaid principal amount of this Note,
together with accrued unpaid interest on the Notes, shall be due and payable on
September 29, 2003 (the "Maturity Date").
(b) Scheduled Prepayments. On each of the dates set forth
below (each, a "Scheduled Prepayment Date"), the Company shall prepay that
portion of the Adjusted Recapitalization Principal Amount of the Notes (as
defined below) set forth below (the "Scheduled Principal Prepayment
Percentage"):
SCHEDULED SCHEDULED PRINCIPAL
PREPAYMENT DATE PREPAYMENT PERCENTAGE
--------------- ---------------------
January 1, 2001 1.9328%
March 29, 2001 0.5998%
January 1, 2002 2.5862%
January 1, 2003 2.6549%
As used herein, the "Adjusted Principal Recapitalization Amount of the Notes"
shall mean, as of the time at which such calculation is being made, an amount
equal to the excess of (i) the outstanding principal amount of the Notes
immediately after giving effect to all post-
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Closing adjustments thereto contemplated by Section 1.2 of the Merger Agreement,
over (ii) the sum of (w) all mandatory prepayments theretofore made by the
Company pursuant to Section 2(c) of the Notes, (x) all scheduled prepayments
theretofore made by the Company pursuant to Section 2(b) of the Notes (subject
to Section 5(a) of the Notes), (y) all optional prepayments theretofore made by
the Company pursuant to Section 2(d) of the Note, and (z) the principal amount
of any notes delivered by ATX Stockholders pursuant to Section 1.2(i) of the
Merger Agreement.
(c) Mandatory Prepayments. Upon the Company's receipt of
Identified Proceeds, the Company shall be required to reduce the principal
amount outstanding under the Notes by prepaying the Notes in an aggregate amount
equal to the lesser of (x) the outstanding principal, together with all accrued
interest, under all notes issued to Purchasers (the "Purchaser Notes") and (y)
(i) 50% of the first $200 million of aggregate Identified Proceeds, and (ii)
100% of aggregate Identified Proceeds in excess of $200 million. Each such
prepayment under this Section 2(c) shall be due and payable upon the closing of
the transaction resulting in the Company's realization of Identified Proceeds.
As used herein, "Identified Proceeds" shall mean (x) Net Proceeds actually
received by the Company from any financing undertaken by the Company following
the issuance of the Purchaser Notes, other than Excluded Financings, (y) Net
Proceeds received by the Company from the sale of assets by the Company (other
than sales of assets in the ordinary course), except that up to $200 million of
net proceeds received from a sale of the Company's assets may be used to repay
Excluded Financings (other than to Xxxxx X. Xxxxx, XX, his successors and
assigns), and (z) the excess, if any, over $300 million of Net Proceeds from
Excluded Financings; provided, however, the Identified Proceeds shall exclude
any refinancing permitted by Section 8.2 of the Note Purchase Agreement. As used
herein, "Excluded Financings" shall mean (i) the $150 million credit facility
entered into between the Company and Chase Manhattan Bank, (ii) the equity
investment made by Xxxxx X Xxxxx, XX in the Company in the amount of $50
million, (iii) the $50 million Senior Unsecured Credit Facility provided by The
Chase Manhattan Bank and (iv) up to $50,000,000 of additional financing referred
to in Section 16 of Amendment No. 3 to the Merger Agreement. Net Proceeds shall
mean gross cash proceeds from such financing less the Company's expenses
directly attributable to such financing, including any reasonable commitment or
facility fees to the lender and reasonable legal fees.
(d) Optional Prepayment. The Company shall have the right, at
any time and from time to time at its sole option and election, without penalty
or premium, to prepay the Notes (an "Optional Prepayment"), in whole or in part,
on not less than 5 days' notice of the date of prepayment, which must be a
Business Day (any such date an "Optional Prepayment Date"). On or before
December 31, 2001 the Company shall be deemed to have prepaid the Notes in full
by payment of an amount equal to the excess of the outstanding principal amount
of the Notes as of the date of the Optional Prepayment Date (plus an amount
equal to all accrued and unpaid interest thereon to the Optional Prepayment
Date) over $6 million (the "2001 Optional Prepayment Price"). After December 31,
2001, but on or before December 31, 2002, the Company shall be deemed to have
prepaid the Notes in full by payment of an amount equal to the excess of the
outstanding principal amount of the Notes
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as of the date of the Optional Prepayment Date (plus an amount equal to all
accrued and unpaid interest thereon, to the Optional Prepayment Date) over $3
million (the "2002 Optional Prepayment Price"). By way of example, and not
limitation, if $110 million aggregate principal amount of Notes are outstanding,
then at any time prior to December 31, 2001, the Company may prepay and satisfy
all of its obligations under the Notes by payment of an aggregate amount equal
to $104 million, plus accrued and unpaid interest on the Notes to the Optional
Prepayment Date. By acceptance of this Note, the Holder agrees that payment by
the Company of the 2001 Optional Prepayment Price or the 2002 Optional
Prepayment Price, as the case may be shall, to the extent that it results in a
payment of less than the full aggregate outstanding principal amount of the
Notes, constitute an adjustment to the Exchange Consideration issued by the
Company in connection with the transactions contemplated by the Merger Agreement
and shall not be deemed to constitute the forgiveness of indebtedness.
(e) Effect of Certain Prepayments. Each $1.00 of principal
prepayment of the Notes made by the Company pursuant to Section 2(c) of the
Notes or pursuant to Section 2(d) of the Notes, if less than all of the Notes
are being prepaid pursuant thereto, shall result in the following reductions in
the outstanding principal amount of the Notes:
REDUCTION (PER $1.00)
PREPAYMENT DATE TO OUTSTANDING PRINCIPAL
--------------- ------------------------
on or prior to December 31, 2000 $1.08182
on or prior to December 31, 2001 $1.05455
on or prior to December 31, 2002 $1.02727
January 1, 2003 or thereafter $1.00
By acceptance of this Note, the Holder agrees that each reduction to the
principal amount of the Notes over and above the actual amount of principal
prepaid shall be deemed to be an adjustment to the Exchange Consideration issued
by the Company in connection with the transactions contemplated by the Merger
Agreement and shall not be deemed to constitute the forgiveness of indebtedness.
(f) Prepayment Notice. Notice of any prepayment pursuant to
Sections 2(c) or (d) of the Notes shall be mailed not later than five (5) days
prior to the date on which such prepayment is required or scheduled to be made
to each Holder of the Notes, at such xxxxxx's address as it appears on the
transfer books of the Company.
3. Liens.
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(a) The Company will not, and shall not permit any of its
subsidiaries to, create, incur or suffer to exist any Lien (as defined in the
Note Purchase Agreement) except as permitted in Section 8.3 of the Note Purchase
Agreement.
(b) Notwithstanding the foregoing, any security interest
granted by the Company to secure the Notes pursuant to Section 8.3 of the Note
Purchase Agreement as adopted in paragraph (a) above shall be automatically and
unconditionally released and discharged upon the release by the holders of the
Secured Indebtedness of their security interest (including any deemed release
upon payment in full of all obligations in respect of such Secured
Indebtedness).
4. Holder; Transfer; Pledge.
(a) The term "Holder" as used herein shall also include any
Permitted Transferee (as hereinafter defined) of this Note whose name has been
recorded by the Company in the register referred to in Section 4(b). Each
Permitted Transferee of this Note acknowledges that this Note has not been
registered under the Securities Act, and may be transferred (x) in whole or in
part and (y) upon receipt by the Company of an opinion of counsel, which opinion
shall be reasonably satisfactory in form and substance to the Company, stating
that this Note may be transferred without registration under the Securities Act
in reliance on an exemption therefrom. As used herein, a "Permitted Transferee"
of a Holder shall mean, subject to compliance with applicable securities laws,
any person or entity other than a competitor of the Company's core business (it
being accepted and agreed by the Holder of this Note by such Xxxxxx's acceptance
of this Note, that this Note may not be transferred, directly or indirectly, or
held for the benefit of, any person or entity that is a competitor of the
Company's core business and that any purported direct or indirect transfer of
this Note, or any beneficial interest herein, to any person or entity that is a
competitor of the Company's core business shall be void and without effect);
provided, however, that prior to December 1, 2000 (or such earlier date as the
Company has completed the Excluded Financings), the Company may prohibit any
such transfer, if in its view the impact of any such transfer would adversely
affect the market for any financing contemplated by the Company. This Note may
only be transferred upon 10 days advance written notice to the Company, pursuant
to Section 10 of the Note Purchase Agreement. Such notice shall set forth the
name of the transferee, the address and telephone number and contact information
for the transferee, and include such additional information or documentation as
may be reasonably requested by the Company in order to confirm that (i) such
transfer will not violate applicable securities laws, and (ii) the transferee is
not a competitor of the Company's core business. The foregoing notwithstanding,
this Note may be pledged to any person or entity other than a competitor of the
Company's core business in order to secure a loan from such person or entity to
the pledging Holder; provided that any transfer of sale by such person or entity
shall be subject to this Section 4(a). For purposes of this Section 4(a), no
bona fide financial institution shall be deemed to be a competitor of the
Company's core business.
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(b) The Company shall maintain a register in its office for
the purpose of registering the Note and any transfer thereof, which register
shall reflect and identify, at all times, the ownership of any interest in the
Note. Upon the issuance of this Note, the Company shall record the name of the
initial Holder of this Note in such register as the first Holder. Thereafter,
the Company shall duly record the name of a transferee on such register promptly
after receipt of notice of a transfer and of the opinion referred to in Section
4(a) above. The Company shall not be required to give effect to any transfer or
purported transfer of this Note that is not made in accordance with the terms
hereof.
5. Payments; Generally.
(a) All payments and prepayments of principal of and interest
under the Notes shall be paid ratably to the respective Holders thereof based on
the respective outstanding principal amount of each of the Notes.
(b) All payments and prepayments of principal of and interest
under the Notes shall be paid to the Holders of record as specified on the books
of the Company at the time of the payment.
(c) All payments on or in respect of this Note, other than
payments of interest made in the form of shares of the Company's Common Stock,
shall be made in such coin and currency of the United States of America as at
the time of payment is legal tender for the payment of public and private debts
by wire transfer pursuant to written wire transfer instructions given to the
Company by the Holder hereof from time to time, or, at the option of the Holder
hereof, in such manner and at such other place in the United States of America
as the Holder hereof shall have designated to the Company in writing pursuant to
the provisions of the Note Purchase Agreement.
(d) If the day on which any payment or prepayment of principal
or interest is required to be made hereunder is other than a Business Day (as
defined below), such payment or prepayment shall instead be due and payable on
the next day following such date which is a Business Day. A "Business Day" means
any day other than a Saturday, a Sunday or a day on which commercial banks in
the Philadelphia, Pennsylvania are required or authorized to be closed.
(e) Upon payment in full of all principal and interest due
under this Note, the Company's obligations in respect of payment of this Note
shall terminate and the Holder shall promptly surrender this Note to the
Company.
This Note issued under and pursuant to a Note Purchase Agreement, dated
September 29, 2000 among the Company, Xxxxxx Xxxxxxx, Xxxxx Xxxxxxxxx, Xxxxxxx
Xxxx and The Xxxxxxxx Xxxx Trust (as the same may be amended from time to time,
the "Note Purchase Agreement") and this Note and the Holder hereof is entitled
to all of the rights provided thereby or referred to therein.
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If any principal or installment of interest is not paid in full on the
due date thereof (whether by maturity, prepayment or acceleration), and upon the
occurrence of any Event of Default (as defined in the Note Purchase Agreement),
the outstanding principal balance of this Note and any overdue installment of
interest (to the extent permitted by applicable law) shall bear interest
thereafter at a rate per annum equal to the Default Rate as determined pursuant
to the terms of the Note Purchase Agreement until such payment is paid in full
or such Event of Default is cured or waived in accordance with the terms of the
Note Purchase Agreement.
5. Events of Default. Events of Default, and the Note holder's
rights upon the occurrence and continuation thereof are set forth in the Note
Purchase Agreement.
6. Remedies Cumulative. No remedy herein conferred upon the
Holder or the Company is intended to be exclusive of any other remedy and each
and every such remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute or otherwise. Except as set forth in the Note Purchase Agreement, the
Company hereby waives protest, notice of protest, presentment, dishonor, notice
of dishonor and demand. The rights and privileges of Holder under this Note
shall inure to the benefit of its heirs, personal representatives, successors
and permitted assigns.
7. Remedies Not Waived. No course of dealing between the Company
and the Holder or any delay on the part of the Holder or the Company in
exercising any rights hereunder shall operate as a waiver of any right. The
failure of the Holder hereof to exercise any of its rights hereunder in any
particular instance shall not constitute a waiver of the same or of any other
right in that or any subsequent instance.
8. Variation in Pronouns. All pronouns and any variations thereof
refer to the masculine, feminine or neuter, singular or plural, as the context
may require.
9. Headings. The headings in this Note are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
10. Waiver of Jury Trial: THE COMPANY (AND HOLDER BY ITS
ACCEPTANCE HEREOF) EACH HEREBY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A JURY
TRIAL IN CONNECTION WITH OR IN RESPECT OF RIGHTS ANY LITIGATION ARISING WITH
RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO.
11. This Note shall be construed and governed by the laws of the
Commonwealth of Pennsylvania without regard to otherwise applicable principles
of conflicts of laws. The provisions of this Note are severable and the
invalidity or unenforceability of any provision shall not alter or impair the
remaining provisions of this Note. No modification hereof shall be binding or
enforceable against Holder unless made as provided in the Note Purchase
Agreement.
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12. CONSENT TO FORUM. AS PART OF THE CONSIDERATION, AND REGARDLESS
OF ANY PRESENT OR FUTURE DOMICILE OR PRINCIPAL PLACE OF BUSINESS OF THE COMPANY
OR ANY HOLDER, THE COMPANY HEREBY CONSENTS AND AGREES THAT THE UNITED STATES
DISTRICT COURT IN THE EASTERN DISTRICT OF PENNSYLVANIA OR THE COURT OF COMMON
PLEAS IN PHILADELPHIA, PENNSYLVANIA SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR
AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE COMPANY AND ANY HOLDER
PERTAINING TO, ARISING OUT OF, OR RELATING TO THIS AGREEMENT, THE SENIOR
UNSECURED NOTES, OR ANY OF THE OTHER OPERATIVE DOCUMENTS. THE COMPANY WAIVES ANY
OBJECTION BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON
CONVENIENS AND ANY BOND, SURETY OR OTHER SECURITY THAT MIGHT BE REQUIRED IN
CONNECTION WITH ANY SUCH LEGAL PROCEEDING BEING INSTITUTED. THE COMPANY HEREBY
WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN
ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND
OTHER PROCESS MAY BE MADE BY COMPLYING WITH THE PROVISIONS FOR GIVING NOTICE AS
SET FORTH IN THIS AGREEMENT. NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR
OPERATE TO AFFECT THE RIGHT OF THE HOLDER TO SERVE LEGAL PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW, OR TO PRECLUDE THE ENFORCEMENT BY THE HOLDER OF ANY
JUDGMENT OR ORDER OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION UNDER THIS
AGREEMENT TO ENFORCE SAME IN ANY OTHER APPROPRIATE FORUM OR JURISDICTION.
CORECOMM LIMITED
By: /s/ Xxxxxxx X. Xxxxxxx
_______________________________
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President,
General Counsel and Secretary
