THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THAT ACT
OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
CENTENNIAL CELLULAR CORP.
Senior Subordinated Note
Due 2009
$180,000,000 January 7, 1999
CENTENNIAL CELLULAR CORP., a Delaware corporation (the "Company"), for
value received, hereby promises to pay to WCAS CAPITAL PARTNERS III, L.P. ("WCAS
CP III"), or registered assigns, the principal sum of ONE HUNDRED EIGHTY MILLION
DOLLARS ($180,000,000), on July 15, 2009, and to pay interest as provided in
Section 2 hereof until the principal amount hereof shall have become due and
payable, whether at maturity or by acceleration or otherwise, and thereafter at
the rate of 13% per annum on any overdue principal amount and (to the extent
permitted by applicable law) on any overdue interest until paid.
Subject to the provisions of Section 2 hereof, all payments of
principal and interest on this Note shall be in such coin or currency of the
United States of America as at the time of payment shall be legal tender for
payment of public and private debts. Such payments shall be subject to the
limitations of (i) the Credit Agreement, dated as of January 7, 1999, among
Centennial Cellular Corp., as guarantor, Centennial Cellular Operating Co. LLC,
as borrower, Centennial Wireless PCS Operations Corp., as PR borrower, the other
guarantors party thereto, Xxxxxxx Xxxxx & Co. and Xxxxxxx Lynch, Pierce, Xxxxxx
& Xxxxx Incorporated, as lead arrangers and syndication agents, NationsBank
N.A., as co-arranger and administrative agent (the "Agent") and The Chase
Manhattan Bank, as co-arranger and co-documentation agent, The Bank of Nova
Scotia, as co-documentation agent, Xxxxxx Xxxxxxx Senior Funding, Inc., as
senior managing agent and the lenders from time to time party thereto, together
with all related documents, including without limitation all guarantees,
security agreements, pledge agreements, mortgages, other collateral documents
and other agreements entered into in connection therewith or in connection with
any restatement, renewal, extension, restructuring, refunding or refinancing
thereof (collectively, the "Bank Credit Agreements"), and (ii) the Indenture,
dated as of December 14, 1998, among Centennial Finance Corp. ("CFC"), a
predecessor in interest to the Company, Centennial Cellular Operating Co. LLC
("Centennial LLC") and the Trustee (the "Trustee") named therein, relating to
the 10 3/4% Senior Subordinated Notes due 2008 (the "High Yield Notes") issued
by CFC and Centennial LLC, together with all related documents, including
without limitation all guarantees, security agreements, pledge agreements,
mortgages, other collateral documents and other agreements entered into in
connection therewith or in connection with any restatement, renewal, extension,
restructuring, refunding or refinancing thereof (collectively, the "High Yield
Debt Agreements").
On any Interest Payment Date (as defined herein) on or after January
6, 2004, the Company shall pay any amount of accrued original issue discount on
this Note as shall be necessary to ensure that this Note shall not be considered
an "applicable high yield discount obligation" within the meaning of Section
163(i) of the Internal Revenue Code of 1986, as amended, or any successor
provision; provided, however, that each such payment shall only be made if also
permitted under the Bank Credit Agreements and the High Yield Debt Agreements.
The amount of principal payable on this Note shall be reduced by the amount of
any accrued original issue discount that is paid pursuant to this paragraph.
If any payment on this Note is due on a day which is not a Business
Day, it shall be due on the next succeeding Business Day. For purposes of this
Note, "Business Day" shall mean any day other than a Saturday, Sunday or a legal
holiday or day on which banks are authorized or required to be closed in Chicago
or New York.
1. The Notes. This Note is issued pursuant to the Securities Purchase
Agreement, dated as of December 29, 1998 (the "Purchase Agreement"), among CCW
Acquisition Corp., a predecessor in interest to the Company, WCAS CP III and
the several Purchasers named in Schedules I, II and III thereto. As used herein,
the term "Note" or "Notes" includes the Senior Subordinated Note due 2009 of the
Company originally so issued, any Senior Subordinated Notes due 2009
subsequently issued upon exchange or transfer thereof and all "Deferred Interest
Notes" (as defined in Section 2(c) hereof).
2. Interest.
(a) Until the principal amount hereof shall have become due and
payable, the Company shall pay interest (computed on the basis of a 360-day year
consisting of twelve 30-day months) from the date hereof on the unpaid principal
amount hereof at the rate of 10% per annum quarterly in arrears on February 28,
May 31, August 31 and November 30 of each year (each said day being an "Interest
Payment Date"), commencing on May 31, 1999; provided, however, that the Company
shall only be required to make cash interest payments on each Interest Payment
Date (A) in accordance with paragraph (d) of this Section 2 or (B) to the extent
that the Company has received on or prior to such Interest Payment Date (i)
"Cash from Investment Interests" (as defined herein) during the prior three
months or (ii) Cash from Investment Interests before the prior three months (but
after the date of original issuance of this Note) if the amount of such Cash
from Investment Interests exceeds the amount of interest paid in cash on the
Notes on all prior Interest Payment Dates; provided, further, however, that each
such payment shall only be made if also permitted under the Bank Credit
Agreements and the High Yield Debt Agreements.
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(b) For purposes hereof, "Cash from Investment Interests" shall mean
any dividends, distributions, interest payments or other periodic payments of
cash received directly or indirectly by the Company from its "Investment
Interests" (as defined in the Purchase Agreement); provided, however, that "Cash
from Investment Interests" shall not include any proceeds received by the
Company from the liquidation, sale, merger, consolidation, transfer or other
disposition of any Investment Interests (any of the foregoing, a "Sale of
Investment Interests").
(c) To the extent that any portion of the amount of interest due
hereon on any Interest Payment Date is not required to be paid in cash on any
Interest Payment Date as provided in paragraph (a) above, any amount not so paid
shall be multiplied by 1.3 (with the result that such unpaid interest shall have
accrued at an effective rate of 13% instead of 10%), and the Company shall
satisfy its obligation to pay such amount of interest by issuing to the holder
hereof a deferred interest note or notes (the "Deferred Interest Notes"), dated
as of such Interest Payment Date, in a principal amount equal to such unpaid
amount of interest. The Deferred Interest Notes shall be in substantially the
form hereof (except that they shall not contain the provision set forth in
clause (i) of Section 3(b) hereof or the text set forth as the second paragraph
immediately preceding Section 1 hereof) and shall bear an appropriate legend
with respect to any original issue discount.
(d) Upon any Sale of Investment Interests, the Company shall in good
faith submit to the holders of the Notes (in form reasonably satisfactory to the
holders of a majority in interest of the aggregate principal amount then
outstanding under the Notes) a calculation of the Cash from Investment Interests
that was directly or indirectly received from the Investment Interests so
disposed of during the twelve months preceding such disposition (such amount,
together with all other such amounts in respect of any other Investment
Interests disposed of previously, being referred to herein as the "Cash from
Sold Interests"). Thereafter, on each subsequent Interest Payment Date, in
addition to the Cash from Investment Interests, the Company shall apply an
amount equal to one-quarter of the Cash from Sold Interests to the payment in
cash of interest on the Notes; provided, however, that each such payment shall
only be made if also permitted under the Bank Credit Agreements and the High
Yield Debt Agreements.
3. Transfer, Etc. of Notes.
(a) The Company shall keep at its office or agency maintained as
provided in paragraph (a) of Section 11 a register in which the Company shall
provide for the registration of this Note and for the registration of transfer
and exchange of this Note. Subject to the provisions of paragraph (b) hereof,
the holder of this Note may, at its option, and either in person or by its duly
authorized attorney, surrender the same for registration of transfer or exchange
at the office or agency of the Company maintained as provided in Section 11 and,
without expense to such holder (except for taxes or governmental charges imposed
in connection therewith), receive in exchange therefor a Note or Notes each in
such denomination or denominations as such holder may request, dated as of the
date to which interest has been paid on the Note or Notes so surrendered for
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transfer or exchange, for the same aggregate principal amount as the then unpaid
principal amount of the Note or Notes so surrendered for transfer or exchange,
and registered in the name of such person or persons as may be designated by
such holder. Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed, or shall be accompanied by a written
instrument of transfer, satisfactory in form to the Company, duly executed by
the holder of such Note or its attorney duly authorized in writing. Every Note
so made and delivered in exchange for such Note shall in all other respects be
in the same form and have the same terms as such Note. No transfer or exchange
of any Note shall be valid unless made in the foregoing manner at such office or
agency.
(b) Notwithstanding anything to the contrary herein, the holder of
this Note, by acceptance hereof, covenants and agrees that it shall not transfer
this Note or any part of its right, title or interest in or to this Note to any
third party (i) for a period of 180 days following the original date of issuance
hereof and (ii) in any event, without the prior written consent of the Agent;
provided, however, that the provisions of clause (ii) shall not apply to any
transfer of this Note by the holder hereof to an affiliate, parent or subsidiary
of such holder.
4. Loss, Theft, Destruction or Mutilation of Note. Upon receipt of
evidence satisfactory to the Company of the loss, theft, destruction or
mutilation of this Note, and, in the case of any such loss, theft or
destruction, upon receipt of an affidavit of loss from the holder thereof
reasonably satisfactory to the Company, or, in the case of any such mutilation,
upon surrender and cancellation of this Note, the Company will make and deliver,
in lieu of this Note, a new Note of like tenor and unpaid principal amount and
dated as of the date to which interest has been paid on this Note.
5. Persons Deemed Owners; Holders. The Company may deem and treat the
person in whose name any Note is registered as the owner and holder of such Note
for the purpose of receiving payment of principal of and interest on such Note
and for all other purposes whatsoever, whether or not such Note shall be
overdue. With respect to any Note at any time outstanding, the term "holder", as
used herein, shall be deemed to mean the person in whose name such Note is
registered as aforesaid at such time.
6. Prepayments.
(a) Optional Prepayment. Subject to any applicable restrictions under
the Bank Credit Agreements or the High Yield Debt Agreements, the Company may,
at its option, prepay this Note without premium or penalty, as a whole at any
time or in part from time to time in amounts which shall be integral multiples
of $1,000,000.
(b) Mandatory Prepayment on Change of Control. Subject to any
applicable restrictions under the Bank Credit Agreements or the High Yield Debt
Agreements, if at any time while this Note is outstanding a Change in Control
(as hereinafter defined) shall occur, the Company shall prepay, without
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penalty or premium, all principal and interest then outstanding hereunder.
(c) For purposes of this Section 6, a "Change in Control" shall be
deemed to have occurred if:
(i) any person or any persons acting together that would constitute a
"group" (a "Group") for purposes of Section 13(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or any successor
provision thereto, together with any affiliates or related persons thereof,
other than any of the Purchasers named in the Purchase Agreement together
with their respective affiliates, shall beneficially own (for purposes of
Rule 13d-3 of the Exchange Act or any successor provision thereto) at least
50% of the aggregate voting power of all classes of voting capital stock of
the Company; or
(ii) any person or Group, together with any affiliates or related
persons thereof, other than any of the Purchasers named in the Purchase
Agreement together with their respective affiliates, shall succeed in
having a majority of its or their nominees elected to the Board of
Directors of the Company; or
(iii) the Company is a party to any merger or consolidation with any
other business entity, at the conclusion of which transaction the
stockholders of the Company immediately prior to the transaction do not
continue to hold a majority of the total voting capital stock of the
successor entity, in substantially the same proportions, following such
transaction; or
(iv) the Company sells, leases, transfers or otherwise disposes of all
or substantially all of its assets.
(d) In the event of a Change in Control, the Company will promptly, in
good faith, (i) seek to obtain any required consent of the holders of any
"Senior Indebtedness" (as defined herein) to permit the prepayment contemplated
by paragraph (b) above, or (ii) to the extent that it is permitted to do so
pursuant to the Bank Credit Agreements and the High Yield Debt Agreements, repay
some or all of such holders of Senior Indebtedness to the extent necessary
(including, if necessary, payment in full of such Senior Indebtedness and
payment of any prepayment premiums, fees, expenses or penalties) to permit the
prepayment contemplated hereby without such consent.
7. Notice of Prepayment and Other Notices. The Company shall give
written notice of any prepayment of this Note or any portion hereof pursuant to
Section 6 not less than 30 nor more than 60 days prior to the date fixed for
such prepayment. Such notice of prepayment and all other notices to be given to
the holder of this Note shall be given by registered or certified mail to the
person in whose name this Note is registered at its address designated on the
5
register maintained by the Company on the date of mailing such notice of
prepayment or other notice. Upon notice of prepayment being given as aforesaid,
the Company covenants and agrees that it will prepay, on the date therein fixed
for prepayment, this Note or the portion hereof, as the case may be, so called
for prepayment, at the principal amount thereof so called for prepayment,
together with interest accrued thereon to the date fixed for such prepayment. A
prepayment of less than all of the outstanding principal amount of this Note
shall not relieve the Company of its obligation to make scheduled payments of
interest payable in respect of the principal remaining outstanding on the
Interest Payment Dates.
8. Allocation of All Payments. In the event of any partial payment of
less than all of the interest then due on the Notes then outstanding or any
prepayment, purchase, redemption or retirement of less than all of the
outstanding Notes, the Company will allocate the amount of interest so to be
paid and the principal amount so to be prepaid, purchased, redeemed or retired
to each Note in proportion, as nearly as may be, to the aggregate principal
amount of all Notes then outstanding.
9. Interest After Date Fixed for Prepayment. If this Note or a portion
hereof is called for prepayment as herein provided, this Note or such portion
shall cease to bear interest on and after the date fixed for such prepayment
unless, upon presentation for such purpose, the Company shall fail to pay this
Note or such portion, as the case may be, in which event this Note or such
portion, as the case may be, and, so far as may be lawful, any overdue
installment of interest, shall bear interest on and after the date fixed for
such prepayment and until paid at the rate per annum provided herein for overdue
principal.
10. Surrender of Note; Notation Thereon. Upon any prepayment of a
portion of the principal amount of this Note, the holder hereof, at its option,
may require the Company to execute and deliver at the expense of the Company
(other than for transfer taxes, if any), upon surrender of this Note, a new Note
registered in the name of such person or persons as may be designated by such
holder for the principal amount of this Note then remaining unpaid, dated as of
the date to which the interest has been paid on the principal amount of this
Note then remaining unpaid, or may present this Note to the Company for notation
hereon of the payment of the portion of the principal amount of this Note so
prepaid.
11. Covenants Relating to the Note. The Company covenants and agrees
that so long as the Note shall be outstanding:
(a) Maintenance of Office. The Company will maintain an office or
agency in such place in the United States of America as the Company may
designate in writing to the registered holder of this Note, where this Note may
be presented for registration of transfer and for exchange as herein provided,
where notices and demands to or upon the Company in respect of this Note may be
served and where this Note may be presented for payment. Until the Company
otherwise notifies the holder hereof, said office shall be the principal office
of the Company located at 0000 Xxxxxx Xxxxxxx, Xxxxxxx, Xxx Xxxxxx 00000.
6
(b) Payment of Taxes. The Company will promptly pay and discharge or
cause to be paid and discharged, before the same shall become in default, all
material lawful taxes and assessments imposed upon the Company or any of its
subsidiaries or upon the income and profits of the Company or any of its
material subsidiaries, or upon any property, real, personal or mixed, belonging
to the Company or any of its material subsidiaries, as well as all material
lawful claims for labor, materials and supplies which, if unpaid, would become a
lien or charge upon such property or any part thereof; provided, however, that
the Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings and for
which disputed amounts adequate reserves have been established in accordance
with GAAP.
(c) Corporate Existence. The Company will do or cause to be done all
things necessary and lawful to preserve and keep in full force and effect its
corporate existence, rights and franchises and the corporate existence, rights
and franchises of each of its material subsidiaries; provided, however, that
the Company shall not be required to preserve, with respect to itself, any right
or franchise, and with respect to any material subsidiary, its existence or any
such right or franchise, if the Board of Directors of the Company shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of such entity.
(d) Maintenance of Property. The Company will at all times maintain
and keep, or cause to be maintained and kept, in good repair, working order and
condition all significant properties of the Company and its subsidiaries used in
the conduct of its business, and will from time to time make or cause to be made
all needful and proper repairs, renewals, replacements, betterments and
improvements thereto, so that its business may be properly and advantageously
conducted at all times; provided, however, that nothing in this paragraph (d)
shall prevent the Company from discontinuing any operation or maintenance of any
of such properties, or disposing of any of them, if such discontinuance or
disposal is, in the judgment of the Board of Directors of the Company, desirable
in the conduct of the business of such entity.
(e) Insurance. The Company will, and will cause each of its
subsidiaries to, (i) keep adequately insured, by financially sound and reputable
insurers, all property of a character usually insured by corporations engaged in
the same or a similar business similarly situated against loss or damage of the
kinds customarily insured against by such corporations and (ii) carry, with
financially sound and reputable insurers, such other insurance (including
without limitation liability insurance) in such amounts as are available at
reasonable expense and to the extent believed advisable in the good faith
business judgment of the Company.
(f) Keeping of Books. The Company will at all times keep, and cause
each of its subsidiaries to keep, proper books of record and account in which
proper entries will be made of its transactions in accordance with generally
accepted accounting principles consistently applied.
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(g) Notice of Default. If any one or more events which constitute, or
which with notice or lapse of time or both would constitute, an Event of Default
under Section 13 shall occur, the Company shall, immediately after it becomes
aware that any such event has occurred, give notice to the holder of this Note,
specifying the nature of such event.
(h) Financial Reporting. The Company shall furnish to the holder
hereof:
(i) within 90 days after the end of each fiscal year of the Company, a
consolidated balance sheet of the Company and its subsidiaries as of the
end of such fiscal year and the related consolidated statements of
operations, changes in stockholders' equity and changes in financial
position of the Company and its subsidiaries for the fiscal year then
ended, together with supporting notes thereto, certified without
qualification as to scope of audit by a firm of independent certified
public accountants of recognized national standing selected by the Board of
Directors of the Company;
(ii) within 45 days after the end of each quarter in each fiscal year
(other than the last quarter in each fiscal year), a consolidated balance
sheet of the Company and its subsidiaries and the related consolidated
statements of operations, changes in stockholders' equity and changes in
financial position of the Company and its subsidiaries for the quarter then
ended, unaudited but certified by the principal financial officer of the
Company, such balance sheet to be as of the end of such quarter and such
statements of operations, changes in stockholders' equity and changes in
financial position to be for such quarter and for the period from the
beginning of the fiscal year to the end of such quarter, in each case
subject to normal year-end adjustments;
(iii) within 30 days after the end of each month in each fiscal year,
a consolidated balance sheet of the Company and its subsidiaries and the
related consolidated statement of operations for the month then ended,
unaudited but certified by the principal financial officer of the Company,
such balance sheet to be as of the end of such month and such statement of
operations to be for such month and for the period from the beginning of
the fiscal year to the end of such month, in each case subject to normal
year-end adjustments;
(iv) promptly upon filing, copies of all registration statements,
prospectuses, periodic reports and other documents filed by the Company
with the Securities and Exchange Commission; and
(v) promptly, from time to time, such other information regarding the
operations, business, affairs and financial condition of the Company or
any subsidiary as the holder hereof may reasonably request, subject to such
confidentiality agreements as the Company may reasonably request.
8
(i) Consolidation, Merger and Sale. The Company will not consolidate
or merge with or into, or sell or otherwise dispose of all or substantially all
of its property to, any other corporation or other entity, unless:
(i) in the event of any such transaction which constitutes a Change in
Control (as defined in Section 6 hereof), and in connection with which the
Company for any reason shall not prepay all principal and interest then
outstanding under this Note (whether or not prepayment is restricted by the
Bank Credit Agreements or the High Yield Debt Agreements), the Company
shall have obtained the written consent of the holders of at least 66-2/3%
of the aggregate principal amount then outstanding under the Notes;
(ii) the surviving corporation or other entity (if other than the
Company) shall expressly and effectively assume in writing the due and
punctual payment of the principal of and interest on this Note, according
to its tenor, and the due and punctual performance and observance of all
the terms, covenants, agreements and conditions of this Note to be
performed or observed by the Company to the same extent as if such
surviving corporation had been the original maker of this Note; and
(iii) the Company or such other corporation or other entity shall not
otherwise be in default in the performance or observance of any covenant,
agreement or condition of this Note or the Purchase Agreement.
(j) Prohibition of Dividends. The Company will not pay any dividend or
distribution in respect of its capital stock, payable in cash or other property,
except for dividends or distributions of common stock of the Company.
12. Modification by Holders; Waiver.
(a) The Company may, with the written consent of the holders of not
less than 66-2/3% in principal amount of the Notes then outstanding, modify the
terms and provisions of this Note or the rights of the holders of this Note or
the obligations of the Company hereunder, and the observance by the Company of
any term or provision of this Note may be waived with the written consent of the
holders of not less than 66-2/3% in principal amount of the Notes then
outstanding; provided, however, that no such modification or waiver shall:
(i) change the maturity of any Note, reduce the principal amount
thereof or reduce the rate or extend the time of payment of interest
thereon without the consent of the holder of each Note so affected; or
(ii) give any Note any preference over any other Note, including,
without limitation, by amending the allocation provisions of Section 8
hereof; or
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(iii) reduce the percentage of principal amount outstanding under any
Note, the consent of the holder of which is required for any such
modification; or
(iv) amend the provisions of Section 17 hereof in any manner adverse
to the interests of the holder of this Note;
without the consent of the holder of each Note so affected.
(b) Any such modification or waiver shall apply equally to each holder
of the Notes and shall be binding upon them, upon each future holder of any Note
and upon the Company, whether or not such Note shall have been marked to
indicate such modification or waiver, but any Note issued thereafter shall bear
a notation referring to any such modification or waiver. Promptly after
obtaining the written consent of the holders as herein provided, the Company
shall transmit a copy of such modification or waiver to the holders of the Notes
at the time outstanding.
(c) Notwithstanding anything to the contrary herein, any modification
of the Notes that adversely affects the holders of any Senior Indebtedness shall
require the prior written consent of such holders (or any agent or trustee that
is duly authorized to give such consent).
13. Events of Default. Subject to the provisions of Section 17 of this
Note (including without limitation clause (D) of paragraph (a) thereof), if any
one or more of the following events, herein called "Events of Default," shall
occur (for any reason whatsoever, and whether such occurrence shall, on the part
of the Company or any of its subsidiaries, be voluntary or involuntary or come
about or be effected by operation of law or pursuant to or in compliance with
any judgment, decree or order of a court of competent jurisdiction or any order,
rule or regulation of any administrative or other governmental authority) and
such Event of Default shall be continuing:
(i) default shall be made in the payment of the principal of this Note
when and as the same shall become due and payable, whether at maturity or
at a date fixed for prepayment (in accordance with the requirements of
Section 6) or by acceleration or otherwise;
(ii) default shall be made in the payment of any installment of
interest on this Note according to its terms when and as the same shall
become due and payable and such default shall continue for a period of 10
days;
(iii) default shall be made in the due observance or performance of
any covenant, condition or agreement on the part of the Company contained
in Section 11(i);
(iv) default shall be made in the due observance or performance of any
other covenant, condition or agreement on the part of the Company to be
observed or performed pursuant to the terms hereof or of the Purchase
Agreement, and such default shall continue for 30 days after written notice
thereof, specifying such default and requesting that the same be remedied;
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(v) the entry of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Company or any of its
subsidiaries in any involuntary case under the federal bankruptcy laws, as
now constituted or hereafter amended, or any other applicable federal or
state bankruptcy, insolvency or other similar laws, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of the Company or any of its subsidiaries for any
substantial part of any of their property or ordering the winding-up or
liquidation of any of their affairs and the continuance of any such decree
or order unstayed and in effect for a period of 60 consecutive days;
(vi) the commencement by the Company or any of its subsidiaries of a
voluntary case under the federal bankruptcy laws, as now constituted or
hereafter amended, or any other applicable federal or state bankruptcy,
insolvency or other similar laws, or the consent by any of them to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) of the Company
or any of its subsidiaries for any substantial part of any of their
property, or the making by any of them of any assignment for the benefit of
creditors, or the failure of the Company or of any of its subsidiaries
generally to pay its debts as such debts become due, or the taking of
corporate action by the Company or any of its subsidiaries in furtherance
of or which might reasonably be expected to result in any of the foregoing;
(vii) default, as defined in any instrument evidencing or under which
the Company or any of its subsidiaries has outstanding at the time any
indebtedness for money borrowed in excess of $20,000,000 in aggregate
principal amount, shall occur and as a result thereof the maturity of any
such indebtedness shall have been accelerated so that the same shall have
become due and payable prior to the date on which the same would otherwise
have become due and payable and such acceleration shall not have been
rescinded or annulled within 30 days; or
(viii) final judgment for the payment of money in excess of
$20,000,000 shall be rendered against the Company or any of its
subsidiaries and the same shall remain undischarged for a period of 60 days
during which execution shall not be effectively stayed;
then, subject to the provisions of Section 17 hereof, the holders of at least
25% in aggregate principal amount of the Notes at the time outstanding may, at
their option, by a notice in writing to the Company, to the Agent of the lenders
specified in the Bank Credit Agreements, if the Bank Credit Agreements are then
in effect, and to the Trustee named in the High Yield Debt Agreements, if the
High Yield Debt Agreements are then in effect, declare this Note to be, and this
Note shall thereupon be and become, immediately due and payable together with
11
interest accrued thereon, without diligence, presentment, demand, protest or
further notice of any kind, all of which are expressly waived by the Company to
the extent permitted by law. The Company expressly agrees that this Note, or any
payment hereunder, may be extended from time to time and that the holder thereof
may accept security for this Note or release security for this Note, all without
in any way affecting the liability of the Company hereunder.
Without limiting the foregoing, the Company hereby waives any right to
trial by jury in any legal proceeding related in any way to this Note and agrees
that any such proceeding may, if the holder so elects, be brought and enforced
in the Supreme Court of the State of New York for New York County or the United
States District Court for the Southern District of New York and the Company
hereby waives any objection to jurisdiction or venue in any such proceeding
commenced in such court. The Company further agrees that any process required to
be served on it for purposes of any such proceeding may be served on it, with
the same effect as personal service on it within the State of New York, by
registered mail addressed to it at its office or agency set forth in paragraph
(a) of Section 11 for purposes of notices hereunder.
14. Suits for Enforcement. Subject to the provisions of Section 17 of
this Note, in case any one or more of the Events of Default specified in Section
13 of this Note shall happen and be continuing, the holder of this Note may
proceed to protect and enforce its rights by suit in equity, action at law
and/or by other appropriate proceeding, whether for the specific performance of
any covenant or agreement contained in this Note or in aid of the exercise of
any power granted in this Note, or may proceed to enforce the payment of this
Note or to enforce any other legal or equitable right of the holder of this
Note.
In case of any default under this Note, the Company will pay to the
holder hereof such amounts as shall be sufficient to cover the costs and
expenses of such holder due to said default, including without limitation
collection costs and reasonable attorneys' fees, to the extent actually
incurred.
15. Remedies Cumulative. No remedy herein conferred upon the holder of
this Note 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.
16. Remedies Not Waived. No course of dealing between the Company and
the holder of this Note or any delay on the part of the holder hereof in
exercising any rights hereunder shall operate as a waiver of any right of the
holder of this Note.
17. Subordination.
(a) Anything contained in this Note to the contrary notwithstanding,
the indebtedness evidenced by the Notes shall be subordinate and junior, to the
extent set forth in the following paragraphs (A), (B), (C), (D) and (E), to all
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Senior Indebtedness of the Company. "Senior Indebtedness" shall mean the
principal of, premium, if any, and interest (including any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided for in
the documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law) on, and all reasonable fees, reimbursement
and indemnity obligations, and all other obligations arising in connection with,
any indebtedness for borrowed money of the Company, contingent or otherwise, now
outstanding or created, incurred, issued, assumed or guaranteed in the future,
for which, in the case of any particular indebtedness, the instrument creating
or evidencing the same or pursuant to which the same is outstanding expressly
provides that such indebtedness is senior in right of payment to the Notes.
Notwithstanding anything to the contrary herein, Senior Indebtedness shall
include all "Obligations" (under and as defined in the Bank Credit Agreements)
and all "Obligations" (under and as defined in the High Yield Debt Agreements)
in respect of the High Yield Notes; notwithstanding the foregoing, Senior
Indebtedness shall include only such Obligations until such time as the same are
paid in full in cash and all obligations to provide financial accommodations
under the Bank Credit Agreements have terminated.
(A) In the event of any insolvency, bankruptcy, liquidation,
reorganization or other similar proceedings, or any receivership
proceedings in connection therewith, relative to the Company or its
creditors or its property, and in the event of any proceedings for
voluntary liquidation, dissolution or other winding up of the Company,
whether or not involving insolvency or bankruptcy proceedings, then all
Senior Indebtedness shall first be paid in full in cash before any payment,
whether on account of principal, interest or otherwise, is made upon the
Notes.
(B) In any of the proceedings referred to in paragraph (A) above, any
payment or distribution of any kind or character, whether in cash,
property, stock or obligations which may be payable or deliverable in
respect of the Notes shall be paid or delivered directly to the holders of
Senior Indebtedness for application in payment thereof, unless and until
all Senior Indebtedness shall have been paid in full in cash.
(C) No payment shall be made, directly or indirectly, on account of
the Notes upon maturity of any Senior Indebtedness, whether by lapse of
time, acceleration (unless waived) or otherwise, unless and until all
principal thereof and interest thereon and all other obligations in respect
thereof shall first be paid in full in cash and, in the case of maturity of
the Senior Indebtedness incurred pursuant to the Bank Credit Agreements,
all obligations to provide financial accommodations under the Bank Credit
Agreements have terminated.
(D) Notwithstanding anything to the contrary herein, upon the
occurrence of any Event of Default, the holders the Notes shall not declare
the Notes to be due and payable in accordance with Section 13 hereof unless
(i) the Agent shall have declared the indebtedness under the Bank Credit
Agreements, and the Trustee or the holders of at least 25% of the
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outstanding principal amount of the High Yield Notes shall have declared
such High Yield Notes, due and payable prior to the date on which they are
otherwise due and payable and (ii) such declarations shall not have been
rescinded by any such party within 90 days after receipt by such party of
written notice from the holders of the Notes of such holders' intention to
accelerate the payment of all indebtedness due under the Notes.
(E) Upon the occurrence of any default or event of default under the
Bank Credit Agreements, the High Yield Debt Agreements or any other Senior
Indebtedness, no payments of principal (whether at maturity or otherwise)
or cash payments of interest shall be made upon or in respect of the Notes
until the Company receives written notice from the Agent, the Trustee
and/or the holder of such other Senior Indebtedness, as the case may be,
that such default or event of default has been cured or duly waived.
(b) Subject to the payment in full in cash of all Senior Indebtedness
as aforesaid, the holders of the Notes shall be subrogated to the rights of the
holders of Senior Indebtedness to receive payments or distributions of any kind
or character, whether in cash, property, stock or obligations, which may be
payable or deliverable to the holders of Senior Indebtedness, until the
principal of, and interest on, the Notes shall be paid in full in cash, and, as
between the Company, its creditors other than the holders of Senior
Indebtedness, and the holders of the Notes, no such payment or distribution made
to the holders of Senior Indebtedness by virtue of this Section 17 which
otherwise would have been made to the holder of the Notes shall be deemed a
payment by the Company on account of the Senior Indebtedness, it being
understood that the provisions of this Section 17 are and are intended solely
for the purposes of defining the relative rights of the holders of the Notes, on
the one hand, and the holders of the Senior Indebtedness, on the other hand.
Subject to the rights, if any, under this Section 17 of holders of Senior
Indebtedness to receive cash, property, stock or obligations otherwise payable
or deliverable to the holders of the Notes, nothing herein shall either impair,
as between the Company and the holder of this Note, the obligation of the
Company, which is unconditional and absolute, to pay to the holder hereof the
principal hereof and interest hereon in accordance with the terms hereof or
prevent (except as otherwise specified herein) the holder of this Note from
exercising all remedies otherwise permitted by applicable law or hereunder upon
default hereunder.
(c) If any payment or distribution of any character or any security,
whether in cash, securities or other property, shall be received by any holders
of the Notes in contravention of any of the terms hereof or before all the
Senior Indebtedness obligations have been paid in full in cash and all
obligations to provide financial accommodations under the Bank Credit Agree-
ments have terminated, such payment or distribution or security shall be
received in trust for the benefit of, and shall be paid over or delivered and
transferred to, the holders of the Senior Indebtedness at the time outstanding
in accordance with the priorities then existing among such holders for
application to the payment of all Senior Indebtedness remaining unpaid, to the
extent necessary to pay all such Senior Indebtedness in full in cash. In the
event of the failure of any such holder to endorse or assign any such payment,
distribution or security, each holder of any Senior Indebtedness is hereby
irrevocably authorized to endorse or assign the name of such holder.
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(d) The rights under these subordination provisions of the holders of
any Senior Indebtedness as against any holders of the Notes shall remain in full
force and effect without regard to, and shall not be impaired or affected by:
(i) any act or failure to act on the part of the Company; or
(ii) any extension or indulgence in respect of any payment or
prepayment of any Senior Indebtedness or any part thereof or in respect of
any other amount payable to any holder of any Senior Indebtedness; or
(iii) any amendment, modification or waiver of, or addition or
supplement to, or deletion from, or compromise, release, consent or other
action in respect of, any of the terms of any Senior Indebtedness or any
other agreement which may be made relating to any Senior Indebtedness; or
(iv) any exercise or non-exercise by the holder of any Senior
Indebtedness of any right, power, privilege or remedy under or in respect
of such Senior Indebtedness or these subordination provisions or any waiver
of any such right, power, privilege or remedy or of any default in respect
of such Senior Indebtedness or these subordination provisions or any
receipt by the holder of any Senior Indebtedness of any security, or any
failure by such holder to perfect a security interest in, or any release by
such holder of, any security for the payment of such Senior Indebtedness;
or
(v) any merger or consolidation of the Company or any of its
subsidiaries into or with any other person, or any sale, lease or transfer
of any or all of the assets of the Company or any of its subsidiaries to
any other person; or
(vi) absence of any notice to, or knowledge by, any holder of any
claim hereunder of the existence or occurrence of any of the matters or
events set forth in the foregoing clauses (i) through (v).
(e) The holders of the Notes unconditionally waive (i) notice of any
of the matters referred to in Section 13; (ii) all notices which may be
required, whether by statute, rule of law or otherwise, to preserve intact any
rights of any holder of any Senior Indebtedness, including, without limitation,
any demand, presentment and protest, proof of notice of nonpayment under any
Senior Indebtedness and notice of any failure on the part of the Company to
perform and comply with any covenant, agreement, term or condition of any Senior
Indebtedness, (iii) any right to the enforcement, assertion or exercise by any
holder of any Senior Indebtedness of any right, power, privilege or remedy
conferred in such Senior Indebtedness or otherwise, (iv) any requirements of
diligence on the part of any holder of any of the Senior Indebtedness, (v) any
15
requirement on the part of any holder of any Senior Indebtedness to mitigate
damages resulting from any default under such Senior Indebtedness and (vi) any
notice of any sale, transfer or other disposition of any Senior Indebtedness by
any holder thereof.
(f) The obligations of the holder under these subordination provisions
shall continue to be effective, or be reinstated, as the case may be, if at any
time any payment in respect of any Senior Indebtedness, or any other payment to
any holder of any Senior Indebtedness in its capacity as such, is rescinded or
must otherwise be restored or returned by the holder of such Senior Indebtedness
upon the occurrence of any proceeding referred to in Section 17(a)(A) or upon or
as a result of the appoint of a receiver, intervenor or conservator of, or
trustee or similar officer for, the Company or any substantial part of its
property or otherwise, all as though such payment had not been made.
18. Covenants Bind Successors and Assigns. All the covenants,
stipulations, promises and agreements in this Note contained by or on behalf of
the Company shall bind its successors and assigns, whether so expressed or not.
19. Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of New York.
20. Headings. The headings of the sections and paragraphs of this Note
are inserted for convenience only and do not constitute a part of this Note.
21. Third Party Beneficiaries. The provisions of Section 17 are
intended to be for the benefit of, and shall be enforceable directly by each
holder of, the Senior Indebtedness.
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IN WITNESS WHEREOF, Centennial Cellular Corp. has caused this Note to
be signed in its corporate name by one of its officers thereunto duly authorized
and to be dated as of the day and year first above written.
CENTENNIAL CELLULAR CORP.
By:/s/ Xxxxxxx Xxxxx
--------------------
Name: Xxxxxxx Xxxxx
Title:Chief Executive Officer
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