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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 14, 1999
RIFKIN ACQUISITION PARTNERS, LLC
RIFKIN ACQUISITION CAPITAL CORP.
(Exact Name of Registrant as Specified in its Charter)
Delaware 333-3084 84-1317717
Colorado 333-3084 84-1341424
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
12444 Powerscourt Drive, Suite 400, St. Louis, MO 63131
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (314) 965-0555
360 Monroe Street, Suite 600, Denver, CO 80209
(Former address, if changed since last report)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
On September 14, 1999, certain affiliates of Charter Investment, Inc.,
a Delaware corporation, formerly Charter Communications, Inc. ("CII"),
acquired, directly or indirectly, all of the partnership interests of Rifkin
Acquisition Partners, L.L.L.P., a Colorado registered limited liability limited
partnership ("RAP"). The terms and conditions of the acquisition are governed by
(1) a Purchase and Sale Agreement (the "RAP Purchase Agreement") dated April 26,
1999 by and among RAP, CII and the holders of certain partnership interests in
RAP (the "RAP Sellers"), and (2) a Purchase and Sale Agreement (the "InterLink
Purchase Agreement" and, together with the RAP Purchase Agreement, the "Purchase
Agreements") dated April 26, 1999 by and among InterLink Communications
Partners, LLLP ("InterLink"), CII and the direct or indirect holders of all of
the partnership interests in InterLink (the "InterLink Sellers"). Certain rights
under the RAP Purchase Agreement were assigned to Charter Communications
Operating, LLC ("CCO") and Charter Communications Holding Company, LLC, which
together acquired from the RAP Sellers approximately 72.5% of the outstanding
interests in RAP. Certain rights under the InterLink Purchase Agreement were
assigned to CCO and certain affiliates, which together acquired from the
InterLink Sellers, directly or indirectly, all of the interests in InterLink.
By acquiring InterLink, CCO and such affiliates indirectly acquired the
remaining approximately 27.5% of the outstanding partnership interests in RAP,
which, at the time of the acquisition, were held directly by Greenwich Street
(RAP) Partners I, L.P., an indirect wholly-owned subsidiary of InterLink.
The aggregate consideration paid to acquire RAP and InterLink was $1.46
billion, consisting of $1.2 billion in cash, $133.3 million in equity of an
affiliate of CII and $125.0 million of assumed debt. The sources of the cash
consideration were (1) an equity contribution made by Paul G. Allen, the
controlling shareholder of CII, and (2) a loan made in the ordinary course of
business pursuant to CCO's Credit Agreement, dated as of March 18, 1999, among
The Chase Manhattan Bank and Nationsbank, N.A. as administrative agents and
certain lenders named therein.
Immediately after the consummation of the transactions contemplated by
the Purchase Agreements, on September 14, 1999, RAP merged (the "Merger") with
and into Rifkin Acquisition Partners, LLC, a Delaware limited liability company
("RAP LLC"). RAP LLC was the surviving entity of the Merger and succeeded to the
rights and obligations of RAP. As a result of the Merger, Rifkin Acquisition
Capital Corp. became a wholly-owned subsidiary of RAP LLC. In addition, as a
result of certain restructuring transactions occurring immediately after the
Merger and as of September 14, 1999, CCO became the direct owner of all of the
outstanding interests of RAP LLC. RAP LLC is a manger-managed limited liability
company, the manager of which is CII.
ITEM 5. OTHER EVENTS.
(a) Immediately after the consummation of the transactions contemplated
by the Purchase Agreements, the following occurred (the "Restructuring
Transactions"): (i) RAP merged with and into RAP LLC, with RAP LLC being the
surviving entity; (ii) Cable
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Equities of Colorado, Ltd., a Colorado limited partnership merged with and into
Cable Equities Colorado, LLC, a Delaware limited liability company affiliated
with CII, with Cable Equities Colorado, LLC being the surviving entity; and
(iii) Cable Equities, Inc. merged with and into Cable Equities of Colorado
Management Corp., with Cable Equities of Colorado Management Corp. being the
surviving entity.
As a result of the Restructuring Transactions and the consummation of
the transactions contemplated by the Purchase Agreements, the following
occurred:
(1) As required by that certain Indenture dated January 15,
1996, by and among Rifkin Acquisition Partners, L.L.L.P. and Rifkin Acquisition
Capital Corp. as Issuers, Cable Equities of Colorado Management Corp., FNI
Management Corp., Cable Equities of Colorado, Ltd., Cable Equities, Inc. and
Rifkin/Tennessee, Ltd., as Subsidiary Guarantors and Marine Midland Bank, as
Trustee (the "Indenture"), which governs the outstanding $125 million principal
amount of 11-1/8% Senior Subordinated Notes due 2006 (the "Notes"), as of
September 14, 1999, RAP LLC and Rifkin Acquisition Capital Corp. as Issuers,
Cable Equities of Colorado Management Corp. and Cable Equities Colorado, LLC as
Subsidiary Guarantors and HSBC Bank USA as Trustee entered into that First
Supplemental Indenture to the Indenture.
(2) On September 20, 1999, RAP LLC and Rifkin Acquisition
Capital Corp. commenced a cash tender offer to purchase any and all of the
Notes. In the alternative, RAP LLC and Rifkin Acquisition Capital Corp. offered
to repurchase the Notes in a change of control repurchase offer required by the
Indenture.
The terms and conditions of the tender offer and change of
control repurchase offer are set forth in their entirety in an Offer to Purchase
and Consent Solicitation Statement dated September 20, 1999, and related Consent
and Letter of Transmittal (the "Offer").
As set forth in the Offer, in conjunction with the tender
offer, RAP LLC and Rifkin Acquisition Capital Corp. are soliciting consents to
certain proposed amendments to the Indenture that would eliminate substantially
all of the restrictive covenants and would amend certain other provisions.
(3) On September 20, 1999, Charter Communications issued a
press release, a copy of which is attached hereto as Exhibit 99.1 and
incorporated herein by reference.
(c) In connection with the sale of RAP, the address of the corporate
offices of each of RAP LLC and Rifkin Acquisition Capital Corp. is 12444
Powerscourt Drive, Suite 400, St. Louis, Missouri 63131.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA INFORMATION AND EXHIBITS
(a) Not Applicable
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(b) Not Applicable
(c) The following are furnished as exhibits to this report:
2.1 Purchase and Sale Agreement dated April 26, 1999 by
and among Rifkin Acquisition Partners, L.L.L.P.,
Charter Investment, Inc., a Delaware corporation
(formerly Charter Communications, Inc.) and the
holders of certain partnership interests in Rifkin
Acquisition Partners, L.L.L.P. (1)
2.2 Purchase and Sale Agreement dated April 26, 1999 by
and among InterLink Communications Partners, LLLP,
Charter Investment, Inc., a Delaware corporation
(formerly Charter Communications, Inc.) and the
holders of certain partnership interests in InterLink
Communications Partners, LLLP. (2)
2.3 Assignment of Purchase Agreement with Rifkin
Acquisition Partners, L.L.L.P., dated as of June 30,
1999, by and between Charter Investment, Inc.
(formerly Charter Communications, Inc.) and Charter
Communications Operating, LLC. (2)
2.4 Assignment of Purchase Agreement with InterLink
Communications Partners, LLLP, dated as of June 30,
1999, by and between Charter Investment, Inc.
(formerly Charter Communications, Inc.) and Charter
Communications Operating, LLC. (2)
2.5 Amendment to the Purchase Agreement with InterLink
Communications Partners, LLLP, dated June 29, 1999.
(3)
2.6 Indenture dated January 15, 1996, by and among Rifkin
Acquisition Partners, L.L.L.P. and Rifkin Acquisition
Capital Corp. as Issuers, Cable Equities of Colorado
Management Corp., FNI Management Corp., Cable
Equities of Colorado, Ltd., Cable Equities, Inc. and
Rifkin/Tennessee, Ltd., as Subsidiary Guarantors and
Marine Midland Bank, as Trustee. (4)
2.7 First Supplemental Indenture, dated as of September
14, 1999, by and among Rifkin Acquisition Partners,
LLC and Rifkin Acquisition Capital Corp. as Issuers,
Cable Equities of Colorado Management Corp. and Cable
Equities Colorado, LLC as Subsidiary Guarantors and
HSBC Bank USA as trustee.*
2.8 Offer to Purchase and Consent Solicitation Statement
and Offer to Repurchase 11-1/8% Senior Subordinated
Notes due 2006 Pursuant to a Change of Control, made
by Rifkin Acquisition Partners, LLC and Rifkin
Acquisition Capital Corporation as of September 20,
1999.*
99.1 Press Release issued on September 20, 1999, by
Charter Communications.*
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* - filed herewith
(1) Incorporated by reference to Amendment No. 4 to the registration statement
on Form S-4 of Charter Communications Holdings, LLC and Charter
Communications Holdings Capital Corporation filed on July 22, 1999 (File
No. 333-77499).
(2) Incorporated by reference to Amendment No. 2 to the registration statement
on Form S-4 of Charter Communications Holdings, LLC and Charter
Communications Holdings Capital Corporation filed on June 21, 1999 (File
No. 333-77499).
(3) Incorporated by reference to Amendment No. 6 to the registration statement
on Form S-4 of Charter Communications Holdings, LLC and Charter
Communications Holdings Capital Corporation filed on August 27, 1999 (File
No. 333-77499).
(4) Incorporated by reference to the registration statement on Form S-1 of
Rifkin Acquisition Partners, L.L.L.P. and Rifkin Acquisition Capital Corp.
filed on April 2, 1996 (File No. 333-3084).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
RIFKIN ACQUISITION PARTNERS, LLC
By: Charter Investment, Inc., its Manager
Date: September 29, 1999 By: /s/ Kent D. Kalkwarf
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Kent D. Kalkwarf
Senior Vice President
RIFKIN ACQUISITION CAPITAL CORP.
By: Charter Investment, Inc., its Manager
Date: September 29, 1999 By: /s/ Kent D. Kalkwarf
------------------------------------------
Kent D. Kalkwarf
Senior Vice President
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Exhibit Index
Exhibit Description
2.1 Purchase and Sale Agreement dated April 26, 1999 by and among Rifkin
Acquisition Partners, L.L.L.P., Charter Investment, Inc., a Delaware
corporation (formerly Charter Communications, Inc.) and the holders of
certain partnership interests in Rifkin Acquisition Partners, L.L.L.P.
(1)
2.2 Purchase and Sale Agreement dated April 26, 1999 by and among InterLink
Communications Partners, LLLP, Charter Investment, Inc., a Delaware
corporation (formerly Charter Communications, Inc.) and the holders of
certain partnership interests in InterLink Communications Partners,
LLLP. (2)
2.3 Assignment of Purchase Agreement with Rifkin Acquisition Partners,
L.L.L.P., dated as of June 30, 1999, by and between Charter Investment,
Inc. (formerly Charter Communications, Inc.) and Charter Communications
Operating, LLC. (2)
2.4 Assignment of Purchase Agreement with InterLink Communications
Partners, LLLP, dated as of June 30, 1999, by and between Charter
Investment, Inc. (formerly Charter Communications, Inc.) and Charter
Communications Operating, LLC. (2)
2.5 Amendment to the Purchase Agreement with InterLink Communications
Partners, LLLP, dated June 29, 1999. (3)
2.6 Indenture dated January 15, 1996, by and among Rifkin Acquisition
Partners, L.L.L.P. and Rifkin Acquisition Capital Corp. as Issuers,
Cable Equities of Colorado Management Corp., FNI Management Corp.,
Cable Equities of Colorado, Ltd., Cable Equities, Inc. and
Rifkin/Tennessee, Ltd., as Subsidiary Guarantors and Marine Midland
Bank, as Trustee. (4)
2.7 First Supplemental Indenture, dated as of September 14, 1999, by and
among Rifkin Acquisition Partners, LLC and Rifkin Acquisition Capital
Corp. as Issuers, Cable Equities of Colorado Management Corp. and Cable
Equities Colorado, LLC as Subsidiary Guarantors and HSBC Bank USA as
trustee.*
2.8 Offer to Purchase and Consent Solicitation Statement and Offer to
Repurchase 11-1/8% Senior Subordinated Notes due 2006 Pursuant to a
Change of Control, made by Rifkin Acquisition Partners, LLC and Rifkin
Acquisition Capital Corporation as of September 20, 1999.*
99.1 Press Release issued on September 20, 1999, by Charter Communications.*
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* - filed herewith
(1) Incorporated by reference to Amendment No. 4 to the registration statement
on Form S-4 of Charter Communications Holdings, LLC and Charter
Communications Holdings Capital Corporation filed on July 22, 1999 (File
No. 333-77499).
(2) Incorporated by reference to Amendment No. 2 to the registration statement
on Form S-4 of Charter Communications Holdings, LLC and Charter
Communications Holdings Capital Corporation filed on June 21, 1999 (File
No. 333-77499).
(3) Incorporated by reference to Amendment No. 6 to the registration statement
on Form S-4 of Charter Communications Holdings, LLC and Charter
Communications Holdings Capital Corporation filed on August 27, 1999 (File
No. 333-77499).
(4) Incorporated by reference to the registration statement on Form S-1 of
Rifkin Acquisition Partners, L.L.L.P. and Rifkin Acquisition Capital Corp.
filed on April 2, 1996 (File No. 333-3084).
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FIRST SUPPLEMENTAL INDENTURE
Dated as of September 14, 1999
TO
INDENTURE,
Dated as of January 15, 1996
RIFKIN ACQUISITION PARTNERS, LLC
RIFKIN ACQUISITION CAPITAL CORPORATION
as Issuers,
CABLE EQUITIES OF COLORADO MANAGEMENT CORP.,
CABLE EQUITIES COLORADO, LLC
as Subsidiary Guarantors
and
HSBC BANK USA
as Trustee
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This First Supplemental Indenture (the "SUPPLEMENTAL INDENTURE"), dated as
of September 14, 1999, by and among Rifkin Acquisition Partners, LLC, a
Delaware limited liability company (the "NEW COMPANY"), and Rifkin Acquisition
Capital Corporation, a Colorado corporation ("CAPITAL CORP."), as issuers (the
"ISSUERS"), the Subsidiary Guarantors listed below, and HSBC Bank USA, a New
York banking corporation and trust company formerly known as Marine Midland
Bank, as trustee (the "TRUSTEE"), to that certain Indenture (the "INDENTURE"),
dated as of January 15, 1996, by and among Rifkin Acquisition Partners,
L.L.L.P., a Colorado limited liability limited partnership (the "COMPANY"), and
Capital Corp., as issuers (the "FORMER ISSUERS"), the Subsidiary Guarantors
named therein, and the Trustee.
W I T N E S S E T H:
WHEREAS, the Former Issuers, as co-issuers, issued, pursuant to the
Indenture, $125,000,000 aggregate principal amount of 11-1/8% Senior
Subordinated Notes due 2006 (the "NOTES");
WHEREAS, the Company has merged with and into the New Company as of
September 14, 1999, with the New Company surviving the merger as successor to
the Company;
WHEREAS, Cable Equities, Inc., a Colorado corporation and a former
Subsidiary Guarantor ("CEI"), has merged with and into Cable Equities of
Colorado Management Corp., a Colorado corporation and a Subsidiary Guarantor
("CECMC") as of September 14, 1999, with CECMC surviving the merger as
successor to CEI;
WHEREAS, Cable Equities of Colorado, Ltd., a Colorado limited partnership
and former Subsidiary Guarantor ("CECLP"), has merged with and into Cable
Equities Colorado, LLC, a Delaware limited liability company ("CECLLC") as of
September 14, 1999, with CECLLC surviving the merger as successor to CECLP;
WHEREAS, FNI Management Corp., a Tennessee corporation and former Subsidiary
Guarantor ("FNI"), of which Company was the sole shareholder, has dissolved as
of December 31, 1997, resulting in the transfer of all assets of FNI to Company;
WHEREAS, Rifkin/Tennessee, Ltd., a Tennessee limited partnership and former
Subsidiary Guarantor ("RTL"), of which Company was the sole general partner
and FNI was the sole limited partner, has ceased to have independent legal
existence as of December 31, 1997, pursuant to the dissolution of FNI and the
resulting transfer of FNI's limited partnership interest in RTL to Company, and
all assets of RTL were transferred to Company;
WHEREAS, Section 5.01(a) of the Indenture provides that neither Issuer shall
merge with or into another Person unless (1) the Surviving Person assumes all
the obligations of such Issuer under the Securities and the Indenture pursuant
to a supplemental indenture in a form reasonably satisfactory to the Trustee;
(2) at the time of the Disposition and immediately following the Disposition,
no Default or Event of Default has occurred and is continuing; and (3) the
Surviving Person has a Consolidated Net Worth (immediately after giving effect
to the Disposition on a pro forma basis) equal to or greater than the
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Consolidated Net Worth of such Issuer immediately preceding the Disposition
and, at the time of the Disposition and after giving pro forma effect thereto,
the Surviving Person would be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the first paragraph of Section 4.12 of the Indenture.
WHEREAS, Section 5.01(b) of the Indenture provides that, subject to one
exception, no Subsidiary Guarantor shall consolidate with or merge with or into
another Person unless (1) the Surviving Person assumes all the obligations of
such Issuer under the Securities and the Indenture pursuant to a supplemental
indenture in a form reasonably satisfactory to the Trustee; (2) at the time of
the Disposition and immediately following the Disposition, no Default or Event
of Default has occurred and is continuing; and (3), if the merger involves any
Person or entity other than an Issuer and/or one or more Wholly-Owned
Subsidiaries of an Issuer, the Surviving Person has a Consolidated Net Worth
(immediately after giving pro forma effect to the Disposition) equal to or
greater than the Consolidated Net Worth of such Subsidiary Guarantor
immediately preceding the transaction; and
WHEREAS, Section 9.01 of the Indenture provides that the Issuers, the
Subsidiary Guarantors, and the Trustee may together amend or supplement the
Indenture without notice to or consent of any Holder to cure any ambiguity,
defect, or inconsistency; provided that such amendment does not, in the opinion
of the Trustee, adversely affect the rights of the Holders in any material
respect.
NOW, THEREFORE, the parties hereto hereby amend the Indenture as follows:
Section 1. Definitions. Terms defined (whether directly or indirectly by
reference) in the Indenture and used without other definition herein shall have
the respective meanings assigned to such terms in the Indenture.
Section 2. Assumption of Duties. New Company hereby expressly assumes all
the obligations of the Company under the Securities and the Indenture, and all
references to the Company in the Indenture shall henceforth be considered
references to New Company. New Company also hereby expressly assumes all of the
obligations of FNI and RTL under the Securities and the Indenture, however,
insofar as New Company is to become an Issuer pursuant to this Supplemental
Indenture, the obligations of FNI and RTL under the Securities and the
Indenture are hereby merged with and into New Company's obligations under the
Securities and the Indenture as an Issuer. CECMC hereby expressly assumes all
the obligations of CEI as Subsidiary Guarantor under the Securities and the
Indenture, and all references to CEI in the Indenture shall henceforth be
considered references to CECMC. CECLLC hereby expressly assumes all the
obligations of CECLP as Subsidiary Guarantor under the Securities and the
Indenture, and all references to CECLP in the Indenture shall henceforth be
considered references to CECLLC.
Section 3. Amendment to Section 4.15 of the Indenture. Section 4.15 of the
Indenture is hereby amended by (a) inserting, immediately following the words
"specified in the notice" in clause (b)(5) thereof, the additional text: "or,
in the case of any Holder electing to have a Security purchased pursuant to a
Change of Control Offer whose interest in such Security is evidenced by a
Global Security and related book-entry records, such Holder will be required to
comply with the procedures for book-entry transfer set forth in the
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Change of Control Offer, in either case," and (b) inserting, immediately
before the words "certificate number" in clause (b)(6) thereof, a comma and
the additional words "for each Holder of Certificated Securities".
Section 4. Acceptance of Trustee. Trustee hereby expressly
acknowledges and agrees that this Supplemental Indenture is in a form
reasonably satisfactory to the Trustee so as to satisfy Section 5.01(2) of the
Indenture.
Section 5. Ratification, Etc. Each term and provision of the
Indenture is hereby ratified and confirmed and shall continue in full force and
effect. From and after the date of this Supplemental Indenture, all references
to the Indenture shall be deemed to be references to the Indenture as amended
by this Supplemental Indenture.
Section 6. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
Section 7. No Representations by Trustee. The recitals contained
herein shall be construed as statements of the New Company, and the Trustee
assumes no responsibility for the correctness of the same. The Trustee makes no
representation and shall have no responsibility as to the validity of this
Supplemental Indenture or the proper authorization or the due execution hereof
by the New Company, Capital Corp., or the Subsidiary Guarantors.
Section 8. Counterparts. This Supplemental Indenture may be executed
in any number of counterparts, which shall together constitute but one and the
same instrument. To make proof of this Supplemental Indenture, it shall only be
necessary to produce one such counterpart.
Section 9. Successors and Assigns. This Supplemental Indenture shall
be binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns.
Section 10. Severability Clause. In case any provision (or portion
thereof) in this Supplemental Indenture shall be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of the remaining
provisions (or portions thereof) shall not in any way be affected or impaired
thereby.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the day and year first above written.
HSBC BANK USA, as Trustee
By: /s/ Frank J. Godino
-------------------------------------
Name: Frank J. Godino
-----------------------------------
Title: Vice President
----------------------------------
"ISSUERS"
RIFKIN ACQUISITION PARTNERS, LLC
By: /s/ Marcy Lifton
-------------------------------------
Name: Marcy Lifton
-----------------------------------
Title: Vice-President
----------------------------------
RIFKIN ACQUISITION CAPITAL CORPORATION
By: /s/ Marcy Lifton
-------------------------------------
Name: Marcy Lifton
-----------------------------------
Title: Vice-President
----------------------------------
"SUBSIDIARY GUARANTORS"
CABLE EQUITIES OF COLORADO
MANAGEMENT CORP.
By: /s/ Marcy Lifton
-------------------------------------
Name: Marcy Lifton
-----------------------------------
Title: Vice-President
----------------------------------
CABLE EQUITIES COLORADO, LLC,
By: /s/ Marcy Lifton
-------------------------------------
Name: Marcy Lifton
-----------------------------------
Title: Vice-President
----------------------------------
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OFFER TO PURCHASE AND
CONSENT SOLICITATION STATEMENT
RIFKIN ACQUISITION PARTNERS, LLC AND
RIFKIN ACQUISITION CAPITAL CORPORATION
OFFER TO PURCHASE FOR CASH AND
SOLICITATION OF CONSENTS RELATING TO THE
$125,000,000
11 1/8% SENIOR SUBORDINATED NOTES DUE 2006 ("NOTES")
ISSUED BY
RIFKIN ACQUISITION PARTNERS, L.L.L.P. AND
RIFKIN ACQUISITION CAPITAL CORPORATION
AND
OFFER TO REPURCHASE THE NOTES PURSUANT TO A CHANGE OF CONTROL
(CUSIP NO. 766520AC4)
Rifkin Acquisition Partners, LLC (the successor-in-interest to Rifkin
Acquisition Partners, L.L.L.P.) and Rifkin Acquisition Capital Corporation
(collectively, the "Issuers"), hereby offer to purchase for cash, upon the terms
and subject to the conditions set forth in this Offer to Purchase and Consent
Solicitation Statement and the related Letter of Transmittal and Consent (such
offer, including the solicitation of consents referred to herein, but excluding
the Change of Control Offer referred to herein, as it may be amended from time
to time, is referred to herein as the "Tender Offer"), any or all of the
outstanding Notes issued by the Issuers at a purchase price determined in the
manner described herein by reference to a fixed spread of 75 basis points (the
"Fixed Spread") over the yield to maturity of the U.S. Treasury 4 1/2% Note due
January 31, 2001 ("UST Reference Security") on the second business day preceding
the date on which the Tender Offer expires, of which an amount equal to $30 per
$1,000 principal amount of each Note purchased shall constitute a consent
payment that will be paid only for Notes tendered prior to the Consent Payment
Deadline referred to below, plus accrued and unpaid interest to but not
including the date of payment of such purchase price.
In the alternative, the Issuers hereby offer, subject to all relevant terms
and conditions herein, to repurchase for cash any or all of the outstanding
Notes issued by the Issuers at a purchase price equal to 101% of the aggregate
principal amount thereof, plus accrued and unpaid interest to the date of
purchase. This alternative offer is referred to herein as the "Change of Control
Offer", and collectively, with the Tender Offer, as the "Offers," and is
described more thoroughly below.
IN ORDER TO BE ELIGIBLE TO RECEIVE ONE OF THE FOLLOWING PAYMENTS, A HOLDER MUST
VALIDLY TENDER ITS NOTES BY 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THE
CORRESPONDING DATE SET FORTH BELOW:
FOR RECEIPT OF TOTAL TENDER OFFER PURCHASE
PRICE (INCLUDING CONSENT PAYMENT) ------------------------ OCTOBER 1, 1999
(UNLESS EXTENDED)
FOR RECEIPT OF TOTAL TENDER OFFER PURCHASE
PRICE LESS CONSENT PAYMENT -------------------------- OCTOBER 18, 1999 (UNLESS
EXTENDED)
FOR RECEIPT OF CHANGE OF CONTROL OFFER PRICE ----- OCTOBER 18, 1999 (UNLESS
EXTENDED)
The execution and delivery of the accompanying Letter of Transmittal and
Consent by a Holder (as defined herein) tendering any Notes pursuant to the
Tender Offer will constitute the consent of such Holder to certain proposed
amendments to the indenture under which the Notes were issued (the "Indenture").
The Tender Offer is conditioned upon, among other things, the satisfaction
of the Consent Condition (as defined herein).
Notes purchased pursuant to the Tender Offer will be paid for in same-day
funds delivered to the Depositary (as defined herein) on the second business day
after the date on which the Tender Offer expires, or as soon as practicable
thereafter (the "Tender Offer Settlement Date"). Assuming the Tender Offer is
not extended, it is expected that the Tender Offer Settlement Date will be on or
about October 20, 1999.
None of the Issuers, the Trustee, the Information Agent, or the Dealer
Manager (each as defined herein) makes any recommendation as to whether or not
Holders should tender their Notes pursuant to either of the Offers.
THE DEALER MANAGER FOR THE OFFERS IS:
BANC OF AMERICA SECURITIES LLC
THE DATE OF THIS OFFER TO PURCHASE AND CONSENT SOLICITATION STATEMENT IS
SEPTEMBER 20, 1999.
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IMPORTANT
Any Holder of Notes ("Holder") desiring to tender Notes should either (a)
in the case of a Holder who holds Notes in book-entry form, request such
Holder's broker, dealer, commercial bank, trust company, or other nominee (a
"Custodian") to effect the tender of Notes for such Holder pursuant to the
procedures for book-entry delivery set forth herein, (b) tender through The
Depository Trust Company ("DTC") pursuant to DTC's Automated Tender Offer
Program ("ATOP"), or (c) in the case of a Holder who holds physical certificates
evidencing such Notes, complete and sign the Letter of Transmittal and Consent
included herewith (the "Letter of Transmittal and Consent") or a facsimile copy
in accordance with the instructions therein, mail or deliver it and any other
required documents to Bankers Trust Company (the "Depositary") and deliver the
certificates for the tendered Notes to the Depositary. See "Certain Terms of
Both Offers -- Procedure for Tendering Notes" below. A beneficial owner who has
Notes registered in the name of a Custodian must contact that Custodian if such
beneficial owner desires to tender those Notes.
Any questions or requests for assistance or for additional copies of this
Offer to Purchase and Consent Solicitation Statement (this "Offer to Purchase"),
the Letter of Transmittal and Consent, or related documents may be directed to
D.F. King & Co., Inc. (the "Information Agent") at one of its telephone numbers
set forth on the last page of this Offer to Purchase. A Holder may also contact
Banc of America Securities LLC (the "Dealer Manager") at its telephone numbers
set forth on the last page of this Offer to Purchase or such Holder's Custodian
for assistance concerning the Offers.
THIS OFFER TO PURCHASE (INCLUDING THE ANNEX HERETO) AND THE LETTER OF
TRANSMITTAL AND CONSENT CONTAIN IMPORTANT INFORMATION WHICH A HOLDER SHOULD READ
BEFORE MAKING A DECISION WITH RESPECT TO THE OFFERS.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED HEREIN OR IN THE LETTER OF
TRANSMITTAL AND CONSENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE ISSUERS
OR ANY OF THEIR AGENTS.
This Offer to Purchase and related documents do not constitute an offer to
buy or the solicitation of an offer to sell Notes or a solicitation of Consents
(as defined herein) in any circumstances in which such offer or solicitation is
unlawful. In those jurisdictions where the securities, blue sky, or other laws
require either of the Offers to be made by a licensed broker or dealer, such
Offer shall be deemed to be made on behalf of the Issuers by the Dealer Manager
or one or more registered brokers or dealers licensed under the laws of such
jurisdiction. Neither the delivery of this Offer to Purchase and related
documents nor any purchase of Notes shall, under any circumstances, create any
implication that the information contained herein or therein is current as of
any time subsequent to the date of such information.
AVAILABLE INFORMATION
Pursuant to the terms of the Indenture, the Issuers file reports and other
information with the Securities and Exchange Commission (the "Commission"). Such
reports and other information may be inspected and copied at the public
reference facilities of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549 and at the Commission's regional offices located at Seven World Trade
Center, New York, New York 10048 and 500 West Madison Street, Chicago, Illinois
60661. Copies of such material may be obtained by mail, upon payment of the
Commission's prescribed rates, by writing to the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of such
material may also be obtained from the website that the Commission maintains at
http://www.sec.gov. If the Amendments (as defined herein) are adopted, the
Issuers will no longer be required to file such information with the Commission.
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THE TENDER OFFER
GENERAL
The Issuers hereby offer to purchase for cash, upon the terms and subject
to the conditions set forth in this Offer to Purchase and the Letter of
Transmittal and Consent, all of the outstanding Notes at a purchase price per
$1,000 principal amount of Notes determined in the manner described herein by
reference to the Fixed Spread over the yield to maturity of the UST Reference
Security on the second business day preceding the date on which the Tender Offer
expires (such purchase price, the "Total Tender Offer Purchase Price"), of which
an amount equal to $30 (i.e., 3% of the principal amount) shall constitute a
consent payment per $1,000 principal amount of the Notes (a "Consent Payment")
that will be paid only for Notes tendered prior to the Consent Payment Deadline,
plus accrued and unpaid interest to but not including the Tender Offer
Settlement Date. See "-- Total Tender Offer Purchase Price" and Annex A hereto.
The Consent Payment is part of the Total Tender Offer Purchase Price for Notes
tendered prior to the Consent Payment Deadline and purchased pursuant to the
Tender Offer. Accordingly, no Consent Payment will be made unless Notes are
validly tendered prior to the Consent Payment Deadline and purchased pursuant to
the Tender Offer. Holders who validly tender Notes pursuant to the Tender Offer
after the Consent Payment Deadline but prior to the Tender Offer Expiration Time
(as defined below), and do not withdraw such tenders, will receive the "Tender
Offer Purchase Price Less Consent Payment" (the Total Tender Offer Purchase
Price, less $30 per $1,000 principal amount of Notes). All of such payments for
Notes validly tendered (and not withdrawn) and accepted for payment will be made
on the Tender Offer Settlement Date.
BOTH THE TOTAL TENDER OFFER PURCHASE PRICE INCLUDING THE CONSENT PAYMENT
AND THE TENDER OFFER PURCHASE PRICE LESS CONSENT PAYMENT ARE EXPECTED TO BE
SIGNIFICANTLY HIGHER THAN THE CHANGE OF CONTROL OFFER PRICE (AS DEFINED BELOW).
The purposes of the Tender Offer are to acquire all of the outstanding
Notes and to obtain consents ("Consents") from Holders of Notes to the adoption
of certain proposed amendments (the "Amendments") to the Indenture. See "The
Amendments." The Amendments will be set forth in a supplemental indenture to the
Indenture (the "Supplemental Indenture"), but such Amendments will not become
operative unless and until validly tendered Notes are purchased pursuant to the
Tender Offer. The completion, execution, and timely delivery of the Letter of
Transmittal and Consent by a Holder tendering Notes in connection with the
Tender Offer will constitute the Consent of such Holder to the Amendments.
The "Consent Payment Deadline" for the Notes will be 12:00 midnight, New
York City time, on October 1, 1999, unless extended. Holders who desire to
tender Notes pursuant to the Tender Offer and receive the Total Tender Offer
Purchase Price (including the Consent Payment) per $1,000 principal amount must
tender such Notes prior to the Consent Payment Deadline.
The Tender Offer will expire at 12:00 midnight, New York City time, on
October 18, 1999, unless extended (such time and date, as the same may be
extended, the "Tender Offer Expiration Time"). See "-- Expiration, Extension,
Amendment, and Termination of the Tender Offer" below.
The Tender Offer is expressly conditioned upon, among other things, receipt
by the Depositary of valid and unrevoked Consents from the Holders of record of
a majority in principal amount at maturity of the outstanding Notes (the
"Requisite Consents," and such condition the "Consent Condition"). Since a valid
tender of Notes pursuant to the Tender Offer will constitute the Consent of the
tendering Holder to the Amendments, the Consent Condition will be satisfied if a
majority in principal amount of Notes are validly tendered pursuant to the
Tender Offer by the Holders and not validly withdrawn as provided in this Offer
to Purchase.
As used herein, the term "Agent's Message" means, with respect to any
tendered Notes, a message transmitted by DTC to, and received by, the Depositary
and forming a part of a book-entry confirmation, which states that DTC has
received an express acknowledgment from the tendering participant stating that,
with respect to such Notes, such participant has received and agrees to be bound
by the Letter of Transmittal and Consent and that the Issuers may enforce the
Letter of Transmittal and Consent against such participant.
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Notes purchased pursuant to the Tender Offer will be paid for in same-day
funds on the Tender Offer Settlement Date, which will be the second business day
after the date on which the Tender Offer expires, or as soon as practicable
thereafter. See "-- Acceptance for Payment and Payment."
Each Issuer hereby acquiesces to, and agrees to be bound by, any and all
actions taken by the other Issuer in accordance with the terms of this Offer to
Purchase.
TOTAL TENDER OFFER PURCHASE PRICE AND TENDER OFFER PURCHASE PRICE LESS CONSENT
PAYMENT
The Total Tender Offer Purchase Price will be calculated in a manner
intended to result in a price on the Tender Offer Settlement Date equivalent to
a yield to the first date on which the Notes may be redeemed at the option of
the Issuers (i.e., January 15, 2001, which is herein referred to as the "Call
Date") equal to the sum (such sum, the "Tender Offer Yield") of (a) the yield to
maturity (calculated in accordance with standard market practice) based on the
bid side price, as reported by the Bloomberg Government Pricing Monitor at the
close of business New York City time on the second business day preceding the
date on which the Tender Offer expires (such yield, the "UST Reference Yield"),
of the UST Reference Security and (b) the Fixed Spread. Specifically, the Total
Tender Offer Purchase Price per $1,000 principal amount of Notes will equal (a)
the value per $1,000 principal amount of Notes, assuming the Notes will be
redeemed in full on the Call Date at the then applicable redemption price (i.e.,
$1,055.63), of all remaining payments of principal thereof and premium and
interest thereon to be made through the Call Date, discounted to the Tender
Offer Settlement Date (in accordance with the formula set forth in Annex A
hereto) at a discount rate equal to the Tender Offer Yield, minus (b) accrued
and unpaid interest per $1,000 principal amount of Notes to but not including
the Tender Offer Settlement Date. Both the Total Tender Offer Purchase Price and
the Tender Offer Purchase Price Less Consent Payment, in each case, plus accrued
interest per $1,000 principal amount of Notes purchased pursuant to the Tender
Offer will be rounded to the nearest cent. The Dealer Manager will calculate the
Tender Offer Yield, the Total Tender Offer Purchase Price, the Tender Offer
Purchase Price Less Consent Payment and accrued interest, and its calculation
will be final and binding, absent manifest error.
As soon as practicable after the Total Tender Offer Purchase Price and the
Tender Offer Purchase Price Less Consent Payment are determined, but in any
event at or before 9:00 a.m. New York City time, on the following business day,
the Issuers will publicly announce the actual Total Tender Offer Purchase Price
and the Tender Offer Purchase Price Less Consent Payment by press release to the
Dow Jones News Service. Because the Total Tender Offer Purchase Price and the
Tender Offer Purchase Price Less Consent Payment prior to the date on which they
are determined (the "Price Determination Date") are based on a fixed-spread
pricing formula that is linked to the yield on the UST Reference Security, the
actual amount of cash that will be received by a tendering Holder pursuant to
the Tender Offer will be affected by changes in such yield on or prior to the
Price Determination Date. After the Price Determination Date, the actual amount
of cash that will be received by a tendering Holder pursuant to the Tender Offer
will be known and Holders will be able to ascertain the Total Tender Offer
Purchase Price and the Tender Offer Purchase Price Less Consent Payment in the
manner described above. Assuming a Tender Offer Settlement Date of October 20,
1999 and no change to the UST Reference Yield as measured on September 16, 1999,
the hypothetical Tender Offer Yield would be 6.308%, the Total Tender Offer
Purchase Price would be $1,107.73, the Tender Offer Purchase Price Less Consent
Payment would be $1,077.73, and the accrued interest per $1,000 principal amount
of the Notes would be $29.36.
Holders of Notes may obtain hypothetical quotes of the UST Reference Yield
(calculated as of a then recent time) and the resulting hypothetical Tender
Offer Yield and Total Tender Offer Purchase Price prior to the time at which the
actual Total Tender Offer Purchase Price and the Tender Offer Purchase Price
Less Consent Payment are calculated, and may obtain the actual UST Reference
Yield, Tender Offer Yield and Total Tender Offer Purchase Price and the Tender
Offer Purchase Price Less Consent Payment after such time, by contacting the
Dealer Manager toll-free at (888) 292-0070. Although the Total Tender Offer
Purchase Price and the Tender Offer Purchase Price Less Consent Payment will be
calculated based solely on the UST Reference Yield (determined as described
above), information regarding the closing yield to maturity of the UST Reference
Security on any trading day may also be found in The Wall Street Journal.
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WITHDRAWAL OF TENDERS AND REVOCATION OF CORRESPONDING CONSENTS
Notes tendered pursuant to the Tender Offer prior to the Consent Payment
Deadline may be withdrawn at any time prior to the Consent Payment Deadline (but
not thereafter unless the Notes are not accepted for payment). A valid
withdrawal of tendered Notes prior to the Consent Payment Deadline will
constitute the concurrent valid revocation of (and the only means of validly
revoking) such Holder's related Consent. In order for a Holder to revoke a
Consent, such Holder must withdraw the related tendered Notes. Notes tendered
prior to the Consent Payment Deadline may not be withdrawn, and the
corresponding Consents may not be revoked, subsequent to the Consent Payment
Deadline. Notes tendered pursuant to the Tender Offer on or after the Consent
Payment Deadline and prior to the Tender Offer Expiration Time may be withdrawn
at any time prior to the Tender Offer Expiration Time. For Notes tendered on or
after the Consent Payment Deadline and prior to the Tender Offer Expiration
Time, a valid withdrawal of such Notes prior to the Tender Offer Expiration Time
will constitute the concurrent valid revocation of (and the only means of
validly revoking) such Holder's related Consent. If the Tender Offer is
terminated without any Notes being purchased thereunder, the Notes tendered
pursuant to the Tender Offer will be promptly returned to the tendering Holder.
For a withdrawal of Notes tendered pursuant to the Tender Offer (and the
related revocation of Consents) to be effective, a written or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the last page of this Offer to Purchase. Such
withdrawal notice must (i) specify the name of the person who tendered the Notes
to be withdrawn; (ii) contain a description of the Notes to be withdrawn, the
certificate numbers shown on the particular certificates evidencing such Notes
(unless such Notes were tendered by book-entry transfer), and the aggregate
principal amount represented by such Notes; and (iii) be signed by the Holder of
such Notes in the same manner as the original signature on the Letter of
Transmittal and Consent (including any required signature guarantees) or be
accompanied by evidence satisfactory to the Issuers that the person withdrawing
the tender has succeeded to the beneficial ownership of the Notes. In addition,
such notice of withdrawal must specify, in the case of Notes tendered by
delivery of certificates for such Notes, the name of the registered Holder (if
different from that of the tendering Holder) or, in the case of Notes tendered
by book-entry transfer, the name and number of the account at DTC to be credited
with the withdrawn Notes. The signature on such notice of withdrawal must be
guaranteed by an Eligible Institution unless such Notes have been tendered for
the account of an Eligible Institution. If certificates for the Notes to be
withdrawn have been delivered or otherwise identified to the Depositary, such
signed notice of withdrawal will be effective immediately upon receipt by the
Depositary of written or facsimile transmission of such notice, even if physical
release is not yet effected.
Withdrawal of tenders of Notes may not be rescinded, and any Notes properly
withdrawn will thereafter be deemed not validly tendered for purposes of the
Tender Offer. Notes properly withdrawn from the Tender Offer may, however, be
retendered by again following one of the procedures described in "Procedure for
Tendering Notes" below at any time prior to the Tender Offer Expiration Time
(or, in the case of Holders wishing to receive the Consent Payment, the Consent
Payment Deadline). Alternatively, such Notes may be tendered in the Change of
Control Offer.
Withdrawals of Notes tendered in the Tender Offer and revocation of the
related Consents can only be accomplished in accordance with the foregoing
procedures. See "Certain Terms of Both Offers -- Procedure for Tendering Notes"
below with respect to the Issuers' discretion as to the withdrawal of Notes and
revocation of Consents.
If the Issuers are delayed in their acceptance for purchase of, or payment
for, any Notes tendered in the Tender Offer, or are unable to accept for
purchase or pay for Notes pursuant to the Tender Offer for any reason, then,
without prejudice to the Issuers' rights hereunder, tendered Notes may be
retained by the Depositary on behalf of the Issuers and may not be withdrawn
(subject to Rule 14e-1 under the Exchange Act, which requires that the Issuers
pay the consideration offered or return the Notes deposited by or on behalf of
the Holders promptly after the termination or withdrawal of the Tender Offer).
The Notes are debt obligations of the Issuers and are governed by the
Indenture. There are no appraisal or other similar statutory rights available to
the Holders in connection with the Tender Offer.
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ACCEPTANCE FOR PAYMENT AND PAYMENT
Upon the terms and subject to the conditions of the Tender Offer, the
Issuers will accept for payment all Notes that are validly tendered pursuant to
the Tender Offer and not validly withdrawn. Such acceptance will occur promptly
after the later of (i) the Tender Offer Expiration Time or (ii) the satisfaction
or waiver of the conditions to the Tender Offer set forth in this Offer to
Purchase. For purposes of the Tender Offer, the Issuers will be deemed to have
accepted for payment tendered Notes if, as, and when the Issuers give oral or
written notice to the Depositary of their acceptance for payment of such Notes
(the date of such acceptance, the "Acceptance Date"). Payment for Notes accepted
for payment pursuant to the Tender Offer will be made by prompt deposit of funds
with the Depositary, which will act as agent for the tendering Holders for the
purpose of receiving payments from the Issuers and transmitting such payments to
the tendering Holders. Notes purchased pursuant to the Tender Offer will be paid
for in same-day funds on the Tender Offer Settlement Date.
The Issuers expressly reserve the right, in their sole discretion, to delay
acceptance for purchase of Notes tendered under the Tender Offer or the payment
for Notes accepted for purchase (subject to Rule 14e-1 under the Exchange Act,
which requires that an offeror pay the consideration offered or return the
securities deposited by or on behalf of the holders thereof promptly after the
termination or withdrawal of the tender offer), or to terminate the Tender Offer
and not accept for purchase any Notes not theretofore accepted for purchase, if
any of the conditions to the Tender Offer set forth in this Offer to Purchase
shall not have been satisfied or waived by the Issuers or in order to comply in
whole or in part with any applicable law. In all cases, payment for Notes
accepted for purchase pursuant to the Tender Offer will be made only after
timely receipt by the Depositary of certificates representing Notes (or
confirmation of book-entry transfer thereof), a properly completed and duly
executed Letter of Transmittal and Consent (or a manually signed facsimile
thereof or satisfaction of DTC's ATOP procedures) and any other documents
required thereby.
If, for any reason, acceptance for purchase of, or payment for, validly
tendered Notes pursuant to the Tender Offer is delayed or the Issuers are unable
to accept for purchase, or to pay for, validly tendered Notes pursuant to the
Tender Offer, then the Depositary may, nevertheless, on behalf of the Issuers,
retain such tendered Notes, without prejudice to the rights of the Issuers
described under "-- Expiration, Extension, Amendment, and Termination of the
Tender Offer," "-- Withdrawal of Tenders and Revocation of Corresponding
Consents," and "Certain Terms of Both Offers -- Conditions to the Offers"
(subject to Rule 14e-1 under the Exchange Act, which requires that an offeror
pay the consideration offered or return the securities deposited by or on behalf
of the holders thereof promptly after the termination or withdrawal of a tender
offer). If any tendered Notes are not accepted for payment for any reason
pursuant to the terms and conditions of the Tender Offer, or if certificates are
submitted evidencing more Notes than those which are tendered, certificates
evidencing unpurchased Notes will be returned, without expense, to the tendering
Holder (or, in the case of Notes tendered by book-entry transfer into the
Depositary's account at DTC pursuant to the procedure set forth under "Certain
Terms of Both Offers -- Procedure for Tendering Notes -- Book-Entry Delivery of
the Notes," such Notes will be credited to the account maintained at DTC from
which such Notes were delivered), unless otherwise requested by such Holder in
the box titled "A. Special Issuance/Delivery Instructions" in the Letter of
Transmittal and Consent, promptly following the Acceptance Date or the
termination of the Tender Offer.
The Issuers reserve the right to transfer or assign, in whole or from time
to time in part, to one or more of their affiliates, the right to purchase all
or any portion of the Notes tendered pursuant to the Tender Offer, but any such
transfer or assignment will not relieve the Issuers of their obligations under
the Tender Offer and will in no way prejudice the rights of tendering Holders to
receive the full payment contemplated by the Tender Offer (free and clear of any
withholding or similar tax, except as described herein) for Notes validly
tendered and not validly withdrawn and accepted for payment pursuant to the
Tender Offer.
Holders of the Notes whose Notes are tendered and accepted for payment
pursuant to the Tender Offer will be entitled to accrued and unpaid interest on
their Notes up to, but not including, the Tender Offer Settlement Date. Assuming
the Issuers make full payment for purchase of Notes to the Depositary on the
Tender Offer Settlement Date, under no circumstances will any additional
interest be payable because of any delay in the transmission of funds from the
Depositary to the Holders of purchased Notes.
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Tendering Holders of Notes purchased in the Tender Offer will not be
obligated to pay brokerage commissions, fees, or transfer taxes with respect to
the purchase of their Notes unless either box titled "Special Issuance/Delivery
Instructions" on the Letter of Transmittal and Consent has been completed, as
described in the instructions thereto. The Issuer or an affiliate will pay all
other charges and expenses in connection with the Tender Offer. See "Dealer
Manager, Information Agent, and Depositary". It is a condition precedent to the
Issuers' obligation to purchase the Notes pursuant to the Tender Offer, among
other conditions, that the Supplemental Indenture has been executed. The
Amendments contained in the Supplemental Indenture will become operative upon
the Issuers' purchase of all the Notes validly tendered (and not validly
withdrawn) pursuant to the Tender Offer. See "Certain Terms of Both
Offers -- Conditions to the Offers" below.
EXPIRATION, EXTENSION, AMENDMENT, AND TERMINATION OF THE TENDER OFFER
The Tender Offer will expire at 12:00 midnight, New York City time, on
October 18, 1999, unless extended by the Issuers. The Consent Payment Deadline
is 12:00 midnight, New York City time, on October 1, 1999, unless extended by
the Issuers.
The Issuers expressly reserve the right, in their sole discretion at any
time or from time to time, regardless of whether or not the conditions to the
Tender Offer, set forth in this Offer to Purchase, shall have been satisfied,
subject to applicable law, (i) to extend the Consent Payment Deadline or Tender
Offer Expiration Time for the Tender Offer on a daily basis or for such period
or periods as they may determine in their sole discretion, (ii) to amend the
Tender Offer in any respect, (iii) to waive any condition of the Tender Offer,
or (iv) to terminate the Tender Offer prior to the Tender Offer Expiration Time
therefor and return the Notes tendered pursuant thereto, in each case by giving
written notice of such extension, amendment, or termination to the Depositary.
During any extension of the Tender Offer, all Notes previously tendered and
not accepted for payment will remain subject to the Tender Offer and, subject to
the terms and conditions of the Tender Offer, may be accepted for payment by the
Issuers. If the Issuers make a material change in the terms of the Tender Offer,
or the information concerning the Tender Offer, the Issuers will disseminate
additional Tender Offer materials and extend the Tender Offer, or, if
applicable, the Consent Payment Deadline, to the extent required by law. For
purposes of the Tender Offer, the term "business day" means any day other than a
Saturday, Sunday, or federal holiday, and consists of the time period from 12:01
a.m. through 12:00 midnight, New York City time. During any extension of the
Tender Offer, all Notes previously tendered pursuant to the Tender Offer and not
accepted for purchase will remain subject to the Tender Offer and may, subject
to the terms and conditions of the Tender Offer, be accepted for purchase by the
Issuers.
There can be no assurance that the Issuers will exercise their right to
extend the Consent Payment Deadline or Tender Offer Expiration Time for the
Tender Offer. Any extension, amendment, or termination will be followed as
promptly as practicable by public announcement thereof, with the announcement in
the case of an extension to be issued no later than 9:00 a.m., New York City
time, on the first business day after the previously scheduled Consent Payment
Deadline or Tender Offer Expiration Time, as the case may be. Without limiting
the manner in which the Issuers may choose to make any public announcement, the
Issuers shall have no obligation to publish, advertise, or otherwise communicate
any such public announcement other than by issuing a release to the Dow Jones
News Service.
In the event the Issuers shall terminate the Tender Offer, they shall, as
soon as practicable, give notice thereof to the Depositary, and all Notes
therefore tendered and not accepted for payment shall be returned promptly to
the tendering and delivering Holders thereof. In that event, neither the Total
Tender Offer Purchase Price nor the Tender Offer Purchase Price Less Consent
Payment will be paid or become payable and the Amendments will not become
operative. See "-- Withdrawal of Tenders and Revocation of Consents" above and
"Certain Terms of Both Offers -- Conditions to the Offers" below.
CERTAIN TERMS OF BOTH OFFERS
The following terms apply to the Tender Offer, the Change of Control Offer,
or both Offers, as specified below.
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CERTAIN CONSIDERATIONS
In deciding whether to participate in either Offer, each Holder should
consider carefully, in addition to the other information contained or
incorporated by reference in this Offer to Purchase, the following:
Limited Trading Market. To the extent that Notes are purchased pursuant to
this Offer to Purchase, the trading markets for the Notes that remain
outstanding will become more limited. A debt security with a smaller outstanding
principal amount available for trading (a smaller "float") may command a lower
price than would a comparable debt security with a greater float. Therefore, the
market price for Notes not purchased may be affected adversely to the extent the
amount of Notes purchased pursuant to the Offer to Purchase reduces the float of
the Notes. The reduced float may also tend to make the trading price of the
Notes more volatile. In addition, upon the effectiveness of the Amendments, most
of the restrictive covenants will be eliminated, and this may adversely affect
the market price for the remaining Notes. The extent of the public market for
the Notes following consummation of either of the Offers would depend upon the
number of Holders that remain at such time, the interest in maintaining markets
in the Notes on the part of securities firms, and other factors. There can be no
assurance that any trading market will exist for the Notes following either of
the Offers.
Effect of the Amendments. If the Supplemental Indenture and the Amendments
become effective, Holders of Notes that are not purchased pursuant to one of the
Offers will no longer be entitled to the benefits provided by certain
restrictive covenants, events of default, and other provisions contained in the
Indenture because these restrictive covenants and provisions will be eliminated
or amended by the Amendments. See "The Amendments." The elimination or amendment
of such covenants, events of default, and other provisions would permit the
Issuers and their subsidiaries to take actions that could increase the credit
risks with respect to the Issuers and their subsidiaries or otherwise adversely
affect the interests of the Holders of the remaining Notes. However, the
Amendments will not relieve the Issuers from any of their obligations to make
payments of principal and interest on the Notes not purchased pursuant to the
Offers in accordance with the terms of the Indenture as currently in effect.
Other Purchases of the Notes. Whether or not either Offer is consummated,
the Issuers or their affiliates may, from time to time, acquire Notes otherwise
than pursuant to the Offers, through open market purchases, privately negotiated
transactions, tender offers, exchange offers, or otherwise (or may defease the
Notes), upon such terms and at such prices as they may determine which may be
more or less than the prices to be paid pursuant to either Offer, and could be
for cash or other consideration.
PROCEDURE FOR TENDERING NOTES
The tender of Notes pursuant to the Tender Offer and in accordance with the
procedures described herein will automatically be deemed to constitute a Consent
with respect to the Notes so tendered. Holders who tender Notes pursuant to the
Tender Offer will, by so tendering, be consenting to the Amendments and to the
execution and delivery of the Supplemental Indenture. Holders may not deliver
Consents without tendering their Notes pursuant to the Tender Offer. A defective
tender of Notes (which defect is not waived by the Issuers) will not constitute
a valid Consent to the Amendments, will not be counted for purposes of
determining whether the requisite Consents have been obtained therefor, and will
not entitle the Holder thereof to a Consent Payment. The tender of Notes
pursuant to the Change of Control Offer and in accordance with the procedures
described herein will not be deemed to constitute a Consent with respect to the
Notes so tendered. Any beneficial owner whose Notes are registered in the name
of a Custodian and who wishes to tender Notes should contact such Custodian
promptly and instruct such Custodian to tender Notes on such beneficial owner's
behalf. Tenders of Notes will be accepted only in principal amounts of $1,000 or
integral multiples thereof.
Book-Entry Delivery of the Notes. Within two business days after the date
of this Offer to Purchase, the Depositary will establish an account with respect
to the Notes at DTC for purposes of the Offers. Any financial institution that
is a participant in the DTC system and whose name appears on a security position
listing as the owner of the Notes may make book-entry delivery of Notes by
causing DTC to transfer such Notes into the Depositary's account in accordance
with DTC's procedure for such transfer. Although delivery of Notes may be
effected through book-entry at DTC, a properly completed and duly executed
Letter of Transmittal and Consent (or facsimile thereof), with any required
signature guarantees, or (in the case of a book-entry transfer) an Agent's
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Message in lieu of the Letter of Transmittal and Consent pursuant to ATOP
procedures for transfer, and any other required documents, must be transmitted
to and received by the Depositary at one of its addresses set forth on the last
page of this Offer to Purchase either: (i) prior to the Tender Offer Expiration
Time for Notes tendered pursuant to the Tender Offer (or, for Holders desiring
to receive the Consent Payment, prior to the Consent Payment Deadline); or (ii)
prior to the Change of Control Offer Deadline for Notes tendered pursuant to the
Change of Control Offer. Delivery of such documents to DTC does not constitute
delivery to the Depositary.
Need for Guarantee of Signature. Signatures on a Letter of Transmittal and
Consent must be guaranteed by a recognized participant (a "Medallion Signature
Guarantor") in the Securities Transfer Agents Medallion Program or the Stock
Exchange Medallion program (generally, a member of a registered national
securities exchange or the National Association of Securities Dealers, Inc. or a
commercial bank or trust company having an office in the United States (each, an
"Eligible Institution")), unless the Notes tendered thereby are tendered (a) by
the registered Holder of such Notes and that Holder has not completed either of
the boxes entitled "Special Issuance/ Delivery Instructions" on the Letter of
Transmittal and Consent, or (b) such Notes are tendered for the account of an
Eligible Institution.
Notes held in Physical Form. For a Holder to validly tender Notes held in
physical form pursuant to one of the Offers, such Holder must deliver a properly
completed and duly executed Letter of Transmittal and Consent (or facsimile
thereof), with any required signature guarantee, and any other required
documents, to the Depositary at one of its addresses set forth on the last page
of this Offer to Purchase either: (i) prior to the Tender Offer Expiration Time
for Notes tendered pursuant to the Tender Offer (or, for Holders desiring to
receive the Consent Payment, prior to the Consent Payment Deadline); or (ii)
prior to the Change of Control Offer Deadline for Notes tendered pursuant to the
Change of Control Offer. In addition, the Depositary must receive certificates
for tendered Notes at one of its addresses either: (i) prior to the Tender Offer
Expiration Time for Notes tendered pursuant to the Tender Offer (or, for Holders
desiring to receive the Consent Payment, prior to the Consent Payment Deadline);
or (ii) prior to the Change of Control Offer Deadline for Notes tendered
pursuant to the Change of Control Offer. If the Notes are held of record in the
name of a person other than the signer of the Letter of Transmittal and Consent,
or if certificates for unpurchased Notes are to be issued to a person other than
the registered Holder, the certificates must be endorsed or accompanied by
appropriate bond powers, in either case signed exactly as the name of the
registered Holder appears on the certificates, with the signature on the
certificates or bond powers guaranteed as described herein. The Letter of
Transmittal and Consent and Notes should be sent only to the Depositary, and not
to the Issuers, the Dealer Manager, the Information Agent, or DTC.
Withholding Tax. Under federal tax laws, the Depositary may be required to
withhold 31% of the amount of any payments made to certain Holders pursuant to
either Offer. See "Certain Federal Income Tax Consequences" below.
General. Notwithstanding any other provision hereof, payment for Notes
accepted for payment pursuant to either of the Offers will in all cases be made
only after timely receipt by the Depositary of (i) certificates for (or a timely
book-entry confirmation with respect to) such Notes, (ii) a Letter of
Transmittal and Consent (or a manually signed facsimile thereof), properly
completed and duly executed, with any required signature guarantees, or, in the
case of a book-entry transfer, an Agent's Message, and (iii) any other documents
required by the Letter of Transmittal and Consent.
The tender of Notes pursuant to the Tender Offer by one of the procedures
set forth herein will constitute (a) a binding agreement between the tendering
Holder and the Issuers in accordance with the terms and subject to the
conditions of the Tender Offer, and (b) the Consent of the tendering Holder to
the Amendments. The tender of Notes pursuant to the Change of Control Offer by
one of the procedures set forth herein will constitute a binding agreement
between the tendering Holder and the Issuers in accordance with the terms and
subject to the conditions of the Change of Control Offer. By executing a Letter
of Transmittal and Consent as set forth above, and subject to and effective upon
acceptance for purchase of, and payment for, the Notes tendered therewith, a
tendering Holder irrevocably sells, assigns, and transfers to or upon the order
of the Issuers all right, title, and interest in and to all of the Notes
tendered thereby, waives any and all other rights with respect to the Notes
(including, without limitation, the tendering Holder's rights with respect to
any existing or past defaults and their
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consequences in respect of the Notes and the Indenture), and releases and
discharges the Issuers and their affiliates from any and all claims such Holder
may have now or may have in the future arising out of, or related to, the Notes,
including, without limitation, any claims that such Holder is entitled to
receive additional principal or interest payments with respect to the Notes or
to participate in any redemption or defeasance of the Notes.
The method of delivery of the Letter of Transmittal and Consent,
certificates for Notes and all other required documents is at the election and
risk of the tendering Holder. If a Holder chooses to deliver by mail, the
recommended method is by registered mail with return receipt requested, properly
insured. In all cases, sufficient time should be allowed to ensure timely
delivery.
All questions as to the form of documents and validity, eligibility
(including time of receipt), acceptance for payment, and withdrawal of tendered
Notes and validity or revocation of Consents will be determined by the Issuers
in their sole discretion, and their determination will be final and binding. The
Issuers reserve the absolute right to reject any or all tenders of Notes that
they determine are not in proper form or the acceptance for payment of or
payment for which may, in the opinion of their counsel, be unlawful. The Issuers
also reserve the absolute right in their sole discretion to waive any of the
conditions to either of the Offers or any defect or irregularity in the tender
of Notes or of the delivery of Consents of any particular Holder, whether or not
they elect to waive similar conditions, defects or irregularities in the case of
the other Holders. The Issuers' interpretation of the terms and conditions of
the Offers (including the instructions in the Letter of Transmittal and Consent)
will be final and binding. Any defect or irregularity in connection with tenders
of Notes or deliveries of Consents must be cured within such time as the Issuers
determine, unless waived by the Issuers. Tenders of Notes and deliveries of
Consents shall not be deemed to have been made until all defects and
irregularities have been waived by the Issuers or cured. A defective tender
(which defect is not waived by the Issuers) will not constitute a valid Consent.
None of the Issuers, the Depositary, the Dealer Manager, the Information Agent,
the Trustee, or any other person will be under any duty to give notification of
any defects or irregularities in tenders or any notices of withdrawal or will
incur any liability for failure to give any such notification.
CONDITIONS TO THE OFFERS
Notwithstanding any other provision of the Offers, the Issuers will not be
required to accept for purchase, or to pay for, Notes tendered pursuant to an
Offer and may terminate, extend, or amend such Offer and may (subject to Rule
14e-1 under the Exchange Act, which requires that an offeror pay the
consideration offered or return the securities deposited by or on behalf of the
holder thereof promptly after the termination or withdrawal of a tender offer)
postpone the acceptance for purchase of, and payment for, Notes so tendered if
the applicable conditions described below shall occur on or after the date of
this Offer to Purchase and be continuing at the Tender Offer Expiration Time or
the Change of Control Offer Deadline, as applicable:
Conditions to the Tender Offer. The following conditions apply to the Tender
Offer only:
(a) less than a majority in outstanding principal amount of the Notes
are validly tendered pursuant to the Tender Offer;
(b) in the sole judgment of the Issuers, there exists any actual or
threatened legal impediment (including but not limited to a default under
an agreement, indenture, or other instrument or obligation to which the
Issuers or any of their affiliates is party or by which it is bound) to the
purchase of Notes pursuant to the Tender Offer or the effectiveness of the
Amendments;
(c) there shall have been instituted, threatened, or be pending any
claim, action, or proceeding before or by any court, governmental,
regulatory, or administrative agency or instrumentality, or by any other
person, in connection with the Tender Offer, that (i) challenges, delays,
restricts, or makes illegal the acceptance for purchase of, or payment for,
the Notes pursuant to the Tender Offer, (ii) may prohibit, prevent,
restrict, or delay the closing of the Tender Offer, (iii) may prevent or
impair the effectiveness of the Supplemental Indenture or the Amendments,
or (iv) is, or is reasonably likely to be, in the sole judgment of the
Issuers, materially adverse to the business, operations, properties,
condition (financial or otherwise), assets, liabilities, or prospects of
the Issuers or any of their affiliates or which would or might, in the sole
judgment of the Issuers, prohibit, prevent, restrict, or delay consummation
of the Tender Offer;
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(d) there shall have occurred any development which would, in the sole
judgment of the Issuers, materially adversely affect the business of the
Issuers or any of their affiliates;
(e) an order, statute, rule, regulation, executive order, stay,
decree, judgment, or injunction shall have been proposed, enacted, entered,
issued, promulgated, enforced, or deemed applicable by any court or
governmental, regulatory, or administrative agency or instrumentality that,
in the sole judgment of the Issuers, would or might prohibit, prevent,
restrict, or delay consummation of the Tender Offer, or have any of the
other consequences referred to in clause (d) above;
(f) there shall have occurred or be likely to occur any events
affecting the business or financial affairs of the Issuers or any of their
affiliates that, in the sole judgment of the Issuers, would or might
prohibit, prevent, restrict, or delay consummation of the Tender Offer.
(g) the trustee under the Indenture (the "Trustee") shall have
objected in any respect to or taken any action that could, in the sole
judgment of the Issuers, adversely affect the consummation of the Tender
Offer or the effectiveness of any of the Amendments or shall have taken any
action that challenges the validity or effectiveness of the procedures used
by the Issuers in soliciting the Consents (including the form thereof) or
in the making of the Tender Offer or the acceptance of, or payment for, the
Notes; or
(h) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on any national securities
exchange or in the over-the-counter market, (ii) any significant change in
the price of the Notes which is adverse to the Issuers or any of their
affiliates, (iii) a material impairment in the trading market for debt
securities, (iv) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States or abroad, (v) any
limitation (whether or not mandatory) by any government or governmental,
administrative, or regulatory authority or agency, domestic or foreign, or
other event that, in the reasonable judgment of the Issuers, might affect
the extension of credit by banks or other lending institutions, (vi) a
commencement or escalation of a war or armed hostilities or other national
or international calamity directly or indirectly involving the United
States, or (vii) in the case of any of the foregoing existing on the date
hereof, a material acceleration or worsening thereof.
Conditions to the Change of Control Offer. The following conditions apply to the
Change of Control Offer only.
(a) there shall have been instituted, threatened, or be pending any
claim, action, or proceeding before or by any court, governmental,
regulatory, or administrative agency or instrumentality, or by any other
person, in connection with the Change of Control Offer, that (i)
challenges, delays, restricts, or makes illegal the acceptance for purchase
of, or payment for, the Notes pursuant to the Change of Control Offer or,
(ii) may prohibit, prevent, restrict, or delay the closing of the Change of
Control Offer;
(b) an order, statute, rule, regulation, executive order, stay,
decree, judgment, or injunction shall have been proposed, enacted, entered,
issued, promulgated, enforced, or deemed applicable by any court or
governmental, regulatory, or administrative agency or instrumentality that,
in the sole judgment of the Issuers, would or might prohibit, prevent,
restrict, or delay consummation of the Change of Control Offer;
(c) the Trustee under the Indenture shall have objected in any respect
to or taken any action that could, in the sole judgment of the Issuers,
adversely affect the consummation of the Change of Control Offer or shall
have taken any action that challenges the validity or effectiveness of the
procedures used by the Issuers in soliciting the Consents (including the
form thereof) or in the making of the Change of Control Offer or the
acceptance of, or payment for, the Notes; or
(d) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on any national securities
exchange or in the over-the-counter market, (ii) any significant change in
the price of the Notes which is adverse to the Issuers or any of their
affiliates, (iii) a material impairment in the trading market for debt
securities, (iv) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States or abroad, (v) any
limitation (whether or not mandatory) by any government or governmental,
administrative, or regulatory authority or agency, domestic or foreign, or
other event that, in the reasonable judgment of the Issuers, might affect
the extension of credit by banks or other lending institutions, (vi) a
commencement or escalation of a war or armed hostilities or other national
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<PAGE> 12
or international calamity directly or indirectly involving the United
States, or (vii) in the case of any of the foregoing existing on the date
hereof, a material acceleration or worsening thereof.
General. The foregoing conditions are for the sole benefit of the Issuers and
their affiliates, and may be asserted by any of them regardless of the
circumstances (including any action or inaction on their part) giving rise to
such condition or may be waived by the Issuers in whole or in part at any time
and from time to time in their sole discretion. If any condition to either Offer
is not satisfied or waived by the Issuers prior to the Tender Offer Expiration
Time or the Change of Control Deadline, as applicable, the Issuers reserve the
right (but shall not be obligated), subject to applicable law, (i) to terminate
such Offer and return the tendered Notes to the tendering Holders, (ii) to waive
all unsatisfied conditions and accept for payment and purchase all Notes that
are validly tendered (and not validly withdrawn), (iii) to extend such Offer and
retain the Notes that have been tendered during the period for which such Offer
is extended, or (iv) to amend such Offer. Any determination by the Issuers
concerning any of the foregoing events shall be final and binding upon all
persons.
Although the Issuers have no present plans or arrangements to do so, the
Issuers reserve the right to amend, at any time, the terms of either Offer;
provided that any amendment to the terms of the Change of Control Offer will be
made in compliance with the terms of the Indenture. The Issuers will give such
notice as is required by applicable law.
RIFKIN NOTE REPURCHASE OFFER
Contemporaneously with the Offers, the Issuers will offer to repurchase
from Monroe M. Rifkin the Amended and Restated Promissory Note issued January
31, 1996 by the Issuers to Rifkin, in the original principal amount of
$3,000,000, on terms corresponding to the terms of the Offers.
THE AMENDMENTS
The following sets forth a brief description of the Amendments for which
the Consents are being sought pursuant to the Tender Offer. The description is
qualified by reference to the full provisions of the Indenture and the form of
Supplemental Indenture. Capitalized terms used in this description and not
otherwise defined herein shall have the meanings assigned to them in the
Indenture. Copies of the Indenture and the Supplemental Indenture can be
obtained without charge from the Information Agent.
The Amendments to the Indenture would:
1. Delete Section 4.03 (Corporate Existence);
2. Delete Section 4.04 (Payment of Taxes and Other Claims);
3. Delete Section 4.05 (Maintenance of Properties and Insurance);
4. Delete subsection (b) of Section 4.06 (Compliance Certificate; Notice
of Default);
5. Delete Section 4.07 (Compliance with Laws);
6. Delete Section 4.08 (Reports);
7. Delete Section 4.10 (Limitation on Restricted Payments);
8. Delete Section 4.11 (Limitation on Transactions with Affiliates);
9. Delete Section 4.12 (Limitation on Incurrence of Additional
Indebtedness and Issuance of Disqualified Equity Interests);
10. Delete Section 4.13 (Limitation on Dividends and Other Payment
Restrictions Affecting Subsidiaries);
11. Delete Section 4.14 (Prohibition on Incurrence of Senior Subordinated
Debt);
12. Delete Section 4.16 (Limitation on Asset Sales);
13. Delete Section 4.17 (Limitation on Liens);
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14. Delete Section 4.18 (Guarantees of Certain Indebtedness);
15. Delete Section 4.19 (Conduct of Business of the Company and Its
Subsidiaries);
16. Delete Section 4.20 (Subsidiary Guarantor Equity Interests);
17. Delete Section 4.21 (Additional Subsidiary Equity Interests);
18. Delete Section 4.22 (Limitation on Conduct of Business of Capital
Corp.);
19. Delete Section 5.01 (When Issuers May Merge, etc.); and
20. Delete subsections (5), (7), and (8) of Section 6.01 (Events of
Default).
The foregoing Amendments will result in the deletion of substantially all
protective covenants from the Indenture.
Certain conforming and other changes to the Indenture will also be made,
including the modification or deletion of certain definitions.
The execution and delivery of a Letter of Transmittal and Consent by a
Holder tendering Notes pursuant to the Tender Offer will constitute the Consent
of such Holder to the Amendments summarized above. Holders of Notes who tender
their Notes pursuant to the Tender Offer must deliver a corresponding Consent to
the Amendments, and Holders may not deliver Consents without tendering their
Notes pursuant to the Tender Offer.
The Amendments will be set forth in the Supplemental Indenture which will
be executed by the Issuers and the Trustee promptly following receipt of the
Requisite Consents. However, the Supplemental Indenture will provide that the
Amendments will not become operative unless and until at least a majority in
outstanding principal amount of the Notes have been validly tendered and
purchased pursuant to the Tender Offer. If at least a majority in outstanding
principal amount of the Notes are not purchased pursuant to the Tender Offer,
the Amendments will not become operative.
If the Tender Offer is consummated and the Amendments become effective, the
Amendments will be binding on all non-tendering Holders of Notes. The
modification or elimination of restrictive covenants and other provisions
pursuant to the Amendments would permit the Issuers to take actions that could
increase the credit risks faced by non-tendering Holders with respect to the
Issuers, adversely affect the market price of the Notes that remain outstanding,
or otherwise be adverse to the interests of non-tendering Holders. Holders of
Notes should consider the effect of the Amendments on their position as such
Holders if their Notes are not purchased pursuant to either Offer. See "Certain
Terms of Both Offers -- Certain Considerations."
The Consents to all of the Amendments are being sought as a single
proposal. Accordingly, a Consent purporting to consent to only some of the
Amendments will not be valid.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following summary is a general discussion of certain United States
federal income tax consequences applicable to the sale of Notes pursuant to the
Offers. This discussion is a general summary only and does not address all tax
aspects of these transactions that may be relevant to a Holder's particular
circumstances. This discussion addresses only a sale of Notes by a "U.S. Holder"
which, for purposes of this Offer to Purchase, means a Holder of Notes that is
(a) a citizen or resident of the United States, (b) a corporation or other
entity created or organized under the laws of the United States or any political
subdivision of the United States, (c) an estate taxed by the United States on
its income without regard to the source of its income, or (d) a trust if a
United States court can exercise primary jurisdiction over its administration
and one or more United States persons has the authority to control all of the
substantial decisions of the trust. The discussion does not deal with special
classes of Holders, such as dealers in securities or currencies, traders in
securities that expect to mark to market, banks, financial institutions,
insurance companies, tax-exempt organizations, persons with a functional
currency other than the U.S. dollar, or investors in pass-through entities such
as partnerships. This discussion (i) does not address the effects of any
arrangement entered into by a Holder that partly or completely hedges Notes, or
that includes or utilizes Notes as part of a straddle, conversion transaction,
synthetic security, or other
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integrated transaction; (ii) does not describe any tax consequences arising out
of the laws of any state or local or foreign jurisdiction; (iii) assumes that
the Notes are held as "capital assets" within the meaning of Section 1221 of the
Internal Revenue Code of 1986, as amended; and (iv) is based upon the Internal
Revenue Code of 1986, as amended, and the regulations, rulings, and judicial
decisions thereunder as of the date hereof, any of which may be repealed or
modified in a manner resulting in federal income tax consequences that differ
from those described below. The Issuers have not sought any ruling from the
Internal Revenue Service (the "IRS") with respect to the statements made and the
conclusions reached in this discussion, and there can be no assurance that the
IRS will agree with such statements and conclusions.
Sales of Notes by U.S. Holders pursuant to either Offer will be taxable
transactions for United States federal income tax purposes. The amount received
by a U.S. Holder that is attributable to accrued interest that has not already
been taken into income by the U.S. Holder will be taxed as ordinary income.
Except as described below in connection with application of the market discount
rules and the treatment of the Consent Payment, a U.S. Holder selling Notes
pursuant to either Offer will recognize capital gain or loss in an amount equal
to the difference between (i) the amount of cash received (less any amount
attributable to accrued interest) and (ii) the U.S. Holder's adjusted tax basis
in the Notes sold at the time of sale. A U.S. Holder's adjusted tax basis in
Notes generally will equal the cost of the Notes to such U.S. Holder, increased
by the amount of any original issue discount and market discount previously
taken into income by the U.S. Holder, and reduced by the amount of any bond
premium previously amortized by the U.S. Holder with respect to the Notes and by
any principal payments on the Notes. Capital gain of a non-corporate U.S. Holder
is generally subject to a maximum tax rate of 20% if the Notes have been held
for more than one year. In general, a corporation may deduct capital losses only
to the extent of its capital gains, and a taxpayer other than a corporation may
deduct capital losses only to the extent of its capital gains plus $3,000.
A U.S. Holder of a Note who did not acquire the Note at its original issue,
and who acquired such Note at a market discount (that is, at a price that is
less than the stated redemption price of the Note at its maturity), may be
required, subject to a statutory de minimis exception, to treat gain on the sale
of the Note as ordinary income to the extent of "accrued market discount", and
therefore as ordinary income. Market discount accrues on a straight-line basis
or, at the election of the U.S. Holder, on a constant yield basis. In general,
unless the U.S. Holder has elected to include market discount in income
currently as it accrues, gain on the sale of the Note will be treated as
ordinary income to the extent of the lesser of (i) the gain recognized or (ii)
the portion of the market discount that has accrued while such Note was held by
the U.S. Holder.
The tax treatment of the receipt of a Consent Payment by a Holder is
subject to uncertainty. A Holder may be able to treat the Consent Payment as
additional consideration received in exchange for tendered Notes, in which case
and accordingly, such payments would be taxed in the manner described above.
There can be no assurance, however, that the IRS will not attempt to treat the
receipt of a Consent Payment as a separate payment that is taxable as ordinary
income to a Holder.
In the case of a Holder who does not tender its Notes pursuant to one of
the Offers, the adoption of the Amendments should not cause such Holder to be
deemed to have exchanged its Notes for U.S. federal income tax purposes. Under
applicable Treasury regulations, there must be a "significant modification" of a
debt instrument for the holder to be deemed to have exchanged such instrument. A
modification that deletes or alters customary accounting and financial covenants
is generally not a significant modification for these purposes. Therefore, a
Holder who does not tender its Notes pursuant to one of the Offers should not
recognize any gain or loss, for U.S. federal income tax purposes, upon the
adoption of the Amendments and should have the same adjusted tax basis and
holding period in the Notes after the adoption of the Amendments that such
Holder had in the Notes immediately before such adoption.
Sales of Notes pursuant to one of the Offers by U.S. Holders generally will
be subject to information reporting requirements. In addition, certain U.S.
Holders who fail to complete the Substitute Form W-9 included in the Letter of
Transmittal and Consent may be subject to backup withholding at a rate of 31%
with respect to payments the U.S. Holder receives pursuant to the Offers. Backup
withholding is not an additional federal income tax. Rather, the federal income
tax liability of persons subject to backup withholding will be offset by the
amount of tax withheld. If backup withholding results in an overpayment of
federal income taxes, a refund may be
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obtained from the IRS provided the required information is furnished. Certain
U.S. Holders (including, among others, corporations) are not subject to these
backup withholding and reporting requirements.
ALL HOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE
TAX CONSEQUENCES OF THE OFFERS IN THEIR PARTICULAR CIRCUMSTANCES, INCLUDING THE
APPLICATION OF FEDERAL, STATE, LOCAL, AND FOREIGN TAX LAWS.
DEALER MANAGER, INFORMATION AGENT, AND DEPOSITARY
The Issuers have retained Banc of America Securities LLC to act as the
Dealer Manager for the Offers (the "Dealer Manager"), D.F. King & Co., Inc. to
act as Information Agent for the Offers (the "Information Agent"), and Bankers
Trust Company to act as Depositary (the "Depositary") for the Offers. The Dealer
Manager may contact Holders regarding the Offers and may request Custodians to
forward this Offer to Purchase and related materials to beneficial owners of
Notes. The Issuers have agreed to pay the Dealer Manager, the Information Agent,
and the Depositary customary fees for their services in connection with the
Offers. The Issuers have also agreed to reimburse the Dealer Manager, the
Information Agent, and the Depositary for their out-of-pocket expenses
(including the fees and disbursements of counsel) and to indemnify them against
certain liabilities, including liabilities under federal securities laws. In the
past, the Dealer Manager has provided certain investment banking services to the
Issuers or their affiliates for which it has received compensation that is
customary for services of such nature.
All deliveries and correspondence sent to the Depositary should be directed
to one of its addresses set forth on the back cover of this Offer to Purchase.
Requests for additional copies of documentation may be directed to the
Information Agent at the address and telephone numbers set forth on the back
cover of this Offer to Purchase.
In connection with the Offers, directors and officers of the Issuers and
their affiliates may solicit tenders by use of the mails, personally, or by
telephone, facsimile, telegram, or other similar methods. The Issuers or their
affiliates will also pay brokerage houses and other custodians, nominees, and
fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding
this Offer to Purchase and related materials to Holders.
Neither the Dealer Manager, the Information Agent, nor the Depositary
assume any responsibility for the accuracy or completeness of the information
concerning the Issuers or any of their affiliates contained in this Offer to
Purchase or for any failure by the Issuers to disclose events that may have
occurred and may affect the significance or accuracy of such information.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Issuers with the Commission are
incorporated herein by reference:
(1) The Issuers' Annual Report on Form 10-K for the year ended December 31,
1998;
(2) The Issuers' Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1998 and June 30, 1998;
(3) The Issuers' Report on Form 8-K dated May 7, 1999; and
(4) All documents subsequently filed by the Issuers with the Commission
pursuant to Section 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and prior to the
termination of the Tender Offer.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of the Offer to Purchase to the extent that a statement contained
herein modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of the Offer to Purchase.
The Issuers will make available to any Holder of Notes, copies of the
Indenture, the information incorporated herein by reference, and the reports or
other information filed with the Commission under the Exchange Act. Any such
request should be directed to Charter Communications, Inc., Attention: Ralph
Kelly, Treasurer and Senior Vice President, 12444 Powerscourt Drive, Suite 100,
St. Louis, Missouri 63131, telephone number (314) 543-2388.
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THE CHANGE OF CONTROL OFFER
On September 14, 1999, Charter Communications Operating, LLC ("Charter")
acquired Rifkin Acquisition Partners, L.L.L.P., a Colorado limited liability
limited partnership (the "Company"), and Rifkin Acquisition Capital Corporation,
a Delaware corporation ("Capital Corp."), by acquiring the Company, the parent
company of Capital Corp. Immediately following the aforementioned acquisition,
the Company merged with and into Rifkin Acquisition Partners, LLC, a Delaware
limited liability company (the "New Company"), pursuant to which the New Company
was the surviving entity of such merger and succeeded to the rights and
obligations of the Company, including those rights and obligations under the
terms of the Indenture and the Notes. In connection with such merger, the New
Company entered into the First Supplemental Indenture, dated as of September 14,
1999, whereby the New Company assumed all of the obligations of the Company
under the Indenture and the Notes as required by Section 5.01 of the Indenture.
Pursuant to Section 4.15 of the Indenture, following a Change of Control,
the Issuers must offer (the "Change of Control Offer") to repurchase all or a
portion (equal to $1,000 principal amount or an integral multiple thereof) of
the Notes at 101% of the aggregate principal amount thereof, plus accrued and
unpaid interest to the date of the purchase (the "Change of Control Offer
Price"). To satisfy this obligation, the Issuers hereby offer to repurchase for
cash all or a portion (equal to $1,000 principal amount or an integral multiple
thereof) of the outstanding Notes at the Change of Control Offer Price. THIS
CHANGE OF CONTROL OFFER SHALL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON
OCTOBER 18, 1999, UNLESS EXTENDED (THE "CHANGE OF CONTROL OFFER DEADLINE");
Accordingly, the Holders are hereby notified pursuant to Section 4.15(b) as
follows:
(1) The acquisition described above constituted a "Change of Control"
under the Indenture.
(2) The amount of accrued and unpaid interest to, but not including,
the Change of Control Payment Date (defined below) will be $29.67 per
$1,000 outstanding principal amount of the Notes.
(3) Any Notes not tendered for purchase pursuant to the Change of
Control Offer (nor tendered pursuant to the Tender Offer) will continue to
accrue interest at the rate specified in the Indenture and the Notes.
(4) Unless the Issuers default in the payment of the purchase price
for the Notes payable pursuant to the Change of Control Offer, Notes
accepted for payment pursuant to the Change of Control Offer shall cease to
accrue interest after the Change of Control Payment Date (defined below);
(5) Any Holder desiring to tender a Note in the Change of Control
Offer should, prior to the Change of Control Offer Deadline, either (a)
surrender the Note, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Note completed, to the Depositary at the
appropriate address set forth on the last page of this Offer to Purchase,
or (b) follow the applicable instructions set forth above (see "Certain
Terms of Both Offers -- Procedure for Tendering Notes"). The Issuers shall
purchase all Notes properly tendered pursuant to the Change of Control
Offer on October 21, 1999, unless extended (the "Change of Control Payment
Date");
(6) Holders may withdraw their election to tender a Note in the Change
of Control Offer by delivering to the Depositary, not later than October
14, 1999 (unless such date is extended by the Issuers), a facsimile
transmission or letter setting forth the name of the Holder, the principal
amount and, in the case of certificated securities, certificate number of
the Securities the Holder delivered for purchase, and a statement signed by
such Holder that such Holder is withdrawing its election to have such
Security purchased;
(7) Holders whose Notes are only purchased in part will be issued new
Notes in a principal amount equal to the unpurchased portion of the Notes;
and
(8) Each Holder is urged to review this Offer to Purchase in its
entirety for other information pertaining to the Change of Control Offer.
The Change of Control Offer is subject to certain conditions as set forth
above under "Certain Terms of Both Offers -- Conditions to the Offers". Tenders
of Notes pursuant to the Change of Control Offer will be deemed not to include
Consents to the Amendments and Holders of Notes tendered in the Change of
Control Offer will not, under any circumstances, be entitled to the Consent
Payment, the Total Tender Offer Purchase
16
<PAGE> 17
Price, or the Tender Offer Purchase Price Less Consent Payment. BOTH THE TOTAL
TENDER OFFER PURCHASE PRICE AND THE TOTAL TENDER OFFER PURCHASE PRICE LESS
CONSENT PAYMENT ARE EXPECTED TO BE SIGNIFICANTLY HIGHER THAN THE CHANGE OF
CONTROL OFFER PRICE.
Any Notes remaining outstanding shall continue to be subject to the terms
of the Indenture. In the event that the Tender Offer is consummated and the
Amendments to the Indenture become effective, any Notes remaining outstanding
would thereafter be subject to the Indenture as modified by the Amendments. The
modification or elimination of restrictive covenants and other provisions
pursuant to the Amendments would permit the Issuers to take actions that could
increase the credit risks faced by non-tendering Holders with respect to the
Issuers, adversely affect the market price of the Notes that remain outstanding,
or otherwise be adverse to the interests of non-tendering Holders. Holders of
Notes should consider the effect of the Amendments on their position as such
Holders if their Notes are not purchased pursuant to either of the Offers. See
"Certain Terms of Both Offers -- Certain Considerations."
The Issuers make no recommendation to any Holder as to whether to tender or
refrain from tendering Notes pursuant to the Change of Control Offer. Each
Holder should make its own independent investment decision, based on this Offer
to Purchase and the related Letter of Transmittal and Consent. Holders are
therefore urged to read this Offer to Purchase and the Letter of Transmittal and
Consent carefully.
The Notes are debt obligations of the Issuers and are governed by the
Indenture. There are no appraisal or other similar statutory rights available to
the Holders in connection with the Change of Control Offer.
17
<PAGE> 18
ANNEX A
FORMULA TO DETERMINE TOTAL TENDER OFFER PURCHASE PRICE OF NOTES
DEFINITIONS
<TABLE>
<S> <C> <C>
PRICE = The Total Tender Offer Purchase Price per $1,000 principal
amount of the Notes (excluding accrued interest). The Total
Tender Offer Purchase Price plus accrued interest is rounded
to the nearest cent with five one thousandths of one dollar
to be taken as a full cent.
N = The number of remaining cash payment dates for the Notes
from but excluding the applicable Tender Offer Settlement
Date to and including the Call Date for such Notes.
CFi = The aggregate amount of cash per $1,000 principal amount at
maturity scheduled to be paid on the Notes on the "ith" out
of the N remaining cash payment dates for the Notes,
assuming for this purpose that the Notes are redeemed on the
Call Date (January 15, 2001). Scheduled payments of cash
include interest and, on the Call Date, principal and
premium.
YLD = The Tender Offer Yield for the Notes (expressed as a decimal
number).
Di = The number of days from and including the applicable Tender
Offer Settlement Date to but excluding the "ith" out of the
N remaining cash payment dates for the Notes. The number of
days is computed using the 30/360 day count method in
accordance with market convention.
Accrued = Accrued and unpaid interest per $1,000 principal amount of
Interest the Notes to, but excluding, the Tender Offer Settlement
Date.
/ = Divide. The term immediately to the left of the division
symbol is divided by the term immediately to the right of
the division symbol before any other addition or subtraction
operations are performed.
exp = Exponentiate. The term to the left of the exponentiation
symbol is raised to the power indicated by the term to the
right of the exponentiation symbol.
N = Summate. The term to the right of the summation symbol is
O separately calculated "N" times (substituting for the "i" in
i = 1 that term each whole number between 1 and N, inclusive), and
the separate calculations are then added together.
</TABLE>
FORMULA TO DETERMINE TOTAL TENDER OFFER PURCHASE PRICE:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
N CFi
PRICE = [ ----------------------- ] -- Accrued
O (1 + YLD/2) exp (Di;/180) Interest
i = l
</TABLE>
<PAGE> 19
THE DEPOSITARY FOR THE OFFERS IS:
BANKERS TRUST COMPANY
<TABLE>
<S> <C> <C>
BY FACSIMILE: BY MAIL: BY HAND:
(615) 835-3701 BT SERVICES TENNESSEE, INC. BANKERS TRUST COMPANY
CONFIRM BY TELEPHONE: REORGANIZATION UNIT CORPORATE TRUST & AGENCY SERVICES
(615) 835-3572 P.O. BOX 292737 ATTENTION: REORGANIZATION DEPARTMENT
NASHVILLE, TN 37229-2737 RECEIPT & DELIVERY WINDOW
123 WASHINGTON STREET, 1ST FLOOR
NEW YORK, NY 10006
</TABLE>
BY OVERNIGHT MAIL OR COURIER:
BT SERVICES TENNESSEE, INC.
CORPORATE TRUST & AGENCY SERVICES
REORGANIZATION UNIT
648 GRASSMERE PARK ROAD
NASHVILLE, TN 37211
CONFIRM BY TELEPHONE:
(615) 835-3572
THE INFORMATION AGENT FOR THE OFFERS IS:
D.F. KING & CO., INC.
77 WATER STREET
NEW YORK, NEW YORK 10005
BANKERS AND BROKERS, CALL COLLECT: (212) 269-5550
OTHERS, CALL TOLL FREE: (800) 207-3156
------------------------------
THE DEALER MANAGER FOR THE OFFERS IS:
BANC OF AMERICA SECURITIES LLC
100 NORTH TRYON STREET
CHARLOTTE, NORTH CAROLINA 28255
ATTENTION: LIABILITY MANAGEMENT GROUP
CALL TOLL FREE: (888) 292-0070
CALL COLLECT: (704) 388-4807
<PAGE> 1
RIFKIN ACQUISITION PARTNERS COMMENCES TENDER OFFER AND CONSENT SOLICITATION AND
CHANGE OF CONTROL REPURCHASE OFFER FOR 11-1/8% SENIOR SUBORDINATED NOTES DUE
2006
ST. LOUIS, Sept. 20 -- Rifkin Acquisition Partners, LLC and Rifkin Acquisition
Capital Corporation today announced the commencement of a cash tender offer to
purchase any and all of the outstanding $125 million principal amount of their
11-1/8% Senior Subordinated Notes due 2006. In the alternative, Rifkin is
offering to repurchase the Notes in a change of control repurchase offer
required by the indenture for the Notes.
The terms and conditions of the tender offer and change of control repurchase
offer are set forth in an Offer to Purchase and Consent Solicitation Statement
dated September 20, 1999, and related Consent and Letter of Transmittal. The
tender offer and the change of control repurchase offer will expire at 12:00
midnight, New York City time, on October 18, 1999, unless extended.
In conjunction with the tender offer, Rifkin is soliciting consents to certain
proposed amendments to the indenture governing the Notes that would eliminate
substantially all of the restrictive covenants and would amend certain other
provisions.
For holders who tender their Notes and give their consents prior to the consent
payment deadline of 12:00 midnight, New York City time, on October 1, 1999,
unless extended, the tender offer purchase price will include a consent payment
of $30.00 per $1,000 principal amount of Notes. The total tender offer purchase
price will be based on a fixed spread of 75 basis points (0.75%) over the yield
on the second business day prior to the expiration date of the 4-1/2% U.S.
Treasury Notes due January 31, 2001. The change of control repurchase price will
be $1,010 per $1,000 principal amount of the Notes. The purchase prices for the
offers will also include accrued and unpaid interest.
Adoption of the proposed amendments requires the consent of holders of not less
than a majority in principal amount of the outstanding Notes. Closing of the
tender offer is subject to the receipt of the consents of holders of not less
than a majority in principal amount of the outstanding Notes and certain other
conditions described in the Offer to Purchase and Consent Solicitation
Statement. Holders who tender their Notes in the tender offer are required to
consent to the proposed amendments.
On September 14, 1999, Charter Communications completed the acquisition of
Rifkin, which was effected as a merger between Rifkin Acquisition Partners,
L.L.L.P. and a new subsidiary of Charter formed solely for this purpose. As a
result of this transaction, Rifkin has become a wholly owned subsidiary of
Charter.
Banc of America Securities LLC is acting as the dealer manager and D.F. King &
Co., Inc. is acting as information agent in connection with the tender offer and
the change of control
<PAGE> 2
repurchase offer for the Notes. The depositary for the tender offer and the
change of control repurchase offer is Banker's Trust Company. Copies of the
Offer to Purchase and Consent Solicitation Statement and additional information
concerning the terms of the tender offer may be obtained by contacting Banc of
America Securities LLC at 888-292-0070 (toll free) or 704-388-4807 (collect).
Charter is the fourth largest cable television system operator in the United
States based on customers served, with approximately 6.2 million customers,
after giving pro forma effect to Charter's pending acquisitions.
Rifkin owns and operates cable television systems serving approximately 460,000
customers in Miami Beach, Tennessee, Virginia, and West Virginia.
