<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 31, 1999
REGISTRATION NO. 333-63641
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
AMENDMENT NO. 10
TO
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
CLASSIC COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
---------------------
<TABLE>
<S> <C> <C>
DELAWARE 4841 74-2630019
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification Number)
incorporation or
organization)
</TABLE>
515 CONGRESS AVENUE
SUITE 2626
AUSTIN, TEXAS 78701
512/476-9095
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
---------------------
J. MERRITT BELISLE
CHIEF EXECUTIVE OFFICER
CLASSIC COMMUNICATIONS, INC.
515 CONGRESS AVENUE
SUITE 2626
AUSTIN, TEXAS 78701
512/476-9095
(Name, address including zip code, and telephone number, including area code, of
agent for service)
---------------------
<TABLE>
<S> <C>
Copies of all communications to:
TIMOTHY E. YOUNG, ESQ. BRUCE A. CHEATHAM, ESQ.
WINSTEAD SECHREST & MINICK P.C. WINSTEAD SECHREST & MINICK P.C.
100 CONGRESS AVE., SUITE 800 1201 ELM STREET, SUITE 5400
AUSTIN, TEXAS 78701 DALLAS, TEXAS 75270
512/370-2804 214/745-5213
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware (the
"DGCL") grants each corporation organized thereunder, such as the Registrant,
the power to indemnify its directors and officers against liabilities for
certain of their acts. Section 102(b)(7) of the DGCL permits a provision in the
certificate of incorporation of each corporation organized thereunder, such as
the Registrant, eliminating or limiting the personal liability of a director to
the corporation or its stockholders for monetary damages for certain breaches of
fiduciary duty as a director except (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) pursuant to Section 174 of the DGCL (providing for liability of
directors for unlawful payment of dividends or unlawful stock purchases or
redemptions) or (iv) for any transaction from which a director derived an
improper personal benefit. Article Eighth of the Registrant's Certificate of
Incorporation has eliminated the personal liability of directors to the fullest
extent permitted by Section 102(b)(7) of the DGCL.
Article 10 of the Registrant's Certificate of Incorporation provides as
follows: The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(whether or not by or in the right of the Corporation) by reason of the fact
that he is or was a director, officer, employee, or agent of the Corporation, or
is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees), liability, loss,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding to the fullest extent
permitted by either (i) any applicable law in effect on the date of
incorporation of the Corporation, or (ii) any law which becomes effective during
the existence of the Corporation and which is applicable to it.
Article 8 of the Registrant's By-Laws provides as follows: To the extent
permitted by law, the Corporation shall indemnify any person against any and all
judgments, fines, amounts paid in settling or otherwise disposing of actions or
threatened actions, and expenses in connection therewith, incurred by reason of
the fact that he, his testator or intestate is or was a director or officer of
the Corporation or of any other corporation of any type or kind, domestic or
foreign, which he served in any capacity at the request of the Corporation. To
the extent permitted by law, expenses so incurred by any such person in
defending a civil or criminal action or proceeding shall at his request be paid
by the Corporation in advance of the final disposition of such action or
proceeding.
The foregoing statements are subject to the detailed provisions of Section
102(b)(7) of the DGCL, Article 10 of the Certificate of Incorporation of the
Registrant and Article 8 of the By-Laws of the Registrant, as applicable.
The foregoing discussion is qualified in its entirety by reference to the
DGCL and the Registrant's Certificate of Incorporation and By-Laws.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits:
<TABLE>
<CAPTION>
EXHIBIT
NO.
-------
<C> <S>
2.1 -- Securities Purchase Agreement among Classic Cable, Inc.
and Buford Group, Inc. dated as of May 11, 1999.
3.1 -- Amended and Restated Certificate of Incorporation of
Classic Communications, Inc., dated as of October 30,
1995.
</TABLE>
II-1
<PAGE> 3
<TABLE>
<CAPTION>
EXHIBIT
NO.
-------
<C> <S>
3.1(b) -- Certificate of Amendment to Amended and Restated
Certificate of Incorporation of Classic Communications,
Inc. dated July 21, 1998.
3.1(c) -- Certificate of Amendment to Amended and Restated
Certificate of Incorporation of Classic Communications,
Inc. dated July 28, 1999.
3.2 -- Amended and Restated Bylaws of Classic Communications,
Inc.
4.1 -- Indenture dated as of July 29, 1998, for Units consisting
of $114,000,000 in Aggregate Principal Amount at
Maturity, 13 1/4% Senior Discount Notes due 2009, by and
among Classic Communications, Inc., as Issuer, and Bank
One, N.A., as Trustee.
4.2 -- Form of Global 13 1/4 Senior Discount Note due 2009.
4.3A -- Registration Rights Agreement dated as of July 29, 1998,
by and between Classic Communications, Inc. and Merrill
Lynch, Pierce, Fenner & Smith Incorporated.
4.3B -- Shareholder and Registration Rights Agreement, dated as
of July 29, 1998, by and among Classic Communications,
Inc. and Certain Stockholders and Merrill, Lynch, Pierce,
Fenner & Smith Incorporated.
4.3C -- Amended and Restated Registration Rights Agreement dated
as of October 31, 1995, modified by Amendment No. 1
(dated as of October 31, 1995) and Amendment No. 2 (dated
as of December 27, 1995).
4.3D -- Amended and Restated Shareholders Agreement dated as of
October 31, 1995, modified by Amendment No. 1 (dated as
of October 31, 1995), Amendment No. 2 (dated as of
December 27, 1995) and Amendment No. 3 (dated as of
December 19, 1997).
4.4 -- First Supplemental Indenture, dated as of July 28, 1999,
between Classic Cable, Inc., as Issuer, the Subsidiary
Guarantors named thereon, as Guarantors, and Chase Bank
of Texas, National Association, as Trustee.
5.1(a) -- Opinion of Winstead Sechrest & Minick P.C. dated
September 17, 1998 regarding the enforceability and
issuance of the securities, including consent.
5.1(b) -- Opinion of Winstead Sechrest & Minick P.C. dated November
10, 1998 regarding the enforceability and issuance of the
securities, including consent.
*5.1(c) -- Opinion of Winstead Sechrest & Minick P.C. dated August
30, 1999 regarding the enforceability and issuance of the
securities, including consent.
8.1(a) -- Opinion of Winstead Sechrest & Minick P.C. dated
September 17, 1998 regarding federal income tax matters,
including consent.
8.1(b) -- Opinion of Winstead Sechrest & Minick P.C. dated November
10, 1998 regarding federal income tax matters, including
consent.
*8.1(c) -- Opinion of Winstead Sechrest & Minick P.C. dated August
30, 1999 regarding federal income tax matters, including
consent.
10.1 -- Employment Agreement dated as of January 31, 1998 by and
between Classic Communications, Inc., Classic Cable, Inc.
and J. Merritt Belisle.
10.2 -- Employment Agreement dated as of January 31, 1998 by and
between Classic Communications, Inc., Classic Cable, Inc.
and Steven E. Seach.
10.3 -- Employment Agreement dated as of July 28, 1999 by and
between Classic Communications, Inc., Classic Cable, Inc.
and J. Merritt Belisle.
10.4 -- Employment Agreement dated as of July 28, 1999 by and
between Classic Communications, Inc., Classic Cable, Inc.
and Steven E. Seach.
10.5 -- Credit Agreement among Classic Cable, Inc., As Borrower,
the Lenders Parties thereto, Union Bank of California,
N.A. and Goldman Sachs Credit Partners L.P. as
Co-Arrangers, Goldman Sachs Credit Partners L.P., as
Syndication Agent and Union Bank of California, N.A., as
Administrative and Documentation Agent, dated as of July
29, 1998.
10.6 -- Amended and Restated Credit Agreement dated July 28, 1999
among Classic Cable, Inc., as Borrower, the Lenders
Parties thereto, Goldman Sachs Credit Partners, L.P., as
Lead Arranger and Syndication Agent, and The Chase
Manhattan Bank, as Documentation Agent, and Union Bank of
California, N.A., as Administrative Agent.
</TABLE>
II-2
<PAGE> 4
<TABLE>
<CAPTION>
EXHIBIT
NO.
-------
<C> <S>
10.7 -- Facilities Commitment Letter, dated June 24, 1999,
between Classic Cable, Inc. and Goldman Sachs Credit
Partners L.P.
10.8 -- Asset Purchase Agreement dated May 14, 1998 by and
between Cable One, Inc. and Black Creek Communications,
Inc.
10.8(b) -- Assignment of Asset Purchase Agreement dated June 19,
1998.
10.8(c) -- Amendment No. 1 to Asset Purchase Agreement dated July
15, 1998.
10.9 -- 1996 Restricted Stock Award Plan of Classic
Communications, Inc.
10.10 -- 1998 Restricted Stock Award Plan of Classic
Communications, Inc.
10.10(a) -- Restricted Stock Award Agreement dated July 29, 1998 by
and between J. Merritt Belisle and Classic
Communications, Inc.
10.10(b) -- Restricted Stock Award Agreement dated July 29, 1998 by
and between Steven E. Seach and Classic Communications,
Inc.
10.11 -- Investment Agreement dated as of May 24, 1999 between
Brera Classic, LLC and Classic Communications, Inc.
10.12 -- Management and Advisory Fee Agreement dated May 24, 1999.
10.13 -- Stockholder Voting Agreements dated effective May 24,
1999, among Brera Classic, L.L.C. and Austin Ventures,
L.P., BT Capital Partners, Inc., The Texas Growth Fund,
BA SBIC Management, L.L.C., as the successor in interest
to NationsBanc Capital Corp., J. Merritt Belisle, Steven
E. Seach, and Bryan Noteboom.
10.14 -- Stockholders' Agreement, dated as of July 28, 1999, by
and among Classic Communications, Inc., Brera Classic,
LLC and the additional parties named therein.
10.15 -- Registration Rights Agreement, dated as of July 28, 1999,
among Classic Communications, Inc., Brera Classic, LLC,
and the additional parties named therein.
10.16 -- Purchase Agreement, dated July 21, 1999, by and among
Classic Cable, Inc. and Goldman, Sachs & Co., Donaldson,
Lufkin & Jenrette Securities Corporation and Merrill
Lynch, Pierce, Fenner & Smith Incorporated.
10.17 -- Exchange and Registration Rights Agreement, dated July
28, 1999, by and between Classic Cable, Inc. and Goldman,
Sachs & Co., Donaldson, Lufkin & Jenrette Securities
Corporation and Merrill Lynch, Pierce, Fenner & Smith
Incorporated.
10.18 -- Indenture for $150,000,000 9 3/8% Senior Subordinated
Notes due 2009, dated as of July 28, 1999 between Classic
Cable, Inc., as Issuer, the Guarantors listed on Schedule
1 thereto, and Chase Bank of Texas, National Association,
as Trustee.
10.19 -- Form of Global 9 3/8% Senior Subordinated Note due 2009.
12.1 -- Statement of Earnings to Fixed Charges.
21.1 -- Subsidiaries of Classic Communications, Inc.
23.1 -- Consent of Ernst & Young LLP.
23.2 -- Consent of Winstead Sechrest & Minick P.C. (included in
Exhibits 5.1 and 8.1 of this Registration Statement).
23.3 -- Consent of KPMG LLP.
24.1 -- Powers of Attorney (included as part of signature page of
this Registration Statement).
25.1 -- Statement of Eligibility on Form T-1 of Bank One, N.A.,
as Trustee, including consent.
27.1 -- Financial Data Schedule.
99.1 -- Form of Transmittal Letter with respect to the Exchange
Offer.
99.2 -- Form of Notice of Guaranteed Delivery with respect to the
Exchange Offer.
</TABLE>
II-3
<PAGE> 5
b. Financial Statement Schedules.
The following appear after the signature page of this Registration
Statement:
Report of Independent Public Accountants on Financial Statement Schedules
<TABLE>
<CAPTION>
PAGE
SCHEDULE DESCRIPTION NO.
- -------- ----------- ----
<C> <S> <C>
S-1 Condensed Financial Information of Classic Communications,
Inc. stand alone. S-1
</TABLE>
All other schedules are omitted because the required information is
included in the Consolidated Financial Statements or the Notes thereto or is
otherwise inapplicable.
ITEM 22. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at the time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the Registration Statement through the
date of responding to this request.
(c) The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the Registration Statement.
(d) The undersigned Registrant hereby undertakes as follows: That prior to
any public reoffering of the securities registered hereunder through use of a
prospectus which is part of this Registration Statement, by any person or party
who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer
undertakes that such reoffering prospectus will contain the information called
for by the applicable registration form with respect to reofferings by persons
who may be deemed underwriters, in addition to the information called for by the
other Items of the applicable form.
II-4
<PAGE> 6
(e) The Registrant undertakes that every prospectus (i) that is filed
pursuant to paragraph immediately preceding, or (ii) that
purports to meet the requirements of section 10(a)(3) of the Act is used in
connection with an offering of securities subject to Rule 415 (sec. 230.415 of
this chapter), will be filed as a part of an amendment to the Registration
Statement and will not be used until such amendment is effective, and that, for
purposes of determining any liability under the Securities Act of 1933, each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(f) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time was it declared effective.
(2) For purposes of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-5
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Amendment No. 10 to Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized in the City of Austin,
State of Texas, on the 31st day of August 1999.
CLASSIC COMMUNICATIONS, INC.
By: /s/ STEVEN E. SEACH
----------------------------------
Steven E. Seach
President and Chief Financial
Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 10 to Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
Chairman of the Board
- -----------------------------------------------------
Alberto Cribiore
/s/ J. MERRITT BELISLE Chief Executive Officer and August 31, 1999
- ----------------------------------------------------- Director (Principal Executive
J. Merritt Belisle Officer)
/s/ STEVEN E. SEACH President and Chief Financial August 31, 1999
- ----------------------------------------------------- Officer and a Director
Steven E. Seach (Principal Financial Officer
and Principal Accounting
Officer)
* Director August 31, 1999
- -----------------------------------------------------
Lisa A. Hook
* Director August 31, 1999
- -----------------------------------------------------
David Webb
Director
- -----------------------------------------------------
Martin D. Payson
</TABLE>
*By: /s/ STEVEN E. SEACH
----------------------------------
Steven E. Seach
Steven E. Seach, by signing his name hereto, does sign this document on
behalf of the persons named above, pursuant to a power of attorney duly executed
by such persons and previously filed.
II-6
<PAGE> 8
SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CLASSIC COMMUNICATIONS, INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31
----------------------------
1998 1997
------------ ------------
<S> <C> <C>
ASSETS
Cash and cash equivalents................................... $ -- $ --
Investment in and advances to affiliates.................... 13,142,000 16,339,000
Deferred financing costs, net............................... 2,465,000 --
------------ ------------
Total assets...................................... $ 15,607,000 $ 16,339,000
============ ============
LIABILITIES, REDEEMABLE PREFERRED STOCK AND
STOCKHOLDERS' DEFICIT
Liabilities:
Accrued interest.......................................... $ -- $ 90,000
Subordinated debt......................................... -- 4,023,000
Long-term debt............................................ 62,038,000 --
Deferred taxes, net....................................... 51,000 --
Amounts due to parent..................................... 306,000 --
------------ ------------
Total liabilities................................. 62,395,000 4,113,000
15% PIK Redeemable Senior Preferred Stock................. -- 5,978,000
15% PIK Redeemable Junior Preferred Stock................. -- 19,434,000
Common stock, Voting...................................... 17,000 6,000
Common stock, Nonvoting................................... 15,000 22,000
Paid in capital........................................... 28,544,000 31,287,000
Accumulated deficit....................................... (75,364,000) (44,501,000)
------------ ------------
Total stockholders' deficit....................... (46,788,000) (13,186,000)
------------ ------------
Total liabilities, redeemable preferred stock and
stockholders' deficit........................... $ 15,607,000 $ 16,339,000
============ ============
</TABLE>
S-1
<PAGE> 9
CLASSIC COMMUNICATIONS, INC.
CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
--------------------------------------------
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
Interest expense................................. $ (3,754,000) $ (539,000) $ (469,000)
Interest in loss of subsidiary................... (26,700,000) (13,787,000) (12,866,000)
------------ ------------ ------------
Loss before taxes................................ (30,454,000) (14,326,000) (13,335,000)
Income tax benefit (expense)..................... (409,000) 198,000 169,000
------------ ------------ ------------
Net loss......................................... $(30,863,000) $(14,128,000) $(13,166,000)
============ ============ ============
</TABLE>
S-2
<PAGE> 10
CLASSIC COMMUNICATIONS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
---------------------------------------
1998 1997 1996
----------- -------- ------------
<S> <C> <C> <C>
Cash from operations................................. $ 265,000 $ -- $ 85,000
Investing activities
Capital contribution to subsidiary................. (22,764,000) -- --
----------- -------- ------------
Net cash used in investing activities................ (22,764,000) -- --
Financing activities
Expenses related to equity financings.............. -- -- (85,000)
Proceeds from long-term debt....................... 59,981,000 -- --
Repayments of long-term debt....................... (16,000) -- --
Repayment of subordinated indebtedness............. (4,458,000) -- --
Repayment of promissory notes...................... (650,000) -- --
Redemption of preferred stock...................... (29,756,000) -- --
Financing costs.................................... (2,527,000) -- --
Sale of common stock............................... 50,000 -- --
Repurchase of common stock......................... (125,000) -- --
----------- -------- ------------
Net cash provided by (used in) financing
activities......................................... 22,499,000 -- (85,000)
Net change in cash................................... -- -- --
----------- -------- ------------
Cash and cash equivalents at beginning of year....... -- -- --
----------- -------- ------------
Cash and cash equivalents at end of year............. $ -- $ -- $ --
=========== ======== ============
All 1997 activity related to non cash items.
</TABLE>
S-3
<PAGE> 11
CLASSIC COMMUNICATIONS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 1998
1. BASIS OF PRESENTATION
In the parent company-only financial statements, the Company's investment
in subsidiaries is stated at cost plus equity in undistributed earnings (losses)
of subsidiaries since the date of acquisition, plus advances to, and less
payments from, subsidiaries. The parent company-only financial statements should
be read in conjunction with the Company's consolidated financial statements.
2. LONG-TERM DEBT
Balance of amounts outstanding under the Company's debt agreement is as
follows (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31
-------------------
1998 1997
-------- --------
<S> <C> <C>
13.25% Senior Discount Notes................................ $114,000 $ --
Unamortized discount...................................... (51,962) --
-------- --------
$ 62,038 $ --
======== ========
</TABLE>
In July 1998, the Company issued $114.0 million of 13.25% Senior Discount
Notes due 2009. Net of the applicable discounts and the fair value of the common
stock sold along with the Senior Discount Notes, proceeds from this issue were
$60.0 million. Interest payments on the Senior Discount Notes do not commence
until 2004.
The Senior Discount Notes were sold in units that consisted of a $1,000
note and three shares of common stock of the Company. Shares issued in
connection with the offering totaled 342,000. Proceeds of $3.77 per share were
allocated to the sale of the shares. A discount of $1.3 million was recorded in
connection with common stock issued. This per share amount represents the fair
value of the stock as of the date of the offering.
3. SUBORDINATED DEBT
Subordinated debt consisted of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31
----------------
1998 1997
------ ------
<S> <C> <C>
7.5% Junior Subordinated Promissory Notes(A)................ $ -- $ 295
15% Senior Subordinated Promissory Note (B)................. -- 3,727
------ ------
$ -- $4,023
====== ======
</TABLE>
- ---------------
(A) The Junior Subordinated Promissory Notes (the "Interest Notes") bore
interest at 7.5% per annum. The Interest Notes had no required principal
payments other than upon maturity on July 7, 2002. The interest on the
Interest Notes was deferred until maturity. The Interest Notes and
accrued interest were paid in full in July 1998.
(B) The Senior Subordinated Promissory Note (the "Senior Note") bore interest
at 15% per annum, payable quarterly in arrears unless paid in kind
("PIK") through the issuance of new Senior Notes (the "PIK Notes")
incorporating the same terms as the Senior Note. All principal and
deferred interest under the Senior and PIK Notes was due on December 31,
2007. The Senior Note, the PIK Notes and accrued interest was paid in
full in July 1998.
S-4
<PAGE> 12
EXHIBIT LIST
<TABLE>
<CAPTION>
EXHIBIT
NO. NAME
------- ----
<C> <S>
2.1 -- Securities Purchase Agreement among Classic Cable, Inc.
and Buford Group, Inc. dated as of May 11, 1999.
3.1 -- Amended and Restated Certificate of Incorporation of
Classic Communications, Inc., dated as of October 30,
1995.
3.1(b) -- Certificate of Amendment to Amended and Restated
Certificate of Incorporation of Classic Communications,
Inc. dated July 21, 1998.
3.1(c) -- Certificate of Amendment to Amended and Restated
Certificate of Incorporation of Classic Communications,
Inc. dated July 28, 1999.
3.2 -- Amended and Restated Bylaws of Classic Communications,
Inc.
4.1 -- Indenture dated as of July 29, 1998, for Units consisting
of $114,000,000 in Aggregate Principal Amount at
Maturity, 13 1/4% Senior Discount Notes due 2009, by and
among Classic Communications, Inc., as Issuer, and Bank
One, N.A., as Trustee.
4.2 -- Form of Global 13 1/4 Senior Discount Note due 2009.
4.3A -- Registration Rights Agreement dated as of July 29, 1998,
by and between Classic Communications, Inc. and Merrill
Lynch, Pierce, Fenner & Smith Incorporated.
4.3B -- Shareholder and Registration Rights Agreement, dated as
of July 29, 1998, by and among Classic Communications,
Inc. and Certain Stockholders and Merrill, Lynch, Pierce,
Fenner & Smith Incorporated.
4.3C -- Amended and Restated Registration Rights Agreement dated
as of October 31, 1995, modified by Amendment No. 1
(dated as of October 31, 1995) and Amendment No. 2 (dated
as of December 27, 1995).
4.3D -- Amended and Restated Shareholders Agreement dated as of
October 31, 1995, modified by Amendment No. 1 (dated as
of October 31, 1995), Amendment No. 2 (dated as of
December 27, 1995) and Amendment No. 3 (dated as of
December 19, 1997).
4.4 -- First Supplemental Indenture, dated as of July 28, 1999,
between Classic Cable, Inc., as Issuer, the Subsidiary
Guarantors named thereon, as Guarantors, and Chase Bank
of Texas, National Association, as Trustee.
5.1(a) -- Opinion of Winstead Sechrest & Minick P.C. dated
September 17, 1998 regarding the enforceability and
issuance of the securities, including consent.
5.1(b) -- Opinion of Winstead Sechrest & Minick P.C. dated November
10, 1998 regarding the enforceability and issuance of the
securities, including consent.
*5.1(c) -- Opinion of Winstead Sechrest & Minick P.C. dated August
30, 1999 regarding the enforceability and issuance of the
securities, including consent.
8.1(a) -- Opinion of Winstead Sechrest & Minick P.C. dated
September 17, 1998 regarding federal income tax matters,
including consent.
8.1(b) -- Opinion of Winstead Sechrest & Minick P.C. dated November
10, 1998 regarding federal income tax matters, including
consent.
*8.1(c) -- Opinion of Winstead Sechrest & Minick P.C. dated August
30, 1999 regarding federal income tax matters, including
consent.
10.1 -- Employment Agreement dated as of January 31, 1998 by and
between Classic Communications, Inc., Classic Cable, Inc.
and J. Merritt Belisle.
10.2 -- Employment Agreement dated as of January 31, 1998 by and
between Classic Communications, Inc., Classic Cable, Inc.
and Steven E. Seach.
10.3 -- Employment Agreement dated as of July 28, 1999 by and
between Classic Communications, Inc., Classic Cable, Inc.
and J. Merritt Belisle.
10.4 -- Employment Agreement dated as of July 28, 1999 by and
between Classic Communications, Inc., Classic Cable, Inc.
and Steven E. Seach.
10.5 -- Credit Agreement among Classic Cable, Inc., As Borrower,
the Lenders Parties thereto, Union Bank of California,
N.A. and Goldman Sachs Credit Partners L.P. as
Co-Arrangers, Goldman Sachs Credit Partners L.P., as
Syndication Agent and Union Bank of California, N.A., as
Administrative and Documentation Agent, dated as of July
29, 1998.
</TABLE>
<PAGE> 13
<TABLE>
<CAPTION>
EXHIBIT
NO. NAME
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<C> <S>
10.6 -- Amended and Restated Credit Agreement dated July 28, 1999
among Classic Cable, Inc., as Borrower, the Lenders
Parties thereto, Goldman Sachs Credit Partners, L.P., as
Lead Arranger and Syndication Agent, and The Chase
Manhattan Bank, as Documentation Agent, and Union Bank of
California, N.A., as Administrative Agent.
10.7 -- Facilities Commitment Letter, dated June 24, 1999,
between Classic Cable, Inc. and Goldman Sachs Credit
Partners L.P.
10.8 -- Asset Purchase Agreement dated May 14, 1998 by and
between Cable One, Inc. and Black Creek Communications,
Inc.
10.8(b) -- Assignment of Asset Purchase Agreement dated June 19,
1998.
10.8(c) -- Amendment No. 1 to Asset Purchase Agreement dated July
15, 1998.
10.9 -- 1996 Restricted Stock Award Plan of Classic
Communications, Inc.
10.10 -- 1998 Restricted Stock Award Plan of Classic
Communications, Inc.
10.10(a) -- Restricted Stock Award Agreement dated July 29, 1998 by
and between J. Merritt Belisle and Classic
Communications, Inc.
10.10(b) -- Restricted Stock Award Agreement dated July 29, 1998 by
and between Steven E. Seach and Classic Communications,
Inc.
10.11 -- Investment Agreement dated as of May 24, 1999 between
Brera Classic, LLC and Classic Communications, Inc.
10.12 -- Management and Advisory Fee Agreement dated May 24, 1999.
10.13 -- Stockholder Voting Agreements dated effective May 24,
1999, among Brera Classic, L.L.C. and Austin Ventures,
L.P., BT Capital Partners, Inc., The Texas Growth Fund,
BA SBIC Management, L.L.C., as the successor in interest
to NationsBanc Capital Corp., J. Merritt Belisle, Steven
E. Seach, and Bryan Noteboom.
10.14 -- Stockholders' Agreement, dated as of July 28, 1999, by
and among Classic Communications, Inc., Brera Classic,
LLC and the additional parties named therein.
10.15 -- Registration Rights Agreement, dated as of July 28, 1999,
among Classic Communications, Inc., Brera Classic, LLC,
and the additional parties named therein.
10.16 -- Purchase Agreement, dated July 21, 1999, by and among
Classic Cable, Inc. and Goldman, Sachs & Co., Donaldson,
Lufkin & Jenrette Securities Corporation and Merrill
Lynch, Pierce, Fenner & Smith Incorporated.
10.17 -- Exchange and Registration Rights Agreement, dated July
28, 1999, by and between Classic Cable, Inc. and Goldman,
Sachs & Co., Donaldson, Lufkin & Jenrette Securities
Corporation and Merrill Lynch, Pierce, Fenner & Smith
Incorporated.
10.18 -- Indenture for $150,000,000 9 3/8% Senior Subordinated
Notes due 2009, dated as of July 28, 1999 between Classic
Cable, Inc., as Issuer, the Guarantors listed on Schedule
1 thereto, and Chase Bank of Texas, National Association,
as Trustee.
10.19 -- Form of Global 9 3/8% Senior Subordinated Note due 2009.
12.1 -- Statement of Earnings to Fixed Charges.
21.1 -- Subsidiaries of Classic Communications, Inc.
23.1 -- Consent of Ernst & Young LLP.
23.2 -- Consent of Winstead Sechrest & Minick P.C. (included in
Exhibits 5.1 and 8.1 of this Registration Statement).
23.3 -- Consent of KPMG LLP.
24.1 -- Powers of Attorney (included as part of signature page of
this Registration Statement).
25.1 -- Statement of Eligibility on Form T-1 of Bank One, N.A.,
as Trustee, including consent.
27.1 -- Financial Data Schedule.
99.1 -- Form of Transmittal Letter with respect to the Exchange
Offer.
99.2 -- Form of Notice of Guaranteed Delivery with respect to the
Exchange Offer.
</TABLE>
<PAGE> 1
EXHIBIT 5.1(c)
[WINSTEAD, SECHREST & MINICK LETTERHEAD]
August 30, 1998
Classic Communications, Inc.
515 Congress Avenue, Suite 2626
Austin, Texas 78701
Gentlemen:
We have acted as counsel to Classic Communications, Inc. (the
"Company") in connection with the Registration Statement on Form S-4 and the
amendments thereto (as amended, the "Registration Statement") filed with the
Securities and Exchange Commission in connection with the registration under
the Securities Act of 1933, as amended, of $114 million aggregate principal
amount of 13 1/4% Senior Discount Notes due 2009 of the Company (the "New
Notes") to be offered and issued by the Company under an Indenture dated as of
July 29, 1998 by and among the Company and BancOne, N.A., as Trustee.
We have examined the Indenture, the global notes issued under the
Indenture and such statutes, corporate records and documents, certificates of
corporate and public officials and such other instruments and documents as we
have deemed necessary or appropriate for the purposes of the opinions expressed
herein.
Upon the basis of the foregoing, we are of the opinion that, upon
issuance thereof in the manner described in the Registration Statement the New
Notes will be valid and binding obligations of the Company, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization
or other similar laws affecting the enforcement of creditors' rights generally
and by general equitable principles (regardless of whether the issue of
enforceability is considered in a proceeding in equity or at law).
We hereby consent to the filing of this opinion as an exhibit to the
Company's Registration Statement on Form S-4 and to the reference to this firm
under the heading "Legal Matters" in the Prospectus which is part of the
Registration Statement.
Very truly yours,
WINSTEAD SECHREST & MINICK P.C.
By: /s/ Timothy E. Young
-----------------------------
Timothy E. Young, Shareholder
<PAGE> 1
EXHIBIT 8.1(c)
[WINSTEAD SECHREST & MINICK LETTERHEAD]
August 30, 1999
Classic Communications, Inc.
515 Congress Avenue, Suite 2626
Austin, Texas 78701
Gentlemen:
We have acted as counsel in connection with the transactions described
in the Registration Statement on Form S-4 and the amendments thereto (as
amended, the "Registration Statement") filed with the Securities and Exchange
Commission (the "Commission") pursuant to the Securities Act of 1933, as amended
(the "Securities Act"), by Classic Communications, Inc., a Delaware corporation
(the "Company"), and described in the Company's Offer to Exchange 13 1/4% Senior
Discount Notes due 2009 (the "New Notes") for all outstanding 13 1/4% Senior
Discount Notes due 2009 (the "Old Notes") set forth in the Prospectus (the
"Prospectus") contained within the Registration Statement. Capitalized terms
used but not otherwise defined herein shall have the meaning ascribed thereto in
the Registration Statement.
Our opinion is based on an examination of the Registration Statement,
the Prospectus, and such other documents, corporate records and materials as we
have deemed necessary or appropriate for the purposes of this opinion. We assume
that all transactions relating to the exchange pursuant to the Exchange Offer
will be carried out in accordance with the terms of the governing documents
without any amendments thereto or waiver of any terms thereof, and that such
documents represent the entire agreement of the parties thereto. We understand
the relevant facts to be as follows:
The Old Notes were originally issued and sold on July 29, 1998 in a
transaction not registered under the Securities Act, in reliance upon the
exemptions provided in Rule 144A under the Securities Act. Accordingly, the Old
Notes are generally subject to substantial transfer restrictions unless such
notes are registered pursuant to the Securities Act or unless an applicable
exemption from the registration requirements of the Securities Act is available.
Pursuant to an Exchange and Registration Rights Agreement dated as of July 29,
1998 (the "Registration Rights Agreement") between the Company and Merrill
Lynch, Pierce, Fenner & Smith Incorporated, as initial purchaser (the "Initial
Purchaser"), with respect to the Old Notes, the Company agreed to file within 60
days of the original issuance of the Old Notes to the Initial Purchaser (the
"Issuance Date") the registered Exchange Offer pursuant to which holders of the
Old Notes would receive, in exchange, the New Notes, which would be issued
without legends restricting the transfer thereof and use its best efforts to
cause such filing to become effective within 150 days after the Issuance Date.
Failure of the Company to comply with the requirements of the
<PAGE> 2
WINSTEAD SECHREST & MINICK
Classic Communications, Inc.
August 30, 1999
Page 2
Registration Rights Agreement results in an increase of one-quarter of one
percent per annum in the interest rate borne by the Old Notes. The New Notes
will not be subject to such provisions. In general, the New Notes will be freely
transferable after the Exchange Offer without further registration under the
Securities Act. Except as noted above, the terms of the New Notes are identical
to those of the Old Notes.
Based on the foregoing and subject to the assumptions, qualifications
and limitations contained herein, we hereby confirm that the discussion set
forth in the Prospectus under the heading "United States Federal Income Tax
Considerations" constitutes our opinion with respect to the material United
States Federal income tax consequences of the exchange pursuant to the Exchange
Offer, and the ownership and disposition of the Old Notes or the New Notes by
holders who hold such notes as capital assets. The possibility exists that
contrary positions may be taken by the Internal Revenue Service and that a court
may agree with such contrary position.
The foregoing opinion is specific to the transactions and the documents
referred to herein, and is based upon the facts known to us as of the date
hereof.
The foregoing opinion is predicated upon the Internal Revenue Code, the
regulations thereunder, the administrative and judicial interpretations of the
Internal Revenue Code and regulations, in each case as in effect on the date
hereof. Any change in applicable law or in any of the facts or other assumptions
upon which we have relied, may adversely affect such opinion.
We hereby consent to the filing with the Securities and Exchange
Commission of this opinion as an exhibit to the Company's Registration Statement
on Form S-4 relating to the exchange of the Old Notes for the New Notes and to
the reference to our firm under the heading "Legal Matters" in the Prospectus.
In giving such consent, we do not thereby admit that we are in the category of
persons whose consent is required under Section 7 of the Securities Act.
Very truly yours,
WINSTEAD SECHREST & MINICK P.C.
By: /s/ Timothy E. Young
----------------------------------
Timothy E. Young, Shareholder
