<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 3 )*
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Cox Communications, Inc.
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(Name of Issuer)
Class A Common Stock, $1.00 par value per share
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(Title of Class of Securities)
224044 10 7
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(CUSIP Number)
Andrew A. Merdek, Esq., Cox Enterprises, Inc.
1400 Lake Hearn Drive, Atlanta, Georgia 30319 (404) 843-5564
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 22, 1996
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]
Check the following box if a fee is being paid with the statement [ ]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
AMENDMENT NO. 3 TO SCHEDULE 13D
<TABLE>
<CAPTION>
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CUSIP NO. 224044 10 7 PAGE 2 OF 8 PAGES
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<S> <C>
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NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Anne Cox Chambers
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
Not Applicable (b) [_]
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SEC USE ONLY
3
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SOURCE OF FUNDS* 00 (See Item 3)
4
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5 Not Applicable
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CITIZENSHIP OR PLACE OF ORGANIZATION U.S.A.
6
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SOLE VOTING POWER 0
7
NUMBER OF
SHARES ----------------------------------------------------------------
SHARED VOTING POWER 203,394,484 (Owned Indirectly)**
BENEFICIALLY 8
OWNED BY
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EACH SOLE DISPOSITIVE POWER 0
9
REPORTING
PERSON ----------------------------------------------------------------
SHARED DISPOSITIVE POWER 203,394,484 (Owned Indirectly)**
WITH 10
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11 203,394,484 (Owned Indirectly)**
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_] Not Applicable
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
Approximately 75.3%**
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TYPE OF REPORTING PERSON* OO (Trustee, See Item 4)
14
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</TABLE>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
** Includes 13,798,896 shares of Class A Common Stock into which the Class C
Common Stock indirectly beneficially owned by Mrs. Chambers may be converted at
any time on a share-for-share basis. Assuming the delivery by Cox Enterprises,
Inc. to the ML & Co. Subsidiary of 9,775,000 shares of Class A Common Stock,
which is the maximum number of shares required by ML& Co. to pay and discharge
or redeem all of the STRYPES pursuant to the STRYPES Agreement, Mrs. Chambers
would indirectly beneficially own 193,619,484 shares of Class A Common Stock
(including 13,798,896 shares of Class A Common Stock into which the Class C
Common Stock is convertible), which would represent approximately 71.65% of the
Class A Common Stock. (See Item 4).
<PAGE>
Amendment No. 3 to Schedule 13D Page 3 of 8
Anne Cox Chambers
Cox Communications, Inc.
Anne Cox Chambers hereby amends her Statement on Schedule 13D (filed with
the Securities and Exchange Commission (the "Commission") on January 27, 1995),
and amended by Amendment No. 1 to Schedule 13D (filed with the Commission on
April 25, 1995) and Amendment No. 2 to Schedule 13D (filed with the Commission
on July 17, 1995) (the Statement on Schedule 13D, together with Amendment No. 1
to Schedule 13D, Amendment No. 2 to Schedule 13D and this Amendment No. 3 to
Schedule 13D, is collectively referred to herein as the "Schedule 13D"), with
respect to her beneficial ownership of shares of Class A Common Stock, par value
$1.00 per share (the "Class A Common Stock"), issued by Cox Communications,
Inc., a Delaware corporation (the "Company").
ITEM 1. SECURITY AND ISSUER
The title of the class of equity securities to which this Schedule 13D
relates is the Class A Common Stock. The address of the principal executive
offices of the Company is 1400 Lake Hearn Drive, Atlanta, Georgia 30319.
ITEM 2. IDENTITY AND BACKGROUND
(a) The person filing this Amendment No. 3 to Schedule 13D is
Anne Cox Chambers. A joint statement on Schedule 13D is being filed separately
for Cox Enterprises, Inc. ("CEI"), Cox Discovery, Inc. ("CDI"), Cox Holdings,
Inc. ("CHI") and Cox Investment Company, Inc. ("CICI") (collectively, the "Cox
Corporations"). Barbara Cox Anthony, who shares control with Mrs. Chambers over
the Cox Corporations, is also filing a separate statement on Schedule 13D. (See
Item 4).
(b) The principal residence address of Mrs. Chambers is 426
West Paces Ferry Road, N.W., Atlanta, Georgia 30305.
(c) The present principal employment of Mrs. Chambers is
Director and Vice President of CEI.
(d) During the last five years, Mrs. Chambers has not been
convicted in any criminal proceedings (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, Mrs. Chambers has not been a
party to any civil proceeding of a judicial or administrative body of competent
jurisdiction as the result of which she was or is subject to any judgment,
decree or final order enjoining future violations of, or
<PAGE>
Amendment No. 3 to Schedule 13D Page 4 of 8
Anne Cox Chambers
Cox Communications, Inc.
prohibiting or mandating activities subject to, federal or state securities laws
or finding any violation with respect to such laws.
Mrs. Chambers is a citizen of the United States of America.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The consideration paid by the ML & Co. Subsidiary (as defined below
in Item 4) to CEI on May 29, 1996 under the STRYPES Agreement (as defined below
in Item 4), was $216,858,375.
ITEM 4. PURPOSE OF TRANSACTION
This Amendment No. 3 to Schedule 13D is being filed to report an
agreement with respect to the Company's Class A Common Stock dated as of May 22,
1996 (the "STRYPES Agreement"), among Merrill Lynch & Co., Inc. ("ML & Co."),
Merrill Lynch Capital Services, Inc., a wholly owned subsidiary of ML & Co. (the
"ML & Co. Subsidiary"), and CEI. Under the STRYPES Agreement, up to 9,775,000
shares of Class A Common Stock indirectly beneficially owned by CEI may be
delivered by ML & Co. at maturity or upon redemption of the Structured Yield
Product Exchangeable For Stock(SM), 6% STRYPES(SM), Due June 1, 1999 of ML & Co.
(each, a "STRYPES"), subject to ML & Co.'s right to deliver at maturity an
amount in cash with an equal value. Pursuant to the terms of the STRYPES
Agreement, CEI is obligated to deliver to the ML & Co. Subsidiary immediately
prior to the maturity date of the STRYPES, a number of shares of Class A Common
Stock equal to the number required by ML & Co. to pay and discharge all of the
STRYPES, subject to CEI's right to satisfy such obligation by delivering a
specified amount of cash in lieu of such shares. Under the STRYPES Agreement, ML
& Co. has agreed to pay and discharge the STRYPES by delivering to the holders
thereof at maturity the form of consideration that the ML & Co. Subsidiary
receives from CEI. CEI also has the option, exercisable upon the occurrence of
certain changes involving taxation, to satisfy and discharge its obligations
under the STRYPES Agreement by delivering to the ML & Co. Subsidiary, on a date
fixed by CEI for early settlement, cash and shares of Class A Common Stock,
equal to the amount and number required by ML & Co. to redeem all of the
STRYPES. Under the STRYPES Agreement, ML & Co. has agreed to redeem all of the
STRYPES in the event that CEI exercises such option.
___________
(SM) Service mark of Merrill Lynch & Co., Inc.
<PAGE>
Amendment No. 3 To Schedule 13D Page 5 of 8
Anne Cox Chambers
Cox Communications, Inc.
CEI is the holder of (i) all of the outstanding capital stock of CHI, which
directly beneficially owns 189,953,558 shares of Class A Common Stock (including
12,848,235 shares of Class A Common Stock into which the Class C Common Stock
directly beneficially owned by CHI may be converted at any time), which
represents approximately 70.5% of the Class A Common Stock, and (ii) all of the
outstanding capital stock of CICI, which directly owns all of the outstanding
capital stock of CDI, which in turn directly beneficially owns 13,440,926 shares
of Class A Common Stock (including 950,661 shares of Class A Common Stock into
which the Class C Common Stock directly beneficially owned by CDI may be
converted at any time), which represents approximately 5.2% of the Class A
Common Stock. Therefore, CEI indirectly exercises beneficial ownership over an
aggregate of approximately 75.3% of the Class A Common Stock.
As a trustee of the Barbara Cox Anthony Atlanta Trust and of the Dayton Cox
Trust A, Mrs. Chambers exercises beneficial ownership over an aggregate of
approximately 69.6% of the outstanding capital stock of CEI. As a trustee of the
Anne Cox Chambers Atlanta Trust and of the Dayton Cox Trust A, Mrs. Anthony
exercises beneficial ownership over an aggregate of approximately 69.6% of the
outstanding capital stock of CEI. Thus, Mrs. Chambers and Mrs. Anthony share
ultimate control over the Cox Corporations, and thereby indirectly exercise
beneficial ownership over approximately 75.3% of the Class A Common Stock, which
is reported in this Schedule 13D.
Assuming the delivery to the ML & Co. Subsidiary of 9,775,000 shares of
Class A Common Stock, which is the maximum number of shares required by ML & Co.
to pay and discharge or redeem all of the STRYPES pursuant to the STRYPES
Agreement, Mrs. Chambers would indirectly beneficially own 193,619,484 shares of
Class A Common Stock (including 13,798,896 shares of Class A Common Stock into
which the Class C Common Stock indirectly beneficially owned may be converted at
any time), which would represent approximately 71.7% of the Class A Common
Stock.
Until such time, if any, as CEI shall have delivered shares of Class A
Common Stock to the ML & Co. Subsidiary pursuant to the terms of the STRYPES
Agreement, CEI will retain all ownership rights with respect to the shares of
Class A Common Stock held by it (including, without limitation, voting rights
and rights to receive any dividends or other distributions in respect thereof).
Pursuant to the terms of the STRYPES Agreement, CEI has placed in escrow an
aggregate of 13,294,000 shares of Class A Common Stock. CEI has also agreed,
under certain circumstances, to pledge and grant to MLCS a first priority lien
on, and security interest in, and right to set off against, all of CEI's right,
title and interest in and to the
<PAGE>
Amendment No. 3 to Schedule 13D Page 6 of 8
Anne Cox Chambers
Cox Communications, Inc.
shares of Class A Common Stock (or, in the event there shall occur a
reorganization event, cash, securities and/or other property in lieu thereof)
held thereunder.
CEI has also entered into a Registration Agreement dated as of May 22, 1996
(the "Registration Agreement"), among ML & Co., the Company and CEI, and an
Underwriting Agreement dated as of May 22, 1996 (the "Underwriting Agreement"),
among ML & Co., CEI and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated (the "Underwriter of the STRYPES"). Under the Registration
Agreement and the Underwriting Agreement, CEI has agreed, among other things,
not to offer, sell, contract to sell or otherwise dispose of, directly or
indirectly, or cause to be filed a registration statement under the Securities
Act of 1933, as amended, with respect to any shares of Class A Common Stock,
securities convertible into, exchangeable for or repayable with such shares or
rights or warrants to acquire such shares, for a period of 120 days after the
date of the Registration Agreement without the prior written consent of the
Underwriter of the STRYPES, subject to certain exceptions.
CEI has no obligations with respect to the STRYPES or amounts to be paid to
holders thereof, including any obligation to take the needs of ML & Co. or of
holders of the STRYPES into consideration in determining whether to deliver
shares of Class A Common Stock or cash or for any other reasons.
The foregoing description of the STRYPES Agreement, Registration Agreement
and Underwriting Agreement is qualified in its entirety by reference to copies
of such agreements, which are included herewith as Exhibits 7.01 through 7.03,
respectively, and are specifically incorporated herein by reference.
Other than the above-mentioned transactions, Mrs. Chambers does not have
any plans or proposals that relate to or would result in any of the events set
forth in Items 4(a) through (j).
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) Mrs. Chambers indirectly beneficially owns 203,394,484 shares of Class
A Common Stock (including 13,798,896 shares of Class A Common Stock into which
the Class C Common Stock indirectly beneficially owned by Mrs. Chambers may be
converted at any time). As of March 31, 1996, there was an aggregate of
256,436,754 shares of Class A Common Stock issued and outstanding. Accordingly,
Mrs. Chambers is the indirect beneficial owner of approximately 75.3% of the
Class A Common Stock.
<PAGE>
Amendment No. 3 to Schedule 13D Page 7 of 8
Anne Cox Chambers
Cox Communications, Inc.
(b) Mrs. Chambers and Mrs. Anthony have the indirect shared power to
direct the vote or direct the disposition of 203,394,484 shares of Class A
Common Stock (including 13,798,896 shares of Class A Common Stock into which the
Class C Common Stock indirectly beneficially owned by Mrs. Chambers and Mrs.
Anthony may be converted at any time).
(c) No transactions in the Class A Common Stock were effected by Mrs.
Chambers during the past sixty days.
(d) No other person is known to have the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the sale of, the
shares of Class A Common Stock referred to in paragraphs (a) and (b) above.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
Other than the agreements described in Item 4 and filed herewith, there are
no contracts, arrangements, understandings or relationships with respect to the
securities of the Company between Mrs. Chambers and any other person which are
required to be described under Item 6 of Schedule 13D.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 7.01 STRYPES Agreement dated as of May 22, 1996, among ML & Co., the
ML & Co. Subsidiary and CEI.
Exhibit 7.02 Registration Agreement dated as of May 22, 1996, among ML & Co.,
the Company and CEI.
Exhibit 7.03 Underwriting Agreement dated as of May 22, 1996, among ML & Co.,
CEI and the Underwriter of the STRYPES.
<PAGE>
Amendment No. 3 to Schedule 13D Page 8 of 8
Anne Cox Chambers
Cox Communications, Inc.
Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
ANNE COX CHAMBERS
July 7, 1996 By: /s/ Anne Cox Chambers
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Date Anne Cox Chambers
<PAGE>
EXHIBIT 7.01
STRYPES AGREEMENT
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THIS AGREEMENT is made as of this 22nd day of May, 1996, between MERRILL
LYNCH CAPITAL SERVICES, INC. ("MLCS"), a Delaware corporation and wholly-owned
subsidiary of MERRILL LYNCH & CO., INC., a Delaware corporation ("ML & Co."), ML
& Co. and COX ENTERPRISES, INC., a Delaware corporation ("CEI").
WHEREAS, ML & Co. has filed with the Securities and Exchange Commission
(the "SEC") a registration statement on Form S-3 (File No. 33-65135) and Post-
Effective Amendment No. 1 thereto contemplating the offering of up to 9,775,000
of its Structured Yield Product Exchangeable for Stock/SM/, 6% STRYPES/SM/ Due
June 1, 1999 (the "STRYPES"), the terms of which require ML & Co. to pay and
discharge the STRYPES on June 1, 1999 (the "Maturity Date") by delivering to the
holders thereof a specified number of shares of Class A Common Stock, par value
$1.00 per share (the "Cox Common Stock"), of Cox Communications, Inc., a
Delaware corporation ("Cox"), or, at ML & Co.'s option, cash with an equal
value. The terms of the STRYPES permit ML & Co., from and after a Tax Event
Date, to redeem the STRYPES, in whole but not in part, at the Tax Event
Redemption Price (as such terms are defined in the Supplemental Indenture
referred to below), consisting of a specified number of shares of Cox Common
Stock and an amount of cash determined as set forth in the Supplemental
Indenture (such amount of cash payable upon redemption being hereinafter
referred to as the "Redemption Cash Component").
WHEREAS, ML & Co. has agreed, pursuant to an underwriting agreement dated
the date hereof (the "Underwriting Agreement") among ML & Co., CEI and Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (the
"Underwriter"), to issue and sell to the Underwriter an aggregate of 8,500,000
STRYPES (the "Initial STRYPES") and, at the Underwriter's option, all or any
part of 1,275,000 additional STRYPES (the "Option STRYPES") to cover over-
allotments, if any.
WHEREAS, the STRYPES are to be issued under an indenture, dated as of April
1, 1983 and restated as of April 1, 1987 (as amended and supplemented, the
"Principal Indenture"), between ML & Co. and Chemical Bank (successor by merger
to Manufacturers Hanover Trust Company), as trustee (the "Trustee"), as further
amended and supplemented by the Eighth Supplemental Indenture, dated as of May
__, 1996 (the "Supplemental Indenture"), between ML & Co. and the Trustee,
relating to the STRYPES. The Principal Indenture, as amended and supplemented
by the Supplemental Indenture, is hereinafter referred to as the "Indenture."
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/SM/ Service mark of Merrill Lynch & Co., Inc.
<PAGE>
WHEREAS, in order to obtain the cash and/or shares of Cox Common Stock,
including any Distributed Assets required to be delivered to ML & Co. pursuant
to the Subsidiary STRYPES (the "Distributed Assets"), (or, in the event there
shall occur a Reorganization Event, cash, securities and/or other property in
lieu thereof) required to satisfy its obligations under the STRYPES, ML & Co.
has agreed to purchase from MLCS, and MLCS has agreed to sell to ML & Co., (i)
concurrent with the issuance and sale of the Initial STRYPES, an obligation of
MLCS in the form of Exhibit A hereto, the aggregate principal amount of which
will be equal to the net proceeds to ML & Co. from the sale of the Initial
STRYPES, less an amount equal to certain of ML & Co.'s expenses in connection
with the offering of the Initial STRYPES, and the payment terms (other than the
interest rate) of which will be identical to the payment terms of the Initial
STRYPES (the "Initial Subsidiary STRYPES") and (ii) concurrent with each
issuance and sale of any Option STRYPES, an additional obligation of MLCS in the
form of Exhibit A hereto, the aggregate principal amount of which will be equal
to the net proceeds to ML & Co. from the sale of such Option STRYPES, less an
amount equal to certain of ML & Co.'s expenses in connection with the offering
of the Option STRYPES, and the payment terms (other than the interest rate) of
which will be identical to the payment terms of such Option STRYPES (an "Option
Subsidiary STRYPES"); the Initial Subsidiary STRYPES and each Option Subsidiary
STRYPES are hereinafter collectively referred to as the "Subsidiary STRYPES."
WHEREAS, CEI, through its wholly-owned subsidiary Cox Holdings, Inc. ("Cox
Holdings"), owns a number of shares of Cox Common Stock in excess of the maximum
number that would be required by MLCS to satisfy its obligations under the
Subsidiary STRYPES.
WHEREAS, in exchange for certain consideration to be paid by MLCS and to be
established hereunder, MLCS and CEI desire to provide for the Periodic Payments
(as defined herein) and for the future acquisition, sale and delivery of that
number of shares of Cox Common Stock, including any Distributed Assets, (or, in
the event there shall occur a Reorganization Event, cash, securities and/or
other property in lieu thereof) that would be required by MLCS to pay and
discharge the Subsidiary STRYPES on the Maturity Date or redeem the Subsidiary
STRYPES on the Redemption Date, without taking into account any default with
respect to the Subsidiary STRYPES or any acceleration of the maturity of the
Subsidiary STRYPES resulting therefrom. The number of shares of Cox Common
Stock, including any Distributed Assets, (or, in the event there shall occur a
Reorganization Event, such cash, securities and/or other property in lieu
thereof) that would be required to pay and discharge the Subsidiary STRYPES on
the Maturity Date, without taking into account any default with respect to the
Subsidiary STRYPES or any acceleration of the maturity of the Subsidiary STRYPES
resulting therefrom, are hereinafter referred to as the "Maturity Contract
Shares", and the number of shares of Cox Common Stock, including any Distributed
Assets, (or, in the event there shall occur a Reorganization Event, such cash,
securities and/or other property in lieu thereof) that would be required to
redeem the Subsidiary STRYPES on the Redemption Date, without taking into
account any default with respect to the Subsidiary STRYPES or any acceleration
of the maturity of the Subsidiary STRYPES resulting therefrom are hereinafter
referred to as the "Redemption Contract Shares"; the Maturity Contract Shares
and the Redemption Contract Shares are hereinafter collectively referred to as
the "Contract Shares".
2
<PAGE>
WHEREAS, CEI and MLCS desire that, at the option of CEI, the respective
future acquisition, sale and delivery obligations with respect to the Maturity
Contract Shares can be settled entirely, but not less than entirely, through
cash settlement in lieu of delivery of the Maturity Contract Shares.
WHEREAS, CEI will initially place in escrow, pursuant to an Escrow
Agreement dated as of May 29, 1996 (the "Escrow Agreement"), among MLCS, CEI and
The First National Bank of Chicago, as escrow agent (the "Escrow Agent"), an
aggregate of 13,294,000 shares of Cox Common Stock.
WHEREAS, CEI will agree, pursuant to a Collateral Agreement dated as of May
29, 1996 (the "Collateral Agreement"), among MLCS, CEI and The First National
Bank of Chicago, as collateral agent (the "Collateral Agent"), under the
circumstances set forth therein, to pledge and grant to MLCS a first priority
lien on, and security interest in, and right to set off against, all of CEI's
right, title and interest in and to the shares of Cox Common Stock (or, in the
event there shall occur a Reorganization Event, cash, securities and/or other
property in lieu thereof) held thereunder.
WHEREAS, the ownership, voting rights and rights to receive any dividends
or other distributions in respect of the Escrow Shares (as defined herein) shall
remain with CEI unless and until delivery, if any, of such Escrow Shares to MLCS
pursuant to the provisions of this Agreement.
NOW, THEREFORE, in consideration of their mutual covenants herein
contained, the parties hereto, intending to be legally bound, hereby mutually
covenant and agree as follows:
1.
Definitions
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1.1. Definitions. Capitalized words and phrases used herein and not
-----------
otherwise defined shall have the meanings ascribed to them in the Supplemental
Indenture.
2.
Periodic Payments and Future Delivery of Maturity Contract Shares or Cash
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Settlement
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2.1. Periodic Payments; Acquisition, Sale and Delivery. On the basis of
-------------------------------------------------
the representations and warranties herein set forth and subject to the terms and
conditions herein set forth, (i) CEI agrees to make the periodic payments to
MLCS required by Section 2.3 hereof, and (ii) on the Maturity Date Closing (as
defined in Section 2.4 hereof), CEI agrees to assign, transfer, convey and
deliver to MLCS (or to cause Cox Holdings to assign, transfer, convey and
3
<PAGE>
deliver to MLCS), and MLCS agrees to acquire from CEI (or Cox Holdings), the
Maturity Contract Shares.
2.2. Consideration.
-------------
(a) The consideration to be paid by MLCS in exchange for CEI's obligations
hereunder to make the Periodic Payments and to deliver (or cause to be
delivered) the Contract Shares in respect of the Initial Subsidiary STRYPES (the
"Firm Consideration Amount") shall be $188,572,500 in cash. Upon the terms and
subject to the conditions of this Agreement, MLCS shall deliver to CEI the Firm
Consideration Amount on May 29, 1996 (the "Firm Payment Date") at the offices of
Brown & Wood, One World Trade Center, New York, New York 10048, or at such other
place as shall be agreed upon by MLCS and CEI.
(b) ML & Co. shall deliver promptly to MLCS and CEI notice of any exercise
by the Underwriter of its option to purchase any Option STRYPES, stating the
number of Option STRYPES as to which the Underwriter is then exercising the
option and the time and date of payment and delivery for such Option STRYPES
(any such time and date of delivery, a "Date of Delivery"). The consideration to
be paid by MLCS in exchange for CEI's obligations hereunder to make the Periodic
Payments and to deliver (or cause to be delivered) the Contract Shares in
respect of any Option Subsidiary STRYPES (the "Option Consideration Amount")
shall be an amount in cash equal to 100% of the aggregate principal amount of
such Option Subsidiary STRYPES. Upon the terms and subject to the conditions of
this Agreement, MLCS shall deliver to CEI the Option Consideration Amount on the
related Date of Delivery at the offices of Brown & Wood, One World Trade Center,
New York, New York 10048, or at such other place as shall be agreed upon by MLCS
and CEI.
(c) Payment of the Firm Consideration Amount and the Option Consideration
Amount shall be made by Fedwire transfer of immediately available funds to an
account designated by CEI, or such other form of payment specified by CEI,
against delivery by CEI or Cox Holdings to the Escrow Agent of the number of
shares of Cox Common Stock, including any Distributed Assets, (or, in the event
there shall occur a Reorganization Event, cash, securities and/or other property
in lieu thereof) necessary to comply with CEI's obligations under Section 6.1
hereof.
2.3. Periodic Payments. (a) On or prior to 10:00 a.m., New York City
-----------------
time, on September 1, 1996 and on each March 1, June 1, September 1, and
December 1, to and including June 1, 1999, CEI shall pay to MLCS, by Fedwire
transfer of immediately available funds to an account designated by MLCS, an
amount equal to the total interest payments due on the Subsidiary STRYPES on
such dates (each such payment being hereinafter referred to as a "Periodic
Payment").
(b) Any Periodic Payment (or portion thereof) not paid when due shall bear
interest until paid in full at a rate per annum equal to the Prime Rate plus 2%
per annum. For purposes of the foregoing, "Prime Rate" shall mean, for any day,
the prime rate quoted in The Wall Street
4
<PAGE>
Journal (New York Edition) for the immediately preceding Business Day; provided,
however, if more than one rate is so quoted, the Prime Rate shall be the average
of the prime rates so quoted.
2.4. Delivery upon Maturity. Consummation of the acquisition, sale and
----------------------
delivery of the Maturity Contract Shares shall take place on a date mutually
agreeable to MLCS and CEI, not later than one (1) Trading Day prior to the
Maturity Date (or such later date acceptable to MLCS so as to permit MLCS to
meet its obligations under the Subsidiary STRYPES) (the "Maturity Date
Closing"). Delivery of the certificates representing the Maturity Contract
Shares (unless the Maturity Contract Shares are represented by one or more
global certificates registered in the name of a depositary or a nominee of a
depositary, in which event MLCS's interest in such Maturity Contract Shares
shall be noted in a manner satisfactory to MLCS and its counsel) shall be made
at the offices of MLCS, or at such other place as shall be agreed upon by MLCS
and CEI. Any certificates for the Maturity Contract Shares delivered shall be
registered in MLCS's name (or endorsed in blank or otherwise registered as
requested by MLCS).
2.5. Cash Settlement. Notwithstanding the provisions of Sections 2.1 and
---------------
2.4 hereof, CEI shall have the option, exercisable in its sole discretion, to
require that its obligation contained therein be settled, in whole, through a
cash payment at the Maturity Date Closing in lieu of delivery of the Maturity
Contract Shares. The amount of such cash settlement payment shall be equal to
the value of the Maturity Contract Shares at the Maturity Price (the "Share
Value"). On or prior to the day seven Business Days preceding the Maturity Date
(or such later date acceptable to MLCS so as to permit MLCS to meet its
obligations under the Subsidiary STRYPES), CEI shall notify MLCS whether it will
exercise its option to require cash settlement pursuant to this Section 2.5.
2.6. Maturity Date Closing Condition. If a Reorganization Event shall
-------------------------------
have occurred, CEI's right to deliver (or cause to be delivered) to MLCS
hereunder securities and/or other property received pursuant to such
Reorganization Event shall be conditioned upon such securities and/or other
property so delivered being (a) transferable after such delivery without
contemporaneous registration under the Securities Act of 1933, as amended (the
"1933 Act"), and (b) free of any transfer restrictions. If the condition set
forth in the preceding sentence shall not be satisfied, then, notwithstanding
the provisions hereof, the parties respective obligations contained in clause
(ii) of Section 2.1 shall be settled, in whole, through a cash payment at the
Maturity Date Closing in lieu of delivery of the Maturity Contract Shares as
provided in Section 2.5.
3.
Early Satisfaction and Discharge
--------------------------------
3.1. Early Satisfaction and Discharge. Except as provided in Section 8.1
--------------------------------
hereof, CEI shall have the option, exercisable at any time from and after the
Tax Event Date, to require that the parties satisfy and discharge their
respective obligations hereunder, on a date fixed by CEI
5
<PAGE>
for early settlement (the "Early Settlement Date Closing" and, together with the
Maturity Date Closing, a "Closing"), in the following manner:
(i) CEI shall assign, transfer, convey and deliver to MLCS (or shall
cause Cox Holdings to assign, transfer, convey and deliver to MLCS), and
MLCS shall acquire from CEI (or Cox Holdings), the Redemption Contract
Shares; and
(ii) CEI shall deliver to MLCS the Redemption Cash Component.
CEI shall provide notice of its intention to require early satisfaction and
discharge of this Agreement to MLCS and ML & Co. not less than 15 nor more than
30 calendar days prior to the Early Settlement Date Closing (or at such other
time as shall be acceptable to both MLCS and ML & Co. that will permit ML & Co.
to meet its obligations under Section 402 of the Supplemental Indenture).
3.2. Payment and Delivery. Consummation of the acquisition, sale and
--------------------
delivery of the Redemption Contract Shares and delivery of the Redemption Cash
Component shall take place at the Early Settlement Date Closing. Payment of the
Redemption Cash Component shall be made by Fedwire transfer of immediately
available funds to an account designated by MLCS, or such other form of payment
specified by MLCS. Delivery of the certificates representing the Redemption
Contract Shares (unless the Redemption Contract Shares are represented by one or
more global certificates registered in the name of a depositary or a nominee of
a depositary, in which event MLCS's interest in such Redemption Contract Shares
shall be noted in a manner satisfactory to MLCS and its counsel) shall be made
at the offices of MLCS, or at such other place as shall be agreed upon by MLCS
and CEI. Any certificates for the Redemption Contract Shares delivered shall be
registered in MLCS's name (or endorsed in blank or otherwise registered as
requested by MLCS).
4.
Representations and Warranties of CEI
-------------------------------------
CEI represents and warrants to MLCS as of the date hereof and as of the
date of each Closing as follows:
(a) CEI has been duly organized and is validly existing as a corporation in
good standing under the laws of the State of Delaware.
(b) This Agreement, the Escrow Agreement and the Collateral Agreement have
been duly authorized, executed and delivered by CEI and (assuming the due
authorization, execution and delivery by the other parties thereto) constitute
valid and binding agreements of CEI, enforceable against CEI in accordance with
their respective terms, except as the enforcement hereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of
6
<PAGE>
creditors' rights generally and except as enforcement hereof is subject to
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law).
(c) (i) At the date hereof, Cox Holdings is the sole registered owner of
and has all rights in and to at least 14,000,000 shares of Cox Common Stock,
free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity; and (ii) to the extent CEI elects to deliver the Contract
Shares at Closing, upon delivery of such Contract Shares against payment
therefor pursuant to this Agreement, MLCS will be the sole registered owner of
such Contract Shares and, assuming MLCS purchased for value in good faith and
without notice of any adverse claim, MLCS will have acquired all rights in and
to such Contract Shares, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity.
(d) No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority or
agency is necessary or required for the execution, delivery or performance by
CEI of this Agreement, the Escrow Agreement or the Collateral Agreement or the
consummation by CEI or Cox Holdings of the transactions contemplated herein and
therein, except such as have been already obtained or as may be required under
the 1933 Act or the rules and regulations promulgated thereunder or state
securities laws; and CEI has full right, power and authority to enter into this
Agreement, the Escrow Agreement and the Collateral Agreement and to sell,
assign, transfer and deliver (or cause to be sold, assigned, transferred and
delivered) the Contract Shares pursuant to this Agreement.
(e) The execution, delivery and performance by CEI of this Agreement, the
Escrow Agreement and the Collateral Agreement and the consummation by CEI or Cox
Holdings of the transactions contemplated herein and therein and compliance by
CEI with its obligations hereunder and thereunder do not and will not, whether
with or without the giving of notice or passage of time or both, conflict with
or constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any shares of Cox Common
Stock owned by CEI or Cox Holdings pursuant to, any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or any other
agreement or instrument to which CEI or Cox Holdings is a party or by which CEI
or Cox Holdings is bound, or to which any shares of Cox Common Stock owned by
CEI or Cox Holdings is subject (except for such conflicts, breaches or defaults
or liens, charges or encumbrances that would not, singly or in the aggregate,
materially and adversely affect the ability of CEI to perform its obligations
under this Agreement, the Escrow Agreement and the Collateral Agreement), nor
will such action result in any violation of the provisions of the charter or by-
laws of CEI or Cox Holdings, or any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over CEI or Cox Holdings or any
of their respective assets, properties or operations (except for violations that
would not, singly or in the aggregate, materially and adversely affect the
ability of CEI to perform its obligations under this Agreement, the Escrow
Agreement and the Collateral Agreement).
7
<PAGE>
5.
Representations and Warranties of MLCS
--------------------------------------
MLCS represents and warrants to CEI as of the date hereof and as of the
date of each Closing as follows:
(a) MLCS has been duly organized and is validly existing as a corporation
in good standing under the laws of the State of Delaware.
(b) This Agreement, the Escrow Agreement and the Collateral Agreement have
been duly authorized, executed and delivered by MLCS and (assuming the due
authorization, execution and delivery by the other parties thereto) constitute
valid and binding agreements of MLCS, enforceable against MLCS in accordance
with their respective terms, except as the enforcement hereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement hereof is
subject to general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(c) No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority or
agency is necessary or required for the execution, delivery or performance by
MLCS of this Agreement, the Escrow Agreement and the Collateral Agreement or the
consummation by MLCS of the transactions contemplated herein and therein, except
such as have been already obtained or as may be required under the 1933 Act or
the rules and regulations promulgated thereunder or state securities laws; and
MLCS has full right, power and authority to enter into this Agreement, the
Escrow Agreement and the Collateral Agreement and to purchase the Contract
Shares pursuant to this Agreement.
(d) The execution, delivery and performance by MLCS of this Agreement, the
Escrow Agreement and the Collateral Agreement and the consummation by MLCS of
the transactions contemplated herein and therein and compliance by MLCS with its
obligations hereunder and thereunder do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
MLCS pursuant to, any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or any other agreement or instrument to which MLCS
is a party or by which MLCS is bound, or to which any of the property or assets
of MLCS is subject (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not, singly or in the aggregate, materially
and adversely affect the ability of MLCS to perform its obligations under this
Agreement, the Escrow Agreement and the Collateral Agreement), nor will such
action result in any violation of the provisions of the charter or by-laws of
MLCS, or any applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government
8
<PAGE>
instrumentality or court, domestic or foreign, having jurisdiction over MLCS or
any of its assets, properties or operations (except for violations that would
not, singly or in the aggregate, materially and adversely affect the ability of
MLCS to perform its obligations under this Agreement, the Escrow Agreement and
the Collateral Agreement).
6.
Covenants
---------
6.1. Escrow. (a) CEI shall cause to be held during the term of this
------
Agreement:
(i) collectively by the Escrow Agent in the Maximum Share Escrow
Account under the Escrow Agreement and by the Collateral Agent in the
Maximum Share Collateral Account under the Collateral Agreement an
aggregate number of shares of Cox Common Stock and any Distributed Assets
(or, in the event there shall occur a Reorganization Event, cash,
securities and/or other property in lieu thereof) at least equal to the
maximum number of shares of Cox Common Stock and any Distributed Assets
(or, in the event there shall occur a Reorganization Event, cash,
securities and/or other property in lieu thereof) that would be required by
MLCS to pay and discharge all Subsidiary STRYPES on the Maturity Date (the
"Maximum Contract Shares"); and
(ii) collectively by the Escrow Agent in the Periodic Payment Escrow
Account under the Escrow Agreement and by the Collateral Agent in the
Periodic Payment Collateral Account under the Collateral Agreement an
aggregate number of shares of Cox Common Stock (or such other assets
permitted by the Escrow Agreement and the Collateral Agreement) (the
"Periodic Payment Shares" and, together with the Maximum Contract Shares,
the "Escrow Shares") so that the fraction (expressed as a percentage)
obtained by dividing (x) the sum of all Periodic Payments due and unpaid
and to become due on or prior to the Maturity Date by (y) the total value
of the Periodic Payment Shares then held by the Escrow Agent and the
Collateral Agent, based upon the Closing Price at the end of each calendar
month (the "Specified Percentage") at the date hereof shall be 50% and at
the times hereafter shall be less than or equal to 60%. In the event the
Specified Percentage exceeds 60%, CEI shall promptly effect deliveries
pursuant to the Escrow Agreement and/or the Collateral Agreement such that
immediately following such delivery the Specified Percentage is 50% or less
and CEI is in compliance with its obligations under the Escrow Agreement
and the Collateral Agreement.
(b) CEI shall cause the Escrow Shares to bear the legends required by the
Escrow Agreement and the Collateral Agreement, and to cause the required orders
to be given to the Transfer Agent for the Cox Common Stock in order to restrict
the transfer thereof.
6.2. Collateral. If at any time after the date hereof (i) the credit
----------
rating assigned by Moody's Investors Services, Inc. ("Moody's") to the long-term
senior unsecured debt of CEI ("Senior Debt") shall be lowered by Moody's or (ii)
the credit rating assigned by Standard &
9
<PAGE>
Poor's Ratings Services, a division of McGraw Hill, Inc. ("S&P"), to the Senior
Debt shall be lowered by S&P, then CEI shall deliver, or cause to be delivered
by the Escrow Agent, to the Collateral Agent to be held as collateral pursuant
to the Collateral Agreement, a number of Escrow Shares so that, immediately
after such delivery, the total number of Escrow Shares held as collateral
pursuant to the terms of the Collateral Agreement is equal to the sum of (x) the
Applicable Percentage of the Periodic Payment Shares and (y) the Applicable
Percentage of the Maximum Contract Shares. Each Applicable Percentage shall be
determined based upon the lower of the credit ratings assigned to the Senior
Debt by Moody's and S&P (or, if only one of Moody's or S&P has assigned a rating
to the Senior Debt, such rating) or a substitute rating agency or agencies as
follows:
<TABLE>
<CAPTION>
Applicable
Credit Ratings Percentage
-------------- -----------
Periodic Maximum
Payment Contract
Moody's S&P Shares Shares
------- --- --------- --------
<S> <C> <C> <C>
Baa1 or higher A- or higher 0% 0%
BBB+ 100% 0%
Baa2 BBB 100% 25%
Baa3 BBB- 100% 75%
Below Baa3 Below BBB- 100% 100%
</TABLE>
In the event the Senior Debt is not rated by Moody's or S&P or if a Collateral
Event of Default has occurred and is continuing, the Applicable Percentage of
Periodic Payment Shares and the Applicable Percentage of Maturity Contract
Shares shall each be 100%.
6.3. No Default. CEI agrees that at all times from the date hereof through
----------
the Closing hereunder, it will conduct its affairs so that compliance with its
obligations hereunder and under the Escrow Agreement and the Collateral
Agreement do not and will not result in any violation of its charter or by-laws
or conflict with or constitute a breach or default (or in any situation that,
with the giving of notice or the passage of time, or both, would result in
default) in the performance or observance of any obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage, deed of trust, loan
or credit agreement, note, lease or other agreement or instrument to which CEI
is a party or by which it may be bound or to which any of the property or assets
of CEI is subject.
6.4. Taxes. (a) CEI shall pay any and all documentary, stamp, transfer or
-----
similar taxes and charges that may be payable in respect of the entry into this
Agreement and the transfer and delivery of the Contract Shares pursuant hereto.
(b) MLCS and CEI hereby agree:
10
<PAGE>
(i) to treat, for all United States Federal, state and local tax
purposes, this Agreement as a unit (a "Unit") consisting of (A) a debt
instrument (the "Debt Instrument") with a fixed principal amount
unconditionally payable on the Maturity Date equal to the total Firm
Consideration Amount and the Option Consideration Amount (the "Total
Consideration Amount") payable by MLCS hereunder and bearing interest in an
amount equal to the Periodic Payments and (B) a forward contract (the
"Forward Contract") pursuant to which MLCS is irrevocably committed to use
the principal payment due on the Debt Instrument to purchase on the
Maturity Date or the Early Settlement Date Closing the Contract Shares
which CEI is obligated to deliver at that time (subject to CEI's right to
deliver cash with an equal value in lieu of the Contract Shares), which
treatment will require, among other things, MLCS to include currently in
income as ordinary interest the Periodic Payments that are made under this
Agreement by CEI in accordance with MLCS's regular method of tax
accounting and to include in income as ordinary interest original issue
discount in an amount equal to 1.4% of the Total Consideration Amount under
a constant yield method.
(ii) to allocate $185,932,485 of the Firm Consideration Amount to the
Debt Instrument component and to allocate the remaining $2,640,015 of the
Firm Compensation Amount to the Forward Contract component, and to allocate
98.6% of the Option Consideration Amount to the Debt Instrument component
and to allocate 1.4% of the Option Consideration Amount to the Forward
Contract component;
(iii) to file all United States Federal, state and local income,
franchise and estate tax returns consistent with the treatment of this
Agreement as a Unit consisting of the Debt Instrument and the Forward
Contract and consistent with the allocation described above in (ii) (in the
absence of any change or clarification in applicable law, by regulation or
otherwise, requiring a different characterization or treatment of this
Agreement).
6.5. Amounts Due to Trustee. ML & Co. shall pay any and all amounts due to
----------------------
the Trustee under Section 607 of the Indenture.
6.6. Certain Notices. (a) ML & Co. shall notify MLCS and CEI of any
---------------
notice of default with respect to the STRYPES received by ML & Co. from the
Trustee or any holders of STRYPES pursuant to the Indenture as promptly as
reasonably practicable after receipt thereof.
(b) In case at any time while any of the STRYPES are outstanding CEI
receives notice that:
11
<PAGE>
(i) Cox shall declare a dividend (or any other distribution) on or in
respect of the Cox Common Stock to which Section 303(a)(i) or 303(a)(iii)
of the Supplemental Indenture shall apply (other than any cash dividends
and distributions, if any, paid from time to time by Cox that do not
constitute Extraordinary Cash Dividends);
(ii) Cox shall authorize the issuance to all holders of Cox Common
Stock of rights or warrants to subscribe for or purchase shares of Cox
Common Stock or of any other subscription rights or warrants;
(iii) there shall occur any conversion or reclassification of Cox
Common Stock (other than a subdivision or combination of outstanding shares
of such Cox Common Stock) or any consolidation, merger or reorganization to
which Cox is a party and for which approval of any stockholders of Cox is
required, or the sale or transfer of all or substantially all of the assets
of Cox; or
(iv) there shall occur the voluntary or involuntary dissolution,
liquidation, winding up or bankruptcy of Cox;
then CEI shall promptly notify MLCS and ML & Co. of such fact and of (x) the
date on which a record is to be taken for the purpose of such dividend,
distribution or grant of rights or warrants, or, if a record is not to be taken,
the date as of which the holders of Cox Common Stock of record to be entitled to
such dividend, distribution or grant of rights or warrants are to be determined,
or (y) the date, if known by CEI, on which such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation, winding up or bankruptcy is
expected to become effective.
6.7. No Supplemental Indentures or Amendments Without Consent. ML & Co.
--------------------------------------------------------
shall not, without the consent of MLCS and CEI, enter into any indenture
supplemental to the Indenture that would adversely affect any obligation of CEI
hereunder, including, without limitation, by increasing the consideration that
CEI is obligated to deliver at Closing pursuant to this Agreement. ML & Co. and
CEI shall not, without the consent of CEI, amend the Subsidiary STRYPES in any
respect that would adversely affect any obligation of CEI hereunder, including,
without limitation, by increasing the consideration that CEI is obligated to
deliver at Closing pursuant to this Agreement.
6.8. Limitations on Trading During Certain Days. Each of CEI and ML & Co.
------------------------------------------
hereby agrees that it will not, and it will cause each of its Majority-Owned
Subsidiaries not to, buy or sell shares of Cox Common Stock for their own
account during the 20 Trading Days immediately prior to the second Trading Day
preceding the Maturity Date or any Redemption Date of the STRYPES (or, in the
case of a Tax Event (as defined in the Supplemental Indenture) that occurs less
than 20 Trading Days prior to a Redemption Date, during the period from and
after the occurrence of such Tax Event). For purposes hereof, "Majority-Owned
Subsidiaries" with respect to either party means a subsidiary more than 50% of
whose outstanding securities
12
<PAGE>
representing the right to vote for the election of directors is owned by such
party and/or one or more of such party's other Majority-Owned Subsidiaries.
6.9. Payment and Discharge of STRYPES. MLCS agrees that it shall pay and
--------------------------------
discharge its obligations under the Subsidiary STRYPES by delivering to ML & Co.
on the Maturity Date the form of consideration that it receives from CEI
hereunder. ML & Co. agrees that it shall pay and discharge its obligations
under the STRYPES by delivering to the holders of the STRYPES on the Maturity
Date the form of consideration that it receives from MLCS under the Subsidiary
STRYPES.
6.10. Redemption. In the event that CEI exercises its option granted
----------
pursuant to Section 3.1 hereof, MLCS agrees that it shall effect the redemption
of the Subsidiary STRYPES and ML & Co. agrees that it shall effect the
redemption of the STRYPES.
6.11. Further Assurances. From time to time on and after the date hereof
------------------
through the date of Closing, each of the parties hereto shall use its best
efforts to take, or cause to be taken, all action and to do, or cause to be
done, all things necessary, proper and advisable to consummate and make
effective as promptly as practicable the transactions contemplated by this
Agreement in accordance with the terms and conditions hereof, including (i)
using best efforts to remove any legal impediment to the consummation of such
transactions and (ii) the execution and delivery of all such deeds, agreements,
assignments and further instruments of transfer and conveyance necessary, proper
or advisable to consummate and make effective the transactions contemplated by
this Agreement in accordance with the terms and conditions hereof.
7.
Conditions to Closing
---------------------
7.1. CEI's Conditions to Each Closing. CEI's obligation to consummate the
--------------------------------
transactions contemplated hereunder is conditioned upon (i) the purchase and
sale of the Initial STRYPES pursuant to the Underwriting Agreement having been
consummated as contemplated therein, (ii) CEI having received, at or prior to
the date of such Closing, notice from MLCS specifying the number of shares of
Cox Common Stock and any Distributed Assets, or such cash, securities or other
property as may have been received in a Reorganization Event, that would be
required by MLCS to pay and discharge all of the Subsidiary STRYPES on the
Maturity Date or to redeem all of the Subsidiary STRYPES on the Redemption Date,
as applicable, without taking into account any default with respect to the
Subsidiary STRYPES or any acceleration of the maturity of the Subsidiary STRYPES
resulting therefrom, (iii) the representations and warranties of MLCS contained
in Article 5 hereof being true and correct as of the date of such Closing, and
(iv) the performance by MLCS and ML & Co. of their respective covenants and
other obligations hereunder.
13
<PAGE>
7.2. MLCS's Conditions to each Closing. MLCS's obligation to consummate
---------------------------------
the transactions contemplated hereunder is conditioned upon (i) the purchase and
sale of the Initial STRYPES pursuant to the Underwriting Agreement having been
consummated as contemplated therein, (ii) the representations and warranties of
CEI contained in Article 4 hereof being true and correct as of the date of such
Closing, and (iii) the performance by CEI of its covenants and other obligations
hereunder.
8.
Acceleration of Delivery
------------------------
8.1. Events of Default; Acceleration of Delivery. If one or more of the
-------------------------------------------
following events (each an "Event of Default") shall occur:
(i) CEI shall fail to make any Periodic Payment when due, and such
failure shall continue for a period of three (3) days;
(ii) CEI shall commence a voluntary case or other proceeding seeking a
liquidation, reorganization or other relief with respect to itself or its
debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary
case or other proceeding commenced against it, or shall take any corporate
action to authorize any of the foregoing;
(iii) an involuntary case or other proceeding shall be commenced
against CEI seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or
any substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of 60 days;
or an order for relief shall be entered against CEI, under the federal
bankruptcy laws as now or hereafter in effect; or
(iv) a Collateral Event of Default within the meaning of the
Collateral Agreement;
then, (A) the Periodic Payment Shares and the Maximum Contract Shares (together,
the "Aggregate Acceleration Value") shall become immediately deliverable and
payable by CEI to MLCS in accordance with the Escrow Agreement and the
Collateral Agreement and (B) CEI's rights under Sections 2.5 and 3.1 hereof
shall terminate immediately.
14
<PAGE>
9.
Miscellaneous
-------------
9.1. Adjustments of Payment Rate Formula; Selection of Independent
-------------------------------------------------------------
Investment Banking Firm. MLCS shall provide CEI reasonable opportunity to
- -----------------------
review the calculations pertaining to any adjustment of the Payment Rate Formula
made pursuant to Section 303 of the Supplemental Indenture. If, pursuant to the
terms and conditions of the Supplemental Indenture and the Subsidiary STRYPES,
MLCS shall be required to retain a nationally recognized independent investment
banking firm for any purpose provided in the Supplemental Indenture or the
Subsidiary STRYPES, such nationally recognized independent investment banking
firm shall be selected and retained by MLCS only after consultation with CEI and
shall be reasonably acceptable to CEI.
9.2. Notices. All notices and other communications hereunder shall be in
-------
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to MLCS shall be directed to it
at North Tower, World Financial Center, New York, New York 10281-1322,
attention of _______________, with a copy to the Treasurer of ML & Co. at World
Financial Center, South Tower, New York, New York, 10080-6105; notices to CEI
shall be directed to it at 1400 Lake Hearn Drive, Atlanta, Georgia 30319,
attention of Treasurer.
9.3. Governing Law; Consent to Jurisdiction. This Agreement shall be
--------------------------------------
governed by and construed in accordance with the laws of the State of New York
applicable to agreements made and to be performed wholly within such State. For
the purpose of any suit, action or proceeding arising out of or relating to this
Agreement, the parties hereto hereby expressly and irrevocably consent and
submit to the non-exclusive jurisdiction of any competent court in the place of
its domicile and any United States Federal court sitting in the Borough of
Manhattan, City and State of New York, and expressly and irrevocably waive, to
the extent permitted under applicable law, any immunity from the jurisdiction
thereof and any claim or defense in such suit, action or proceeding based on a
claim of improper venue, forum non conveniens or any similar basis to which it
might otherwise be entitled.
9.4. Entire Agreement. Except as expressly set forth herein, this
----------------
Agreement constitutes the entire agreement among the parties with respect to the
subject matter hereof and supersedes all prior agreements, understandings and
negotiations, both written and oral, among the parties with respect to the
subject matter of this Agreement.
9.5. Amendments; Waivers. Any provision of this Agreement may be amended
-------------------
or waived if, and only if, such amendment or waiver is in writing and signed, in
the case of an amendment, by MLCS, ML & Co. and CEI or, in the case of a waiver,
by the party against whom the waiver is to be effective. No failure or delay by
any party in exercising any right, power or privilege hereunder shall operate as
a waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right,
15
<PAGE>
power or privilege. The rights and remedies herein provided shall be cumulative
and not exclusive of any rights or remedies provided by law.
9.6. Successors, Assigns. The provisions of this Agreement shall be
-------------------
binding upon and accrue to the benefit of the parties hereto and their
respective heirs, successors and permitted assigns. Notwithstanding the
foregoing, neither this Agreement nor any right, remedy, obligation or liability
arising hereunder or by reason hereof shall be assignable by any party hereto
without the prior written consent of the other parties hereto.
9.7. No Third Party Rights. This Agreement is not intended and shall not
---------------------
be construed to create any rights in any person other than CEI, MLCS and ML &
Co. and no person shall assert any rights as third party beneficiary hereunder.
9.8. Counterparts. This Agreement may be signed in any number of
------------
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
16
<PAGE>
IN WITNESS WHEREOF, the parties have signed this Agreement as of the date
and year first above written.
MERRILL LYNCH CAPITAL SERVICES, INC. COX ENTERPRISES, INC.
By___________________________________ By______________________________
Name: Name:
Title: Title:
MERRILL LYNCH & CO., INC.
By___________________________________
Name:
Title:
17
<PAGE>
EXHIBIT 7.02
______________________________________________________________________________
______________________________________________________________________________
COX COMMUNICATIONS, INC.
(a Delaware corporation)
REGISTRATION AGREEMENT
----------------------
Dated: May 22, 1996
______________________________________________________________________________
______________________________________________________________________________
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
SECTION 1. Representations and Warranties.................................................... 3
------------------------------
Representations and Warranties by the Company............................................ 3
Compliance with Registration Requirements......................................... 3
Incorporated Documents............................................................ 4
Independent Accountants........................................................... 4
Financial Statements.............................................................. 4
No Material Adverse Change in Business............................................ 5
Good Standing of the Company...................................................... 5
Good Standing of Subsidiaries..................................................... 5
Capitalization.................................................................... 6
Description of Common Stock....................................................... 6
Authorization of Agreement........................................................ 6
Absence of Defaults and Conflicts................................................. 6
Absence of Labor Dispute.......................................................... 6
Absence of Proceedings............................................................ 7
Accuracy of Exhibits.............................................................. 7
Possession of Intellectual Property............................................... 7
Absence of Further Requirements................................................... 7
Possession of Licenses and Permits................................................ 7
Title to Property................................................................. 8
Compliance with Cuba Act.......................................................... 8
Investment Company Act............................................................ 8
Environmental Laws................................................................ 8
Officer's Certificates................................................................... 9
SECTION 2. Covenants of the Company.......................................................... 9
------------------------
Compliance with Securities Regulations and Commission Requests........................... 9
Filing of Amendments..................................................................... 9
Delivery of Cox Registration Statements.................................................. 10
Delivery of Cox Prospectuses............................................................. 10
Continued Compliance with Securities Laws................................................ 10
Blue Sky Qualifications.................................................................. 10
Rule 158................................................................................. 11
Restriction on Sale of Securities........................................................ 11
Reporting Requirements................................................................... 11
SECTION 3. Payment of Expenses............................................................... 11
-------------------
Expenses................................................................................. 11
SECTION 4. Indemnification................................................................... 12
---------------
Indemnification of Underwriter and ML&Co................................................. 12
Indemnification of Company, Directors, Officers.......................................... 13
Actions against Parties; Notification.................................................... 13
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Settlement without Consent if Failure to Reimburse..................................... 14
SECTION 5. Contribution.................................................................. 14
------------
SECTION 6. Representations, Warranties and Agreements to Survive Delivery................ 15
--------------------------------------------------------------
SECTION 7. Termination................................................................... 15
-----------
SECTION 8. Notices....................................................................... 15
-------
SECTION 9. Parties....................................................................... 16
-------
SECTION 10. GOVERNING LAW................................................................. 16
-------------
SECTION 11. Effect of Headings............................................................ 16
------------------
</TABLE>
-ii-
<PAGE>
COX COMMUNICATIONS, INC.
(a Delaware corporation)
REGISTRATION AGREEMENT
----------------------
May 22, 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
MERRILL LYNCH & CO., INC.
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Cox Communications, Inc., a Delaware corporation (the "Company"), and Cox
Enterprises, Inc., a Delaware corporation ("CEI"), confirm their respective
agreements with Merrill Lynch & Co., Inc., a Delaware corporation ("ML&Co."),
and with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
(the "Underwriter"), in connection with the proposed issue and sale by ML&Co. to
the Underwriter, pursuant to an underwriting agreement, dated the date hereof
(the "Underwriting Agreement"), among ML&Co., CEI and the Underwriter, of an
aggregate of 8,500,000 of ML&Co.'s Structured Yield Product Exchangeable for
Stock/SM/, 6% STRYPES/SM/ due June 1, 1999 (each, a "STRYPES"), payable at
maturity or upon redemption by delivery of shares of Class A Common Stock, par
value $1.00 per share (the "Cox Common Stock"), of the Company, and, at the
option of the Underwriter, all or any part of 1,275,000 additional STRYPES to
cover over-allotments, if any. The aforesaid 8,500,000 STRYPES (the "Initial
Securities") to be purchased by the Underwriter and all or any part of the
1,275,000 STRYPES subject to the option described in Section 2(b) of the
Underwriting Agreement (the "Option Securities") are hereinafter called,
collectively, the "Securities." Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to them in the Underwriting Agreement.
1
<PAGE>
The Company understands that the Underwriter proposes to make a public
offering of the Securities as soon as the Underwriter deems advisable after this
Agreement and the Underwriting Agreement have been executed and delivered. The
Company acknowledges that the execution and delivery of this Agreement is a
condition to the execution and delivery of the Underwriting Agreement by the
Underwriter and ML&Co. and that, in consideration of the execution and delivery
of the Underwriting Agreement by the Underwriter and ML&Co., the Company is
willing to make the representations, warranties and covenants herein contained.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-03351) covering the
registration of (i) the shares of Cox Common Stock deliverable at maturity or
upon redemption of the Securities and (ii) 4,225,000 shares of Cox Common Stock
(the "Pledged Shares") that may be pledged to and sold by or on behalf of the
ML&Co. Subsidiary (as defined below) under the Securities Act of 1933, as
amended (the "1933 Act"), including the related preliminary prospectus or
prospectuses. Each prospectus used before such registration statement became
effective is herein called a "Cox preliminary prospectus." Such registration
statement, including the exhibits thereto, the schedules thereto, if any, and
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, at the time it became effective, is herein called the "Cox
Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the rules and regulations of the Commission under the 1933 Act (the
"1933 Act Regulations") is herein referred to as the "Cox Rule 462(b)
Registration Statement," and after such filing the term "Cox Registration
Statement" shall include the Cox Rule 462(b) Registration Statement. The final
prospectus, including the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the 1933 Act, in the form first furnished to the
Underwriter for use in connection with the offering of the Securities is herein
called the "Cox Securities Prospectus." The prospectus, including the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act, in the form furnished from time to time to the ML&Co. Subsidiary for use in
connection with the sale of the Pledged Shares is herein called the "Pledged
Share Prospectus" and, together with the Cox Securities Prospectus, the "Cox
Prospectus." For purposes of this Agreement, all references to the Cox
Registration Statement, any Cox preliminary prospectus, the Cox Prospectus or
any amendment or supplement to any of the foregoing shall be deemed to include
the copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the Cox
Registration Statement, any Cox preliminary prospectus or the Cox Prospectus (or
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Cox Registration Statement, any Cox preliminary prospectus
or the Cox Prospectus, as the case may be; and all references in this Agreement
to amendments or supplements to the Cox Registration Statement, any Cox
preliminary prospectus or the Cox Prospectus shall be deemed to mean and include
the filing of any document under the Securities Exchange Act of 1934, as amended
(the "1934 Act"), which is incorporated by reference in the Cox Registration
Statement, such Cox preliminary prospectus or the Cox Prospectus, as the case
may be.
2
<PAGE>
Prior to the closing under the Underwriting Agreement, ML&Co., Merrill
Lynch Capital Services, Inc., a wholly-owned subsidiary of ML&Co. (the "ML&Co.
Subsidiary"), and CEI will enter into a contract (the "STRYPES Agreement"),
pursuant to which CEI will be obligated to deliver to the ML&Co. Subsidiary,
immediately prior to the maturity date or date of redemption of the Securities,
a number of shares of Cox Common Stock equal to the number required by ML&Co. to
pay and discharge or redeem all of the Securities, subject to CEI's option,
exercisable in its sole discretion, to satisfy its obligation under the STRYPES
Agreement by delivering immediately prior to the maturity date a specified
amount of cash in lieu of such shares.
SECTION 1. Representations and Warranties.
------------------------------
(a) Representations and Warranties by the Company. The Company represents
and warrants to each of the Underwriter and to ML&Co. as of the date hereof, as
of the Closing Time referred to in Section 2(c) of the Underwriting Agreement,
and as of each Date of Delivery (if any) referred to in Section 2(b) of the
Underwriting Agreement, and agrees with each of the Underwriter and ML&Co. as
follows:
(i) Compliance with Registration Requirements. The Company meets
-----------------------------------------
the requirements for the use of Form S-3 under the 1933 Act. Each of the
Cox Registration Statement and any Cox Rule 462(b) Registration Statement
has become effective under the 1933 Act and no stop order suspending the
effectiveness of the Cox Registration Statement or any Cox Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to the
knowledge of the Company, are contemplated by the Commission, and any
request on the part of the Commission for additional information has been
complied with.
At the respective times the Cox Registration Statement, any Cox Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and at the Date of Delivery if
any Option Securities are purchased and at the date of delivery of the
Pledged Share Prospectus to the ML&Co. Subsidiary if any Pledged Shares are
sold), the Cox Registration Statement, the Cox Rule 462(b) Registration
Statement and any amendments and supplements thereto complied and will
comply in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations and did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading. Neither the Cox Prospectus nor any amendments or supplements
thereto, at the time the Cox Prospectus or any such amendment or supplement
was issued and at the Closing Time (and at the Date of Delivery if any
Option Securities are purchased and at the date of delivery of the Pledged
Share Prospectus to the ML&Co. Subsidiary if any Pledged Shares are sold),
included or will include an untrue statement of a material fact or omitted
or will omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The representations and warranties in this
subsection shall not apply to statements in or omissions from the Cox
Registration Statement or Cox Prospectus made in reliance upon and in
conformity with (x) information furnished to the Company in writing by the
Underwriter expressly for use in the Cox Registration
3
<PAGE>
Statement or Cox Prospectus and (y) information furnished to the Company in
writing by ML&Co. expressly for use in the Cox Registration Statement or
Cox Prospectus.
Each Cox preliminary prospectus and the Cox Prospectus filed as part
of the Cox Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and, if applicable, each Cox preliminary prospectus and the Cox
Prospectus delivered to the Underwriter for use in connection with the
offering of the Securities was identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or deemed
----------------------
to be incorporated by reference in the Cox Registration Statement and the
Cox Prospectus, when they became effective or at the time they were or
hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations or the 1934 Act and the rules and regulations of the Commission
thereunder (the "1934 Act Regulations"), as applicable, and, when read
together with the other information in the Cox Prospectus, at the time the
Cox Registration Statement became effective, at the time the Cox Prospectus
was issued and at the Closing Time (and at the Date of Delivery if any
Option Securities are purchased and at the date of delivery of the Pledged
Share Prospectus to the ML&Co. Subsidiary if any Pledged Shares are sold),
did not and will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading.
(iii) Independent Accountants. The accountants who certified the
-----------------------
financial statements and supporting schedules of the Company and its
subsidiaries, and of Times Mirror Cable Television, Inc. and its
subsidiaries ("Times Mirror"), included in the Cox Registration Statement
are independent public accountants as required by the 1933 Act and the 1933
Act Regulations.
(iv) Financial Statements. The financial statements of the Company
--------------------
included in the Cox Registration Statement and the Cox Prospectus, together
with the related schedules and notes, present fairly the financial position
of the Company and its consolidated subsidiaries at the dates indicated and
the statement of operations, stockholders' equity and cash flows of the
Company and its consolidated subsidiaries for the periods specified; said
financial statements have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved. The financial statements of Times Mirror
included in the Cox Registration Statement and the Cox Prospectus, together
with the related notes, present fairly the financial position of Times
Mirror and its consolidated subsidiaries at the dates indicated and the
statement of operations, stockholders' equity and cash flows of Times
Mirror and its consolidated subsidiaries for the periods specified; said
financial statements have been prepared in conformity with GAAP applied on
a consistent basis throughout the periods involved. The supporting
schedules, if any, included in the Cox
4
<PAGE>
Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected financial data and
the summary financial information included in the Cox Prospectus present
fairly the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements of the Company and
its subsidiaries included in the Cox Registration Statement. The selected
pro forma financial data included in the Cox Prospectus present fairly the
information shown therein and have been compiled from pro forma financial
statements prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements.
(v) No Material Adverse Change in Business. Since the respective
--------------------------------------
dates as of which information is given in the Cox Registration Statement
and the Cox Prospectus, except as otherwise stated therein, (A) there has
been no material adverse change in the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise, whether or not arising
in the ordinary course of business (a "Material Adverse Effect"), (B) there
have been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its subsidiaries considered as
one enterprise, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(vi) Good Standing of the Company. The Company has been duly
----------------------------
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has the corporate power and authority
to own, lease and operate its properties and to conduct its business as
described in the Cox Prospectus and to enter into and perform its
obligations under this Agreement; and the Company is duly qualified as a
foreign corporation to transact business and is in good standing in each
other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each "significant subsidiary"
-----------------------------
of the Company (as such term is defined in Rule 1-02 of Regulation S-X)
(each a "Subsidiary" and, collectively, the "Subsidiaries") has been duly
organized and is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Cox Prospectus and is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not result
in a Material Adverse Effect; except as otherwise disclosed in the Cox
Registration Statement, all of the capital stock of each such Subsidiary
owned by the Company, directly or through subsidiaries, has been duly
authorized and validly issued, is fully paid and non-assessable and is
owned free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity. The only subsidiaries of the
5
<PAGE>
Company are (A) the subsidiaries listed on Exhibit 21 to the Annual Report
on Form 10-K of the Company filed with the Commission under Section 13 of
the 1934 Act and (B) certain other subsidiaries which, considered in the
aggregate as a single Subsidiary, do not constitute a "significant
subsidiary" as defined in Rule 1-02 of Regulation S-X.
(viii) Capitalization. The shares of outstanding capital stock of
--------------
the Company have been duly authorized and validly issued and are fully paid
and non-assessable; none of the outstanding shares of capital stock of the
Company was issued in violation of the preemptive or other similar rights
of any securityholder of the Company.
(ix) Description of Common Stock. The Cox Common Stock conforms to
---------------------------
all statements relating thereto contained in the Cox Prospectus and such
description conforms to the rights set forth in the instruments defining
the same.
(x) Authorization of Agreement. This Agreement has been duly
--------------------------
authorized, executed and delivered by the Company.
(xi) Absence of Defaults and Conflicts. Neither the Company nor
---------------------------------
any of its subsidiaries is in violation of its charter or bylaws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound, or to which any of the property or
assets of the Company or any subsidiary is subject (collectively,
"Agreements and Instruments") except for such defaults that would not
result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated herein and compliance by the Company with its obligations
hereunder do not and will not, whether with or without the giving of notice
or passage of time or both, conflict with or constitute a breach of, or
default or Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any subsidiary pursuant to, the Agreements and
Instruments (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not result in a Material Adverse
Effect), nor will such action result in any violation of the provisions of
the charter or bylaws of the Company or any subsidiary or any applicable
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any subsidiary or any of their
assets, properties or operations. As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note, debenture
or other evidence of indebtedness of the Company or any subsidiary (or any
person acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the
Company or any subsidiary.
(xii) Absence of Labor Dispute. No labor dispute with the
------------------------
employees of the Company or any subsidiary exists or, to the knowledge of
the Company, is imminent,
6
<PAGE>
that, individually or in the aggregate, may reasonably be expected to
result in a Material Adverse Effect.
(xiii) Absence of Proceedings. There is no action, suit,
----------------------
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Company, threatened, against or affecting the Company or
any subsidiary, which is required to be disclosed in the Cox Registration
Statement (other than as disclosed therein), or which, individually or in
the aggregate, might reasonably be expected to result in a Material Adverse
Effect, or which, individually or in the aggregate, might reasonably be
expected to materially and adversely affect the properties or assets
thereof or the performance by the Company of its obligations hereunder; the
aggregate of all pending legal or governmental proceedings to which the
Company or any subsidiary is a party or of which any of their respective
property or assets is the subject which are not described in the Cox
Registration Statement, including ordinary routine litigation incidental to
the business, could not reasonably be expected to result in a Material
Adverse Effect.
(xiv) Accuracy of Exhibits. There are no contracts or documents
--------------------
which are required to be described in the Cox Registration Statement, the
Cox Prospectus or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described or filed as
required.
(xv) Possession of Intellectual Property. Except as disclosed in
-----------------------------------
the Cox Prospectus, the Company and its subsidiaries own or possess, or can
acquire on reasonable terms, adequate patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary to
carry on the business now operated by them, other than those the absence of
which would not have a Material Adverse Effect and neither the Company nor
any of its subsidiaries has received any notice or is otherwise aware of
any infringement of or conflict with asserted rights of others with respect
to any Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect the
interest of the Company or any of its subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the aggregate,
would result in a Material Adverse Effect.
(xvi) Absence of Further Requirements. No filing with, or
-------------------------------
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, except such as has been already obtained or as may
be required under the 1933 Act or the 1933 Act Regulations or state
securities laws.
(xvii) Possession of Licenses and Permits. The Company and its
----------------------------------
subsidiaries own or possess such permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or
7
<PAGE>
foreign regulatory agencies or bodies necessary to conduct the business now
operated by them other than those the absence of which would not have a
Material Adverse Effect; the Company and its subsidiaries are in compliance
with the terms and conditions of all such Governmental Licenses, except
where the failure so to comply would not, singly or in the aggregate, have
a Material Adverse Effect; all of the Governmental Licenses are valid and
in full force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full force
and effect would not have a Material Adverse Effect; and neither the
Company nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such Governmental
Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material Adverse
Effect.
(xviii) Title to Property. The Company and its subsidiaries have
-----------------
good and marketable title to all material real properties owned by the
Company and its subsidiaries and good title to all other properties owned
by them, in each case, free and clear of all mortgages, pledges, liens,
security interests, claims, restrictions or encumbrances of any kind except
such as (a) are described in the Cox Prospectus or (b) do not, singly or in
the aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company or any of its subsidiaries; and all of the leases and subleases
material to the business of the Company and its subsidiaries, considered as
one enterprise, and under which the Company or any of its subsidiaries
holds properties described in the Cox Prospectus, are in full force and
effect, and neither the Company nor any subsidiary has any notice of any
material claim of any sort that has been asserted by anyone adverse to the
rights of the Company or any subsidiary under any of the leases or
subleases mentioned above, or affecting or questioning the rights of the
Company or such subsidiary to the continued possession of the leased or
subleased premises under any such lease or sublease.
(xix) Compliance with Cuba Act. The Company has complied with, and
------------------------
is and will be in compliance with, the provisions of that certain Florida
act relating to disclosure of doing business with Cuba, codified as Section
517.075 of the Florida statutes, and the rules and regulations thereunder
(collectively, the "Cuba Act") or is exempt therefrom.
(xx) Investment Company Act. The Company is not an "investment
----------------------
company" or an entity "controlled" by an "investment company" as such terms
are defined in the Investment Company Act of 1940, as amended.
(xxi) Environmental Laws. Except as described in the Cox
------------------
Registration Statement and except as would not, singly or in the aggregate,
result in a Material Adverse Effect, (A) neither the Company nor any of its
subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common
law or any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land surface
or subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of
8
<PAGE>
chemicals, pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum or petroleum products (collectively, "Hazardous
Materials") or to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials
(collectively, "Environmental Laws"), (B) the Company and its subsidiaries
have all permits, authorizations and approvals required under any
applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or threatened administrative,
regulatory or judicial actions, suits, demands, demand letters, claims,
liens, notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of its
subsidiaries and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of its
subsidiaries relating to Hazardous Materials or any Environmental Laws.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company and delivered to the Underwriter or counsel for the Underwriter or to
ML&Co. or counsel for ML&Co. in connection with the offering of the Securities
shall be deemed a representation and warranty by the Company to the Underwriter
and to ML&Co., as the case may be, as to the matters covered thereby.
SECTION 2. Covenants of the Company. The Company covenants with the
------------------------
Underwriter and with ML&Co. as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 2(b), will notify the Underwriter and ML&Co.
immediately, and confirm the notice in writing, (i) when any post-effective
amendment to the Cox Registration Statement shall become effective, or any
supplement to the Cox Prospectus or any amended Cox Prospectus shall have been
filed, (ii) of the receipt of any comments from the Commission, (iii) of any
request by the Commission for any amendment to the Cox Registration Statement or
any amendment or supplement to the Cox Prospectus or for additional information,
and (iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Cox Registration Statement or of any order preventing or
suspending the use of any Cox preliminary prospectus, or of the suspension of
the qualification of the shares of Cox Common Stock deliverable at maturity or
upon redemption of the Securities for offering or sale in any jurisdiction, or
of the initiation or threatening of any proceedings for any of such purposes.
The Company will promptly effect the filings necessary pursuant to Rule 424(b)
and will take such steps as it deems necessary to ascertain promptly whether the
form of prospectus transmitted for filing under Rule 424(b) was received for
filing by the Commission and, in the event that it was not, it will promptly
file such prospectus. The Company will use its best efforts to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Underwriter and ML&Co.
notice of its intention to file or prepare any amendment to the Cox Registration
Statement (including any filing under Rule 462(b)) or any amendment, supplement
or revision to either the
9
<PAGE>
prospectus included in the Cox Registration Statement at the time it became
effective or to the Cox Prospectus, whether pursuant to the 1933 Act, the 1934
Act or otherwise, will furnish the Underwriter and ML&Co. with copies of any
such documents a reasonable amount of time prior to such proposed filing or use,
as the case may be, and will not file or use any such document to which the
Underwriter or counsel for the Underwriter or ML&Co. or counsel for ML&Co. shall
reasonably object.
(c) Delivery of Cox Registration Statements. The Company has furnished or
will deliver to the Underwriter, counsel for the Underwriter, ML&Co. and counsel
for ML&Co., without charge, signed copies of the Cox Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents incorporated or
deemed to be incorporated by reference therein) and signed copies of all
consents and certificates of experts. If applicable, the copies of the Cox
Registration Statement and each amendment thereto furnished to the Underwriter
and ML&Co. will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(d) Delivery of Cox Prospectuses. The Company has delivered to the
Underwriter, without charge, as many copies of each Cox preliminary prospectus
as the Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to the Underwriter, without charge, during the period when the Cox
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Cox Prospectus (as amended or supplemented) as the
Underwriter may reasonably request. If applicable, the Cox Prospectus and any
amendments or supplements thereto furnished to the Underwriter and ML&Co. will
be identical to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations so as to permit the completion of
the distribution of the Securities as contemplated in the Underwriting Agreement
and to permit the sale of the Pledged Shares. If at any time when a prospectus
is required by the 1933 Act to be delivered in connection with sales of the
Securities or the Pledged Shares, any event shall occur or condition shall exist
as a result of which it is necessary, in the reasonable opinion of counsel for
the Underwriter, counsel for ML&Co. or counsel for the Company, to amend the Cox
Registration Statement or amend or supplement the Cox Prospectus in order that
the Cox Prospectus will not include any untrue statements of a material fact or
omit to state a material fact necessary in order to make the statements therein
not misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the reasonable opinion
of any such counsel, at any such time to amend the Cox Registration Statement or
amend or supplement the Cox Prospectus in order to comply with the requirements
of the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare
and file with the Commission, subject to Section 2(b), such amendment or
supplement as may be necessary to correct such statement or omission or to make
the Cox Registration Statement or the Cox Prospectus comply with such
requirements, and the Company will furnish to the Underwriter and ML&Co. such
number of copies of such amendment or supplement as the Underwriter and ML&Co.
may reasonably request.
10
<PAGE>
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriter, to qualify the shares of Cox Common Stock
deliverable at maturity or upon redemption of the Securities and the Pledged
Shares for offering and sale under the applicable securities laws of such states
and other jurisdictions of the United States as the Underwriter may designate
and to maintain such qualifications in effect through the maturity date of the
Securities; provided, however, that the Company shall not be obligated to file
any general consent to service of process or to qualify as a foreign corporation
or as a dealer in securities in any jurisdiction in which it is not so qualified
or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. In each jurisdiction in
which the shares of Cox Common Stock deliverable at maturity or upon redemption
of the Securities have been so qualified, the Company will file such statements
and reports as may be required by the laws of such jurisdiction to continue such
qualification in effect through the maturity date of the Securities.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Restriction on Sale of Securities. During a period of 120 days from
the date of this Agreement, the Company will not, without the prior written
consent of the Underwriter, (x) offer, sell, contract to sell or otherwise
dispose of, directly or indirectly, any shares of Cox Common Stock, securities
convertible into, exchangeable for or repayable with shares of Cox Common Stock,
or rights or warrants to acquire shares of Cox Common Stock or (y) file any
registration statement under the 1933 Act with respect to any shares of Cox
Common Stock, securities convertible into, exchangeable for or repayable with
shares of Cox Common Stock, or rights or warrants to acquire shares of Cox
Common Stock. The foregoing sentence shall not apply to (A) restricted shares
or options to purchase shares of Cox Common Stock granted pursuant to employee
benefit or director plans of the Company existing at the date of this Agreement;
or (B) shares of Cox Common Stock issued upon exercise of options outstanding at
the date of this Agreement; or (C) any transfer of shares of Cox Common Stock to
an affiliate (as such term is defined in Rule 405 promulgated under the 1933
Act) or affiliates of the Company, provided, however, that in any such case it
shall be a condition to the transfer that the transferee execute an agreement
stating that the transferee is receiving and holding such shares of Cox Common
Stock subject to the foregoing restrictions and that there shall be no further
transfer of such securities except in accordance therewith.
(i) Reporting Requirements. The Company, during the period when the Cox
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the rules and
regulations of the Commission thereunder.
SECTION 3. Payment of Expenses. (a) Expenses. CEI will pay all expenses
-------------------
incident to the performance of the Company's obligations under this Agreement,
including (i) the preparation, printing and filing of the Cox Registration
Statement (including financial statements and exhibits) as originally filed and
of each amendment thereto, (ii) the preparation, printing and
11
<PAGE>
delivery to the Underwriter and ML&Co. of this Agreement, (iii) the fees and
disbursements of the Company's counsel, accountants and other advisors, (iv) the
qualification of the shares of Cox Common Stock deliverable at maturity or upon
redemption of the Securities under securities laws in accordance with the
provisions of Section 2(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for ML&Co. in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (v) the printing and delivery to the Underwriter of copies of each Cox
Preliminary Prospectus and of the Cox Prospectus and any amendments or
supplements thereto, (vi) the preparation, printing and delivery to the
Underwriter of copies of the Blue Sky Survey and any supplement thereto and
(vii) the filing fees incident to, and the reasonable fees and disbursements of
counsel to the Underwriter in connection with, the review by the National
Association of Securities Dealers, Inc. of the terms of the offering and sale of
the shares of Cox Common Stock deliverable at maturity or upon redemption of the
Securities. The Company shall have no obligation whatsoever to pay the expenses
described in this Section 3(a).
SECTION 4. Indemnification.
---------------
(a) Indemnification of Underwriter and ML&Co. The Company agrees to
indemnify and hold harmless (1) the Underwriter and each person, if any, who
controls the Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act and (2) ML&Co. and each person, if any, who controls
ML&Co. within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act, as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Cox Registration
Statement (or any amendment thereto) or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
Cox preliminary prospectus or the Cox Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, referred to under (i) above; provided
that (subject to Section 4(d) below) any such settlement is effected with
the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the Underwriter
or ML&Co., as the case may be), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
12
<PAGE>
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, referred to
under (i) above, to the extent that any such expense is not paid under (i)
or (ii) above;
provided, however, that this indemnity agreement shall not apply to (A) any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by the Underwriter expressly for use in the Cox Registration Statement
(or any amendment thereto), or any Cox preliminary prospectus or the Cox
Prospectus (or any amendment or supplement thereto) or (B) any loss, liability,
claim, damage or expense to the extent arising out of any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by ML&Co.
expressly for use in the Cox Registration Statement (or any amendment thereto),
or any Cox preliminary prospectus or the Cox Prospectus (or any amendment or
supplement thereto).
(b) Indemnification of Company, Directors, Officers. The Underwriter
agrees to indemnify and hold harmless the Company, its directors, each of its
officers who signed the Cox Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of this Section,
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Cox Registration Statement (or any
amendment thereto), or any Cox preliminary prospectus or the Cox Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by the Underwriter expressly for
use in the Cox Registration Statement (or any amendment thereto) or such Cox
preliminary prospectus or the Cox Prospectus (or any amendment or supplement
thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. An indemnifying party may participate at its own expense in the
defense of any such action. If it so elects within a reasonable time after
receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume the defense of such
action with counsel chosen by it and approved by the indemnified parties
defendant in such action, unless such indemnified parties reasonably object to
such assumption on the ground that there may be legal defenses available to them
which are different from or in addition to those available to such indemnifying
party. If an indemnifying party assumes the defense of such action, the
indemnifying parties shall not be liable for any fees and expenses of counsel
for the indemnified parties incurred thereafter in connection with such action.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general
13
<PAGE>
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 4 or Section 5 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 4(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 60 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 5. Contribution. If the indemnification provided for in Section 4
------------
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then the Company on the one hand and the
Underwriter and ML&Co. on the other hand shall contribute to the aggregate
amount of such losses, liabilities, claims, damages and expenses incurred by
such indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriter and ML&Co. on the other hand from the offering of the Securities
pursuant to the Underwriting Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
Underwriter and ML&Co. on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the offering of the Securities pursuant
to the Underwriting Agreement shall be deemed to be such that the Underwriter
and ML&Co. shall be responsible for that portion of the aggregate amount of such
losses, liabilities, claims, damages and expenses represented by the percentage
that the total underwriting discount received by the Underwriter, as set forth
on the cover of the ML&Co. Prospectus, or, if Rule 434 is used, the
corresponding location on the ML&Co. Term Sheet, bears to the aggregate initial
public offering price of the Securities as set forth on such cover and the
Company shall be responsible for the balance.
The relative fault of the Company on the one hand and the Underwriter and
ML&Co. on the other hand shall be determined by reference to, among other
things, whether any such untrue
14
<PAGE>
or alleged untrue statement of a material fact or omission or alleged omission
to state a material fact relates to information supplied by the Company or CEI
on the one hand or by the Underwriter or ML&Co. on the other hand and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
Notwithstanding the provisions of this Section 5, the Underwriter and
ML&Co. shall not be required to contribute any amount in excess of the amount by
which the total price at which the Securities underwritten by the Underwriter
and distributed to the public were offered to the public exceeds the amount of
any damages which the Underwriter and ML&Co. have otherwise been required to pay
by reason of any such untrue or alleged untrue statement or omission or alleged
omission.
The Company, the Underwriter and ML&Co. agree that it would not be just and
equitable if contribution pursuant to this Section 5 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 5. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 5 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 5, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as the Underwriter; each
person, if any, who controls ML&Co. within the meaning of Section 15 of the 1933
Act shall have the same rights to contribution as ML&Co.; and each director of
the Company, each officer of the Company who signed the Cox Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company.
SECTION 6. Representations, Warranties and Agreements to Survive Delivery.
--------------------------------------------------------------
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company submitted pursuant to the Underwriting
Agreement, shall remain operative and in full force and effect, regardless of
any investigation made by or on behalf of the Underwriter or controlling person
thereof, or by or on behalf of ML&Co. or controlling person thereof or by or on
behalf of the Company, and shall survive delivery of the Securities to the
Underwriter pursuant to the Underwriting Agreement and any sale of the Pledged
Shares.
SECTION 7. Termination. In the event that the Underwriter terminates the
-----------
Underwriting Agreement as provided in Section 9 thereof, this Agreement shall
simultaneously terminate, except that the provisions of Section 3, the indemnity
agreements set forth in Section
15
<PAGE>
4, the contribution provisions set forth in Section 5, and the provisions of
Section 6 shall remain in effect.
SECTION 8. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriter shall be directed to it at North Tower, World Financial Center, New
York, New York 10281-1328, attention of Douglas W. Squires, Managing Director;
notices to ML&Co. shall be directed to it at 100 Church St., 12th Floor, New
York, New York 10007, attention of the Secretary, with a copy to the Treasurer
at World Financial Center, South Tower, New York, New York 10080-6105; notices
to the Company or CEI shall be directed to it at 1400 Lake Hearn Drive, Atlanta,
Georgia 30319, attention of Andrew A. Merdek.
SECTION 9. Parties. This Agreement shall inure to the benefit of and be
-------
binding upon each of the Underwriter, ML&Co., the Company and CEI and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriter, ML&Co., the Company and CEI and their respective
successors and the controlling persons and officers and directors referred to in
Sections 4 and 5 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the Underwriter,
ML&Co., the Company and CEI and their respective successors, and said
controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation.
No purchaser of Securities from the Underwriter shall be deemed to be a
successor by reason merely of such purchase.
SECTION 10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 11. Effect of Headings. The Article and Section headings herein
------------------
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
16
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the Underwriter, ML&Co., CEI and the Company in accordance with its terms.
Very truly yours,
COX COMMUNICATIONS, INC.
By__________________________________________
Name:
Title:
COX ENTERPRISES, INC.
By__________________________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By _____________________________________
Authorized Signatory
MERRILL LYNCH & CO., INC.
By _____________________________________
Name:
Title:
17
<PAGE>
EXHIBIT 7.03
______________________________________________________________________________
______________________________________________________________________________
MERRILL LYNCH & CO., INC.
(a Delaware corporation)
UNDERWRITING AGREEMENT
----------------------
Dated: May 22, 1996
______________________________________________________________________________
______________________________________________________________________________
<PAGE>
TABLE OF CONTENTS
SECTION 1. Representations and Warranties.................................. 4
-----------------------------
Representations and Warranties by the Company............................ 4
Compliance with Registration Requirements...................... 4
Incorporated Documents......................................... 5
Independent Accountants........................................ 6
Financial Statements........................................... 6
No Material Adverse Change in Business......................... 6
Good Standing of the Company................................... 6
Good Standing of Subsidiaries.................................. 6
Authorization of Agreement..................................... 7
Authorization of the Indenture................................. 7
Authorization of the Securities................................ 7
Authorization of the STRYPES Agreement......................... 8
Description of Securities, Indenture and STRYPES Agreement..... 8
Absence of Defaults and Conflicts.............................. 8
Absence of Labor Dispute....................................... 9
Absence of Proceedings......................................... 9
Exhibits....................................................... 9
Possession of Intellectual Property............................ 9
Absence of Further Requirements................................ 10
Possession of Licenses and Permits............................. 10
Title to Property.............................................. 10
Compliance with Cuba Act....................................... 11
Representations and Warranties by CEI................................. 11
Good Standing of CEI........................................... 11
Delivery of Cox Common Stock................................... 11
Authorization of Agreement..................................... 11
Authorization of the STRYPES Agreement......................... 11
Absence of Defaults and Conflicts.............................. 12
Absence of Further Requirements................................ 12
Cox Registration Statement and Prospectus...................... 12
Officer's Certificates................................................ 13
SECTION 2. Sale and Delivery to Underwriter; Closing...................... 13
-----------------------------------------
Initial Securities.................................................... 13
Option Securities..................................................... 13
Payment............................................................... 13
Denominations; Registration........................................... 14
SECTION 3 Covenants...................................................... 14
---------
Covenants of the Company.............................................. 14
Compliance with Securities Regulations and Commission Requests. 14
i
<PAGE>
Filing of Amendments............................................... 14
Delivery of ML&Co. Registration Statements......................... 15
Delivery of ML&Co. Prospectuses.................................... 15
Continued Compliance with Securities Laws.......................... 15
Blue Sky Qualifications............................................ 16
Rule 158........................................................... 16
Use of Proceeds.................................................... 16
Listing............................................................ 16
Reporting Requirements............................................. 16
Covenants of CEI........................................................ 16
Restriction on Sale of Securities.................................. 16
Purpose Statement.................................................. 17
SECTION 4. Payment of Expenses............................................. 17
-------------------
Expenses Payable by the Company......................................... 17
Expenses Payable by CEI................................................. 17
Termination of Agreement................................................ 17
SECTION 5. Conditions...................................................... 18
----------
Conditions of Underwriter's Obligations................................. 18
Effectiveness of ML&Co. Registration Statement..................... 18
Effectiveness of Cox Registration Statement........................ 18
Opinion of Counsel for the Company................................. 18
Opinion of Counsel for Cox and CEI................................. 18
Company Officers' Certificate...................................... 18
Cox Officers' Certificate.......................................... 19
CEI Officer's Certificate.......................................... 19
Company Accountant's Comfort Letter................................ 19
Cox Accountant's Comfort Letters................................... 20
Company Bring-down Comfort Letter.................................. 20
Cox Bring-down Comfort Letter...................................... 20
Maintenance of Rating.............................................. 20
Approval of Listing................................................ 20
No Objection....................................................... 20
Lock-up Agreements................................................. 20
Conditions to Purchase of Option Securities........................ 20
Additional Documents............................................... 21
Conditions of the Company's Obligations................................. 22
Effectiveness of Cox Registration Statement........................ 22
Opinion of Counsel for the Company................................. 22
Opinion of Counsel for Cox and CEI................................. 22
Cox Officers' Certificate.......................................... 22
CEI Officer's Certificate.......................................... 22
Cox Accountant's Comfort Letters................................... 22
Cox Bring-down Comfort Letter...................................... 23
Conditions to Sale of Option Securities............................ 23
ii
<PAGE>
Termination of Agreement................................................ 23
SECTION 6. Indemnification................................................ 24
---------------
Indemnification of the Underwriter by the Company....................... 24
Indemnification of the Underwriter and the Company by CEI............... 25
Indemnification of the Company, Directors and Officers.................. 26
Actions against Parties; Notification................................... 26
Settlement without Consent if Failure to Reimburse...................... 27
Conditions of Indemnification by CEI.................................... 27
SECTION 7. Contribution................................................... 27
------------
SECTION 8. Representations, Warranties and Agreements to Survive Delivery. 30
--------------------------------------------------------------
SECTION 9. Termination of Agreement....................................... 30
------------------------
Termination; General.................................................. 30
Liabilities........................................................... 30
SECTION 10. Notices........................................................ 30
---------
SECTION 11. Parties........................................................ 31
-------
SECTION 12. GOVERNING LAW AND TIME......................................... 31
----------------------
SECTION 13. Effect of Headings............................................. 31
------------------
iii
<PAGE>
MERRILL LYNCH & CO., INC.
(a Delaware corporation)
____% STRYPES/SM/ DUE ____, 1999
Payable with Shares of Common Stock of Cox Communications, Inc.
UNDERWRITING AGREEMENT
----------------------
_____________, 1996
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Merrill Lynch & Co., Inc., a Delaware corporation (the "Company"), and Cox
Enterprises, Inc., a ___________ corporation ("CEI"), confirm their respective
agreements with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated (the "Underwriter") with respect to the issue and sale by the
Company and the purchase by the Underwriter of an aggregate of ____________ of
the Company's Structured Yield Product Exchangeable for Stock/SM/, ____%
STRYPES/SM/ Due ____, 1999 (each, a "STRYPES") and with respect to the grant by
the Company to the Underwriter of the option described in Section 2(b) hereof to
purchase all or any part of ______ additional STRYPES to cover over-allotments,
if any. The aforesaid ______ STRYPES (the "Initial Securities") to be purchased
by the Underwriter and all or any part of the ______ STRYPES subject to the
option described in Section 2(b) hereof (the "Option Securities") are
hereinafter called, collectively, the "Securities." The Securities are to be
issued pursuant to an indenture, dated as of April 1, 1983 and restated as of
April 1, 1987, as amended and supplemented as of __________, 1996 (the
"Indenture"), between the Company and [Chemical Bank (successor by merger to
Manufacturers Hanover Trust Company)], as trustee (the "Trustee").
__________________________
/SM/ Service mark of Merrill Lynch & Co., Inc.
1
<PAGE>
The STRYPES will be payable at maturity or upon redemption by delivery of
shares of Class A Common Stock, par value $1.00 per share (the "Cox Common
Stock"), of Cox Communications, Inc., a Delaware corporation ("Cox"), subject to
the Company's option to deliver at maturity, in lieu of shares of Cox Common
Stock, cash with an equal value. The Company, Cox and the Underwriter are
concurrently entering into an agreement dated the date hereof (the "Registration
Agreement") relating to the registration of shares of Cox Common Stock
deliverable by the Company pursuant to the STRYPES.
The Company understands that the Underwriter proposes to make a public
offering of the Securities as soon as the Underwriter deems advisable after this
Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 33-65135) for the
registration of debt securities, including the Securities, and warrants under
the Securities Act of 1933, as amended (the "1933 Act"), and the offering
thereof from time to time in accordance with Rule 415 of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations"),
and the Company has filed post-effective amendment no. 1 thereto, including a
preliminary prospectus and preliminary prospectus supplement relating to the
offering of the Securities. Promptly after execution and delivery of this
Agreement, the Company will either (i) prepare and file a prospectus and
prospectus supplement in accordance with the provisions of Rule 430A ("Rule
430A") of the 1933 Act Regulations and paragraph (b) of Rule 424 ("Rule 424(b)")
of the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (an
"ML&Co. Term Sheet") in accordance with the provisions of Rule 434 and Rule
424(b). The information included in such prospectus and prospectus supplement
or in such ML&Co. Term Sheet, as the case may be, that was omitted from such
registration statement (as so amended) at the time it became effective but that
is deemed to be part of such registration statement (as so amended) at the time
it became effective (i) pursuant to paragraph (b) of Rule 430A is referred to as
"Rule 430A Information" or (ii) pursuant to paragraph (d) of Rule 434 is
referred to as "Rule 434 Information." Any prospectus and prospectus supplement
relating to the offering of the Securities used before such registration
statement (as so amended) became effective, and any prospectus and prospectus
supplement relating to the offering of the Securities that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information, that was used
after such effectiveness and prior to the execution and delivery of this
Agreement, in each case excluding any Cox preliminary prospectus (as defined
below) attached [as Appendix A] thereto, are herein called, collectively, an
"ML&Co. preliminary prospectus." Such registration statement (as so amended),
including the exhibits thereto, the schedules thereto, if any, and the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act, at the time it became effective and including the Rule 430A Information and
the Rule 434 Information, as applicable, is herein called the "ML&Co.
Registration Statement." Any registration statement filed by the Company
pursuant to Rule 462(b) of the 1933 Act Regulations is herein referred to as the
"ML&Co. Rule 462(b) Registration Statement," and after such filing the term
"ML&Co. Registration Statement" shall include the ML&Co. Rule 462(b)
Registration Statement. The final prospectus and final prospectus supplement
relating to the offering of the Securities, including the documents
2
<PAGE>
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act, but excluding any Cox Prospectus (as defined below) attached [as Appendix
A] thereto, in the form first furnished to the Underwriter for use in connection
with the offering of the Securities are collectively referred to herein as the
"ML&Co. Prospectus." If Rule 434 is relied on, the term "ML&Co. Prospectus"
shall refer to the ML&Co. preliminary prospectus dated _______, 1996 together
with the ML&Co. Term Sheet and all references in this Agreement to the date of
the ML&Co. Prospectus shall mean the date of the ML&Co. Term Sheet. For
purposes of this Agreement, all references to the ML&Co. Registration Statement,
any ML&Co. preliminary prospectus, the ML&Co. Prospectus or any ML&Co. Term
Sheet or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the ML&Co.
Registration Statement, any ML&Co. preliminary prospectus or the ML&Co.
Prospectus (or other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which
is incorporated by reference in the ML&Co. Registration Statement, any ML&Co.
preliminary prospectus or the ML&Co. Prospectus, as the case may be, and shall
be deemed to exclude all financial statements and schedules and other
information which is included or incorporated by reference in any Cox
preliminary prospectus or the Cox Prospectus which is attached [as Appendix A]
to any ML&Co. preliminary prospectus or the ML&Co. Prospectus; and all
references in this Agreement to amendments or supplements to the ML&Co.
Registration Statement, any ML&Co. preliminary prospectus or the ML&Co.
Prospectus shall be deemed to mean and include the filing of any document under
the Securities Exchange Act of 1934, as amended (the "1934 Act"), which is
incorporated by reference in the ML&Co. Registration Statement, such ML&Co.
preliminary prospectus or the ML&Co. Prospectus, as the case may be.
Cox has filed with the Commission a registration statement on Form S-3 (No.
333-______) covering the registration of the shares of Cox Common Stock
deliverable at maturity or upon redemption of the Securities under the 1933 Act,
including the related preliminary prospectus or prospectuses. Each prospectus
used before such registration statement became effective is herein called a "Cox
preliminary prospectus." Such registration statement, including the exhibits
thereto, the schedules thereto, if any, and the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, at the
time it became effective, is herein called the "Cox Registration Statement."
Any registration statement filed by Cox pursuant to Rule 462(b) of the 1933 Act
Regulations is herein referred to as the "Cox Rule 462(b) Registration
Statement," and after such filing the term "Cox Registration Statement" shall
include the Cox Rule 462(b) Registration Statement. The final prospectus,
including the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the 1933 Act, in the form first furnished to the Underwriter for
use in connection with the offering of the Securities is herein called the "Cox
Prospectus." For purposes of this Agreement, all references to the Cox
Registration Statement, any Cox preliminary prospectus, the Cox Prospectus or
any amendment or supplement to any of the foregoing shall be deemed to include
the copy filed with the Commission pursuant to EDGAR.
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All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the Cox
Registration Statement, any Cox preliminary prospectus or the Cox Prospectus (or
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Cox Registration Statement, any Cox preliminary prospectus
or the Cox Prospectus, as the case may be; and all references in this Agreement
to amendments or supplements to the Cox Registration Statement, any Cox
preliminary prospectus or the Cox Prospectus shall be deemed to mean and include
the filing of any document under the 1934 Act which is incorporated by reference
in the Cox Registration Statement, such Cox preliminary prospectus or the Cox
Prospectus, as the case may be.
Prior to the closing under this Agreement, [the Company,] ________________,
a wholly-owned subsidiary of the Company (the "ML&Co. Subsidiary"), and CEI will
enter into a contract (the "STRYPES Agreement") pursuant to which CEI will be
obligated to deliver to the ML&Co. Subsidiary, immediately prior to the maturity
date or date of redemption of the Securities, a number of shares of Cox Common
Stock equal to the number required by the Company to pay and discharge or redeem
all of the Securities, subject to CEI's option, exercisable in its sole
discretion, to satisfy its obligation under the STRYPES Agreement by delivering
immediately prior to the maturity date a specified amount of cash in lieu of
such shares.
SECTION 1. Representations and Warranties.
------------------------------
(a) Representations and Warranties by the Company. The Company represents
and warrants to the Underwriter as of the date hereof, as of the Closing Time
referred to in Section 2(c) hereof, and as of each Date of Delivery (if any)
referred to in Section 2(b) hereof, and agrees with the Underwriter, as follows:
(i) Compliance with Registration Requirements. The Company meets the
-----------------------------------------
requirements for use of Form S-3 under the 1933 Act. Each of the ML&Co.
Registration Statement and any ML&Co. Rule 462(b) Registration Statement
has become effective under the 1933 Act and no stop order suspending the
effectiveness of the ML&Co. Registration Statement or any ML&Co. Rule
462(b) Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to the
knowledge of the Company, are contemplated by the Commission, and any
request on the part of the Commission for additional information has been
complied with.
At the respective times the ML&Co. Registration Statement, any ML&Co.
Rule 462(b) Registration Statement and any post-effective amendments
thereto became effective and at the Closing Time (and, if any Option
Securities are purchased, at the Date of Delivery), the ML&Co. Registration
Statement, the ML&Co. Rule 462(b) Registration Statement and any amendments
and supplements thereto complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and the
Trust Indenture Act of 1939, as amended (the "1939 Act"), and the rules and
regulations of the Commission under the 1939 Act (the "1939 Act
Regulations"), and did not and will not contain an untrue statement of a
material fact or
4
<PAGE>
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading. Neither the ML&Co. Prospectus
nor any amendments or supplements thereto, at the time the ML&Co.
Prospectus or any such amendment or supplement was issued and at the
Closing Time (and, if any Option Securities are purchased, at the Date of
Delivery), included or will include an untrue statement of a material fact
or omitted or will omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading. If Rule 434 is used, the Company will comply
with the requirements of Rule 434. The representations and warranties in
this subsection shall not apply to (A) statements in or omissions from the
ML&Co. Registration Statement or ML&Co. Prospectus made in reliance upon
and in conformity with information furnished to the Company in writing by
the Underwriter expressly for use in the ML&Co. Registration Statement or
ML&Co. Prospectus or (B) that part of the ML&Co. Registration Statement
that constitutes the Statement of Eligibility on Form T-1 (the "Form T-1")
under the 1939 Act of the Trustee.
Each ML&Co. preliminary prospectus and the prospectus relating to the
offering of the Securities filed as part of the ML&Co. Registration
Statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the 1933 Act, complied when so filed in all
material respects with the 1933 Act Regulations and, if applicable, each
ML&Co. preliminary prospectus and the ML&Co. Prospectus delivered to the
Underwriter for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or deemed to
----------------------
be incorporated by reference in the ML&Co. Registration Statement and the
ML&Co. Prospectus, when they became effective or at the time they were or
hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations or the 1934 Act and the rules and regulations of the Commission
thereunder (the "1934 Act Regulations"), as applicable, and, when read
together with the other information in the ML&Co. Prospectus, at the time
the ML&Co. Registration Statement became effective, at the time the ML&Co.
Prospectus was issued and at the Closing Time (and, if any Option
Securities are purchased, at the Date of Delivery), did not and will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading.
(iii) Independent Accountants. The accountants who certified the
-----------------------
financial statements and supporting schedules included in the ML&Co.
Registration Statement are independent public accountants as required by
the 1933 Act and the 1933 Act Regulations.
(iv) Financial Statements. The financial statements included in the
--------------------
ML&Co. Registration Statement and the ML&Co. Prospectus, together with the
related schedules and notes, present fairly the financial position of the
Company and its consolidated
5
<PAGE>
subsidiaries at the dates indicated and the statement of operations,
stockholders' equity and cash flows of the Company and its consolidated
subsidiaries for the periods specified; said financial statements have been
prepared in conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved. The
supporting schedules, if any, included in the ML&Co. Registration Statement
present fairly in accordance with GAAP the information required to be
stated therein. The selected financial data and the summary financial
information included in the ML&Co. Prospectus present fairly the
information shown therein and have been compiled on a basis consistent with
that of the audited financial statements included in the ML&Co.
Registration Statement.
(v) No Material Adverse Change in Business. Since the respective
--------------------------------------
dates as of which information is given in the ML&Co. Registration Statement
and the ML&Co. Prospectus, except as otherwise stated therein, (A) there
has been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business (a "Material Adverse
Effect"), (B) there have been no transactions entered into by the Company
or any of its subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company and its
subsidiaries considered as one enterprise, and (C) except for regular
quarterly dividends on its outstanding common stock and regular dividends
on its outstanding preferred stock in amounts per share that are consistent
with past practice, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
(vi) Good Standing of the Company. The Company has been duly
----------------------------
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the ML&Co. Prospectus and to enter into and perform its
obligations under this Agreement, the Indenture [and the STRYPES
Agreement]; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so
to qualify or to be in good standing would not result in a Material Adverse
Effect.
(vii) Good Standing of Subsidiaries. Each subsidiary of the Company
-----------------------------
which is a "significant subsidiary" as defined in Rule 1-02 of Regulation
S-X under the 1933 Act (each a "Subsidiary" and, collectively, the
"Subsidiaries") has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the ML&Co.
Prospectus and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify
or to be in good standing would not result in a Material Adverse Effect;
except as
6
<PAGE>
otherwise disclosed in the ML&Co. Registration Statement, all of the issued
and outstanding capital stock of each such Subsidiary has been duly
authorized and validly issued and is fully paid and non-assessable and is
owned by the Company, directly or through subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or
equity; and none of the outstanding shares of capital stock of any
Subsidiary was issued in violation of the preemptive or similar rights of
any securityholder of such Subsidiary. The only subsidiaries of the Company
are (A) the subsidiaries listed in Exhibit 21 to the Annual Report on Form
10-K of the Company filed with the Commission under Section 13 of the 1934
Act for the fiscal year ended December 29, 1995 and (B) certain other
subsidiaries which, considered in the aggregate as a single subsidiary, do
not constitute a "significant subsidiary" as defined in Rule 1-02 of
Regulation S-X under the 1933 Act.
(viii) Authorization of Agreement. This Agreement has been duly
--------------------------
authorized, executed and delivered by the Company.
(ix) Authorization of the Indenture. The Indenture has been duly
------------------------------
authorized by the Company, duly qualified under the 1939 Act and duly
executed and delivered by the Company and (assuming the due authorization,
execution and delivery by the Trustee) will constitute a valid and binding
agreement of the Company, enforceable against the Company in accordance
with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(x) Authorization of the Securities. The Securities have been duly
-------------------------------
authorized by the Company for issuance and sale to the Underwriter pursuant
to this Agreement and, at the Closing Time, will have been duly executed by
the Company and, when authenticated by the Trustee in the manner provided
for in the Indenture and delivered against payment of the purchase price
therefor as provided in this Agreement, will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance
with their terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law), and will be
in the form contemplated by, and entitled to the benefits of, the
Indenture.
(xi) Authorization of the STRYPES Agreement. The STRYPES Agreement
--------------------------------------
has been duly authorized by [the Company and] the ML&Co. Subsidiary and, at
the Closing Time, will have been duly executed and delivered by [the
Company and] the ML&Co. Subsidiary and (assuming the due authorization,
execution and delivery by CEI) will constitute a valid and binding
agreement of [the Company and] the ML&Co. Subsidiary,
7
<PAGE>
enforceable against [the Company and] the ML&Co. Subsidiary in accordance
with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(xii) Description of Securities, Indenture and STRYPES Agreement.
----------------------------------------------------------
The Securities, the Indenture and the STRYPES Agreement will conform in all
material respects to the respective statements relating thereto contained
in the ML&Co. Prospectus and will be in substantially the respective forms
filed or incorporated by reference, as the case may be, as exhibits to the
ML&Co. Registration Statement.
(xiii) Absence of Defaults and Conflicts. Neither the Company nor
---------------------------------
any of its subsidiaries is in violation of its charter or by-laws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound, or to which any of the property or
assets of the Company or any subsidiary is subject (collectively,
"Agreements and Instruments") except for such defaults that would not
result in a Material Adverse Effect; and (A) the execution, delivery and
performance by the Company of this Agreement, the Indenture, the Securities
[and the STRYPES Agreement] and the consummation of the transactions
contemplated herein, therein and in the ML&Co. Registration Statement
(including the issuance and sale of the Securities and the delivery of
shares of Cox Common Stock pursuant thereto and the use of the proceeds
from the sale of the Securities as described in the ML&Co. Prospectus under
the caption "Supplemental Use of Proceeds") and compliance by the Company
with its obligations hereunder and under the Indenture, the Securities [and
the STRYPES Agreement] and (B) the execution, delivery and performance by
the ML&Co. Subsidiary of the STRYPES Agreement and the consummation of the
transactions contemplated therein and compliance by the ML&Co. Subsidiary
with its obligations under the STRYPES Agreement have been duly authorized
by all necessary corporate action and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any subsidiary
pursuant to, the Agreements and Instruments (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not
result in a Material Adverse Effect), nor will such action result in any
violation of the provisions of the charter or by-laws of the Company or any
subsidiary or, to the best of the Company's knowledge, any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any subsidiary or any of their
assets, properties or operations. As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note, debenture
or other evidence of indebtedness of the Company or any subsidiary (or any
person acting on such holder's behalf) the
8
<PAGE>
right to require the repurchase, redemption or repayment of all or a
portion of such indebtedness by the Company or any subsidiary.
(xiv) Absence of Labor Dispute. No labor dispute with the employees
------------------------
of the Company or any subsidiary exists or, to the knowledge of the
Company, is imminent which may reasonably be expected to result in a
Material Adverse Effect.
(xv) Absence of Proceedings. There is no action, suit, proceeding,
----------------------
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or affecting the Company or any
subsidiary, which is required to be disclosed in the ML&Co. Registration
Statement (other than as disclosed therein), or which, individually or in
the aggregate, might reasonably be expected to result in a Material Adverse
Effect, or which, individually or in the aggregate, might reasonably be
expected to materially and adversely affect the properties or assets
thereof or the consummation of the transactions contemplated in this
Agreement, the Indenture or the STRYPES Agreement (including the issuance
and sale of the Securities and the delivery of shares of Cox Common Stock
pursuant thereto) or the performance by the Company of its obligations
hereunder or thereunder or the performance by the ML&Co. Subsidiary of its
obligations under the STRYPES Agreement; the aggregate of all pending legal
or governmental proceedings to which the Company or any subsidiary is a
party or of which any of their respective property or assets is the subject
which are not described in the ML&Co. Registration Statement, including
ordinary routine litigation incidental to the business, could not
reasonably be expected to result in a Material Adverse Effect.
(xvi) Exhibits. There are no contracts or documents which are of a
--------
character required to be described in the ML&Co. Registration Statement,
the ML&Co. Prospectus or the documents incorporated by reference therein or
to be filed as exhibits thereto which have not been so described or filed
as required.
(xvii) Possession of Intellectual Property. The Company and its
-----------------------------------
subsidiaries own or possess, or can acquire on reasonable terms, adequate
trademarks, service marks, trade names and other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
now operated by them, and neither the Company nor any of its subsidiaries
has received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of the
Company or any of its subsidiaries therein, and which infringement or
conflict (if the subject of any unfavorable decision, ruling or finding) or
invalidity or inadequacy, singly or in the aggregate, would result in a
Material Adverse Effect.
(xviii) Absence of Further Requirements. No filing with, or
-------------------------------
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required (A) for the performance by the Company of its
obligations under this Agreement [or the STRYPES Agreement] or
9
<PAGE>
the consummation by the Company of the transactions contemplated herein [or
therein] (including the issuance and sale of the Securities and the
delivery of shares of Cox Common Stock pursuant thereto) or for the due
execution, delivery or performance of the Indenture by the Company or (B)
for the performance by the ML&Co. Subsidiary of its obligations under the
STRYPES Agreement or the consummation by the ML&Co. Subsidiary of the
transactions contemplated therein, except, in each case, such as have been
already obtained or as may be required under the 1933 Act or the 1933 Act
Regulations or state securities laws and except for the qualification of
the Indenture under the 1939 Act.
(xix) Possession of Licenses and Permits. The Company and the
----------------------------------
subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them; the Company and its
subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not,
singly or in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except when
the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xx) Title to Property. The Company and its subsidiaries have good
-----------------
and marketable title to all real property owned by the Company and its
subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (A) are
described in the ML&Co. Prospectus or (B) do not, singly or in the
aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company or any of its subsidiaries; and all of the leases and subleases
material to the business of the Company and its subsidiaries, considered as
one enterprise, and under which the Company or any of its subsidiaries
holds properties described in the ML&Co. Prospectus, are in full force and
effect, and neither the Company nor any subsidiary has any notice of any
material claim of any sort that has been asserted by anyone adverse to the
rights of the Company or any subsidiary under any of the leases or
subleases mentioned above, or affecting or questioning the rights of the
Company or such subsidiary to the continued possession of the leased or
subleased premises under any such lease or sublease.
(xxi) Compliance with Cuba Act. The Company has complied with, and
------------------------
is and will be in compliance with, the provisions of that certain Florida
act relating to disclosure of doing business with Cuba, codified as Section
517.075 of the Florida statutes, and the rules and regulation thereunder
(collectively, the "Cuba Act") or is exempt therefrom.
10
<PAGE>
(b) Representations and Warranties by CEI. CEI represents and warrants to
each of the Company and the Underwriter as of the date hereof, as of the Closing
Time referred to in Section 2(c) hereof, and as of each Date of Delivery (if
any) referred to in Section 2(b) hereof, and agrees with each of the Company and
the Underwriter, as follows:
(i) Good Standing of CEI. CEI has been duly organized and is validly
--------------------
existing as a corporation in good standing under the laws of the State of
________ and has corporate power and authority to enter into and perform
its obligations under this Agreement and the STRYPES Agreement.
(ii) Delivery of Cox Common Stock. At the date hereof, CEI is the
----------------------------
sole registered owner of and has all rights in and to at least ____________
shares of Cox Common Stock, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity. If immediately prior
to maturity or redemption of the Securities CEI delivers to the ML&Co.
Subsidiary shares of Cox Common Stock pursuant to the STRYPES Agreement,
upon delivery by CEI to the ML&Co. Subsidiary of such shares of Cox Common
Stock pursuant to the STRYPES Agreement, the ML&Co. Subsidiary will be the
sole registered owner of the shares of Cox Common Stock so delivered and,
assuming the ML&Co. Subsidiary purchased for value in good faith and
without notice of any adverse claim, the ML&Co. Subsidiary will have
acquired all rights in and to such shares of Cox Common Stock, free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim
or equity. The delivery of shares of Cox Common Stock to the ML&Co.
Subsidiary at maturity or upon redemption of the Securities in accordance
with the STRYPES Agreement is not, and at the time of delivery of such
shares will not be, subject to any right of first refusal or similar rights
of any person pursuant to any contract to which CEI or any of its
subsidiaries is a party or by which any of them is bound.
(iii) Authorization of Agreement. This Agreement has been duly
--------------------------
authorized, executed and delivered by CEI.
(iv) Authorization of the STRYPES Agreement. The STRYPES Agreement
--------------------------------------
has been duly authorized by CEI and, at the Closing Time, will have been
duly executed and delivered by CEI and (assuming the due authorization,
execution and delivery by [the Company and] the ML&Co. Subsidiary) will
constitute a valid and binding agreement of CEI, enforceable against CEI in
accordance with its terms, except as the enforcement thereof may be limited
by bankruptcy, insolvency (including, without limitation, all laws relating
to fraudulent transfers), reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law).
Amounts received by CEI at Closing Time and at each Date of Delivery, if
any, pursuant to the STRYPES Agreement will not be used by CEI for the
purpose, whether immediate, incidental or ultimate, of buying or carrying a
margin stock, as such terms are defined in Regulation G promulgated by the
Board of Governors of the Federal Reserve System.
11
<PAGE>
(v) Absence of Defaults and Conflicts. The execution, delivery and
---------------------------------
performance by CEI of this Agreement and the STRYPES Agreement and the
consummation by CEI of the transactions contemplated herein and therein and
compliance by CEI with its obligations hereunder and thereunder have been
duly authorized by all necessary corporate action and do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or CEI Repayment Event
(as defined below) under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of CEI or any of
its subsidiaries pursuant to, any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or any other agreement or
instrument to which CEI or any of its subsidiaries is a party or by which
it or any of them may be bound, or to which any of the property or assets
of CEI or any of its subsidiaries is subject (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not,
singly or in the aggregate, materially and adversely affect the ability of
CEI to perform its obligations under this Agreement or the STRYPES
Agreement), nor will such action result in any violation of the provisions
of the charter or by-laws of CEI or any of its subsidiaries, or any
applicable law, statute, rule, regulation, judgment, order, writ or decree
of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over CEI or any of its subsidiaries or any of
their assets, properties or operations (except for such violations that
would not, singly or in the aggregate, materially and adversely affect the
ability of CEI to perform its obligations under this Agreement or the
STRYPES Agreement). As used herein, a "CEI Repayment Event" means any event
or condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf) the
right to require the repurchase, redemption or repayment of all or a
portion of such indebtedness by CEI or any of its subsidiaries.
(vi) Absence of Further Requirements. No filing with, or
-------------------------------
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the execution, delivery or performance by CEI
of this Agreement or the STRYPES Agreement or the consummation by CEI of
the transactions contemplated by this Agreement or the STRYPES Agreement,
except such as have been already obtained or as may be required under the
1933 Act or the 1933 Act Regulations or state securities laws.
(vii) Cox Registration Statement and Prospectus. CEI is familiar
-----------------------------------------
with the representations and warranties of Cox contained in Section 1(a) of
the Registration Agreement and the information included or incorporated by
reference in the Cox Registration Statement and the Cox Prospectus and has
no reason to believe that (A) the representations and warranties of Cox
contained in Section 1(a) of the Registration Agreement are not true and
correct, (B) the Cox Registration Statement, any Cox Rule 462(b)
Registration Statement or any post-effective amendments thereto, at the
respective times the Cox Registration Statement, any Cox Rule 462(b)
Registration Statement or any post-effective amendments thereto became
effective, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading or (C) the Cox Prospectus or any
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amendment or supplement thereto, at the time the Cox Prospectus was issued,
at the time any such amended or supplemented prospectus was issued or at
the Closing Time (and, if any Option Securities are purchased, at the Date
of Delivery), included or will include an untrue statement of a material
fact or omitted or will omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(c) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Underwriter shall be deemed
a representation and warranty by the Company to the Underwriter as to the
matters covered thereby. Any certificate signed by any officer of CEI or any of
its subsidiaries delivered to the Underwriter or the Company shall be deemed a
representation and warranty by CEI to the Underwriter or the Company, as the
case may be, as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriter; Closing.
-----------------------------------------
(a) Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company agrees to sell to the Underwriter, and the Underwriter agrees to
purchase from the Company, at the price per STRYPES set forth in Schedule A, the
Initial Securities.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants an option to the Underwriter to purchase up
to an additional ______ STRYPES at the price per STRYPES set forth in Schedule
A. The option hereby granted will expire 30 days after the date hereof and may
be exercised in whole or in part from time to time only for the purpose of
covering over-allotments which may be made in connection with the offering and
distribution of the Initial Securities upon notice by the Underwriter to the
Company setting forth the number of Option Securities as to which the
Underwriter is then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of delivery (a
"Date of Delivery") shall be determined by the Underwriter, but shall not be
later than seven full business days after the exercise of said option, nor in
any event prior to the Closing Time, as hereinafter defined.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Brown &
Wood, One World Trade Center, New York, New York 10048, or at such other place
as shall be agreed upon by the Underwriter and the Company, at 10:00 A.M.
(Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern time) on any given day) business day after the date hereof, or such
other time not later than ten business days after such date as shall be agreed
upon by the Underwriter and the Company (such time and date of payment and
delivery being herein called "Closing Time"). In addition, in the event that
any or all of the Option Securities are purchased by the Underwriter, payment of
the purchase price for, and delivery of certificates for, such Option Securities
shall be made at the above-mentioned offices, or at such other place as shall be
agreed upon by the Underwriter and the Company, on each Date of Delivery as
specified in the notice from the Underwriter to the Company.
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Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Underwriter of certificates for the Securities to be purchased by it.
(d) Denominations; Registration. Certificates for the Initial Securities
and the Option Securities, if any, shall be in such denominations and registered
in such names as the Underwriter may request in writing at least one full
business day before the Closing Time or the relevant Date of Delivery, as the
case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Underwriter in The City of New York not later than 10:00 A.M. (Eastern time) on
the business day prior to the Closing Time or the relevant Date of Delivery, as
the case may be.
SECTION 3. Covenants.
---------
(a) Covenants of the Company. The Company covenants with the Underwriter
as follows:
(i) Compliance with Securities Regulations and Commission Requests.
The Company, subject to Section 3(a)(ii), will comply with the requirements
of Rule 430A or Rule 434, as applicable, and will notify the Underwriter
immediately, and confirm the notice in writing, (A) when any post-effective
amendment to the ML&Co. Registration Statement shall become effective, or
any supplement to the ML&Co. Prospectus or any amended ML&Co. Prospectus
shall have been filed, (B) of the receipt of any comments from the
Commission, (C) of any request by the Commission for any amendment to the
ML&Co. Registration Statement or any amendment or supplement to the ML&Co.
Prospectus or for additional information, and (D) of the issuance by the
Commission of any stop order suspending the effectiveness of the ML&Co.
Registration Statement or of any order preventing or suspending the use of
any ML&Co. preliminary prospectus, or of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction,
or of the initiation or threatening of any proceedings for any of such
purposes. The Company will promptly effect the filings necessary pursuant
to Rule 424(b) and will take such steps as it deems necessary to ascertain
promptly whether the form of prospectus transmitted for filing under Rule
424(b) was received for filing by the Commission and, in the event that it
was not, it will promptly file such prospectus. The Company will make
every reasonable effort to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(ii) Filing of Amendments. The Company will give the Underwriter
notice of its intention to file or prepare any amendment to the ML&Co.
Registration Statement (including any filing under Rule 462(b)), any ML&Co.
Term Sheet or any amendment, supplement or revision to either the
prospectus relating to the offering of the Securities included in the
ML&Co. Registration Statement at the time it became effective or to the
ML&Co. Prospectus, whether pursuant to the 1933 Act, the 1934 Act or
otherwise, will furnish the Underwriter with copies of any such documents a
reasonable amount of time prior to such proposed filing or use, as the case
may be, and will not file or use any such
14
<PAGE>
document to which the Underwriter or counsel for the Underwriter shall
reasonably object.
(iii) Delivery of ML&Co. Registration Statements. The Company has
furnished or will deliver to the Underwriter, without charge, signed copies
of the ML&Co. Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated
by reference therein) and signed copies of all consents and certificates of
experts. If applicable, the copies of the ML&Co. Registration Statement
and each amendment thereto furnished to the Underwriter will be identical
to the electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(iv) Delivery of ML&Co. Prospectuses. The Company has delivered to
the Underwriter, without charge, as many copies of each ML&Co. preliminary
prospectus as the Underwriter reasonably requested, and the Company hereby
consents to the use of such copies for purposes permitted by the 1933 Act.
The Company will furnish to the Underwriter, without charge, during the
period when the ML&Co. Prospectus is required to be delivered under the
1933 Act or the 1934 Act, such number of copies of the ML&Co. Prospectus
(as amended or supplemented) as the Underwriter may reasonably request. If
applicable, the ML&Co. Prospectus and any amendments or supplements thereto
furnished to the Underwriter will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
(v) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and
the 1934 Act Regulations so as to permit the completion of the distribution
of the Securities as contemplated in this Agreement and in the ML&Co.
Prospectus. If at any time when a prospectus is required by the 1933 Act
to be delivered in connection with sales of the Securities, any event shall
occur or condition shall exist as a result of which it is necessary, in the
opinion of counsel for the Underwriter or for the Company, to amend the
ML&Co. Registration Statement or amend or supplement the ML&Co. Prospectus
in order that the ML&Co. Prospectus will not include any untrue statements
of a material fact or omit to state a material fact necessary in order to
make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of either such counsel, at any such time
to amend the ML&Co. Registration Statement or amend or supplement the
ML&Co. Prospectus in order to comply with the requirements of the 1933 Act
or the 1933 Act Regulations, the Company will promptly prepare and file
with the Commission, subject to Section 3(a)(ii), such amendment or
supplement as may be necessary to correct such statement or omission or to
make the ML&Co. Registration Statement or the ML&Co. Prospectus comply with
such requirements, and the Company will furnish to the Underwriter such
number of copies of such amendment or supplement as the Underwriter may
reasonably request.
15
<PAGE>
(vi) Blue Sky Qualifications. The Company will use its best efforts,
in cooperation with the Underwriter, to qualify the Securities for offering
and sale under the applicable securities laws of such states and other
jurisdictions of the United States as the Underwriter may designate and to
maintain such qualifications in effect for a period of not less than one
year from the later of the effective date of the ML&Co. Registration
Statement and any ML&Co. Rule 462(b) Registration Statement; provided,
however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation or as
a dealer in securities in any jurisdiction in which it is not so qualified
or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. In each jurisdiction
in which the Securities have been so qualified, the Company will file such
statements and reports as may be required by the laws of such jurisdiction
to continue such qualification in effect for a period of not less than one
year from the effective date of the ML&Co. Registration Statement and any
ML&Co. Rule 462(b) Registration Statement.
(vii) Rule 158. The Company will timely file such reports pursuant
to the 1934 Act as are necessary in order to make generally available to
its securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(viii) Use of Proceeds. The Company will use the net proceeds
received by it from the sale of the Securities in the manner specified in
the ML&Co. Prospectus under "Supplemental Use of Proceeds."
(ix) Listing. The Company will use its best efforts to effect the
listing of the Securities on the New York Stock Exchange.
(x) Reporting Requirements. The Company, during the period when the
ML&Co. Prospectus is required to be delivered under the 1933 Act or the
1934 Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act
and the 1934 Act Regulations.
(b) Covenants of CEI.
(i) Restriction on Sale of Securities. During a period of 120 days
from the date of the Cox Prospectus, CEI will not, without the prior
written consent of the Underwriter, (x) offer, sell, contract to sell or
otherwise dispose of, directly or indirectly, any shares of Cox Common
Stock, securities convertible into, exchangeable for or repayable with
shares of Cox Common Stock, or rights or warrants to acquire shares of Cox
Common Stock, or (y) cause to be filed any registration statement under the
1933 Act with respect to any shares of Cox Common Stock, securities
convertible into, exchangeable for or repayable with shares of Cox Common
Stock, or rights or warrants to acquire shares of Cox Common Stock.
16
<PAGE>
(ii) Purpose Statement. At or prior to Closing Time, CEI will
deliver to the ML&Co. Subsidiary a duly executed purpose statement on Form
F. R. G-3 of the Board of Governors of the Federal Reserve System.
SECTION 4. Payment of Expenses. (a) Expenses Payable by the Company.
-------------------
The Company will pay all expenses incident to the performance of its obligations
under this Agreement, including (i) the preparation, printing and filing of the
ML&Co. Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, printing
and delivery to the Underwriter of this Agreement, the Indenture, the STRYPES
Agreement and such other documents as may be required in connection with the
offering, purchase, sale, issuance or delivery of the Securities, (iii) the
preparation, issuance and delivery of the certificates for the Securities to the
Underwriter, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors, (v) the qualification of the Securities under
securities laws in accordance with the provisions of Section 3(a)(vi) hereof,
including filing fees and the reasonable fees and disbursements of the Company's
counsel in connection therewith and in connection with the preparation of the
Blue Sky Survey and any supplement thereto, (vi) the printing and delivery to
the Underwriter of copies of each ML&Co. preliminary prospectus, any ML&Co. Term
Sheets and of the ML&Co. Prospectus and any amendments or supplements thereto,
(vii) the preparation, printing and delivery to the Underwriter of copies of the
Blue Sky Survey and any supplement thereto, (viii) the fees and expenses of the
Trustee, including the fees and disbursements of counsel for the Trustee in
connection with the Indenture and the Securities, (ix) any fees payable in
connection with the rating of the Securities, (x) the filing fees incident to,
and the reasonable fees and disbursements of counsel to the Underwriter in
connection with, the review by the National Association of Securities Dealers,
Inc. (the "NASD") of the terms of the sale of the Securities and (xi) the fees
and expenses incurred in connection with the listing of the Securities on the
New York Stock Exchange.
(b) Expenses Payable by CEI. CEI will pay all expenses incident to the
performance of its obligations under this Agreement, including the fees and
disbursements of CEI's counsel and advisors.
(c) Termination of Agreement. If this Agreement is terminated by the
Underwriter in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company shall reimburse the Underwriter for all of its out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Underwriter.
SECTION 5. Conditions.
----------
(a) Conditions of Underwriter's Obligations. The obligations of the
Underwriter hereunder are subject to the accuracy of the representations and
warranties of the Company and CEI contained in Sections 1(a) and 1(b) hereof,
respectively, to the accuracy of the representations and warranties of Cox
contained in the Registration Agreement, to the accuracy of the statements in
certificates of any officer of the Company, Cox or CEI delivered pursuant to the
provisions hereof, to the performance by the Company and CEI of their respective
17
<PAGE>
covenants and other obligations hereunder, to the performance by Cox of its
covenants and other obligations under the Registration Agreement, and to the
following further conditions:
(1) Effectiveness of ML&Co. Registration Statement. The ML&Co.
Registration Statement, including any ML&Co. Rule 462(b) Registration
Statement, has become effective and at Closing Time no stop order
suspending the effectiveness of the ML&Co. Registration Statement shall
have been issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission, and any request on the part of the Commission
for additional information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriter. A prospectus containing the
Rule 430A Information shall have been filed with the Commission in
accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with
the requirements of Rule 430A) or, if the Company has elected to rely upon
Rule 434, an ML&Co. Term Sheet shall have been filed with the Commission in
accordance with Rule 424(b).
(2) Effectiveness of Cox Registration Statement. The Cox Registration
Statement, including any Cox Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of
the Cox Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any
request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel to the
Underwriter.
(3) Opinion of Counsel for the Company. At Closing Time, the
Underwriter shall have received the favorable opinion, dated as of Closing
Time, of Brown & Wood, counsel for the Company, in form and substance
satisfactory to the Underwriter, to the effect set forth in Exhibit A
hereto and to such further effect as the Underwriter may reasonably
request.
(4) Opinion of Counsel for Cox and CEI. At Closing Time, the
Underwriter shall have received the favorable opinion, dated as of Closing
Time, of Dow, Lohnes & Albertson, counsel for Cox and CEI, in form and
substance satisfactory to the Underwriter, to the effect set forth in
Exhibit B hereto and to such further effect as the Underwriter may
reasonably request.
(5) Company Officers' Certificate. At Closing Time, there shall not
have been, since the date hereof or since the respective dates as of which
information is given in the ML&Co. Prospectus, any material adverse change
in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course
of business, and the Underwriter shall have received a certificate of the
President or a Vice President of the Company and of the chief financial or
chief accounting officer of the Company, dated as of Closing Time, to the
effect that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) hereof are true and correct
with the same force and effect as though expressly made at and as of
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<PAGE>
Closing Time, (iii) the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or
prior to Closing Time, and (iv) no stop order suspending the effectiveness
of the ML&Co. Registration Statement has been issued and no proceedings for
that purpose have been instituted or are pending or are contemplated by the
Commission.
(6) Cox Officers' Certificate. At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Cox Prospectus, any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of Cox and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and
the Underwriter shall have received a certificate of the President or a
Vice President of Cox and of the chief financial or chief accounting
officer of Cox, dated as of Closing Time, to the effect that (i) there has
been no such material adverse change, (ii) the representations and
warranties of Cox contained in Section 1(a) of the Registration Agreement
are true and correct with the same force and effect as though expressly
made at and as of Closing Time, (iii) Cox has complied with all agreements
and satisfied all conditions on its part to be performed or satisfied at or
prior to Closing Time pursuant to the Registration Agreement, and (iv) no
stop order suspending the effectiveness of the Cox Registration Statement
has been issued and no proceedings for that purpose have been instituted
or, to the best of their knowledge, are pending or are contemplated by the
Commission.
(7) CEI Officer's Certificate. At Closing Time, the Underwriter shall
have received a certificate of the President or a Vice President of CEI,
dated as of Closing Time, to the effect that (i) the representations and
warranties of CEI contained in Section 1(b) hereof are true and correct
with the same force and effect as though expressly made at and as of
Closing Time and (ii) CEI has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to
Closing Time.
(8) Company Accountant's Comfort Letter. At the time of the execution
of this Agreement, the Underwriter shall have received from Deloitte &
Touche LLP a letter dated such date, in form and substance satisfactory to
the Underwriter, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information
contained in the ML&Co. Registration Statement and the ML&Co. Prospectus.
(9) Cox Accountant's Comfort Letters. At the time of the execution of
this Agreement, the Underwriter shall have received from each of Deloitte &
Touche LLP and Ernst & Young LLP a letter dated such date, in form and
substance satisfactory to the Underwriter, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in the Cox Registration Statement
and the Cox Prospectus.
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<PAGE>
(10) Company Bring-down Comfort Letter. At Closing Time, the
Underwriter shall have received from Deloitte & Touche LLP a letter, dated
as of Closing Time, to the effect that they reaffirm the statements made in
the letter furnished by them pursuant to Section 5(a)(8) hereof, except
that the "specified date" referred to shall be a date not more than three
business days prior to Closing Time.
(11) Cox Bring-down Comfort Letter. At Closing Time, the Underwriter
shall have received from Deloitte & Touche LLP a letter, dated as of
Closing Time, to the effect that they reaffirm the statements made in the
letter furnished by them pursuant to Section 5(a)(9) hereof, except that
the "specified date" referred to shall be a date not more than three
business days prior to Closing Time.
(12) Maintenance of Rating. Since the date of this Agreement, there
shall not have occurred a downgrading in the rating assigned to any of the
Company's securities by any "nationally recognized statistical rating
agency", as that term is defined by the Commission for purposes of Rule
436(g)(2) under the 1933 Act, and no such organization shall have publicly
announced that it has under surveillance or review its rating of any of the
Company's securities.
(13) Approval of Listing. At Closing Time, the Securities shall have
been approved for listing on the New York Stock Exchange, subject only to
official notice of issuance.
(14) No Objection. The NASD shall not have raised any objection with
respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(15) Lock-up Agreements. At the date of this Agreement, the
Underwriter shall have received an agreement substantially in the form of
Exhibit C hereto signed by each of the persons and entities listed on
Schedule B hereto.
(16) Conditions to Purchase of Option Securities. In the event that
the Underwriter exercises its option provided in Section 2(b) hereof to
purchase all or any portion of the Option Securities, the representations
and warranties of the Company and CEI contained herein, the representations
and warranties of Cox contained in the Registration Agreement and the
statements in any certificates furnished by the Company, Cox or CEI
hereunder shall be true and correct as of each Date of Delivery and, at the
relevant Date of Delivery, the Underwriter shall have received:
(A) Company Officers' Certificate. A certificate, dated such Date of
-----------------------------
Delivery, of the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company
confirming that the certificate delivered at Closing Time pursuant to
Section 5(a)(5) hereof is true and correct as of such Date of
Delivery.
(B) Cox Officers' Certificate. A certificate, dated such Date of
-------------------------
Delivery, of the President or a Vice President of Cox and of the chief
financial or chief accounting
20
<PAGE>
officer of Cox confirming that the certificate delivered at Closing
Time pursuant to Section 5(a)(6) hereof is true and correct as of such
Date of Delivery.
(C) CEI Officers' Certificate. A certificate, dated such Date of
-------------------------
Delivery, of the President or a Vice President of CEI confirming that
the certificate delivered at Closing Time pursuant to Section 5(a)(7)
hereof is true and correct as of such Date of Delivery.
(D) Opinion of Counsel for the Company. The favorable opinion of
----------------------------------
Brown & Wood, counsel for the Company, in form and substance
satisfactory to the Underwriter, dated such Date of Delivery, relating
to the Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section
5(a)(3) hereof.
(E) Opinion of Counsel for Cox and CEI. The favorable opinion of
----------------------------------
Dow, Lohnes & Albertson, counsel for Cox and CEI, in form and
substance satisfactory to the Underwriter, dated such Date of
Delivery, to the same effect as the opinion required by Section
5(a)(4) hereof.
(F) Company Bring-down Comfort Letter. A letter from Deloitte &
---------------------------------
Touche LLP, in form and substance satisfactory to the Underwriter and
dated such Date of Delivery, substantially the same in form and
substance as the letter furnished to the Underwriter pursuant to
Section 5(a)(10) hereof, except that the "specified date" in the
letter furnished pursuant to this paragraph shall be a date not more
than five days prior to such Date of Delivery.
(G) Cox Bring-down Comfort Letter. A letter from Deloitte & Touche
-----------------------------
LLP, in form and substance satisfactory to the Underwriter and dated
such Date of Delivery, substantially the same in form and substance as
the letter furnished to the Underwriter pursuant to Section 5(a)(11)
hereof, except that the "specified date" in the letter furnished
pursuant to this paragraph shall be a date not more than five days
prior to such Date of Delivery.
(17) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the Underwriter shall have been furnished with such
documents and opinions as they may require for the purpose of enabling them
to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
contained herein or in the Registration Agreement; and all proceedings
taken by the Company in connection with the issuance and sale of the
Securities as herein contemplated shall be satisfactory in form and
substance to the Underwriter and counsel for the Underwriter.
(b) Conditions of the Company's Obligations. The obligations of the
Company hereunder are subject to the accuracy of the representations and
warranties of CEI contained in Section 1(b) hereof, to the accuracy of the
representations and warranties of Cox contained in the Registration Agreement,
to the accuracy of the statements in certificates of any officer of
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Cox or CEI delivered pursuant to the provisions hereof, to the performance by
CEI of its covenants and other obligations hereunder, to the performance by Cox
of its covenants and other obligations under the Registration Agreement, and to
the following further conditions:
(1) Effectiveness of Cox Registration Statement. The Cox Registration
Statement, including any Cox Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of
the Cox Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any
request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel to the
Company.
(2) Opinion of Counsel for the Company. At Closing Time, the Company
shall have received the favorable opinion, dated as of Closing Time, of
Brown & Wood, counsel for the Company, to the same effect as the opinion
required by Section 5(a)(3) hereof.
(3) Opinion of Counsel for Cox and CEI. At Closing Time, the Company
shall have received the favorable opinion, dated as of Closing Time, of
Dow, Lohnes & Albertson, counsel for Cox and CEI, to the same effect as the
opinion required by Section 5(a)(4) hereof.
(4) Cox Officers' Certificate. At Closing Time, the Company shall
have received a certificate of the President or a Vice President of Cox and
of the chief financial or chief accounting officer of Cox, dated as of
Closing Time, to the same effect as the certificate delivered to the
Underwriter pursuant to Section 5(a)(6) hereof.
(5) CEI Officer's Certificate. At Closing Time, the Company shall
have received a certificate of the President or a Vice President of CEI,
dated as of Closing Time, to the same effect as the certificate delivered
to the Underwriter pursuant to Section 5(a)(7) hereof.
(6) Cox Accountant's Comfort Letters. At the time of the execution of
this Agreement, the Company shall have received from each of Deloitte &
Touche LLP and Ernst & Young LLP a letter dated such date, in form and
substance satisfactory to the Company, substantially the same in form and
substance as the letter delivered to the Underwriter pursuant to Section
5(a)(9) hereof.
(7) Cox Bring-down Comfort Letter. At Closing Time, the Company shall
have received from Deloitte & Touche LLP a letter, dated as of Closing
Time, in form and substance satisfactory to the Company, substantially the
same in form and substance as the letter delivered to the Underwriter
pursuant to Section 5(a)(11) hereof.
(8) Conditions to Sale of Option Securities. In the event that the
Underwriter exercises its option provided in Section 2(b) hereof to
purchase all or any portion of the Option Securities, the representations
and warranties of CEI contained
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<PAGE>
herein, the representations and warranties of Cox contained in the
Registration Agreement and the statements in any certificates furnished by
Cox or CEI hereunder shall be true and correct as of each Date of Delivery
and, at the relevant Date of Delivery, the Company shall have received:
(A) Cox Officers' Certificate. A certificate, dated such Date of
-------------------------
Delivery, of the President or a Vice President of Cox and of the chief
financial or chief accounting officer of Cox confirming that the
certificate delivered at Closing Time pursuant to Section 5(b)(4)
hereof is true and correct as of such Date of Delivery.
(B) CEI Officers' Certificate. A certificate, dated such Date of
-------------------------
Delivery, of the President or a Vice President of CEI confirming that
the certificate delivered at Closing Time pursuant to Section 5(b)(5)
hereof is true and correct as of such Date of Delivery.
(C) Opinion of Counsel for the Company. The favorable opinion, dated
----------------------------------
such Date of Delivery, of Brown & Wood, counsel for the Company, to
the same effect as the opinion required by Section 5(a)(16)(D) hereof.
(D) Opinion of Counsel for Cox and CEI. The favorable opinion, dated
----------------------------------
such Date of Delivery, of Dow, Lohnes & Albertson, counsel for Cox and
CEI, to the same effect as the opinion required by Section 5(a)(16)(E)
hereof.
(E) Cox Bring-down Comfort Letter. A letter from Deloitte & Touche
-----------------------------
LLP, in form and substance satisfactory to the Company and dated such
Date of Delivery, substantially the same in form and substance as the
letter furnished to the Underwriter pursuant to Section 5(a)(16)(G)
hereof.
(c) Termination of Agreement. If any condition specified in subsection (a)
of this Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement, or, in the case of any condition to the purchase of
Option Securities on a Date of Delivery which is after the Closing Time, the
obligations of the Underwriter to purchase the relevant Option Securities, may
be terminated by the Underwriter by notice to the Company and CEI at any time at
or prior to Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party except as
provided in Section 4 and except that Sections 1, 6, 7 and 8 shall survive any
such termination and remain in full force and effect. If any condition
specified in subsection (b) of this Section shall not have been fulfilled when
and as required to be fulfilled, this Agreement, or, in the case of any
condition to the sale of Option Securities on a Date of Delivery which is after
the Closing Time, the obligations of the Company to sell the relevant Option
Securities, may be terminated by the Company by notice to the Underwriter and
CEI at any time at or prior to Closing Time or such Date of Delivery, as the
case may be, and such termination shall be without liability of any party to any
other party except as provided in Section 4 and except that Sections 1, 6, 7 and
8 shall survive any such termination and remain in full force and effect.
23
<PAGE>
SECTION 6. Indemnification.
---------------
(a) Indemnification of the Underwriter by the Company. The Company agrees
to indemnify and hold harmless the Underwriter and each person, if any, who
controls the Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the ML&Co. Registration
Statement (or any amendment thereto), including the Rule 430A Information
and the Rule 434 Information, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact
contained in any ML&Co. preliminary prospectus or the ML&Co. Prospectus (or
any amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, referred to under (i) above; provided
that (subject to Section 6(e) below) any such settlement is effected with
the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by the Underwriter),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission, referred to under (i) above, to the extent that any such expense
is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Underwriter expressly for use in the ML&Co. Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any ML&Co. preliminary prospectus or the ML&Co.
Prospectus (or any amendment or supplement thereto).
Insofar as this indemnity agreement may permit indemnification for
liabilities under the 1933 Act of any person who controls an underwriter within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and who,
at the date of this Agreement, is a director
24
<PAGE>
or officer of the Company or controls the Company within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act, such indemnity agreement is
subject to the undertaking of the Company in the ML&Co. Registration Statement
under Item 17 thereof.
(b) Indemnification of the Underwriter and the Company by CEI. CEI agrees
to indemnify and hold harmless (1) the Underwriter and each person, if any, who
controls the Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act and (2) the Company and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act, as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Cox Registration
Statement (or any amendment thereto), or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
Cox preliminary prospectus or the Cox Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, referred to under (i) above; provided
that (subject to Section 6(e) below) any such settlement is effected with
the written consent of CEI; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by the Underwriter or the
Company, as the case may be), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, referred to under (i) above,
to the extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to (A) any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to Cox by the
Underwriter expressly for use in the Cox Registration Statement (or any
amendment thereto), or any Cox preliminary prospectus or the Cox Prospectus (or
any amendment or supplement thereto) or (B) any loss, liability, claim, damage
or expense to the extent arising out of any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to Cox by the Company expressly for use in
the Cox Registration Statement (or any amendment thereto),
25
<PAGE>
or any Cox preliminary prospectus or the Cox Prospectus (or any amendment or
supplement thereto).
(c) Indemnification of the Company, Directors and Officers. The
Underwriter agrees to indemnify and hold harmless the Company, its directors,
each of its officers who signed the ML&Co. Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the ML&Co.
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any ML&Co.
preliminary prospectus or the ML&Co. Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by the Underwriter expressly for use in the ML&Co. Registration
Statement (or any amendment thereto) or such ML&Co. preliminary prospectus or
the ML&Co. Prospectus (or any amendment or supplement thereto).
(d) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) or
clause (1) of Section 6(b) above, counsel to the indemnified parties shall be
selected by the Underwriter, and, in the case of parties indemnified pursuant to
clause (2) of Section 6(b) or Section 6(c) above, counsel to the indemnified
parties shall be selected by the Company. An indemnifying party may participate
at its own expense in the defense of any such action; provided, however, that
counsel to the indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party. In no event shall
the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 6 or Section 7 hereof (whether
or not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(e) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of
26
<PAGE>
the nature contemplated by Section 6(a)(ii) and 6(b)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement .
SECTION 7. Contribution.
------------
(a) If the indemnification provided for in Sections 6(a) and 6(c) is for
any reason unavailable to or insufficient to hold harmless an indemnified party
in respect of any losses, liabilities, claims, damages or expenses referred to
therein, then the Company and the Underwriter shall contribute to the aggregate
amount of such losses, liabilities, claims, damages and expenses incurred by
such indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriter on the other hand from the offering of the Securities pursuant to
this Agreement or (ii) if the allocation provided by clause (i) is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and of the Underwriter on the other hand in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriter on the other hand in connection with the offering
of the Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the Underwriter, in
each case as set forth on the cover of the ML&Co. Prospectus, or, if Rule 434 is
used, the corresponding location on the ML&Co. Term Sheet, bear to the aggregate
initial public offering price of the Securities as set forth on such cover. The
relative fault of the Company on the one hand and the Underwriter on the other
hand shall be determined by reference to, among other things, whether any such
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company
or by the Underwriter and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
Notwithstanding the provisions of this Section 7(a), the Underwriter shall
not be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which the
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
The Company and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 7(a) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 7(a). The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7(a) shall be
27
<PAGE>
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7(a), each person, if any, who controls the
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as the Underwriter, and
each director of the Company, each officer of the Company who signed the ML&Co.
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company.
(b) If the indemnification provided for in Section 6(b) hereof is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then CEI on the one hand and the Underwriter and the Company on the
other hand shall contribute to the aggregate amount of such losses, liabilities,
claims, damages and expenses incurred by such indemnified party, as incurred,
(i) in such proportion as is appropriate to reflect the relative benefits
received by CEI on the one hand and by the Underwriter and the Company on the
other hand from the offering of the Securities pursuant to this Agreement or
(ii) if the allocation provided by clause (i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of CEI on
the one hand and of the Underwriter and the Company on the other hand in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations. The relative benefits received from the offering of
the Securities pursuant to this Agreement shall be deemed to be such that the
Underwriter and the Company shall be responsible for that portion of the
aggregate amount of such losses, liabilities, claims, damages and expenses
represented by the percentage that the total underwriting discount received by
the Underwriter, as set forth on the cover of the ML&Co. Prospectus, or, if Rule
434 is used, the corresponding location on the ML&Co. Term Sheet, bears to the
aggregate initial public offering price of the Securities as set forth on such
cover and CEI shall be responsible for the balance. The relative fault of CEI
on the one hand and the Underwriter and the Company on the other hand shall be
determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by CEI or Cox on the one
hand or by the Underwriter or the Company on the other hand and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
Notwithstanding the provisions of this Section 7(b), the Underwriter and
the Company shall not be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by the
Underwriter and distributed to the public were
28
<PAGE>
offered to the public exceeds the amount of any damages which the Underwriter
and the Company have otherwise been required to pay by reason of any such untrue
or alleged untrue statement or omission or alleged omission.
CEI, the Underwriter and the Company agree that it would not be just and
equitable if contribution pursuant to this Section 7(b) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 7(b). The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7(b) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7(b), each person, if any, who controls the
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as the Underwriter, and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
--------------------------------------------------------------
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company, Cox or CEI submitted pursuant hereto,
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Underwriter or controlling person, or
by or on behalf of the Company or CEI, and shall survive delivery of the
Securities to the Underwriter.
SECTION 9. Termination of Agreement.
------------------------
(a) Termination; General. The Underwriter may terminate this Agreement, by
notice to the Company and CEI, at any time at or prior to Closing Time (i) if
there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the ML&Co. Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has been, since the time of
execution of this Agreement, or since the respective dates as of which
information is given in the Cox Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of Cox and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, or (iii) if there has
occurred any material adverse change in the financial markets in the United
States, any outbreak of hostilities or escalation thereof or other calamity or
crisis or any change or development involving a prospective change in national
or
29
<PAGE>
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Underwriter,
impracticable to market the Securities or to enforce contracts for the sale of
the Securities, or (iv) if trading in any securities of the Company or in the
Cox Common Stock has been suspended or limited by the Commission or the New York
Stock Exchange, or if trading generally on the American Stock Exchange or the
New York Stock Exchange or in the Nasdaq National Market has been suspended or
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the NASD or any other governmental authority, or
(v) if a banking moratorium has been declared by either federal or New York
authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7 and 8 shall survive such termination and remain in full force and effect.
SECTION 10. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriter shall be directed to it at North Tower, World Financial Center, New
York, New York 10281-1201, attention of Douglas Squires, Managing Director;
notices to the Company shall be directed to it at 100 Church St., 12th Floor,
New York, New York 10007, attention of the Secretary, with a copy to the
Treasurer at World Financial Center, South Tower, New York, New York 10080-6107;
and notices to CEI shall be directed to it at 1400 Lake Hearn Drive, Atlanta,
Georgia 30319, attention of ____________.
SECTION 11. Parties. This Agreement shall each inure to the benefit of
-------
and be binding upon each of the Underwriter, the Company and CEI and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the parties hereto and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the parties hereto and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from the Underwriter shall be deemed to
be a successor by reason merely of such purchase.
SECTION 12. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
----------------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 13. Effect of Headings. The Article and Section headings herein
------------------
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
30
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the Underwriter, the Company and CEI in accordance with its terms.
Very truly yours,
MERRILL LYNCH & CO., INC.
By_________________________________
Name:
Title:
COX ENTERPRISES, INC.
By_________________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By__________________________________
Authorized Signatory
31
<PAGE>
SCHEDULE A
MERRILL LYNCH & CO. INC
____% STRYPES/SM/ DUE ____, 1999
1. The initial public offering price of the Securities shall be
$__________ per STRYPES.
2. The purchase price for the Securities to be paid by the
Underwriter shall be $___________ per STRYPES, being an amount equal to the
initial public offering price set forth above less $_______ per STRYPES.
3. The "Threshold Appreciation Price" with respect to the Securities
shall be $________.
__________________________
/SM/ Service mark of Merrill Lynch & Co., Inc.
Sch A - 1
<PAGE>
[SCHEDULE B]
[List of persons and entities subject to lock-up]
Sch B - 1
<PAGE>
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)(3)
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the ML&Co.
Prospectus and to enter into and perform its obligations under the
Underwriting Agreement.
(iii) The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(iv) Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S") has
been duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware, has corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the ML&Co. Prospectus and is duly qualified as a foreign
corporation to transact business and is in good standing in the State of New
York; all of the issued and outstanding capital stock of MLPF&S has been duly
authorized and validly issued, is fully paid and non-assessable and, to the
best of our knowledge, is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity; none of the outstanding shares of capital stock
of MLPF&S was issued in violation of the preemptive or similar rights of any
securityholder of MLPF&S.
(v) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
(vi) The Indenture has been duly authorized, executed and delivered by
the Company and (assuming the due authorization, execution and delivery
thereof by the Trustee) constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except
as the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of creditors'
rights generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
A-1
<PAGE>
(vii) The Securities are in the form contemplated by the Indenture, have
been duly authorized by the Company and, assuming that the Securities have
been duly authenticated by the Trustee in the manner described in its
certificate delivered to you today (which fact such counsel need not determine
by an inspection of the Securities), the Securities have been duly executed,
issued and delivered by the Company and constitute valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting enforcement
of creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law), and will be entitled to the benefits of
the Indenture.
(viii) The STRYPES Agreement has been duly authorized, executed and
delivered by [the Company and] the ML&Co. Subsidiary and (assuming the due
authorization, execution and delivery thereof by CEI) constitutes a valid and
binding agreement of [the Company and] the ML&Co. Subsidiary, enforceable
against [the Company and] the ML&Co. Subsidiary in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of creditors'
rights generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(ix) The Indenture has been duly qualified under the 1939 Act.
(x) The Securities, the Indenture and the STRYPES Agreement conform in
all material respects as to legal matters to the descriptions thereof
contained in the ML&Co. Prospectus.
(xi) The ML&Co. Registration Statement, including any ML&Co. Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act; any
required filing of the ML&Co. Prospectus pursuant to Rule 424(b) has been made
in the manner and within the time period required by Rule 424(b); and, to the
best of our knowledge, no stop order suspending the effectiveness of the
ML&Co. Registration Statement or any ML&Co. Rule 462(b) Registration Statement
has been issued under the 1933 Act and no proceedings for that purpose have
been instituted or are pending or threatened by the Commission.
(xii) The ML&Co. Registration Statement, including any ML&Co. Rule
462(b) Registration Statement, the Rule 430A Information and the Rule 434
Information, as applicable, the ML&Co. Prospectus, excluding the documents
incorporated by reference therein, and each amendment or supplement to the
ML&Co. Registration Statement and ML&Co. Prospectus, excluding the documents
incorporated by reference therein, as of their respective effective or issue
dates (other than the financial statements and supporting schedules included
therein or omitted therefrom, and the Trustee's Statement of Eligibility on
Form T-1 (the "Form T-1"), as to which we need express no opinion) complied as
to form in all material respects with the requirements of the 1933 Act and the
1933 Act Regulations.
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<PAGE>
(xiii) The documents incorporated by reference in the ML&Co. Prospectus
(other than the financial statements and supporting schedules included therein
or omitted therefrom, as to which we need express no opinion), when they
became effective or were filed with the Commission, as the case may be,
complied as to form in all material respects with the requirements of the 1933
Act or the 1934 Act, as applicable, and the rules and regulations of the
Commission thereunder.
(xiv) The Cox Registration Statement, including any Cox Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act; any
required filing of the Cox Prospectus pursuant to Rule 424(b) has been made in
the manner and within the time period required by Rule 424(b); and, to the
best of our knowledge, no stop order suspending the effectiveness of the Cox
Registration Statement or any Cox Rule 462(b) Registration Statement has been
issued under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or threatened by the Commission.
(xv) The Cox Registration Statement, including any Cox Rule 462(b)
Registration Statement, the Cox Prospectus, excluding the documents
incorporated by reference therein, and each amendment or supplement to the Cox
Registration Statement and Cox Prospectus, excluding the documents
incorporated by reference therein, as of their respective effective or issue
dates (other than the financial statements and supporting schedules included
therein or omitted therefrom, as to which we need express no opinion) complied
as to form in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations.
(xvi) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than under the 1933 Act and
the 1933 Act Regulations, which have been obtained, or as may be required
under the securities or blue sky laws of the various states and except for the
qualification of the Indenture under the 1939 Act, as to which we need express
no opinion) is necessary or required in connection with the due authorization,
execution and delivery of the Underwriting Agreement by the Company or the due
execution, delivery or performance of the Indenture [or the STRYPES Agreement]
by the Company or for the offering, issuance, sale or delivery of the
Securities or for the due execution, delivery or performance of the STRYPES
Agreement by the ML&Co. Subsidiary.
(xvii) (A) The execution, delivery and performance by the Company of
the Underwriting Agreement, the Indenture, the Securities [and the STRYPES
Agreement] and the consummation by the Company of the transactions
contemplated in the Underwriting Agreement, [the STRYPES Agreement] and in the
ML&Co. Registration Statement (including the issuance and sale of the
Securities and the delivery of shares of Cox Common Stock pursuant thereto and
the use of the proceeds from the sale of the Securities as described in the
ML&Co. Prospectus under the caption "Supplemental Use of Proceeds") and
compliance by the Company with its obligations under the Underwriting
Agreement, the Indenture, the Securities [and the STRYPES Agreement] and (B)
the execution, delivery and performance by the ML&Co. Subsidiary of the
STRYPES Agreement and the consummation by the ML&Co. Subsidiary of the
transactions contemplated therein and compliance by the ML&Co. Subsidiary with
its obligations under the STRYPES Agreement do not and will not, whether with
or without the giving of notice or lapse
A-3
<PAGE>
of time or both, conflict with or constitute a breach of, or default or
Repayment Event (as defined in Section 1(a)(xiii) of the Underwriting
Agreement) under or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company or any subsidiary
pursuant to any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or any other agreement or instrument, known to us, to
which the Company or any subsidiary is a party or by which it or any of them
may be bound, or to which any of the property or assets of the Company or any
subsidiary is subject (except for such conflicts, breaches or defaults or
liens, charges or encumbrances that would not have a Material Adverse Effect),
nor will such action result in any violation of the provisions of the charter
or by-laws of the Company or any subsidiary, or any applicable law, statute,
rule, regulation, judgment, order, writ or decree, known to us, of any
government, government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any subsidiary or any of their respective
properties, assets or operations.
We have participated in conferences with officers and representatives of
the Company and Cox, representatives of the independent accountants of the
Company and Cox, and the Underwriter at which the contents of the ML&Co.
Registration Statement and Prospectus, the contents of the Cox Registration
Statement and Prospectus and related matters were discussed and, although we
are not passing upon or assuming responsibility for the accuracy, completeness
or fairness of the statements contained or incorporated by reference in said
Registration Statements and Prospectuses and have made no independent check or
verification thereof, on the basis of the foregoing, nothing has come to our
attention that would lead us to believe (i) that the ML&Co. Registration
Statement or any amendment thereto, including the Rule 430A Information and
Rule 434 Information (if applicable), (except for financial statements and
schedules and other financial data included or incorporated by reference
therein or omitted therefrom and the Form T-1, as to which we need make no
statement), at the time such ML&Co. Registration Statement or any such
amendment became effective or at the date of the Underwriting Agreement,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the ML&Co. Prospectus or any
amendment or supplement thereto (except for financial statements and schedules
and other financial data included or incorporated by reference therein or
omitted therefrom, as to which we need make no statement), at the time the
ML&Co. Prospectus was issued, at the time any such amended or supplemented
prospectus was issued or at the Closing Time, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or (ii) that the Cox
Registration Statement or any amendment thereto, (except for financial
statements and schedules and other financial data included or incorporated by
reference therein or omitted therefrom, as to which we need make no
statement), at the time such Cox Registration Statement or any such amendment
became effective, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Cox Prospectus or any
amendment or supplement thereto (except for financial statements and schedules
and other financial data included or incorporated by reference therein or
omitted therefrom, as to which we need make no statement), at the time the Cox
Prospectus was issued, at the time any such amended or supplemented prospectus
was issued or at the Closing Time, included or includes an untrue statement of
a material fact or omitted or
A-4
<PAGE>
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
In rendering such opinion, such counsel may rely as to matters of fact (but
not as to legal conclusions), to the extent they deem proper, on certificates of
responsible officers of the Company and public officials.
A-5
<PAGE>
Exhibit B
FORM OF OPINION OF COX'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)(4)
(i) Cox has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, has
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Cox Prospectus and to enter into and
perform its obligations under the Registration Agreement and is duly qualified
as a foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a Material
Adverse Effect.
(ii) CEI has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation and has corporate power and authority to enter into and perform
its obligations under the Underwriting Agreement and the STRYPES Agreement.
(iii) The shares of issued and outstanding capital stock of Cox have
been duly authorized and validly issued and are fully paid and non-assessable;
and none of the outstanding shares of capital stock of Cox was issued in
violation of the preemptive or other similar rights of any securityholder of
Cox.
(iv) CEI is the sole registered owner of and has all rights in and to at
least _____________ shares of Cox Common Stock, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity.
(v) If immediately prior to maturity or redemption of the Securities CEI
delivers to the ML&Co. Subsidiary shares of Cox Common Stock pursuant to the
STRYPES Agreement, upon delivery by CEI to the ML&Co. Subsidiary of such
shares of Cox Common Stock pursuant to the STRYPES Agreement, the ML&Co.
Subsidiary will be the sole registered owner of the shares of Cox Common Stock
so delivered and, assuming the ML&Co. Subsidiary purchased for value in good
faith and without notice of any adverse claim, the ML&Co. Subsidiary will have
acquired all rights in and to such shares of Cox Common Stock, free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity.
(vi) Each Subsidiary has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
B-1
<PAGE>
Cox Prospectus and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect; except
as otherwise disclosed in the Cox Registration Statement, all of the issued
and outstanding capital stock of each Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and, to the best of our
knowledge, is owned by Cox, directly or through subsidiaries, free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity; none of the outstanding shares of capital stock of any Subsidiary was
issued in violation of the preemptive or similar rights of any securityholder
of such Subsidiary.
(vii) The Registration Agreement has been duly authorized, executed and
delivered by Cox.
(viii) The Underwriting Agreement has been duly authorized, executed and
delivered by CEI.
(ix) The STRYPES Agreement has been duly authorized, executed and
delivered by CEI and (assuming the due authorization, execution and delivery
thereof by the other parties thereto) constitutes a valid and binding
agreement of CEI, enforceable against CEI in accordance with its terms, except
as the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of creditors'
rights generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(x) The Cox Registration Statement, including any Cox Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act; any
required filing of the Cox Prospectus pursuant to Rule 424(b) has been made in
the manner and within the time period required by Rule 424(b); and, to the
best of our knowledge, no stop order suspending the effectiveness of the Cox
Registration Statement or any Cox Rule 462(b) Registration Statement has been
issued under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or threatened by the Commission.
(xi) The Cox Registration Statement, including any Cox Rule 462(b)
Registration Statement, the Cox Prospectus, excluding the documents
incorporated by reference therein, and each amendment or supplement to the Cox
Registration Statement and Cox Prospectus, excluding the documents
incorporated by reference therein, as of their respective effective or issue
dates (other than the financial statements and supporting schedules included
therein or omitted therefrom, as to which we need express no opinion) complied
as to form in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations.
(xii) The documents incorporated by reference in the Cox Prospectus
(other than the financial statements and supporting schedules included therein
or omitted therefrom, as to which we need express no opinion), when they
[became effective or] were filed with the Commission,
B-2
<PAGE>
[as the case may be,] complied as to form in all material respects with the
requirements of [the 1933 Act or] the 1934 Act [, as applicable,] and the
rules and regulations of the Commission thereunder.
(xiii) The form of certificate used to evidence the Cox Common Stock
complies in all material respects with all applicable statutory requirements,
with any applicable requirements of the charter and by-laws of Cox and the
requirements of the New York Stock Exchange.
(xiv) To the best of our knowledge, there is not pending or threatened
any action, suit, proceeding, inquiry or investigation, to which Cox or any
subsidiary is a party, or to which the property of Cox or any subsidiary is
subject, before or brought by any court or governmental agency or body,
domestic or foreign, (including the U.S. Federal Communications Commission
("FCC")) which might reasonably be expected to result in a Material Adverse
Effect, or which might reasonably be expected to materially and adversely
affect the properties or assets thereof or the consummation of the
transactions contemplated in the Registration Agreement or the performance by
Cox of its obligations thereunder.
(xv) The information in the Prospectus under "Business--Legislation and
Regulation", "Certain Transactions" and "Description of Capital Stock", and in
the Registration Statement under Items 14 and 15, to the extent that it
constitutes matters of law, summaries of legal matters, Cox's charter and
bylaws or legal proceedings, or legal conclusions, has been reviewed by us and
is correct in all material respects.
(xvi) To the best of our knowledge, there are no statutes or regulations,
and no legal or governmental proceedings pending or threatened to which Cox or
any of its subsidiaries is a party or to which any of the properties of Cox or
any of its subsidiaries is subject, that are required to be described in the
Cox Prospectus that are not described as required.
(xvii) All descriptions in the Cox Registration Statement of contracts
and other documents to which Cox or its subsidiaries are a party are accurate
in all material respects; to the best of our knowledge, there are no
franchises, contracts, indentures, mortgages, loan agreements, notes, leases
or other instruments required to be described or referred to in the Cox
Registration Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed or incorporated by reference as
exhibits thereto, and the descriptions thereof or references thereto are
correct in all material respects.
(xviii) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign, (including the FCC) (other than
under the 1933 Act and the 1933 Act Regulations, which have been obtained, or
as may be required under the securities or blue sky laws of the various
states, as to which we need express no opinion) is necessary or required in
connection with the due authorization, execution, and delivery by Cox of the
Registration Agreement or the performance by Cox of its obligations
thereunder.
(xix) The execution, delivery and performance of the Registration
Agreement and the consummation of the transactions contemplated in the
Registration Agreement and in the Cox
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<PAGE>
Registration Statement and compliance by Cox with its obligations under the
Registration Agreement do not and will not, whether with or without the giving
of notice or lapse of time or both, conflict with or constitute a breach of,
or default or Repayment Event (as defined in Section [1(a)(xi)] of the
Registration Agreement) under or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of Cox or any
subsidiary pursuant to, any contract, indenture, mortgage, deed of trust, loan
or credit agreement, note, lease or any other agreement or instrument, known
to us, to which Cox or any subsidiary is a party or by which it or any of them
may be bound, or to which any of the property or assets of Cox or any
subsidiary is subject (except for such conflicts, breaches or defaults or
liens, charges or encumbrances that would not have a Material Adverse Effect),
nor will such action result in any violation of the provisions of the charter
or by-laws of Cox or any subsidiary, or any applicable law, statute, rule,
regulation, judgment, order, writ or decree, known to us, of any government,
government instrumentality or court, domestic or foreign, having jurisdiction
over Cox or any subsidiary or any of their respective properties, assets or
operations.
(xx) No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority
or agency (including the FCC) (other than under the 1933 Act and the 1933 Act
Regulations, which have been obtained, or as may be required under the
securities or blue sky laws of the various states, as to which we need express
no opinion) is necessary or required in connection with the due authorization,
execution and delivery by CEI of the Underwriting Agreement or the STRYPES
Agreement or the performance by CEI of its obligations thereunder.
(xxi) The execution, delivery and performance by CEI of the Underwriting
Agreement and the STRYPES Agreement and the consummation by CEI of the
transactions contemplated therein and compliance by CEI with its obligations
thereunder have been duly authorized by all necessary corporate action and do
not and will not, whether with or without the giving of notice or lapse of
time or both, conflict with or constitute a breach of, or default or CEI
Repayment Event under or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of CEI or any of its
subsidiaries pursuant to, any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or any other agreement or instrument,
known to us, to which CEI or any of its subsidiaries is a party or by which it
or any of them may be bound, or to which any of the property or assets of CEI
or any of its subsidiaries is subject (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not, singly or in the
aggregate, materially and adversely affect the ability of CEI to perform its
obligations under the Underwriting Agreement or the STRYPES Agreement), nor
will such action result in any violation of the provisions of the charter or
by-laws of CEI or any of its subsidiaries, or any applicable law, statute,
rule, regulation, judgment, order, writ or decree, known to us, of any
government, government instrumentality or court, domestic or foreign, having
jurisdiction over CEI or any of its subsidiaries or any of their respective
assets, properties or operations (except for such violations that would not,
singly or in the aggregate, materially and adversely affect the ability of CEI
to perform its obligations under the Underwriting Agreement or the STRYPES
Agreement).
(xxii) Cox has been granted and presently holds the FCC authorizations
necessary for Cox to conduct its business as presently conducted or proposed
to be conducted, except such as would
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<PAGE>
not have, singly or in the aggregate with all such other authorizations that
have not been granted or are not presently held, a Material Adverse Effect;
such FCC authorizations are valid and in full force and effect, except when
the invalidity of such authorizations or the failure of such authorizations to
be in full force and effect would not have a Material Adverse Effect; and to
our knowledge, no proceedings to revoke or modify any of such FCC
authorizations are pending or threatened.
(xxiii)To our knowledge after due inquiry, we are of the opinion that Cox
is not, nor with the giving of notice or lapse of time or both would be, in
violation of any judgment, injunction, order or decree of the FCC other than
those that would not have, singly or in the aggregate with all such other
violations, a Material Adverse Effect.
(xxiv)The execution, delivery and performance of the Registration
Agreement by Cox, and the execution, delivery and performance of the
Underwriting Agreement and the STRYPES Agreement by CEI, do not violate the
Communications Act of 1934, as amended, or any rules or the regulations
thereunder binding on Cox, CEI or their respective subsidiaries or any
order, writ, judgment, injunction, decree or award of the FCC binding on Cox,
CEI or their respective subsidiaries of which we have knowledge after due
inquiry.
(xxv)The execution, delivery and performance of the STRYPES Agreement
does not constitute the transfer or assignment, directly or indirectly, of any
license existing as of the date hereof issued by the FCC in connection with
the operations of Cox or the transfer of control of Cox within the meaning of
Section 310(d) of the Communications Act of 1934, as amended.
(xxvi) Cox is not an "investment company" or an entity "controlled" by
an "investment company," as such terms are defined in the 1940 Act.
We have participated in conferences with officers and representatives of
Cox, representatives of the independent accountants of Cox, and the
Underwriter at which the contents of the Cox Registration Statement and the
Cox Prospectus and related matters were discussed and, although we are not
passing upon or assuming responsibility for the accuracy, completeness or
fairness of the statements contained or incorporated by reference in the Cox
Registration Statement and the Cox Prospectus and have made no independent
check or verification thereof except as described in paragraph (xv) above, on
the basis of the foregoing, nothing has come to our attention that would lead
us to believe that the Cox Registration Statement or any amendment thereto
(except for financial statements and schedules and other financial data
included or incorporated by reference therein or omitted therefrom, as to
which we need make no statement), at the time such Cox Registration Statement
or any such amendment became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Cox Prospectus or any amendment or supplement thereto (except for financial
statements and schedules and other financial data included or incorporated by
reference therein or omitted therefrom, as to which we need make no
statement), at the time the Cox Prospectus was issued, at the time any such
amended or supplemented prospectus was issued or at the Closing Time, included
or includes an untrue statement of a material fact or omitted or omits to
state a material fact necessary in
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<PAGE>
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
[In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the State of New
York, the corporate laws of the State of Delaware or the federal laws of the
United States of America, to the extent such counsel deems proper and
specified in such opinion, upon the opinion of other counsel whom such counsel
believes to be reliable, provided that such counsel furnishes copies thereof
to the Underwriter and states that such opinion of such local counsel is
satisfactory in form and substance and the Underwriter and counsel for the
Underwriter are entitled to rely thereon, and (B) as to matters of fact (but
not as to legal conclusions), to the extent they deem proper, on certificates
of responsible officers of Cox, CEI and public officials. As used in this
Exhibit B, the terms "Material Adverse Effect", "Subsidiary" and
"Subsidiaries" shall have the meanings ascribed to them in the Registration
Agreement.]
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<PAGE>
[FORM OF LOCK-UP FROM DIRECTORS, OFFICERS OR OTHER
STOCKHOLDERS PURSUANT TO SECTION 5(a)(15)]
Exhibit C
___________, 1996
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Re: Proposed Public Offering of STRYPES by Merrill Lynch & Co. Inc.
---------------------------------------------------------------
Ladies and Gentlemen:
The undersigned, a stockholder [and an officer and/or director] of Cox
Communications, Inc., a Delaware corporation (the "Company"), understands that
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch") proposes to enter into an Underwriting Agreement (the
"Underwriting Agreement") with Merrill Lynch & Co., Inc. ("ML&Co.") and Cox
Enterprises, Inc. providing for the public offering of ML&Co.'s Structured Yield
Product Exchangeable for Stock/sm/, __% STRYPES/sm/ due _________, 1999, payable
at maturity or upon redemption with shares of Class A Common Stock, par value
$1.00 per share (the "Cox Common Stock"), of the Company. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
undersigned agrees with Merrill Lynch that, during a period of 120 days from the
date of the Underwriting Agreement, the undersigned will not, without the prior
written consent of Merrill Lynch, offer, sell, contract to sell or otherwise
dispose of, directly or indirectly, any shares of Cox Common Stock or any
securities convertible into, exchangeable for or repayable with shares of Cox
Common Stock, whether now owned or hereafter acquired by the undersigned or with
respect to which the undersigned has or hereafter acquires the power of
disposition, or cause to be filed any registration statement under the
Securities Act of 1933, as amended, with respect to any of the foregoing.
Very truly yours,
Signature:
Print Name:
C-1
