SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):August 12, 1999
Cox Communications, Inc.
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(Exact name of Registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation or organization)
1-6590 58-2112288
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(Commission File Number) (I.R.S. Employer Identification Number)
1400 Lake Hearn Drive
Atlanta, Georgia 30319
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(Address of principal executive offices) (Zip Code)
(404) 843-5000
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(Registrant's telephone number, including area code)
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Item 5. Other Events.
This Current Report on Form 8-K is being filed to incorporate by reference
certain documents into Cox's registration statement on Form S-3 (Registration
No. 333-82575) in connection with (i) the sale by Cox on August 12, 1999 of
10,100,000 shares of Class A common stock, par value $1.00 per share for an
aggregate amount of $350,343,750; (ii) the sale by Cox on August 12, 1999 of
13,000,000 FELINE PRIDES, consisting of 11,700,000 Income PRIDES and 1,300,000
Growth PRIDES, and $65,000,000 aggregate liquidation amount of 7% Capital
Securities of Cox Trust II, a wholly owned financing subsidiary of Cox; and
(iii) the sale by Cox on August 13, 1999 of $525,000,000 aggregate principal
amount of Floating Rate Notes due August 15, 2000, $300,000,000 aggregate
principal amount of 7% Notes due August 15, 2001, $375,000,000 aggregate
principal amount of 7-1/2% Notes due August 15, 2004, $400,000,000 aggregate
principal amount of 7-3/4 Notes due August 15, 2006 and $400,000,000 aggregate
principal amount of 7-7/8% Notes due August 15, 2009. Such documents consist of
(i) the U.S. and International purchase agreements relating to the Class A
common stock; (ii) the underwriting agreement relating to the FELINE PRIDES;
(iii) the purchase agreement relating to the notes; (iv) the purchase contract
agreement relating to the FELINE PRIDES; (v) the remarketing agreement relating
to the FELINE PRIDES; (vi) the pledge agreement relating to the FELINE PRIDES;
(vii) the supplemental indenture relating to the FELINE PRIDES; and (ix) an
opinion of Dow, Lohnes & Albertson, PLLC, Cox's special tax counsel as to
certain tax matters related to the FELINE PRIDES.
Item 7. Financial Statements and Exhibits
(a) Not applicable.
(b) Not applicable.
(c) Exhibits:
1.1 U.S. Purchase Agreement, dated as of August 9, 1999,
among Cox, Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated and the several
underwriters relating to the issuance and sale of
8,080,000 shares of Class A common stock.
1.2 International Purchase Agreement, dated as of August 9,
1999, among Cox, Merrill Lynch International and the
several managers relating to the issuance and sale of
2,020,000 shares of Class A common stock.
1.3 Underwriting Agreement, dated as of August 9, 1999,
among Cox, Cox Trust II, Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated and the
several underwriters relating to the issuance and sale
of the FELINE PRIDES.
1.4 Purchase Agreement, dated as of August 10, 1999, among
the Company, Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated and the several
underwriters relating to the issuance and sale of the
notes.
4.1 Purchase Contract Agreement, dated as of August 12,
1999, between Cox and The First National Bank of
Chicago, as Purchase Contract Agent.
4.2 Remarketing Agreement, dated as of August 12, 1999,
among Cox, Cox Trust II, The First National Bank of
Chicago, as Purchase Contract Agent, and Merrill Lynch
& Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated as Remarketing Agent.
4.3 Pledge Agreement, dated as of August 12, 1999, among
Cox, The Bank of New York, as Collateral Agent,
Custodial Agent and Securities Intermediary, and The
First National Bank of Chicago, as Purchase Contract
Agent.
4.4 Supplemental Indenture, dated as of August 12, 1999,
between Cox and The Bank of New York, as Trustee.
8.1 Opinion of Dow, Lohnes & Albertson, PLLC, relating to
the FELINE PRIDES.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
COX COMMUNICATIONS, INC.
Dated: August __, 1999 By: /s/ Andrew A. Merdek
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Andrew A. Merdek
Secretary
Exhibit 1.1
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COX COMMUNICATIONS, INC.
(a Delaware corporation)
8,080,000 Shares of Common Stock
U.S. PURCHASE AGREEMENT
Dated August 9, 1999
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Table of Contents
Page
SECTION 1. Representations and Warranties..................................4
(a) Representations and Warranties by the Company...................4
(i) Compliance with Registration Requirements............4
(ii) Incorporated Documents...............................5
(iii) Independent Accountants..............................5
(iv) Financial Statements.................................5
(v) No Material Adverse Change in Business...............6
(vi) Good Standing of the Company.........................6
(vii) Good Standing of Subsidiaries........................6
(viii) Capitalization.......................................7
(ix) Authorization of Agreement...........................7
(x) Authorization and Description of Securities..........7
(xi) Absence of Defaults and Conflicts....................7
(xii) Absence of Labor Dispute.............................8
(xiii) Absence of Proceedings...............................8
(xiv) Accuracy of Exhibits.................................8
(xv) Possession of Intellectual Property..................8
(xvi) Absence of Further Requirements......................9
(xvii) Possession of Licenses and Permits...................9
(xviii) Title to Property....................................9
(xix) Investment Company Act..............................10
(xx) Environmental Laws..................................10
(b) Officer's Certificates.........................................10
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing................10
(a) Initial Securities.............................................10
(b) Option Securities..............................................11
(c) Payment........................................................11
(d) Denominations; Registration....................................12
SECTION 3. Covenants of the Company.......................................12
(a) Compliance with Securities Regulations and Commission Requests.12
(b) Filing of Amendments...........................................12
(c) Delivery of Registration Statements............................12
(d) Delivery of Prospectuses.......................................13
(e) Continued Compliance with Securities Laws......................13
(f) Blue Sky Qualifications........................................13
(g) Rule 158.......................................................14
(h) Use of Proceeds................................................14
(i) Listing........................................................14
(j) Restriction on Sale of Securities..............................14
(k) Reporting Requirements.........................................14
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SECTION 4. Payment of Expenses.
(a) Expenses.......................................................15
(b) Termination of Agreement.......................................15
SECTION 5. Conditions of U.S. Underwriters' Obligations...................15
(a) Effectiveness of Registration Statement........................15
(b) Opinion of Counsel for Company.................................16
(c) Opinion of Counsel for U.S. Underwriters.......................16
(d) Officers' Certificate..........................................16
(e) Accountant's Comfort Letter....................................16
(f) Bring-down Comfort Letter......................................17
(g) Approval of Listing............................................17
(h) Lock-up Agreements.............................................17
(i) Purchase of Initial International Securities...................17
(j) Conditions to Purchase of U.S. Option Securities...............17
(k) Additional Documents...........................................18
(l) Termination of Agreement.......................................18
SECTION 6. Indemnification................................................18
(a) Indemnification of U.S. Underwriters...........................18
(b) Indemnification of Company, Directors and Officers.............19
(c) Actions against Parties; Notification..........................19
(d) Settlement without Consent if Failure to Reimburse.............20
SECTION 7. Contribution...................................................20
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.22
SECTION 9. Termination of Agreement.......................................22
(a) Termination; General...........................................22
(b) Liabilities....................................................22
SECTION 10. Default by One or More of the U.S. Underwriters................22
SECTION 11. Notices........................................................23
SECTION 12. Parties........................................................23
SECTION 13. GOVERNING LAW AND TIME.........................................24
SECTION 14. Effect of Headings.............................................24
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SCHEDULES
Schedule A - List of Underwriters.............................Sch A-1
Schedule B - Pricing Information..............................Sch B-1
Schedule C - List of Persons subject to Lock-up...............Sch C-1
Schedule D - List of Subsidiaries.............................Sch D-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel..................A-1
Exhibit B - Form of Lock-up Letter................................B-1
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COX COMMUNICATIONS, INC.
(a Delaware corporation)
8,080,000 Shares of Class A Common Stock
(Par Value $1.00 Per Share)
U.S. PURCHASE AGREEMENT
August 9, 1999
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Morgan Stanley & Co. Incorporated
Bear, Stearns & Co. Inc.
Credit Suisse First Boston Corporation
Goldman, Sachs & Co.
Salomon Smith Barney Inc
SG Cowen Securities Corporation
as U.S. Representatives of the several U.S. Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Cox Communications, Inc., a Delaware corporation (the "Company"),
confirms its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch"), Morgan Stanley & Co. Incorporated ("Morgan
Stanley") and each of the other U.S. Underwriters named in Schedule A hereto
(collectively, the "U.S. Underwriters", which term shall also include any
underwriter substituted as hereinafter provided in Section 10 hereof), for whom
Merrill Lynch, Morgan Stanley, Bear, Stearns & Co. Inc., Credit Suisse First
Boston Corporation, Goldman, Sachs & Co., Salomon Smith Barney Inc and SG Cowen
Securities Corporation are acting as Representatives (in such capacity, the
"U.S. Representatives"), with respect to the issue and sale by the Company and
the purchase by the U.S. Underwriters, acting severally and not jointly, of the
respective numbers of shares of Class A Common Stock, par value $1.00 per share,
of the Company ("Common Stock") set forth in said Schedule A, and with respect
to the grant by the Company to the U.S. Underwriters, acting severally and not
jointly, of the option described in Section 2(b) hereof to purchase all or any
part of 1,212,000 additional shares of Common Stock to cover over-allotments, if
any. The aforesaid 8,080,000 shares of Common Stock (the "Initial U.S.
Securities") to be purchased by
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the U.S. Underwriters and all or any part of the 1,212,000 shares of Common
Stock subject to the option described in Section 2(b) hereof (the "U.S. Option
Securities") are hereinafter called, collectively, the "U.S. Securities".
It is understood that the Company is concurrently entering into an
agreement dated the date hereof (the "International Purchase Agreement")
providing for the offering by the Company of an aggregate of 2,020,000 shares of
Common Stock (the "Initial International Securities") through arrangements with
Merrill Lynch International, Morgan Stanley & Co. International Limited, Bear,
Stearns International Limited, Cazenove & Co., Credit Suisse First Boston
(Europe) Limited, Goldman Sachs International, Salomon Brothers International
Limited and Societe Generale, as underwriters outside the United States and
Canada (the "International Managers"), and the grant by the Company to the
International Managers, acting severally and not jointly, of an option to
purchase all or any part of the International Managers' pro rata portion of up
to 303,000 additional shares of Common Stock solely to cover over-allotments, if
any (the "International Option Securities" and, together with the U.S. Option
Securities, the "Option Securities"). The Initial International Securities and
the International Option Securities are hereinafter called the "International
Securities". It is understood that the Company is not obligated to sell, and the
U.S. Underwriters are not obligated to purchase, any Initial U.S. Securities
unless all of the Initial International Securities are contemporaneously
purchased by the International Managers.
The U.S. Underwriters and the International Managers are hereinafter
collectively called the "Underwriters", the Initial U.S. Securities and the
Initial International Securities are hereinafter collectively called the
"Initial Securities", and the U.S. Securities and the International Securities
are hereinafter collectively called the "Securities".
It is also understood that, concurrent with the initial issuance of the
Common Stock, the Company will be offering and selling its (i) FELINE PRIDES,
consisting of, among other things, stock purchase contracts pursuant to which
holders will purchase from the Company a specified number of shares of its
Common Stock on or prior to August 16, 2002 and (ii) debt securities, in each
case pursuant to underwriting agreements to be entered into among the Company
and Merrill Lynch and the other underwriters named therein (each, a "Concurrent
Offering"). The obligations of the Company and Underwriters contained in this
Agreement and the International Purchase Agreement are not conditioned upon the
consummation of either Concurrent Offering.
The Underwriters will concurrently enter into an Intersyndicate
Agreement of even date herewith (the "Intersyndicate Agreement") providing for
the coordination of certain transactions among the Underwriters under the
direction of Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated (in such capacity, the "Global Coordinator").
The Company understands that the U.S. Underwriters propose to make a
public offering of the U.S. Securities as soon as the U.S. Representatives deem
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 (Nos. 333-82575, 333-82575-01
and 333-82575-02) and pre-effective amendment nos. 1, 2 and 3 thereto covering
the registration of
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certain securities, including the Securities, under the Securities Act of 1933,
as amended (the "1933 Act"), including the related preliminary prospectus or
prospectuses, 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"). Promptly after execution and delivery of this Agreement, the
Company will either (i) prepare and file a prospectus 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 (a "Term Sheet") in accordance with
the provisions of Rule 434 and Rule 424(b). Two forms of prospectus are to be
used in connection with the offering and sale of the Securities: one relating to
the U.S. Securities (the "Form of U.S. Prospectus") and one relating to the
International Securities (the "Form of International Prospectus"). The Form of
International Prospectus is identical to the Form of U.S. Prospectus, except for
the front cover and back cover pages and the information under the caption
"Underwriting". The information included in any such prospectus or in any such
Term Sheet, as the case may be, that was omitted from such registration
statement at the time it became effective but that is deemed to be part of such
registration statement at the time it became effective (a) pursuant to paragraph
(b) of Rule 430A is referred to as "Rule 430A Information" or (b) pursuant to
paragraph (d) of Rule 434 is referred to as "Rule 434 Information." Each Form of
U.S. Prospectus and Form of International Prospectus used before such
registration statement became effective, and any prospectus 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, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits thereto, 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
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final Form of U.S.
Prospectus and the final Form of International Prospectus, including the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, in the forms first furnished to the Underwriters for use in
connection with the offering of the Securities are herein called the "U.S.
Prospectus" and the "International Prospectus," respectively, and collectively,
the "Prospectuses." If Rule 434 is relied on, the terms "U.S. Prospectus" and
"International Prospectus" shall refer to the preliminary U.S. Prospectus dated
July 28, 1999 and preliminary International Prospectus dated July 28, 1999,
respectively, each together with the applicable Term Sheet and all references in
this Agreement to the date of such Prospectuses shall mean the date of the
applicable Term Sheet. For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the U.S. Prospectus, the
International Prospectus or any 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
Registration Statement, any preliminary prospectus (including the Form of U.S.
Prospectus and Form of International Prospectus) or the Prospectuses (or other
references of like import) shall be deemed to mean and
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include all such financial statements and schedules and other information which
is incorporated by reference in the Registration Statement, any preliminary
prospectus (including the Form of U.S. Prospectus and Form of International
Prospectus) or the Prospectuses, as the case may be; and all references in this
Agreement to amendments or supplements to the Registration Statement, any
preliminary prospectus or the Prospectuses shall be deemed to mean and include
the filing of any document under the Securities Exchange Act of 1934 (the "1934
Act") which is incorporated by reference in the Registration Statement, such
preliminary prospectus or the Prospectuses, as the case may be.
SECTION 1.........Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents and
warrants to each U.S. 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 U.S. 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
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any 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 Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any U.S. Option
Securities are purchased, at the Date of Delivery), the Registration
Statement, the Rule 462(b) Registration Statement and any amendments
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 of the
Prospectuses nor any amendments or supplements thereto, at the time
the Prospectuses or any amendments or supplements thereto were issued
and at the Closing Time (and, if any U.S. 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 statements in or omissions from the
Registration Statement (or any amendment thereto) or the U.S.
Prospectus (or any amendment or supplement thereto) made in reliance
upon and in conformity with information furnished to the Company in
writing by any U.S. Underwriter through the U.S. Representatives
expressly for use in the Registration Statement (or such amendment
thereto) or the U.S. Prospectus (or such amendment or supplement
thereto).
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Each preliminary prospectus and the prospectuses filed as part
of the 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 each preliminary prospectus and the Prospectuses
delivered to the Underwriters for use in connection with this offering
was identical in all material respects 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 Registration Statement and the
Prospectuses, 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
Prospectuses, at the time the Registration Statement became effective,
at the time the Prospectuses were issued and at the Closing Time (and,
if any U.S. 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 of the Company and its
subsidiaries, of Cox Communications PCS, L.P. ("PCS") and its
subsidiaries and of TCA Cable TV, Inc. ("TCA") and its subsidiaries
included in the Registration Statement and the Prospectuses are
independent public accountants with respect to the Company and its
subsidiaries as required by the 1933 Act and the 1933 Act Regulations.
(iv) Financial Statements. The financial statements of the Company
included in the Registration Statement and the Prospectuses, 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 PCS included in the Registration Statement and
the Prospectuses, together with the related schedules and notes,
present fairly the financial position of PCS and its consolidated
subsidiaries at the dates indicated and the statement of operations,
stockholders' equity and cash flows of PCS 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 financial statements of TCA
included in the Registration Statement and the Prospectuses, together
with the related schedules and notes, present fairly the financial
position of TCA and its consolidated subsidiaries at the date
indicated and the statement of operations, stockholders' equity and
cash flows of TCA and its subsidiaries for the period specified; said
financial statements have been prepared in conformity with GAAP. The
supporting schedules, if any, included in the Registration Statement
and the Prospectuses present fairly in accordance with GAAP the
information required to be
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stated therein. The selected financial data and the summary financial
information included in the Prospectuses present fairly the
information shown therein and have been compiled on a basis consistent
with that of the audited financial statements included in the
Registration Statement. The pro forma financial statements of the
Company and its consolidated subsidiaries and the related notes
thereto included in the Registration Statement and the Prospectuses
present fairly the information shown therein, have been prepared in
accordance with the Commission's rules and guidelines with respect to
pro forma financial statements and have been properly compiled on the
bases described therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances
referred to therein.
(v) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statement
and the Prospectuses, 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 corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectuses 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 or
limited liability company in good standing under the laws of the
jurisdiction of its incorporation or organization, as the case may be,
has corporate or other power and authority to own, lease and operate
its properties and to conduct its business as described in the
Prospectuses 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 Registration Statement, all of the issued and outstanding capital
stock of each such Subsidiary owned by the Company, directly or
through subsidiaries, has been duly authorized and validly issued, is
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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 Company are (a) the subsidiaries
listed on Schedule D hereto 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 authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectuses in the column
entitled "Cox Historical" under the caption "Capitalization" (except
for subsequent issuances, if any, pursuant to this Agreement, pursuant
to reservations, agreements or employee benefit plans referred to in
the Prospectuses or pursuant to the exercise of convertible securities
or options referred to in the Prospectuses). 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) Authorization of Agreement. This Agreement and the
International Purchase Agreement have been duly authorized, executed
and delivered by the Company.
(x) Authorization and Description of Securities. The Securities
to be purchased by the U.S. Underwriters and the International
Managers from the Company have been duly authorized for issuance and
sale to the U.S. Underwriters pursuant to this Agreement and the
International Managers pursuant to the International Purchase
Agreement, respectively, and, when issued and delivered by the Company
pursuant to this Agreement and the International Purchase Agreement,
respectively, against payment of the consideration set forth herein
and the International Purchase Agreement, respectively, will be
validly issued, fully paid and non-assessable; the Common Stock
conforms to all statements relating thereto contained in the
Prospectuses and such description conforms to the rights set forth in
the instruments defining the same; no holder of the Securities will be
subject to personal liability by reason of being such a holder; and
the issuance of the Securities is not subject to the preemptive or
other similar rights of any securityholder of the Company.
(xi) Absence of Defaults and Conflicts. Neither the Company nor
any of its subsidiaries is in violation of its charter or by-laws or
other constitutive documents 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 International Purchase Agreement and the
consummation of the transactions contemplated in this Agreement, the
International Purchase Agreement and in the Registration Statement
(including the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities as described in the
Prospectuses under the caption "Use of Proceeds") and compliance by
the Company with its obligations under
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this Agreement and the International Purchase Agreement 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 or other constitutive documents
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 (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 which, 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
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 and the International
Purchase Agreement or the performance by the Company of its
obligations hereunder or thereunder; 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 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 Registration Statement, the
Prospectuses or the documents incorporated by reference therein or to
be filed as exhibits thereto which have not been so described and
filed as required.
(xv) Possession of Intellectual Property. Except as disclosed
in the Prospectuses, 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
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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, in connection with the offering, issuance
or sale of the Securities under this Agreement and the International
Purchase Agreement or the consummation of the transactions
contemplated by this Agreement and the International Purchase
Agreement, except such as have been already obtained or as may be
required under the 1933 Act or the 1933 Act Regulations and foreign or
state securities laws, the laws of a foreign jurisdiction or the
by-laws and rules of the NASD.
(xvii) Possession of Licenses and Permits. The Company and its
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 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 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 Prospectuses 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 Prospectuses, 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
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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) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectuses will not be, an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended (the "1940
Act").
(xx) Environmental Laws. Except as described in the Registratio
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 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
delivered to the Global Coordinator, the U.S. Representatives or to counsel for
the U.S. Underwriters in connection with the offering of the Securities shall be
deemed a representation and warranty by the Company to each U.S. Underwriter as
to the matters covered thereby.
SECTION 2. Sale and Delivery to U.S. Underwriters; 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 each U.S. Underwriter, severally and not jointly, and
each U.S. Underwriter, severally and not jointly, agrees to purchase from the
Company, at the price per share set forth in Schedule B, the number of Initial
U.S. Securities set forth in Schedule A opposite the name of such U.S.
Underwriter, plus any additional number of Initial U.S. Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
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(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 U.S. Underwriters, severally
and not jointly, to purchase up to an additional 1,212,000 shares of Common
Stock at the price per share set forth in Schedule B, less an amount per share
equal to any dividends or distributions declared by the Company and payable on
the Initial U.S. Securities but not payable on the U.S. Option Securities. 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 U.S. Securities upon notice by the Global
Coordinator to the Company setting forth the number of U.S. Option Securities as
to which the several U.S. Underwriters are then exercising the option and the
time and date of payment and delivery for such U.S. Option Securities. Any such
time and date of delivery for the U.S. Option Securities (a "Date of Delivery")
shall be determined by the Global Coordinator, 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. If the option is exercised as to all
or any portion of the U.S. Option Securities, each of the U.S. Underwriters,
acting severally and not jointly, will purchase that proportion of the total
number of U.S. Option Securities then being purchased which the number of
Initial U.S. Securities set forth in Schedule A opposite the name of such U.S.
Underwriter bears to the total number of Initial U.S. Securities, subject in
each case to such adjustments as the Global Coordinator in its discretion shall
make to eliminate any sales or purchases of fractional shares.
(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 LLP, or
at such other place as shall be agreed upon by the Global Coordinator and the
Company, at 9:00 A.M. (Eastern time) on the third business day after the date
hereof (unless postponed in accordance with the provisions of Section 10), or
such other time not later than ten business days after such date as shall be
agreed upon by the Global Coordinator 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 U.S. Option Securities
are purchased by the U.S. Underwriters, payment of the purchase price for, and
delivery of certificates for, such U.S. Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
Global Coordinator and the Company, on each Date of Delivery as specified in the
notice from the Global Coordinator to the Company.
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 U.S. Representatives for the respective accounts of the U.S. Underwriters of
certificates for the U.S. Securities to be purchased by them. It is understood
that each U.S. Underwriter has authorized the U.S. Representatives, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Initial U.S. Securities and the U.S. Option Securities, if any,
which it has agreed to purchase. Merrill Lynch, individually and not as
representative of the U.S. Underwriters, may (but shall not be obligated to)
make payment of the purchase price for the Initial U.S. Securities or the U.S.
Option Securities, if any, to be purchased by any U.S. Underwriter whose funds
have not been received by the Closing Time or the relevant Date of
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Delivery, as the case may be, but such payment shall not relieve such U.S.
Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial U.S. Securities
and the U.S. Option Securities, if any, shall be in such denominations and
registered in such names as the U.S. Representatives 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 U.S. Securities
and the U.S. Option Securities, if any, will be made available for examination
and packaging by the U.S. Representatives 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 of the Company. The Company covenants with each
U.S. Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule
430A or Rule 434, as applicable, and will notify the Global Coordinator
immediately, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective, or any
supplement to the Prospectuses or any amended Prospectuses 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 Registration
Statement or any amendment or supplement to the Prospectuses or for
additional information, and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of
any order preventing or suspending the use of any 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 use its reasonable 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 Global Coordinator
notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any Term
Sheet or any amendment, supplement or revision to either the prospectus
included in the Registration Statement at the time it became effective or
to the Prospectuses, whether pursuant to the 1933 Act, the 1934 Act or
otherwise, will furnish the Global Coordinator 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
Global Coordinator or counsel for the U.S. Underwriters shall object in
writing within three business days of receipt.
(c) Delivery of Registration Statements. The Company has furnished or will
deliver to the U.S. Representatives and counsel for the U.S. Underwriters,
without
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charge, signed copies of the 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, and will also deliver to the U.S. Representatives,
without charge, a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without exhibits) for each
of the U.S. Underwriters. The copies of the Registration Statement and each
amendment thereto furnished to the U.S. Underwriters will be identical in
all material respects 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 Prospectuses. The Company has delivered to each U.S.
Underwriter, without charge, as many copies of each preliminary prospectus
as such U.S. 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 each U.S. Underwriter, without charge, during
the period when the U.S. Prospectus is required to be delivered under the
1933 Act or the 1934 Act, such number of copies of the U.S. Prospectus (as
amended or supplemented) as such U.S. Underwriter may reasonably request.
The U.S. Prospectus and any amendments or supplements thereto furnished to
the U.S. Underwriters will be identical in all material respects 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 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, the International Purchase
Agreement and in the Prospectuses. 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 U.S. Underwriters
or for the Company, to amend the Registration Statement or amend or
supplement any Prospectus in order that the Prospectuses 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 any such counsel,
at any such time to amend the Registration Statement or amend or supplement
any 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(b), such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectuses comply with such requirements,
and the Company will furnish to the U.S. Underwriters, without charge, such
number of copies of such amendment or supplement as the U.S. Underwriters
may reasonably request.
(f) Blue Sky Qualifications. The Company will use its reasonable best
efforts, in cooperation with the U.S. Underwriters, to qualify the
Securities for offering and sale under the applicable securities laws of
such states and other jurisdictions as the Global
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Coordinator 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 Registration Statement and any 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
Registration Statement and any Rule 462(b) Registration Statement.
(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) 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 Prospectuses
under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect the listing of
the Securities on the New York Stock Exchange.
(j) Restriction on Sale of Securities. During a period of 90 days from the
date of the Prospectuses, the Company will not, without the prior written
consent of Merrill Lynch and Morgan Stanley, (i) directly or indirectly,
offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase or otherwise dispose of or transfer any shares of
Common Stock or any securities convertible into or exercisable or
exchangeable for or repayable with Common Stock or file any registration
statement under the 1933 Act with respect to any of the foregoing or (ii)
directly or indirectly, enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, the economic consequence
of ownership of the Common Stock, whether any such swap or transaction is
to be settled by delivery of Common Stock or other securities, in cash or
otherwise. The foregoing sentence shall not apply to (A) the Securities to
be sold hereunder or under the International Purchase Agreement, (B) any
shares of Common Stock issued by the Company upon the exercise of an option
or warrant or the conversion of a security outstanding on the date hereof
and referred to in the Prospectuses, (C) any shares of Common Stock issued
or options to purchase Common Stock granted pursuant to existing employee
benefit plans of the Company referred to in the Prospectuses, or (D) any
shares of Common Stock issued pursuant to any non-employee director stock
plan or dividend reinvestment plan or (E) the issuance of Common Stock
pursuant to the purchase contract related to any FELINE PRIDES.
(k) Reporting Requirements. The Company, during the period when the
Prospectuses are required to be delivered under the 1933 Act or the 1934
Act, will file all
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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.
SECTION 4. Payment of Expenses. (a) Expenses. 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 Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters 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 Underwriters, including
any stock or other transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Securities to the Underwriters and the
transfer of the Securities between the U.S. Underwriters and the International
Managers, (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(f) hereof, including filing
fees and the reasonable fees and disbursements of counsel for the Underwriters
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
Underwriters of copies of each preliminary prospectus, any Term Sheets and of
the Prospectuses and any amendments or supplements thereto, (vii) the
preparation, printing and delivery to the Underwriters of copies of the Blue Sky
Survey and any supplement thereto, (viii) the fees and expenses of any transfer
agent or registrar for the Securities and (ix) the fees and expenses incurred in
connection with the listing of the Securities on the New York Stock Exchange.
(b) Termination of Agreement. If this Agreement is terminated by the U.S.
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the U.S. Underwriters for all of
their out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the U.S. Underwriters.
SECTION 5. Conditions of U.S. Underwriters' Obligations. The obligations of the
several U.S. Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any subsidiary of the Company
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective and
at Closing Time no stop order suspending the effectiveness of the
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 U.S.
Underwriters. 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
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434, a Term Sheet shall have been filed with the Commission in accordance
with Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the U.S.
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Dow, Lohnes & Albertson, PLLC, counsel for the Company, in
form and substance satisfactory to counsel for the U.S. Underwriters,
together with signed or reproduced copies of such letter for each of the
other U.S. Underwriters, to the effect set forth in Exhibit A hereto and to
such further effect as counsel to the U.S. Underwriters may reasonably
request.
(c) Opinion of Counsel for U.S. Underwriters. At Closing Time, the U.S.
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Brown & Wood LLP, counsel for the U.S. Underwriters,
together with signed or reproduced copies of such letter for each of the
other U.S. Underwriters, in form and substance satisfactory to the U.S.
Underwriters. Such counsel may state that, insofar as such opinion involves
factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and its subsidiaries and
certificates of public officials.
(d) 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 Prospectuses, 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 U.S.
Representatives 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
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 Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or are contemplated by the
Commission.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the U.S. Representatives shall have received letters from
Deloitte & Touche LLP, in relation to the Company, and KPMG LLP, in
relation to TCA, each dated such date, in form and substance satisfactory
to the U.S. Representatives, together with signed or reproduced copies of
such letter for each of the other U.S. Underwriters, 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 Registration Statement and
the Prospectuses.
(f) Bring-down Comfort Letter. At Closing Time, the Representatives shall
have received from Deloitte & Touche LLP and KPMG LLP letters, each dated
as of
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Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (e) of this Section, except that
the specified date referred to shall be a date not more than three business
days prior to Closing Time.
(g) 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.
(h) Lock-up Agreements. At the date of this Agreement, the U.S.
Representatives shall have received an agreement substantially in the form
of Exhibit B hereto signed by the persons listed on Schedule C hereto.
(i) Purchase of Initial International Securities. Contemporaneously with
the purchase by the U.S. Underwriters of the Initial U.S. Securities under
this Agreement, the International Managers shall have purchased the Initial
International Securities under the International Purchase Agreement.
(j) Conditions to Purchase of U.S. Option Securities. In the event that the
U.S. Underwriters exercise their option provided in Section 2(b) hereof to
purchase all or any portion of the U.S. Option Securities, the
representations and warranties of the Company contained herein and the
statements in any certificates furnished by the Company or any subsidiary
of the Company hereunder shall be true and correct as of each Date of
Delivery and, at the relevant Date of Delivery, the U.S. Representatives
shall have received:
(i) 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 the
Closing Time pursuant to Section 5(d) hereof remains true and
correct as of such Date of Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion of
Dow, Lohnes & Albertson, PLLC, counsel for the Company, in
form and substance satisfactory to counsel for the U.S.
Underwriters, dated such Date of Delivery, relating to the
U.S. Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion
required by Section 5(b) hereof.
(iii) Opinion of Counsel for U.S. Underwriters. The favorable
opinion of Brown & Wood LLP, counsel for the U.S.
Underwriters, dated such Date of Delivery, relating to the
U.S. Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion
required by Section 5(c) hereof.
(iv) Bring-down Comfort Letter. Letters from Deloitte & Touche
LLP and KPMG LLP, in form and substance satisfactory to the
U.S. Representatives and dated such Date of Delivery,
substantially in the same form and substance as the letter
furnished to the U.S. Representatives pursuant to Section 5(f)
hereof, except
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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.
(k) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the U.S. Underwriters 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,
herein contained; 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 U.S. Representatives and
counsel for the U.S. Underwriters.
(l) Termination of Agreement. If any condition specified in 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 U.S. Option
Securities on a Date of Delivery which is after the Closing Time, the
obligations of the several U.S. Underwriters to purchase the relevant
Option Securities, may be terminated by the U.S. Representatives by notice
to the Company 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 6, 7 and 8 shall survive any such termination and
remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of U.S. Underwriters. The Company agrees to indemnify
and hold harmless each U.S. Underwriter and each person, if any, who controls
any U.S. 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
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 included in any preliminary prospectus or
the Prospectuses (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(d) below) any such
settlement is effected with the written consent of the Company; and
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(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Merrill
Lynch), 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 any
U.S. Underwriter through the U.S. Representatives expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the U.S. Prospectus (or any amendment or supplement thereto) and
provided, further, that as to any preliminary prospectus this indemnity
agreement shall not inure to the benefit of any U.S. Underwriter or any person
controlling that U.S. Underwriter on account of any loss, claim, damage,
liability or action arising from the sale of U.S. Securities to any person by
that U.S. Underwriter if that U.S. Underwriter failed to send or give a copy of
the Prospectus, as the same may be amended or supplemented, to that person and
the untrue statement or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact in such preliminary prospectus was
corrected in said amended or supplemented Prospectus and the delivery thereof
was required by law and would have constituted a complete defense to the claim
of that person, unless such failure resulted from non-compliance by the Company
with Section 3(a) or (b). For purposes of the second proviso to the immediately
preceding sentence, the term Prospectus shall not be deemed to include the
documents incorporated by reference therein, and no U.S. Underwriter shall be
obligated to send or give any supplement or amendment to any document
incorporated by reference in a preliminary prospectus or supplement thereto or
the Prospectus to any person.
(b) Indemnification of Company, Directors and Officers. Each U.S.
Underwriter severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the 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 Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary U.S. prospectus or
the U.S. Prospectus (or any amendment or supplement thereto) in reliance upon
and in conformity with written information furnished to the Company by such U.S.
Underwriter through the U.S. Representatives expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the U.S. 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
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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) above, counsel to the indemnified parties shall be
selected by Merrill Lynch, and, in the case of parties indemnified pursuant to
Section 6(b) 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. If it so elects within a reasonable time after receipt of
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 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 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.
(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 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 90 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 45 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. If the indemnification provided for in Section 6 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 and the U.S. Underwriters 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
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U.S. Underwriters 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 U.S. Underwriters 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
U.S. Underwriters on the other hand in connection with the offering of the U.S.
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 U.S.
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the U.S.
Underwriters, in each case as set forth on the cover of the U.S. Prospectus, or,
if Rule 434 is used, the corresponding location on the Term Sheet, bear to the
aggregate initial public offering price of the U.S.
Securities as set forth on such cover.
The relative fault of the Company on the one hand and the U.S.
Underwriters 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 U.S. Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the U.S. Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the U.S. Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 7. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7 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.
Notwithstanding the provisions of this Section 7, no U.S. Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the U.S. Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such U.S. Underwriter has otherwise been required to pay by reason of 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, each person, if any, who controls a
U.S. 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 such U.S.
Underwriter, and each director of the Company, each
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officer of the Company who signed the 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. The U.S. Underwriters' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the number of Initial
U.S. Securities set forth opposite their respective names in Schedule A hereto
and not joint.
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 or any of its subsidiaries submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any U.S. Underwriter or controlling
person, or by or on behalf of the Company, and shall survive delivery of the
Securities to the U.S. Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The U.S. Representatives may terminate this
Agreement, by notice to the Company, 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 U.S. 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 occurred any material adverse
change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the U.S.
Representatives, impracticable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
Company has been suspended or materially 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 materially 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 National Association of
Securities Dealers, Inc. or any other governmental authority, or (iv) 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 6, 7
and 8 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the U.S. Underwriters. If one or more of
the U.S. Underwriters shall fail at Closing Time or a Date of Delivery to
purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the U.S. Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting U.S. Underwriters, or any other underwriters, to purchase all,
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but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, the U.S.
Representatives shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the number of U.S. Securities to be purchased on such date, each of
the non-defaulting U.S. Underwriters shall be obligated, severally and
not jointly, to purchase the full amount thereof in the proportions
that their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting U.S. Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of U.S. Securities to be purchased on such date, this Agreement
or, with respect to any Date of Delivery which occurs after the Closing
Time, the obligation of the U.S. Underwriters to purchase and of the
Company to sell the Option Securities to be purchased and sold on such
Date of Delivery shall terminate without liability on the part of any
non-defaulting U.S. Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
U.S. Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
U.S. Underwriters to purchase and the Company to sell the relevant U.S. Option
Securities, as the case may be, either the U.S. Representatives or the Company
shall have the right to postpone Closing Time or the relevant Date of Delivery,
as the case may be, for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements.
SECTION 11. 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 U.S. Underwriters shall
be directed to the U.S. Representatives at North Tower, World Financial Center,
New York, New York 10281-1201, attention of Daniel Richards, Managing Director
and notices to the Company shall be directed to it at 1400 Lake Hearn Drive,
Atlanta, Georgia 30319, attention of Andrew A. Merdek.
SECTION 12. Parties. This Agreement shall each inure to the benefit of and be
binding upon the U.S. Underwriters and the Company 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 U.S.
Underwriters and the Company 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 U.S. Underwriters and the Company 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 any U.S.
Underwriter shall be deemed to be a successor by reason merely of such purchase.
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SECTION 13. GOVERNING LAW AND TIME. 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 IN SUCH STATE.
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. 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.
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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
between the U.S. Underwriters and the Company in accordance with its terms.
Very truly yours,
COX COMMUNICATIONS, INC.
By: /s/ Dallas S. Clement
Name: Dallas S. Clement
Title: Vice President and Treasurer
CONFIRMED AND ACCEPTED, as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
BEAR, STEARNS & CO. INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
GOLDMAN, SACHS & CO.
SALOMON SMITH BARNEY INC
SG COWEN SECURITIES CORPORATION
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By /s/ Tristam Collins
Authorized Signatory
For themselves and as U.S. Representatives of the
other U.S. Underwriters named in Schedule A hereto.
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SCHEDULE A
Number of
Initial U.S.
Name of U.S. Underwriter Securities
-------------------------- ----------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 2,154,000
Morgan Stanley & Co. Incorporated 2,154,000
Bear, Stearns & Co. Inc. 574,400
Credit Suisse First Boston Corporation 574,400
Goldman, Sachs & Co. 574,400
Salomon Smith Barney Inc 574,400
SG Cowen Securities Corporation 574,400
Banc of America Securities LLC 100,000
CIBC World Markets Corp. 100,000
Donaldson, Lufkin & Jenrette Securities Corporation 100,000
ING Baring Furman Selz LLC 100,000
Lehman Brothers Inc. 100,000
PaineWebber Incorporated 100,000
Barrington Research Associates, Inc. 50,000
Davenport & Company LLC 50,000
Gerard Klauer Mattison & Co. Inc. 50,000
The Robinson-Humphrey Company, LLC 50,000
Utendahl Capital Partners, L.P. 50,000
Wachovia Securities, Inc. 50,000
Total........................................ 8,080,000
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SCHEDULE B
COX COMMUNICATIONS, INC.
8,080,000 Shares of Common Stock
(Par Value $1.00 Per Share)
1. The initial public offering price per share for the
Securities shall be $34.6875.
2. The purchase price per share for the U.S. Securities to be
paid by the several U.S. Underwriters shall be $33.4775, being an
amount equal to the initial public offering price set forth above less
$1.21 per share; provided that the purchase price per share for any
U.S. Option Securities purchased upon the exercise of the
over-allotment option described in Section 2(b) shall be reduced by an
amount per share equal to any dividends or distributions declared by
the Company and payable on the Initial U.S. Securities but not payable
on the U.S. Option Securities.
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SCHEDULE C
Cox Enterprises, Inc.
Margaret A. Bellville
Alex B. Best
Ajit M. Dalvi
David E. Easterly
Jimmy W. Hayes
James C. Kennedy
James O. Robbins
David M. Woodrow
Janet Morrison Clarke
Robert F. Erburu
Robert C. O'Leary
Andrew J. Young
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SCHEDULE D
List of Subsidiaries
Cox Communications Hampton Roads, Inc.
Cox Communications Las Vegas, Inc.
Cox Classic Cable, Inc.
Cox Trust I
Cox Trust II
CoxCom, Inc.
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Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(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, has
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectuses and to enter into and
perform its obligations under the U.S. Purchase Agreement and the International
Purchase 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) The authorized, issued and outstanding capital stock of the Company is
as set forth in the Prospectuses in the column entitled "Cox Historical" under
the caption "Capitalization" (except for subsequent issuances, if any, pursuant
to the U.S. Purchase Agreement and the International Purchase Agreement or
pursuant to reservations, agreements or employee benefit plans referred to in
the Prospectuses or pursuant to the exercise of convertible securities or
options referred to in the Prospectuses); the shares of issued and outstanding
capital stock of the Company have been duly authorized and validly issued and
are fully paid and non-assessable; and none of the outstanding shares of capital
stock of the Company was issued in violation of the preemptive rights of any
securityholder of the Company.
(iii) Each Subsidiary has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectuses and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property as described in
the Prospectuses requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not result in a Material
Adverse Effect; except as otherwise disclosed in the Registration Statement, all
of the capital stock of each Subsidiary owned by the Company, directly or
through subsidiaries, has been duly authorized and validly issued, is fully paid
and non-assessable and, to the best of our knowledge, is owned free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or equity.
(iv) The Securities to be purchased by the U.S. Underwriters and the
International Managers from the Company have been duly authorized for issuance
and sale to the Underwriters pursuant to the U.S. Purchase Agreement and the
International Purchase Agreement, respectively, and, when issued and delivered
by the Company pursuant to the U.S. Purchase Agreement and the International
Purchase Agreement,
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respectively, against payment of the consideration set forth in the U.S.
Purchase Agreement and the International Purchase Agreement, will be validly
issued and fully paid and non-assessable and no holder of the Securities is or
will be subject to personal liability by reason of being such a holder.
(v) The issuance of the Securities is not subject to the preemptive or
other similar rights of any securityholder of the Company.
(vi) The U.S. Purchase Agreement and the International Purchase Agreement
have been duly authorized, executed and delivered by the Company.
(vii) The Registration Statement, including any Rule 462(b) Registration
Statement, has been declared effective under the 1933 Act; any required filing
of the Prospectuses 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 Registration
Statement or any 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.
(viii) The Registration Statement, including any Rule 462(b) Registration
Statement, the Rule 430A Information and the Rule 434 Information, as
applicable, the Prospectuses, excluding the documents incorporated by reference
therein, and each amendment or supplement to the Registration Statement and the
Prospectuses, excluding the documents incorporated by reference therein, as of
their respective effective or issue dates (other than the financial statements
and supporting schedules and other financial data included or incorporated by
reference therein or omitted therefrom and the Statements of Eligibility on Form
T-1, as to which we express no opinion) complied as to form in all material
respects with the requirements of the 1933 Act and the 1933 Act Regulations.
(ix) The documents incorporated by reference in the Prospectuses (other
than the financial statements and supporting schedules or other financial data
included therein or omitted therefrom, as to which we 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.
(x) The form of certificate used to evidence the Common Stock complies in
all material respects with all applicable statutory requirements, with any
applicable requirements of the charter and by-laws of the Company and the
requirements of the New York Stock Exchange.
(xi) To our knowledge and other than as set forth in the Prospectuses,
there is not pending any action, suit, proceeding, inquiry or investigation, to
which the Company or any subsidiary is a party, or to which the property of the
Company 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
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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 U.S.
Purchase Agreement and International Purchase Agreement or the performance by
the Company of its obligations thereunder; and, to the best of our knowledge, no
such action, suit, proceeding, inquiry or investigation is threatened in writing
by governmental authorities or others.
(xii) The information (A) included in the Prospectuses under the captions
"Description of Capital Stock--Common Stock" and "Certain United States Federal
Tax Considerations to Non-U.S. Holders," (B) included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1998 under the captions
"Business--Competition," "Business -- Legislation and Regulation," "Legal
Proceedings," and "Certain Relationships and Related Transactions," and (C) in
the Registration Statement under Items 14 and 15, to the extent that it
constitutes matters of law, summaries of legal matters, the Company's charter
and bylaws or legal proceedings, or legal conclusions, has been reviewed by us
and fairly present the information called for with respect to such matters of
law and fairly summarize the matters referred to therein.
(xiii) To the best of our knowledge, there are no statutes or regulations,
and no legal or governmental proceedings pending or threatened to which the
Company or any of its subsidiaries is a party or to which any of the properties
of the Company or any of its subsidiaries is subject, that are required to be
described in the Prospectuses that are not described as required.
(xiv) All descriptions in the Prospectuses of contracts and other documents
to which the Company 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 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.
(xv) 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 state or foreign securities or blue sky laws, as to which we express no
opinion) is necessary or required in connection with the due authorization,
execution and delivery of the U.S. Purchase Agreement and the International
Purchase Agreement or for the offering, issuance, sale or delivery of the
Securities.
(xvi) The execution, delivery and performance of the U.S. Purchase
Agreement and the International Purchase Agreement and the consummation of the
transactions contemplated in the U.S. Purchase Agreement, the International
Purchase Agreement and in the Registration Statement (including the issuance and
sale of the Securities, and the use of the proceeds from the sale of the
Securities as described in the Prospectuses under the caption "Use Of Proceeds")
and compliance by the Company with its obligations
A-3-
<PAGE>
under the U.S. Purchase Agreement and the International Purchase 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 Purchase Agreements) 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 or other constitutive documents of the
Company or any subsidiary, or, to our 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 respective properties, assets or
operations.
(xvii) The Company has been granted and presently holds the FCC
authorizations necessary for the Company to conduct its business as presently
conducted or proposed to be conducted, except such as would 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 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.
(xviii) To our knowledge after due inquiry, the Company 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.
(xix) The execution, delivery and performance by the Company of the U.S.
Purchase Agreement and the International Purchase Agreement does not violate the
Communications Act of 1934, as amended, or any rules or the regulations
thereunder binding on the Company or its subsidiaries or any order, writ,
judgment, injunction, decree or award of the FCC binding on the Company or its
subsidiaries of which we have knowledge after due inquiry.
(xx) The Company is not an "investment company," as such term is defined in
the 1940 Act.
We have participated in conferences with officers and representatives of
the Company, representatives of the independent accountants of the Company, and
the Underwriters at which the contents of the Registration Statement and the
Prospectuses 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
A-4
<PAGE>
incorporated by reference in the Registration Statement and the Prospectuses and
have made no independent check or verification thereof except as described in
paragraph (xii) above, on the basis of the foregoing, nothing has come to our
attention that would lead us to believe that the 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 Statements of Eligibility on Form T-1, as to which we make no
statement), at the time such 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 Prospectuses 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 make no statement), at the time the Prospectuses were
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.
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 U.S.
Underwriters and states that such opinion of such local counsel is satisfactory
in form and substance and the U.S. Underwriters and counsel for the U.S.
Underwriters 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 the Company and public officials.
A-5
<PAGE>
[Form of lock-up from directors, officers or other
stockholders pursuant to Section 5(h)]
Exhibit B
August __, 1999
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
MORGAN STANLEY & CO. INCORPORATED
BEAR, STEARNS & CO. INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
GOLDMAN, SACHS & CO.
SALOMON SMITH BARNEY INC
SG COWEN SECURITIES CORPORATION
as U.S. Representatives of the several
U.S. Underwriters to be named in the
within-mentioned U.S. Purchase Agreement
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Re: Proposed Public Offering by Cox Communications, Inc.
Dear Sirs:
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"), Morgan Stanley & Co. Incorporated ("Morgan Stanley"), Bear,
Stearns & Co. Inc., Credit Suisse First Boston Corporation, Goldman, Sachs &
Co., Salomon Smith Barney Inc and SG Cowen Securities Corporation propose to
enter into a U.S. Purchase Agreement (the "U.S. Purchase Agreement") with the
Company providing for the public offering of shares (the "Securities") of the
Company's Class A common stock, par value $1.00 per share (the "Common Stock").
In recognition of the benefit that such an offering will confer upon the
undersigned as a stockholder [and an officer and/or director] of the Company,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the undersigned agrees with each underwriter to
be named in the U.S. Purchase Agreement that, during a period of 90 days from
the date of the U.S. Purchase Agreement, the undersigned will not, without the
prior written consent of Merrill Lynch and Morgan Stanley, directly or
indirectly, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, or otherwise dispose of or transfer any shares of
the Company's Common Stock or any securities convertible into or exchangeable or
exercisable for or repayable with Common Stock, whether now owned or hereafter
acquired by the undersigned or with respect to which the
B-1
<PAGE>
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 or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Stock, whether
any such swap or transaction is to be settled by delivery of Common Stock or
other securities, in cash or otherwise.
Very truly yours,
Signature:
Print Name:
Exhibit 1.2
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
COX COMMUNICATIONS, INC.
(a Delaware corporation)
2,020,000 Shares of Common Stock
INTERNATIONAL PURCHASE AGREEMENT
Dated August 9, 1999
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
Table of Contents
SECTION 1. Representations and Warranties.....................................5
(a) Representations and Warranties by the Company......................5
(i) Compliance with Registration Requirements...............5
(ii) Incorporated Documents..................................6
(iii) Independent Accountants.................................6
(iv) Financial Statements....................................6
(v) No Material Adverse Change in Business..................7
(vi) Good Standing of the Company............................7
(vii) Good Standing of Subsidiaries...........................7
(viii) Capitalization..........................................8
(ix) Authorization of Agreement..............................8
(x) Authorization and Description of Securities.............8
(xi) Absence of Defaults and Conflicts.......................9
(xii) Absence of Labor Dispute................................9
(xiii) Absence of Proceedings.................................10
(xiv) Accuracy of Exhibits...................................10
(xv) Possession of Intellectual Property....................10
(xvi) Absence of Further Requirements........................10
(xvii) Possession of Licenses and Permits.....................11
(xviii) Title to Property......................................11
(xix) Investment Company Act.................................12
(xx) Environmental Laws.....................................12
(b) Officer's Certificates............................................12
SECTION 2. Sale and Delivery to International Managers; Closing..............13
(a) Initial Securities............................................13
(b) Option Securities.............................................13
(c) Payment.......................................................14
(d) Denominations; Registration...................................14
SECTION 3. Covenants of the Company..........................................15
(a) Compliance with Securities Regulations and Commission Requests.15
(b) Filing of Amendments..........................................15
(c) Delivery of Registration Statements...........................16
(d) Delivery of Prospectuses......................................16
(e) Continued Compliance with Securities Laws.....................16
(f) Blue Sky Qualifications.......................................17
(g) Rule 158......................................................17
(h) Use of Proceeds...............................................17
(i) Listing.......................................................17
(j) Restriction on Sale of Securities.............................17
(k) Reporting Requirements........................................18
<PAGE>
SECTION 4. Payment of Expenses..............................................18
(a) Expenses......................................................19
(b) Termination of Agreement......................................19
SECTION 5. Conditions of International Managers' Obligations.......19
(a) Effectiveness of Registration Statement.......................19
(b) Opinion of Counsel for Company................................20
(c) Opinion of Counsel for International Managers.................20
(d) Officers' Certificate.........................................21
(e) Accountant's Comfort Letter...................................21
(f) Bring-down Comfort Letter.....................................22
(g) Approval of Listing...........................................22
(h) Lock-up Agreements............................................22
(i) Purchase of Initial U.S. Securities...........................22
(j) Conditions to Purchase of International Option Securities.....22
(k) Additional Documents..........................................23
(l) Termination of Agreement......................................23
SECTION 6. Indemnification...................................................24
(a) Indemnification of International Managers.....................24
(b) Indemnification of Company, Directors and Officers............26
(c) Actions against Parties; Notification.........................26
(d) Settlement without Consent if Failure to Reimburse............27
SECTION 7. Contribution.....................................................27
SECTION 8. Representations, Warranties and Agreements to Survive Delivery...29
SECTION 9. Termination of Agreement.........................................29
(a) Termination; General..........................................29
(b) Liabilities...................................................30
SECTION 10. Default by One or More of the International Managers............30
SECTION 11. Notices.........................................................31
SECTION 12. Parties.........................................................31
SECTION 13. GOVERNING LAW AND TIME..........................................31
SECTION 14. Effect of Headings..............................................31
<PAGE>
SCHEDULES
Schedule A - List of Underwriters....................................Sch A-1
Schedule B - Pricing Information.....................................Sch B-1
Schedule C - List of Persons Subject to Lock-up......................Sch C-1
Schedule D - List of Subsidiaries ...................................Sch D-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel.........................A-1
Exhibit B - Form of Lock-up Letter.......................................B-1
<PAGE>
COX COMMUNICATIONS, INC.
(a Delaware corporation)
2,020,000 Shares of Class A Common Stock
(Par Value $1.00 Per Share)
INTERNATIONAL PURCHASE AGREEMENT
August 9, 1999
Merrill Lynch International
Morgan Stanley & Co. International Limited
Bear, Stearns International Limited
Cazenove & Co.
Credit Suisse First Boston (Europe) Limited
Goldman Sachs International
Salomon Brothers International Limited
Societe Generale
c/o Merrill Lynch International
Ropemaker Place
25 Ropemaker Street
London EC2Y 9LY
England
Ladies and Gentlemen:
Cox Communications, Inc. (the "Company"), confirms its agreement with Merrill
Lynch International ("Merrill Lynch"), Morgan Stanley & Co. International
Limited ("Morgan Stanley"), Cazenove & Co., Credit Suisse First Boston (Europe)
Limited, Goldman Sachs International, Salomon Brothers International Limited and
Societe Generale (collectively, the "International Managers", which term shall
also include any underwriter substituted as hereinafter provided in Section 10
hereof) with respect to the issue and sale by the Company and the purchase by
the International Managers, acting severally and not jointly, of the respective
numbers of shares of Class A Common Stock, par value $1.00 per share, of the
Company ("Common Stock") set forth in said Schedule A, and with respect to the
grant by the Company to the International Managers, acting severally and not
jointly, of the option described in Section 2(b) hereof to purchase all or any
part of 303,000 additional shares of Common Stock to cover over-allotments, if
any. The aforesaid 2,020,000 shares of Common Stock (the "Initial International
Securities") to be purchased by the International Managers and all or any part
of the 303,000 shares of Common Stock subject to the option described in Section
2(b) hereof (the "International Option Securities") are hereinafter called,
collectively, the "International Securities".
<PAGE>
It is understood that the Company is concurrently entering into an
agreement dated the date hereof (the "U.S. Purchase Agreement") providing for
the offering by the Company of an aggregate of 8,080,000 shares of Common Stock
(the "Initial U.S. Securities") through arrangements with certain underwriters
in the United States and Canada (the "U.S. Underwriters") for which Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated,
Bear, Stearns & Co. Inc., Credit Suisse First Boston Corporation, Goldman, Sachs
& Co., Salomon Smith Barney Inc and SG Cowen Securities Corporation are acting
as representatives (the "U.S. Representatives") and the grant by the Company to
the U.S. Underwriters, acting severally and not jointly, of an option to
purchase all or any part of the U.S. Underwriters' pro rata portion of up to
1,212,000 additional shares of Common Stock solely to cover over-allotments, if
any (the "U.S. Option Securities" and, together with the International Option
Securities, the "Option Securities"). The Initial U.S. Securities and the U.S.
Option Securities are hereinafter called the "U.S. Securities". It is understood
that the Company is not obligated to sell, and the International Managers are
not obligated to purchase, any Initial International Securities unless all of
the Initial U.S. Securities are contemporaneously purchased by the U.S.
Underwriters.
The International Managers and the U.S. Underwriters are hereinafter
collectively called the "Underwriters", the Initial International Securities and
the Initial U.S. Securities are hereinafter collectively called the "Initial
Securities", and the International Securities and the U.S. Securities are
hereinafter collectively called the "Securities".
It is also understood that, concurrent with the initial issuance of the
Common Stock, the Company will be offering and selling its (i) FELINE PRIDES,
consisting of, among other things, stock purchase contracts pursuant to which
holders will purchase from the Company a specified number of shares of Common
Stock on or prior to August 16, 2002 and (ii) debt securities, in each case
pursuant to underwriting agreements to be entered into among the Company and
Merrill Lynch and the other underwriters named therein (each, a "Concurrent
Offering"). The obligations of the Company and Underwriters contained in this
Agreement and the U.S. Purchase Agreement are not conditioned upon the
consummation of either Concurrent Offering.
The Underwriters will concurrently enter into an Intersyndicate
Agreement of even date herewith (the "Intersyndicate Agreement") providing for
the coordination of certain transactions among the Underwriters under the
direction of Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated (in such capacity, the "Global Coordinator").
The Company understands that the International Managers propose to make
a public offering of the International Securities as soon as the International
Managers deem 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 (Nos. 333-82575, 333-82575-01
and 333-82575-02) and pre-effective amendment nos. 1, 2 and 3 thereto covering
the registration of certain securities, including the Securities, under the
Securities Act of 1933, as amended (the "1933 Act"), including the related
preliminary prospectus or prospectuses, and the offering from time to time in
accordance with Rule 415 of the rules and regulations of the Commission under
-2-
<PAGE>
the 1933 Act (the "1933 Act Regulations"). Promptly after execution and delivery
of this Agreement, the Company will either (i) prepare and file a prospectus 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 (a "Term
Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). Two forms
of prospectus are to be used in connection with the offering and sale of the
Securities: one relating to the International Securities (the "Form of
International Prospectus") and one relating to the U.S. Securities (the "Form of
U.S. Prospectus"). The Form of International Prospectus is identical to the Form
of U.S. Prospectus, except for the front cover and back cover pages and the
information under the caption "Underwriting". The information included in any
such prospectus or in any such Term Sheet, as the case may be, that was omitted
from such registration statement at the time it became effective but that is
deemed to be part of such registration statement at the time it became effective
(a) pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A
Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to as
"Rule 434 Information." Each Form of International Prospectus and Form of U.S.
Prospectus used before such registration statement became effective, and any
prospectus 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, is herein called a "preliminary
prospectus." Such registration statement, including the exhibits thereto,
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 "Registration Statement." Any registration
statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein
referred to as the "Rule 462(b) Registration Statement," and after such filing
the term "Registration Statement" shall include the Rule 462(b) Registration
Statement. The final Form of International Prospectus and the final Form of U.S.
Prospectus, including the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the 1933 Act, in the forms first furnished to the
Underwriters for use in connection with the offering of the Securities are
herein called the "International Prospectus" and the "U.S. Prospectus,"
respectively, and collectively, the "Prospectuses." If Rule 434 is relied on,
the terms "International Prospectus" and "U.S. Prospectus" shall refer to the
preliminary International Prospectus dated July 28, 1999 and preliminary U.S.
Prospectus dated July 28, 1999, respectively, each together with the applicable
Term Sheet and all references in this Agreement to the date of such Prospectuses
shall mean the date of the applicable Term Sheet. For purposes of this
Agreement, all references to the Registration Statement, any preliminary
prospectus, the International Prospectus, the U.S. Prospectus or any 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
Registration Statement, any preliminary prospectus (including the Form of U.S.
Prospectus and Form of International Prospectus) or the Prospectuses (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 Registration Statement, any preliminary prospectus
(including the Form of
-3-
<PAGE>
U.S. Prospectus and Form of International Prospectus) or the Prospectuses, as
the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement, any preliminary prospectus or the
Prospectuses shall be deemed to mean and include the filing of any document
under the Securities Exchange Act of 1934 (the "1934 Act") which is incorporated
by reference in the Registration Statement, such preliminary prospectus or the
Prospectuses, as the case may be.
SECTION 1.........Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents
and warrants to each International Manager 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 International
Manager, 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
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any 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 Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any International Option
Securities are purchased, at the Date of Delivery), the Registration
Statement, the Rule 462(b) Registration Statement and any amendments
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 of the Prospectuses nor any
amendments or supplements thereto, at the time the Prospectuses or any
amendments or supplements thereto were issued and at the Closing Time (and,
if any International 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 statements in or omissions from the
Registration Statement (or any amendment thereto) or the International
Prospectus (or any amendment or supplement thereto) made in reliance upon
and in conformity with information furnished to the Company in writing by
the International Managers expressly for use in the Registration Statement
(or such amendment thereto) or the International Prospectus (or such
amendment or supplement thereto).
-4-
<PAGE>
Each preliminary prospectus and the prospectuses filed as part of the
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 each
preliminary prospectus and the Prospectuses delivered to the Underwriters
for use in connection with this offering was identical in all material
respects 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 Registration Statement and the
Prospectuses, 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 Prospectuses, at the time the
Registration Statement became effective, at the time the Prospectuses were
issued and at the Closing Time (and, if any International 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 of the Company and its
subsidiaries, of Cox Communications PCS, L.P. ("PCS") and its subsidiaries
and of TCA Cable TV, Inc. ("TCA") and its subsidiaries included in the
Registration Statement and the Prospectuses are independent public
accountants with respect to the Company and its subsidiaries as required by
the 1933 Act and the 1933 Act Regulations.
(iv) Financial Statements. The financial statements of the Company
included in the Registration Statement and the Prospectuses, 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 PCS included
in the Registration Statement and the Prospectuses, together with the
related schedules and notes, present fairly the financial position of PCS
and its consolidated subsidiaries at the dates indicated and the statement
of operations, stockholders' equity and cash flows of PCS 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 financial statements
of TCA included in the Registration Statement and the Prospectuses,
together with the related schedules and notes, present fairly the financial
position of TCA and its consolidated subsidiaries at the date indicated and
the statement of operations, stockholders' equity and cash flows of TCA and
its subsidiaries for the period specified; said financial statements have
been prepared in conformity with GAAP.
-5-
<PAGE>
The supporting schedules, if any, included in the Registration Statement
and the Prospectuses 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 Prospectuses present fairly the
information shown therein and have been compiled on a basis consistent with
that of the audited financial statements included in the Registration
Statement. The pro forma financial statements of the Company and its
consolidated subsidiaries and the related notes thereto included in the
Registration Statement and the Prospectuses present fairly the information
shown therein, have been prepared in accordance with the Commission's rules
and guidelines with respect to pro forma financial statements and have been
properly compiled on the bases described therein, and the assumptions used
in the preparation thereof are reasonable and the adjustments used therein
are appropriate to give effect to the transactions and circumstances
referred to therein.
(v) No Material Adverse Change in Business. Since the respective dates
as of which information is given in the Registration Statement and the
Prospectuses, 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 corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectuses 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 or limited liability
company in good standing under the laws of the jurisdiction of its
incorporation or organization, as the case may be, has corporate or other
power and authority to own, lease and operate its properties and to conduct
its business as described in the Prospectuses 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
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in a Material Adverse Effect; except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding 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 Company are (a) the subsidiaries listed on Schedule D hereto 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 authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectuses in the column
entitled "Cox Historical" under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectuses or pursuant to the exercise of convertible securities or
options referred to in the Prospectuses). 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) Authorization of Agreement. This Agreement and the U.S. Purchase
Agreement have been duly authorized, executed and delivered by the Company.
(x) Authorization and Description of Securities. The Securities to be
purchased by the International Managers and the U.S. Underwriters from the
Company have been duly authorized for issuance and sale to the
International Managers pursuant to this Agreement and the U.S. Underwriters
pursuant to the U.S. Purchase Agreement, respectively, and, when issued and
delivered by the Company pursuant to this Agreement and the U.S. Purchase
Agreement, respectively, against payment of the consideration set forth
herein and the U.S. Purchase Agreement, respectively, will be validly
issued, fully paid and non-assessable; the Common Stock conforms to all
statements relating thereto contained in the Prospectuses and such
description conforms to the rights set forth in the instruments defining
the same; no holder of the Securities will be subject to personal liability
by reason of being such a holder; and the issuance of the Securities is not
subject to the preemptive or other similar rights of any securityholder of
the Company.
(xi) Absence of Defaults and Conflicts. Neither the Company nor any of
its subsidiaries is in violation of its charter or by-laws or other
constitutive documents 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 U.S. Purchase
Agreement and the consummation of the transactions contemplated in this
Agreement, the U.S. Purchase Agreement and in the Registration
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Statement (including the issuance and sale of the Securities and the use of
the proceeds from the sale of the Securities as described in the
Prospectuses under the caption "Use of Proceeds") and compliance by the
Company with its obligations under this Agreement and the U.S. Purchase
Agreement 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 or other constitutive documents 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 (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 which, 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 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 and the U.S. Purchase Agreement or the performance by the Company
of its obligations hereunder or thereunder; 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 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 Registration Statement, the
Prospectuses or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and filed as
required.
(xv) Possession of Intellectual Property. Except as disclosed in the
Prospectuses, the Company and its subsidiaries own or possess, or can
acquire on
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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, in connection with the offering, issuance or sale of
the Securities under this Agreement and the U.S. Purchase Agreement or the
consummation of the transactions contemplated by this Agreement and the
U.S. Purchase Agreement, except such as have been already obtained or as
may be required under the 1933 Act or the 1933 Act Regulations and foreign
or state securities laws, the laws of a foreign jurisdiction or the by-laws
and rules of the NASD.
(xvii) Possession of Licenses and Permits. The Company and its
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 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 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 Prospectuses 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
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<PAGE>
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 Prospectuses, 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) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectuses
will not be, an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended (the "1940 Act").
(xx) Environmental Laws. Except as described in the 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 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
delivered to the Global Coordinator or to counsel for the International Managers
in connection with the offering of the Securities shall be deemed a
representation and warranty by the Company to each International Manager as to
the matters covered thereby.
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<PAGE>
SECTION 2. Sale and Delivery to International Managers; 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 each International Manager, severally and not jointly,
and each International Manager, severally and not jointly, agrees to purchase
from the Company, at the price per share set forth in Schedule B, the number of
Initial International Securities set forth in Schedule A opposite the name of
such International Manager, plus any additional number of Initial International
Securities which such International Manager may become obligated to purchase
pursuant to the provisions of Section 10 hereof.
(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 International Managers,
severally and not jointly, to purchase up to an additional 303,000 shares of
Common Stock at the price per share set forth in Schedule B, less an amount per
share equal to any dividends or distributions declared by the Company and
payable on the Initial International Securities but not payable on the
International Option Securities. 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 International Securities upon
notice by the Global Coordinator to the Company setting forth the number of
International Option Securities as to which the several International Managers
are then exercising the option and the time and date of payment and delivery for
such International Option Securities. Any such time and date of delivery for the
International Option Securities (a "Date of Delivery") shall be determined by
the Global Coordinator, 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. If the option is exercised as to all or any portion of
the International Option Securities, each of the International Managers, acting
severally and not jointly, will purchase that proportion of the total number of
International Option Securities then being purchased which the number of Initial
International Securities set forth in Schedule A opposite the name of such
International Manager bears to the total number of Initial International
Securities, subject in each case to such adjustments as the Global Coordinator
in its discretion shall make to eliminate any sales or purchases of fractional
shares.
(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 LLP, or at such other place as shall be agreed upon by the Global
Coordinator and the Company, at 9:00 A.M. (Eastern time) on the third business
day after the date hereof (unless postponed in accordance with the provisions of
Section 10), or such other time not later than ten business days after such date
as shall be agreed upon by the Global Coordinator 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 International Option
Securities are purchased by the International Managers, payment of the purchase
price for, and delivery of certificates for, such International Option
Securities shall be made at the above-mentioned offices, or at such other place
as shall be agreed upon by the Global Coordinator and the
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<PAGE>
Company, on each Date of Delivery as specified in the notice from the Global
Coordinator to the Company.
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 International Managers for the respective accounts of the International
Managers of certificates for the International Securities to be purchased by
them. It is understood that each International Manager has authorized the Lead
Managers, for its account, to accept delivery of, receipt for, and make payment
of the purchase price for, the Initial International Securities and the
International Option Securities, if any, which it has agreed to purchase.
Merrill Lynch, individually and not as representative of the International
Managers, may (but shall not be obligated to) make payment of the purchase price
for the Initial International Securities or the International Option Securities,
if any, to be purchased by any International Manager whose funds have not been
received by the Closing Time or the relevant Date of Delivery, as the case may
be, but such payment shall not relieve such International Manager from its
obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial International
Securities and the International Option Securities, if any, shall be in such
denominations and registered in such names as the International Managers 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
International Securities and the International Option Securities, if any, will
be made available for examination and packaging by the International Managers 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 of the Company. The Company covenants with each
International Manager as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Company, subject to Section 3(b), will comply with the requirements of
Rule 430A or Rule 434, as applicable, and will notify the Global
Coordinator immediately, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement shall become
effective, or any supplement to the Prospectuses or any amended
Prospectuses 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 Registration Statement or any amendment or supplement to
the Prospectuses or for additional information, and (iv) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of
any 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 use its reasonable
best
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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 Global Coordinator
notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any Term
Sheet or any amendment, supplement or revision to either the prospectus
included in the Registration Statement at the time it became effective or
to the Prospectuses, whether pursuant to the 1933 Act, the 1934 Act or
otherwise, will furnish the Global Coordinator 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
Global Coordinator or counsel for the International Managers shall object
in writing within three business days of receipt.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the International Managers and counsel for the
International Managers, without charge, signed copies of the 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, and will also deliver
to the International Managers, without charge, a conformed copy of the
Registration Statement as originally filed and of each amendment thereto
(without exhibits) for each of the International Managers. The copies of
the Registration Statement and each amendment thereto furnished to the
International Managers will be identical in all material respects 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 Prospectuses. The Company has delivered to each
International Manager, without charge, as many copies of each preliminary
prospectus as such International Manager 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 each International Manager,
without charge, during the period when the International Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, such number of
copies of the International Prospectus (as amended or supplemented) as such
International Manager may reasonably request. The International Prospectus
and any amendments or supplements thereto furnished to the International
Managers will be identical in all material respects 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 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, the U.S. Purchase
Agreement and in the Prospectuses. 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 International
Managers or for the Company, to amend the Registration Statement or amend
or supplement any
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Prospectus in order that the Prospectuses 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 any such counsel, at any such time to
amend the Registration Statement or amend or supplement any 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(b), such amendment or supplement as may be
necessary to correct such statement or omission or to make the Registration
Statement or the Prospectuses comply with such requirements, and the
Company will furnish to the International Managers, without charge, such
number of copies of such amendment or supplement as the International
Managers may reasonably request.
(f) Blue Sky Qualifications. The Company will use its reasonable best
efforts, in cooperation with the International Managers, to qualify the
Securities for offering and sale under the applicable securities laws of
such states and other jurisdictions as the Global Coordinator 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 Registration Statement
and any 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 Registration Statement and any Rule 462(b) Registration Statement.
(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) 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
Prospectuses under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect the
listing of the Securities on the New York Stock Exchange.
(j) Restriction on Sale of Securities. During a period of 90 days from
the date of the Prospectuses, the Company will not, without the prior
written consent of Merrill Lynch and Morgan Stanley, (i) directly or
indirectly, offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise dispose of or transfer
any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for or
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repayable with Common Stock or file any registration statement under the
1933 Act with respect to any of the foregoing or (ii) directly or
indirectly, enter into any swap or any other agreement or any transaction
that transfers, in whole or in part, the economic consequence of ownership
of the Common Stock, whether any such swap or transaction is to be settled
by delivery of Common Stock or other securities, in cash or otherwise. The
foregoing sentence shall not apply to (A) the Securities to be sold
hereunder or under the U.S. Purchase Agreement, (B) any shares of Common
Stock issued by the Company upon the exercise of an option or warrant or
the conversion of a security outstanding on the date hereof and referred to
in the Prospectuses, (C) any shares of Common Stock issued or options to
purchase Common Stock granted pursuant to existing employee benefit plans
of the Company referred to in the Prospectuses, or (D) any shares of Common
Stock issued pursuant to any non-employee director stock plan or dividend
reinvestment plan or (E) the issuance of Common Stock pursuant to the
purchase contract related to any FELINE PRIDES.
(k) Reporting Requirements. The Company, during the period when the
Prospectuses are 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.
SECTION 4. Payment of Expenses.
(a) Expenses. 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 Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment thereto, (ii) the
preparation, printing and delivery to the Underwriters of this Agreement, any
Agreement among Underwriters 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 Underwriters, including any stock or other transfer taxes
and any stamp or other duties payable upon the sale, issuance or delivery of the
Securities to the Underwriters and the transfer of the Securities between the
U.S. Underwriters and the International Managers, (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(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters 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 Underwriters of copies of each
preliminary prospectus, any Term Sheets and of the Prospectuses and any
amendments or supplements thereto, (vii) the preparation, printing and delivery
to the Underwriters of copies of the Blue Sky Survey and any supplement thereto,
(viii) the fees and expenses of any transfer agent or registrar for the
Securities and (ix) the fees and expenses incurred in connection with the
listing of the Securities on the New York Stock Exchange.
(b) Termination of Agreement. If this Agreement is terminated by the
International Managers in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company
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shall reimburse the International Managers for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
International Managers.
SECTION 5. Conditions of International Managers' Obligations. The obligations of
the several International Managers hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any subsidiary of the Company
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of
the 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
International Managers. 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, a Term Sheet
shall have been filed with the Commission in accordance with Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the International
Managers shall have received the favorable opinion, dated as of Closing
Time, of Dow, Lohnes & Albertson, PLLC, counsel for the Company, in form
and substance satisfactory to counsel for the International Managers,
together with signed or reproduced copies of such letter for each of the
other International Managers, to the effect set forth in Exhibit A hereto
and to such further effect as counsel to the International Managers may
reasonably request.
(c) Opinion of Counsel for International Managers. At Closing Time,
the International Managers shall have received the favorable opinion, dated
as of Closing Time, of Brown & Wood LLP, counsel for the International
Managers, together with signed or reproduced copies of such letter for each
of the other U.S. Underwriters, in form and substance satisfactory to the
International Managers. Such counsel may state that, insofar as such
opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company and its subsidiaries
and certificates of public officials.
(d) 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 Prospectuses, 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
International Managers shall have received a certificate of the President
or a Vice
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<PAGE>
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 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 Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or are contemplated by the Commission.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the International Managers shall have received letters from
Deloitte & Touche LLP, in relation to the Company, and KPMG LLP, in
relation to TCA, each dated such date, in form and substance satisfactory
to the International Managers, together with signed or reproduced copies of
such letter for each of the other International Managers 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 Registration Statement
and the Prospectuses.
(f) Bring-down Comfort Letter. At Closing Time, the International
Managers shall have received from Deloitte & Touche LLP and KPMG LLP
letters, each dated as of Closing Time, to the effect that they reaffirm
the statements made in the letter furnished pursuant to subsection (e) of
this Section, except that the specified date referred to shall be a date
not more than three business days prior to Closing Time.
(g) 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.
(h) Lock-up Agreements. At the date of this Agreement, the
International Managers shall have received an agreement substantially in
the form of Exhibit B hereto signed by the persons listed on Schedule C
hereto.
(i) Purchase of Initial U.S. Securities. Contemporaneously with the
purchase by the International Managers of the Initial International
Securities under this Agreement, the U.S. Underwriters shall have purchased
the Initial U.S. Securities under the U.S. Purchase Agreement.
(j) Conditions to Purchase of International Option Securities. In the
event that the International Managers exercise their option provided in
Section 2(b) hereof to purchase all or any portion of the International
Option Securities, the representations and warranties of the Company
contained herein and the statements in any certificates furnished by the
Company or any subsidiary of the Company hereunder shall be true and
correct as of each Date of Delivery and, at the relevant Date of Delivery,
the International Managers shall have received:
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<PAGE>
(i) 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 the
Closing Time pursuant to Section 5(d) hereof remains true and
correct as of such Date of Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion of
Dow, Lohnes & Albertson, PLLC, counsel for the Company, in
form and substance satisfactory to counsel for the
International Managers, dated such Date of Delivery, relating
to the International Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the
opinion required by Section 5(b) hereof.
(iii) Opinion of Counsel for International Managers. The
favorable opinion of Brown & Wood LLP, counsel for the
International Managers, dated such Date of Delivery, relating
to the International Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the
opinion required by Section 5(c) hereof. (iv) Bring-down
Comfort Letter. Letters from Deloitte & Touche LLP and KPMG
LLP, in form and substance satisfactory to the International
Managers and dated such Date of Delivery, substantially in the
same form and substance as the letter furnished to the
International Managers pursuant to Section 5(f) 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.
(k) Additional Documents. At Closing Time and at each Date of Delivery
counsel for the International Managers 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,
herein contained; 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 International Managers and
counsel for the International Managers.
(l) Termination of Agreement. If any condition specified in 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
International Option Securities on a Date of Delivery which is after the
Closing Time, the obligations of the several International Managers to
purchase the relevant Option Securities may be terminated by the
International Managers by notice to the Company 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 6, 7 and 8 shall
survive any such termination and remain in full force and effect.
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<PAGE>
SECTION 6. Indemnification.
(a) Indemnification of International Managers. The Company agrees to
indemnify and hold harmless each International Manager and each person, if any,
who controls any International Manager 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
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 included in any preliminary prospectus or
the Prospectuses (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(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 Merrill
Lynch), 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 in (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 any
International Manager expressly for use in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the International
Prospectus (or any amendment or supplement thereto) and provided, further, that
as to any preliminary prospectus this indemnity agreement shall not inure to the
benefit of any International Manager or any person controlling that
International Manager on account of any loss, claim, damage, liability or action
arising from the sale of International Securities to any person by that
International Manager if that International Manager failed to send or give a
copy of the Prospectus, as the same may be amended or supplemented, to that
person and the untrue statement or alleged untrue
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<PAGE>
statement of a material fact or omission or alleged omission to state a material
fact in such preliminary prospectus was corrected in said amended or
supplemented Prospectus and the delivery thereof was required by law and would
have constituted a complete defense to the claim of that person, unless such
failure resulted from non-compliance by the Company with Section 3(a) or (b).
For purposes of the second proviso to the immediately preceding sentence, the
term Prospectus shall not be deemed to include the documents incorporated by
reference therein, and no International Manager shall be obligated to send or
give any supplement or amendment to any document incorporated by reference in a
preliminary prospectus or supplement thereto or the Prospectus to any person.
(b) Indemnification of Company, Directors and Officers. Each International
Manager severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the 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 Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary international
prospectus or the International Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such International Manager expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the International 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. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Merrill Lynch, and, in
the case of parties indemnified pursuant to Section 6(b) 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. If
it so elects within a reasonable time after receipt of 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 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
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<PAGE>
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.
(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 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 90 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 45 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. If the indemnification provided for in Section 6 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 and the International Managers 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 International Managers 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 International Managers 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
International Managers on the other hand in connection with the offering of the
International 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
International Securities pursuant to this Agreement (before deducting expenses)
received by the Company and the total underwriting discount received by the
International Managers, in each case as set forth on the cover of the
International Prospectus, or, if Rule 434 is used, the corresponding location on
the Term Sheet, bear to the aggregate initial public offering price of the
International Securities as set forth on such cover.
The relative fault of the Company on the one hand and the International
Managers on the other hand shall be determined by reference to, among other
things, whether any such untrue or
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<PAGE>
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
International Managers and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the International Managers agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the International Managers were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 7. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7 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.
Notwithstanding the provisions of this Section 7, no International Manager
shall be required to contribute any amount in excess of the amount by which the
total price at which the International Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such International Managers has otherwise been required to pay by
reason of 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, each person, if any, who controls an
International Managers 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 such
International Manager, and each director of the Company, each officer of the
Company who signed the 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.
The International Managers' respective obligations to contribute pursuant to
this Section 7 are several in proportion to the number of Initial International
Securities set forth opposite their respective names in Schedule A hereto and
not joint.
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<PAGE>
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 or any of its subsidiaries submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any International Manager or
controlling person, or by or on behalf of the Company, and shall survive
delivery of the Securities to the International Managers.
SECTION 9. Termination of Agreement.
(a) Termination; General. The International Managers may terminate this
Agreement, by notice to the Company, 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 International
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 occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the International Managers, impracticable to market the Securities
or to enforce contracts for the sale of the Securities, or (iii) if trading in
any securities of the Company has been suspended or materially 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 materially 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
National Association of Securities Dealers, Inc. or any other governmental
authority, or (iv) 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 6, 7
and 8 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the International Managers. If one or more
of the International Managers shall fail at Closing Time or a Date of Delivery
to purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the International Managers shall have
the right, within 24 hours thereafter, to make arrangements for one or more of
the non-defaulting International Managers, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon the terms herein set forth; if, however, the
International Managers shall not have completed such arrangements within such
24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of International Securities to be purchased on such date, each of
the non-defaulting
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<PAGE>
International Managers shall be obligated, severally and not jointly, to
purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of
all non-defaulting International Managers, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
International Securities to be purchased on such date, this Agreement or,
with respect to any Date of Delivery which occurs after the Closing Time,
the obligation of the International Managers to purchase and of the Company
to sell the Option Securities to be purchased and sold on such Date of
Delivery shall terminate without liability on the part of any
non-defaulting International Manager.
No action taken pursuant to this Section shall relieve any defaulting
International Manager from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
International Managers to purchase and the Company to sell the relevant
International Option Securities, as the case may be, either the International
Managers or the Company shall have the right to postpone Closing Time or the
relevant Date of Delivery, as the case may be, for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements.
SECTION 11. 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 International Managers
shall be directed to the International Managers at North Tower, World Financial
Center, New York, New York 10281-1201 attention of Daniel Richards, Managing
Director; and notices to the Company shall be directed to it at 1400 Lake Hearn
Drive, Atlanta, Georgia 30319, attention of Andrew A. Merdek.
SECTION 12. Parties. This Agreement shall each inure to the benefit of and be
binding upon the International Managers and the Company 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
International Managers and the Company 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 International Managers and the
Company 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
any International Manager shall be deemed to be a successor by reason merely of
such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
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<PAGE>
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED WHOLLY IN
SUCH STATE. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. 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.
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<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
between the International Managers and the Company in accordance with its terms.
Very truly yours,
Cox Communications, Inc.
By /s/ Dallas S. Clement
Name: Dallas S. Clement
Title: Vice President and Treasurer
CONFIRMED AND ACCEPTED, as of the date first above written:
MERRILL LYNCH INTERNATIONAL
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
BEAR, STEARNS INTERNATIONAL LIMITED
CAZENOVE & CO.
CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
GOLDMAN SACHS INTERNATIONAL
SALOMON BROTHERS INTERNATIONAL LIMITED
SOCIETE GENERALE
By: MERRILL LYNCH INTERNATIONAL
By /s/ Tristam Collins
Authorized Signatory
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<PAGE>
SCHEDULE A
Number of Initial International
Name of International Manager Securities
- ------------------------------- -------------
Merrill Lynch International..........................................608,000
Morgan Stanley & Co. International Limited...........................608,000
Bear, Stearns International Limited..................................134,000
Credit Suisse First Boston (Europe) Limited..........................134,000
Goldman, Sachs International.........................................134,000
Salomon Brothers International Limited...............................134,000
Societe Generale.....................................................134,000
-------
Total.......................................................2,020,000
=========
Sch A-1
<PAGE>
SCHEDULE B
COX COMMUNICATIONS, INC.
2,020,000 Shares of Common Stock
(Par Value $1.00 Per Share)
1. The initial public offering price per share for the
Securities shall be $34.6875.
2. The purchase price per share for the International
Securities to be paid by the several International Managers shall be
$33.4775, being an amount equal to the initial public offering price
set forth above less $1.21 per share; provided that the purchase price
per share for any International Option Securities purchased upon the
exercise of the over-allotment option described in Section 2(b) shall
be reduced by an amount per share equal to any dividends or
distributions declared by the Company and payable on the Initial
International Securities but not payable on the International Option
Securities.
Sch B-1
<PAGE>
SCHEDULE C
Cox Enterprises, Inc.
Margaret A. Bellville
Alex B. Best
Ajit M. Dalvi
David E. Easterly
Jimmy W. Hayes
James C. Kennedy
James O. Robbins
David M. Woodrow
Janet Morrison Clarke
Robert F. Erburu
Robert C. O'Leary
Andrew J. Young
Sch C-1
<PAGE>
SCHEDULE D
List of Subsidiaries
Cox Communications Hampton Roads, Inc.
Cox Communications Las Vegas, Inc.
Cox Classic Cable, Inc.
Cox Trust I
Cox Trust II
CoxCom, Inc.
Sch D-1
<PAGE>
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(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, has
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectuses and to enter into and
perform its obligations under the International Purchase Agreement and the U.S.
Purchase 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) The authorized, issued and outstanding capital stock of the Company is
as set forth in the Prospectuses in the column entitled "Cox Historical" under
the caption "Capitalization" (except for subsequent issuances, if any, pursuant
to the International Purchase Agreement and the U.S. Purchase Agreement or
pursuant to reservations, agreements or employee benefit plans referred to in
the Prospectuses or pursuant to the exercise of convertible securities or
options referred to in the Prospectuses); the shares of issued and outstanding
capital stock of the Company have been duly authorized and validly issued and
are fully paid and non-assessable; and none of the outstanding shares of capital
stock of the Company was issued in violation of the preemptive rights of any
securityholder of the Company.
(iii) Each Subsidiary has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectuses and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property as described in
the Prospectuses requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not result in a Material
Adverse Effect; except as otherwise disclosed in the Registration Statement, all
of the capital stock of each Subsidiary owned by the Company, directly or
through subsidiaries, has been duly authorized and validly issued, is fully paid
and non-assessable and, to the best of our knowledge, is owned free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or equity.
(iv) The Securities to be purchased by the International Managers and the
U.S. Underwriters from the Company have been duly authorized for issuance and
sale to the Underwriters pursuant to the International Purchase Agreement and
the U.S. Purchase Agreement, respectively, and, when issued and delivered by the
Company pursuant to the International Purchase Agreement and the U.S. Purchase
Agreement, respectively, against payment of the consideration set forth in the
U.S. Purchase Agreement and the International
A-1
<PAGE>
Purchase Agreement, will be validly issued and fully paid and non-assessable and
no holder of the Securities is or will be subject to personal liability by
reason of being such a holder.
(v) The issuance of the Securities is not subject to the preemptive or
other similar rights of any securityholder of the Company.
(vi) The International Purchase Agreement and the U.S. Purchase Agreement
have been duly authorized, executed and delivered by the Company.
(vii) The Registration Statement, including any Rule 462(b) Registration
Statement, has been declared effective under the 1933 Act; any required filing
of the Prospectuses 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 Registration
Statement or any 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.
(viii) The Registration Statement, including any Rule 462(b) Registration
Statement, the Rule 430A Information and the Rule 434 Information, as
applicable, the Prospectuses, excluding the documents incorporated by reference
therein, and each amendment or supplement to the Registration Statement and the
Prospectuses, excluding the documents incorporated by reference therein, as of
their respective effective or issue dates (other than the financial statements
and supporting schedules and other financial data included or incorporated by
reference therein or omitted therefrom and the Statements of Eligibility on Form
T-1, as to which we express no opinion) complied as to form in all material
respects with the requirements of the 1933 Act and the 1933 Act Regulations.
(ix) The documents incorporated by reference in the Prospectuses (other
than the financial statements and supporting schedules or other financial data
included therein or omitted therefrom, as to which we 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.
(x) The form of certificate used to evidence the Common Stock complies in
all material respects with all applicable statutory requirements, with any
applicable requirements of the charter and by-laws of the Company and the
requirements of the New York Stock Exchange.
(xi) To our knowledge and other than as set forth in the Prospectuses,
there is not pending any action, suit, proceeding, inquiry or investigation, to
which the Company or any subsidiary is a party, or to which the property of the
Company 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 International Purchase
Agreement and U.S. Purchase Agreement or the performance by the
A-2
<PAGE>
Company of its obligations thereunder; and, to the best of our knowledge, no
such action, suit, proceeding, inquiry or investigation is threatened in writing
by governmental authorities or others.
(xii) The information (A) included in the Prospectuses under the captions
"Description of Capital Stock--Common Stock" and "Certain United Stated Federal
Tax Considerations to Non-U.S. Holders," (B) included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1998 under the captions
"Business - Competition," "Business - Legislation and Regulation," "Legal
Proceedings" and "Certain Relationships and Related Transactions," and (C) in
the Registration Statement under Items 14 and 15, to the extent that it
constitutes matters of law, summaries of legal matters, the Company's charter
and bylaws or legal proceedings, or legal conclusions, has been reviewed by us
and fairly present the information called for with respect to such matters of
law and fairly summarize the matters referred to therein.
(xiii) To the best of our knowledge, there are no statutes or regulations,
and no legal or governmental proceedings pending or threatened to which the
Company or any of its subsidiaries is a party or to which any of the properties
of the Company or any of its subsidiaries is subject, that are required to be
described in the Prospectuses that are not described as required.
(xiv) All descriptions in the Prospectuses of contracts and other documents
to which the Company 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 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.
(xv) 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 state or foreign securities or blue sky laws, as to which we express no
opinion) is necessary or required in connection with the due authorization,
execution and delivery of the International Purchase Agreement and the U.S.
Purchase Agreement or for the offering, issuance, sale or delivery of the
Securities.
(xvi) The execution, delivery and performance of the International Purchase
Agreement and the U.S. Purchase Agreement and the consummation of the
transactions contemplated in the International Purchase Agreement, the U.S.
Purchase Agreement and in the Registration Statement (including the issuance and
sale of the Securities, and the use of the proceeds from the sale of the
Securities as described in the Prospectuses under the caption "Use Of Proceeds")
and compliance by the Company with its obligations under the International
Purchase Agreement and the U.S. Purchase 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 Purchase Agreements) 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
A-3
<PAGE>
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
or other constitutive documents of the Company or any subsidiary, or, to our
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
respective properties, assets or operations.
(xvii) The Company has been granted and presently holds the FCC
authorizations necessary for the Company to conduct its business as presently
conducted or proposed to be conducted, except such as would 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 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.
(xviii) To our knowledge after due inquiry, the Company 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.
(xix) The execution, delivery and performance by the Company of the
International Purchase Agreement and the U.S. Purchase Agreement does not
violate the Communications Act of 1934, as amended, or any rules or the
regulations thereunder binding on the Company or its subsidiaries or any order,
writ, judgment, injunction, decree or award of the FCC binding on the Company or
its subsidiaries of which we have knowledge after due inquiry.
(xx) The Company is not an "investment company" as such term is defined in
the 1940 Act.
We have participated in conferences with officers and representatives of
the Company, representatives of the independent accountants of the Company, and
the Underwriters at which the contents of the Registration Statement and the
Prospectuses 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 Registration
Statement and the Prospectuses and have made no independent check or
verification thereof except as described in paragraph (xii) above, on the basis
of the foregoing, nothing has come to our attention that would lead us to
believe that the 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 Statements of
Eligibility on Form T-1, as to which we make no statement), at the time such
Registration Statement or any such amendment became effective, contained an
untrue statement of a material fact or omitted to state
A-4
<PAGE>
a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectuses 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 make no statement), at the time the Prospectuses were
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.
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
International Managers and states that such opinion of such local counsel is
satisfactory in form and substance and the International Managers and counsel
for the International Managers 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 the Company and public
officials.
A-5
<PAGE>
Exhibit B
[Form of lock-up from directors, officers or other
stockholders pursuant to Section 5(h)]
August 9, 1999
MERRILL LYNCH INTERNATIONAL
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
BEAR, STEARNS INTERNATIONAL LIMITED
CAZENOVE & CO.
CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
GOLDMAN, SACHS INTERNATIONAL
SALOMON BROTHERS INTERNATIONAL LIMITED
SOCIETE GENERALE
c/o Merrill Lynch International
Ropemaker Place
25 Ropemaker Street
London EC24 9L4
England
Re: Proposed Public Offering by Cox Communications, Inc.
Dear Sirs:
The undersigned, a stockholder [and an officer and/or director] of Cox
Communications, Inc., a Delaware corporation (the "Company"), understands that
Merrill Lynch International ("Merrill Lynch"), Morgan Stanley & Co.
International Limited ("Morgan Stanley"), Bear, Stearns International Limited,
Credit Suisse First Boston (Europe) Limited, Goldman, Sachs International,
Salomon Brothers International Limited and Societe Generale propose to enter
into an International Purchase Agreement (the "International Purchase
Agreement") with the Company providing for the public offering of shares (the
"Securities") of the Company's Class A common stock, par value $1.00 per share
(the "Common Stock"). In recognition of the benefit that such an offering will
confer upon the undersigned as a stockholder [and an officer and/or director] of
the Company, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned agrees with each
underwriter to be named in the International Purchase Agreement that, during a
period of 90 days from the date of the International Purchase Agreement, the
undersigned will not, without the prior written consent of Merrill Lynch and
Morgan Stanley, directly or indirectly, (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, or otherwise dispose of
or transfer any shares of the Company's Common Stock or any securities
convertible into or exchangeable or exercisable for or repayable with 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
B-1
<PAGE>
disposition, or cause to be filed any registration statement under the
Securities Act of 1933, as amended, with respect to any of the foregoing or (ii)
enter into any swap or any other agreement or any transaction that transfers, in
whole or in part, directly or indirectly, the economic consequence of ownership
of the Common Stock, whether any such swap or transaction is to be settled by
delivery of Common Stock or other securities, in cash or otherwise.
Very truly yours,
Signature:
Print Name:
B-2
Exhibit 1.3
COX COMMUNICATIONS, INC.
(a Delaware Corporation)
COX TRUST II
(a Delaware Business Trust)
13,000,000 FELINE PRIDES
consisting of
11,700,000 Income PRIDES
and
1,300,000 Growth PRIDES
1,300,000 7% CAPITAL SECURITIES
UNDERWRITING AGREEMENT
Dated: August 9, 1999
<PAGE>
COX COMMUNICATIONS, INC.
(A DELAWARE CORPORATION)
COX TRUST II
(A DELAWARE BUSINESS TRUST)
13,000,000 FELINE PRIDES (SM) (Stated Amount of $50 per FELINE PRIDES),
consisting of
11,700,000 Income PRIDES (SM)
each consisting of
a Purchase Contract of Cox Communications, Inc.
requiring the purchase on August 16, 2002 (or earlier) of Shares
of Class A Common Stock of
Cox Communications, Inc.
and
a 7% Capital Security
of Cox Trust II (Liquidation Amount $50)
and
1,300,000 Growth PRIDES (SM)
each consisting of
a Purchase Contract of Cox Communications, Inc. requiring the purchase on
August 16, 2002 (or earlier) of Shares of Class A Common Stock of
Cox Communications, Inc.
and
a 1/20 undivided beneficial interest in a Zero-Coupon U.S.
Treasury Security having a principal amount at maturity equal to
$1,000 and maturing on August 15, 2002
1,300,000 7% Capital Securities
of Cox Trust II (Liquidation Amount $50 per Capital Security)
<PAGE>
UNDERWRITING AGREEMENT
August 9, 1999
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Morgan Stanley & Co. Incorporated
Banc of America Securities LLC
J.P. Morgan Securities Inc.
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Cox Communications, Inc., a Delaware corporation (the "Company"), and Cox
Trust II (the "Trust" and, together with the Company, the "Offerors"), a
Delaware statutory business trust organized under the Business Trust Act (the
"Delaware Act") of the State of Delaware (Chapter 38, Title 12, of the Delaware
Code, 12 Del. (Sections 3801 et seq.)), confirm their agreement with Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill
Lynch"), Morgan Stanley & Co. Incorporated, Banc of America Securities LLC and
J.P. Morgan Securities Inc. (collectively, the "Underwriters," which term shall
also include any underwriter substituted as hereinafter provided in Section 10
hereof), with respect to the issue and sale by the Offerors and the purchase by
the Underwriters, acting severally and not jointly, of (A) 13,000,000 FELINE
PRIDES (SM), of which (I) 11,700,000 will initially consist of a unit (referred
to as "Income PRIDES(SM)") with a Stated Amount of $50 comprised of (a) a stock
purchase contract (the "Purchase Contract") under which (i) the holder will
purchase from the Company on August 16, 2002, a number of shares (the "Shares")
of Class A common stock, $1.00 par value per share, of the Company (the "Common
Stock") equal to the Settlement Rate as set forth in the Purchase Contract
Agreement (as defined below) and (ii) the Company will pay to the holder
contract adjustment payments, if any, and (b) beneficial ownership of a 7%
Capital Security of the Trust, having a liquidation amount of $50 (each, an
"Income PRIDES Capital Security"), and (II) 1,300,000 will initially consist of
a unit (referred to as "Growth PRIDES(SM)") with a Stated Amount of $50
comprised of (a) a Purchase Contract and (b) a 1/20 undivided beneficial
interest in a zero-coupon U.S. Treasury Security (CUSIP No. 912820 BE 6) (each,
a "Treasury Security") maturing on August 15, 2002 and (B) 1,300,000 7% Capital
Securities of the Trust, having a liquidation amount of $50 (the "Separate
Capital Securities" and, together with the Income PRIDES Capital Securities, the
"Capital Securities"; such Income PRIDES, Growth PRIDES and Separate Capital
Securities being referred to herein collectively as the "Initial Securities")
and with respect to the grant by the Offerors to the Underwriters, acting
severally and not jointly, of an option to purchase up to an additional
1,950,000 FELINE
<PAGE>
PRIDES, in any combination of Income PRIDES (the "Option Income PRIDES") and
Growth PRIDES (the "Option Growth PRIDES"), and an additional number of Separate
Capital Securities (the "Option Capital Securities" and, together with the
Option Income PRIDES and the Option Growth PRIDES, the "Option Securities"; the
Option Securities together with the Initial Securities being referred to herein
as the "Securities")equal to the number of Option Growth PRIDES so purchased as
described in Section 2(b) hereof. In accordance with the terms of the Purchase
Contract Agreement, to be dated as of August 12, 1999, between the Company and
The First National Bank of Chicago, as purchase contract agent (the "Purchase
Contract Agent"), the Income PRIDES Capital Securities and the Treasury
Securities will be pledged by the Purchase Contract Agent, on behalf of the
holders of Securities that are Income PRIDES and Growth PRIDES, respectively, to
The Bank of New York, as collateral agent, pursuant to the Pledge Agreement, to
be dated as of August 12, 1999 (the "Pledge Agreement"), among the Company, the
Purchase Contract Agent and the Collateral Agent, to secure such holders'
obligation to purchase Common Stock under the Purchase Contracts. The rights and
obligations of (i) a holder of Income PRIDES in respect of Capital Securities,
subject to the pledge thereof, and Purchase Contracts, (ii) a holder of Growth
PRIDES in respect of beneficial interest in the Treasury Securities, subject to
the pledge thereof, and Purchase Contracts and (iii) a holder of Separate
Capital Securities will be evidenced by Security Certificates (the "Security
Certificates").
The Company will guarantee the Capital Securities with respect to
distributions and payments upon liquidation, redemption or otherwise to the
extent described in the Prospectus (as defined below) (the "Capital Securities
Guarantee"). All, or substantially all, of the proceeds from the sale of the
Capital Securities will be combined with the entire net proceeds from the sale
by the Trust to the Company of its common securities (the "Common Securities"
and, together with the Capital Securities, the "Trust Securities") that will be
guaranteed by the Company with respect to distributions and payments upon
liquidation, redemption or otherwise to the extent set forth in the Prospectus
(the "Common Securities Guarantee" and, together with the Capital Securities
Guarantee, the "Guarantees") and will be used by the Trust to purchase the 7%
Senior Debentures Due 2004 (the "Debentures") of the Company.
The Capital Securities and the Common Securities will be issued
pursuant to the Amended and Restated Declaration of Trust of the Trust, to be
dated as of Closing Time (as defined below) (the "Declaration"), among the
Company, as sponsor, James O. Robbins, Jimmy W. Hayes and Dallas S. Clement, as
administrative trustees (the "Administrative Trustees"), The Bank of New York,
as property trustee (the "Property Trustee"), and The Bank of New York
(Delaware), as Delaware trustee (the "Delaware Trustee" and, together with the
Property Trustee and the Administrative Trustees, the "Trustees"). The Capital
Securities Guarantee will be issued pursuant to the Capital Securities Guarantee
Agreement, to be dated as of the Closing Time (the "Capital Securities Guarantee
Agreement"), between the Company and The Bank of New York, as guarantee trustee
(the "Guarantee Trustee"), and the Common Securities Guarantee will be issued
pursuant to the Common Securities Guarantee Agreement, to be dated as of Closing
Time (the "Common Securities Guarantee Agreement" and, together with the Capital
Securities Guarantee Agreement, the "Guarantee Agreements"), of the Company. The
Debentures will be issued pursuant to the Indenture, dated as of June 27, 1995
(the "Base Indenture"), between the Company and The Bank of New York, as Trustee
(the "Debt Trustee"), as supplemented by the First Supplemental Indenture, to be
dated as of August 12, 1999 (the
<PAGE>
Base Indenture, as supplemented and amended, being referred to as the
"Indenture"). Capitalized terms used herein without definition shall be used as
defined in the Prospectus.
It is understood that, concurrent with the initial issuance of the
Securities, the Company will be offering and selling shares of its Common Stock
and debt securities ("Debt Securities") in separate offerings pursuant to
underwriting agreements to be entered into among the Company, Merrill Lynch and
the other underwriters named therein (the "Concurrent Offerings"). The
obligations of the Offerors and the Underwriters contained in this Agreement are
not conditioned upon the consummation of either Concurrent Offering.
Pursuant to a remarketing agreement (the "Remarketing Agreement") to be
dated as of August 12, 1999, among the Company, the Trust, the Purchase Contract
Agent and a nationally recognized investment banking firm chosen by the Company,
certain Capital Securities may be remarketed, subject to certain terms and
conditions.
Prior to the purchase and public offering of the Securities by the
several Underwriters, the Offerors and the Underwriters shall enter into an
agreement substantially in the form of Exhibit A hereto (the "Pricing
Agreement"). The Pricing Agreement may take the form of an exchange of any
standard form of written communication between the Offerors and the Underwriters
and shall specify such applicable information as is indicated in Exhibit A
hereto. The offering of the Securities will be governed by this Agreement, as
supplemented by the Pricing Agreement. From and after the date of the execution
and delivery of the Pricing Agreement, this Agreement shall be deemed to
incorporate the Pricing Agreement.
The Company and the Trust have filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (Nos.
333-82575, 333-82575-01 and 333-82575-02) and pre-effective amendments nos. 1, 2
and 3 thereto for the registration of certain securities, including the
Securities and the Purchase Contracts and Capital Securities included in, and
shares of Common Stock underlying, the Securities, under the Securities Act of
1933, as amended (the "1933 Act"), including the related preliminary prospectus
or prospectuses, 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 such pre-and post-effective
amendments thereto as may be required prior to the execution of the Pricing
Agreement. Such registration statement (as so amended) has been declared
effective by the Commission and each of the Declaration, the Indenture and the
Capital Securities Guarantee Agreement has been duly qualified under the Trust
Indenture Act of 1939, as amended (the "1939 Act"). Such registration statement
(as so amended), in the form in which it became effective, including the
exhibits and schedules thereto, if any, and the information, if any, deemed to
be a part thereof pursuant to Rule 430A(b) of the 1933 Act Regulations (the
"Rule 430A Information"), is referred to herein as the "Registration Statement";
and the final prospectus and the final prospectus supplement relating to the
offering of the Securities, in the form first furnished to the Underwriters by
the Offerors for use in connection with the offering of the Securities, are
collectively referred to herein as the "Prospectus"; provided, however, that all
references to the "Registration Statement" and the "Prospectus" shall also be
deemed to include all documents incorporated therein by reference pursuant to
the Securities Exchange Act of 1934, as amended (the "1934 Act"), prior to the
time the execution and delivery of the Pricing Agreement; and provided, further,
that if the Offerors file a registration statement with the
<PAGE>
Commission pursuant to Section 462(b) of the 1933 Act Regulations (the "Rule
462(b) Registration Statement"), then after such filing, all references to
"Registration Statement" shall be also be deemed to include the Rule 462(b)
Registration Statement. A "preliminary prospectus" shall be deemed to refer to
any prospectus used before the Registration Statement became effective and any
prospectus that omitted, as applicable, the Rule 430A Information or other
information to be included upon pricing in a form of prospectus filed with the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations and was used
after such effectiveness but prior to the execution and delivery of the Pricing
Agreement. For purposes of this Agreement, all references to the Registration
Statement, Prospectus or preliminary prospectus or to any amendment or
supplement to any of the foregoing shall be deemed to include any 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 that is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information that is incorporated by
reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the 1934 Act that is incorporated by reference in the
Registration Statement, such preliminary prospectus or the Prospectus, as the
case may be.
The Indenture, the First Supplemental Indenture, the Declaration, the
Remarketing Agreement, the Purchase Contract Agreement, the Pledge Agreement,
the Guarantee Agreements, the Debentures, the Pricing Agreement and this
Agreement are referred to collectively as the "Operative Agreements."
The Offerors understand that the Underwriters propose to make a public
offering of the Securities as soon as the Underwriters deem advisable after the
Pricing Agreement has been executed and delivered.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties. The Offerors represent and warrant to
and agree with each Underwriter as of the date hereof, as of the date of the
Pricing Agreement and as of the Closing Time, and, if applicable, as of each
Date of Delivery (as defined below) (in each case, a "Representation Date") as
follows:
(i) Compliance with Registration Requirements. The Company and the
Trust meet the requirements for the use of Form S-3 under the 1933 Act. The
Registration Statement (including any Rule 462(b) Registration Statement)
has become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement (or such 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 and the Trust, are contemplated by the Commission,
and any request on the part of the Commission for additional
<PAGE>
information has been complied with. In addition, each of the Declaration,
the Capital Securities Guarantee and the Indenture has been duly qualified
under the 1939 Act.
At the respective times the Registration Statement (including and Rule
462(b) Registration Statement) and any post-effective amendments thereto became
effective and at each Representation Date, the Registration Statement (including
any such Rule 462(b) Registration Statement) and any amendments thereto complied
and will comply in all material respects with the requirements of the 1933 Act,
the 1933 Act Regulations and 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 omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading. At the date of the Prospectus, at the Closing Time and at each
Date of Delivery, if any, neither the Prospectus nor any amendments or
supplements thereto 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. Notwithstanding the foregoing, the representations and
warranties in this subsection shall not apply to statements in or omissions from
the Registration Statement (or any amendment thereto) or Prospectus (or any
amendment or supplement thereto) made in reliance upon and in conformity with
information furnished to the Offerors in writing by the Underwriters expressly
for use in the Registration Statement (or such amendment thereto) or Prospectus
(or such amendment or supplement thereto).
Each preliminary prospectus and the prospectus filed as part of the
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 each preliminary prospectus
and the Prospectus delivered to the Underwriters for use in connection with the
offering of the Securities will, at the time of such delivery, be identical in
all material respects 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 Registration Statement and the
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 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 Prospectus, at the time the
Registration Statement became effective, at the time the Prospectus was
issued, at the Closing Time and at each Date of Delivery, if any, 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, of Cox Communications PCS, L.P. ("PCS") and its subsidiaries
and of TCA Cable TV, Inc. ("TCA") and its subsidiaries, included in the
Registration Statement and the Prospectus are independent public
accountants with respect to the Company and its subsidiaries as required by
the 1933 Act and the 1933 Act Regulations.
<PAGE>
(iv) Financial Statements. The financial statements of the Company
included in the Registration Statement and the 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 PCS included
in the Registration Statement and the Prospectus, together with the related
schedules and notes, present fairly the financial position of PCS and its
consolidated subsidiaries at the dates indicated and the statement of
operations, stockholders' equity and cash flows of PCS 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 financial statements of TCA included in the
Registration Statement and the Prospectus, together with the related
schedules and notes, present fairly the financial position of TCA and its
consolidated subsidiaries at the date indicated and the statement of
operations, stockholders' equity and cash flows of TCA and its subsidiaries
for the period specified; said financial statements have been prepared in
conformity with GAAP. The supporting schedules, if any, included in the
Registration Statement and the Prospectus 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 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 Registration Statement. The
pro forma financial statements of the Company and its consolidated
subsidiaries and the related notes thereto included in the Registration
Statement and the Prospectus present fairly the information shown therein,
have been prepared in accordance with the Commission's rules and guidelines
with respect to pro forma financial statements and have been properly
compiled on the bases described therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances referred
to therein.
(v) No Material Adverse Change in Business. Since the respective dates
as of which information is given in the Registration Statement and the
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 Trust or of the
Company and its subsidiaries considered as one enterprise, in each case
whether or not arising in the ordinary course of business (a "Material
Adverse Effect"), (B) there have been no transactions entered into by the
Trust or the Company or any of its subsidiaries, other than those in the
ordinary course of business, which are material with respect to the Trust
or 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 Prospectus and to enter into and perform its obligations under each
of the Operative Agreements to which it is a party; 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
<PAGE>
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 or limited liability
company in good standing under the laws of the jurisdiction of its
incorporation or organization, as the case may be, has corporate or other
power and authority to own, lease and operate its properties and to conduct
its business as described in the 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
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 Company are (A)
the subsidiaries listed on Schedule B hereto 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 authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus in the column
entitled "Cox Historical" under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectus or pursuant to the exercise of convertible securities or options
referred to in the Prospectus). 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) Good Standing of the Trust. The Trust has been duly created and
is validly existing in good standing as a business trust under the Delaware
Act with the power and authority to own property and to conduct its
business as described in the Prospectus, to issue the Capital Securities
and the Common Securities and to enter into and perform its obligations
under each of the Operative Agreements to which it is a party. The Trust is
not a party to or otherwise bound by any agreement other than those
described in the Prospectus. The Trust is, and will be, under current law,
classified for United States federal income tax purposes as a grantor trust
and not as an association taxable as a corporation.
(x) Authorization of the Purchase Contract Agreement. The Purchase
Contract Agreement has been duly authorized by the Company and, when
validly executed and delivered by the Company and assuming due
authorization, execution and delivery of the Purchase Contract Agreement by
the Purchase Contract Agent, the Purchase Contract Agreement 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 other similar laws affecting the enforcement of creditors'
rights generally or by general equitable principles (regardless of whether
enforcement is considered in a proceeding at law or in equity). (xi)
Authorization of the Pledge Agreement. The Pledge Agreement has been duly
authorized by the Company and, when validly executed and delivered by the
Company and assuming due authorization, execution and delivery of the
Pledge Agreement by the Collateral Agent and the Purchase Contract Agent,
the Pledge Agreement 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),
<PAGE>
reorganization, moratorium or other similar laws affecting the enforcement
of creditors' rights generally or by general equitable principles
(regardless of whether enforcement is considered in a proceeding at law or
in equity).
(xii) Authorization of Common Securities. As of the Closing Time, the
Common Securities will have been duly authorized for issuance by the Trust
pursuant to the Declaration and, when issued and delivered by the Trust to
the Company against payment therefor as described in the Prospectus, will
be validly issued and fully paid and non-assessable undivided common
beneficial interests in the assets of the Trust. The issuance of the Common
Securities will not be subject to preemptive or other similar rights. As of
the Closing Time, all of the issued and outstanding Common Securities of
the Trust will be directly owned by the Company, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity.
(xiii) Authorization of the FELINE PRIDES. The FELINE PRIDES have been
duly authorized for issuance and sale to the Underwriters and, when issued
and delivered against payment therefor as provided herein, will be validly
issued and fully paid and non-assessable. The issuance of the FELINE PRIDES
is not subject to preemptive or other similar rights. All corporate action
required to be taken for the authorization, issuance and delivery of the
FELINE PRIDES have been validly taken.
(xiv) Authorization of Capital Securities. The Capital Securities have
been duly authorized for issuance by the Trust and, when issued and
delivered against payment therefor as provided herein, will be validly
issued and fully paid and non-assessable undivided preferred beneficial
interests in the assets of the Trust. The issuance of the Capital
Securities will not be subject to preemptive or other similar rights. The
Capital Securities will be in the form contemplated by, and each registered
holder thereof will be entitled to the benefits of, the Declaration.
(xv) Authorization of the Shares. The Shares have been duly authorized
and validly reserved for issuance by the Company and, when issued and
delivered in accordance with the provisions of the Purchase Contract
Agreement and the Pledge Agreement, will be validly issued and fully paid
and non-assessable. The issuance of the Shares will not be subject to
preemptive or other similar rights. All corporate action required to be
taken for the authorization, issuance and delivery of the Shares has been
validly taken.
<PAGE>
(xvi) Authorization of Declaration. The Declaration has been duly
authorized by the Company and, at the Closing Time, will have been executed
and delivered by the Company and the Trustees and, assuming due
authorization, execution and delivery of the Declaration by the Property
Trustee and the Delaware Trustee, the Declaration will, at the Closing
Time, 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 other similar laws affecting the enforcement of creditors'
rights generally or by general equitable principles (regardless of whether
enforcement is considered in a proceeding at law or in equity).
(xvii) Authorization of Guarantee Agreements. Each of the Guarantee
Agreements has been duly authorized by the Company and, when validly
executed and delivered by the Company and in the case of the Capital
Securities Guarantee Agreement, assuming due authorization, execution and
delivery of the Capital Securities Guarantee Agreement by the Guarantee
Trustee, the Guarantee Agreements will constitute valid and binding
agreements 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 other similar laws
affecting the enforcement of creditors' rights generally or by general
equitable principles (regardless of whether enforcement is considered in a
proceeding at law or in equity).
(xviii) Authorization of the Administrative Trustees. Each of the
Administrative Trustees of the Trust is an officer of the Company and has
been duly authorized by the Company to execute and deliver the Declaration.
(xix) Authorization of this Agreement, the Pricing Agreement and the
Remarketing Agreement. This Agreement, the Pricing Agreement and the
Remarketing Agreement have been duly authorized, executed and delivered by
each of the Company and the Trust.
(xx) Authorization of the Indenture. The Indenture has been duly
authorized, executed and delivered by the Company and, assuming due
authorization, execution and delivery of the Indenture by the Debt Trustee,
the Indenture 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 other similar laws affecting the enforcement
of creditors' rights generally or by general equitable principles
(regardless of whether enforcement is considered in a proceeding at law or
in equity).
(xxi) Authorization of Debentures. The Debentures have been duly
authorized by the Company for issuance and sale to the Trust as
contemplated by the Prospectus. The Debentures, when issued and
authenticated in the manner provided for in the Indenture and delivered
against payment of the stated consideration therefor, 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 other
similar
<PAGE>
laws affecting the enforcement of creditors' rights generally or by general
equitable principles (regardless of whether enforcement is considered in a
proceeding at law or in equity). The Debentures will be in the form
contemplated by, and each registered holder thereof will be entitled to the
benefits of, the Indenture.
(xxii) Descriptions of the Securities and the Operative Agreements.
The Securities and the Operative Agreements, as of each Representation
Date, conform and will conform, as applicable, in all material respects to
the statements relating thereto contained in the Prospectus and will be in
substantially the form filed or incorporated by reference, as the case may
be, as an exhibit to the Registration Statement.
(xxiii) Absence of Defaults and Conflicts. None of the Trust, the
Company or any of the Company's subsidiaries is in violation of its charter
or bylaws or other constitutive documents 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 Trust,
the Company or any of the Company's 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 Trust, the Company or any subsidiary of the Company is subject
(collectively, "Agreements and Instruments") except for such defaults that
would not result in a Material Adverse Effect. The entry by the Company
into the Purchase Contracts underlying the Income PRIDES and the Growth
PRIDES, the offer of the Securities as contemplated herein and in the
Prospectus, the assurance of the Shares and the sale of the Shares pursuant
to the Purchase Contracts, the execution, delivery and performance by the
Company and the Trust of each of the Operative Agreements to which it is a
party and any other agreement or instrument entered into or issued or to be
entered into or issued by the Company or the Trust, as applicable, in
connection with the transactions contemplated hereby or thereby or in the
Registration Statement and the Prospectus and the consummation of the
transactions contemplated herein and in the Registration Statement and the
Prospectus (including, the issuance and sale of the Securities and the use
of the proceeds from the sale of the Securities as described in the
Prospectus under the caption "Use of Proceeds") and compliance by the
Offerors with their 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 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 Trust,
the Company or any subsidiary of the Company 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 Declaration or certificate of trust of the Trust or the charter or
bylaws or other constitutive documents of the Company or any subsidiary of
the Company 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 Trust, the Company
or any subsidiary of the Company 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 (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, subsidiary of the Company or the Trust.
<PAGE>
(xxiv) Absence of Labor Dispute. No labor dispute with the employees
of the Company or any of its subsidiaries exists or, to the knowledge of
the Company, is imminent, that, individually or in the aggregate, may
reasonably be expected to result in a Material Adverse Effect.
(xxv) 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 or the Trust, threatened, against or affecting the Trust, the
Company or any subsidiary of the Company, which is required to be disclosed
in the 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 the Operative Documents, the performance by the Company or
the Trust of their obligations under any of the Operative Agreements; the
aggregate of all pending legal or governmental proceedings to which the
Trust, the Company or any subsidiary of the Company is a party or of which
any of their respective property or assets is the subject which are not
described in the Registration Statement, including ordinary routine
litigation incidental to the business, could not reasonably be expected to
result in a Material Adverse Effect.
(xxvi) Accuracy of Exhibits. There are no contracts or documents which
are required to be described in the Registration Statement, the 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.
(xxvii) Possession of Intellectual Property. Except as disclosed in
the 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.
(xxviii) 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 entry into the Purchase Contracts
underlying the Income PRIDES or the Growth PRIDES or in connection with the
issuance and sale of the Common Securities, the offering of the Securities
and the issuance and sale of the Shares by the Company pursuant to such
Purchase Contracts, for the due authorization, execution and delivery by
the Trust or the Company of the Operative Agreements or for the performance
by the Trust or the Company of its obligations under any of the Operative
<PAGE>
Agreements to which it is a party, 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, the laws of a foreign jurisdiction or the by-laws
and rules of the NASD.
(xxix) 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 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.
(xxx) 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 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 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.
(xxxi) Investment Company Act. Neither the Company nor the Trust is,
and upon the issuance and sale (as applicable) of the Securities as herein
contemplated and the application of the net proceeds therefrom as described
in the Prospectus neither the Company nor the Trust will be, an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended (the "1940 Act").
(xxxii) Environmental Laws. Except as described in the 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
<PAGE>
release or threatened release of 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 or any Trustee of the Trust and delivered to the Underwriters or to
counsel for the Underwriters in connection with the offering of the Securities
shall be deemed a representation and warranty by the Company or the Trust, as
applicable, to the Underwriters as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriter; Closing.
(a) Initial Securities. On the basis of the representations, warranties and
agreements herein contained and subject to the terms and conditions herein set
forth, the Offerors agree to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Offerors, at the price per security set forth in the Pricing Agreement,
the number of Initial Securities set forth in Schedule A hereto opposite the
name of such Underwriter, plus any additional number of Initial Securities that
such Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
The purchase prices per Security to be paid by the several Underwriters
shall be an amount equal to the respective initial public offering prices per
Security, less an amount per such Security to be determined by agreement between
the Underwriters and the Offerors. The initial public offering prices per
Security shall be a fixed price for Income PRIDES, Growth PRIDES and Separate
Capital Securities, respectively, to be determined by agreement between the
Underwriters and the Offerors. The initial public offering prices and the
purchase prices, when so determined, shall be set forth in the Pricing
Agreement. In the event that such prices have not been agreed upon and the
Pricing Agreement has not been executed and delivered by all parties thereto by
the close of business on the fourteenth business day following the date of this
Agreement, this Agreement shall terminate forthwith, without liability of any
party to any other party, unless otherwise agreed to by the Offerors and the
Underwriters.
(b) Option Securities. On the basis of the representations, warranties and
agreements herein contained and subject to the terms and conditions herein set
forth, the Offerors hereby grant an option to the Underwriters, severally and
not jointly, to purchase at their election up to an additional 1,950,000 FELINE
PRIDES, in any combination of Option Income PRIDES and Option Growth PRIDES, and
an additional number of Option Capital Securities equal to the number of Option
Growth PRIDES so purchased, in each case at the respective prices per
<PAGE>
Security set forth in the Pricing Agreement; provided, however, that the
Underwriters must purchase a number of Option Capital Securities equal to the
number of any Option Growth PRIDES that the Underwriters purchase. The option
will expire automatically at the close of business on the 30th calendar day
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
Underwriters to the Offerors setting forth the aggregate number of additional
Option Securities as to which the several Underwriters are then exercising the
option and the time, date and place of payment and delivery for such Option
Securities. Any such time and date of payment and delivery (a "Date of
Delivery") shall be determined by the Underwriters and the Offerors, but shall
not be later than seven full business days after the exercise of said options,
nor in any event prior to the Closing Time, unless otherwise agreed upon by the
Underwriters and the Offerors. If the option is exercised as to all or any
portion of the Option Income PRIDES, the Option Growth PRIDES or the Option
Capital Securities, each of the Underwriters, severally and not jointly, will
purchase that proportion of the total number of Option Securities then being
purchased which the number of Initial Securities each such Underwriter has
severally agreed to purchase bears to the total number of Initial Securities,
subject to such adjustments as the Underwriters in their discretion shall make
to eliminate any sales or purchases of a fractional number of Option Securities.
(c) Pledge of Securities. The Income PRIDES Capital Securities and the
Treasury Securities will be pledged with the Collateral Agent to secure the
obligations of holders of the Income PRIDES and Growth PRIDES, as applicable, to
purchase Common Stock under the Purchase Contracts. Such pledge shall be
effected by the transfer to the Collateral Agent of the Income PRIDES Capital
Securities at the Closing Time and appropriate Date of Delivery, if any, in
accordance with the Pledge Agreement.
(d) Delivery and Payment. Delivery of certificates for the Initial
Securities shall be made at the offices of Merrill Lynch in New York, New York,
against the delivery to the Collateral Agent of the Income PRIDES Capital
Securities and the Treasury Securities by such Underwriters or on their behalf,
and payment of the purchase price for the Initial Securities shall be made at
the offices of Brown & Wood LLP, or at such other place as shall be agreed upon
by the Underwriters and the Offerors, at 9:00 A.M. (Eastern time) on the third
business day after the date on which the Pricing Agreement is executed (unless
postponed in accordance with the provisions of Section 10 hereof), or such other
time not later than ten business days after such date as shall be agreed upon by
the Underwriters and the Offerors (such time and date of payment and delivery
being herein called the "Closing Time"). In addition, in the event that the
Underwriters have exercised their option to purchase any or all of the Option
Securities, payment of the purchase price for, and delivery of such Option
Securities, shall be made at the above-mentioned offices of Brown & Wood LLP, or
at such other place as shall be agreed upon by the Underwriters and the
Offerors, on the relevant Date of Delivery as specified in the notice from the
Underwriters to the Offerors.
Payment for the Securities shall be made by wire transfer of
immediately available funds to a bank account designated by the Company, against
delivery to the Underwriters of the Securities to be purchased by them. It is
understood that each Underwriter has authorized Merrill Lynch, for its account,
to accept delivery of, receipt for, and make payment of the
<PAGE>
purchase price for, the Securities which it has severally agreed to purchase.
Merrill Lynch, individually and not as representative of the Underwriters, may
(but shall not be obligated to) make payment of the purchase price for the
Securities to be purchased by any Underwriter whose funds have not been received
by the Closing Time or the relevant Date of Delivery, as the case may be, but
such payment shall not relieve such Underwriter from its obligations hereunder.
Delivery of, and payment for, the Securities shall be made through the
facilities of The Depository Trust Company.
(e) Denominations; Registration. The certificates for the Securities shall
be in such denominations and registered in such names as the Underwriters may
request in writing at least two full business days prior to the Closing Time or
the relevant Date of Delivery, as the case may be. The certificates for the
Securities will be made available for examination and, if applicable, packaging
by the Underwriters 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 of the Offerors. The Offerors covenant with the
Underwriters as follows:
(a) Compliance with the Securities Regulations and Commission Requests. The
Offerors will comply with the requirements of Rule 430A of the 1933 Act and,
subject to Section 3(b), will notify the Underwriters immediately, and confirm
the notice in writing, (i) when any post-effective amendment to the Registration
Statement shall become effective, or any supplement to the Prospectus or any
amended 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 Registration Statement or any amendment or supplement to the Prospectus or
for additional information, and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of any
order preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities or the Shares for offering or
sale in any jurisdiction, or of the initiation or threatening of any proceedings
for any of such purposes. The Offerors 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 Offerors will use
their reasonable best efforts to prevent the issuance of any stop order and, if
any stop order is issued, to promptly obtain the lifting thereof at the earliest
possible moment.
(b) Filing of Amendments. The Offerors will give the Underwriters notice of
their intention to file or prepare any amendment to the Registration Statement
(including any filing under Rule 462(b)) or any amendment, supplement or
revision to either the prospectus included in the Registration Statement at the
time it became effective or to the Prospectus, whether pursuant to the 1933 Act,
the 1934 Act or otherwise; will furnish the Underwriters 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
Underwriters or counsel for the Underwriters shall reasonably object in writing
within three business days of receipt.
<PAGE>
(c) Delivery of Registration Statements. The Offerors have furnished or
will deliver to Merrill Lynch and counsel for the Underwriters without charge,
signed copies of the 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, and will also deliver to Merrill Lynch, without charge, a conformed
copy of the Registration Statement as originally filed and of each amendment
thereto (without exhibits) for each of the Underwriters. The copies of the
Registration Statement and each amendment thereto furnished to the Merrill Lynch
will be identical in all material respects 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 Prospectuses. The Offerors have delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Offerors hereby consent to the
use of such copies for purposes permitted by the 1933 Act. The Offerors will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request. The Prospectus and any amendments or
supplements thereto furnished to each Underwriter will be identical in all
material respects 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 Offerors 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 the Registration Statement and the
Prospectus. If at any time when a prospectus is required by the 1933 Act or the
1934 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 Underwriters or counsel for the Company, to amend
the Registration Statement or amend or supplement the Prospectus in order that
the 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 any
such counsel, at any such time to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, the Offerors will promptly prepare and file
with the Commission, subject to Section 3(b), such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements, and the
Offerors will furnish to the Underwriters, without charge, such number of copies
of such amendment or supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Offerors will use their reasonable best
efforts, in cooperation with the Underwriters, to qualify the Securities and the
Shares for offering and sale under the applicable securities laws of such states
and other jurisdictions as the Underwriters may designate and to maintain such
qualifications in effect for so long as may be required in connection with the
distribution of the Securities and the Shares; provided, however, that neither
<PAGE>
Offeror shall be obligated to file any general consent to service of process or
to qualify as a foreign trust or 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 Offerors will file such statements and reports as may be required by the
laws of such jurisdiction to continue such qualification in effect for so long
as may be required in connection with the distribution of the Securities and the
Shares.
(g) Rule 158. The Trust (to the extent applicable) and the Company will
timely file such reports pursuant to the 1934 Act as are necessary in order to
make generally available to their 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) Use of Proceeds. The Offerors will use the net proceeds from the sale
of the Securities in the manner specified in the Prospectus under "Use of
Proceeds."
(i) Listing. The Offerors will use their best efforts to have the
Securities and the Shares approved for listing, subject only to official notice
of issuance, on the New York Stock Exchange and to cause the Securities to be
registered under the 1934 Act.
(j) Restriction on Sale of Securities. During a period of 90 days from the
date of the Pricing Agreement, neither the Trust nor the Company will, without
the prior written consent of Merrill Lynch, (A) directly or indirectly, offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option for the sale of, or
otherwise transfer or dispose of any Securities, Purchase Contracts, Capital
Securities, Common Stock or any security of the Trust or the Company similar to
the Securities, Purchase Contracts, Capital Securities or Common Stock or any
security convertible into or exercisable or exchangeable for or repayable with
Securities, Purchase Contracts, Capital Securities, Common Stock or any equity
securities substantially similar to the Securities, Purchase Contracts, Capital
Securities or Common Stock; or (B) directly or indirectly, enter into any swap
or any other agreement or any transaction that transfers, in whole or in part,
the economic equivalent of ownership of the Securities, Purchase Contracts,
Capital Securities or Common Stock, any security convertible into or exercisable
or exchangeable for or repayable with the Securities, Purchase Contracts,
Capital Securities, Common Stock or equity securities substantially similar to
the Securities, Purchase Contracts, Capital Securities or Common Stock whether
any such swap or transaction is to be settled by delivery of Securities,
Purchase Contracts, Capital Securities, Common Stock or other securities, in
cash or otherwise. The foregoing sentence shall not affect the ability of the
Offerors to take any such action (i) in connection with any employee benefit,
dividend reinvestment and stock option or stock purchase plans of the Company or
its subsidiaries; (ii) in connection with the offering of the Securities,
including the Capital Securities, issued pursuant to this Agreement; (iii) in
connection with any securities issued pursuant to or sold in connection with any
securities of the Company or its subsidiaries, outstanding as of the date
hereof, that are convertible into or exercisable or exchangeable for or
repayable with any securities of the Company and its subsidiaries; (iv) in
connection with the Growth PRIDES or Income PRIDES to be created or recreated
upon substitution of Pledged Securities, or shares of Common Stock issuable upon
early settlement of the Income PRIDES or
<PAGE>
Growth PRIDES; (v) upon exercise of stock options or (vi) in connection with the
issuance of Debt Securities and Common Stock pursuant to the Concurrent
Offerings.
(k) Reporting Requirements. The Offerors, during the period when the
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.
(l) Reserve of Common Stock. The Company will reserve and keep available at
all times, free of preemptive or other similar rights and liens and adverse
claims, sufficient shares of Common Stock to satisfy any obligations to issue
Shares upon settlement of the Purchase Contracts and shall take all actions
necessary to keep effective the Registration Statement with respect to the
Shares.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the performance
of the obligations of the Offerors under this Agreement, the Pricing Agreement,
the Purchase Contracts, the Purchase Contract Agreement and the Pledge
Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, printing
and delivery to the Underwriters of this Agreement, the Pricing Agreement, any
Agreement among Underwriters, the other Operative Agreements 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 Securities to the Underwriters, including any transfer taxes and
any stamp or other duties payable upon the sale, issuance or delivery of the
Securities to the Underwriters, (iv) the fees and disbursements of the counsel,
accountants and other advisors or agents (including transfer agents and
registrars) to the Offerors, as well as the fees and disbursements of the
Trustees, the Guarantee Trustee, the Debt Trustee, the Purchase Contract Agent,
the Collateral Agent and any Depositary, and their respective counsel, (v) the
printing and delivery to the Underwriters of copies of each preliminary
prospectus, and the Prospectus and any amendments or supplements thereto, (vi)
the fees charged by nationally recognized statistical rating organizations for
the rating of the Securities, (vii) the fees and expenses incurred with respect
to the listing of the Securities and the Shares on the New York Stock Exchange,
(viii) the qualification of the Securities and the Shares under securities laws
in accordance with the provisions of Section 3(f) hereof, including filing fees
and the reasonable fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of the Blue Sky
Survey and any supplement thereto, (ix) the cost of making the Securities
eligible for clearance and settlement through the facilities of The Depository
Trust Company, and (x) any fees payable or expenses incurred pursuant to any
Uniform Commercial Code related filings.
(b) Termination of Agreement. If this Agreement is terminated by the
Underwriters in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
<PAGE>
SECTION 5. Conditions of Underwriters' Obligations. The obligations of the
Underwriters to purchase and pay for the Securities pursuant to this Agreement
are subject to the accuracy of the representations and warranties of the
Offerors contained in Section 1 hereof or in certificates of any trustees of the
Trust or any officer of the Company or any of its subsidiaries delivered
pursuant to the provisions hereof, to the performance by the Offerors of their
covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, shall have become effective
and at Closing Time, and any Date of Delivery no stop order suspending the
effectiveness of the 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
Underwriters. 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).
(b) Opinions of Counsel to the Company and the Trust. At Closing Time, the
Underwriters shall have received the favorable opinions, dated as of Closing
Time, of (i) Dow, Lohnes & Albertson, PLLC, counsel for the Company and (ii)
Richards, Layton & Finger LLP, counsel for the Trust, each in form and substance
satisfactory to counsel for the Underwriters, to the effect set forth in
Exhibits B and C hereto, respectively, and to such further effect as counsel to
the Underwriters may reasonably request.
(c) Opinion of Special Tax Counsel for the Company and the Trust. At
Closing Time, the Company, the Trust and Underwriters shall have received the
favorable opinion, dated as of Closing Time, of Dow, Lohnes & Albertson, PLLC,
special tax counsel to the Company and the Trust, that (i) the Debentures will
be classified for United States federal income tax purposes as indebtedness of
the Company, (ii) the Trust will be classified for United States federal income
tax purposes as a grantor trust and not as an association taxable as a
corporation and (iii) the discussion set forth in the Prospectus under the
heading "Certain United States Federal Income Tax Consequences" constitutes, in
all material respects, a fair and accurate summary of the United States federal
income tax consequences of the purchase, ownership and disposition of the Income
PRIDES Growth PRIDES, Separate Capital Securities and Shares under current law.
Such opinion may be conditioned on, among other things, the initial and
continuing accuracy of the facts, financial and other information, covenants and
representations set forth in certificates of officers of the Company and other
documents deemed necessary for such opinion.
(d) Opinion of Counsel for Property Trustee and Delaware Trustee. At
Closing Time, the Underwriters shall have received the favorable opinion, dated
as of Closing Time, of Emmet, Marvin & Martin, LLP, counsel to The Bank of New
York (Delaware), as Delaware Trustee, and to The Bank of New York, as Property
Trustee and Guarantee Trustee, in form and substance satisfactory to counsel for
the Underwriters, to the effect that:
(i) The Bank of New York is a banking corporation duly organized, validly
existing and in good standing under the laws of the State of New York with all
necessary
<PAGE>
corporate power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, the Declaration and the Capital
Securities Guarantee Agreement;
(ii) The Bank of New York (Delaware) is a Delaware corporation, duly
organized, validly existing and in good standing, with full corporate power and
authority to execute and deliver, and to carry out and perform its obligations
under the terms of, the Declaration;
(iii) The execution, delivery and performance by The Bank of New York, in
its capacity as Property Trustee, of the Declaration, and the execution,
delivery and performance by The Bank of New York, in its capacity as Guarantee
Trustee, of the Capital Securities Guarantee Agreement have been duly authorized
by all necessary corporate action on the part of The Bank of New York. The
Declaration and the Capital Securities Guarantee Agreement have been duly
executed and delivered by The Bank of New York, in its capacity as Property
Trustee, in the case of the Declaration, and by The Bank of New York, in its
capacity as Guarantee Trustee, in the case of the Capital Securities Guarantee
Agreement, and the Declaration and the Capital Securities Guarantee Agreement
constitute the legal, valid and binding obligations of The Bank of New York,
enforceable against The Bank of New York 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 other similar laws affecting the enforcement of creditors' rights
generally or by general equitable principles (regardless of whether enforcement
is considered in a proceeding at law or in equity);
(iv) The execution, delivery and performance by the Bank of New York, in
its capacity as Property Trustee, of the Declaration, and the execution,
delivery and performance by The Bank of New York, in its capacity as Guarantee
Trustee, of the Capital Securities Guarantee Agreement, do not conflict with, or
constitute a breach of, The Bank of New York's charter or bylaws; and
(v) No consent, approval or authorization of, or registration with or
notice to, any New York or federal banking authority is required for the
execution, delivery or performance by The Bank of New York, in its capacity as
Property Trustee, of the Declaration, or by The Bank of New York, in its
capacity as Guarantee Trustee, of the Capital Securities Guarantee Agreement.
(e) Opinion of Counsel for Purchase Contract Agent. At Closing Time, the
Underwriters shall have received the favorable opinion, dated as of Closing
Time, of the legal department of The First National Bank of Chicago, as Purchase
Contract Agent, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) The First National Bank of Chicago is duly incorporated and is
validly existing as a national banking association with trust powers under
the laws of the United States with all necessary power and authority to
execute, deliver and perform its obligations under the Purchase Contract
Agreement, the Pledge Agreement and the Remarketing Agreement;
(ii) The execution, delivery and performance by the Purchase Contract
Agent of the Purchase Contract Agreement, the Pledge Agreement and the
Remarketing Agreement,
<PAGE>
and the authentication and delivery of the Securities have been duly
authorized by all necessary action on the part of the Purchase Contract
Agent. The Purchase Contract Agreement, the Pledge Agreement and the
Remarketing Agreement have been duly executed and delivered by the Purchase
Contract Agent, and constitute the legal, valid and binding obligations of
the Purchase Contract Agent, enforceable against the Purchase Contract
Agent in accordance with their respective terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws affecting the enforcement of creditors'
rights generally or by general equitable principles (regardless of whether
enforcement is considered in a proceeding at law or in equity);
(iii) The execution, delivery and performance of the Purchase Contract
Agreement, the Pledge Agreement and the Remarketing Agreement by the
Purchase Contract Agent does not conflict with or constitute a breach of
the charter or by-laws of the Purchase Contract Agent; and
(iv) No consent, approval or authorization of, or registration with or
notice to, any Illinois or federal governmental authority or agency is
required for the execution, delivery or performance by the Purchase
Contract Agent of the Purchase Contract Agreement, the Pledge Agreement and
the Remarketing Agreement.
(f) Opinion of Counsel for Underwriters. At Closing Time, the Underwriters
shall have received the favorable opinion, dated as of Closing Time, of Brown &
Wood LLP, counsel for the Underwriters, in form and substance satisfactory to
the Underwriters, with respect to the issuance and sale of the Securities and
other related matters as the Underwriters may reasonably require. Such counsel
may state that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of officers of the
Company, of Trustees of the Trust and of public officials.
(g) 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 Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Trust or of the Company and its subsidiaries considered as one enterprise, in
each case whether or not arising in the ordinary course of business, and the
Underwriters 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 and a certificate of an Administrative Trustee of the Trust,
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 Closing Time, (iii) the Company or the Trust, as applicable, 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 Registration Statement has been issued and
no proceedings for that purpose have been instituted or are pending or are
contemplated by the Commission.
(h) Accountant's Comfort Letters. At the time of the execution of this
Agreement, the Underwriters shall have received letters from Deloitte & Touche
LLP, in relation to the
<PAGE>
Company, and KPMG LLP, in relation to TCA, each dated such date, in form and
substance satisfactory to the Underwriters, 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 Registration Statement and the Prospectus.
(i) Bring-down Comfort Letters. At Closing Time, the Underwriters shall
have received from Deloitte & Touche LLP and KPMG LLP letters, each dated as of
Closing Time, to the effect that they reaffirm the statements made in the
letters furnished by them pursuant to Section (g) of this Section 5, except that
the "specified date" referred to shall be a date not more than three business
days prior to Closing Time.
(j) Maintenance of Rating. At the Closing Time and at any relevant Date of
Delivery, the Securities shall be rated in one of the four highest rating
categories for preferred stock ("Investment Grade") by Standard & Poor's Rating
Service and by Moody's Investors Service, Inc., and the Company shall have
delivered to the Underwriters a letter, dated as of such date, from each such
rating organization, or other evidence satisfactory to the Underwriters,
confirming that the Securities have such ratings. Since the date of this
Agreement, there shall not have occurred a downgrading in the rating assigned to
the Securities or any of the Company's other securities by any such rating
organization or any other "nationally recognized statistical rating
organization," as defined for purposes of Rule 436(g)(2) under the 1933 Act
Regulations, and no such organization shall have publicly announced that it has
under surveillance or review, with possible negative implications, its rating of
the Securities or any of the Company's other securities.
(k) Approval of Listing. At Closing Time, the Income PRIDES, the Growth
PRIDES and the Shares shall have been approved for listing on the New York Stock
Exchange, subject only to official notice of issuance.
(l) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option to purchase all or any portion of the Option
Securities, the representations and warranties of the Offerors contained herein
and the statements in any certificates furnished by the Offerors hereunder shall
be true and correct as of each Date of Delivery and, at the relevant Date of
Delivery, the Underwriters shall have received:
(i) Officers' and Trustee's Certificates. 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 and a
certificate of an Administrative Trustee of the Trust confirming that the
certificate delivered at Closing Time pursuant to Section 5(g) hereof is
true and correct as of such Date of Delivery.
(ii) Opinions of Counsel to the Company and the Trust. The favorable
opinion of (i) Dow, Lohnes & Albertson, PLLC, counsel for the Company, and
(ii) Richards, Layton & Finger LLP, counsel for the Trust, each in form and
substance satisfactory to counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities and otherwise to the same
effect as the opinions required by Section 5(b) hereof.
<PAGE>
(iii) Opinion of Special Tax Counsel to the Trust. The favorable
opinion of Dow, Lohnes & Albertson, PLLC, special tax counsel to the
Company and the Trust, in form and substance satisfactory to counsel for
the Underwriters, dated such Date of Delivery, relating to the Option
Securities and otherwise to the same effect as the opinion required by
Section 5(c) hereof.
(iv) The favorable opinion of Emmet, Marvin & Martin, LLP, counsel to
the Bank of New York (Delaware), as Delaware Trustee, and to the Bank of
New York, as Property Trustee and Guarantee Trustee, in form and substance
satisfactory to counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities and otherwise to the same effect as the
opinion required by Section 5(d) hereof.
(v) The favorable opinion of the legal department of The First
National Bank of Chicago, as Purchase Contract Agent, in form and substance
satisfactory to counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities and otherwise to the same effect as the
opinion required by Section 5(e) hereof.
(vi) Opinion of Counsel for the Underwriters. The favorable opinion of
Brown & Wood LLP, counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities and otherwise to the same
effect as the opinion required by Section 5(f) hereof.
(vii) Bring-down Comfort Letters. Letters from Deloitte & Touche LLP
and KPMG LLP, in form and substance satisfactory to the Underwriters and
dated such Date of Delivery, substantially the same in form and substance
as the letters furnished to the Underwriters pursuant to Section 5(i)
hereof, except that the "specified date" in the letter furnished pursuant
to this paragraph shall be a date not more than three business days prior
to such Date of Delivery.
(m) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the Underwriters 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 (as applicable) 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; and all
proceedings taken by the Offerors in connection with the issuance and sale (as
applicable) of the Securities as herein contemplated shall be reasonably
satisfactory in form and substance to the Underwriters and counsel for the
Underwriters.
(n) Termination of this Agreement. If any condition specified in this
Section 5 shall not have been fulfilled when and as required to be fulfilled,
this Agreement (or, with respect to the Underwriters' exercise of the
over-allotment option for the purchase of Option Securities on a Date of
Delivery after the Closing Time, the obligations of the Underwriters to purchase
the Option Securities on such Date of Delivery) may be terminated by the
Underwriters by notice to the Offerors at any time at or prior to the Closing
Time (or such Date of Delivery, as applicable), and such termination shall be
without liability of any party to any other party except as provided in Section
4 and except that Sections 6, 7 and 8 shall survive any such termination and
remain in full force and effect.
<PAGE>
SECTION 6. Indemnification.
(a) Indemnification of the Underwriters by the Offerors. The Offerors,
jointly and severally, agree to indemnify and hold harmless each Underwriter and
each person, if any, who controls any 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 Registration Statement (or any
amendment thereto), including the Rule 430A Information deemed to be part
thereof, 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 included in any preliminary prospectus or the
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(d) below) any such settlement is effected with the written consent of
the Offerors; and
(iii) against any and all expense whatsoever, as incurred (including the
fees and disbursements of counsel chosen by Merrill Lynch), 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
Offerors by the Underwriters expressly for use in the Registration Statement (or
any amendment thereto), including the Rule 430A Information deemed to be part
thereof, if applicable, or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) and provided, further, that as to any
preliminary prospectus this indemnity agreement shall not inure to the benefit
of any Underwriter or any person controlling that Underwriter on account of any
loss, claim, damage, liability or action arising from the sale of Securities to
any person by that Underwriter if that Underwriter failed to send or give a copy
of the Prospectus, as the same may be amended or supplemented, to that person
and the untrue statement or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact in such preliminary
prospectus was corrected in said amended or supplemented Prospectus and the
delivery thereof was required by law and would have constituted a complete
defense to the claim of that person, unless such failure resulted from
non-compliance by the Company with Section 3(a) or (b). For purposes of the
second provision to the immediately preceding sentence, the term
<PAGE>
Prospectus shall not be deemed to include the documents incorporated by
reference therein, and no Underwriter shall be obligated to send or give any
supplement or amendment to any document incorporated by reference in a
preliminary prospectus or supplement thereto or the Prospectus to any person.
(b) Indemnification of the Company, Directors and Officers and the Trust
and Trustees. Each Underwriter, severally and not jointly, agrees to indemnify
and hold harmless the Company, its directors, each of its officers who signed
the Registration Statement, the Trust, each of the Trustees who signed the
Registration Statement and each person, if any, who controls the Company or the
Trust 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 Registration Statement (or any amendment thereto),
including the Rule 430A Information deemed to be part thereof, if applicable, or
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Offerors by the Underwriters expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
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 that it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Merrill Lynch, and, in
the case of parties indemnified pursuant to Section 6(b) 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. 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 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
<PAGE>
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 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 90 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 45 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.
If the indemnification provided for in Sections 6(a) and 6(b) 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 Underwriters 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 Offerors on the one hand and the
Underwriters 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 Offerors on the one hand and of the Underwriters on the other hand, in
connection with the statements or omissions that resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by Offerors on the one hand and the
Underwriters 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 such Securities
pursuant to this Agreement (before deducting expenses) received by the Offerors
and the total underwriting discount or commission received by the Underwriters,
in each case as set forth on the cover of the Prospectus, bear to the aggregate
initial public offering price of such Securities as set forth on such cover.
The relative fault of the Offerors on the one hand and the Underwriters
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 Offerors or by the Underwriters, 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, no Underwriters shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities
<PAGE>
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of any such untrue or alleged untrue statement or
omission or alleged omission.
The Offerors and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 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, 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 such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, each Trustee of the Trust who signed the Registration
Statement and each person, if any, who controls the Company or the Trust 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 Offerors. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Initial Securities set forth opposite their names on
Schedule A hereto, and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery. All
representations, warranties and agreements contained in this Agreement and the
Pricing Agreement, or contained in certificates of Trustees of the Trust or
officers of the Company submitted pursuant to this Agreement, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of any Underwriter or controlling person thereof or by or on behalf
of the Trust or the Company, and shall survive delivery of the Securities to the
Underwriters pursuant to this Agreement.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Underwriters may terminate this Agreement, by
notice to the Offerors, at any time at or prior to Closing Time, (i) if there
has been, since the date of this Agreement or since the respective dates as of
which information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Trust or of the Company and its subsidiaries
considered as one enterprise, in each case whether or not arising in the
ordinary course of business, or (ii) 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
<PAGE>
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Underwriters, impracticable to market
the Income PRIDES, the Growth PRIDES or the Separate Capital Securities or to
enforce contracts for the sale of the Income PRIDES, the Growth PRIDES or the
Separate Capital Securities, or (iii) if trading in any securities of the Trust
or the Common Stock or any other security of the Company 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 either of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority, or (iv) if a banking moratorium has been declared by
either Federal, New York or Delaware authorities.
(b) Liabilities. If this Agreement and the Pricing Agreement are terminated
pursuant to this Section 9, 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 6, 7 and 8 shall survive such termination and remain in
full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of the
Underwriters shall fail at the Closing Time or the relevant Date of Delivery, as
the case may be, to purchase the Securities that it or they are obligated to
purchase under this Agreement and the Pricing Agreement (the "Defaulted
Securities"), then Merrill Lynch shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, Merrill Lynch shall not have completed such
arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the total
number of the Income PRIDES, Growth PRIDES or Separate Capital Securities to be
purchased on such date pursuant to this Agreement, the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective underwriting obligations
under this Agreement bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the total number
of the Income PRIDES, Growth PRIDES or Separate Capital Securities to be
purchased on such date pursuant to this Agreement, this Agreement (or, with
respect to the Underwriters' exercise of the over-allotment option for the
purchase of Option Securities on a Date of Delivery after the Closing Time, the
obligations of the Underwriters to purchase, and the Company to sell, such
Option Securities on such Date of Delivery) shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default.
<PAGE>
In the event of any such default which does not result in (i) a
termination of this Agreement, or (ii) in the case of a Date of Delivery after
the Closing Time, a termination of the obligations of the Underwriters and the
Company with respect to the related Option Securities, as the case may be,
either Merrill Lynch or the Company shall have the right to postpone the Closing
Time or the relevant Date of Delivery, as the case may be, for a period not
exceeding seven days in order to effect any required changes in the Registration
Statement or the Prospectus or in any other documents or arrangements.
SECTION 11. 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 Underwriters shall be
directed to the Underwriters c/o Merrill Lynch at World Financial Center, North
Tower, New York, New York 10281-1328, attention of Daniel Richards, Managing
Director; notices to the Company shall be directed to it at 1400 Lake Hearn
Drive, Atlanta, Georgia 30319, Attention of Andrew A. Merdek.
SECTION 12. Parties. This Agreement and the Pricing Agreement shall each inure
to the benefit of and be binding upon each of the Offerors and the Underwriters
and their respective successors. Nothing expressed or mentioned in this
Agreement or the Pricing Agreement is intended or shall be construed to give any
person, firm or corporation, other than the Underwriters and the Offerors and
their respective successors and the controlling persons and officers, directors
and Trustees 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 the Pricing Agreement or any provision herein or
therein contained. This Agreement and the Pricing Agreement and all conditions
and provisions hereof and thereof are intended to be for the sole and exclusive
benefit of the parties hereto and their respective successors, and said
controlling persons and officers, directors and Trustees and their heirs and
legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW. THIS AGREEMENT AND THE PRICING 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 IN SUCH STATE.
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. 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.
SECTION 15. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts hereof shall constitute a single instrument.
<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 Underwriters, the Company and the Trust in accordance with its terms.
Very truly yours,
COX COMMUNICATIONS, INC.
By: /s/ Dallas S. Clement
Name: Dallas S. Clement
Title: Vice President and Treasurer
COX TRUST II
By: /s/ Dallas S. Clement
Name: Dallas S. Clement
Title: Administrative Trustee
CONFIRMED AND ACCEPTED, as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
BANC OF AMERICA SECURITIES LLC
J.P. MORGAN SECURITIES INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Tristam Collins
Authorized Signatory
<PAGE>
SCHEDULE A
<TABLE>
<S> <C> <C> <C>
Number of Income Number of Growth Number of Capital
Name of Underwriter PRIDES PRIDES Securities
Merrill Lynch, Pierce, Fenner & Smith
Incorporated......................... 6,435,000 715,000 715,000
- -----------------------------------------------------
Morgan Stanley & Co. Incorporated................ 4,095,000 455,000 455,000
- -----------------------------------------------------
Banc of America Securities LLC................... 585,000 65,000 65,000
- -----------------------------------------------------
J.P. Morgan Securities Inc....................... 585,000 65,000 65,000
- -----------------------------------------------------
TOTAL............................................ 11,700,000 1,300,000 1,300,000
=====================================================
</TABLE>
<PAGE>
SCHEDULE B
List of Subsidiaries
Cox Communications Hampton Roads, Inc.
Cox Communications Las Vegas, Inc.
Cox Classic Cable, Inc.
Cox Trust I
Cox Trust II
CoxCom, Inc.
<PAGE>
EXHIBIT A
COX COMMUNICATIONS, INC.
(a Delaware Corporation)
COX TRUST II
(a Delaware Business Trust)
13,000,000 FELINE PRIDES
consisting of
11,700,000 Income PRIDES
and
1,300,000 Growth PRIDES
1,300,000 7% CAPITAL SECURITIES
PRICING AGREEMENT
Dated: August 9, 1999
<PAGE>
COX COMMUNICATIONS, INC.
(A DELAWARE CORPORATION)
COX TRUST II
(A DELAWARE BUSINESS TRUST)
13,000,000 FELINE PRIDES(SM) (Stated Amount of $50 per FELINE PRIDES),
consisting of
11,700,000 Income PRIDES (SM)
each consisting of
a Purchase Contract of Cox Communications, Inc.
requiring the purchase on August 16, 2002 (or earlier) of Shares
of Class A Common Stock of
Cox Communications, Inc.
and
a 7% Capital Security
of Cox Trust II (Liquidation Amount $50)
and
1,300,000 Growth PRIDES (SM)
each consisting of
a Purchase Contract of Cox Communications, Inc. requiring the purchase on
August 16, 2002 (or earlier) of Shares of Class A Common Stock of
Cox Communications, Inc.
and
a 1/20 undivided beneficial interest in a Zero-Coupon U.S.
Treasury Security having a principal amount at maturity equal to
$1,000 and maturing on August 15, 2002
1,300,000 7% Capital Securities
of Cox Trust II (Liquidation Amount $50 per Capital Security)
<PAGE>
PRICING AGREEMENT
August 9, 1999
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
BANC OF AMERICA SECURITIES LLC
J.P. MORGAN SECURITIES INC.
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower
New York, New York 10281
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated August 9, 1999
(the "Underwriting Agreement"), relating to the purchase by the several
Underwriters named in Schedule A thereto of the above Income PRIDES (the "Income
PRIDES"), Growth PRIDES (the "Growth PRIDES") and Capital Securities (the
"Separate Capital Securities" and, together with the Income PRIDES and Growth
PRIDES, the "Securities") of Cox Communications, Inc. (the "Company") and Cox
Trust II (the "Trust"). The Securities are being issued and sold by the Company
and the Trust to the Underwriters on the terms and conditions set forth in the
Underwriting Agreement and as set forth in the Prospectus (as defined in the
Underwriting Agreement).
Pursuant to Section 2 of the Underwriting Agreement, the Company and
the Trust agree with each Underwriter as follows:
1. The initial public offering price per security for the Securities,
determined as provided in said Section 2, shall be (a) in the case of
each Income PRIDES, $50, (b) in the case of each Growth PRIDES,
$43.1140 and (c) in the case of each Separate Capital Security,
$48.844.
2. The respective purchase prices per security for the Securities to be
paid by the several Underwriters shall be equal to the initial public
offering prices set forth in paragraph 1 above. The Company shall pay a
commission to the Underwriters equal, in the case of the Initial
Securities, $19,500,000 dollars and, with respect to the Option
Securities, $1.50 per security in the case of Option Income PRIDES,
$1.25 per security in the case of Option Growth PRIDES and $.25 per
security in the case of Option Capital Securities.
<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 Underwriters and the Company and the Trust in accordance with its
terms.
Very truly yours,
COX COMMUNICATIONS, INC.
By:
Name: Dallas S. Clement
Title: Treasurer
COX TRUST II
By:
Name: Dallas S. Clement
Title: Adminstrative Trustee
CONFIRMED AND ACCEPTED, as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
BANC OF AMERICA SECURITIES LLC
J.P. MORGAN SECURITIES INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
Authorized Signatory
<PAGE>
Exhibit B
FORM OF OPINION OF COX'S COUNSEL TO BE DELIVERED
PURSUANT TO 5(b)
(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, has
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and to enter into and
perform its obligations under each of the Operative Agreements to which it is a
party 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) The authorized, issued and outstanding capital stock of the Company is
as set forth in the Prospectus in the column entitled "Cox Historical" under the
caption "Capitalization" (except for subsequent issuances, if any, pursuant to
the Underwriting Agreement, pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectus or pursuant to the exercise of
convertible securities or options referred to in the Prospectus); the shares of
issued and outstanding capital stock of the Company have been duly authorized
and validly issued and are fully paid and non-assessable; and none of the
outstanding shares of capital stock of the Company was issued in violation of
the preemptive rights of any securityholder of the Company.
(iii) Each Subsidiary has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property as described in
the Prospectus requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not result in a Material
Adverse Effect; except as otherwise disclosed in the Registration Statement, all
of the capital stock of each Subsidiary owned by the Company, directly or
through subsidiaries, has been duly authorized and validly issued, is fully paid
and non-assessable and, to the best of our knowledge, is owned free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or equity.
(iv) The Underwriting Agreement, the Pricing Agreement, the Remarketing
Agreement and the Declaration have been duly authorized, executed and delivered
by the Company.
(v) The Declaration, the Indenture and the Capital Securities Guarantee
Agreement have been duly qualified under the 1939 Act.
(vi) The Securities to be purchased by the Underwriters from the Company
and the Trust have been authorized for issuance and sale to the Underwriters
and, when issued and delivered by the Company and the Trust pursuant to the
Underwriting Agreement against payment of the consideration set forth in the
Pricing Agreement, will be validly issued and fully
<PAGE>
paid and non-assessable; the issuance of such Securities will not be subject the
preemptive or other similar rights arising by law or otherwise.
(vii) The Shares subject to the Purchase Contract Agreement have been
validly authorized and reserved for issuance and, when issued and delivered by
the Company in accordance with the provisions of the Purchase Contract
Agreement, the Purchase Contracts and the Pledge Agreement, will be fully paid
and non-assessable; the issuance of such Shares will not be subject to
preemptive or other similar rights arising by law or otherwise.
(viii) The Purchase Contract Agreement has been duly authorized, executed
and delivered by the Company and, assuming due authorization, execution and
delivery of the Purchase Contract Agreement by the Purchase Contract Agent,
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 other similar
laws affecting the enforcement of creditors' rights generally or by general
equitable principles (regardless of whether enforcement is considered in a
proceeding at law or in equity).
(ix) The Pledge Agreement has been duly authorized, executed and delivered
by the Company and, assuming due authorization, execution and delivery of the
Pledge Agreement by the Collateral Agent and the Purchase Contract Agent,
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 other similar
laws affecting the enforcement of creditors' rights generally or by general
equitable principles (regardless of whether enforcement is considered in a
proceeding at law or in equity).
(x) Each of the Guarantee Agreements has been duly authorized, executed and
delivered by the Company; the Capital Securities Guarantee Agreement, assuming
due authorization, execution and delivery by the Guarantee 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 other similar laws
affecting the enforcement of creditors' rights generally or by general equitable
principles (regardless of whether enforcement is considered in a proceeding at
law or in equity).
(xi) The Indenture has been duly authorized, executed and delivered by the
Company and, assuming due authorization, execution and delivery of the Indenture
by the Debt Trustee, the Indenture 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 other similar laws affecting the enforcement of
creditors' rights generally or by general equitable principles (regardless of
whether enforcement is considered in a proceeding at law or in equity).
(xii) The Debentures have been duly authorized by the Company for issuance
and sale to the Trust as contemplated by the Prospectus. The Debentures, when
issued and authenticated
<PAGE>
in the manner provided for in the Indenture and delivered against payment of the
stated consideration therefor, 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 other similar laws affecting the enforcement of
creditors' rights generally or by general equitable principles (regardless of
whether enforcement is considered in a proceeding at law or in equity). The
Debentures will be in the form contemplated by, and each registered holder
thereof will be entitled to the benefits of, the Indenture.
(xiii) The Registration Statement, including any Rule 462(b) Registration
Statement, has been declared effective under the 1933 Act; any required filing
of the 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 Registration Statement or any
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.
(xiv) The Registration Statement, including any Rule 462(b) Registration
Statement, the Rule 430A Information, if applicable, the Prospectus, excluding
the documents incorporated by reference therein, and each amendment or
supplement to the Registration Statement and Prospectus, excluding the documents
incorporated by reference therein, as of their respective effective and issue
dates (other than the financial statements and supporting schedules and other
financial data included or incorporated by reference therein or omitted
therefrom and the Statements of Eligibility on Form T-1, as to which we express
no opinion) complied as to form in all material respects with the requirements
of the 1933 Act and the 1933 Act Regulations; and the Declaration, the Indenture
and the Capital Securities Guarantee Agreement complied as to form in all
material respects with the requirements of the 1939 Act and the 1939 Act
Regulations.
(xv) The documents incorporated by reference in the Prospectus (other than
the financial statements and supporting schedules and other financial data
included or incorporated by reference therein or omitted therefrom, as to which
we 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.
(xvi) To our knowledge and other than as set forth in the Prospectus, there
is not pending any action, suit, proceeding, inquiry or investigation, to which
the Company or any subsidiary is a party, or to which the property of the
Company 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 Operative Agreements or the
performance by the Company of its obligations thereunder; and, to the best of
our knowledge, no such action, suit, proceeding, inquiry or investigation is
threatened in writing by governmental authorities or others.
<PAGE>
(xvii) When issued in accordance with the terms of the Purchase Contract
Agreement and delivered against payment therefor as provided in the Underwriting
Agreement, the holders of the Income PRIDES and the Growth PRIDES will be
entitled to the right and subject to the obligations specified in the Purchase
Contract Agreement.
(xviii) The provisions of the Pledge Agreement are effective to create in
favor of the Collateral Agent for the benefit of the Company a valid security
interest under the UCC in all "securities entitlements" (as defined in Section
8-102(a)(17) of the UCC and the Federal Book-Entry Regulations) now or hereafter
credited to the Collateral Account and relating to the Capital Securities or the
Treasury Securities (the "Pledged Securities Entitlements"); and the provisions
of the Pledge Agreement are effective under the UCC and the Federal Book-Entry
Regulations to perfect the security interest of the Collateral Agent for the
benefit of the Company in the Pledged Securities Entitlements.
(xix) The Security Certificates are in the form contemplated by the
Purchase Contract Agreement.
(xx) The information (A) included in the Prospectus under the captions
"Description of FELINE PRIDES," "Description of the Purchase Contracts,"
"Provisions of the Purchase Contract Agreement and the Pledge Agreement,"
"Description of the Capital Securities," "Description of the Guarantee,"
"Description of the Debentures," "Effect of Obligations Under the Debentures and
the Guarantee," "Description of Capital Stock," "Description of Debt
Securities," "Description of Capital Securities," "Description of Capital
Securities Guarantees" and "Relationship Among the Capital Securities, the
Corresponding Senior Debt Securities and the Capital Securities Guarantees," (B)
included in the Company's Annual Report on Form 10-K for the year ended December
31, 1998 under the captions "Business - Competition," "Business - Legislation
and Regulation," "Legal Proceedings" and "Certain Relationships and Related
Transactions," and (C) in the Registration Statement under Items 14 and 15, to
the extent that it constitutes matters of law, summaries of legal matters, the
Company's charter and bylaws, other documents or legal proceedings, or legal
conclusions, has been reviewed by us and fairly present the information called
for with respect to such matters of law and fairly summarize the matters
referred to therein.
(xxi) To the best of our knowledge, there are no statutes or regulations,
and no legal or governmental proceedings pending or threatened to which the
Company or any of its subsidiaries is a party or to which any of the properties
of the Company or any of its subsidiaries is subject, that are required to be
described in the Prospectus that are not described as required.
(xxii) All descriptions in the Registration Statement of contracts and
other documents to which the Company 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 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.
<PAGE>
(xxiii) 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 state or foreign securities or blue sky laws, as to which we
express no opinion) is necessary or required (a) for the entry by the Company
into the Purchase Contracts underlying the Income PRIDES or the Growth PRIDES or
in connection with the issuance and sale of the Common Securities, (b) for the
due authorization, execution, and delivery by the Trust or the Company of the
Operative Agreements, or for the performance by the Trust or the Company of its
obligations under any of the Operative Agreements to which it is a party or (c)
in connection with the issuance and sale of the Common Securities, the offering
of the Securities and the issuance and sale of the Shares by the Company
pursuant to the Purchase Contracts.
(xxiv) The entry by the Company into the Purchase Contracts underlying the
Income PRIDES and the Growth PRIDES, the offer of the Securities as contemplated
in the Underwriting Agreement and the Prospectus, the issuance of the Shares and
the sale of the Shares by the Company pursuant to the Purchase Contracts; the
execution, delivery and performance by the Trust and the Company of each of the
Operative Agreements to which it is a party and any other agreement or
instrument entered into or issued or to be entered into or issued by the Trust
or the Company, as applicable, in connection with the transactions contemplated
thereby or in the Registration Statement and the Prospectus and the consummation
of the transactions contemplated in the Underwriting Agreement and in the
Registration Statement and the Prospectus (including the issuance and sale of
the securities and the use of proceeds from the sale of the Securities as
described in the Prospectus under the caption "Use of Proceeds") and compliance
by the Offerors with their obligations thereunder 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)(xxiii) 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
Trust, the Company or any subsidiary of the Company 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 Trust, the Company or
any subsidiary of the Company 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 Trust, the Company or
any subsidiary of the Company 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 Declaration or certificate of trust of the Trust or the charter or
by-laws or other constitutive documents of the Company or any subsidiary of the
Company, or, to our 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 Trust, the Company or
any subsidiary of the Company or any of their respective properties, assets or
operations.
(xxv) The Company has been granted and presently holds the FCC
authorizations necessary for the Company to conduct its business as presently
conducted or proposed to be conducted, except such as would 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 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
<PAGE>
Material Adverse Effect; and, to our knowledge, no proceedings to revoke or
modify any of such FCC authorizations are pending or threatened.
(xxvi) To our knowledge after due inquiry, the Company 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.
(xxvii) The execution, delivery and performance by the Company of the
Underwriting Agreement and the Pricing Agreement does not violate the
Communications Act of 1934, as amended, or any rules or the regulations
thereunder binding on the Company or its subsidiaries or any order, writ,
judgment, injunction, decree or award of the FCC binding on the Company or its
subsidiaries of which we have knowledge after due inquiry.
(xxviii) The FELINE PRIDES issuable at Closing Time and the Shares issuable
by the Company pursuant to the Purchase Contracts have been authorized for
listing on the New York Stock Exchage, upon official notice of issuance.
(xxix) The issuance and sale of the Income PRIDES and the Growth PRIDES do
not violate the Commodity Exchange Act or the regulations of the Commodity
Futures Trading Commission thereunder.
(xxx) Neither the Trust nor the Company is, and upon the issuance and sale
of the securities as contemplated in the Underwriting Agreement and the
application of the act proceeds therefrom as described in the Prospectus will
not be, an "investment company" as such term is defined in the 1940 Act.
We have participated in conferences with officers and representatives
of the Company, representatives of the independent accountants of the Company,
and the Underwriters at which the contents of the Registration Statement and the
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 Registration
Statement and the Prospectus and have made no independent check or verification
thereof except as described in paragraph (xx) above, on the basis of the
foregoing, nothing has come to our attention that would lead us to believe that
the Registration Statement or any amendment thereto, including the Rule 430A
Information (except for financial statements and schedules and other financial
data included or incorporated by reference therein or omitted therefrom and the
Statements of Eligibility on Form T-1, as to which we make no statement), at the
time such 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 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 make
no statement), at the time the 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.
<PAGE>
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
Underwriters and states that such opinion of such local counsel is satisfactory
in form and substance and the Underwriters and counsel for the Underwriters 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 the Company, its subsidiaries and public officials.
<PAGE>
Exhibit C
FORM OF OPINION OF COUNSEL TO THE TRUST
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Act, and all filings required
under the laws of the State of Delaware with respect to the creation and valid
existence of the Trust as a business trust have been made.
(ii) Under the Delaware Act and the Declaration, the Trust has the trust
power and authority to own property and conduct its business, all as described
in the Prospectus.
(iii) Under the Delaware Act and the Declaration, the Trust has the trust
power and authority (a) to execute and deliver, and to perform its obligations
under, the Underwriting Agreement and the Pricing Agreement and (b) to issue and
perform its obligations under the Trust Securities.
(iv) Under the Delaware Act and the Declaration, the execution and delivery
by the Trust of the Underwriting Agreement and the Pricing Agreement, and the
performance by the Trust of its obligations thereunder, have been duly
authorized by all necessary trust action on the part of the Trust.
(v) The Declaration constitutes a valid and binding obligation of the
Company and the Trustees, and is enforceable against the Company and the
Trustees, in accordance with its terms.
(vi) The Capital Securities have been duly authorized by the Declaration
and are duly and validly issued and, subject to the qualifications set forth
herein, fully paid and nonassessable undivided beneficial interests in the
assets of the Trust. The Capital Security Holders will be entitled to the
benefits of the Declaration and, as beneficial owners of the Trust, are entitled
to the same limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware. We note that the Capital Security Holders may be obligated,
pursuant to the Declaration, to (a) provide indemnity and/or security in
connection with and pay a sum sufficient to cover taxes or governmental charges
arising from transfers or exchanges of Capital Securities certificates and the
issuance of replacement Capital Securities certificates and (b) provide security
and/or indemnity in connection with requests of or directions to the Property
Trustee to exercise its rights and powers under the Declaration. Under the
Delaware Act and the Declaration, the issuance of the Capital Securities is not
subject to preemptive or other similar rights.
(vii) The Common Securities have been duly authorized by the Declaration
and are duly and validly issued and fully paid undivided beneficial interests in
the assets of the Trust. Under the Delaware Act and the Declaration, the
issuance of the Common Securities is not subject to preemptive or other similar
rights.
<PAGE>
(viii) The issuance and sale by the Trust of the Capital Securities and the
Common Securities, the purchase by the Trust of the Debentures, the execution,
delivery and performance by the Trust of the Underwriting Agreement, the
consummation by the Trust of the transactions contemplated therein and the
compliance by the Trust with its obligations thereunder do not violate (a) any
of the provisions of the Certificate or the Declaration or (b) any applicable
Delaware law or Delaware administrative regulation.
(ix) No filing or registration with, or authorization, approval, consent,
license, order, qualification or decree of, any Delaware court or Delaware
governmental authority or Delaware agency is required to be obtained by the
Trust solely as a result of the issuance and sale of the Capital Securities, the
purchase by the Trust of the Debentures, the execution, delivery and performance
by the Trust of the Underwriting Agreement and the Pricing Agreement, the
consummation by the Trust of the transactions contemplated in the Underwriting
Agreement and the Pricing Agreement or the compliance by the Trust of its
obligations thereunder.
(x) The Capital Security Holders (other than those Capital Security Holders
who reside or are domiciled in the State of Delaware) will have no liability for
income taxes imposed by the State of Delaware solely as a result of their
participation in the Trust, and the Trust will not be liable for any income tax
imposed by the State of Delaware.
Exhibit 1.4
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COX COMMUNICATIONS, INC.
(a Delaware corporation)
$525,000,00 Floating Rate Notes due 2000
$300,000,000 7% Notes due 2001
$375,000,000 7.5% Notes due 2004
$400,000,000 7.75% Notes due 2006
$400,000,000 7.875% Notes due 2009
PURCHASE AGREEMENT
Dated August 10, 1999
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
Table of Contents
Page
SECTION 1. Representations and Warranties.....................................4
(a) Representations and Warranties by the Company......................4
(i) Compliance with Registration Requirements...............4
(ii) Incorporated Documents..................................5
(iii) Independent Accountants.................................5
(iv) Financial Statements....................................5
(v) No Material Adverse Change in Business..................6
(vi) Good Standing of the Company............................6
(vii) Good Standing of Subsidiaries...........................6
(viii) Capitalization..........................................7
(ix) Authorization of Agreement..............................7
(x) Authorization and Description of Securities.............7
(xi) Absence of Defaults and Conflicts.......................7
(xii) Absence of Labor Dispute................................8
(xiii) Absence of Proceedings..................................8
(xiv) Accuracy of Exhibits....................................8
(xv) Possession of Intellectual Property.....................8
(xvi) Absence of Further Requirements.........................9
(xvii) Possession of Licenses and Permits......................9
(xviii) Title to Property.......................................9
(xix) Investment Company Act.................................10
(xx) Environmental Laws.....................................10
(b) Officer's Certificates............................................10
SECTION 2. Sale and Delivery to Underwriters; Closing........................10
(a) Securities........................................................10
(b) Payment...........................................................11
(c) Denominations; Registration.......................................12
SECTION 3. Covenants of the Company..........................................12
(a) Compliance with Securities Regulations and Commission Requests....12
(b) Filing of Amendments..............................................12
(c) Delivery of Registration Statements...............................12
(d) Delivery of Prospectus............................................13
(e) Continued Compliance with Securities Laws.........................13
(f) Blue Sky Qualifications...........................................13
(g) Rule 158..........................................................14
(h) Use of Proceeds...................................................14
(i) Restriction on Sale of Securities.................................14
(j) Reporting Requirements............................................14
SECTION 4. Payment of Expenses.
(a) Expenses..........................................................15
(b) Termination of Agreement..........................................15
<PAGE>
SECTION 5. Conditions of Underwriters' Obligations...........................15
(a) Effectiveness of Registration Statement...........................15
(b) Opinion of Counsel for Company....................................16
(c) Opinion of Counsel for Underwriters...............................16
(d) Officers' Certificate.............................................16
(e) Accountant's Comfort Letter.......................................16
(f) Bring-down Comfort Letter.........................................17
(g) Maintenance of Rating.............................................17
(h) Additional Documents..............................................18
(i) Termination of Agreement..........................................18
SECTION 6. Indemnification...................................................18
(a) Indemnification of Underwriters...................................18
(b) Indemnification of Company, Directors and Officers................19
(c) Actions against Parties; Notification.............................19
(d) Settlement without Consent if Failure to Reimburse................20
SECTION 7. Contribution......................................................20
SECTION 8. Representations, Warranties and Agreements to Survive Delivery....22
SECTION 9. Termination of Agreement..........................................22
(a) Termination; General..............................................22
(b) Liabilities.......................................................22
SECTION 10. Default by One or More of the Underwriters.......................22
SECTION 11. Notices..........................................................23
SECTION 12. Parties..........................................................23
SECTION 13. GOVERNING LAW AND TIME...........................................24
SECTION 14. Effect of Headings...............................................24
<PAGE>
SCHEDULES
Schedule A - List of Underwriters..............................Sch A-1
Schedule B - Pricing Information...............................Sch B-1
Schedule C - List of Subsidiaries..............................Sch C-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel...............A-1
<PAGE>
COX COMMUNICATIONS, INC.
(a Delaware corporation)
$525,000,00 Floating Rate Notes due 2000
$300,000,000 7% Notes due 2001
$375,000,000 7.5% Notes due 2004
$400,000,000 7.75% Notes due 2006
$400,000,000 7.875% Notes due 2009
PURCHASE AGREEMENT
August 10, 1999
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Chase Securities Inc.
ABN AMRO Incorporated
BNY Capital Markets, Inc.
Credit Suisse First Boston Corporation
First Union Capital Markets Corp.
J.P. Morgan Securities Inc.
Morgan Stanley & Co. Incorporated
Utendahl Capital Partners, L.P.
Wachovia Securities, Inc.
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Cox Communications, Inc., a Delaware corporation (the "Company"), confirms its
agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch"), Chase Securities Inc., ABN AMRO Incorporated,
BNY Capital Markets, Inc., Credit
<PAGE>
Suisse First Boston Corporation, First Union
Capital Markets Corp., J.P. Morgan Securities Inc., Morgan Stanley & Co.
Incorporated, Utendahl Capital Partners, L.P. and Wachovia Securities, Inc.
(collectively, the "Underwriters", which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), with respect to the
issue and sale by the Company and the purchase by the Underwriters, acting
severally and not jointly, of the respective principal amounts set forth in said
Schedule A of $525,000,000 aggregate principal amount of the Company's Floating
Rate Notes due 2000 (the "2000 Notes"), $300,000,000 aggregate principal amount
of the Company's 7.0% Notes due 2001 (the "2001 Notes"), $375,000,000 aggregate
principal amount of the Company's 7.5% Notes due 2004 (the "2004 Notes"),
$400,000,000 aggregate principal amount of the Company's 7.75% Notes due 2006
(the "2006 Notes"), and $400,000,000 aggregate principal amount of the Company's
7.875% Notes due 2009 (collectively, the "Securities"). Each series of the
Securities is to be issued pursuant to an indenture dated as of June 27, 1995
(the "Indenture") between the Company and The Bank of New York, as trustee (the
"Trustee").
It is understood that, concurrent with the initial issuance of the
Securities, the Company will be offering and selling its (i) FELINE PRIDES,
consisting, among other things, of stock purchase contracts pursuant to which
holders will purchase from the Company a specified number of shares of its
Common Stock on or prior to August 16, 2002 and (ii) Class A Common Stock,
pursuant to underwriting agreements to be entered into between the Company and
Merrill Lynch and the other underwriters named therein (each, a "Concurrent
Offering"). The obligations of the Company and Underwriters contained in this
Agreement are not conditioned upon the consummation of either Concurrent
Offering.
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Underwriters deem advisable after this
Agreement has been executed and delivered and the Indenture has been qualified
under the Trust Indenture Act of 1939, as amended (the "1939 Act").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (Nos. 333-82575, 333-82575-01
and 333-82575-02) and pre-effective amendment nos. 1 and 2 and 3 thereto,
covering the registration of certain securities, including the Securities, under
the Securities Act of 1933, as amended (the "1933 Act"), including the related
preliminary prospectus or prospectuses 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"). Promptly after execution and
delivery of this Agreement, the Company will either (i) prepare and file a
prospectus 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 (a "Term
Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). The
information included in such prospectus or in such Term Sheet, as the case may
be, that was omitted from such registration statement at the time it became
effective but that is deemed to be part of such registration statement at the
time it became effective (a) pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule 434 is
referred to as "Rule 434 Information." Each Prospectus used before such
registration statement became effective, and the Prospectus that omitted, as
applicable, the Rule 430A
-2-
<PAGE>
Information or the Rule 434 Information, that was used after such effectiveness
and prior to the execution and delivery of this Agreement, is herein called a
"preliminary prospectus." Such registration statement, including the exhibits
thereto, 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 "Registration Statement." Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations
is herein referred to as the "Rule 462(b) Registration Statement," and after
such filing the term "Registration Statement" shall include the 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 Underwriters for use in connection with
the offering of the Securities is herein called the "Prospectus." If Rule 434 is
relied on, the term "Prospectus" shall refer to the preliminary prospectus dated
July 30, 1999 together with the Term Sheet and all references in this Agreement
to the date of such Prospectus shall mean the date of the Term Sheet. For
purposes of this Agreement, all references to the Registration Statement, any
preliminary prospectus, the Prospectus or any 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
Registration Statement, any preliminary prospectus or the 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 Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") which is
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectus, as the case may be.
SECTION 1.........Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents
and warrants to each Underwriter as of the date hereof, as of the Closing Time
referred to in Section 2(b) hereof, and agrees with each 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
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any 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 Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at
-3-
<PAGE>
the Closing Time, the Registration Statement, the 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 1939 Act and the rules and regulations of
the Commission under the 1939 Act (the (1939 Act"), 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 Prospectus nor any
amendments or supplements thereto, at the time the Prospectus or any
amendments or supplements thereto were issued and at the Closing Time,
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 statements in or omissions from the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto) made in reliance upon and in conformity
with information furnished to the Company in writing by any Underwriter
through Merrill Lynch expressly for use in the Registration Statement (or
such amendment thereto) or the Prospectus (or such amendment or supplement
thereto).
Each preliminary prospectus and the prospectus filed as part of the
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 each
preliminary prospectus and the Prospectus delivered to the Underwriters for
use in connection with this offering was identical in all material respects
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 Registration Statement and the
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 Prospectus, at the time the
Registration Statement became effective, at the time the Prospectus was
issued and at the Closing Time, 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, of Cox Communications PCS, L.P. ("PCS") and its subsidiaries
and of TCA Cable TV, Inc. ("TCA") and its subsidiaries included in the
Registration Statement and the Prospectus are independent public
accountants with respect to the Company and its subsidiaries as required by
the 1933 Act and the 1933 Act Regulations.
-4-
<PAGE>
(iv) Financial Statements. The financial statements of the Company
included in the Registration Statement and the 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 PCS included
in the Registration Statement and the Prospectus, together with the related
schedules and notes, present fairly the financial position of PCS and its
consolidated subsidiaries at the dates indicated and the statement of
operations, stockholders' equity and cash flows of PCS 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 financial statements of TCA included in the
Registration Statement and the Prospectus, together with the related
schedules and notes, present fairly the financial position of TCA and its
consolidated subsidiaries at the date indicated and the statement of
operations, stockholders' equity and cash flows of TCA and its subsidiaries
for the period specified; said financial statements have been prepared in
conformity with GAAP. The supporting schedules, if any, included in the
Registration Statement and the Prospectus 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 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 Registration Statement. The pro forma financial statements of the
Company and its consolidated subsidiaries and the related notes thereto
included in the Registration Statement and the Prospectus present fairly
the information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the bases described therein,
and the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions
and circumstances referred to therein.
(v) No Material Adverse Change in Business. Since the respective dates
as of which information is given in the Registration Statement and the
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 corporate power and authority to own, lease
and operate its properties
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and to conduct its business as described in the 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 or limited liability
company in good standing under the laws of the jurisdiction of its
incorporation or organization, as the case may be, has corporate or other
power and authority to own, lease and operate its properties and to conduct
its business as described in the 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
Registration Statement, all of the issued and outstanding 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; none of the
outstanding shares of capital stock of any Subsidiary was issued in
violation of the preemptive or similar rights of any securityholder or such
Subsidiary. The only subsidiaries of the Company are (a) the subsidiaries
listed on Schedule C hereto 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 authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus in the column
entitled "Cox Historical" under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectus or pursuant to the exercise of convertible securities or options
referred to in the Prospectus). 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) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(x) Authorization of the Indenture. The Indenture has been duly
authorized by the Company and duly qualified under the 1939 Act and, when
duly executed and delivered by the Company and 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
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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).
(xi) Authorization of Securities. The Securities have been duly
authorized and, at the Closing Time, will have been duly executed by the
Company and, when authenticated, issued and delivered 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.
(xii) Description of the Securities and the Indenture. The Securities
and the Indenture will conform in all material respects to the respective
statements relating thereto contained in the Prospectus and will be in
substantially the respective forms filed or incorporated by reference, as
the case may be, as exhibits to the 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 other
constitutive documents 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, the Indenture and
the Securities and the consummation of the transactions contemplated in
this Agreement and in the Registration Statement (including the issuance
and sale of the Securities and the use of the proceeds from the sale of the
Securities as described in the Prospectus under the caption "Use of
Proceeds") and compliance by the Company with its obligations under this
Agreement and under the Indenture and the Securities 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 or other
constitutive documents 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,
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<PAGE>
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 (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.
(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, individually or in the aggregate, 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 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 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
Registration Statement, including ordinary routine litigation incidental to
the business, could not reasonably be expected to result in a Material
Adverse Effect.
(xvi) Accuracy of Exhibits. There are no contracts or documents which
are required to be described in the Registration Statement, the Prospectus
or the documents incorporated by reference therein or to be filed as
exhibits thereto which have not been so described and filed as required.
(xvii) Possession of Intellectual Property. Except as disclosed in the
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.
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<PAGE>
(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 for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale of
the Securities under this Agreement or the consummation of the transactions
contemplated by this Agreement or for the due execution, delivery or
performance of the Indenture by the Company, except such as have been
already obtained or as may be required under the 1933 Act or the 1933 Act
Regulations and foreign or state securities laws, the laws of a foreign
jurisdiction or the by-laws and rules of the NASD and except for the
qualification of the Indenture under the 1939 Act..
(xix) Possession of Licenses and Permits. The Company and its
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 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.
(xx) Title to Property. The Company and its subsidiaries have good and
marketable title to all material 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 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 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) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectus
will not be, an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended (the "1940 Act").
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<PAGE>
(xxii) Environmental Laws. Except as described in the 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 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 delivered to the Underwriters or to counsel for the Underwriters in
connection with the offering of the Securities shall be deemed a representation
and warranty by the Company to each Underwriter as to the matters covered
thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) 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 each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Company, at
the price set forth in Schedule B, the aggregate principal amount of Securities
set forth in Schedule A opposite the name of such Underwriter, plus any
additional principal amount of Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) Payment. Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the offices of Brown & Wood
LLP, or at such other place as shall be agreed upon by the Underwriters and the
Company, at 9:00 A.M. (Eastern time) on the third business day (fourth, if the
pricing occurs after 4:30 P.M. (Eastern time) on any given day) after the date
hereof (unless postponed in accordance with the provisions of Section 10), or
such other time not later than ten business days after such date as shall be
agreed upon by the Underwriters and the Company (such time and date of payment
and delivery being herein called "Closing Time").
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<PAGE>
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 Underwriters for the respective accounts of the Underwriters of certificates
for the Securities to be purchased by them. It is understood that each
Underwriter has authorized Merrill Lynch, for its account, to accept delivery
of, receipt for, and make payment of the purchase price for, the Securities,
which it has agreed to purchase. Merrill Lynch, individually and not as
representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Securities, to be purchased by any
Underwriter whose funds have not been received by the Closing Time, but such
payment shall not relieve such Underwriter from its obligations hereunder.
(c) Denominations; Registration. Certificates for the Securities shall be
in such denominations ($1,000 or integral multiples thereof) and registered in
such names as the Underwriters may request in writing at least one full business
day before the Closing Time. The Securities will be made available for
examination and packaging by the Underwriters in The City of New York not later
than 10:00 A.M. (Eastern time) on the business day prior to the Closing Time.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Company, subject to Section 3(b), will comply with the requirements of
Rule 430A or Rule 434, as applicable, and will notify the Underwriters
immediately, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective, or any
supplement to the Prospectus or any amended 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 Registration
Statement or any amendment or supplement to the Prospectus or for
additional information, and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of
any order preventing or suspending the use of any 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 use its reasonable 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 Underwriters
notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any Term
Sheet or any amendment, supplement or revision to either the prospectus
included in the Registration Statement at the time it became effective or
to the Prospectus, whether pursuant to the 1933 Act, the 1934 Act or
otherwise, will furnish the Underwriters 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
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<PAGE>
or use any such document to which the Underwriters or counsel for the
Underwriters shall object in writing within three business days of receipt.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Underwriters and counsel for the Underwriters, without
charge, signed copies of the 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, and will also deliver to the Underwriters, without
charge, a conformed copy of the Registration Statement as originally filed
and of each amendment thereto (without exhibits) for each of the
Underwriters. The copies of the Registration Statement and each amendment
thereto furnished to the Underwriters will be identical in all material
respects 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 Prospectus. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus
as such 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 each Underwriter, without charge, during the period
when the Prospectus is required to be delivered under the 1933 Act or the
1934 Act, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request. The Prospectus
and any amendments or supplements thereto furnished to the Underwriters
will be identical in all material respects 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, the 1934 Act and the 1934
Act Regulations and the 1939 Act and the 1939 Act Regulations so as to
permit the completion of the distribution of the Securities as contemplated
in this Agreement and in the 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 Underwriters or
for the Company, to amend the Registration Statement or amend or supplement
the Prospectus in order that the 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 any such counsel, at any such time to
amend the Registration Statement or amend or supplement the 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(b), such amendment or supplement as may be
necessary to correct such statement or omission or to make the Registration
Statement or the Prospectus comply with such requirements, and the Company
will furnish to the Underwriters, without charge, such number of copies of
such amendment or supplement as the Underwriters may reasonably request.
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(f) Blue Sky Qualifications. The Company will use its reasonable best
efforts, in cooperation with the Underwriters, to qualify the Securities
for offering and sale under the applicable securities laws of such states
and other jurisdictions as the Underwriters 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 Registration Statement and any 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 Registration Statement and any Rule 462(b) Registration Statement. The
Company will also supply the Underwriters with such information as is
necessary for the determination of the legality of the Securities for
investment under the laws of such jurisdictions as the Underwriters may
request.
(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) 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
Prospectus under "Use of Proceeds".
(i) Restriction on Sale of Securities. During a period of 90 days from
the date of the Prospectus, the Company will not, without the prior written
consent of Merrill Lynch, directly or indirectly, issue, sell, offer or
agree to sell, grant any option for the sale of, or otherwise dispose of,
any other debt securities of the Company or securities of the Company that
are convertible into, or exchangeable for, the Securities or such other
debt securities.
(j) Reporting Requirements. The Company, during the period when the
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.
SECTION 4. Payment of Expenses. (a) Expenses. 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 Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters, the Indenture
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
Underwriters, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors, (v) the qualification of the Securities under
securities laws in
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accordance with the provisions of Section 3(f) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the Underwriters 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
Underwriters of copies of each preliminary prospectus, any Term Sheets and of
the Prospectus and any amendments or supplements thereto, (vii) the preparation,
printing and delivery to the Underwriters 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
Indenture and the Securities and (ix) any fees payable in connection with the
rating of the Securities,.
(b) Termination of Agreement. If this Agreement is terminated by the
Underwriters in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any subsidiary of the Company
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of
the 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
Underwriters. 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, a Term Sheet shall have
been filed with the Commission in accordance with Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the Underwriters
shall have received the favorable opinion, dated as of Closing Time, of
Dow, Lohnes & Albertson, PLLC, counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other
Underwriters, to the effect set forth in Exhibit A hereto and to such
further effect as counsel to the Underwriters may reasonably request.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
Underwriters shall have received the favorable opinion, dated as of Closing
Time, of Brown & Wood LLP, counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other
Underwriters, in form and substance satisfactory to the Underwriters. Such
counsel may state that, insofar as such opinion involves factual
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matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and its subsidiaries and
certificates of public officials.
(d) 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 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
Underwriters 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 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 Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or are contemplated by the Commission.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Underwriters shall have received letters from Deloitte &
Touche LLP, in relation to the Company, and KPMG LLP, in relation to TCA,
each dated such date, in form and substance satisfactory to the
Underwriters, together with signed or reproduced copies of such letter for
each of the other Underwriters, 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 Registration Statement and the Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the Underwriters shall
have received from Deloitte & Touche LLP and KPMG LLP letters, each dated
as of Closing Time, to the effect that they reaffirm the statements made in
the letter furnished pursuant to subsection (e) of this Section except that
the specified date referred to shall be a date not more than three business
days prior to Closing Time.
(g) Maintenance of Rating. At Closing Time, the Securities shall be
rated at least Baa2 by Moody's Investor's Service Inc. and BBB+ by Standard
& Poor's Ratings Service, and the Company shall have delivered to the
Underwriters a letter dated the Closing Time, from each such rating agency,
or other evidence satisfactory to the Underwriters, confirming that the
Securities have such ratings; and since the date of this Agreement, there
shall not have occurred a downgrading in the rating assigned to the
Securities or any of the Company's other debt 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 the Securities or any of the Company's other debt
securities.
(h) Additional Documents. At Closing Time, counsel for the
Underwriters shall have been furnished with such documents and opinions as
they may require for the
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<PAGE>
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, herein contained; 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
Underwriters and counsel for the Underwriters.
(i) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement may be terminated by the Underwriters by notice to the
Company at any time at or prior to Closing Time, and such termination shall
be without liability of any party to any other party except as provided in
Section 4 and except that Sections 6, 7 and 8 shall survive any such
termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
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
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 included in any preliminary prospectus or
the 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(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 Merrill
Lynch), 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;
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<PAGE>
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 any
Underwriter through Merrill Lynch expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) and provided, further, that
as to any preliminary prospectus this indemnity agreement shall not inure to the
benefit of any Underwriter or any person controlling that Underwriter on account
of any loss, claim, damage, liability or action arising from the sale of
Securities to any person by that Underwriter if that Underwriter failed to send
or give a copy of the Prospectus, as the same may be amended or supplemented, to
that person and the untrue statement or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact in such
preliminary prospectus was corrected in said amended or supplemented Prospectus
and the delivery thereof was required by law and would have constituted a
complete defense to the claim of that person, unless such failure resulted from
non-compliance by the Company with Section 3(a) or (b). For purposes of the
second proviso to the immediately preceding sentence, the term Prospectus shall
not be deemed to include the documents incorporated by reference therein, and no
Underwriter shall be obligated to send or give any supplement or amendment to
any document incorporated by reference in a preliminary prospectus or supplement
thereto or the Prospectus to any person.
(b) Indemnification of Company, Directors and Officers. Each Underwriter
severally agrees to indemnify and hold harmless the Company, its directors, each
of its officers who signed the 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 Registration Statement
(or any amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through Merrill
Lynch expressly for use in the Registration Statement (or any amendment thereto)
or such preliminary prospectus or the 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. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Merrill Lynch, and, in
the case of parties indemnified pursuant to Section 6(b) 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. If
it so elects within a
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<PAGE>
reasonable time after receipt of 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 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 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.
(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 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 90 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 45 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. If the indemnification provided for in Section 6 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 and the Underwriters 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 Underwriters 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 Underwriters 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
Underwriters on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall
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<PAGE>
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 Underwriters, in each case as set forth on the cover of the Prospectus,
or, if Rule 434 is used, the corresponding location on the 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 Underwriters
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 Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 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.
Notwithstanding the provisions of this Section 7, no Underwriter shall
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 such
Underwriter has otherwise been required to pay by reason of 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, 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 such Underwriter, and
each director of the Company, each officer of the Company who signed the
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. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the principal amount of Securities set forth opposite their
respective names in Schedule A hereto and not joint.
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 or any of its subsidiaries submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any
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<PAGE>
Underwriter or controlling person, or by or on behalf of the Company, and shall
survive delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Underwriters may terminate this Agreement, by
notice to the Company, 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 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 occurred any material adverse change in the financial markets
in the United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Underwriters, impracticable to market
the Securities or to enforce contracts for the sale of the Securities, or (iii)
if trading in any securities of the Company has been suspended or materially
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 materially 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 National Association of Securities Dealers, Inc. or any other
governmental authority, or (iv) 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 6, 7
and 8 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of the
Underwriters shall fail at Closing Time to purchase the Securities which it or
they are obligated to purchase under this Agreement (the "Defaulted
Securities"), then Merrill Lynch shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, Merrill Lynch shall not have completed such
arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
aggregate principal amount of the Securities to be purchased hereunder,
each of the non-defaulting Underwriters shall be obligated, severally and
not jointly, to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
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<PAGE>
(b) if the number of Defaulted Securities exceeds 10% of the aggregate
principal amount of the Securities to be purchased hereunder, this
Agreement shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
SECTION 11. 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 Underwriters shall be
directed to the Underwriters c/o Merrill Lynch at North Tower, World Financial
Center, New York, New York 10281-1201, attention of Daniel Richards, Managing
Director and notices to the Company shall be directed to it at 1400 Lake Hearn
Drive, Atlanta, Georgia 30319, attention of Andrew A. Merdek.
SECTION 12. Parties. This Agreement shall each inure to the benefit of and be
binding upon the Underwriters and the Company 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 Underwriters
and the Company 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 Underwriters and the Company 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 any Underwriter shall be deemed to
be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. 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 IN SUCH STATE.
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. 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.
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<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
between the Underwriters and the Company in accordance with its terms.
Very truly yours,
COX COMMUNICATIONS, INC.
By /s/ Dallas S. Clement
Name: Dallas S. Clement
Title: Vice President and Treasurer
CONFIRMED AND ACCEPTED, as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
CHASE SECURITIES INC.
ABN AMRO INCORPORATED
BNY CAPITAL MARKETS, INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
FIRST UNION CAPITAL MARKETS CORP.
J.P. MORGAN SECURITIES INC.
MORGAN STANLEY & CO. INCORPORATED
UTENDAHL CAPITAL PARTNERS, L.P.
WACHOVIA SECURITIES, INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By /s/ Marilyn J. Pugliesi
Authorized Signatory
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<PAGE>
SCHEDULE A
Principal
Amount of
Name of Underwriter 2000 Notes
--------------------- --------------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated $196,900,000
Chase Securities Inc. 196,900,000
ABN AMRO Incorporated 16,400,000
BNY Capital Markets, Inc. 16,400,000
Credit Suisse First Boston Corporation 16,400,000
First Union Capital Markets Corp. 16,400,000
J.P. Morgan Securities Inc. 16,400,000
Morgan Stanley & Co. Incorporated 16,400,000
Utendahl Capital Partners, L.P. 16,400,000
Wachovia Securities, Inc. 16,400,000
Total......................................................$525,000,000
- -----------------------------------------------------------------------
Principal
Amount of
Name of Underwriter 2001 Notes
--------------------- --------------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated $112,500,000
Chase Securities Inc. 112,500,000
ABN AMRO Incorporated 9,375,000
BNY Capital Markets, Inc. 9,375,000
Credit Suisse First Boston Corporation 9,375,000
First Union Capital Markets Corp. 9,375,000
J.P. Morgan Securities Inc. 9,375,000
Morgan Stanley & Co. Incorporated 9,375,000
Utendahl Capital Partners, L.P. 9,375,000
Wachovia Securities, Inc. 9,375,000
Total......................................................$300,000,000
- -------------------------------------------------------------------------
<PAGE>
Principal
Amount of
Name of Underwriter 2004 Notes
--------------------- --------------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated $140,620,000
Chase Securities Inc. 140,620,000
ABN AMRO Incorporated 11,720,000
BNY Capital Markets, Inc. 11,720,000
Credit Suisse First Boston Corporation 11,720,000
First Union Capital Markets Corp. 11,720,000
J.P. Morgan Securities Inc. 11,720,000
Morgan Stanley & Co. Incorporated 11,720,000
Utendahl Capital Partners, L.P. 11,720,000
Wachovia Securities, Inc. 11,720,000
Total......................................................$375,000,000
- -------------------------------------------------------------------------
Principal
Amount of
Name of Underwriter 2006 Notes
--------------------- --------------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated $150,000,000
Chase Securities Inc. 150,000,000
ABN AMRO Incorporated 12,500,000
BNY Capital Markets, Inc. 12,500,000
Credit Suisse First Boston Corporation 12,500,000
First Union Capital Markets Corp. 12,500,000
J.P. Morgan Securities Inc. 12,500,000
Morgan Stanley & Co. Incorporated 12,500,000
Utendahl Capital Partners, L.P. 12,500,000
Wachovia Securities, Inc. 12,500,000
Total......................................................$400,000,000
- ----------------------------------------------------------------------
<PAGE>
Principal
Amount of
Name of Underwriter 2009 Notes
--------------------- --------------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated $150,000,000
Chase Securities Inc. 150,000,000
ABN AMRO Incorporated 12,500,000
BNY Capital Markets, Inc. 12,500,000
Credit Suisse First Boston Corporation 12,500,000
First Union Capital Markets Corp. 12,500,000
J.P. Morgan Securities Inc. 12,500,000
Morgan Stanley & Co. Incorporated 12,500,000
Utendahl Capital Partners, L.P. 12,500,000
Wachovia Securities, Inc. 12,500,000
Total......................................................$400,000,000
- ------------------------------------------------------------------------
<PAGE>
SCHEDULE B
COX COMMUNICATIONS, INC.
$525,000,000
Floating Rate Notes due 2000
1. The initial public offering price of the 2000 Notes shall be 100%
of the principal amount thereof, plus accrued interest, if any, from the
date of issuance.
2. The purchase price to be paid by the Underwriters for the 2000
Notes shall be 99.850% of the principal amount thereof.
3. The interest rate payable on the 2000 Notes shall be determined by
reference to LIBOR as set forth in such Notes and in the Prospectus.
$300,000,000
7% Notes due 2001
1. The initial public offering price of the 2001 Notes shall be
99.891% of the principal amount thereof, plus accrued interest, if any,
from the date of issuance.
2. The purchase price to be paid by the Underwriters for the 2001
Notes shall be 99.541% of the principal amount thereof.
3. The interest rate on the Notes 2001 shall be 7% per annum.
$375,000,000
7.5% Notes due 2004
1. The initial public offering price of the 2004 Notes shall be
99.663% of the principal amount thereof, plus accrued interest, if any,
from the date of issuance.
2. The purchase price to be paid by the Underwriters for the 2004
Notes shall be 99.063% of the principal amount thereof.
3. The interest rate on the 2004 Notes shall be 7.5% per annum.
<PAGE>
COX COMMUNICATIONS, INC.
$400,000,000
7.75% Notes due 2006
1. The initial public offering price of the 2009 Notes shall be
99.797% of the principal amount thereof, plus accrued interest, if any,
from the date of issuance.
2. The purchase price to be paid by the Underwriters for the 2009
Notes shall be 99.172% of the principal amount thereof.
3. The interest rate on the 2009 Notes shall be 7.75% per annum.
COX COMMUNICATIONS, INC.
$400,000,000
7.875% Notes due 2009
1. The initial public offering price of the 2009 Notes shall be
99.883% of the principal amount thereof, plus accrued interest, if any,
from the date of issuance.
2. The purchase price to be paid by the Underwriters for the 2009
Notes shall be 99.233% of the principal amount thereof.
3. The interest rate on the 2009 Notes shall be 7.875% per annum.
<PAGE>
SCHEDULE C
List of Subsidiaries
Cox Communications Hampton Roads, Inc.
Cox Communications Las Vegas, Inc.
Cox Classic Cable, Inc.
Cox Trust I
Cox Trust II
CoxCom, Inc.
<PAGE>
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(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, has
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus and to enter into
and perform its obligations under the Purchase 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) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus in the column entitled "Cox
Historical" under the caption "Capitalization" (except for subsequent
issuances, if any, pursuant to the Purchase Agreement or pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectus or pursuant to the exercise of convertible securities or options
referred to in the Prospectus); the shares of issued and outstanding
capital stock of the Company have been duly authorized and validly issued
and are fully paid and non-assessable; and none of the outstanding shares
of capital stock of the Company was issued in violation of the preemptive
rights of any securityholder of the Company.
(iii) Each Subsidiary has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of
property as described in the Prospectus requires such qualification, except
to the extent that the failure to be so qualified or be in good standing
would not result in a Material Adverse Effect; except as otherwise
disclosed in the Registration Statement, all of the capital stock of each
Subsidiary owned by the Company, directly or through subsidiaries, has been
duly authorized and validly issued, is fully paid and non-assessable and,
to the best of our knowledge, is owned free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity.
(iv) The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(v) 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
B-1
<PAGE>
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).
(vi) 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.
(vii) The Indenture has been duly qualified under the 1939 Act.
(viii) The Securities and the Indenture conform as to legal matters in
all material respects to the descriptions thereof contained in the
Prospectus.
(ix) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act; any
required filing of the 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
Registration Statement or any 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.
(x) The Registration Statement, including any Rule 462(b) Registration
Statement, the Rule 430A Information and the Rule 434 Information, as
applicable, the Prospectus, excluding the documents incorporated by
reference therein, and each amendment or supplement to the Registration
Statement and the Prospectus, excluding the documents incorporated by
reference therein, as of their respective effective or issue dates (other
than the financial statements and supporting schedules and other financial
data included or incorporated by reference therein or omitted therefrom,
and the Trustee's Statement of Eligibility on Form T-1 (the "Form T-1"), as
to which we express no opinion) complied as to form in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations.
(xi) The documents incorporated by reference in the Prospectus (other
than the financial statements and supporting schedules or other financial
data included therein or omitted therefrom, as to which we express no
opinion), when they became effective or
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<PAGE>
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.
(xii) To our knowledge and other than as set forth in the Prospectus,
there is not pending any action, suit, proceeding, inquiry or
investigation, to which the Company or any subsidiary is a party, or to
which the property of the Company 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 Purchase Agreement or the performance by the Company of
its obligations thereunder; and, to the best of our knowledge, no such
action, suit, proceeding, inquiry or investigation is threatened in writing
by governmental authorities or others.
(xiii) The information (A) included in the Prospectus under the
captions "Description of the Notes" and "Certain United States Federal Tax
Considerations," (B) included in the Company's Annual Report on Form 10-K
for the year ended December 31, 1998 under the captions
"Business--Competition," "Business -- Legislation and Regulation," "Legal
Proceedings," and "Certain Relationships and Related Transactions," and (C)
in the Registration Statement under Items 14 and 15, to the extent that it
constitutes matters of law, summaries of legal matters, the Company's
charter and bylaws or legal proceedings, or legal conclusions, has been
reviewed by us and fairly present the information called for with respect
to such matters of law and fairly summarize the matters referred to
therein.
(xiv) To the best of our knowledge, there are no statutes or
regulations, and no legal or governmental proceedings pending or threatened
to which the Company or any of its subsidiaries is a party or to which any
of the properties of the Company or any of its subsidiaries is subject,
that are required to be described in the Prospectus that are not described
as required.
(xv) All descriptions in the Prospectus of contracts and other
documents to which the Company 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
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.
(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 (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 state or foreign securities or blue sky
laws and except for the qualification of the Indenture under the 1939 Act,
as to which we express no opinion) is necessary or required in connection
with
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<PAGE>
the due authorization, execution and delivery of the Purchase Agreement or
the due execution, delivery or performance of the Indenture by the Company
or for the offering, issuance, sale or delivery of the Securities.
(xvii) The execution, delivery and performance of the Purchase Agreement,
the Indenture and the Securities and the consummation of the transactions
contemplated in the Purchase Agreement and in the Registration Statement
(including the issuance and sale of the Securities, and the use of the
proceeds from the sale of the Securities as described in the Prospectus
under the caption "Use Of Proceeds") and compliance by the Company with its
obligations under the Purchase Agreement, the Indenture and the Securities
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)(xiii) of the Purchase
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 or other constitutive documents of
the Company or any subsidiary, or, to our 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
respective properties, assets or operations.
(xviii) The Company has been granted and presently holds the FCC
authorizations necessary for the Company to conduct its business as
presently conducted or proposed to be conducted, except such as would 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 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.
(xix) To our knowledge after due inquiry, the Company 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.
(xx) The execution, delivery and performance by the Company of the
Purchase Agreement does not violate the Communications Act of 1934, as
amended, or any rules or the regulations thereunder binding on the Company
or its subsidiaries or any order, writ, judgment, injunction, decree or
award of the FCC binding on the Company or its subsidiaries of which we
have knowledge after due inquiry.
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<PAGE>
(xxi) The Company is not an "investment company," as such term is
defined in the 1940 Act.
We have participated in conferences with officers and representatives
of the Company, representatives of the independent accountants of the
Company, and the Underwriters at which the contents of the Registration
Statement and the 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 Registration Statement and the Prospectus
and have made no independent check or verification thereof except as
described in paragraph (xiii) above, on the basis of the foregoing, nothing
has come to our attention that would lead us to believe that the
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
make no statement), at the time such 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
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 and the Form T-1, as to which we
make no statement), at the time the 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.
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 Underwriters and states that such opinion of such
local counsel is satisfactory in form and substance and the Underwriters
and counsel for the Underwriters 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 the Company and public
officials.
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Exhibit 4.1
COX COMMUNICATIONS, INC.
AND
THE FIRST NATIONAL BANK OF CHICAGO,
AS PURCHASE CONTRACT AGENT
------------------
PURCHASE CONTRACT AGREEMENT
------------------
Dated as of August 12, 1999
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1. DEFINITIONS....................................................1
SECTION 1.2. COMPLIANCE CERTIFICATES AND OPINIONS...........................9
SECTION 1.3. FORM OF DOCUMENTS DELIVERED TO AGENT...........................9
SECTION 1.4. ACTS OF HOLDERS; RECORD DATES.................................10
SECTION 1.5. NOTICES.......................................................11
SECTION 1.6. NOTICE TO HOLDERS; WAIVER.....................................12
SECTION 1.7. EFFECT OF HEADINGS AND TABLE OF CONTENTS......................12
SECTION 1.8. SUCCESSORS AND ASSIGNS........................................12
SECTION 1.9. SEPARABILITY CLAUSE...........................................12
SECTION 1.10. BENEFITS OF AGREEMENT.........................................13
SECTION 1.11. GOVERNING LAW.................................................13
SECTION 1.12. LEGAL HOLIDAYS................................................13
SECTION 1.13. COUNTERPARTS..................................................13
SECTION 1.14. INSPECTION OF AGREEMENT.......................................13
ARTICLE II
CERTIFICATE FORMS
SECTION 2.1. FORMS OF CERTIFICATES GENERALLY...............................14
SECTION 2.2. FORM OF AGENT'S CERTIFICATE OF AUTHENTICATION.................15
ARTICLE III
THE SECURITIES
SECTION 3.1. TITLE AND TERMS; DENOMINATIONS................................15
SECTION 3.2. RIGHTS AND OBLIGATIONS EVIDENCED BY THE CERTIFICATES..........15
SECTION 3.3. EXECUTION, AUTHENTICATION, DELIVERY AND DATING................16
SECTION 3.4. TEMPORARY CERTIFICATES........................................16
SECTION 3.5. REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE...........17
SECTION 3.6. BOOK-ENTRY INTERESTS..........................................18
SECTION 3.7. NOTICES TO HOLDERS............................................19
SECTION 3.8. APPOINTMENT OF SUCCESSOR CLEARING AGENCY......................19
SECTION 3.9. DEFINITIVE CERTIFICATES.......................................19
SECTION 3.10. MUTILATED, DESTROYED, LOST AND STOLEN CERTIFICATES............19
SECTION 3.11. PERSONS DEEMED OWNERS.........................................20
SECTION 3.12. CANCELLATION..................................................21
SECTION 3.13. ESTABLISHMENT OR REESTABLISHMENT OF GROWTH PRIDES.............21
SECTION 3.14. ESTABLISHMENT OR REESTABLISHMENT OF INCOME PRIDES.............23
SECTION 3.15. TRANSFER OF COLLATERAL UPON OCCURRENCE OF TERMINATION EVENT...24
SECTION 3.16. NO CONSENT TO ASSUMPTION......................................24
ARTICLE IV
THE CAPITAL SECURITIES
SECTION 4.1. PAYMENT OF DISTRIBUTION; RIGHTS TO DISTRIBUTIONS PRESERVED;
DISTRIBUTION RATE RESET; NOTICE.............................25
SECTION 4.2. NOTICE AND VOTING.............................................26
SECTION 4.3. DISTRIBUTION OF DEBENTURES; TAX EVENT REDEMPTION............ .26
<PAGE>
ARTICLE V
THE PURCHASE CONTRACTS
SECTION 5.1. PURCHASE OF SHARES OF COMMON STOCK............................27
SECTION 5.2. CONTRACT ADJUSTMENT PAYMENTS..................................29
SECTION 5.3. PAYMENT OF PURCHASE PRICE.....................................30
SECTION 5.4. ISSUANCE OF SHARES OF COMMON STOCK............................33
SECTION 5.5. ADJUSTMENT OF SETTLEMENT RATE.................................34
SECTION 5.6. NOTICE OF ADJUSTMENTS AND CERTAIN OTHER EVENTS................38
SECTION 5.7. TERMINATION EVENT; NOTICE.....................................39
SECTION 5.8. EARLY SETTLEMENT..............................................39
SECTION 5.9. NO FRACTIONAL SHARES..........................................41
SECTION 5.10. CHARGES AND TAXES.............................................41
ARTICLE VI
REMEDIES
SECTION 6.1. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE CONTRACT
ADJUSTMENT PAYMENTS AND TO PURCHASE COMMON STOCK.............41
SECTION 6.2. RESTORATION OF RIGHTS AND REMEDIES............................42
SECTION 6.3. RIGHTS AND REMEDIES CUMULATIVE................................42
SECTION 6.4. DELAY OR OMISSION NOT WAIVER..................................42
SECTION 6.5. UNDERTAKING FOR COSTS.........................................42
SECTION 6.6. WAIVER OF STAY OR EXTENSION LAWS..............................43
ARTICLE VII
THE AGENT
SECTION 7.1. CERTAIN DUTIES AND RESPONSIBILITIES...........................43
SECTION 7.2. NOTICE OF DEFAULT.............................................44
SECTION 7.3. CERTAIN RIGHTS OF AGENT.......................................44
SECTION 7.4. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES........45
SECTION 7.5. MAY HOLD SECURITIES...........................................45
SECTION 7.6. MONEY HELD IN CUSTODY.........................................45
SECTION 7.7. COMPENSATION AND REIMBURSEMENT................................45
SECTION 7.8. CORPORATE AGENT REQUIRED; ELIGIBILITY.........................46
SECTION 7.9. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.............46
SECTION 7.10. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR........................47
SECTION 7.11. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS...47
SECTION 7.12. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS........48
SECTION 7.13. NO OBLIGATIONS OF AGENT.......................................48
SECTION 7.14. TAX COMPLIANCE................................................48
ARTICLE VIII
SUPPLEMENTAL AGREEMENTS
SECTION 8.1. SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF HOLDERS............49
SECTION 8.2. SUPPLEMENTAL AGREEMENTS WITH CONSENT OF HOLDERS...............49
SECTION 8.3. EXECUTION OF SUPPLEMENTAL AGREEMENTS..........................50
SECTION 8.4. EFFECT OF SUPPLEMENTAL AGREEMENTS.............................50
SECTION 8.5. REFERENCE TO SUPPLEMENTAL AGREEMENTS..........................50
ARTICLE IX
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1. COVENANT NOT TO MERGE, CONSOLIDATE, SELL OR CONVEY
PROPERTY EXCEPT UNDER CERTAIN CONDITIONS.....................51
SECTION 9.2. RIGHTS AND DUTIES OF SUCCESSOR CORPORATION....................51
<PAGE>
SECTION 9.3. OPINION OF COUNSEL GIVEN TO AGENT.............................52
ARTICLE X
COVENANTS
SECTION 10.1. PERFORMANCE UNDER PURCHASE CONTRACTS..........................52
SECTION 10.2. MAINTENANCE OF OFFICE OR AGENCY...............................52
SECTION 10.3. COMPANY TO RESERVE COMMON STOCK...............................53
SECTION 10.4. COVENANTS AS TO COMMON STOCK..................................53
SECTION 10.5. STATEMENTS OF OFFICER OF THE COMPANY AS TO DEFAULT............53
EXHIBIT A Form of Income PRIDES Certificate
EXHIBIT B Form of Growth PRIDES Certificate
EXHIBIT C Instruction to Collateral Agent
EXHIBIT D Instruction to Purchase Contract Agent
EXHIBIT E Notice to Settle with Separate Cash
<PAGE>
PURCHASE CONTRACT AGREEMENT, dated as of August 12, 1999, between Cox
Communications, Inc., a Delaware corporation (the "Company"), and The First
National Bank of Chicago, a national banking association, acting as purchase
contract agent for the Holders of Securities from time to time (the "Agent").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Securities.
All things necessary to make the Purchase Contracts, when the
Certificates are executed by the Company and authenticated, executed on behalf
of the Holders and delivered by the Agent, as provided in this Agreement, the
valid obligations of the Company, and to constitute these presents a valid
agreement of the Company, in accordance with its terms, have been done.
WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1. Definitions.
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them in this
Article and include the plural as well as the singular; and nouns and pronouns
of the masculine gender include the feminine and neuter genders;
(b) all accounting terms not otherwise defined herein have the meanings assigned
to them in accordance with generally accepted accounting principles in the
United States;
(c) the words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular Article,
Section or other subdivision;
(d) the following terms have the meanings given to them in the Declaration: (i)
Applicable Ownership Interest; (ii) Applicable Principal Amount; (iii)
Authorized Newspaper; (iv) Capital Securities Guarantee; (v) Indenture, (vi)
Investment Company Event; (vii) Liquidation Distribution; (viii) Primary
Treasury Dealer; (ix) Quotation Agent; (x) Redemption Amount; (xi) Redemption
Price; (xii) Reset Agent; (xiii) Reset Announcement Date; (xiv) Reset Rate; (xv)
Reset Spread; (xvi) Tax Event; (xvii) Tax Event Redemption; (xviii) Tax Event
Redemption Date; (xix) Treasury Portfolio; (xx) Treasury Portfolio Purchase
Price and (xxi) Two-Year Benchmark Treasury; and
(e) the following terms have the meanings given to them in this Section 1.1(e).
<PAGE>
"Act" when used with respect to any Holder, has the meaning specified
in Section 1.4.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act or any successor rule thereunder.
"Agent" means the Person named as the "Agent" in the first paragraph of
this instrument until a successor Agent shall have become such pursuant to the
applicable provisions of this Agreement, and thereafter "Agent" shall mean such
Person.
"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Applicable Market Value" has the meaning specified in Section 5.1.
"Bankruptcy Code" means title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform system
of bankruptcy laws.
"Beneficial Owner" means, with respect to a Book-Entry Interest, a
Person who is the beneficial owner of such Book-Entry Interest as reflected on
the books of the Clearing Agency or on the books of a Person maintaining an
account with such Clearing Agency (directly as a Clearing Agency Participant or
as an indirect participant, in each case in accordance with the rules of such
Clearing Agency).
"Board of Directors" means the board of directors of the Company or a
duly authorized committee of that board.
"Board Resolution" means one or more resolutions of the Board of
Directors, a copy of which has been certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors and
to be in full force and effect on the date of such certification and delivered
to the Agent.
"Book-Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 3.6.
"Business Day" means any day other than a Saturday, Sunday or any other
day on which banking institutions and trust companies in The City of New York
are permitted or required by any applicable law to close.
"Capital Securities" means the 7% Capital Securities of the Trust, each
having a stated liquidation amount of $50, representing undivided beneficial
interests in the assets of the Trust.
"Cash Settlement" has the meaning set forth in Section 5.3(a)(i).
"Certificate" means an Income PRIDES Certificate or a Growth PRIDES
Certificate.
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"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as a
depositary for the Securities and in whose name, or in the name of a nominee of
that organization, shall be registered a Global Certificate and which shall
undertake to effect book-entry transfers and pledges of the Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Price" has the meaning specified in Section 5.1.
"Collateral" has the meaning specified in Section 2.1 of the Pledge
Agreement.
"Collateral Agent" means The Bank of New York, as Collateral Agent
under the Pledge Agreement until a successor Collateral Agent shall have become
such pursuant to the applicable provisions of the Pledge Agreement, and
thereafter "Collateral Agent" shall mean the Person who is then the Collateral
Agent thereunder.
"Collateral Substitution" has the meaning specified in Section 3.13.
"Common Stock" means the Class A common stock, par value $1.00 per
share, of the Company.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such pursuant
to the applicable provision of this Agreement, and thereafter "Company" shall
mean such successor.
"Contract Adjustment Payments" means the fee payable by the Company in
respect of each Purchase Contract underlying a Growth PRIDES, equal to .25% per
annum of the Stated Amount, computed on the basis of a 360-day year of twelve 30
day months.
"Corporate Trust Office" means the principal corporate trust office of
the Agent at which, at any particular time, its corporate trust business shall
be administered, which office at the date hereof is located at One First
National Plaza, Suite 0126, Chicago, IL 60670-0126, Attention: Corporate Trust
Services Division, except that for purposes of Section 10.2, such term shall
mean the office or agency of the Agent in the Borough of Manhattan, The City of
New York, which office at the date hereof is located at 14 Wall Street, Eighth
Floor, New York, New York 10005.
"Coupon Rate" means the percentage rate per annum at which each
Debenture will bear interest initially.
"Current Market Price" has the meaning specified in Section 5.5(a)(8).
"Debentures" means the series of debt securities of the Company
designated the 7% Senior Debentures due 2004, to be issued under the Indenture
as of the date hereof.
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<PAGE>
"Declaration" means the Amended and Restated Declaration of Trust,
dated August 12, 1999, of Cox Trust II, among the Company, as the sponsor, the
trustees named therein and the holders from time to time of individual
beneficial interests in the assets of the Trust.
"Depositary" means, initially, DTC until another Clearing Agency
becomes its successor.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Early Settlement" has the meaning specified in Section 5.8(a).
"Early Settlement Amount" has the meaning specified in Section 5.8(a).
"Early Settlement Date" has the meaning specified in Section 5.8(a).
"Early Settlement Rate" has the meaning specified in Section 5.8(b).
"Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time, and the
rules and regulations promulgated thereunder.
"Expiration Date" has the meaning specified in Section 1.4.
"Expiration Time" has the meaning specified in Section 5.5(a)(6).
"Global Certificate" means a Certificate that evidences all or part of
the Securities and is registered in the name of a Depositary or a nominee
thereof.
"Global Capital Security Certificate" means a certificate evidencing
the rights and obligations of a Holder in respect of the number of Capital
Securities specified on such certificate and which is registered in the name of
a Clearing Agency or a nominee thereof.
"Growth PRIDES" means the collective rights and obligations of a holder
of a Growth PRIDES Certificate in respect of a 1/20 undivided beneficial
interest in a Treasury Security, subject in each case to the Pledge thereof, and
the related Purchase Contract.
"Growth PRIDES Certificate" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Growth PRIDES specified
on such certificate.
"Growth PRIDES Register" and "Growth PRIDES Registrar" have the
respective meanings specified in Section 3.5.
"Holder," when used with respect to a Security, means the Person in
whose name the Security evidenced by an Income PRIDES Certificate and/or a
Growth PRIDES Certificate is registered in the related Income PRIDES Register
and/or the Growth PRIDES Register, as the case may be.
"Income PRIDES" means the collective rights and obligations of a Holder
of an Income PRIDES Certificate in respect of a Capital Security or an
appropriate Applicable Ownership
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<PAGE>
Interest of the Treasury Portfolio, as the case may be, subject in each case to
the Pledge thereof, and the related Purchase Contract.
"Income PRIDES Certificate" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Income PRIDES specified
on such certificate.
"Income PRIDES Register" and "Income PRIDES Registrar" have the
respective meanings specified in Section 3.5.
"Indenture" has the meaning set forth in Section 1.1 of the
Declaration.
"Indenture Trustee" means The Bank of New York, a New York banking
corporation, as trustee under the Indenture, or any successor thereto.
"Issuer Order" or "Issuer Request" means a written order or request
signed in the name of the Company by the Chairman of the Board, the Vice
Chairman, the President or any Vice President (or other officer performing
similar functions) of the Company and delivered to the Agent.
"NYSE" has the meaning specified in Section 5.1.
"Officer's Certificate" means a certificate signed by the Chairman of
the Board, the Vice Chairman, the President or any Vice President (or other
officer performing similar functions) of the Company and delivered to the Agent.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company or an Affiliate and
who shall be reasonably acceptable to the Agent.
"Outstanding Securities," with respect to any Income PRIDES or Growth
PRIDES, means, as of the date of determination, all Income PRIDES or Growth
PRIDES evidenced by Certificates theretofore authenticated, executed and
delivered under this Agreement, except:
(i) If a Termination Event has occurred, (A) Growth PRIDES and (B)
Income PRIDES for which the Stated Amount of the related Capital Security
or the appropriate Applicable Ownership Interest of the Treasury Portfolio,
or a Liquidation Distribution in respect of such Capital Security, as the
case may be, has been theretofore deposited with the Agent in trust for the
Holders of such Income PRIDES;
(ii) Income PRIDES and Growth PRIDES evidenced by Certificates
theretofore cancelled by the Agent or delivered to the Agent for
cancellation or deemed cancelled pursuant to the provisions of this
Agreement; and
(iii) Income PRIDES and Growth PRIDES evidenced by Certificates in
exchange for or in lieu of which other Certificates have been
authenticated, executed on behalf of the Holder and delivered pursuant to
this Agreement, other than any such Certificate in respect of which there
shall have been presented to the Agent proof satisfactory to it that such
Certificate is held by a bona fide purchaser in whose hands the
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<PAGE>
Income PRIDES or Growth PRIDES evidenced by such Certificate are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
number of the Income PRIDES or Growth PRIDES have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Income PRIDES or
Growth PRIDES owned by the Company or any Affiliate of the Company shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Agent shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Income PRIDES or
Growth PRIDES which a Responsible Officer of the Agent knows to be so owned
shall be so disregarded. Income PRIDES or Growth PRIDES so owned which have been
pledged in good faith may be regarded as Outstanding Securities if the pledgee
establishes to the satisfaction of the Agent the pledgee's right so to act with
respect to such Income PRIDES or Growth PRIDES and that the pledgee is not the
Company or any Affiliate of the Company.
"Payment Date" means each February 16, May 16, August 16 and November
16, commencing November 16, 1999.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Permitted Investments" has the meaning set forth in Section 1.1 of the
Pledge Agreement.
"Pledge" means the pledge under the Pledge Agreement of the Capital
Securities, the Treasury Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, in each case constituting a part of the
Securities.
"Pledge Agreement" means the Pledge Agreement, dated as of the date
hereof, by and among the Company, the Collateral Agent and the Agent, on its own
behalf and as attorney-in-fact for the Holders from time to time of the
Securities.
"Predecessor Certificate" means a Predecessor Income PRIDES Certificate
or a Predecessor Growth PRIDES Certificate.
"Predecessor Growth PRIDES Certificate" of any particular Growth PRIDES
Certificate means every previous Growth PRIDES Certificate evidencing all or a
portion of the rights and obligations of the Company and the Holder under the
Growth PRIDES evidenced thereby; and, for the purposes of this definition, any
Growth PRIDES Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Growth PRIDES
Certificate shall be deemed to evidence the same rights and obligations of the
Company and the Holder as the mutilated, destroyed, lost or stolen Growth PRIDES
Certificate.
"Predecessor Income PRIDES Certificate" of any particular Income PRIDES
Certificate means every previous Income PRIDES Certificate evidencing all or a
portion of the rights and obligations of the Company and the Holder under the
Income PRIDES evidenced thereby; and, for the purposes of this definition, any
Income PRIDES Certificate authenticated and delivered
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under Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Income PRIDES Certificate shall be deemed to evidence the same rights and
obligations of the Company and the Holder as the mutilated, destroyed, lost or
stolen Income PRIDES Certificate.
"Proceeds" has the meaning set forth in Section 1.1 of the Pledge
Agreement.
"Property Trustee" means The Bank of New York, as property trustee
under the Declaration, or any successor thereto that is a financial institution
unaffiliated with the Company.
"Purchase Contract," when used with respect to any Security, means the
contract forming a part of such Security and obligating the Company to (i) sell
and the Holder of such Security to purchase Common Stock and (ii) pay the Holder
Contract Adjustment Payments, if any, on the terms and subject to the conditions
set forth in Article Five hereof.
"Purchase Contract Settlement Date" means August 16, 2002.
"Purchase Contract Settlement Fund" has the meaning specified in
Section 5.4.
"Purchase Price" has the meaning specified in Section 5.1.
"Purchased Shares" has the meaning specified in Section 5.5(a)(6).
"Record Date" for the distribution and Contract Adjustment Payments
payable on any Payment Date means, as to any Global Certificate, the Business
Day next preceding such Payment Date, and as to any other Certificate, a day
selected by the Company which shall be more than one Business Day but less than
60 Business Days prior to such Payment Date.
"Register" means the Income PRIDES Register and the Growth PRIDES
Register.
"Registrar" means the Income PRIDES Registrar and the Growth PRIDES
Registrar.
"Remarketing Agent" has the meaning specified in Section 5.3.
"Remarketing Agreement" means the Remarketing Agreement dated August
12, 1999 by and among the Company, the Trust, the Remarketing Agent and the
Purchase Contract Agent.
"Remarketing Fee" has the meaning specified in Section 5.3.
"Remarketing Purchase Agreement" has the meaning specified in the
Remarketing Agreement.
"Reorganization Event" has the meaning specified in Section 5.5(b).
"Responsible Officer," when used with respect to the Agent, means any
officer of the Agent assigned by the Agent to administer its corporate trust
matters.
"Security" means an Income PRIDES or a Growth PRIDES.
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"Senior Indebtedness" means indebtedness of any kind of the Company
unless the instrument under which such indebtedness is incurred expressly
provides that it is on parity with or subordinated in right of payment to the
Contract Adjustment Payments.
"Settlement Rate" has the meaning specified in Section 5.1.
"Stated Amount" means $50.
"Termination Date" means the date, if any, on which a Termination Event
occurs.
"Termination Event" means the occurrence of any of the following
events: (i) at any time on or prior to the Purchase Contract Settlement Date, a
judgment, decree or court order shall have been entered granting relief under
the Bankruptcy Code, adjudicating the Company to be insolvent, or approving as
properly filed a petition seeking reorganization or liquidation of the Company
or any other similar applicable Federal or State law, and, unless such judgment,
decree or order shall have been entered within 60 days prior to the Purchase
Contract Settlement Date, such decree or order shall have continued undischarged
and unstayed for a period of 60 days; or (ii) a judgment, decree or court order
for the appointment of a receiver or liquidator or trustee or assignee in
bankruptcy or insolvency of the Company or of its property, or for the winding
up or liquidation of its affairs, shall have been entered, and, unless such
judgment, decree or order shall have been entered within 60 days prior to the
Purchase Contract Settlement Date, such judgment, decree or order shall have
continued undischarged and unstayed for a period of 60 days, or (iii) at any
time on or prior to the Purchase Contract Settlement Date the Company shall file
a petition for relief under the Bankruptcy Code, or shall consent to the filing
of a bankruptcy proceeding against it, or shall file a petition or answer or
consent seeking reorganization or liquidation under the Bankruptcy Code or any
other similar applicable Federal or State law, or shall consent to the filing of
any such petition, or shall consent to the appointment of a receiver or
liquidator or trustee or assignee in bankruptcy or insolvency of it or of its
property, or shall make an assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as they become due.
"Threshold Appreciation Price" has the meaning specified in Section
5.1.
"TIA" means the Trust Indenture Act of 1939, as amended, or any
successor statute.
"Trading Day" has the meaning specified in Section 5.1.
"Treasury Security" means a zero coupon U.S. Treasury security (CUSIP
Number 912820 BE 6) with a principal amount at maturity equal to $1,000 and
maturing on August 15, 2002.
"Trust" means Cox Trust II, a statutory business trust formed under the
laws of the State of Delaware, or any successor thereto by merger or
consolidation.
"Underwriting Agreement" means the Underwriting Agreement dated August
12, 1999 among the Company, the Trust and Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated, Banc of
America Securities LLC and J.P. Morgan Securities Inc.
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"Vice President" means any vice president, whether or not designated by
a number or a word or words added before or after the title "vice president."
Section 1.2. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Agent to take any action under any
provision of this Agreement, the Company shall furnish to the Agent an Officer's
Certificate stating that all conditions precedent, if any, provided for in this
Agreement relating to the proposed action have been complied with and, if
requested by the Agent, an Opinion of Counsel stating that, in the opinion of
such counsel, all such conditions precedent, if any, have been complied with,
except that in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of this
Agreement relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement shall include:
(1) a statement that the individual signing such certificate or opinion has
read such covenant or condition and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he or she has made
such examination or investigation as is necessary to enable such
individual to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of such individual, such
condition or covenant has been complied with.
Section 1.3. Form of Documents Delivered to Agent.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of
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the Company stating that the information with respect to such factual matters is
in the possession of the Company unless such counsel knows, or in the exercise
of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
Section 1.4. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Agent and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Agreement
and (subject to Section 7.1) conclusive in favor of the Agent and the Company,
if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved in any manner which the Agent deems sufficient.
(c) The ownership of Securities shall be proved by the Income PRIDES
Register or the Growth PRIDES Register, as the case may be.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Certificate shall bind every future Holder of
the same Certificate and the Holder of every Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Agent or the
Company in reliance thereon, whether or not notation of such action is made upon
such Certificate.
(e) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Agreement to be given, made or taken by
Holders of Securities. If any record date is set pursuant to this paragraph, the
Holders of the Outstanding Income PRIDES and the Outstanding Growth PRIDES, as
the case may be, on such record date, and no other Holders, shall be entitled to
take the relevant action with respect to the Income PRIDES or the Growth PRIDES,
as the case may be, whether or not such Holders remain Holders after such record
date; provided that no such action shall be effective hereunder unless taken on
or prior to the applicable Expiration Date by Holders of the requisite number of
Outstanding Securities on such record date. Nothing in this paragraph shall be
construed to prevent the Company from setting a new record date for any action
for which a record date has previously been set pursuant to this paragraph
(whereupon
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the record date previously set shall automatically and with no action by any
Person be cancelled and of no effect), and nothing in this paragraph shall be
construed to render ineffective any action taken by Holders of the requisite
number of Outstanding Securities on the date such action is taken. Promptly
after any record date is set pursuant to this paragraph, the Company, at its own
expense, shall cause notice of such record date, the proposed action by Holders
and the applicable Expiration Date to be given to the Agent in writing and to
each Holder of Securities in the manner set forth in Section 1.6.
With respect to any record date set pursuant to this Section, the
Company may designate any date as the "Expiration Date" and from time to time
may change the Expiration Date to any earlier or later day; provided that no
such change shall be effective unless notice of the proposed new Expiration Date
is given to the Agent in writing, and to each Holder of Securities in the manner
set forth in Section 1.6, on or prior to the existing Expiration Date. If an
Expiration Date is not designated with respect to any record date set pursuant
to this Section, the Company shall be deemed to have initially designated the
180th day after such record date as the Expiration Date with respect thereto,
subject to its right to change the Expiration Date as provided in this
paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than
the 180th day after the applicable record date.
Section 1.5. Notices.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Agreement to
be made upon, given or furnished to, or filed with,
(1) the Agent by any Holder or by the Company shall be sufficient for every
purpose hereunder (unless otherwise herein expressly provided) if made,
given, furnished or filed in writing and personally delivered or
mailed, first-class postage prepaid, to the Agent at The First National
Bank of Chicago, One First National Plaza, Suite 0126, Chicago, IL
60670-0126, Attention: Corporate Trust Services Division, or at any
other address previously furnished in writing by the Agent to the
Holders and the Company; or
(2) the Company by the Agent or by any Holder shall be sufficient for every
purpose hereunder (unless otherwise herein expressly provided) if made,
given, furnished or filed in writing and personally delivered or
mailed, first-class postage prepaid, to the Company at Cox
Communications, Inc., 1400 Lake Hearn Drive, Atlanta, Georgia 30319,
Attention: Treasurer, or at any other address previously furnished in
writing to the Agent by the Company; or
(3) the Collateral Agent by the Agent, the Company or any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing and
personally delivered or mailed, first-class postage prepaid, addressed
to the Collateral Agent at The Bank of New York, 101 Barclay Street,
Floor 21 West, New York, New York 10286, Attention: Corporate Trust
Administration, or at any other address previously furnished in writing
by the Collateral Agent to the Agent, the Company and the Holders; or
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(4) the Property Trustee by the Company shall be sufficient for every
purpose hereunder (unless otherwise herein expressly provided) if made,
given, furnished or filed in writing and personally delivered or
mailed, first-class postage prepaid, addressed to the Property Trustee
at The Bank of New York, 101 Barclay Street, Floor 21 West, New York,
New York 10286 Attention: Corporate Trust Administration, or at any
other address previously furnished in writing by the Property Trustee
to the Company; or
(5) the Indenture Trustee by the Company shall be sufficient for every
purpose hereunder (unless otherwise herein expressly provided) if made,
given, furnished or filed in writing and personally delivered or
mailed, first-class postage prepaid, addressed to the Indenture Trustee
at The Bank of New York, 101 Barclay Street, Floor 21 West, New York,
New York 10286 Attention: Corporate Trust Administration, or at any
other address previously furnished in writing by the Indenture Trustee
to the Company.
Section 1.6. Notice to Holders; Waiver.
Where this Agreement provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at its address as it appears in the applicable Register, not
later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice. In any case where notice to Holders is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Agreement provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Agent, but such filing shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Agent shall
constitute a sufficient notification for every purpose hereunder.
Section 1.7. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 1.8. Successors and Assigns.
All covenants and agreements in this Agreement by the Company shall
bind its successors and assigns, whether so expressed or not.
Section 1.9. Separability Clause.
In case any provision in this Agreement or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions hereof and thereof shall not in any way be affected or
impaired thereby.
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Section 1.10. Benefits of Agreement.
Nothing in this Agreement or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and, to the extent provided hereby, the Holders, any benefits or any
legal or equitable right, remedy or claim under this Agreement. The Holders from
time to time shall be beneficiaries of this Agreement and shall be bound by all
of the terms and conditions hereof and of the Securities evidenced by their
Certificates by their acceptance of delivery of such Certificates.
Section 1.11. Governing Law.
This Agreement and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.
Section 1.12. Legal Holidays.
In any case where any Payment Date shall not be a Business Day, then
(notwithstanding any other provision of this Agreement or the Income PRIDES
Certificates or the Growth PRIDES Certificates) payment of the Contract
Adjustment Payments, if any, shall not be made on such date, but such payments
shall be made on the next succeeding Business Day with the same force and effect
as if made on such Payment Date, provided that no interest shall accrue or be
payable by the Company or any Holder for the period from and after any such
Payment Date, except that, if such next succeeding Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day with the same force and effect as if made on such Payment
Date.
In any case where any Purchase Contract Settlement Date shall not be a
Business Day, then (notwithstanding any other provision of this Agreement, the
Income PRIDES Certificates or the Growth PRIDES Certificates), the Purchase
Contracts shall not be performed on such date, but the Purchase Contracts shall
be performed on the immediately following Business Day with the same force and
effect as if performed on the Purchase Contract Settlement Date.
Section 1.13. Counterparts.
This Agreement may be executed in any number of counterparts by the
parties hereto on separate counterparts, each of which, when so executed and
delivered, shall be deemed an original, but all such counterparts shall together
constitute one and the same instrument.
Section 1.14. Inspection of Agreement.
A copy of this Agreement shall be available at all reasonable times
during normal business hours at the Corporate Trust Office for inspection by any
Holder.
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ARTICLE II
CERTIFICATE FORMS
Section 2.1. Forms of Certificates Generally.
The Income PRIDES Certificates (including the form of Purchase Contract
forming part of the Income PRIDES evidenced thereby) shall be in substantially
the form set forth in Exhibit A hereto, with such letters, numbers or other
marks of identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Income PRIDES are listed or any depositary
therefor, or as may, consistently herewith, be determined by the officers of the
Company executing such Income PRIDES Certificates, as evidenced by their
execution of the Income PRIDES Certificates.
The definitive Income PRIDES Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing such
Income PRIDES Certificates, consistent with the provisions of this Agreement, as
evidenced by their execution thereof.
The Growth PRIDES Certificates (including the form of Purchase
Contracts forming part of the Growth PRIDES evidenced thereby) shall be in
substantially the form set forth in Exhibit B hereto, with such letters, numbers
or other marks of identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Growth PRIDES may be listed or any depositary
therefor, or as may, consistently herewith, be determined by the officers of the
Company executing such Growth PRIDES Certificates, as evidenced by their
execution of the Growth PRIDES Certificates.
The definitive Growth PRIDES Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing such
Growth PRIDES Certificates, consistent with the provisions of this Agreement, as
evidenced by their execution thereof.
Every Global Certificate authenticated, executed on behalf of the
Holders and delivered hereunder shall bear a legend in substantially the
following form:
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED
IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS
CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE
REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART MAY
BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH CLEARING
AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
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Section 2.2. Form of Agent's Certificate of Authentication.
The form of the Agent's certificate of authentication of the Income
PRIDES shall be in substantially the form set forth on the form of the Income
PRIDES Certificates.
The form of the Agent's certificate of authentication of the Growth
PRIDES shall be in substantially the form set forth on the form of the Growth
PRIDES Certificates.
ARTICLE III
THE SECURITIES
Section 3.1. Title and Terms; Denominations.
The aggregate number of Income PRIDES and Growth PRIDES evidenced by
Certificates authenticated, executed on behalf of the Holders and delivered
hereunder is limited to 13,000,000 (14,950,000 if the Underwriters'
over-allotment option pursuant to the Underwriting Agreement is exercised in
full), except for Certificates authenticated, executed and delivered upon
registration of transfer of, in exchange for, or in lieu of, other Certificates
pursuant to Section 3.4, 3.5, 3.10, 3.13, 3.14, 5.8 or 8.5.
The Certificates shall be issuable only in registered form and only in
denominations of a single Income PRIDES or Growth PRIDES and any integral
multiple thereof.
Section 3.2. Rights and Obligations Evidenced by the Certificates.
Each Income PRIDES Certificate shall evidence the number of Income
PRIDES specified therein, with each such Income PRIDES representing the
ownership by the Holder thereof of a beneficial interest in a Capital Security
or the Applicable Ownership Interest of the Treasury Portfolio, as the case may
be, subject to the Pledge of such Capital Security or the Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, by such Holder pursuant
to the Pledge Agreement, and the rights and obligations of the Holder thereof
and the Company under one Purchase Contract. The Agent as attorney-in-fact for,
and on behalf of, the Holder of each Income PRIDES shall pledge, pursuant to the
Pledge Agreement, the Capital Security or the Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, forming a part of such Income
PRIDES, to the Collateral Agent and grant to the Collateral Agent a security
interest in the right, title, and interest of such Holder in such Capital
Security or the Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, for the benefit of the Company, to secure the obligation of the
Holder under each Purchase Contract to purchase the Common Stock of the Company.
Prior to the purchase of shares of Common Stock under each Purchase Contract,
such Purchase Contracts shall not entitle the Holders of Income PRIDES
Certificates to any of the rights of a holder of shares of Common Stock,
including, without limitation, the right to vote or receive any dividends or
other payments or to consent or to receive notice as stockholders in respect of
the meetings of stockholders or for the election of directors of the Company or
for any other matter, or any other rights whatsoever as stockholders of the
Company.
Each Growth PRIDES Certificate shall evidence the number of Growth
PRIDES specified therein, with each such Growth PRIDES representing the
ownership by the Holder
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thereof of a 1/20 undivided beneficial interest in a Treasury Security, subject
to the Pledge of such interest in such Treasury Security by such Holder pursuant
to the Pledge Agreement, and the rights and obligations of the Holder thereof
and the Company under one Purchase Contract. Prior to the purchase of shares of
Common Stock under each Purchase Contract, such Purchase Contracts shall not
entitle the Holders of Growth PRIDES Certificates to any of the rights of a
holder of shares of Common Stock, including, without limitation, the right to
vote or receive any dividends or other payments or to consent or to receive
notice as stockholders in respect of the meetings of stockholders or for the
election of directors of the Company or for any other matter, or any other
rights whatsoever as stockholders of the Company.
Section 3.3. Execution, Authentication, Delivery and Dating.
Subject to the provisions of Sections 3.13 and 3.14 hereof, upon the
execution and delivery of this Agreement, and at any time and from time to time
thereafter, the Company may deliver Certificates executed by the Company to the
Agent for authentication, execution on behalf of the Holders and delivery,
together with its Issuer Order for authentication of such Certificates, and the
Agent in accordance with such Issuer Order shall authenticate, execute on behalf
of the Holders and deliver such Certificates.
The Certificates shall be executed on behalf of the Company by the
Chairman of the Board, the Vice Chairman, the President or any Vice President
(or other officer performing similar functions) of the Company and delivered to
the Agent. The signature of any of these officers on the Certificates may be
manual or facsimile.
Certificates bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates.
No Purchase Contract evidenced by a Certificate shall be valid until
such Certificate has been executed on behalf of the Holder by the manual
signature of an authorized signatory of the Agent, as such Holder's
attorney-in-fact. Such signature by an authorized signatory of the Agent shall
be conclusive evidence that the Holder of such Certificate has entered into the
Purchase Contracts evidenced by such Certificate.
Each Certificate shall be dated the date of its authentication.
No Certificate shall be entitled to any benefit under this Agreement or
be valid or obligatory for any purpose unless there appears on such Certificate
a certificate of authentication substantially in the form provided for herein
executed by an authorized signatory of the Agent by manual signature, and such
certificate upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder.
Section 3.4. Temporary Certificates.
Pending the preparation of definitive Certificates, the Company shall
execute and deliver to the Agent, and the Agent shall authenticate, execute on
behalf of the Holders, and deliver, in lieu of such definitive Certificates,
temporary Certificates which are in substantially the form set
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forth in Exhibit A or Exhibit B hereto, as the case may be, with such letters,
numbers or other marks of identification or designation and such legends or
endorsements printed, lithographed or engraved thereon as may be required by the
rules of any securities exchange on which the Income PRIDES or Growth PRIDES are
listed, or as may, consistently herewith, be determined by the officers of the
Company executing such Certificates, as evidenced by their execution of the
Certificates.
If temporary Certificates are issued, the Company will cause definitive
Certificates to be prepared without unreasonable delay. After the preparation of
definitive Certificates, the temporary Certificates shall be exchangeable for
definitive Certificates upon surrender of the temporary Certificates at the
Corporate Trust Office, at the expense of the Company and without charge to the
Holder. Upon surrender for cancellation of any one or more temporary
Certificates, the Company shall execute and deliver to the Agent, and the Agent
shall authenticate, execute on behalf of the Holder, and deliver in exchange
therefor, one or more definitive Certificates of like tenor and denominations
and evidencing a like number of Income PRIDES or Growth PRIDES, as the case may
be, as the temporary Certificate or Certificates so surrendered. Until so
exchanged, the temporary Certificates shall in all respects evidence the same
benefits and the same obligations with respect to the Income PRIDES or Growth
PRIDES, as the case may be, evidenced thereby as definitive Certificates.
Section 3.5. Registration; Registration of Transfer and Exchange.
The Agent shall keep at the Corporate Trust Office a register (the
"Income PRIDES Register") in which, subject to such reasonable regulations as it
may prescribe, the Agent shall provide for the registration of Income PRIDES
Certificates and of transfers of Income PRIDES Certificates (the Agent, in such
capacity, the "Income PRIDES Registrar") and a register (the "Growth PRIDES
Register") in which, subject to such reasonable regulations as it may prescribe,
the Agent shall provide for the registration of the Growth PRIDES Certificates
and transfers of Growth PRIDES Certificates (the Agent, in such capacity, the
"Growth PRIDES Registrar").
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office, the Company shall execute and deliver to the Agent, and
the Agent shall authenticate, execute on behalf of the designated transferee or
transferees, and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of any authorized denominations, like
tenor, and evidencing a like number of Income PRIDES or Growth PRIDES, as the
case may be.
At the option of the Holder, Certificates may be exchanged for other
Certificates, of any authorized denominations and evidencing a like number of
Income PRIDES or Growth PRIDES, as the case may be, upon surrender of the
Certificates to be exchanged at the Corporate Trust Office. Whenever any
Certificates are so surrendered for exchange, the Company shall execute and
deliver to the Agent, and the Agent shall authenticate, execute on behalf of the
Holder, and deliver the Certificates which the Holder making the exchange is
entitled to receive.
All Certificates issued upon any registration of transfer or exchange
of a Certificate shall evidence the ownership of the same number of Income
PRIDES or Growth PRIDES, as the case may be, and be entitled to the same
benefits and subject to the same obligations, under this
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Agreement as the Income PRIDES or Growth PRIDES, as the case may be, evidenced
by the Certificate surrendered upon such registration of transfer or exchange.
Every Certificate presented or surrendered for registration of transfer
or for exchange shall (if so required by the Agent) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Agent duly executed, by the Holder thereof or its attorney duly
authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of a Certificate, but the Company and the Agent may require payment
from the Holder of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Certificates, other than any exchanges pursuant to Sections 3.6 and
8.5 not involving any transfer.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Agent, and the Agent shall not be obligated to
authenticate, execute on behalf of the Holder and deliver any Certificate
presented or surrendered for registration of transfer or for exchange on or
after the Business Day immediately preceding the earlier of the Purchase
Contract Settlement Date or the Termination Date. In lieu of delivery of a new
Certificate, upon satisfaction of the applicable conditions specified above in
this Section and receipt of appropriate registration or transfer instructions
from such Holder, the Agent shall (i) if the Purchase Contract Settlement Date
has occurred, deliver the shares of Common Stock issuable in respect of the
Purchase Contracts forming a part of the Securities evidenced by such
Certificate, (ii) in the case of Income PRIDES, if a Termination Event shall
have occurred prior to the Purchase Contract Settlement Date, transfer the
aggregate Stated Amount of the Capital Securities or the Treasury Portfolio, as
applicable, evidenced thereby, or (iii) in the case of Growth PRIDES, if a
Termination Event shall have occurred prior to the Purchase Contract Settlement
Date, transfer the Treasury Securities evidenced thereby, in each case subject
to the applicable conditions and in accordance with the applicable provisions of
Article Five hereof.
Section 3.6. Book-Entry Interests.
The Certificates, on original issuance, will be issued in the form of
one or more, fully registered Global Certificates, to be delivered to the
Depositary by, or on behalf of, the Company. Such Global Certificate shall
initially be registered on the books and records of the Company in the name of
Cede & Co., the nominee of the Depositary, and no Beneficial Owner will receive
a definitive Certificate representing such Beneficial Owner's interest in such
Global Certificate, except as provided in Section 3.9. The Agent shall enter
into an agreement with the Depositary if so requested by the Company. Unless and
until definitive, fully registered Certificates have been issued to Beneficial
Owners pursuant to Section 3.9:
(a) the provisions of this Section 3.6 shall be in full force and effect;
(b) the Company shall be entitled to deal with the Clearing Agency for all
purposes of this Agreement (including the payment of Contract Adjustment
Payments, if any, and receiving approvals, votes or consents hereunder) as the
Holder of the Securities and the sole holder of the Global Certificate(s) and
shall have no obligation to the Beneficial Owners;
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(c) to the extent that the provisions of this Section 3.6 conflict with any
other provisions of this Agreement, the provisions of this Section 3.6 shall
control; and
(d) the rights of the Beneficial Owners shall be exercised only through the
Clearing Agency and shall be limited to those established by law and agreements
between such Beneficial Owners and the Clearing Agency and/or the Clearing
Agency Participants. The Clearing Agency will make book-entry transfers among
Clearing Agency Participants and receive and transmit payments of Contract
Adjustment Payments to such Clearing Agency Participants.
Section 3.7. Notices to Holders.
Whenever a notice or other communication to the Holders is required to
be given under this Agreement, the Company or the Company's agent shall give
such notices and communications to the Holders and, with respect to any
Securities registered in the name of a Clearing Agency or the nominee of a
Clearing Agency, the Company or the Company's agent shall, except as set forth
herein, have no obligations to the Beneficial Owners.
Section 3.8. Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Securities, the Company may, in its sole
discretion, appoint a successor Clearing Agency with respect to the Securities.
Section 3.9. Definitive Certificates.
If (i) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Securities and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 3.8, (ii) the Company elects to terminate the book-entry system through
the Clearing Agency with respect to the Securities, or (iii) there shall have
occurred and be continuing a default by the Company in respect of its
obligations under one or more Purchase Contracts, then upon surrender of the
Global Certificates representing the Book-Entry Interests with respect to the
Securities by the Clearing Agency, accompanied by registration instructions, the
Company shall cause definitive Certificates to be delivered to Beneficial Owners
in accordance with the instructions of the Clearing Agency. The Company shall
not be liable for any delay in delivery of such instructions and may
conclusively rely on and shall be protected in relying on, such instructions.
Section 3.10. Mutilated, Destroyed, Lost and Stolen Certificates.
If any mutilated Certificate is surrendered to the Agent, the Company
shall execute and deliver to the Agent, and the Agent shall authenticate,
execute on behalf of the Holder, and deliver in exchange therefor, a new
Certificate at the cost of the Holder, evidencing the same number of Income
PRIDES or Growth PRIDES, as the case may be, and bearing a Certificate number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Agent (i) evidence
to their satisfaction of the destruction, loss or theft of any Certificate, and
(ii) such security or indemnity at the cost of the Holder as may be required by
them to hold each of them and any agent of any of them
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harmless, then, in the absence of notice to the Company or the Agent that such
Certificate has been acquired by a bona fide purchaser, the Company shall
execute and deliver to the Agent, and the Agent shall authenticate, execute on
behalf of the Holder, and deliver to the Holder, in lieu of any such destroyed,
lost or stolen Certificate, a new Certificate, evidencing the same number of
Income PRIDES or Growth PRIDES, as the case may be, and bearing a Certificate
number not contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Agent, and the Agent shall not be obligated to
authenticate, execute on behalf of the Holder, and deliver to the Holder, a
Certificate on or after the Business Day immediately preceding the earlier of
the Purchase Contract Settlement Date or the Termination Date. In lieu of
delivery of a new Certificate, upon satisfaction of the applicable conditions
specified above in this Section and receipt of appropriate registration or
transfer instructions from such Holder, the Agent shall (i) if the Purchase
Contract Settlement Date has occurred, deliver the shares of Common Stock
issuable in respect of the Purchase Contracts forming a part of the Securities
evidenced by such Certificate, or (ii) if a Termination Event shall have
occurred prior to the Purchase Contract Settlement Date, transfer the Capital
Securities, the appropriate Applicable Ownership Interest of the Treasury
Portfolio or the Treasury Securities, as the case may be, evidenced thereby, in
each case subject to the applicable conditions and in accordance with the
applicable provisions of Article Five hereof.
Upon the issuance of any new Certificate under this Section, the
Company and the Agent may require the payment by the Holder of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Agent)
connected therewith.
Every new Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Certificate shall constitute an original additional
contractual obligation of the Company and of the Holder in respect of the
Security evidenced thereby, whether or not the destroyed, lost or stolen
Certificate (and the Securities evidenced thereby) shall be at any time
enforceable by anyone, and shall be entitled to all the benefits and be subject
to all the obligations of this Agreement equally and proportionately with any
and all other Certificates delivered hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates.
Section 3.11. Persons Deemed Owners.
Prior to due presentment of a Certificate for registration of transfer,
the Company and the Agent, and any agent of the Company or the Agent, may treat
the Person in whose name such Certificate is registered as the owner of the
Income PRIDES or Growth PRIDES evidenced thereby, for the purpose of receiving
distributions on the Capital Securities or on the maturing quarterly interest
strips of the Treasury Portfolio, as applicable, receiving payments of Contract
Adjustment Payments, performance of the Purchase Contracts and for all other
purposes whatsoever, whether or not any distributions on the Capital Securities
or the Contract Adjustment Payments, if any, payable in respect of the Purchase
Contracts constituting a part of
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the Income PRIDES or Growth PRIDES evidenced thereby shall be overdue and
notwithstanding any notice to the contrary, and neither the Company nor the
Agent, nor any agent of the Company or the Agent, shall be affected by notice to
the contrary.
Notwithstanding the foregoing, with respect to any Global Certificate,
nothing herein shall prevent the Company, the Agent or any agent of the Company
or the Agent, from giving effect to any written certification, proxy or other
authorization furnished by any Clearing Agency (or its nominee), as a Holder,
with respect to such Global Certificate or impair, as between such Clearing
Agency and owners of beneficial interests in such Global Certificate, the
operation of customary practices governing the exercise of rights of such
Clearing Agency (or its nominee) as Holder of such Global Certificate.
Section 3.12. Cancellation.
All Certificates surrendered for delivery of shares of Common Stock on
or after the Purchase Contract Settlement Date, upon the transfer of Capital
Securities, the appropriate Applicable Ownership Interest of the Treasury
Portfolio or Treasury Securities, as the case may be, after the occurrence of a
Termination Event or pursuant to an Early Settlement, or upon the registration
of a transfer or exchange of a Security, or a Collateral Substitution or the
re-establishment of an Income PRIDES shall, if surrendered to any Person other
than the Agent, be delivered to the Agent and, if not already cancelled, shall
be promptly cancelled by it. The Company may at any time deliver to the Agent
for cancellation any Certificates previously authenticated, executed and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Certificates so delivered shall, upon Issuer Order, be
promptly cancelled by the Agent. No Certificates shall be authenticated,
executed on behalf of the Holder and delivered in lieu of or in exchange for any
Certificates cancelled as provided in this Section, except as expressly
permitted by this Agreement. All cancelled Certificates held by the Agent shall
be destroyed by the Agent unless otherwise directed by Issuer Order.
If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Agent
cancelled or for cancellation.
Section 3.13. Establishment or Reestablishment of Growth PRIDES
A Holder may separate the Capital Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as applicable, from the
related Purchase Contracts in respect of an Income PRIDES by substituting for
such Capital Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, Treasury Securities in an aggregate
principal amount equal to the aggregate Stated Amount of such Capital Securities
or for the appropriate Applicable Ownership Interest (as specified in clause (A)
of the definition of such term) of the Treasury Portfolio, as applicable (a
"Collateral Substitution"), at any time from and after the date of this
Agreement and on or prior to the fifth Business Day immediately preceding the
Purchase Contract Settlement Date in the case of the Capital Securities and on
or prior to the second Business Day immediately preceding the Purchase Contract
Settlement Date in the case of the appropriate Applicable Ownership Interest of
the Treasury Portfolio, in each case by (a) depositing with the Collateral Agent
Treasury Securities having an aggregate
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principal amount equal to the aggregate Stated Amount of the Capital Securities
comprising part of such Income PRIDES or for the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio comprising part of such Income PRIDES, as the case may
be, and (b)(i) delivering cash in an amount equal to the Contract Adjustment
Payments that would have accrued since the last Payment Date through the date of
substitution on the Growth PRIDES being created by the Holder, which amount the
Agent shall promptly remit to the Company, and (ii) transferring the related
Income PRIDES to the Agent accompanied by a notice to the Agent, substantially
in the form of Exhibit D hereto, stating that the Holder has transferred the
relevant amount of Treasury Securities to the Collateral Agent and requesting
that the Agent instruct the Collateral Agent to release the Capital Securities
or the appropriate Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, underlying such Income PRIDES, whereupon the Agent shall
promptly give such instruction to the Collateral Agent, substantially in the
form of Exhibit C hereto. Upon receipt of the Treasury Securities described in
clause (a) above and the instruction described in clause (b) above, in
accordance with the terms of the Pledge Agreement, the Collateral Agent will
release to the Agent, on behalf of the Holder, Capital Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, having a corresponding aggregate Stated Amount of such Capital
Securities or the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, as the
case may be, from the Pledge, free and clear of the Company's security interest
therein, and upon receipt thereof the Agent shall promptly:
(i) cancel the related Income PRIDES;
(ii) transfer the Capital Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, to the Holder;
and
(iii) authenticate, execute on behalf of such Holder and deliver a Growth
PRIDES Certificate executed by the Company in accordance with Section
3.3 evidencing the same number of Purchase Contracts as were evidenced
by the cancelled Income PRIDES.
Holders who elect to separate the Capital Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
from the related Purchase Contract and to substitute Treasury Securities for
such Capital Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, shall be responsible for any fees or
expenses payable to the Collateral Agent for its services as Collateral Agent in
respect of the substitution, and the Company shall not be responsible for any
such fees or expenses.
Holders may make Collateral Substitutions (i) only in integral
multiples of 20 Income PRIDES if Capital Securities are being substituted by
Treasury Securities, or (ii) only in integral multiples of 8,000 Income PRIDES
if the appropriate Applicable Ownership Interests of the Treasury Portfolio are
being substituted by Treasury Securities.
In the event a Holder making a Collateral Substitution pursuant to this
Section 3.13 fails to effect a book-entry transfer of the Income PRIDES or fails
to deliver an Income PRIDES
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Certificate to the Agent after depositing Treasury Securities with the
Collateral Agent, the Capital Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, constituting a part of
such Income PRIDES, and any distributions on such Capital Security or the
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
shall be held in the name of the Agent or its nominee in trust for the benefit
of such Holder, until such Income PRIDES are so transferred or the Income PRIDES
Certificate is so delivered, as the case may be, or, with respect to an Income
PRIDES Certificate, such Holder provides evidence satisfactory to the Company
and the Agent that such Income PRIDES Certificate has been destroyed, lost or
stolen, together with any indemnity that may be required by the Agent and the
Company.
Except as described in this Section 3.13, for so long as the Purchase
Contract underlying an Income PRIDES remains in effect, such Income PRIDES shall
not be separable into its constituent parts, and the rights and obligations of
the Holder in respect of the Capital Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, and Purchase
Contract comprising such Income PRIDES may be acquired, and may be transferred
and exchanged, only as an Income PRIDES.
Section 3.14. Establishment or Reestablishment of Income PRIDES.
A Holder of a Growth PRIDES may create or recreate Income PRIDES at any
time (i) on or prior to the fifth Business Day immediately preceding the
Purchase Contract Settlement Date, if a Tax Event Redemption has not occurred,
and (ii) on or prior to the second Business Day immediately preceding the
Purchase Contract Settlement Date, if a Tax Event Redemption has occurred, in
each case by (a) depositing with the Collateral Agent Capital Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, having an aggregate Stated Amount in the case of the Capital Securities,
or an appropriate Applicable Ownership Interest (as defined in clause (A) of the
definition of such term) of the Treasury Portfolio, as the case may be, equal to
the aggregate principal amount of the Treasury Securities comprising part of the
Growth PRIDES and (b) transferring the related Growth PRIDES to the Agent
accompanied by a notice to the Agent, substantially in the form of Exhibit D
hereto, stating that the Holder has transferred the relevant amount of Capital
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, to the Collateral Agent and requesting that the
Agent instruct the Collateral Agent to release the Treasury Securities
underlying such Growth PRIDES, whereupon the Agent shall promptly give such
instruction to the Collateral Agent, substantially in the form of Exhibit C
hereto. Upon receipt of the Capital Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, described in
clause (a) above and the instruction described in clause (b) above, in
accordance with the terms of the Pledge Agreement, the Collateral Agent will
effect the release of the Treasury Securities having a corresponding aggregate
principal amount from the Pledge to the Agent free and clear of the Company's
security interest therein, and upon receipt thereof the Agent shall promptly:
(i) cancel the related Growth PRIDES;
(ii) transfer the Treasury Securities to the Holder; and
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(iii) authenticate, execute on behalf of such Holder and deliver an Income
PRIDES Certificate executed by the Company in accordance with Section
3.3 evidencing the same number of Purchase Contracts as were evidenced
by the cancelled Growth PRIDES.
Holders of Growth PRIDES may establish or reestablish Income PRIDES in
integral multiples of 20 Growth PRIDES for 20 Income PRIDES if a Tax Event
Redemption has not occurred, and in integral multiples of 8,000 Growth PRIDES
for 8,000 Income PRIDES if a Tax Event Redemption has occurred.
Except as provided in this Section 3.14, for so long as the Purchase
Contract underlying a Growth PRIDES remains in effect, such Growth PRIDES shall
not be separable into its constituent parts and the rights and obligations of
the Holder of such Growth PRIDES in respect of the Treasury Security and
Purchase Contract comprising such Growth PRIDES may be acquired, and may be
transferred and exchanged only as a Growth PRIDES.
Section 3.15. Transfer of Collateral upon Occurrence of Termination Event.
Upon the occurrence of a Termination Event and the transfer to the
Agent of the Capital Securities, the appropriate Applicable Ownership Interest
of the Treasury Portfolio or the Treasury Securities, as the case may be,
underlying the Income PRIDES and the Growth PRIDES pursuant to the terms of the
Pledge Agreement, the Agent shall request transfer instructions with respect to
such Capital Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio or Treasury Securities, as the case may be, from each Holder
by written request mailed to such Holder at its address as it appears in the
Income PRIDES Register or the Growth PRIDES Register, as the case may be. Upon
book-entry transfer of the Income PRIDES or Growth PRIDES or delivery of an
Income PRIDES Certificate or Growth PRIDES Certificate to the Agent with such
transfer instructions, the Agent shall transfer the Capital Securities, the
Treasury Portfolio or Treasury Securities, as the case may be, underlying such
Income PRIDES or Growth PRIDES, as the case may be, to such Holder by book-entry
transfer, or other appropriate procedures, in accordance with such instructions.
In the event a Holder of Income PRIDES or Growth PRIDES fails to effect such
transfer or delivery, the Capital Securities, the appropriate Applicable
Ownership Interest of the Treasury Portfolio or Treasury Securities, as the case
may be, underlying such Income PRIDES or Growth PRIDES, as the case may be, and
any distributions thereon, shall be held in the name of the Agent or its nominee
in trust for the benefit of such Holder, until such Income PRIDES or Growth
PRIDES are transferred or the Income PRIDES Certificate or Growth PRIDES
Certificate is surrendered or such Holder provides satisfactory evidence that
such Income PRIDES Certificate or Growth PRIDES Certificate has been destroyed,
lost or stolen, together with any indemnity that may be required by the Agent
and the Company.
Section 3.16. No Consent to Assumption.
Each Holder of a Security, by acceptance thereof, shall be deemed
expressly to have withheld any consent to the assumption under Section 365 of
the Bankruptcy Code or otherwise, of the Purchase Contract by the Company,
receiver, liquidator or a person or entity performing similar functions, its
trustee in the event that the Company becomes the debtor under the
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Bankruptcy Code or subject to other similar state or federal law providing for
reorganization or liquidation.
ARTICLE IV
THE CAPITAL SECURITIES
Section 4.1. Payment of Distribution; Rights to Distributions Preserved;
Distribution Rate Reset; Notice.
A distribution on any Capital Security or on the Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, which is paid on any
Payment Date shall, subject to receipt thereof by the Agent from the Collateral
Agent as provided by the terms of the Pledge Agreement, be paid to the Person in
whose name the Income PRIDES Certificate (or one or more Predecessor Income
PRIDES Certificates) of which such Capital Security or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be, is
a part is registered at the close of business on the Record Date for such
Payment Date.
Each Income PRIDES Certificate evidencing Capital Securities delivered
under this Agreement upon registration of transfer of or in exchange for or in
lieu of any other Income PRIDES Certificate shall carry the rights to
distributions accumulated and unpaid, and to accumulate distributions, which
were carried by the Capital Securities underlying such other Income PRIDES
Certificate.
In the case of any Income PRIDES with respect to which Cash Settlement
of the underlying Purchase Contract is effected on the Business Day immediately
preceding the Purchase Contract Settlement Date pursuant to prior notice, or
with respect to which Early Settlement of the underlying Purchase Contract is
effected on an Early Settlement Date, or with respect to which a Collateral
Substitution is effected, in each case on a date that is after any Record Date
and on or prior to the next succeeding Payment Date, distributions on the
Capital Securities or on the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, underlying such Income PRIDES otherwise
payable on such Payment Date shall be payable on such Payment Date
notwithstanding such Cash Settlement or Early Settlement or Collateral
Substitution, and such distributions shall, subject to receipt thereof by the
Agent, be payable to the Person in whose name the Income PRIDES Certificate (or
one or more Predecessor Income PRIDES Certificates) was registered at the close
of business on the Record Date. Except as otherwise expressly provided in the
immediately preceding sentence, in the case of any Income PRIDES with respect to
which Cash Settlement or Early Settlement of the underlying Purchase Contract is
effected on the Business Day immediately preceding the Purchase Contract
Settlement Date or an Early Settlement Date, as the case may be, or with respect
to which a Collateral Substitution has been effected, distributions on the
related Capital Securities or on the appropriate Applicable Ownership Interest
of the Treasury Portfolio, as the case may be, that would otherwise be payable
after the Purchase Contract Settlement Date or Early Settlement Date shall not
be payable hereunder to the Holder of such Income PRIDES; provided, however,
that to the extent that such Holder continues to hold the separated Capital
Securities that formerly comprised a part of such Holder's Income PRIDES, such
Holder shall be entitled to receive the distributions on such separated Capital
Securities.
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The applicable Coupon Rate on the Capital Securities on and after the
Purchase Contract Settlement Date will be reset on the third Business Day
immediately preceding the Purchase Contract Settlement Date to the Reset Rate
(such Reset Rate to be in effect on and after the Purchase Contract Settlement
Date). On the Reset Announcement Date the Reset Spread and the Two-Year
Benchmark Treasury to be used to determine the Reset Rate will be announced by
the Company. On the Business Day immediately following the Reset Announcement
Date, the Capital Securities Holders will be notified of such Reset Spread and
Two-Year Benchmark Treasury by the Company. Such notice shall be sufficiently
given to Holders of Capital Securities if published in an Authorized Newspaper
in The City of New York.
Not later than 7 calendar days nor more than 15 calendar days prior to
the Reset Announcement Date, the Company will notify DTC or its nominee (or any
successor Clearing Agency or its nominee) by first-class mail, postage prepaid,
to notify the Beneficial Owners or Clearing Agency Participants holding Income
PRIDES or Growth PRIDES, of such Reset Announcement Date and the procedures to
be followed by such Holders of Income PRIDES who intend to settle their
obligation under the Purchase Contract with separate cash on the Purchase
Contract Settlement Date.
Section 4.2. Notice and Voting.
Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Capital
Securities pledged with the Collateral Agent but only to the extent instructed
by the Holders as described below. Upon receipt of notice of any meeting at
which holders of Capital Securities are entitled to vote or upon any
solicitation of consents, waivers or proxies of holders of Capital Securities,
the Agent shall, as soon as practicable thereafter, mail to the Holders of
Income PRIDES a notice (a) containing such information as is contained in the
notice or solicitation, (b) stating that each Holder on the record date set by
the Agent therefor (which, to the extent possible, shall be the same date as the
record date for determining the holders of Capital Securities entitled to vote)
shall be entitled to instruct the Agent as to the exercise of the voting rights
pertaining to the Capital Securities underlying their Income PRIDES and (c)
stating the manner in which such instructions may be given. Upon the written
request of the Holders of Income PRIDES on such record date, the Agent shall
endeavor insofar as practicable to vote or cause to be voted, in accordance with
the instructions set forth in such requests, the maximum number of Capital
Securities as to which any particular voting instructions are received. In the
absence of specific instructions from the Holder of an Income PRIDES, the Agent
shall abstain from voting the Capital Security underlying such Income PRIDES.
The Company hereby agrees, if applicable, to solicit Holders of Income PRIDES to
timely instruct the Agent in order to enable the Agent to vote such Capital
Securities and the Trust shall covenant to such effect in the Declaration.
Section 4.3. Distribution of Debentures; Tax Event Redemption
Upon the occurrence of an Investment Company Event or a liquidation of
the Trust in accordance with the Declaration, a principal amount of Debentures
constituting the assets of the Trust and underlying the Capital Securities equal
to the aggregate Stated Amount of the Pledged Capital Securities shall be
delivered to the Collateral Agent in exchange for the Pledged Capital
Securities. Thereafter, the Debentures will be substituted for the Pledged
Capital Securities, and
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will be held by the Collateral Agent in accordance with the terms of the Pledge
Agreement to secure the obligations of each Holder of an Income PRIDES to
purchase the Common Stock of the Company under the Purchase Contracts
constituting a part of such Income PRIDES. Following the occurrence of an
Investment Company Event or a liquidation of the Trust, the Holders and the
Collateral Agent shall have such security interests, rights and obligations with
respect to the Debentures as the Holders and the Collateral Agent had in respect
of the Capital Securities subject to the Pledge thereof as provided in Articles
II, III, IV, V and VI of the Pledge Agreement, and any reference herein to the
Capital Securities shall be deemed to be a reference to such Debentures. The
Company may cause to be made in any Income PRIDES Certificates thereafter to be
issued such change in phraseology and form (but not in substance) as may be
appropriate to reflect the liquidation of the Trust and the substitution of
Debentures for Capital Securities as Collateral.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principle Amount of Debentures
shall be delivered to the Collateral Agent in exchange for the Pledged Capital
Securities. Thereafter, pursuant to the terms of the Pledge Agreement, the
Collateral Agent will apply an amount equal to the Redemption Amount of such
Redemption Price to purchase on behalf of the Holders of Income PRIDES the
Treasury Portfolio and promptly remit the remaining portion of such Redemption
Price to the Agent for payment to the Holders of such Income PRIDES. The
Treasury Portfolio will be substituted for the Pledged Capital Securities, and
will be held by the Collateral Agent in accordance with the terms of the Pledge
Agreement to secure the obligation of each Holder of an Income PRIDES to
purchase the Common Stock of the Company under the Purchase Contract
constituting a part of such Income PRIDES. Following the occurrence of a Tax
Event Redemption prior to the Purchase Contract Settlement Date, the Holders of
Income PRIDES and the Collateral Agent shall have such security interests,
rights and obligations with respect to the Treasury Portfolio as the Holder of
Income PRIDES and the Collateral Agent had in respect of the Capital Security or
Debentures, as the case may be, subject to the Pledge thereof as provided in
Articles II, III, IV, V, and VI of the Pledge Agreement, and any reference
herein to the Capital Security or the Debenture shall be deemed to be reference
to such Treasury Portfolio. The Company may cause to be made in any Income
PRIDES Certificates thereafter to be issued such change in phraseology and form
(but not in substance) as may be appropriate to reflect the liquidation of the
Trust and the substitution of the Treasury Portfolio for Capital Securities or
Debentures as Collateral.
ARTICLE V
THE PURCHASE CONTRACTS
Section 5.1. Purchase of Shares of Common Stock.
Each Purchase Contract shall, unless an Early Settlement has occurred
in accordance with Section 5.8 hereof, obligate the Holder of the related
Security to purchase, and the Company to sell, on the Purchase Contract
Settlement Date at a price equal to the Stated Amount (the "Purchase Price"), a
number of newly issued shares of Common Stock equal to the Settlement Rate
unless, on or prior to the Purchase Contract Settlement Date, there shall have
occurred a Termination Event with respect to the Security of which such Purchase
Contract is a part. The
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"Settlement Rate" is equal to (a) if the Applicable Market Value (as defined
below) is equal to or greater than $41.7984 (the "Threshold Appreciation
Price"), 1.1962 shares of Common Stock per Purchase Contract, (b) if the
Applicable Market Value is less than the Threshold Appreciation Price, but is
greater than $34.6875, the number of shares of Common Stock equal to the Stated
Amount divided by the Applicable Market Value and (c) if the Applicable Market
Value is less than or equal to $34.6875, 1.4414 shares of Common Stock per
Purchase Contract, in each case subject to adjustment as provided in Section 5.5
(and in each case rounded upward or downward to the nearest 1/10,000th of a
share). As provided in Section 5.9, no fractional shares of Common Stock will be
issued upon settlement of Purchase Contracts.
The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date. The "Closing Price" of the Common Stock on any date of determination means
the closing sale price (or, if no closing price is reported, the last reported
sale price) of the Common Stock on the New York Stock Exchange (the "NYSE") on
such date or, if the Common Stock is not listed for trading on the NYSE on any
such date, as reported in the composite transactions for the principal United
States securities exchange on which the Common Stock is so listed, or if the
Common Stock is not so listed on a United States national or regional securities
exchange, as reported by The Nasdaq Stock Market, or, if the Common Stock is not
so reported, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the National Quotation Bureau or similar
organization, or, if such bid price is not available, the market value of the
Common Stock on such date as determined by a nationally recognized independent
investment banking firm retained for this purpose by the Company. A "Trading
Day" means a day on which the Common Stock (A) is not suspended from trading on
any national or regional securities exchange or association or over-the-counter
market at the close of business and (B) has traded at least once on the national
or regional securities exchange or association or over-the-counter market that
is the primary market for the trading of the Common Stock.
Each Holder of an Income PRIDES or a Growth PRIDES, by its acceptance
thereof, irrevocably authorizes the Agent to enter into and perform the related
Purchase Contract on its behalf as its attorney-in-fact (including the execution
of Certificates on behalf of such Holder), agrees to be bound by the terms and
provisions thereof, covenants and agrees to perform its obligations under such
Purchase Contracts, and consents to the provisions hereof, irrevocably
authorizes the Agent as its attorney-in-fact to enter into and perform the
Pledge Agreement on its behalf as its attorney-in-fact, and consents to and
agrees to be bound by the Pledge of the Capital Securities, the Treasury
Portfolio or the Treasury Securities pursuant to the Pledge Agreement; provided
that upon a Termination Event, the rights of the Holder of such Security under
the Purchase Contract may be enforced without regard to any other rights or
obligations. Each Holder of an Income PRIDES or a Growth PRIDES, by its
acceptance thereof, further covenants and agrees, that, to the extent and in the
manner provided in Section 5.3 and the Pledge Agreement, but subject to the
terms thereof, payments in respect of the Stated Amount of the Capital
Securities or the Proceeds of the Treasury Securities or the Treasury Portfolio
on the Purchase Contract Settlement Date shall be paid by the Collateral Agent
to the Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
payments.
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Upon registration of transfer of a Certificate, the transferee shall be
bound (without the necessity of any other action on the part of such
transferee), under the terms of this Agreement, the Purchase Contracts
underlying such Certificate and the Pledge Agreement and the transferor shall be
released from the obligations under this Agreement, the Purchase Contracts
underlying the Certificates so transferred and the Pledge Agreement. The Company
covenants and agrees, and each Holder of a Certificate, by its acceptance
thereof, likewise covenants and agrees, to be bound by the provisions of this
paragraph.
Section 5.2. Contract Adjustment Payments.
Subject to Section 5.3 herein, the Company shall pay, on each Payment
Date, the Contract Adjustment Payments payable in respect of each Purchase
Contract underlying a Growth PRIDES Certificate to the Person in whose name such
Growth PRIDES Certificate (or one or more Predecessor Growth PRIDES
Certificates) is registered at the close of business on the Record Date next
preceding such Payment Date. The Contract Adjustment Payments will be payable at
the office of the Agent in The City of New York maintained for that purpose or,
at the option of the Company, by check mailed to the address of the Person
entitled thereto at such Person's address as it appears on the Growth PRIDES
Register.
Upon the occurrence of a Termination Event, the Company's obligation to
pay Contract Adjustment Payments shall cease.
Each Growth PRIDES Certificate delivered under this Agreement upon
registration of transfer of or in exchange for or in lieu of any other Growth
PRIDES Certificate shall carry the rights to Contract Adjustment Payments
accrued and unpaid, and to accrue Contract Adjustment Payments, which were
carried by the Purchase Contracts underlying such other Growth PRIDES
Certificates.
Subject to Section 5.8, in the case of any Growth PRIDES with respect
to which Early Settlement of the underlying Purchase Contract is effected on an
Early Settlement Date that is after any Record Date and on or prior to the next
succeeding Payment Date, Contract Adjustment Payments otherwise payable on such
Payment Date shall be payable on such Payment Date notwithstanding such Early
Settlement, and such Contract Adjustment Payments shall be paid to the Person in
whose name the Growth PRIDES Certificate evidencing such Security (or one or
more Predecessor Growth PRIDES Certificates) is registered at the close of
business on such Record Date. Except as otherwise expressly provided in the
immediately preceding sentence, in the case of any Growth PRIDES with respect to
which Early Settlement of the underlying Purchase Contract is effected on an
Early Settlement Date, Contract Adjustment Payments that would otherwise be
payable after the Early Settlement Date with respect to such Purchase Contract
shall not be payable.
The Company's obligations with respect to Contract Adjustment Payments
will be subordinated and junior in right of payment to the Company's obligations
under any Senior Indebtedness.
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Section 5.3. Payment of Purchase Price.
(a) (i) Unless a Tax Event Redemption has occurred or a Holder settles the
underlying Purchase Contract through the early delivery of cash to the Agent in
the manner described in Section 5.8, each Holder of an Income PRIDES must notify
the Agent by use of a notice in substantially the form of Exhibit E hereto of
its intention to pay in cash ("Cash Settlement") the Purchase Price for the
shares of Common Stock to be purchased pursuant to a Purchase Contract. Such
notice shall be made on or prior to 5:00 p.m., New York City time, on the fifth
Business Day immediately preceding the Purchase Contract Settlement Date. The
Agent shall promptly notify the Collateral Agent of the receipt of such a notice
from a Holder intending to make a Cash Settlement.
(ii) A Holder of an Income PRIDES who has so notified the Agent of its
intention to make a Cash Settlement is required to pay the Purchase Price to the
Collateral Agent prior to 11:00 a.m., New York City time, on the Business Day
immediately preceding the Purchase Contract Settlement Date in lawful money of
the United States by certified or cashiers' check or wire transfer, in each case
in immediately available funds payable to or upon the order of the Company. Any
cash received by the Collateral Agent will be invested promptly by the
Collateral Agent in Permitted Investments and paid to the Company on the
Purchase Contract Settlement Date in settlement of the Purchase Contract in
accordance with the terms of this Agreement and the Pledge Agreement. Any funds
received by the Collateral Agent in respect of the investment earnings from the
investment in such Permitted Investments will be distributed to the Agent when
received for payment to the Holder.
(iii) If a Holder of an Income PRIDES fails to notify the Agent of its
intention to make a Cash Settlement in accordance with paragraph (a)(i) above,
such failure shall constitute an event of default and the Holder shall be deemed
to have consented to the disposition of the pledged Capital Securities pursuant
to the remarketing as described in paragraph (b) below. If a Holder of an Income
PRIDES does notify the Agent as provided in paragraph (a)(i) above of its
intention to pay the Purchase Price in cash, but fails to make such payment as
required by paragraph (a)(ii) above, such failure shall also constitute a
default; however, the Capital Securities of such a Holder will not be remarketed
but instead the Collateral Agent, for the benefit of the Company, will exercise
its rights as a secured party with respect to such Capital Securities, including
those rights specified in paragraph (c) below.
(b) In order to dispose of the Capital Securities of Income PRIDES Holders
who have not notified the Agent of their intention to effect a Cash Settlement
as provided in paragraph (a)(i) above, the Company shall engage a nationally
recognized investment bank (the "Remarketing Agent") pursuant to the Remarketing
Agreement to sell such Capital Securities. In order to facilitate the
remarketing, the Agent shall notify, by 10:00 a.m., New York City time, on the
fourth Business Day immediately preceding the Purchase Contract Settlement Date,
the Remarketing Agent of the aggregate number of Capital Securities to be
remarketed. Concurrently, the Collateral Agent, pursuant to the terms of the
Pledge Agreement, will present for remarketing such Capital Securities to the
Remarketing Agent. Upon receipt of such notice from the Agent and such Capital
Securities from the Collateral Agent, the Remarketing Agent will, on the third
Business Day immediately preceding the Purchase Contract Settlement Date, use
its reasonable efforts to remarket such Capital Securities on such date at a
price of
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approximately 100.5% (but not less than 100%) of the aggregate stated
liquidation amount of such Capital Securities, plus accumulated and unpaid
distributions, if any, thereon. After deducting as the remarketing fee
("Remarketing Fee") an amount not exceeding 25 basis points (.25%) of the
aggregate stated liquidation amount of the remarketed Capital Securities from
any amount of such proceeds in excess of the aggregate stated liquidation amount
of the remarketed Capital Securities plus accumulated and unpaid distributions,
if any, then the Remarketing Agent will remit the entire amount of the proceeds
from such remarketing to the Collateral Agent. Such portion of the proceeds,
equal to the aggregate stated liquidation amount of such Capital Securities,
will automatically be applied by the Collateral Agent, in accordance with the
Pledge Agreement to satisfy in full such Income PRIDES holders' obligations to
pay the Purchase Price for the Common Stock under the related Purchase Contracts
on the Purchase Contract Settlement Date. Any proceeds in excess of those
required to pay the Purchase Price and the Remarketing Fee will be remitted to
the Agent for payment to the Holders of the related Income PRIDES. Income PRIDES
Holders whose Capital Securities are so remarketed will not otherwise be
responsible for the payment of any Remarketing Fee in connection therewith. If,
in spite of using its reasonable efforts, the Remarketing Agent cannot remarket
the related Capital Securities of such Holders of Income PRIDES at a price not
less then 100% of the aggregate stated liquidation amount of such Capital
Securities plus accumulated and unpaid distributions, if any, the remarketing
will be deemed to have failed (a "Failed Remarketing") and in accordance with
the terms of the Pledge Agreement the Collateral Agent for the benefit of the
Company will exercise its rights as a secured party with respect to such Capital
Securities, including those actions specified in paragraph (c) below; provided,
that if upon a Failed Remarketing the Collateral Agent exercises such rights for
the benefit of the Company with respect to such Capital Securities, any
accumulated and unpaid distributions on such Capital Securities will become
payable by the Company to the Agent for payment to the Beneficial Owner of the
Income PRIDES to which such Capital Securities relates. Such payment will be
made by the Company on or prior to 11 a.m., New York City time, on the Purchase
Contract Settlement Date in lawful money of the United States by certified or
cashiers' check or wire transfer in immediately available funds payable to or
upon the order of the Agent. The Company will cause a notice of such Failed
Remarketing to be published on the second Business Day immediately preceding the
Purchase Contract Settlement Date in a daily newspaper in the English language
of general circulation in The City of New York, which is expected to be The Wall
Street Journal.
(c) With respect to any Capital Securities beneficially owned by Holders
who have elected Cash Settlement but failed to deliver cash as required in
(a)(ii) above, or with respect to Capital Securities which are subject to a
Failed Remarketing, the Collateral Agent for the benefit of the Company reserves
all of its rights as a secured party with respect thereto and, subject to
applicable law and paragraph (g) below, may, among other things, (i) retain the
Capital Securities in full satisfaction of the Holders obligations under the
Purchase Contracts or (ii) sell the Capital Securities in one or more public or
private sales.
(d) (i) Unless a Holder of Growth PRIDES or Income PRIDES (if a Tax Event
Redemption has occurred) settles the underlying Purchase Contract through the
early delivery of cash to the Agent in the manner described in Section 5.8, each
Holder of a Growth PRIDES or Income PRIDES (if a Tax Event Redemption has
occurred) must notify the Agent by use of a notice in substantially the form of
Exhibit E hereto of its intention to pay in cash the Purchase Price for the
shares of Common Stock to be purchased pursuant to a Purchase
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Contract on or prior to 5:00 p.m., New York City time, on the second Business
Day immediately preceding the Purchase Contract Settlement Date.
(ii) A Holder of a Growth PRIDES or Income PRIDES (if a Tax Event
Redemption has occurred) who has so notified the Agent of its intention to make
a Cash Settlement in accordance with paragraph (d)(i) above is required to pay
the Purchase Price to the Collateral Agent prior to 11:00 a.m., New York City
time, on the Business Day immediately preceding the Purchase Contract Settlement
Date in lawful money of the United States by certified or cashiers' check or
wire transfer, in each case in immediately available funds payable to or upon
the order of the Company. Any cash received by the Collateral Agent will be
invested promptly by the Collateral Agent in Permitted Investments and paid to
the Company on the Purchase Contract Settlement Date in settlement of the
Purchase Contract in accordance with the terms of this Agreement and the Pledge
Agreement. Any funds received by the Collateral Agent in respect of the
investment earnings from the investment in such Permitted Investments will be
distributed to the Agent when received for payment to the Holder.
(iii) If a Holder of a Growth PRIDES fails to notify the Agent of its
intention to make a Cash Settlement in accordance with paragraph (d)(i) above,
or if a Holder of an Income PRIDES (if a Tax Event Redemption has occurred) does
notify the Agent as provided in paragraph (d)(i) above of its intention to pay
the Purchase Price in cash, but fails to make such payment as required by
paragraph (d)(ii) above, then upon the maturity of the Pledged Treasury
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, held by the Collateral Agent on the Business Day
immediately prior to the Purchase Contract Settlement Date, the principal amount
of the Treasury Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, received by the Collateral Agent
will be invested promptly in overnight Permitted Investments. On the Purchase
Contract Settlement Date an amount equal to the Purchase Price will be remitted
to the Company as payment thereof without receiving any instructions from the
Holder. In the event the sum of the proceeds from the related Pledged Treasury
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, and the investment earnings earned from such
investments is in excess of the aggregate Purchase Price of the Purchase
Contracts being settled thereby, the Collateral Agent will distribute such
excess to the Agent for the benefit of the Holder of the related Growth PRIDES
or Income PRIDES when received.
(e) Any distribution to Holders of excess funds and interest described
above shall be payable at the office of the Agent in The City of New York
maintained for that purpose or, at the option of the Holder, by check mailed to
the address of the Person entitled thereto at such address as it appears on the
Register.
(f) Unless a Holder settles the underlying Purchase Contract through the
early delivery of cash to the Collateral Agent in the manner described herein,
the Company shall not be obligated to issue any shares of Common Stock in
respect of a Purchase Contract or deliver any certificate therefor to the Holder
unless it shall have received payment in full of the Purchase Price for the
shares of Common Stock to be purchased thereunder in the manner herein set
forth.
Upon Cash Settlement of any Purchase Contract, (i) the Collateral Agent
will in accordance with the terms of the Pledge Agreement cause the Pledged
Capital Securities or the
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appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, or the Pledged Treasury Securities underlying the relevant Security to
be released from the Pledge by the Collateral Agent free and clear of any
security interest of the Company and transferred to the Agent for delivery to
the Holder thereof or its designee as soon as practicable and (ii) subject to
the receipt thereof from the Collateral Agent, the Agent shall, by book-entry
transfer, or other appropriate procedures, in accordance with instructions
provided by the Holder thereof, transfer such Capital Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, or such Treasury Securities (or, if no such instructions are given to
the Agent by the Holder, the Agent shall hold such Capital Securities or the
Treasury Portfolio, as the case may be, or such Treasury Securities, and any
distribution thereon, in the name of the Agent or its nominee in trust for the
benefit of such Holder).
(g) The obligations of the Holders to pay the Purchase Price are
non-recourse obligations and are payable solely out of any Cash Settlement or
the proceeds of any Collateral Pledged to secure the obligations of the Holders
and in no event will Holders be liable for any deficiency between the proceeds
of Collateral disposition and the Purchase Price.
Section 5.4. Issuance of Shares of Common Stock.
Unless a Termination Event shall have occurred on or prior to the
Purchase Contract Settlement Date or an Early Settlement shall have occurred, on
the Purchase Contract Settlement Date, upon its receipt of payment in full of
the Purchase Price for the shares of Common Stock purchased by the Holders
pursuant to the foregoing provisions of this Article and subject to Section
5.5(b), the Company shall issue and deposit with the Agent, for the benefit of
the Holders of the Outstanding Securities, one or more certificates representing
the newly issued shares of Common Stock registered in the name of the Agent (or
its nominee) as custodian for the Holders (such certificates for shares of
Common Stock, together with any dividends or distributions for which a record
date and payment date for such dividend or distribution has occurred after the
Purchase Contract Settlement Date, being hereinafter referred to as the
"Purchase Contract Settlement Fund") to which the Holders are entitled
hereunder. Subject to the foregoing, upon surrender of a Certificate to the
Agent on or after the Purchase Contract Settlement Date, together with
settlement instructions thereon duly completed and executed, the Holder of such
Certificate shall be entitled to receive in exchange therefor a certificate
representing that number of whole shares of Common Stock which such Holder is
entitled to receive pursuant to the provisions of this Article Five (after
taking into account all Securities then held by such Holder) together with cash
in lieu of fractional shares as provided in Section 5.9 and any dividends or
distributions with respect to such shares constituting part of the Purchase
Contract Settlement Fund, but without any interest thereon, and the Certificate
so surrendered shall forthwith be cancelled. Such shares shall be registered in
the name of the Holder or the Holder's designee as specified in the settlement
instructions provided by the Holder to the Agent. If any shares of Common Stock
issued in respect of a Purchase Contract are to be registered to a Person other
than the Person in whose name the Certificate evidencing such Purchase Contract
is registered, no such registration shall be made unless the Person requesting
such registration has paid any transfer and other taxes required by reason of
such registration in a name other than that of the registered Holder of the
Certificate evidencing such Purchase Contract or has established to the
satisfaction of the Company that such tax either has been paid or is not
payable.
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Section 5.5. Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1) In case the Company shall pay or make a dividend or other distribution
on the Common Stock in Common Stock, the Settlement Rate, as in effect at the
opening of business on the day following the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution shall be
increased by dividing such Settlement Rate by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination and the denominator shall be
the sum of such number of shares and the total number of shares constituting
such dividend or other distribution, such increase to become effective
immediately after the opening of business on the day following the date fixed
for such determination. For the purposes of this paragraph (1), the number of
shares of Common Stock at the time outstanding shall not include shares held in
the treasury of the Company but shall include any shares issuable in respect of
any scrip certificates issued in lieu of fractions of shares of Common Stock.
The Company will not pay any dividend or make any distribution on shares of
Common Stock held in the treasury of the Company.
(2) In case the Company shall issue rights, options or warrants to all
holders of its Common Stock (not being available on an equivalent basis to
Holders of the Securities upon settlement of the Purchase Contracts underlying
such Securities) entitling them, for a period expiring within 45 days after the
record date for the determination of stockholders entitled to receive such
rights, options or warrants, to subscribe for or purchase shares of Common Stock
at a price per share less than the Current Market Price per share of the Common
Stock on the date fixed for the determination of stockholders entitled to
receive such rights, options or warrants (other than pursuant to a dividend
reinvestment plan), the Settlement Rate in effect at the opening of business on
the day following the date fixed for such determination shall be increased by
dividing such Settlement Rate by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding at the close of business on the
date fixed for such determination plus the number of shares of Common Stock
which the aggregate of the offering price of the total number of shares of
Common Stock so offered for subscription or purchase would purchase at such
Current Market Price and the denominator of which shall be the number of shares
of Common Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase, such increase to become effective immediately after
the opening of business on the day following the date fixed for such
determination. For the purposes of this paragraph (2), the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include any shares issuable in respect of any
scrip certificates issued in lieu of fractions of shares of Common Stock. The
Company shall not issue any such rights, options or warrants in respect of
shares of Common Stock held in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be subdivided or split
into a greater number of shares of Common Stock, the Settlement Rate in effect
at the opening of business on the day following the day upon which such
subdivision or split becomes effective shall be proportionately increased, and,
conversely, in case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, the Settlement Rate
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in effect at the opening of business on the day following the day upon which
such combination becomes effective shall be proportionately reduced, such
increase or reduction, as the case may be, to become effective immediately after
the opening of business on the day following the day upon which such
subdivision, split or combination becomes effective.
(4) In case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock evidences of its indebtedness or assets (including
securities, but excluding any rights or warrants referred to in paragraph (2) of
this Section, any dividend or distribution paid exclusively in cash and any
dividend or distribution referred to in paragraph (1) of this Section), the
Settlement Rate shall be adjusted so that the same shall equal the rate
determined by dividing the Settlement Rate in effect immediately prior to the
close of business on the date fixed for the determination of stockholders
entitled to receive such distribution by a fraction, the numerator of which
shall be the Current Market Price per share of the Common Stock on the date
fixed for such determination less the then fair market value (as determined by
the Board of Directors, whose determination shall be conclusive and described in
a Board Resolution filed with the Agent) of the portion of the assets or
evidences of indebtedness so distributed applicable to one share of Common Stock
and the denominator of which shall be such Current Market Price per share of the
Common Stock, such adjustment to become effective immediately prior to the
opening of business on the day following the date fixed for the determination of
stockholders entitled to receive such distribution. In any case in which this
paragraph (4) is applicable, paragraph (2) of this Section shall not be
applicable.
(5) In case the Company shall, (I) by dividend or otherwise, distribute to
all holders of its Common Stock cash (excluding any cash that is distributed in
a Reorganization Event to which Section 5.5(b) applies or as part of a
distribution referred to in paragraph (4) of this Section) in an aggregate
amount that, combined together with (II) the aggregate amount of any other
distributions to all holders of its Common Stock made exclusively in cash within
the 12 months preceding the date of payment of such distribution and in respect
of which no adjustment pursuant to this paragraph (5) or paragraph (6) of this
Section has been made and (III) the aggregate of any cash plus the fair market
value (as determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution) of consideration payable in
respect of any tender or exchange offer by the Company or any of its
subsidiaries for all or any portion of the Common Stock concluded within the 12
months preceding the date of payment of the distribution described in clause (I)
above and in respect of which no adjustment pursuant to this paragraph (5) or
paragraph (6) of this Section has been made, exceeds 15% of the product of the
Current Market Price per share of the Common Stock on the date for the
determination of holders of shares of Common Stock entitled to receive such
distribution times the number of shares of Common Stock outstanding on such
date, then, and in each such case, immediately after the close of business on
such date for determination, the Settlement Rate shall be increased so that the
same shall equal the rate determined by dividing the Settlement Rate in effect
immediately prior to the close of business on the date fixed for determination
of the stockholders entitled to receive such distribution by a fraction (i) the
numerator of which shall be equal to the Current Market Price per share of the
Common Stock on the date fixed for such determination less an amount equal to
the quotient of (x) the combined amount distributed or payable in the
transactions described in clauses (I), (II) and (III) above and (y) the number
of shares of Common Stock outstanding on such date for determination and (ii)
the denominator of
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which shall be equal to the Current Market Price per share of the Common Stock
on such date for determination.
(6) In case (I) a tender or exchange offer made by the Company or any
subsidiary of the Company for all or any portion of the Common Stock shall
expire and such tender or exchange offer (as amended upon the expiration
thereof) shall require the payment to stockholders (based on the acceptance (up
to any maximum specified in the terms of the tender or exchange offer) of
Purchased Shares) of an aggregate consideration having a fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution) that combined together with (II) the
aggregate of the cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution), as of the expiration of such tender or exchange offer, of
consideration payable in respect of any other tender or exchange offer, by the
Company or any subsidiary of the Company for all or any portion of the Common
Stock expiring within the 12 months preceding the expiration of such tender or
exchange offer and in respect of which no adjustment pursuant to paragraph (5)
of this Section or this paragraph (6) has been made and (III) the aggregate
amount of any distributions to all holders of the Company's Common Stock made
exclusively in cash within the 12 months preceding the expiration of such tender
or exchange offer and in respect of which no adjustment pursuant to paragraph
(5) of this Section or this paragraph (6) has been made, exceeds 15% of the
product of the Current Market Price per share of the Common Stock as of the last
time (the "Expiration Time") tenders could have been made pursuant to such
tender or exchange offer (as it may be amended) times the number of shares of
Common Stock outstanding (including any tendered shares) on the Expiration Time,
then, and in each such case, immediately prior to the opening of business on the
day after the date of the Expiration Time, the Settlement Rate shall be adjusted
so that the same shall equal the rate determined by dividing the Settlement Rate
immediately prior to the close of business on the date of the Expiration Time by
a fraction (i) the numerator of which shall be equal to (A) the product of (I)
the Current Market Price per share of the Common Stock on the date of the
Expiration Time and (II) the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time less (B) the amount of
cash plus the fair market value (determined as aforesaid) of the aggregate
consideration payable to stockholders based on the transactions described in
clauses (I), (II) and (III) above (assuming in the case of clause (I) the
acceptance, up to any maximum specified in the terms of the tender or exchange
offer, of Purchased Shares), and (ii) the denominator of which shall be equal to
the product of (A) the Current Market Price per share of the Common Stock as of
the Expiration Time and (B) the number of shares of Common Stock outstanding
(including any tendered shares) as of the Expiration Time less the number of all
shares validly tendered and not withdrawn as of the Expiration Time (the shares
deemed so accepted, up to any such maximum, being referred to as the "Purchased
Shares").
(7) The reclassification of Common Stock into securities including
securities other than Common Stock (other than any reclassification upon a
Reorganization Event to which Section 5.5(b) applies) shall be deemed to involve
(a) a distribution of such securities other than Common Stock to all holders of
Common Stock (and the effective date of such reclassification shall be deemed to
be "the date fixed for the determination of stockholders entitled to receive
such distribution" and the "date fixed for such determination" within the
meaning of paragraph (4) of this Section), and (b) a subdivision, split or
combination, as the case may be, of the
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number of shares of Common Stock outstanding immediately prior to such
reclassification into the number of shares of Common Stock outstanding
immediately thereafter (and the effective date of such reclassification shall be
deemed to be "the day upon which such subdivision or split becomes effective" or
"the day upon which such combination becomes effective", as the case may be, and
"the day upon which such subdivision, split or combination becomes effective"
within the meaning of paragraph (3) of this Section).
(8) The "Current Market Price" per share of Common Stock on any day means
the average of the daily Closing Prices for the 5 consecutive Trading Days
selected by the Company commencing not more than 30 Trading Days before, and
ending not later than, the earlier of the day in question and the day before the
"ex date" with respect to the issuance or distribution requiring such
computation. For purposes of this paragraph, the term "ex date", when used with
respect to any issuance or distribution, shall mean the first date on which the
Common Stock trades regular way on such exchange or in such market without the
right to receive such issuance or distribution.
(9) All adjustments to the Settlement Rate, shall be calculated to the
nearest 1/10,000th of a share of Common Stock (or if there is not a nearest
1/10,000th of a share to the next lower 1/10,000th of a share). No adjustment in
the Settlement Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent therein; provided, however, that
any adjustments which by reason of this subparagraph are not required to be made
shall be carried forward and taken into account in any subsequent adjustment. If
an adjustment is made to the Settlement Rate pursuant to paragraph (1), (2),
(3), (4), (5), (6), (7) or (10) of this Section 5.5(a), an adjustment shall also
be made to the Applicable Market Value solely to determine which of clauses (a),
(b) or (c) of the definition of Settlement Rate in Section 5.1 will apply on the
Purchase Contract Settlement Date. Such adjustment shall be made by multiplying
the Applicable Market Value by a fraction, the numerator of which shall be the
Settlement Rate immediately after such adjustment pursuant to paragraph (1),
(2), (3), (4), (5), (6), (7) or (10) of this Section 5.5(a) and the denominator
of which shall be the Settlement Rate immediately before such adjustment;
provided, however, that if such adjustment to the Settlement Rate is required to
be made pursuant to the occurrence of any of the events contemplated by
paragraph (1) (2) (3) (4) (5) (7) or (10) of this Section 5.5(a) during the
period taken into consideration for determining the Applicable Market Value,
appropriate and customary adjustments shall be made to the Settlement Rate.
(10) The Company may make such increases in the Settlement Rate, in
addition to those required by this Section, as it considers to be advisable in
order to avoid or diminish any income tax to any holders of shares of Common
Stock resulting from any dividend or distribution of stock or issuance of rights
or warrants to purchase or subscribe for stock or from any event treated as such
for income tax purposes or for any other reasons.
(b) Adjustment for Consolidation, Merger or Other Reorganization Event.
In the event of (i) any consolidation or merger of the Company with or into
another Person (other than a merger or consolidation in which the Company is the
continuing corporation and in which the Common Stock outstanding immediately
prior to the merger or consolidation is not exchanged for cash, securities or
other property of the Company or another corporation), (ii) any sale, transfer,
lease or conveyance to another Person of the property of the Company as an
entirety or substantially as an entirety,
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(iii) any statutory exchange of securities of the Company with another Person
(other than in connection with a merger or acquisition) or (iv) any liquidation,
dissolution or winding up of the Company other than as a result of or after the
occurrence of a Termination Event (any such event, a "Reorganization Event"),
the Settlement Rate will be adjusted to provide that each Holder of Securities
will receive on the Purchase Contract Settlement Date with respect to each
Purchase Contract forming a part thereof, the kind and amount of securities,
cash and other property receivable upon such Reorganization Event (without any
interest thereon, and without any right to dividends or distribution thereon
which have a record date that is prior to the Purchase Contract Settlement Date)
by a Holder of the number of shares of Common Stock issuable on account of each
Purchase Contract if the Purchase Contract Settlement Date had occurred
immediately prior to such Reorganization Event assuming such Holder of Common
Stock is not a Person with which the Company consolidated or into which the
Company merged or which merged into the Company or to which such sale or
transfer was made, as the case may be (any such Person, a "Constituent Person"),
or an Affiliate of a Constituent Person to the extent such Reorganization Event
provides for different treatment of Common Stock held by Affiliates of the
Company and non-affiliates and such Holder failed to exercise his rights of
election, if any, as to the kind or amount of securities, cash and other
property receivable upon such Reorganization Event (provided that if the kind or
amount of securities, cash and other property receivable upon such
Reorganization Event is not the same for each share of Common Stock held
immediately prior to such Reorganization Event by other than a Constituent
Person or an Affiliate thereof and in respect of which such rights of election
shall not have been exercised ("non-electing share"), then for the purpose of
this Section the kind and amount of securities, cash and other property
receivable upon such Reorganization Event by each non-electing share shall be
deemed to be the kind and amount so receivable per share by a plurality of the
non-electing shares). In the event of such a Reorganization Event, the Person
formed by such consolidation, merger or exchange or the Person which acquires
the assets of the Company or, in the event of a liquidation or dissolution of
the Company, the Company or a liquidating trust created in connection therewith,
shall execute and deliver to the Agent an agreement supplemental hereto
providing that the Holders of each Outstanding Security shall have the rights
provided by this Section 5.5. Such supplemental agreement shall provide for
adjustments which, for events subsequent to the effective date of such
supplemental agreement, shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Section. The above provisions of this
Section shall similarly apply to successive Reorganization Events.
Section 5.6. Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is adjusted as herein provided, the
Company shall:
(i) forthwith compute the Settlement Rate in accordance with Section 5.5
and prepare and transmit to the Agent an Officer's Certificate setting
forth the Settlement Rate, the method of calculation thereof in
reasonable detail, and the facts requiring such adjustment and upon
which such adjustment is based; and
(ii) within 10 Business Days following the occurrence of an event that
requires an adjustment to the Settlement Rate pursuant to Section 5.5
(or if the Company is not aware of such occurrence, as soon as
practicable after becoming so aware), provide
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a written notice to the Holders of the Securities of the occurrence of
such event and a statement in reasonable detail setting forth the
method by which the adjustment to the Settlement Rate was determined
and setting forth the adjusted Settlement Rate.
(b) The Agent shall not at any time be under any duty or responsibility to
any Holder of Securities to determine whether any facts exist which may require
any adjustment of the Settlement Rate, or with respect to the nature or extent
or calculation of any such adjustment when made, or with respect to the method
employed in making the same. The Agent shall not be accountable with respect to
the validity or value (or the kind or amount) of any shares of Common Stock, or
of any securities or property, which may at the time be issued or delivered with
respect to any Purchase Contract; and the Agent makes no representation with
respect thereto. The Agent shall not be responsible for any failure of the
Company to issue, transfer or deliver any shares of Common Stock pursuant to a
Purchase Contract or to comply with any of the duties, responsibilities or
covenants of the Company contained in this Article.
Section 5.7. Termination Event; Notice.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments, if the Company shall have such obligation, and the rights
and obligations of Holders to purchase Common Stock, shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Purchase Contract
Settlement Date, a Termination Event shall have occurred. Upon and after the
occurrence of a Termination Event, the Securities shall thereafter represent the
right to receive the Capital Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, forming a part of such
Securities in the case of Income PRIDES, or Treasury Securities in the case of
Growth PRIDES, in accordance with the provisions of Section 4.3 of the Pledge
Agreement. Upon the occurrence of a Termination Event, the Company shall
promptly but in no event later than two Business Days thereafter give written
notice to the Agent, the Collateral Agent and to the Holders, at their addresses
as they appear in the Register.
Section 5.8. Early Settlement.
(a) Subject to and upon compliance with the provisions of this Section 5.8,
at the option of the Holder thereof, Purchase Contracts underlying Securities,
having an aggregate Stated Amount equal to $1,000 or an integral multiple
thereof, may be settled early ("Early Settlement") in the case of Income PRIDES
(unless a Tax Event Redemption has occurred) on or prior to the fifth Business
Day immediately preceding the Purchase Contract Settlement Date and in the case
of Growth PRIDES on or prior to the second Business Day immediately preceding
the Purchase Contract Settlement Date, in each case, as provided herein;
provided however, that if a Tax Event Redemption has occurred and the Treasury
Portfolio has become a component of the Income PRIDES, Purchase Contracts
underlying Income PRIDES may be settled early, on or prior to the second
Business Day immediately preceding the Purchase Contract Settlement Date, but
only in integral multiples of 8,000. In order to exercise the right to effect
Early Settlement with respect to any Purchase Contracts, the Holder of the
Certificate evidencing Securities shall deliver such Certificate to the Agent at
the Corporate Trust Office duly endorsed for transfer to
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the Company or in blank with the form of Election to Settle Early on the reverse
thereof duly completed and accompanied by payment (payable to the Company in
immediately available funds in an amount (the "Early Settlement Amount") equal
to (i) the product of (A) the Stated Amount times (B) the number of Purchase
Contracts with respect to which the Holder has elected to effect Early
Settlement plus (ii) in the case of a Growth Pride Certificate, if such delivery
is made with respect to any Purchase Contracts during the period from the close
of business on any Record Date next preceding any Payment Date to the opening of
business on such Payment Date, an amount equal to the Contract Adjustment
Payments payable on such Payment Date with respect to such Purchase Contracts.
Except as provided in the immediately preceding sentence and subject to the
second to last paragraph of Section 5.2, no payment or adjustment shall be made
upon Early Settlement of any Purchase Contract on account of any Contract
Adjustment Payments accrued on such Purchase Contract or on account of any
dividends on the Common Stock issued upon such Early Settlement. If the
foregoing requirements are first satisfied with respect to Purchase Contracts
underlying any Securities at or prior to 5:00 p.m., New York City time, on a
Business Day, such day shall be the "Early Settlement Date" with respect to such
Securities and if such requirements are first satisfied after 5:00 p.m., New
York City time, on a Business Day or on a day that is not a Business Day, the
"Early Settlement Date" with respect to such Securities shall be the next
succeeding Business Day.
(b) Upon Early Settlement of Purchase Contracts by a Holder of the related
Securities, the Company shall issue, and the Holder shall be entitled to
receive, 1.1962 shares of Common Stock on account of each Purchase Contract as
to which Early Settlement is effected (the "Early Settlement Rate"). The Early
Settlement Rate shall be adjusted in the same manner and at the same time as the
Settlement Rate is adjusted. As promptly as practicable after Early Settlement
of Purchase Contracts in accordance with the provisions of this Section 5.8, the
Company shall issue and shall deliver to the Agent at the Corporate Trust Office
a certificate or certificates for the full number of shares of Common Stock
issuable upon such Early Settlement together with payment in lieu of any
fraction of a share, as provided in Section 5.9.
(c) No later than the third Business Day after the applicable Early
Settlement Date the Company shall cause (i) the shares of Common Stock issuable
upon Early Settlement of Purchase Contracts to be issued and delivered, and (ii)
the related Capital Securities or the appropriate Applicable Ownership Interest
of the Treasury Portfolio, in the case of Income PRIDES, or the related Treasury
Securities, in the case of Growth PRIDES, to be released from the Pledge by the
Collateral Agent and transferred, in each case to the Agent for delivery to the
Holder thereof or its designee.
(d) Upon Early Settlement of any Purchase Contracts, and subject to receipt
of shares of Common Stock from the Company and the Capital Securities, the
appropriate Applicable Ownership Interest of the Treasury Portfolio or Treasury
Securities, as the case may be, from the Collateral Agent, as applicable, the
Agent shall, in accordance with the instructions provided by the Holder thereof
on the applicable form of Election to Settle Early on the reverse of the
Certificate evidencing the related Securities, (i) transfer to the Holder the
Capital Securities, Treasury Portfolio or Treasury Securities, as the case may
be, forming a part of such Securities, and (ii) deliver to the Holder a
certificate or certificates for the full number of shares of Common
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Stock issuable upon such Early Settlement together with payment in lieu of any
fraction of a share, as provided in Section 5.9.
(e) In the event that Early Settlement is effected with respect to Purchase
Contracts underlying less than all the Securities evidenced by a Certificate,
upon such Early Settlement the Company shall execute and the Agent shall
authenticate, countersign and deliver to the Holder thereof, at the expense of
the Company, a Certificate evidencing the Securities as to which Early
Settlement was not effected.
Section 5.9. No Fractional Shares.
No fractional shares or scrip representing fractional shares of Common
Stock shall be issued or delivered upon settlement on the Purchase Contract
Settlement Date or upon Early Settlement of any Purchase Contracts. If
Certificates evidencing more than one Purchase Contract shall be surrendered for
settlement at one time by the same Holder, the number of full shares of Common
Stock which shall be delivered upon settlement shall be computed on the basis of
the aggregate number of Purchase Contracts evidenced by the Certificates so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be deliverable upon settlement of any Purchase Contracts on the
Purchase Contract Settlement Date or upon Early Settlement, the Company, through
the Agent, shall make a cash payment in respect of such fractional interest in
an amount equal to the value of such fractional shares times the Applicable
Market Value. The Company shall provide the Agent from time to time with
sufficient funds to permit the Agent to make all cash payments required by this
Section 5.9 in a timely manner.
Section 5.10. Charges and Taxes.
The Company will pay all stock transfer and similar taxes attributable
to the initial issuance and delivery of the shares of Common Stock pursuant to
the Purchase Contracts; provided, however, that the Company shall not be
required to pay any such tax or taxes which may be payable in respect of any
exchange of or substitution for a Certificate evidencing a Security or any
issuance of a share of Common Stock in a name other than that of the registered
Holder of a Certificate surrendered in respect of the Securities evidenced
thereby, other than in the name of the Agent, as custodian for such Holder, and
the Company shall not be required to issue or deliver such share certificates or
Certificates unless or until the Person or Persons requesting the transfer or
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
ARTICLE VI
REMEDIES
Section 6.1. Unconditional Right of Holders to Purchase Common Stock and to
Receive Contract Adjustment Payments.
The Holder of any Income PRIDES or Growth PRIDES shall have the right,
which is absolute and unconditional, to purchase Common Stock pursuant to the
Purchase Contract constituting a part of such Security and, in the case of
Growth PRIDES, to receive payment of each installment of the Contract Adjustment
Payments with respect to the Purchase Contract on
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the respective Payment Date for such Security (subject to the prepayment of
Contract Adjustment Payments pursuant to Section 5.8(a)) and, in each such case,
to institute suit for the enforcement of any such right to purchase Common Stock
and payment and such rights shall not be impaired without the consent of such
Holder.
Section 6.2. Restoration of Rights and Remedies.
If any Holder has instituted any proceeding to enforce any right or
remedy under this Agreement and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to such Holder, then
and in every such case, subject to any determination in such proceeding, the
Company and such Holder shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of such Holder
shall continue as though no such proceeding had been instituted.
Section 6.3. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Certificates in the last paragraph of
Section 3.10, no right or remedy herein conferred upon or reserved to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 6.4. Delay or Omission Not Waiver.
No delay or omission of any Holder to exercise any right or remedy upon
a default shall impair any such right or remedy or constitute a waiver of any
such right. Every right and remedy given by this Article or by law to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by such Holders.
Section 6.5. Undertaking for Costs.
All parties to this Agreement agree, and each Holder of Income PRIDES
or Growth PRIDES, by its acceptance of such Income PRIDES or Growth PRIDES shall
be deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Agreement, or in any
suit against the Agent for any action taken, suffered or omitted by it as Agent,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; provided that the provisions of this Section shall not
apply to any suit instituted by the Company, to any suit instituted by the
Agent, to any suit instituted by any Holder, or group of Holders, holding in the
aggregate more than 10% of the Outstanding Securities, or to any suit instituted
by any Holder for the enforcement of distributions on any Capital Securities or
Contract Adjustment Payments, if any, on any Purchase Contract on or after the
respective Payment Date therefor in respect of any
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Security held by such Holder, or for enforcement of the right to purchase shares
of Common Stock under the Purchase Contracts constituting part of any Security
held by such Holder.
Section 6.6. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Agreement; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Agent or the Holders, but will suffer and permit the
execution of every such power as though no such law had been enacted.
ARTICLE VII
THE AGENT
Section 7.1. Certain Duties and Responsibilities.
(a) (1) The Agent undertakes to perform, with respect to the Securities,
such duties and only such duties as are specifically set forth in this Agreement
and the Pledge Agreement, and no implied covenants or obligations shall be read
into this Agreement against the Agent; and
(2) in the absence of bad faith, willful misconduct or negligence on its
part, the Agent may, with respect to the Securities, conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Agent and conforming to
the requirements of this Agreement, but in the case of any certificates or
opinions which by any provision hereof are specifically required to be furnished
to the Agent, the Agent shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Agreement.
(b) No provision of this Agreement shall be construed to relieve the Agent
from liability for its own negligent action, its own negligent failure to act,
its own bad faith, or its own willful misconduct, except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Agent shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Agent was negligent in ascertaining the pertinent facts; and
(3) no provision of this Agreement shall require the Agent to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if adequate indemnity is not provided to it.
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(c) Whether or not therein expressly so provided, every provision of this
Agreement relating to the conduct or affecting the liability of or affording
protection to the Agent shall be subject to the provisions of this Section.
(d) The Agent is authorized to execute and deliver the Pledge Agreement in
its capacity as Agent.
Section 7.2. Notice of Default.
Within 30 days after the occurrence of any default by the Company
hereunder of which a Responsible Officer of the Agent has actual knowledge, the
Agent shall transmit by mail to the Company and the Holders of Securities, as
their names and addresses appear in the Register, notice of such default
hereunder, unless such default shall have been cured or waived.
Section 7.3. Certain Rights of Agent.
Subject to the provisions of Section 7.1:
(a) the Agent may rely and shall be protected in acting or refraining from
acting upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by an Officer's Certificate, Issuer Order or Issuer
Request, and any resolution of the Board of Directors of the Company may be
sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Agreement the Agent shall deem it
desirable that a matter be proved or established prior to taking, suffering or
omitting any action hereunder, the Agent (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
an Officer's Certificate of the Company;
(d) the Agent may consult with counsel and the written advice of such counsel or
any Opinion of Counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon;
(e) the Agent shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the Agent, in its
discretion, may make reasonable further inquiry or investigation into such facts
or matters related to the execution, delivery and performance of the Purchase
Contracts as it may see fit, and, if the Agent shall determine to make such
further inquiry or investigation, it shall be given a reasonable opportunity to
examine the books, records and premises of the Company, personally or by agent
or attorney; and
(f) the Agent may execute any of the powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys or an Affiliate
and the Agent shall not be
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responsible for any misconduct or negligence on the part of any agent or
attorney or an Affiliate appointed with due care by it hereunder.
Section 7.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Certificates shall be taken as
the statements of the Company and the Agent assumes no responsibility for their
accuracy. The Agent makes no representations as to the validity or sufficiency
of either this Agreement or of the Securities, or of the Pledge Agreement or the
Pledge. The Agent shall not be accountable for the use or application by the
Company of the proceeds in respect of the Purchase Contracts.
Section 7.5. May Hold Securities.
Any Registrar or any other agent of the Company, or the Agent and its
Affiliates, in their individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with the Company, the Collateral
Agent or any other Person with the same rights it would have if it were not
Registrar or such other agent, or the Agent.
Section 7.6. Money Held in Custody.
Money held by the Agent in custody hereunder need not be segregated
from the other funds except to the extent required by law or provided herein.
The Agent shall be under no obligation to invest or pay interest on any money
received by it hereunder except as otherwise agreed in writing with the Company.
Section 7.7. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Agent from time to time reasonable compensation for all
services rendered by it hereunder;
(2) except as otherwise expressly provided herein, to reimburse the Agent
upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Agent in accordance with any provision
of this Agreement (including the reasonable compensation and the
reasonable expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable
to its negligence, willful misconduct or bad faith; and
(3) to indemnify the Agent and any predecessor Agent for, and to hold it
harmless against, any loss, liability or expense incurred without
negligence, willful misconduct or bad faith on its part, arising out of
or in connection with the acceptance or administration of its duties
hereunder, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder.
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Section 7.8. Corporate Agent Required; Eligibility.
There shall at all times be an Agent hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having (or being a member of a bank
holding company having) a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by Federal or State authority and having a
Corporate Trust Office in the Borough of Manhattan, The City of New York, if
there be such a corporation in the Borough of Manhattan, The City of New York,
qualified and eligible under this Article and willing to act on reasonable
terms. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Agent shall cease to be eligible in accordance with the provisions
of this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 7.9. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Agent and no appointment of a
successor Agent pursuant to this Article shall become effective until the
acceptance of appointment by the successor Agent in accordance with the
applicable requirements of Section 7.10.
(b) The Agent may resign at any time by giving written notice thereof to
the Company 60 days prior to the effective date of such resignation. If the
instrument of acceptance by a successor Agent required by Section 7.10 shall not
have been delivered to the Agent within 30 days after the giving of such notice
of resignation, the resigning Agent may petition any court of competent
jurisdiction for the appointment of a successor Agent.
(c) The Agent may be removed at any time by Act of the Holders of a
majority in number of the Outstanding Securities delivered to the Agent and the
Company.
(d) if at any time
(1) the Agent fails to comply with Section 310(b) of the TIA, as if
the Agent were an indenture trustee under an indenture qualified under the
TIA, after written request therefor by the Company or by any Holder who has
been a bona fide Holder of a Security for at least six months, or
(2) the Agent shall cease to be eligible under Section 7.8 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(3) the Agent shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Agent or of its property shall
be appointed or any public officer shall take charge or control of the
Agent or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
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then, in any such case, (i) the Company by a Board Resolution may remove the
Agent, or (ii) any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Agent and
the appointment of a successor Agent.
(e) If the Agent shall resign, be removed or become incapable of acting, or
if a vacancy shall occur in the office of Agent for any cause, the Company, by a
Board Resolution, shall promptly appoint a successor Agent and shall comply with
the applicable requirements of Section 7.10. If no successor Agent shall have
been so appointed by the Company and accepted appointment in the manner required
by Section 7.10, any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Agent.
(f) The Company shall give, or shall cause such successor Agent to give,
notice of each resignation and each removal of the Agent and each appointment of
a successor Agent by mailing written notice of such event by first-class mail,
postage prepaid, to all Holders as their names and addresses appear in the
applicable Register. Each notice shall include the name of the successor Agent
and the address of its Corporate Trust Office.
Section 7.10. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Agent, every such
successor Agent so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Agent an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Agent shall become
effective and such successor Agent, without any further act, deed or conveyance,
shall become vested with all the rights, powers, agencies and duties of the
retiring Agent; but, on the request of the Company or the successor Agent, such
retiring Agent shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Agent all the rights, powers and
trusts of the retiring Agent and shall duly assign, transfer and deliver to such
successor Agent all property and money held by such retiring Agent hereunder.
(b) Upon request of any such successor Agent, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Agent all such rights, powers and agencies referred to in
paragraph (a) of this Section.
(c) No successor Agent shall accept its appointment unless at the time of
such acceptance such successor Agent shall be qualified and eligible under this
Article.
Section 7.11. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Agent may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Agent shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Agent, shall be the successor of the Agent hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Certificates shall have been
authenticated and executed on behalf of the Holders, but not
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delivered, by the Agent then in office, any successor by merger, conversion or
consolidation to such Agent may adopt such authentication and execution and
deliver the Certificates so authenticated and executed with the same effect as
if such successor Agent had itself authenticated and executed such Securities.
Section 7.12. Preservation of Information; Communications to Holders.
(a) The Agent shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders received by the Agent in its
capacity as Registrar.
(b) If three or more Holders (herein referred to as "applicants") apply in
writing to the Agent, and furnish to the Agent reasonable proof that each such
applicant has owned a Security for a period of at least six months preceding the
date of such application, and such application states that the applicants desire
to communicate with other Holders with respect to their rights under this
Agreement or under the Securities and is accompanied by a copy of the form of
proxy or other communication which such applicants propose to transmit, then the
Agent shall, mail to all the Holders copies of the form of proxy or other
communication which is specified in such request, with reasonable promptness
after a tender to the Agent of the materials to be mailed and of payment, or
provision for the payment, of the reasonable expenses of such mailing.
Section 7.13. No Obligations of Agent.
Except to the extent otherwise provided in this Agreement, the Agent
assumes no obligations and shall not be subject to any liability under this
Agreement, the Pledge Agreement or any Purchase Contract in respect of the
obligations of the Holder of any Security thereunder. The Company agrees, and
each Holder of a Certificate, by his acceptance thereof, shall be deemed to have
agreed, that the Agent's execution of the Certificates on behalf of the Holders
shall be solely as agent and attorney-in-fact for the Holders, and that the
Agent shall have no obligation to perform such Purchase Contracts on behalf of
the Holders, except to the extent expressly provided in Article Five hereof.
Section 7.14. Tax Compliance.
(a) The Agent, on its own behalf and on behalf of the Company, will comply
with all applicable certification, information reporting and withholding
(including "backup" withholding) requirements imposed by applicable tax laws,
regulations or administrative practice with respect to (i) any payments made
with respect to the Securities or (ii) the issuance, delivery, holding,
transfer, redemption or exercise of rights under the Securities. Such compliance
shall include, without limitation, the preparation and timely filing of required
returns and the timely payment of all amounts required to be withheld to the
appropriate taxing authority or its designated agent.
(b) The Agent shall comply with any written direction received from the
Company with respect to the application of such requirements to particular
payments or Holders or in other particular circumstances, and may for purposes
of this Agreement rely on any such direction in accordance with the provisions
of Section 7.1(a)(2) hereof.
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(c) The Agent shall maintain all appropriate records documenting compliance with
such requirements, and shall make such records available, on written request, to
the Company or its authorized representative within a reasonable period of time
after receipt of such request.
ARTICLE VIII
SUPPLEMENTAL AGREEMENTS
Section 8.1. Supplemental Agreements Without Consent of Holders.
Without the consent of any Holders, the Company and the Agent, at any
time and from time to time, may enter into one or more agreements supplemental
hereto, in form satisfactory to the Company and the Agent, for any of the
following purposes:
(1) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company herein
and in the Certificates; or
(2) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company; or
(3) to evidence and provide for the acceptance of appointment
hereunder by a successor Agent; or
(4) to make provision with respect to the rights of Holders pursuant
to the requirements of Section 5.5(b); or
(5) to cure any ambiguity, to correct or supplement any provisions
herein which may be inconsistent with any other provisions herein, or to
make any other provisions with respect to such matters or questions arising
under this Agreement, provided such action shall not adversely affect the
interests of the Holders.
Section 8.2. Supplemental Agreements with Consent of Holders.
With the consent of the Holders of not less than a majority of the
outstanding Purchase Contracts voting together as one class, by Act of said
Holders delivered to the Company and the Agent, the Company, when authorized by
a Board Resolution, and the Agent may enter into an agreement or agreements
supplemental hereto for the purpose of modifying in any manner the terms of the
Purchase Contracts, or the provisions of this Agreement or the rights of the
Holders in respect of the Securities; provided, however, that, except as
contemplated herein, no such supplemental agreement shall, without the consent
of the Holder of each Outstanding Security affected thereby,
(1) change any Payment Date;
(2) change the amount or the type of Collateral required to be Pledged
to secure a Holder's Obligations under the Purchase Contract, impair the
right of the Holder of any Purchase Contract to receive distributions on
the related Collateral (except for the rights of Holders of Income PRIDES
to substitute the Treasury Securities for the Pledged
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Capital Securities or the rights of holders of Growth PRIDES to substitute
Capital Securities for the Pledged Treasury Securities) or otherwise
adversely affect the Holder's rights in or to such Collateral or adversely
alter the rights in or to such Collateral;
(3) reduce any Contract Adjustment Payments, or change any place
where, or the coin or currency in which, any Contract Adjustment Payments
are payable;
(4) impair the right to institute suit for the enforcement of any
Purchase Contract;
(5) reduce the number of shares of Common Stock to be purchased
pursuant to any Purchase Contract, increase the price to purchase shares of
Common Stock upon settlement of any Purchase Contract, change the Purchase
Contract Settlement Date or otherwise adversely affect the Holder's rights
under any Purchase Contract; or
(6) reduce the percentage of the outstanding Purchase Contracts the
consent of whose Holders is required for any such supplemental agreement;
provided, that if any amendment or proposal referred to above would adversely
affect only the Income PRIDES or the Growth PRIDES, then only the affected class
of Holder as of the record date for the Holders entitled to vote thereon will be
entitled to vote on such amendment or proposal, and such amendment or proposal
shall not be effective except with the consent of Holders of not less than a
majority of such class.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental agreement, but it shall
be sufficient if such Act shall approve the substance thereof.
Section 8.3. Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby of
the agencies created by this Agreement, the Agent shall be entitled to receive
and (subject to Section 7.1) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental agreement is
authorized or permitted by this Agreement. The Agent may, but shall not be
obligated to, enter into any such supplemental agreement which affects the
Agent's own rights, duties or immunities under this Agreement or otherwise.
Section 8.4. Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this Article,
this Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of this Agreement for all purposes; and every Holder
of Certificates theretofore or thereafter authenticated, executed on behalf of
the Holders and delivered hereunder shall be bound thereby.
Section 8.5. Reference to Supplemental Agreements.
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any supplemental agreement pursuant to this
Article may, and shall if required by
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the Agent, bear a notation in form approved by the Agent as to any matter
provided for in such supplemental agreement. If the Company shall so determine,
new Certificates so modified as to conform, in the opinion of the Agent and the
Company, to any such supplemental agreement may be prepared and executed by the
Company and authenticated, executed on behalf of the Holders and delivered by
the Agent in exchange for Outstanding Certificates.
ARTICLE IX
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 9.1. Covenant Not to Merge, Consolidate, Sell or Convey Property
Except Under Certain Conditions.
The Company covenants that it will not merge or consolidate with any
other Person or sell, assign, transfer, lease or convey all or substantially all
of its properties and assets to any Person or group of affiliated Persons in one
transaction or a series of related transactions, unless (i) either the Company
shall be the continuing corporation, or the successor (if other than the
Company) shall be a corporation organized and existing under the laws of the
United States of America or a State thereof or the District of Columbia and such
corporation shall expressly assume all the obligations of the Company under the
Purchase Contracts, the Debentures, the Capital Securities Guarantee, this
Agreement and the Pledge Agreement by one or more supplemental agreements in
form reasonably satisfactory to the Agent and the Collateral Agent, executed and
delivered to the Agent and the Collateral Agent by such corporation, and (ii)
the Company or such successor corporation, as the case may be, shall not,
immediately after such merger or consolidation, or such sale, assignment,
transfer, lease or conveyance, be in default in the performance of any covenant
or condition hereunder, under any of the Securities or under the Pledge
Agreement.
Section 9.2. Rights and Duties of Successor Corporation.
In case of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance and upon any such assumption by a successor corporation in
accordance with Section 9.1, such successor corporation shall succeed to and be
substituted for the Company with the same effect as if it had been named herein
as the Company. Such successor corporation thereupon may cause to be signed, and
may issue either in its own name or in the name of Cox Communications, Inc. any
or all of the Certificates evidencing Securities issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Agent; and, upon the order of such successor corporation, instead of the
Company, and subject to all the terms, conditions and limitations in this
Agreement prescribed, the Agent shall authenticate and execute on behalf of the
Holders and deliver any Certificates which previously shall have been signed and
delivered by the officers of the Company to the Agent for authentication and
execution, and any Certificate evidencing Securities which such successor
corporation thereafter shall cause to be signed and delivered to the Agent for
that purpose. All the Certificates so issued shall in all respects have the same
legal rank and benefit under this Agreement as the Certificates theretofore or
thereafter issued in accordance with the terms of this Agreement as though all
of such Certificates had been issued at the date of the execution hereof.
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In case of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance such change in phraseology and form (but not in substance)
may be made in the Certificates evidencing Securities thereafter to be issued as
may be appropriate.
Section 9.3. Opinion of Counsel Given to Agent.
The Agent, subject to Sections 7.1 and 7.3, shall receive an Opinion of
Counsel as conclusive evidence that any such consolidation, merger, sale,
assignment, transfer, lease or conveyance, and any such assumption, complies
with the provisions of this Article and that all conditions precedent to the
consummation of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance have been met.
ARTICLE X
COVENANTS
Section 10.1. Performance Under Purchase Contracts.
The Company covenants and agrees for the benefit of the Holders from
time to time of the Securities that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the terms of the
Purchase Contracts and this Agreement.
Section 10.2. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The City of New
York an office or agency where Certificates may be presented or surrendered for
acquisition of shares of Common Stock upon settlement of the Purchase Contracts
on the Purchase Contract Settlement Date or Early Settlement and for transfer of
Collateral upon occurrence of a Termination Event, where Certificates may be
surrendered for registration of transfer or exchange, for a Collateral
Substitution or re-establishment of an Income PRIDES and where notices and
demands to or upon the Company in respect of the Securities and this Agreement
may be served. The Company will give prompt written notice to the Agent of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Agent with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office, and the Company hereby appoints the Agent as its agent to receive all
such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where Certificates may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York for such purposes. The Company will
give prompt written notice to the Agent of any such designation or rescission
and of any change in the location of any such other office or agency. The
Company hereby designates as the place of payment for the Securities the
Corporate Trust Office and appoints the Agent at its Corporate Trust Office as
paying agent in such city.
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Section 10.3. Company to Reserve Common Stock.
The Company shall at all times prior to the Purchase Contract
Settlement Date reserve and keep available, free from preemptive rights, out of
its authorized but unissued Common Stock the full number of shares of Common
Stock issuable against tender of payment in respect of all Purchase Contracts
constituting a part of the Securities evidenced by Outstanding Certificates.
Section 10.4. Covenants as to Common Stock.
The Company covenants that all shares of Common Stock which may be
issued against tender of payment in respect of any Purchase Contract
constituting a part of the Outstanding Securities will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable.
Section 10.5. Statements of Officer of the Company as to Default.
The Company will deliver to the Agent, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officer's
Certificate, stating whether or not to the best knowledge of the signer thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions hereof, and if the Company shall be in default,
specifying all such defaults and the nature and status thereof of which such
Officer may have knowledge.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
COX COMMUNICATIONS, INC.
By: /s/ Dallas S. Clement
Name: Dallas S. Clement
Title: Vice President and Treasurer
THE FIRST NATIONAL BANK OF CHICAGO,
as Purchase Contract Agent
By: /s/Janice Ott Rotunno
Name: Janice Ott Rotunno
Title: Vice President
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EXHIBIT A
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the
Company or its agent for registration of transfer, exchange or payment, and any
Certificate issued is registered in the name of Cede & Co., or such other name
as requested by an authorized representative of The Depository Trust Company,
and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.
No. Cusip No. 224044 30 5
Number of Income PRIDES
Form of Face of Income PRIDES Certificate
This Income PRIDES Certificate certifies that Cede & Co. is the
registered Holder of the number of Income PRIDES set forth above. Each Income
PRIDES represents (i) either (a) beneficial ownership by the Holder of one 7%
Capital Security (the "Capital Security") of Cox Trust II, a Delaware statutory
business trust (the "Trust"), having a stated liquidation amount of $50, subject
to the Pledge of such Capital Security by such Holder pursuant to the Pledge
Agreement or (b) upon the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the appropriate Applicable Ownership Interest
of the Treasury Portfolio, subject to the Pledge of such Applicable Ownership
Interest of the Treasury Portfolio by such Holder pursuant to the Pledge
Agreement, and (ii) the rights and obligations of the Holder under one Purchase
Contract with Cox Communications, Inc., a Delaware corporation (the "Company").
All capitalized terms used herein which are defined in the Purchase Contract
Agreement have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Capital Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, constituting part of each Income PRIDES evidenced hereby have been
pledged to the Collateral Agent, for the benefit of the Company, to secure the
obligations of the Holder under the Purchase Contract comprising a portion of
such Income PRIDES.
The Pledge Agreement provides that all payments of the Stated Amount of
or the appropriate Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) in the Treasury Portfolio, as the case may be, or
cash distributions on, any Pledged Capital Securities (as defined in the Pledge
Agreement) or the appropriate Applicable Ownership Interest
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of the Treasury Portfolio, as the case may be, constituting part of the Income
PRIDES received by the Collateral Agent shall be paid by the Collateral Agent by
wire transfer in same day funds (i) in the case of (A) cash distributions with
respect to Pledged Capital Securities or the appropriate Applicable Ownership
Interest (as specified in clause (B) of the definition of such term) of the
Treasury Portfolio, as the case may be, and (B) any payments of the Stated
Amount or the appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such terms) of the Treasury Portfolio, as the case may
be, with respect to any Capital Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, that have been
released from the Pledge pursuant to the Pledge Agreement, to the Agent to the
account designated by the Agent, no later than 2:00 p.m., New York City time, on
the Business Day such payment is received by the Collateral Agent (provided that
in the event such payment is received by the Collateral Agent on a day that is
not a Business Day or after 12:30 p.m., New York City time, on a Business Day,
then such payment shall be made no later than 10:30 a.m., New York City time, on
the next succeeding Business Day) and (ii) in the case of payments of the Stated
Amount or the appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) in the Treasury Portfolio, as the case may
be, of any Pledged Capital Securities or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) in the
Treasury Portfolio, as the case may be, to the Company on the Purchase Contract
Settlement Date (as defined herein) in accordance with the terms of the Pledge
Agreement, in full satisfaction of the respective obligations of the Holders of
the Income PRIDES of which such Pledged Capital Securities or the Treasury
Portfolio, as the case may be, are a part under the Purchase Contracts forming a
part of such Income PRIDES. Distributions on any Capital Security or the
appropriate Applicable Ownership Interest (as specified in clause (B) of the
definition of such term) of the Treasury Portfolio, as the case may be, forming
part of an Income PRIDES evidenced hereby which are payable quarterly in arrears
on February 16, May 16, August 16 and November 16 each year, commencing November
16, 1999 (a "Payment Date"), shall, subject to receipt thereof by the Agent from
the Collateral Agent, be paid to the Person in whose name this Income PRIDES
Certificate (or a Predecessor Income PRIDES Certificate) is registered at the
close of business on the Record Date for such Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder of this
Income PRIDES Certificate to purchase, and the Company to sell, on August 16,
2002 (the "Purchase Contract Settlement Date"), at a price equal to $50 (the
"Stated Amount"), a number of shares of Class A common stock, $1.00 par value
per share ("Common Stock"), of the Company, equal to the Settlement Rate, unless
on or prior to the Purchase Contract Settlement Date there shall have occurred a
Termination Event or an Early Settlement with respect to the Income PRIDES of
which such Purchase Contract is a part, all as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. The purchase price
(the "Purchase Price") for the shares of Common Stock purchased pursuant to each
Purchase Contract evidenced hereby, if not paid earlier, shall be paid on the
Purchase Contract Settlement Date by application of payment received in respect
of the Stated Amount or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as the case may be, of the Pledged Capital Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, pledged to secure the obligations under such Purchase Contract of the
Holder of the Income PRIDES of which such Purchase Contract is a part.
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Distributions on the Capital Securities or the appropriate Applicable
Ownership Interest (as specified in clause (B) of the definition of such term)
of the Treasury Portfolio, as the case may be, will be payable at the office of
the Agent in The City of New York or, at the option of the Company, by check
mailed to the address of the Person entitled thereto as such address appears on
the Income PRIDES Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Income PRIDES Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
A-3
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IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
COX COMMUNICATIONS, INC.
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to obligations of such
Holder under the Purchase Contracts evidenced
hereby)
By: THE FIRST NATIONAL BANK OF CHICAGO,
not individually but solely as
Attorney-in-Fact of such Holder
By:
Name:
Title:
Dated:
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AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Income PRIDES Certificates referred to in the within
mentioned Purchase Contract Agreement.
By: THE FIRST NATIONAL BANK OF CHICAGO,
as Purchase Contract Agent
By:
Authorized Officer
A-5
<PAGE>
(Form of Reverse of Income PRIDES Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of August 12, 1999 (as may be supplemented from
time to time, the "Purchase Contract Agreement"), between the Company and The
First National Bank of Chicago, as Purchase Contract Agent (including its
successors thereunder, herein called the "Agent"), to which Purchase Contract
Agreement and supplemental agreements thereto reference is hereby made for a
description of the respective rights, limitations of rights, obligations, duties
and immunities thereunder of the Agent, the Company, and the Holders and of the
terms upon which the Income PRIDES Certificates are, and are to be, executed and
delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Income PRIDES Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at a price equal to the Stated Amount (the "Purchase
Price"), a number of shares of Common Stock of the Company equal to the
Settlement Rate, unless, on or prior to the Purchase Contract Settlement Date,
there shall have occurred a Termination Event or an Early Settlement with
respect to the Security of which such Purchase Contract is a part. The
"Settlement Rate" is equal to (a) if the Applicable Market Value (as defined
below) is equal to or greater than $41.7984 (the "Threshold Appreciation
Price"), 1.1962 shares of Common Stock per Purchase Contract, (b) if the
Applicable Market Value is less than the Threshold Appreciation Price but is
greater than $34.6875 , the number of shares of Common Stock per Purchase
Contract equal to the Stated Amount divided by the Applicable Market Value and
(c) if the Applicable Market Value is less than or equal to $34.6875, 1.4414
shares of Common Stock per Purchase Contract, in each case subject to adjustment
as provided in the Purchase Contract Agreement. No fractional shares of Common
Stock will be issued upon settlement of Purchase Contracts, as provided in the
Purchase Contract Agreement.
Each Purchase Contract evidenced hereby, which is settled either
through Early Settlement or Cash Settlement, shall obligate the Holder of the
related Income PRIDES to purchase at the Purchase Price, and the Company to
sell, a number of newly issued shares of Common Stock equal to the Early
Settlement Rate or the Settlement Rate, as applicable.
The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date.
The "Closing Price" of the Common Stock on any date of determination
means the closing sale price (or, if no closing price is reported, the last
reported sale price) of the Common Stock on the New York Stock Exchange (the
"NYSE") on such date or, if the Common Stock is not listed for trading on the
NYSE on any such date, as reported in the composite transactions for the
principal United States securities exchange on which the Common Stock is so
listed, or if the Common Stock is not so listed on a United States national or
regional securities exchange, as reported by The Nasdaq Stock Market, or, if the
Common Stock is not so reported, the last quoted bid price for the Common Stock
in the over-the-counter market as reported by the National Quotation Bureau or
similar organization, or, if such bid price is not available, the market value
of the Common Stock on such date as determined by a nationally recognized
independent investment banking firm retained for this purpose by the Company.
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A "Trading Day" means a day on which the Common Stock (A) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Income PRIDES Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by effecting a Cash Settlement, or an Early Settlement or from the
proceeds of a remarketing of the related Pledged Capital Securities of such
holders. A Holder of Income PRIDES who does not elect, on or prior to 5:00 p.m.,
New York City time, on the fifth Business Day immediately preceding the Purchase
Contract Settlement Date, to make an effective Cash Settlement or an Early
Settlement, shall pay the Purchase Price for the shares of Common Stock to be
issued under the related Purchase Contract from the Proceeds of the sale of the
related Pledged Capital Securities held by the Collateral Agent. Such sale will
be made by the Remarketing Agent pursuant to the terms of the Remarketing
Agreement and the Remarketing Underwriting Agreement on the third Business Day
immediately preceding the Purchase Contract Settlement Date. If, as provided in
the Purchase Contract Agreement, upon the occurrence of a Failed Remarketing the
Collateral Agent, for the benefit of the Company, exercises its rights as a
secured creditor with respect to the Pledged Capital Securities related to this
Income PRIDES certificate, any accumulated and unpaid distributions on such
Pledged Capital Securities will become payable by the Company to the holder of
this Income PRIDES Certificate in the manner provided for in the Purchase
Contract Agreement.
The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate purchase
price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
Each Purchase Contract evidenced hereby and all obligations and rights
of the Company and the Holder thereunder shall terminate if a Termination Event
shall have occurred. Upon the occurrence of a Termination Event, the Company
shall give written notice to the Agent and to the Holders, at their addresses as
they appear in the Income PRIDES Register. Upon and after the occurrence of a
Termination Event, the Collateral Agent shall release the Pledged Capital
Security (as defined in the Pledge Agreement) or the appropriate Applicable
Ownership Interest of the Treasury Portfolio forming a part of each Income
PRIDES, or the Liquidation Distribution received in respect of such Pledged
Capital Security, from the Pledge. An Income PRIDES shall thereafter represent
the right to receive the Capital Security or the appropriate Applicable
Ownership Interest of the Treasury Portfolio forming a part of such Income
PRIDES, or the Liquidation Distribution received in respect of such Capital
Security, in accordance with the terms of the Purchase Contract Agreement and
the Pledge Agreement.
Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Pledged
Capital Securities. Upon receipt of notice of any meeting at which holders of
Capital Securities are entitled to vote or upon the solicitation of consents,
waivers or proxies of holders of Capital Securities, the Agent shall, as
A-7
<PAGE>
soon as practicable thereafter, mail to the Income PRIDES holders a notice (a)
containing such information as is contained in the notice or solicitation, (b)
stating that each Income PRIDES holder on the record date set by the Agent
therefor (which, to the extent possible, shall be the same date as the record
date for determining the holders of Capital Securities entitled to vote) shall
be entitled to instruct the Agent as to the exercise of the voting rights
pertaining to the Capital Securities constituting a part of such holder's Income
PRIDES and (c) stating the manner in which such instructions may be given. Upon
the written request of the Income PRIDES Holders on such record date, the Agent
shall endeavor insofar as practicable to vote or cause to be voted, in
accordance with the instructions set forth in such requests, the maximum number
of Capital Securities as to which any particular voting instructions are
received. In the absence of specific instructions from the Holder of an Income
PRIDES, the Agent shall abstain from voting the Capital Security evidenced by
such Income PRIDES.
Upon the occurrence of an Investment Company Event or liquidation of
the Trust, a principal amount of the Debentures constituting the assets of the
Trust and underlying the Capital Securities equal to the aggregate Stated Amount
of the Pledged Capital Securities shall be delivered to the Collateral Agent in
exchange for Pledged Capital Securities. Thereafter, the Debentures shall be
held by the Collateral Agent to secure the obligations of each Holder of Income
PRIDES to purchase shares of Common Stock under the Purchase Contracts
constituting a part of such Income PRIDES. Following the liquidation of the
Trust, the Holders and the Collateral Agent shall have such security interests,
rights and obligations with respect to the Debentures as the Holders and the
Collateral Agent had in respect of the Pledged Capital Securities, and any
reference in the Purchase Contract Agreement or Pledge Agreement to the Capital
Securities shall be deemed to be a reference to the Debentures.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principal Amount of Debentures
shall be delivered to the Collateral Agent in exchange for the Pledged Capital
Securities. Thereafter, pursuant to the terms of the Pledge Agreement, the
Collateral Agent for the benefit of the Company will apply an amount equal to
the Redemption Amount of such Redemption Price to purchase, the Treasury
Portfolio and promptly remit the remaining portion of such Redemption Price to
the Agent for payment to the Holders of such Income PRIDES.
Following the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Holders of Income PRIDES and the
Collateral Agent shall have such security interests, rights and obligations with
respect to the Treasury Portfolio as the Holder of Income PRIDES and the
Collateral Agent had in respect of the Capital Security or Debentures, as the
case may be, subject to the Pledge thereof as provided in Articles II, III, IV,
V and VI of the Pledge Agreement and any reference herein to the Capital
Security or the Debenture shall be deemed to be reference to such Treasury
Portfolio.
The Income PRIDES Certificates are issuable only in registered form and
only in denominations of a single Income PRIDES and any integral multiple
thereof. The transfer of any Income PRIDES Certificate will be registered and
Income PRIDES Certificates may be exchanged as provided in the Purchase Contract
Agreement. The Income PRIDES Registrar may require a Holder, among other things,
to furnish appropriate endorsements and transfer
A-8
<PAGE>
documents permitted by the Purchase Contract Agreement. No service charge shall
be required for any such registration of transfer or exchange, but the Company
and the Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. A holder who elects to
substitute a Treasury Security for Capital Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, thereby creating Growth
PRIDES, shall be responsible for any fees or expenses payable in connection
therewith. Except as provided in the Purchase Contract Agreement, for so long as
the Purchase Contract underlying an Income PRIDES remains in effect, such Income
PRIDES shall not be separable into its constituent parts, and the rights and
obligations of the Holder of such Income PRIDES in respect of the Capital
Security or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, and Purchase Contract constituting such Income
PRIDES may be transferred and exchanged only as an Income PRIDES. The holder of
an Income PRIDES may substitute for the Pledged Capital Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio securing its
obligation under the related Purchase Contract Treasury Securities in an
aggregate principal amount equal to the aggregate Stated Amount of the Pledged
Capital Securities or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) in the Treasury
Portfolio in accordance with the terms of the Purchase Contract Agreement and
the Pledge Agreement. From and after such Collateral Substitution, the Security
for which such Pledged Treasury Securities secures the Holder's obligation under
the Purchase Contract shall be referred to as a "Growth PRIDES." A Holder may
make such Collateral Substitution only in integral multiples of 20 Income PRIDES
for 20 Growth PRIDES; provided, however, that if a Tax Event Redemption has
occurred and the Treasury Portfolio has become a component of the Income PRIDES,
a Holder may make such Collateral Substitutions only in integral multiples of
8,000 Income PRIDES for 8,000 Growth PRIDES. Such Collateral Substitution may
cause the equivalent aggregate principal amount of this Income PRIDES
Certificate to be increased or decreased; provided, however, the equivalent
aggregate principal amount of Income PRIDES Certificate shall not exceed
$200,000,000. All such adjustments to the equivalent aggregate principal amount
of this Income PRIDES Certificate shall be duly recorded by placing an
appropriate notation on the Schedule attached hereto.
A Holder of Growth PRIDES may create or recreate Income PRIDES by [(a)]
delivering to the Collateral Agent Capital Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, with a Stated Amount,
in the case of such Capital Securities, or with the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, in the case of such appropriate Applicable Ownership
Interest of the Treasury Portfolio, equal to the aggregate principal amount of
the Pledged Treasury Securities in exchange for the release of such Pledged
Treasury Securities in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement.
Any such recreation may be effected only in integral multiples of 20
Growth PRIDES for 20 Income PRIDES; provided, however, that if a Tax Event
Redemption has occurred and the Treasury Portfolio has become a component of the
Income PRIDES, a Holder may make such Collateral Substitution only in integral
multiples of 8,000 Growth PRIDES for 8,000 Income PRIDES.
A-9
<PAGE>
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, shall immediately and automatically terminate,
without the necessity of any notice or action by any Holder, the Agent or the
Company, if, on or prior to the Purchase Contract Settlement Date, a Termination
Event shall have occurred. Upon the occurrence of a Termination Event, the
Company shall promptly but in no event later than two Business Days thereafter
give written notice to the Agent, the Collateral Agent and to the Holders, at
their addresses as they appear in the Income PRIDES Register. Upon and after the
occurrence of a Termination Event, the Collateral Agent shall release the
Capital Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, from the Pledge in accordance with the
provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
underlying Securities having an aggregate Stated Amount equal to $1,000 or an
integral multiple thereof may be settled early ("Early Settlement") as provided
in the Purchase Contract Agreement; provided, however, that if a Tax Event
Redemption has occurred and the Treasury Portfolio has become a component of the
Income PRIDES, Holders may early settle Income PRIDES only in integral multiples
of 8,000 Income PRIDES. In order to exercise the right to effect Early
Settlement with respect to any Purchase Contracts evidenced by this Income
PRIDES Certificate, the Holder of this Income PRIDES Certificate shall deliver
this Income PRIDES Certificate to the Agent at the Corporate Trust Office duly
endorsed for transfer to the Company or in blank with the form of Election to
Settle Early set forth below duly completed and accompanied by payment in the
form of immediately available funds payable to the order of the Company in an
amount (the "Early Settlement Amount") equal to (i) the product of (A) the
Stated Amount times (B) the number of Purchase Contracts with respect to which
the Holder has elected to effect Early Settlement, plus (ii) if such delivery is
made with respect to any Purchase Contracts during the period from the close of
business on any Record Date for any Payment Date to the opening of business on
such Payment Date, the distributions on the related Capital Securities payable
on such Payment Date with respect to such Purchase Contracts. Upon Early
Settlement of Purchase Contracts by a Holder of the related Securities, the
Pledged Capital Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio underlying such Securities shall be released from the
Pledge as provided in the Pledge Agreement and the Holder shall be entitled to
receive a number of shares of Common Stock on account of each Purchase Contract
forming part of an Income PRIDES as to which Early Settlement is effected equal
to the Early Settlement Rate. The Early Settlement Rate shall initially be equal
to 1.1962 shares of Common Stock and shall be adjusted in the same manner and at
the same time as the Settlement Rate is adjusted as provided in the Purchase
Contract Agreement.
Upon registration of transfer of this Income PRIDES Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract Agreement
and the Purchase Contracts evidenced hereby and the transferor shall be released
from the obligations under the Purchase Contracts evidenced by this Income
PRIDES Certificate. The Company covenants and agrees, and the Holder, by its
acceptance hereof, likewise covenants and agrees, to be bound by the provisions
of this paragraph.
A-10
<PAGE>
The Holder of this Income PRIDES Certificate, by its acceptance hereof,
authorizes the Agent to enter into and perform the related Purchase Contracts
forming part of the Income PRIDES evidenced hereby on his behalf as his
attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the event
that the Company becomes the subject of a case under the Bankruptcy Code, agrees
to be bound by the terms and provisions thereof, covenants and agrees to perform
his obligations under such Purchase Contracts, consents to the provisions of the
Purchase Contract Agreement, authorizes the Agent to enter into and perform the
Pledge Agreement on his behalf as its attorney-in-fact, and consents to the
Pledge of the Capital Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, underlying this Income
PRIDES Certificate pursuant to the Pledge Agreement. The Holder further
covenants and agrees, that, to the extent and in the manner provided in the
Purchase Contract Agreement and the Pledge Agreement, but subject to the terms
thereof, payments in respect to the Stated Amount of the Pledged Capital
Securities, or the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, on the
Purchase Contract Settlement Date shall be paid by the Collateral Agent to the
Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
The Company, the Agent and its Affiliates and any agent of the Company
or the Agent may treat the Person in whose name this Income PRIDES Certificate
is registered as the owner of the Income PRIDES evidenced hereby for the purpose
of receiving payments of distributions payable quarterly on the Capital
Securities, performance of the Purchase Contracts and for all other purposes
whatsoever, whether or not any payments in respect thereof be overdue and
notwithstanding any notice to the contrary, and neither the Company, the Agent
nor any such agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.
A-11
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - Custodian
------------------------------------
(cust) (minor)
Under Uniform Gifts to Minors Act
------------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants in
common
Additional abbreviations may also be used though not in the above list.
---------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s)unto
---------------------------------------------------------------
- -------------------------------------------------------------------------------
(Please insert Social Security or Taxpayer I.D. or other Identifying Number
of Assignee)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Income PRIDES Certificates and all rights thereunder, hereby
irrevocably constituting and appointing
- -------------------------------------------------------------------------------
attorney to transfer said Income PRIDES Certificates on the books of Cox
Communications, Inc. with full power of substitution in the premises.
Dated:
--------------------- --------------------------
Signature
NOTICE: The signature to this
assignment must correspond with the
A-12
<PAGE>
name as it appears upon the face of
the within Income PRIDES
Certificates in every particular,
without alteration or enlargement or
any change whatsoever.
Signature Guarantee: --------------------
A-13
<PAGE>
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Income PRIDES evidenced
by this Income PRIDES Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned at
the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated:_________________ _____________________________________
Signature
Signature Guarantee:_________________
(if assigned to another person)
If shares are to be registered
in the name of and delivered to REGISTERED HOLDER
a Person other than the Holder,
please (i) print such Person's
name and address and (ii) provide
a guarantee of your signature:
Please print name
and address of Registered Holder:
- ---------------------------- ------------------------------------
Name Name
- ---------------------------- ------------------------------------
Address Address
- ---------------------------- ------------------------------------
- ---------------------------- ------------------------------------
- ---------------------------- ------------------------------------
Social Security or other
Taxpayer Identification
Number, if any ____________________________________
A-14
<PAGE>
ELECTION TO SETTLE EARLY
The undersigned Holder of this Income PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Income PRIDES evidenced by this Income PRIDES
Certificate specified below. The option to effect Early Settlement may be
exercised only with respect to Purchase Contracts underlying Income PRIDES with
an aggregate Stated Amount equal to $1,000 or an integral multiple thereof. The
undersigned Holder directs that a certificate for shares of Common Stock
deliverable upon such Early Settlement be registered in the name of, and
delivered, together with a check in payment for any fractional share and any
Income PRIDES Certificate representing any Income PRIDES evidenced hereby as to
which Early Settlement of the related Purchase Contracts is not effected, to the
undersigned at the address indicated below unless a different name and address
have been indicated below. Pledged Capital Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
deliverable upon such Early Settlement will be transferred in accordance with
the transfer instructions set forth below. If shares are to be registered in the
name of a Person other than the undersigned, the undersigned will pay any
transfer tax payable incident thereto.
Dated:__________________ _____________________________
Signature
Signature Guarantee:_______________________________
A-15
<PAGE>
Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:
If shares of Common Stock or Income REGISTERED HOLDER
Certificates are to be registered in the
name of and delivered to and Pledged
Capital Securities, or the Treasury
Portfolio, as the case may be, are to be
transferred to a Person other than the
Holder, please print such Person's name
and address:
Please print name and
address of Registered Holder:
- ---------------------------- ------------------------------------
Name Name
- ---------------------------- ------------------------------------
Address Address
- ---------------------------- ------------------------------------
- ---------------------------- ------------------------------------
- ---------------------------- ------------------------------------
Social Security or other
Taxpayer Identification
Number, if any ____________________________________
Transfer Instructions for Pledged Capital Securities, or the Treasury Portfolio,
as the case may be, Transferable Upon Early Settlement or a Termination Event:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
A-16
<PAGE>
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have
been made:
Principal Amount
Amount of Amount of of this Global Signature of
decrease in increase in Certificate authorized officer
Principal Amount Principal Amount Following such of Trustee or
of the Global of the Global decrease or Securities
Date Certificate Certificate increase Custodian
- ------ --------------- --------------- ------------ ------------
A-17
<PAGE>
EXHIBIT B
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF A CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the
Company or its agent for registration of transfer, exchange or payment, and any
Certificate issued is registered in the name of Cede & Co., or such other name
as requested by an authorized representative of The Depository Trust Company,
and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.
No. Cusip No.224044 40 4
Number of Growth PRIDES
Form of Face of Growth PRIDES Certificate
This Growth PRIDES Certificate certifies that Cede & Co. is the
registered Holder of the number of Growth PRIDES set forth above. Each Growth
PRIDES represents (i) a 1/20 undivided beneficial ownership interest in a
Treasury Security, subject to the Pledge of such interest in such Treasury
Security by such Holder pursuant to the Pledge Agreement, and (ii) the rights
and obligations of the Holder under one Purchase Contract with Cox
Communications, Inc., a Delaware corporation (the "Company"). All capitalized
terms used herein which are defined in the Purchase Contract Agreement have the
meaning set forth therein.
Pursuant to the Pledge Agreement, the Treasury Securities constituting
part of each Growth PRIDES evidenced hereby have been pledged to the Collateral
Agent, for the benefit of the Company, to secure the obligations of the Holder
under the Purchase Contract comprising a portion of such Growth PRIDES.
Each Purchase Contract evidenced hereby obligates the Holder of this
Growth PRIDES Certificate to purchase, and the Company, to sell, on August 16,
2002 (the "Purchase Contract Settlement Date"), at a price equal to $50 (the
"Stated Amount"), a number of shares of Class A common stock, $1.00 par value
per share ("Common Stock"), of the Company equal to the Settlement Rate, unless
on or prior to the Purchase Contract Settlement Date there shall have occurred a
Termination Event or an Early Settlement with respect to the Growth PRIDES of
which such Purchase Contract is a part, all as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. The purchase price for
the shares of Common Stock purchased pursuant to each Purchase Contract
evidenced hereby will be paid by application of
B-1
<PAGE>
the Proceeds from the Treasury Securities pledged to secure the obligations
under such Purchase Contract in accordance with the terms of the Pledge
Agreement.
The Company shall pay on each Payment Date in respect of each Purchase
Contract evidenced hereby an amount (the "Contract Adjustment Payments") equal
to 25% per annum of the Stated Amount, computed on the basis of a 360 day year
of twelve 30 day months. Such Contract Adjustment Payments shall be payable to
the Person in whose name this Growth PRIDES Certificate (or a Predecessor Growth
PRIDES Certificate) is registered at the close of business on the Record Date
for such Payment Date.
Contract Adjustment Payments will be payable at the office of the Agent
in The City of New York or, at the option of the Company, by check mailed to the
address of the Person entitled thereto as such address appears on the Growth
PRIDES Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Growth PRIDES Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
B-2
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
COX COMMUNICATIONS, INC.
By: ___________________________
Name:
Title:
By: ___________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to obligations of such
Holder under the Purchase Contracts)
By: THE FIRST NATIONAL BANK OF CHICAGO,
not individually but solely as
Attorney-in-Fact of such Holder
By: ____________________________
Name:
Title:
Dated:
B-3
<PAGE>
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Growth PRIDES referred to in the within-mentioned
Purchase Contract Agreement.
By: THE FIRST NATIONAL BANK OF CHICAGO,
as Purchase Contract Agent
By:
Authorized Officer
B-4
<PAGE>
(Reverse of Growth PRIDES Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of August 12, 1999 (as may be supplemented from
time to time, the "Purchase Contract Agreement") between the Company and The
First National Bank of Chicago, as Purchase Contract Agent (including its
successors thereunder, herein called the "Agent"), to which the Purchase
Contract Agreement and supplemental agreements thereto reference is hereby made
for a description of the respective rights, limitations of rights, obligations,
duties and immunities thereunder of the Agent, the Company and the Holders and
of the terms upon which the Growth PRIDES Certificates are, and are to be,
executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Growth PRIDES Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at a price equal to the Stated Amount (the "Purchase
Price") a number of shares of Common Stock of the Company equal to the
Settlement Rate, unless, on or prior to the Purchase Contract Settlement Date,
there shall have occurred a Termination Event or an Early Settlement with
respect to the Security of which such Purchase Contract is a part. The
"Settlement Rate" is equal to (a) if the Applicable Market Value (as defined
below) is equal to or greater than $41.7984 (the "Threshold Appreciation
Price"), 1.1962 shares of Common Stock per Purchase Contract, (b) if the
Applicable Market Value is less than the Threshold Appreciation Price but is
greater than $34.6875, the number of shares of Common Stock per Purchase
Contract equal to the Stated Amount divided by the Applicable Market Value and
(c) if the Applicable Market Value is less than or equal to $34.6875, 1.4414
shares of Common Stock per Purchase Contract, in each case subject to adjustment
as provided in the Purchase Contract Agreement. No fractional shares of Common
Stock will be issued upon settlement of Purchase Contracts, as provided in the
Purchase Contract Agreement.
Each Purchase Contract evidenced hereby which is settled through Early
Settlement shall obligate the Holder of the related Growth PRIDES to purchase at
the Purchase Price, and the Company to sell, a number of newly issued shares of
Common Stock equal to the Early Settlement Rate.
The "Applicable Market Value" means the average of the Closing Prices
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date.
The "Closing Price" of the Common Stock on any date of determination
means the closing sale price (or, if no closing price is reported, the last
reported sale price) of the Common Stock on the New York Stock Exchange (the
"NYSE") on such date or, if the Common Stock is not listed for trading on the
NYSE on any such date, as reported in the composite transactions for the
principal United States securities exchange on which the Common Stock is so
listed, or if the Common Stock is not so listed on a United States national or
regional securities exchange, as reported by The Nasdaq Stock Market, or, if the
Common Stock is not so reported, the last quoted bid price for the Common Stock
in the over-the-counter market as reported by the National Quotation Bureau or
similar organization, or, if such bid price is not available, the market value
of the Common Stock on such date as determined by a nationally recognized
independent investment banking firm retained for this purpose by the Company.
B-5
<PAGE>
A "Trading Day" means a day on which the Common Stock (A) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Growth PRIDES Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by effecting either an Early Settlement of each such Purchase Contract or
by applying a principal amount of the Pledged Treasury Securities underlying
such Holder's Growth PRIDES equal to the Stated Amount of such Purchase Contract
to the purchase of the Common Stock.
The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate purchase
price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
Each Purchase Contract evidenced hereby and all obligations and rights
of the Company and the Holder thereunder shall terminate if a Termination Event
shall have occurred. Upon the occurrence of a Termination Event, the Company
shall give written notice to the Agent and to the Holders, at their addresses as
they appear in the Growth PRIDES Register. Upon and after the occurrence of a
Termination Event, the Collateral Agent shall release the Pledged Treasury
Securities (as defined in the Pledge Agreement) forming a part of each Growth
PRIDES from the Pledge. A Growth PRIDES shall thereafter represent the right to
receive the Treasury Securities forming a part of such Growth PRIDES in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement.
The Growth PRIDES Certificates are issuable only in registered form and
only in denominations of a single Growth PRIDES and any integral multiple
thereof. The transfer of any Growth PRIDES Certificate will be registered and
Growth PRIDES Certificates may be exchanged as provided in the Purchase Contract
Agreement. The Growth PRIDES Registrar may require a Holder, among other things,
to furnish appropriate endorsements and transfer documents permitted by the
Purchase Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Agent may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. A Holder who elects to substitute Capital
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, for Treasury Securities, thereby recreating
Income PRIDES, shall be responsible for any fees or expenses payable in
connection therewith. Except as provided in the Purchase Contract Agreement, for
so long as the Purchase Contract underlying a Growth PRIDES remains in effect,
such Growth PRIDES shall not be separable into its constituent parts, and the
rights and obligations of the Holder of such Growth PRIDES in respect of the
Treasury Security and the Purchase Contract constituting such Growth PRIDES may
be transferred and exchanged only as a Growth PRIDES. The Holder of a Growth
PRIDES may substitute for the Pledged Treasury Securities securing its
obligation under the related Purchase Contract Capital Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, with a
Stated Amount, in the case of such Capital Securities, or with
B-6
<PAGE>
the appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, in the case of such
appropriate Applicable Ownership Interest of the Treasury Portfolio, equal to
the aggregate principal amount of the Pledged Treasury Securities in accordance
with the terms of the Purchase Contract Agreement and the Pledge Agreement. From
and after such Collateral Substitution, the Security for which such Capital
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio secures the Holder's obligation under the Purchase Contract shall be
referred to as an "Income PRIDES." A Holder may make such Collateral
Substitution only in integral multiples of 20 Growth PRIDES for 20 Income
PRIDES; provided, however, that if a Tax Event Redemption has occurred and the
Treasury Portfolio has become a component of the Income PRIDES, a Holder may
make such Collateral Substitution only in integral multiples of 8,000 Growth
PRIDES for 8,000 Income PRIDES. Such Collateral Substitution may cause the
equivalent aggregate principal amount of this Growth PRIDES Certificate to be
increased or decreased; provided, however, the equivalent aggregate principal
amount outstanding under this Growth PRIDES Certificate shall not exceed
$200,000,000. All such adjustments to the equivalent aggregate principal amount
of this Growth PRIDES Certificate shall be duly recorded by placing an
appropriate notation on the Schedule attached hereto.
A Holder of Income PRIDES may create or recreate a Growth PRIDES by (a)
delivering to the Collateral Agent Treasury Securities in an aggregate principal
amount equal to the aggregate Stated Amount of the Pledged Capital Securities or
the appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as the case may be, in
exchange for the release of such Pledged Capital Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be, in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement and (b) in the event that Contract Adjustment Payments are at a higher
rate for Growth PRIDES than for Income PRIDES, by delivering to the Agent cash
in an amount equal to the excess of the Contract Adjustment Payments that would
have accrued since the last payment date through the date of substitution on the
Growth PRIDES being created or recreated by such Holders, over the Contract
Adjustment Payments that have accrued over the same time period on the related
Income PRIDES. Any such recreation of a Growth PRIDES may be effected only in
multiples of 20 Income PRIDES for 20 Growth PRIDES; provided, however, if a Tax
Event Redemption has occurred and the Treasury Portfolio has become a component
of the Income PRIDES, a Holder may make such Collateral Substitution only in
integral multiples of 8,000 Income PRIDES for 8,000 Growth PRIDES.
The Company shall pay, on each Payment Date, the Contract Adjustment
Payments payable in respect of each Purchase Contract to the Person in whose
name the Growth PRIDES Certificate evidencing such Purchase Contract is
registered at the close of business on the Record Date for such Payment Date.
Contract Adjustment Payments will be payable at the office of the Agent in The
City of New York or, at the option of the Company, by check mailed to the
address of the Person entitled thereto at such address as it appears on the
Growth PRIDES Register.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay Contract Adjustment
Payments, shall immediately and automatically terminate, without the necessity
of any notice or action by any Holder, the Agent or the
B-7
<PAGE>
Company, if, on or prior to the Purchase Contract Settlement Date, a Termination
Event shall have occurred. Upon the occurrence of a Termination Event, the
Company shall promptly but in no event later than two business days thereafter
give written notice to the Agent, the Collateral Agent and to the Holders, at
their addresses as they appear in the Growth PRIDES Register. Upon and after the
occurrence of a Termination Event, the Collateral Agent shall release the
Treasury Securities from the Pledge in accordance with the provisions of the
Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
underlying Securities having an aggregate Stated Amount equal to $1,000 or an
integral multiple thereof may be settled early ("Early Settlement") as provided
in the Purchase Contract Agreement. In order to exercise the right to effect
Early Settlement with respect to any Purchase Contracts evidenced by this Growth
PRIDES Certificate, the Holder of this Growth PRIDES Certificate shall deliver
this Growth PRIDES Certificate to the Agent at the Corporate Trust Office duly
endorsed for transfer to the Company or in blank with the form of Election to
Settle Early set forth below duly completed and accompanied by payment in the
form of immediately available funds payable to the order of the Company in an
amount (the "Early Settlement Amount") equal to (i) the product of (A) the
Stated Amount times (B) the number of Purchase Contracts with respect to which
the Holder has elected to effect Early Settlement, plus (ii) if such delivery is
made with respect to any Purchase Contracts during the period from the close of
business on any Record Date for any Payment Date to the opening of business on
such Payment Date, an amount equal to the Contract Adjustment Payments payable
on such Payment Date with respect to such Purchase Contracts. Upon Early
Settlement of Purchase Contracts by a Holder of the related Securities, the
Pledged Treasury Securities underlying such Securities shall be released from
the Pledge as provided in the Pledge Agreement and the Holder shall be entitled
to receive a number of shares of Common Stock on account of each Purchase
Contract forming part of a Growth PRIDES as to which Early Settlement is
effected equal to the Early Settlement Rate. The Early Settlement Rate shall
initially be equal to 1.1962 shares of Common Stock and shall be adjusted in the
same manner and at the same time as the Settlement Rate is adjusted as provided
in the Purchase Contract Agreement.
Upon registration of transfer of this Growth PRIDES Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract Agreement
and the Purchase Contracts evidenced hereby and the transferor shall be released
from the obligations under the Purchase Contracts evidenced by this Growth
PRIDES Certificate. The Company covenants and agrees, and the Holder, by his
acceptance hereof, likewise covenants and agrees, to be bound by the provisions
of this paragraph.
The Holder of this Growth PRIDES Certificate, by his acceptance hereof,
authorizes the Agent to enter into and perform the related Purchase Contracts
forming part of the Growth PRIDES evidenced hereby on his behalf as its
attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the event
that the Company becomes the subject of a case under the Bankruptcy Code, agrees
to be bound by the terms and provisions thereof, covenants and agrees to perform
its obligations under such Purchase Contracts, consents to the provisions of the
Purchase Contract Agreement, authorizes the Agent to enter into and perform the
Pledge Agreement on his behalf as his
B-8
<PAGE>
attorney-in-fact, and consents to the Pledge of the Treasury Securities
underlying this Growth PRIDES Certificate pursuant to the Pledge Agreement. The
Holder further covenants and agrees, that, to the extent and in the manner
provided in the Purchase Contract Agreement and the Pledge Agreement, but
subject to the terms thereof, payments in respect to the Stated Amount of the
Pledged Treasury Securities on the Purchase Contract Settlement Date shall be
paid by the Collateral Agent to the Company in satisfaction of such Holder's
obligations under such Purchase Contract and such Holder shall acquire no right,
title or interest in such payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
The Company, the Agent and its Affiliates and any agent of the Company
or the Agent may treat the Person in whose name this Growth PRIDES Certificate
is registered as the owner of the Growth PRIDES evidenced hereby for the purpose
of receiving payments of interest on the Treasury Securities, receiving payments
of Contract Adjustment Payments, performance of the Purchase Contracts and for
all other purposes whatsoever, whether or not any payments in respect thereof be
overdue and notwithstanding any notice to the contrary, and neither the Company,
the Agent nor any such agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.
B-9
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - Custodian
------------------------------------
(cust) (minor)
Under Uniform Gifts to Minors Act
------------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants in
common
Additional abbreviations may also be used though not in the above list.
---------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s)unto
---------------------------------------------------------------
- -------------------------------------------------------------------------------
(Please insert Social Security or Taxpayer I.D. or other Identifying Number
of Assignee)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Growth PRIDES Certificates and all rights thereunder, hereby
irrevocably constituting and appointing
- -------------------------------------------------------------------------------
attorney to transfer said Growth PRIDES Certificates on the books of Cox
Communications, Inc. with full power of substitution in the premises.
Dated:
--------------------- --------------------------
Signature
NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the face of
the within Growth PRIDES
B-10
<PAGE>
Certificates in every particular,
without alteration or enlargement or
any change whatsoever.
Signature Guarantee: --------------------
B-11
<PAGE>
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Growth PRIDES evidenced
by this Growth PRIDES Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned at
the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated:_______________________ ______________________________
Signature
Signature Guarantee:
If shares are to be registered
in the name of and delivered to REGISTERED HOLDER
a Person other than the Holder,
please (i) print such Person's
name and address and (ii) provide
a guarantee of your signature:
Please print name
and address of Registered Holder:
- ---------------------------- ------------------------------------
Name Name
- ---------------------------- ------------------------------------
Address Address
- ---------------------------- ------------------------------------
- ---------------------------- ------------------------------------
- ---------------------------- ------------------------------------
Social Security or other
Taxpayer Identification
Number, if any ____________________________________
B-12
<PAGE>
ELECTION TO SETTLE EARLY
The undersigned Holder of this Growth PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Growth PRIDES evidenced by this Growth PRIDES
Certificate specified below. The option to effect Early Settlement may be
exercised only with respect to Purchase Contracts underlying Growth PRIDES with
an aggregate Stated Amount equal to $1,000 or an integral multiple thereof. The
undersigned Holder directs that a certificate for shares of Common Stock
deliverable upon such Early Settlement be registered in the name of, and
delivered, together with a check in payment for any fractional share and any
Growth PRIDES Certificate representing any Growth PRIDES evidenced hereby as to
which Early Settlement of the related Purchase Contracts is not effected, to the
undersigned at the address indicated below unless a different name and address
have been indicated below. Pledged Treasury Securities deliverable upon such
Early Settlement will be transferred in accordance with the transfer
instructions set forth below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer tax
payable incident thereto.
Dated:______________________ ________________________________
Signature
Signature Guarantee: _________________________
B-13
<PAGE>
Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:
If shares of Common Stock or Growth PRIDES
Certificates are to be registered in the REGISTERED HOLDER
name of and delivered to and Pledged
Capital Securities, or the Treasury
Portfolio, as the case may be, are to be
transferred to a Person other than the
Holder, please print such Person's name
and address:
Please print name and
address of Registered Holder:
- ---------------------------- ------------------------------------
Name Name
- ---------------------------- ------------------------------------
Address Address
- ---------------------------- ------------------------------------
- ---------------------------- ------------------------------------
- ---------------------------- ------------------------------------
Social Security or other
Taxpayer Identification
Number, if any ____________________________________
Transfer Instructions for Pledged Treasury Securities Transferable Upon Early
Settlement or a Termination Event:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
B-14
<PAGE>
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have
been made:
Principal Amount
Amount of Amount of of this Global Signature of
decrease in increase in Certificate authorized officer
Principal Amount Principal Amount Following such of Trustee or
of the Global of the Global decrease or Securities
Date Certificate Certificate increase Custodian
- ------ --------------- --------------- ------------ ------------
B-15
<PAGE>
<PAGE>
EXHIBIT C
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO
COLLATERAL AGENT
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York
Attention: Corporate Trust Administration
Re: FELINE PRIDES of Cox Communications, Inc. (the "Company"),
and Cox Trust II
We hereby notify you in accordance with Section 4.1 of the Pledge
Agreement, dated as of August 12, 1999, among the Company, yourselves, as
Collateral Agent, and ourselves, as Purchase Contract Agent and as
attorney-in-fact for the holders of [Income PRIDES] [Growth PRIDES] from time to
time, that the holder of securities listed below (the "Holder") has elected to
substitute [$_____ aggregate principal amount of Treasury Securities] [$_______
Stated Amount of Capital Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be,] in exchange for the
[Pledged Capital Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be,] [Pledged Treasury Securities] held
by you in accordance with the Pledge Agreement and has delivered to us a notice
stating that the Holder has transferred [Treasury Securities] [Capital
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be,] to you, as Collateral Agent. We hereby instruct
you, upon receipt of such [Pledged Treasury Securities] [Pledged Capital
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be], and upon the payment by such Holder of any
applicable fees, to release the [Capital Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,]
[Treasury Securities] related to such [Income PRIDES] [Growth PRIDES] to us in
accordance with the Holder's instructions.
Date:____________________
By:
Name:
Title:
Signature Guarantee:
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Capital Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,] for the
[Pledged Capital Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be,] [Pledged Treasury Securities]:
- ----------------------------- ---------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
- -----------------------------
Address
- -----------------------------
- -----------------------------
C-1
<PAGE>
EXHIBIT D
INSTRUCTION TO PURCHASE CONTRACT AGENT
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, IL 60670-0126
Attention: Corporate Trust Services Division
Re: FELINE PRIDES of Cox Communications, Inc. (the "Company"),
and Cox Trust II
The undersigned Holder hereby notifies you that it has delivered to The
Bank of New York, as Collateral Agent, [$_______ aggregate principal amount of
Treasury Securities] [$_______ Stated Amount of Capital Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be,] in exchange for the [Pledged Capital Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,]
[Pledged Treasury Securities] held by the Collateral Agent, in accordance with
Section 4.1 of the Pledge Agreement, dated August 12, 1999, among you, the
Company and the Collateral Agent. The undersigned Holder has paid the Collateral
Agent all applicable fees relating to such exchange. The undersigned Holder
hereby instructs you to instruct the Collateral Agent to release to you on
behalf of the undersigned Holder the [Pledged Capital Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be,] [Pledged Treasury Securities] related to such [Income PRIDES] [Growth
PRIDES].
Date:____________________ _________________________________
By: _____________________________
Signature Guarantee:_____________
Dated:
Please print name and address of Registered Holder:
- ------------------------- -------------------------
Name Social Security or other Taxpayer
Identification Number, if any
Address
- -------------------------
- -------------------------
- -------------------------
D-1
<PAGE>
EXHIBIT E
NOTICE TO SETTLE BY SEPARATE CASH
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, IL 60670-0126
Attention: Corporate Trust Services Division
Re: FELINE PRIDES of Cox Communications, Inc. (the "Company"),
and Cox Trust II
The undersigned Holder hereby irrevocably notifies you in accordance
with Section 5.3 of the Purchase Contract Agreement, dated as of August 12, 1999
between the Company, yourselves, as Purchase Contract Agent and as
Attorney-in-Fact for the Holders of the Purchase Contracts, that such Holder has
elected to pay to the Collateral Agent, on or prior to 11:00 a.m. New York City
time, on the Business Day immediately preceding the Purchase Contract Settlement
Date, (in lawful money of the United States by [certified or cashiers check]
[wire transfer] in immediately available funds), $_________ as the Purchase
Price for the shares of Common Stock issuable to such Holder by the Company
under the related Purchase Contract on the Purchase Contract Settlement Date.
The undersigned Holder hereby instructs you to notify promptly the Collateral
Agent of the undersigned Holders election to make such cash settlement with
respect to the Purchase Contracts related to such Holder's [Income PRIDES]
[Growth PRIDES].
Date:____________________ _________________________________
By: _____________________________
Signature Guarantee:_____________
Dated:
Please print name and address of Registered Holder:
- ------------------------- -------------------------
Name Social Security or other Taxpayer
Identification Number, if any
Address
- -------------------------
- -------------------------
- -------------------------
E-1
Exhibit 4.2
REMARKETING AGREEMENT
REMARKETING AGREEMENT, dated as of August 12, 1999 (the "Remarketing
Agreement") by and among Cox Communications, Inc., a Delaware corporation ("Cox"
or the "Company"), Cox Trust II, a Delaware statutory business trust (the
"Trust"), The First National Bank of Chicago, a national banking association,
not individually but solely as Purchase Contract Agent and as attorney-in-fact
of the holders of Purchase Contracts (each as defined in the Purchase Contract
Agreement (as defined herein)), and Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated (the "Remarketing Agent").
WITNESSETH:
WHEREAS, the Company will issue its FELINE PRIDES (the "FELINE PRIDES")
in an aggregate Stated Amount $650,000,000 under the Purchase Contract
Agreement, dated as of August 12, 1999, by and between the Purchase Contract
Agent and the Company (the "Purchase Contract Agreement"); and
WHEREAS, the Trust will issue concurrently in connection with the
issuance of the FELINE PRIDES 7% Capital Securities (the "Capital Securities")
in an aggregate stated liquidation amount of $650,000,000 under the Amended and
Restated Declaration of Trust, dated as of August 12, 1999, by and among the
Company, the Administrative Trustees, the Delaware Trustee and the Property
Trustee (the "Declaration"); and
WHEREAS, the FELINE PRIDES will initially consist of 11,700,000 units
referred to as "Income PRIDES" and 1,300,000 units referred to as "Growth
PRIDES;"and
WHEREAS, the sole assets of the Trust, $670,103,100 aggregate principal
amount of 7% Debentures Due 2004 (the "Debentures") of the Company will be
purchased by the Trust from the Company with the proceeds of the sale of the
Capital Securities and the proceeds of the sale of the common securities of the
Trust (the "Common Securities" and, together with the Capital Securities, the
"Trust Securities"); and
WHEREAS, the Capital Securities (or upon a dissolution of the Trust and
the distribution of the Debentures as described in the Declaration, such
Debentures) will be pledged pursuant to the Pledge Agreement (the "Pledge
Agreement"), dated as of August 12, 1999, by and among the Company, The Bank of
New York, as collateral agent (the "Collateral Agent") and the Purchase Contract
Agent, to secure an Income PRIDES holder's obligations under the related
Purchase Contract on the Purchase Contract Settlement Date; and
WHEREAS, the Capital Securities or the Debentures, as the case may be,
of such Capital Security or Debenture holders electing to have their Capital
Securities or Debentures remarketed, or of such Income PRIDES holders who have
elected not to settle the Purchase Contracts related to their Income PRIDES from
the proceeds of a Cash Settlement and who have not early settled their Purchase
Contracts, will be remarketed by the Remarketing Agent on the third Business Day
immediately preceding the Purchase Contract Settlement Date; and
WHEREAS, the applicable distribution rate on the Capital Securities
(and, thus, the interest rate on the Debentures) that remain outstanding on and
after the Purchase Contract
<PAGE>
Settlement Date will be reset on the third Business Day immediately preceding
the Purchase Contract Settlement Date, to the Reset Rate to be determined by the
Reset Agent as the rate that such Capital Securities (and, thus the Debentures)
should bear in order to have an approximate market value of 100.5% of the
aggregate stated liquidation amount of the Capital Securities or the aggregate
principal amount of the Debentures on the third Business Day immediately
preceding the Purchase Contract Settlement Date, provided that in the
determination of such Reset Rate, the Company may limit the Reset Spread (a
component of the Reset Rate) to be no higher than 200 basis points (2%); and
WHEREAS, the Company has requested Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch") to act as the Reset Agent
and as the Remarketing Agent, and as such to perform the services described
herein; and
WHEREAS, Merrill Lynch is willing to act as Reset Agent and Remarketing
Agent and as such to perform such duties on the terms and conditions expressly
set forth herein;
NOW, THEREFORE, for and in consideration of the covenants herein made,
and subject to the conditions herein set forth, the parties hereto agree as
follows:
Section 1. Definitions. Capitalized terms used and not defined in this
Agreement shall have the meanings assigned to them in the Purchase Contract
Agreement or, if not therein stated, the Declaration or the Pledge Agreement.
Section 2. Appointment and Obligations of Remarketing Agent. The Company
hereby appoints Merrill Lynch and Merrill Lynch hereby accepts such appointment,
(i) as the Reset Agent to determine in consultation with the Company, in the
manner provided for in the Declaration with respect to the Trust Securities and
the Indenture with respect to the Debentures, the Reset Rate, that in the
opinion of the Reset Agent, will, when applied to the Trust Securities (and,
thus, the Debentures), enable a Trust Security (and, thus, a Debenture), to have
an approximate market value of approximately 100.5% of the aggregate stated
liquidation amount in the case of such Trust Security and the aggregate
principal amount in the case of such Debenture, provided that the Company
may limit such Reset Rate to be no higher than the rate on the Two-Year
Benchmark Treasury plus 200 basis points (2%), and (ii) as the exclusive
Remarketing Agent to remarket the Capital Securities, or the Debentures, as the
case may be, as the case may be, of such Capital Security or Debenture holders
electing to have their Capital Securities or Debentures remarketed, or of such
Income PRIDES holders who have not early settled the related Purchase Contracts
and have failed to notify the Purchase Contract Agent, on or prior to the fifth
Business Day immediately preceding the Purchase Contract Settlement Date, of
their intention to settle the related Purchase Contracts through Cash
Settlement, for settlement on the Purchase Contract Settlement Date, pursuant to
the Remarketing Underwriting Agreement with the Company, the Trust and the
Purchase Contract Agent, substantially in the form attached hereto as Exhibit A
(with such changes as the Company, the Purchase Contract Agent and the
Remarketing Agent may agree upon, it being understood that changes may be
necessary in the representations, warranties, covenants and other provisions of
the Remarketing Underwriting Agreement due to changes in law or facts and
circumstances). Pursuant to the Remarketing Underwriting Agreement, the
Remarketing Agent, either as the sole remarketing underwriter or as the
representative of a syndicate including the Remarketing Agent and one or more
other
<PAGE>
remarketing underwriters designated by the Remarketing Agent, will agree,
subject to the terms and conditions set forth therein, that the Remarketing
Agent and any such other remarketing underwriters will purchase severally the
Capital Securities or the Debentures, as the case may be, to be sold by the
holder or holders of Capital Securities or Income PRIDES on the third Business
Day immediately preceding the Purchase Contract Settlement Date and use their
reasonable efforts to remarket such Capital Securities or the Debentures, as the
case may be, (such purchase and remarketing being hereinafter referred to as the
"Remarketing"), at a price of approximately 100.5% of such Capital Securities
aggregate stated liquidation amount plus any accumulated and unpaid
distributions and in the case of Debentures, at a price of approximately 100.5%
of such Debentures aggregate principal amount plus any accrued and unpaid
interest. Notwithstanding the preceding sentence, the Remarketing Agent shall
not remarket any Capital Securities or Debentures, as the case may be, for a
price less than 100% of the aggregate stated liquidation amount or aggregate
principal amount of such Capital Securities or Debentures, respectively, plus
accumulated and unpaid distributions or accrued and unpaid interest, as the case
may be. The proceeds of such remarketing shall be paid to the Collateral Agent
in accordance with Section 4.6 of the Pledge Agreement and Section 5.3 of the
Purchase Contract Agreement (each of which Sections are incorporated herein by
reference).
Section 3. Fees. With respect to the Remarketing, the Remarketing Agent
shall retain as Remarketing Fee an amount not exceeding 25 basis points (.25%),
of the aggregate stated liquidation amount or aggregate principal amount of the
remarketed securities from any amount received in connection with such
Remarketing in excess of the aggregate stated liquidation amount or aggregate
principal amount of such remarketed Capital Securities or Debentures plus any
accumulated and unpaid distributions or any accrued and unpaid interest, as the
case may be. In addition, the Reset Agent shall receive from the Company a
reasonable and customary fee as the Reset Agent Fee (the "Reset Agent Fee");
provided, however, that if the Remarketing Agent shall also act as the Reset
Agent, then the Reset Agent shall not be entitled to receive any such Reset
Agent Fee. Payment of such Reset Agent Fee shall be made by the Company on the
third Business Day immediately preceding the Purchase Contract Settlement Date
in immediately available funds or, upon the instructions of the Reset Agent by
certified or official bank check or checks or by wire transfer.
Section 4. Replacement and Resignation of Remarketing Agent. (a) The
Company may in its absolute discretion replace Merrill Lynch in its capacity
hereunder as the Remarketing Agent and/or as the Reset Agent by giving notice
prior to 3:00 p.m., New York City time, on the eleventh Business Day immediately
prior to the Purchase Contract Settlement Date. Any such replacement shall
become effective upon the Company's appointment of a successor to perform the
services that would otherwise be performed hereunder by the Remarketing Agent
and/or the Reset Agent. Upon providing such notice, the Company shall use all
reasonable efforts to appoint such a successor and to enter into a remarketing
agreement with such successor as soon as reasonably practicable.
(b) Merrill Lynch may resign at any time and be discharged from its duties
and obligations hereunder as the Remarketing Agent and/or as the Reset Agent by
giving notice prior to 3:00 p.m., New York City time, on the eleventh Business
Day immediately prior to the Purchase Contract Settlement Date. Any such
resignation shall become effective upon the Company's appointment of a successor
to perform the services that would otherwise be performed hereunder by the
Remarketing Agent and/or the Reset Agent. Upon receiving notice
<PAGE>
from the Remarketing Agent and/or the Reset Agent that it wishes to resign
hereunder, the Company shall appoint such a successor and enter into a
remarketing agreement with it as soon as reasonably practicable.
Section 5. Dealing in the Securities. The Remarketing Agent, when acting
hereunder or under the Remarketing Underwriting Agreement or acting in its
individual or any other capacity, may, to the extent permitted by law, buy,
sell, hold or deal in any of the Capital Securities or Debentures, as the case
may be. With respect to any Capital Securities or Debentures, as the case may
be, owned by it, the Remarketing Agent may exercise any vote or join in any
action with like effect as if it did not act in any capacity hereunder. The
Remarketing Agent, in its individual capacity, either as principal or agent, may
also engage in or have an interest in any financial or other transaction with
the Company as freely as if it did not act in any capacity hereunder.
Section 6. Registration Statement and Prospectus. In connection with the
Remarketing, if and to the extent required (in the opinion of counsel for either
the Remarketing Agent or the Company) by applicable law, regulations or
interpretations in effect at the time of such Remarketing, the Company shall use
its reasonable efforts to have a registration statement relating to the Capital
Securities effective under the Securities Act of 1933 by the third Business Day
immediately preceding the Purchase Contract Settlement Date, shall furnish a
current prospectus and/or prospectus supplement to be used in such Remarketing
by the remarketing underwriter or underwriters under the Remarketing
Underwriting Agreement, and shall pay all expenses relating thereto.
Section 7. Conditions to the Remarketing Agent's Obligations. (a) The
obligations of the Remarketing Agent and any other remarketing underwriters to
purchase and remarket the Capital Securities or the Debentures, as the case may
be, shall be subject to the terms and conditions of the Remarketing Underwriting
Agreement.
(b) If at any time during the term of this Agreement, any Indenture Event
of Default or Declaration Event of Default, or event that with the passage of
time or the giving of notice or both would become an Indenture Event of Default
or Declaration Event of Default, has occurred and is continuing under the
Indenture or the Declaration, then the obligations and duties of the Remarketing
Agent under this Agreement shall be suspended until such default or event has
been cured. The Company will cause the Indenture Trustee and the Property
Trustee to give the Remarketing Agent notice of all such defaults and events of
which the Trustee is aware.
Section 8. Termination of Remarketing Agreement. This Agreement shall
terminate as to the Remarketing Agent on the effective date of its replacement
pursuant to Section 4(a) hereof or pursuant to Section 4(b) hereof.
Notwithstanding any such termination, the obligations set forth in Section 3
hereof shall survive and remain in full force and effect until all amounts
payable under said Section 3 shall have been paid in full.
Section 9. Remarketing Agent's Performance; Duty of Care. The duties and
obligations of the Remarketing Agent hereunder shall be determined solely by the
express provisions of this Agreement and the Remarketing Underwriting Agreement.
<PAGE>
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. Term of Agreement. Unless otherwise terminated in accordance
with the provisions hereof and except as otherwise provided herein, this
Agreement shall remain in full force and effect from the date hereof until the
first day thereafter on which no Capital Securities are outstanding.
Section 12. Successors and Assigns. The rights and obligations of the
Company hereunder may not be assigned or delegated to any other person without
the prior written consent of Merrill Lynch as the Remarketing Agent and/or as
the Reset Agent. The rights and obligations of Merrill Lynch as the Remarketing
Agent and/or as the Reset Agent hereunder may not be assigned or delegated to
any other person without the prior written consent of the Company. This
Agreement shall inure to the benefit of and be binding upon the Company and
Merrill Lynch as the Remarketing Agent and/or as the Reset Agent and their
respective successors and assigns. The terms "successors" and "assigns" shall
not include any purchaser of Securities merely because of such purchase.
Section 13. Headings. Section headings have been inserted in this Agreement
as a matter of convenience of reference only, and it is agreed that such section
headings are not a part of this Agreement and will not be used in the
interpretation of any provision of this Agreement.
Section 14. Severability. If any provision of this Agreement shall be held
or deemed to be or shall, in fact, be invalid, inoperative or unenforceable as
applied in any particular case in any or all jurisdictions because it conflicts
with any provisions of any constitution, statute, rule or public policy or for
any other reason, such circumstances shall not have the effect of rendering the
provision in question invalid, inoperative or unenforceable in any other case,
circumstances or jurisdiction, or of rendering any other provision or provisions
of this Agreement invalid, inoperative or unenforceable to any extent
whatsoever.
Section 15. Counterparts. This Agreement may be executed in counterparts,
each of which shall be regarded as an original and all of which shall constitute
one and the same document.
Section 16. Amendments. This Agreement may be amended by any instrument in
writing signed by the parties hereto.
Section 17. Notices. Unless otherwise specified, any notices, requests,
consents or other communications given or made hereunder or pursuant hereto
shall be made in writing or transmitted by any standard form of
telecommunication, including telephone, telegraph or telecopy, and confirmed in
writing. All written notices and confirmations of notices by telecommunication
shall be deemed to have been validly given or made when delivered or mailed,
registered or certified mail, return receipt requested and postage prepaid. All
such notices, requests, consents or other communications shall be addressed as
follows: if to the Company, to Cox Communications, Inc., 1400 Lake Hearn Drive,
Atlanta, Georgia 30319, Attention: Treasurer; if to the Remarketing Agent or
Reset Agent (if Merrill Lynch & Co. is the Remarketing Agent or the Reset
Agent), to c/o Merrill Lynch & Co.
<PAGE>
World Financial Center, North Tower, New York, New York 10281, Attention: Daniel
Richards, with a copy to Brown & Wood LLP, One World Trade Center, New York, NY
10048, Attention: Michael J. Schiavone; and if to the Purchase Contract Agent,
to The First National Bank of Chicago, One First National Plaza, Suite 0126,
Chicago, IL 60670, or to such other address as any of the above shall specify to
the other in writing.
<PAGE>
IN WITNESS WHEREOF, each of the Company, the Trust, the Purchase
Contract and the Remarketing Agent has caused this Agreement to be executed in
its name and on its behalf by one of its duly authorized officers as of the date
first above written.
COX COMMUNICATIONS, INC.
By: /s/ Dallas S. Clement
Name: Dallas S. Clement
Title: Vice President and Treasurer
COX TRUST II
By: /s/ Dallas S. Clement
Name: Dallas S. Clement
Title: Administrative Trustee
CONFIRMED AND ACCEPTED:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Tristam Collins
Authorized Signatory
THE FIRST NATIONAL BANK OF CHICAGO, not individually but solely as Purchase
Contract Agent and as attorney-in-fact for the holders of the Purchase Contracts
By: /s/ Janice Ott Rotunno
Name: Janice Ott Rotunno
Title: Vice President
<PAGE>
Exhibit A to
Remarketing Agreement
FORM OF REMARKETING UNDERWRITING AGREEMENT
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
(the "Remarketing Underwriter") hereby agrees to purchase the Capital Securities
or, if a Tax Event Redemption has occurred prior to the Purchase Contract
Settlement Date, the Debentures (such Capital Securities or Debentures, as the
case may be, being hereinafter referred to as the "Securities"), that have been
tendered by the holders of the Income PRIDES for sale on [August 16, 2002].
1. Definitions. Capitalized terms used and not defined in this
Agreement shall have the meanings assigned to them in the purchase contract
agreement (the "Purchase Contract Agreement"), the pledge agreement (the "Pledge
Agreement"), the underwriting agreement (the "Underwriting Agreement"), the
amended and restated declaration of trust (the "Declaration") and the indenture,
as supplemented by the first supplemental indenture (the "Indenture"), each as
identified in Schedule I hereto.
2. Registration Statement and Prospectus. If required (in the opinion
of counsel to either the Remarketing Underwriter or the Company) by applicable
law, the Company and the Trust have filed with the Securities and Exchange
Commission, and there has become effective, a registration statement on Form S-3
(Nos. 333-82575, 333-82575-01 and 333-82575-02), including a prospectus,
relating to the Securities. Such registration statement, as amended to the date
of this Agreement, is hereinafter referred to as the "Registration Statement,"
the prospectus included in the Registration Statement is hereinafter referred to
as the "Basic Prospectus" and the Basic Prospectus, as amended or supplemented
to the date of this Agreement to relate to the Securities and to the remarketing
of the Securities, is hereinafter referred to as the "Final Prospectus"
(including in each case all documents incorporated by reference).
3. Provisions Incorporated by Reference. (a) Subject to Section 3(b),
the provisions of the Underwriting Agreement shall be incorporated, as
applicable, into this Agreement and made applicable to the obligations of the
Remarketing Underwriter, except as explicitly amended hereby.
(b) With respect to the provisions of the Underwriting Agreement
incorporated herein, for the purposes hereof, (i) all references therein to the
"Underwriter" or "Underwriters" shall be deemed to refer to the Remarketing
Underwriter; (ii) all references therein to the "Securities" which are the
subject thereof shall be deemed to refer to the Securities as defined herein;
(iii) all references therein to the "Closing Date" shall be deemed to refer to
the Remarketing Closing Date specified in Schedule I hereto (the "Remarketing
Closing Date"); (iv) all references therein to the "Registration Statement" and
the "Final Prospectus" shall be deemed to refer to the Registration Statement,
and the Prospectus, respectively, as defined herein.
<PAGE>
4. Purchase and Sale; Remarketing Underwriting Fee. Subject to the
terms and conditions and in reliance upon the representations and warranties
herein set forth or incorporated herein, the Remarketing Underwriter agrees to
purchase from the registered holder or holders thereof in the manner specified
in Section 5 hereof, the principal amount of Securities set forth in Schedule I
hereto at a purchase price not less than 100% of such Securities' aggregate
stated liquidation amount or aggregate principal amount, as the case may be,
plus any accumulated unpaid distributions or accrued and unpaid interest, as
applicable, thereon. In connection therewith, the registered holder or holders
thereof agree, in the manner specified in Section 5 hereof, to pay to the
Remarketing Underwriter a Remarketing Underwriting Fee equal to an amount not
exceeding 25 basis points (.25%), of the aggregate stated liquidation amount or
aggregate principal amount of securities from any amount received in connection
with such Remarketing in excess of the aggregate stated liquidation amount or
aggregate principal amount, as the case may be, of the Securities plus any
accumulated and unpaid distributions or any accrued and unpaid interest, as the
case may be. The right of each holder of Securities to have Securities tendered
for purchase shall be limited to the extent that (i) the Remarketing Underwriter
conducts a remarketing pursuant to the terms of the Remarketing Agreement, (ii)
Securities tendered have not been called for redemption, (iii) the Remarketing
Underwriter is able to find a purchaser or purchasers for tendered Securities
and (iv) such purchaser or purchasers deliver the purchase price therefor to the
Remarketing Underwriter. The Remarketing Underwriter is not obligated to
purchase any Securities that would otherwise remain unsold in a remarketing.
Neither the Trust, any Trustee, the Company nor the Remarketing Underwriter
shall be obligated in any case to provide funds to make payment upon tender of
Securities for remarketing.
5. Delivery and Payment. Delivery of payment for the remarketed
Securities and payment of the Remarketing Underwriting Fee shall be made on the
Remarketing Closing Date at the location and time specified in Schedule I hereto
(or such later date not later than five business days after such date as the
Remarketing Underwriter shall designate), which date and time may be postponed
by agreement between the Remarketing Underwriter, the Company, the Trust and the
[registered holder or holders thereof]. Delivery of payment for the remarketed
Securities shall be [to or upon the order of the [registered holder or holders
of the remarketed Securities] by certified or official bank check or checks
drawn on or by a New York Clearing House bank and payable in immediately
available funds][in immediately available funds by wire transfer to an account
or accounts designated by the [Company] [Trustee] [registered holder or holders
of the remarketed Securities]] or, if the remarketed Securities are represented
by a Global Security, by any method of transfer agreed upon by the Remarketing
Underwriter and the Depositary for the Securities under the Declaration or
Indenture, as applicable.
[It is understood that any registered holder or, if the Securities are
represented by a Global Security, any beneficial owner, that has an account at
the Remarketing Underwriter and tenders its Securities through such account will
not be required to pay any fee or commission to the Remarketing Underwriter.]
If the Securities are not represented by a Global Security,
certificates for the Securities shall be registered in such names and
denominations as the Remarketing Underwriter may request not less than three
full business days in advance of the Remarketing Closing Date, and
<PAGE>
the Company, the Trust and the [registered holder or holders thereof] agree to
have such certificates available for inspection, packaging and checking by the
Remarketing Underwriter in New York, New York not later than 1:00 p.m. on the
Business Day prior to the Remarketing Closing Date.
6. Notices. Unless otherwise specified, any notices, requests, consents
or other communications given or made hereunder or pursuant hereto shall be made
in writing or transmitted by any standard form of telecommunication, including
telephone, telegraph or telecopy, and confirmed in writing. All written notices
and confirmations of notices by telecommunication shall be deemed to have been
validly given or made when delivered or mailed, registered or certified mail,
return receipt requested and postage prepaid. All such notices, requests,
consents or other communications shall be addressed as follows: if to the
Company, to Cox Communications, Inc., 1400 Lake Hearn Drive, Atlanta, Georgia
30319, Attention: Treasurer; with a copy to Dow, Lohnes & Albertson PLLC,
Attention: Stuart A. Sheldon; if to the Remarketing Underwriter, to Merrill
Lynch & Co., World Financial Center, North Tower, New York, New York 10281,
Attention: Daniel Richards, with a copy to Brown & Wood LLP, One World Trade
Center, New York, NY 10048, Attention: Michael J. Schiavone; and if to the
Purchase Contract Agent, to The First National Bank of Chicago, Corporate Trust
Services Division, One First National Plaza, Suite 0126, Chicago IL 60670-0126,
or to such other address as any of the above shall specify to the other in
writing.
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company, the Trust, the Purchase Contract and the Remarketing Underwriter.
Very truly yours,
COX COMMUNICATIONS, INC.
By:
Name:
Title:
COX TRUST II
By:
Name:
Title: Administrative Trustee
CONFIRMED AND ACCEPTED:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
Authorized Signatory
THE FIRST NATIONAL BANK OF CHICAGO not individually but solely as Purchase
Contract Agent and as attorney-in-fact for the holders of the Purchase Contracts
By:
Name:
Title:
<PAGE>
SCHEDULE I
Purchase Contract Agreement, dated as of August 12, 1999 by and between Cox
Communications, Inc., a Delaware corporation, and The First National Bank of
Chicago, a national banking association
Pledge Agreement dated as of August 12, 1999 by and between Cox Communications,
Inc., a Delaware corporation, The First National Bank of Chicago, a national
banking association, and The Bank of New York
Amended and Restated Declaration of Trust dated as of August 12, 1999 of Cox
Trust II, a Delaware business trust
Indenture dated as of June 27, 1995 by and between Cox Communications, Inc., a
Delaware corporation, and The Bank of New York
First Supplemental Indenture, dated as of August 12, 1999 by and between Cox
Communications, Inc., a Delaware corporation, and The Bank of New York
Registration Statement Nos. 333-82575 and 333-82575-01-02
Principal Amount of Securities: $650,000,000 ($747,500,000 if the Underwriters'
over-allotment option is exercised)
Underwriting Agreement, dated as of August 9, 1999, among Cox Communications,
Inc., Cox Trust II, and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Morgan Stanley & Co. Incorporated, Banc of America
Securities LLC and J.P. Morgan Securities Inc.
Remarketing Underwriting Fee: .25% (.0025)
Remarketing Closing Date, Time and Location:
Exhibit 4.3
COX COMMUNICATIONS, INC.
THE BANK OF NEW YORK,
as Collateral Agent, Custodial Agent
and Securities Intermediary
AND
THE FIRST NATIONAL BANK OF CHICAGO,
as Purchase Contract Agent
PLEDGE AGREEMENT
Dated as of August 12, 1999
<PAGE>
Table of Contents
Page
ARTICLE I
Definitions
Section 1.1 Definitions.................................................2
ARTICLE II Pledge; Control
and Perfection.
Section 2.1 The Pledge..................................................6
Section 2.2 Control and Perfection......................................7
ARTICLE III Distributions on
Pledged Collateral.
ARTICLE IV
Substitution, Release, Repledge and Settlement of Capital Securities.
Section 4.1 Substitution for Capital Securities and the Creation of
Growth Prides..............................................10
Section 4.2 Substitution of Treasury Securities and the Creation of
Income Prides..............................................11
Section 4.3 Termination Event..........................................11
Section 4.4 Cash Settlement............................................12
Section 4.5 Early Settlement...........................................13
Section 4.6 Application of Proceeds Settlement.........................14
ARTICLE V
Voting Rights -- Capital Securities.
ARTICLE VI
Rights and Remedies; Distribution of the Debentures; Tax Event Redemption
Section 6.1 Rights and Remedies of the Collateral Agent................16
Section 6.2 Distribution of the Debentures; Investment Company
Event; Tax Event Redemption................................17
Section 6.3 Substitutions..............................................18
ARTICLE VII Representations
and Warranties; Covenants.
Section 7.1 Representations and Warranties.............................18
Section 7.2 Covenants..................................................19
ARTICLE VIII
The Collateral Agent.
Section 8.1 Appointment, Powers and Immunities.........................19
Section 8.2 Instructions of the Company................................20
Section 8.3 Reliance by Collateral Agent...............................20
<PAGE>
Section 8.4 Rights in Other Capacities.................................21
Section 8.5 Non-Reliance on Collateral Agent...........................21
Section 8.6 Compensation and Indemnity.................................21
Section 8.7 Failure to Act.............................................22
Section 8.8 Resignation of Collateral Agent............................22
Section 8.9 Right to Appoint Agent or Advisor..........................23
Section 8.10 Survival...................................................23
Section 8.11 Exculpation................................................23
ARTICLE IX
Amendment.
Section 9.1 Amendment Without Consent of Holders.......................24
Section 9.2 Amendment with Consent of Holders..........................24
Section 9.3 Execution of Amendments....................................25
Section 9.4 Effect of Amendments.......................................25
Section 9.5 Reference to Amendments....................................25
ARTICLE X
Miscellaneous.
Section 10.1 No Waiver..................................................25
Section 10.2 GOVERNING LAW..............................................26
Section 10.3 Notices....................................................26
Section 10.4 Successors and Assigns.....................................26
Section 10.5 Counterparts...............................................26
Section 10.6 Severability...............................................26
Section 10.7 Expenses, Etc..............................................27
Section 10.8 Security Interest Absolute.................................27
EXHIBIT A
Instruction to Collateral Agent.............................................A-1
EXHIBIT B
Instruction to Purchase Contract Agent......................................B-1
EXHIBIT C
Instruction to Custodial Agent Regarding Remarketing........................C-1
EXHIBIT D
Instruction to Custodial Agent Regarding Withdrawal from
Remarketing.................................................................D-1
<PAGE>
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of August 12, 1999 (this "Agreement"), among
Cox Communications, Inc., a Delaware corporation (the "Company"), The Bank of
New York, a New York banking corporation, not individually but solely as
collateral agent (in such capacity, together with its successors in such
capacity, the "Collateral Agent"), as custodial agent (in such capacity,
together with its successors in such capacity, the "Custodial Agent") and as
"securities intermediary" as defined in Section 8-102(a)(14) of the Code (as
defined herein) (in such capacity, together with its successors in such
capacity, the "Securities Intermediary"), and The First National Bank of
Chicago, not individually but solely as purchase contract agent and as
attorney-in-fact of the Holders (as defined in the Purchase Contract Agreement)
from time to time of the Securities (as hereinafter defined) (in such capacity,
together with its successors in such capacity, the "Purchase Contract Agent")
under the Purchase Contract Agreement (as herein after defined).
RECITALS
The Company and the Purchase Contract Agent are parties to the Purchase
Contract Agreement, dated as of the date hereof (as modified and supplemented
and in effect from time to time, the "Purchase Contract Agreement"), pursuant to
which there may be issued up to 13,000,000 FELINE PRIDES of the Company
(14,950,000 if the Underwriters' over-allotment option pursuant to the
Underwriting Agreement and Pricing Agreement is exercised in full), having a
stated amount of $50 (the "Stated Amount") per FELINE PRIDES.
The FELINE PRIDES will initially consist of (A) 11,700,000 units
(referred to as "Income PRIDES") with a face amount, per Income PRIDES, equal to
the Stated Amount and (B) 1,300,000 units (referred to as "Growth PRIDES" and,
together with the Income PRIDES, the "Securities") with a face amount, per
Growth PRIDES, equal to the Stated Amount. Each Income PRIDES will initially be
comprised of (a) a stock purchase contract (the "Purchase Contract") under which
the holder will purchase from the Company not later than August 16, 2002 (the
"Purchase Contract Settlement Date"), for an amount of cash equal to the Stated
Amount, a number of shares of the Class A common stock, $1.00 par value per
share (the "Common Stock"), of the Company equal to the Settlement Rate (as
defined below), and (b) either beneficial ownership of a Capital Security (as
defined below) or upon the occurrence of a Tax Event Redemption (as defined
herein) prior to the Purchase Contract Settlement Date, the Applicable Ownership
Interest of the Treasury Portfolio (as defined below). Each Growth PRIDES will
initially be comprised of (a) a Purchase Contract under which (i) the holder
will purchase from the Company not later than the Purchase Contract Settlement
Date, for an amount in cash equal to the Stated Amount, a number of shares of
Common Stock of the Company equal to the Settlement Rate, and (ii) the Company
will pay to the Holder, on a quarterly basis, unsecured contract adjustment
payments ("Contract Adjustment Payments") at the rate of .25% of the Stated
Amount per annum, and (b) a 1/20 undivided beneficial interest in a zero-coupon
U.S. Treasury Security (CUSIP No. 912820 BE 6) having a principal amount at
maturity equal to $1,000 and maturing on August 15, 2002 (the "Treasury
Securities").
<PAGE>
Pursuant to the terms of the Declaration (as defined below), Cox Trust
II, a statutory business trust formed under the laws of the State of Delaware
(the "Trust"), will issue 13,000,000 (14,950,000 if the Underwriters'
over-allotment option pursuant to the Underwriting Agreement and Pricing
Agreement is exercised in full) 7% Capital Securities, (the "Capital
Securities") having a stated liquidation value equal to the Stated Amount.
Pursuant to the terms of the Purchase Contract Agreement and the
Purchase Contracts, the Holders, from time to time, of the Securities have
irrevocably authorized the Purchase Contract Agent, as attorney-in-fact of such
Holders, among other things, to execute and deliver this Agreement on behalf of
such Holders and to grant the pledge provided hereby of the Capital Securities,
any Applicable Ownership Interest in the Treasury Portfolio and any Treasury
Securities delivered in exchange therefor to secure each Holder's obligations
under the related Purchase Contract, as provided herein and subject to the terms
hereof. Upon such pledge, the Capital Securities, any Applicable Ownership
Interest in the Treasury Portfolio and the Treasury Securities will be
beneficially owned by the Holders but will be owned of record by the Purchase
Contract Agent subject to the Pledge hereunder.
Accordingly, the Company, the Collateral Agent, the Securities
Intermediary, the Custodial Agent and the Purchase Contract Agent, on its own
behalf and as attorney-in-fact of the Holders from time to time of the
Securities, agree as follows:
ARTICLE I
Definitions
Section 1.1. Definitions. For all purposes of this agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;
(c) the following terms have the meanings assigned to them in the
Purchase Contract Agreement: (i) Act, (ii) Agent, (iii) Board Resolution,
(iv) Cash Settlement, (v) Certificate, (vi) Contract Adjustment
Payments,(vii) Debentures, (viii) Early Settlement, (ix) Early Settlement
Amount, (x) Early Settlement Date, (xi) Failed Remarketing, (xii) Holder,
(xiii) Opinion of Counsel, (xiv) Outstanding Securities, (xv) Remarketing
Agent, (xvi) Remarketing Agreement, (xvii) Settlement Rate, and (xviii)
Termination Event; and
(d) the following terms have the meanings as signed to them in the
Declaration: (i) Applicable Principal Amount, (ii) Indenture, (iii)
Investment Company Event, (iv) Primary Treasury Dealer, (v) Property
Trustee, (vi) Quotation Agent, (vii) Redemption Amount, (viii) Redemption
Price, (ix) Tax Event, (x) Tax Event
2
<PAGE>
Redemption, (xi) Tax Event Redemption Date, (xii) Treasury Portfolio, and
(xiii) Treasury Portfolio Purchase Price.
"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Applicable Ownership Interest" means, with respect to an Income PRIDES
and the U.S. Treasury Securities in the Treasury Portfolio, (A) a 1/20, or 5%,
undivided beneficial ownership interest in a $1,000 principal or interest amount
of a principal or interest strip in a U.S. Treasury Security included in such
Treasury Portfolio which matures on or prior to August 15, 2002 and (B) for each
scheduled interest payment date on the Debentures that occurs after the Tax
Event Redemption Date, a .0875% undivided beneficial ownership interest in a
$1,000 face amount of such U.S. Treasury Security which is a principal or
interest strip maturing on such date.
"Bankruptcy Code" means Title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform system
of bankruptcy laws.
"Business Day" means any day other than a Saturday, Sunday or any
other day on which banking institutions and trust companies in The City of New
York are permitted or required by any applicable law to close.
"Capital Securities" has the meaning specified in the Recitals.
"Cash" means any coin or currency of the United States as at the time
shall be legal tender for payment of public and private debts.
"Code" has the meaning specified in Section 6.1 hereof.
"Collateral" has the meaning specified in Section 2.1 hereof.
"Collateral Account" means the securities account (number 077976)
maintained at The Bank of New York in the name "The First National Bank of
Chicago, as Purchase Contract Agent on behalf of the holders of certain
securities of Cox Trust II, Collateral Account subject to the security interest
of The Bank of New York, as Collateral Agent, for the benefit of Cox
Communications, Inc., as pledgee" and any successor account.
"Collateral Agent" has the meaning specified in the first paragraph of
this Agreement.
"Common Stock" has the meaning specified in the Recitals.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such, and
thereafter "Company" shall mean such successor.
"Custodial Agent" has the meaning specified in the Recitals.
3
<PAGE>
"Debenture Trustee" means The Bank of New York, as trustee under the
Indenture until a successor is appointed thereunder, and thereafter means such
successor trustee.
"Declaration" means the Amended and Restated Declaration of Trust,
dated as of August 12, 1999 among the Company as sponsor, the trustees named
therein and the holders from time to time of undivided beneficial interests in
the assets of the Trust.
"Intermediary" means any entity that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.
"Permitted Investments" means any one of the following which shall
mature not later than the next succeeding Business Day (i) any evidence of
indebtedness with an original maturity of 365 days or less issued, or directly
and fully guaranteed or insured, by the United States of America or any agency
or instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof or such indebtedness
constitutes a general obligation of it); (ii) deposits, certificates of deposit
or acceptances with an original maturity of 365 days or less of any institution
which is a member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than US $200,000,000 at the time of
deposit; (iii) investments with an original maturity of 365 days or less of any
Person that is fully and unconditionally guaranteed by a bank referred to in
clause (ii); (iv) investments in commercial paper, other than commercial paper
issued by the Company or its affiliates, of any corporation incorporated under
the laws of the United States or any State thereof, which commercial paper has a
rating at the time of purchase at least equal to "A-1" by Standard & Poor's
Ratings Services ("S&P") or at least equal to "P-1" by Moody's Investors
Service, Inc. ("Moody's"); and (v) investments in money market funds registered
under the Investment Company Act of 1940, as amended, and rated in the highest
applicable rating category by S&P or Moody's.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Pledge" has the meaning specified in Section 2.1 hereof.
"Pledged Capital Securities" has the meaning specified in Section 2.1
hereof.
"Pledged Treasury Securities" has the meaning specified in Section 2.1
hereof.
"Proceeds" means all interest, dividends, cash, instruments,
securities, financial assets (as defined in Sections 8-102(a)(9) of the Code)
and other property from time to time received, receivable or otherwise
distributed upon the sale, exchange, collection or disposition of the Collateral
or any proceeds thereof.
"Purchase Contract" has the meaning specified in the Recitals.
4
<PAGE>
"Purchase Contract Agent" has the meaning specified in the first
paragraph of this Agreement.
"Purchase Contract Agreement" has the meaning specified in the
Recitals.
"Purchase Contract Settlement Date" has the meaning specified in the
Recitals.
"Remarketing Underwriting Agreement" means the Remarketing Underwriting
Agreement attached as Exhibit A to the Remarketing Agreement.
"Securities" has the meaning specified in the Recitals.
"Securities Intermediary" has the meaning specified in the first
paragraph of this Agreement.
"Security Entitlement" has the meaning set forth in Section 8-102(a)
(17) of the Code.
"Separate Capital Securities" means any Capital Securities that are not
Pledged Capital Securities.
"Stated Amount" has the meaning specified in the Recitals.
"TRADES" means the Treasury/Reserve Automated Debt Entry System
maintained by the Federal Reserve Bank of New York pursuant to the TRADES
Regulations.
"TRADES Regulations" means the regulations of the United States
Department of the Treasury, published at 31 C.F.R. Part 357, as amended from
time to time. Unless otherwise defined herein, all terms defined in the TRADES
Regulations are used herein as therein defined.
"Transfer" means, with respect to the Collateral and in accordance with
the instructions of the Collateral Agent, the Purchase Contract Agent or the
Holder, as applicable:
(i) in the case of Collateral consisting of securities which cannot be
delivered by book-entry or which the parties agree are to be delivered in
physical form, delivery in appropriate physical form to the recipient
accompanied by any duly executed instruments of transfer, assignments in
blank, transfer tax stamps and any other documents necessary to constitute
a legally valid transfer to the recipient;
(ii) in the case of Collateral consisting of securities maintained in
book-entry form by causing a "securities intermediary" (as defined in
Section 8-102(a)(14) of the Code) to (i) credit a "security entitlement"
(as defined in Section 8-102(a)(17) of the Code) with respect to such
securities to a "securities account" (as defined in Section 8-501(a) of the
Code) maintained by or on behalf of the recipient and (ii) to issue a
confirmation to the recipient with respect to such credit. In the case of
Collateral to be delivered to the Collateral Agent, the
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Securities Intermediary shall be the Securities Intermediary and the
securities account shall be the Collateral Account.
"Treasury Security" has the meaning specified in the Recitals.
"Trust" has the meaning specified in the Recitals.
"Value" with respect to any item of Collateral on any date means, as to
(i) a Capital Security, the Stated Amount, (ii) Cash, the face amount thereof
and (iii) Treasury Securities, the aggregate principal amount thereof at
maturity.
ARTICLE II
Pledge; Control and Perfection.
Section 2.1 The Pledge. The Holders from time to time acting through the
Purchase Contract Agent, as their attorney-in-fact, and the Purchase Contract
Agent, as such attorney-in-fact, hereby pledge and grant to the Collateral
Agent, for the benefit of the Company, as collateral security for the
performance when due by such Holders of their respective obligations under the
related Purchase Contracts, a security interest in all of the right, title and
interest of the Purchase Contract Agent and such Holders (a) in the Capital
Securities and Treasury Securities constituting a part of the Securities and any
Treasury Securities delivered in exchange for any Capital Securities, and any
Capital Securities delivered in exchange for any Treasury Securities, in
accordance with Section 4.2 hereof, in each case that have been Transferred to
or received by the Collateral Agent and not released by the Collateral Agent to
such Holders under the provisions of this Agreement; (b) in payments made by
Holders pursuant to Section 4.4; (c) in the Collateral Account and all
securities, financial assets, Cash and other property credited thereto and all
Security Entitlements related thereto; (d) in any Debentures delivered to the
Collateral Agent upon the occurrence of an Investment Company Event or a
liquidation of the Trust as provided in Section 6.2; (e) in the Treasury
Portfolio purchased on behalf of the Holders of Income PRIDES by the Collateral
Agent upon the occurrence of a Tax Event Redemption as provided in Section 6.2
and (f) all Proceeds of the foregoing (all of the foregoing, collectively, the
"Collateral"). Prior to or concurrently with the execution and delivery of this
Agreement, the Purchase Contract Agent, on behalf of the initial Holders of the
Securities, shall cause the Capital Securities comprising a part of the Income
PRIDES, and the Treasury Securities comprising a part of the Growth PRIDES, to
be Transferred to the Collateral Agent for the benefit of the Company. Such
Capital Securities shall be Transferred by physically delivering such Securities
to the Securities Intermediary indorsed in blank and causing the Securities
Intermediary to credit the Collateral Account with such Securities and sending
the Collateral Agent a confirmation of the deposit of such Securities. In the
event a Holder of Income PRIDES so elects, such Holder may Transfer Treasury
Securities to the Collateral Agent for the benefit of the Company in exchange
for the release by the Collateral Agent on behalf of the Company of Capital
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, with an aggregate stated liquidation amount equal
to the aggregate principal amount of the Treasury Securities so Transferred, in
the case of Capital Securities, or with an appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio equal to the aggregate principal amount of the Treasury
Securities
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so transferred, in the event that a Tax Event Redemption has occurred, to the
Purchase Contract Agent on behalf of such Holder. Treasury Securities and the
Treasury Portfolio, as applicable, shall be Transferred to the Collateral
Account maintained by the Collateral Agent at the Securities Intermediary by
book-entry transfer to the Collateral Account in accordance with the TRADES
Regulations and other applicable law and by the notation by the Securities
Intermediary on its books that a Security Entitlement with respect to such
Treasury Securities or Treasury Portfolio, has been credited to the Collateral
Account. For purposes of perfecting the Pledge under applicable law, including,
to the extent applicable, the TRADES Regulations or the Uniform Commercial Code
as adopted and in effect in any applicable jurisdiction, the Collateral Agent
shall be the agent of the Company as provided herein. The pledge provided in
this Section 2.1 is herein referred to as the "Pledge" and the Capital
Securities (or the Debentures that are delivered pursuant to Section 6.2 hereof)
or Treasury Securities subject to the Pledge, excluding any Capital Securities
(or the Debentures that are delivered pursuant to Section 6.2 hereof) or
Treasury Securities released from the Pledge as provided in Sections 4.1 and 4.2
hereof, respectively, are hereinafter referred to as "Pledged Capital
Securities" or the "Pledged Treasury Securities," respectively. Subject to the
Pledge and the provisions of Section 2.2 hereof, the Holders from time to time
shall have full beneficial ownership of the Collateral. Whenever directed by the
Collateral Agent acting on behalf of the Company, the Securities Intermediary
shall have the right to reregister the Capital Securities or any other
Securities held in physical form in its name.
Except as may be required in order to release Capital Securities in
connection with a Holder's election to convert its investment from an Income
PRIDES to a Growth PRIDES, or except as otherwise required to release Securities
as specified herein, neither the Collateral Agent nor the Securities
Intermediary shall relinquish physical possession of any certificate evidencing
a Capital Security prior to the termination of this Agreement. If it becomes
necessary for the Securities Intermediary to relinquish physical possession of a
certificate in order to release a portion of the Capital Securities evidenced
thereby from the Pledge, the Securities Intermediary shall use its best efforts
to obtain physical possession of a replacement certificate evidencing any
Capital Securities remaining subject to the Pledge hereunder registered to it or
endorsed in blank within fifteen days of the date it relinquished possession.
The Securities Intermediary shall promptly notify the Company and the Collateral
Agent of the Securities Intermediary's failure to obtain possession of any such
replacement certificate as required hereby.
Section 2.2 Control and Perfection. (a) In connection with the Pledge
granted in Section 2.1, and subject to the other provisions of this Agreement,
the Holders from time to time acting through the Purchase Contract Agent, as
their attorney-in-fact, hereby authorize and direct the Securities Intermediary
(without the necessity of obtaining the further consent of the Purchase Contract
Agent or any of the Holders), and the Securities Intermediary agrees, to comply
with and follow any instructions and entitlement orders (as defined in Section
8-102(a)(8) of the Code) that the Collateral Agent on behalf of the Company may
give in writing with respect to the Collateral Account, the Collateral credited
thereto and any Security Entitlements with respect to any thereof. Such
instructions and entitlement orders may, without limitation, direct the
Securities Intermediary to transfer, redeem, sell, liquidate, assign, deliver or
otherwise dispose of the Capital Securities, the Treasury Securities, the
Treasury Portfolio, and
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any Security Entitlements with respect thereto and to pay and deliver any
income, proceeds or other funds derived therefrom to the Company. The Holders
from time to time acting through the Purchase Contract Agent hereby further
authorize and direct the Collateral Agent, as Agent of the Company, to itself
issue instructions and entitlement orders, and to otherwise take action, with
respect to the Collateral Account, the Collateral credited thereto and any
Security Entitlements with respect thereto, pursuant to the terms and provisions
hereof, all without the necessity of obtaining the further consent of the
Purchase Contract Agent or any of the Holders. The Collateral Agent shall be the
agent of the Company and shall act as directed in writing by the Company.
Without limiting the generality of the foregoing, the Collateral Agent shall
issue entitlement orders to the Securities Intermediary when and as directed by
the Company.
(b) The Securities Intermediary hereby confirms and agrees that: (i) all
securities or other property underlying any financial assets credited to the
Collateral Account shall be registered in the name of the Securities
Intermediary, indorsed to the Securities Intermediary or in blank or credited to
another Collateral Account maintained in the name of the Securities Intermediary
and in no case will any financial asset credited to the Collateral Account be
registered in the name of the Purchase Contract Agent, the Collateral Agent, the
Company or any Holder, payable to the order of, or specially indorsed to, the
Purchase Contract Agent, the Collateral Agent, the Company or any Holder except
to the extent the foregoing have been specially indorsed to the Securities
Intermediary or in blank; (ii) all property delivered to the Securities
Intermediary pursuant to this Pledge Agreement (including, without limitation,
any Capital Securities, the Treasury Portfolio or Treasury Securities) will be
promptly credited to the Collateral Account; (iii) the Collateral Account is an
account to which financial assets are or may be credited, and the Securities
Intermediary shall, subject to the terms of this Agreement, treat the Purchase
Contract Agent as entitled to exercise the rights of any financial asset
credited to the Collateral Account; (iv) the Securities Intermediary has not
entered into, and until the termination of this Agreement will not enter into,
any agreement with any other person relating to the Collateral Account and/or
any financial assets credited thereto pursuant to which it has agreed to comply
with entitlement orders (as defined in Section 8-102(a)(8) of the Code) of such
other person; and (v) the Securities Intermediary has not entered into, and
until the termination of this Agreement will not enter into, any agreement with
the Company, the Collateral Agent or the Purchase Contract Agent purporting to
limit or condition the obligation of the Securities Intermediary to comply with
entitlement orders as set forth in this Section 2.2 hereof.
(c) The Securities Intermediary hereby agrees that each item of property
(whether investment property, financial asset, security, instrument or cash)
credited to the Collateral Account shall be treated as a "financial asset"
within the meaning of Section 8-102(a)(9) of the Code.
(d) In the event of any conflict between this Agreement (or any portion
thereof) and any other agreement now existing or hereafter entered into, the
terms of this Agreement shall prevail.
(e) The Purchase Contract Agent hereby irrevocably constitutes and appoints
the Collateral Agent and the Company, with full power of substitution, as the
Purchase Contract
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Agent's attorney-in-fact to take on behalf of, and in the name, place and stead
of the Purchase Contract Agent and the Holders, any action necessary or
desirable to perfect and to keep perfected the security interest in the
Collateral referred to in Section 2.1. The grant of such power-of-attorney shall
not be deemed to require of the Collateral Agent any specific duties or
obligations not otherwise assumed by the Collateral Agent hereunder.
ARTICLE III
Distributions on Pledged Collateral.
So long as the Purchase Contract Agent is the registered owner of the
Pledged Capital Securities, it shall receive all payments thereon. If the
Pledged Capital Securities are reregistered, such that the Collateral Agent
becomes the registered holder, all payments of the Stated Amount or, if
applicable, the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, or cash
distributions on, the Pledged Capital Securities or on the appropriate
Applicable Ownership Interest (as specified in clause (B) of the definition of
such term) of the Treasury Portfolio, as the case may be, and all payments of
the principal of, or cash distributions on, any Pledged Treasury Securities
received by the Collateral Agent that are properly payable hereunder shall be
paid by the Collateral Agent by wire transfer in same day funds:
(i) In the case of (A) cash distributions with respect to the Pledged
Capital Securities or the appropriate Applicable Ownership Interest (as
specified in clause (B) of the definition of such term) of the Treasury
Portfolio, as the case may be, and (B) any payments of the Stated Amount
or, if applicable, the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio with respect to any Capital Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may
be, that have been released from the Pledge pursuant to Section 4.3 hereof,
to the Purchase Contract Agent, for the benefit of the relevant Holders of
Securities, to the account designated by the Purchase Contract Agent for
such purpose, no later than 2:00 p.m., New York City time, on the Business
Day such payment is received by the Collateral Agent (provided that in the
event such payment is received by the Collateral Agent on a day that is not
a Business Day or after 12:30 p.m., New York City time, on a Business Day,
then such payment shall be made no later than 10:30 a.m., New York City
time, on the next succeeding Business Day);
(ii) In the case of any principal payments with respect to any
Treasury Securities that have been released from the Pledge pursuant to
Section 4.3 hereof, to the Holders of the Growth PRIDES to the accounts
designated by them in writing for such purpose no later than 2:00 p.m., New
York City time, on the Business Day such payment is received by the
Collateral Agent (provided that in the event such payment is received by
the Collateral Agent on a day that is not a Business Day or after 12:30
p.m., New York City time, on a Business Day, then
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such payment shall be made no later than 10:30 a.m., New York City time, on
the next succeeding Business Day); and
(iii) In the case of payments of the Stated Amount of any Pledged
Capital Securities or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as the case may be, or the principal of any Pledged Treasury
Securities, to the Company on the Purchase Contract Settlement Date in
accordance with the procedure set forth in Section 4.6(a) or 4.6(b) hereof,
in full satisfaction of the respective obligations of the Holders under the
related Purchase Contracts.
All payments received by the Purchase Contract Agent as provided herein
shall be applied by the Purchase Contract Agent pursuant to the provisions of
the Purchase Contract Agreement. If, notwithstanding the foregoing, the Purchase
Contract Agent shall receive any payments of the Stated Amount or, if
applicable, the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) on account of any Capital Security or
the appropriate Applicable Ownership Interest of the Treasury Portfolio, as
applicable, that, at the time of such payment, is a Pledged Capital Security or
the appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, or a Holder of a Growth PRIDES shall receive any payments of
principal on account of any Treasury Securities that, at the time of such
payment, are Pledged Treasury Securities, the Purchase Contract Agent or such
Holder shall hold the same as trustee of an express trust for the benefit of the
Company (and promptly deliver the same over to the Company) for application to
the obligations of the Holders under the related Purchase Contracts, and the
Holders shall acquire no right, title or interest in any such payments of Stated
Amount or principal so received.
ARTICLE IV
Substitution, Release, Repledge and Settlement of Capital Securities.
Section 4.1 Substitution for Capital Securities and the Creation of Growth
Prides. At any time on or prior to the fifth Business Day immediately preceding
the Purchase Contract Settlement Date (unless a Tax Event Redemption has
occurred), a Holder of Income PRIDES shall have the right to substitute Treasury
Securities for the Pledged Capital Securities securing such Holder's obligations
under the Purchase Contract(s) comprising a part of its Income PRIDES in
integral multiples of 20 Income PRIDES by (a) Transferring to the Collateral
Agent Treasury Securities having a Value equal to the aggregate Stated Amount of
the Pledged Capital Securities to be released and (b)(i) delivering to the
Purchase Contract Agent cash in an amount equal to the Contract Adjustment
Payments that would have accrued since the last date that Contract Adjustment
Payments were made through the date of substitution on the Growth PRIDES being
created by the Holder, which amount the Purchase Contract Agent shall promptly
remit to the Company, and (ii) delivering the related Income PRIDES to the
Purchase Contract Agent, accompanied by a notice, substantially in the form of
Exhibit B hereto, to the Purchase Contract Agent stating that such Holder has
Transferred Treasury Securities to the Collateral Agent pursuant to clause (a)
above (stating the Value of the Treasury Securities Transferred by such Holder)
and requesting that the Purchase Contract Agent instruct the Collateral Agent to
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release from the Pledge the Pledged Capital Securities related to such Income
PRIDES. The Purchase Contract Agent shall instruct the Collateral Agent in the
form provided in Exhibit A; provided, however, that if a Tax Event Redemption
has occurred and the Treasury Portfolio has become a component of the Income
PRIDES, Holders of Income PRIDES may make such substitution only in integral
multiples of 8,000 Income PRIDES at any time on or prior to the second Business
Day immediately preceding the Purchase Contract Settlement Date. Upon receipt of
Treasury Securities from a Holder of Income PRIDES and the related instruction
from the Purchase Contract Agent, the Collateral Agent shall release the Pledged
Capital Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, and shall promptly Transfer such Pledged
Capital Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, free and clear of any lien, pledge or
security interest created hereby, to the Purchase Contract Agent. All items
Transferred and/or substituted by any Holder pursuant to this Section 4.1,
Section 4.2 or any other Section of this Agreement shall be Transferred and/or
substituted free and clear of all liens, claims and encumbrances.
Section 4.2 Substitution of Treasury Securities and the Creation of Income
Prides. At any time on or prior to the fifth Business Day immediately preceding
the Purchase Contract Settlement Date (unless a Tax Event Redemption has
occurred), a Holder of Growth PRIDES shall have the right to establish or
reestablish Income PRIDES consisting of the Purchase Contracts and Capital
Securities in integral multiples of 20 Income PRIDES by (a) Transferring to the
Collateral Agent Capital Securities having a Value equal to the Value of the
Pledged Treasury Securities to be released and (b) delivering the related Growth
PRIDES to the Purchase Contract Agent, accompanied by a notice, substantially in
the form of Exhibit B hereto, to the Purchase Contract Agent stating that such
Holder has transferred Capital Securities to the Collateral Agent pursuant to
clause (a) above and requesting that the Purchase Contract Agent instruct the
Collateral Agent to release from the Pledge the Pledged Treasury Securities
related to such Growth PRIDES. The Purchase Contract Agent shall instruct the
Collateral Agent in the form provided in Exhibit A; provided, however, that if a
Tax Event Redemption has occurred and the Treasury Portfolio has become a
component of the Income PRIDES, Holders of Growth PRIDES may make such
substitution only in integral multiples of 8,000 Growth PRIDES, at any time on
or prior to the Business Day immediately preceding the Purchase Contract
Settlement Date. Upon receipt of the Capital Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
from such Holder and the instruction from the Purchase Contract Agent, the
Collateral Agent shall release the Treasury Securities and shall promptly
Transfer such Treasury Securities, free and clear of any lien, pledge or
security interest created hereby, to the Purchase Contract Agent.
Section 4.3 Termination Event. Upon receipt by the Collateral Agent of
written notice from the Company or the Purchase Contract Agent that there has
occurred a Termination Event, the Collateral Agent shall release all Collateral
from the Pledge and shall promptly Transfer any Pledged Capital Securities (or
the Applicable Ownership Interest of the Treasury Portfolio if a Tax Event
Redemption has occurred) and Pledged Treasury Securities to the Purchase
Contract Agent for the benefit of the Holders of the Income PRIDES and the
Growth PRIDES,
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respectively, free and clear of any lien, pledge or security interest or other
interest created hereby.
If such Termination Event shall result from the Company's becoming a
debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to effectuate the release and Transfer of all Pledged
Capital Securities, the Treasury Portfolio or of the Pledged Treasury
Securities, as the case may be, as provided by this Section 4.3, the Purchase
Contract Agent shall (i) use its best efforts to obtain an opinion of a
nationally recognized law firm reasonably acceptable to the Collateral Agent to
the effect that, as a result of the Company's being the debtor in such a
bankruptcy case, the Collateral Agent will not be prohibited from releasing or
Transferring the Collateral as provided in this Section 4.3, and shall deliver
such opinion to the Collateral Agent within ten days after the occurrence of
such Termination Event, and if (y) the Purchase Contract Agent shall be unable
to obtain such opinion within ten days after the occurrence of such Termination
Event or (z) the Collateral Agent shall continue, after delivery of such
opinion, to refuse to effectuate the release and Transfer of all Pledged Capital
Securities, the Treasury Portfolio or the Pledged Treasury Securities, as the
case may be, as provided in this Section 4.3, then the Purchase Contract Agent
shall within fifteen days after the occurrence of such Termination Event
commence an action or proceeding in the court with jurisdiction of the Company's
case under the Bankruptcy Code seeking an order requiring the Collateral Agent
to effectuate the release and transfer of all Pledged Capital Securities, the
Treasury Portfolio or of the Pledged Treasury Securities, as the case may be, as
provided by this Section 4.3 or (ii) commence an action or proceeding like that
described in subsection (i)(z) hereof within ten days after the occurrence of
such Termination Event.
Section 4.4 Cash Settlement. (a) Upon receipt by the Collateral Agent of
(i) a notice from the Purchase Contract Agent promptly after the receipt by the
Purchase Contract Agent of such notice that a Holder of an Income PRIDES or
Growth PRIDES has elected, in accordance with the procedures specified in
Section 5.3(a)(i) or (d)(i) of the Purchase Contract Agreement, respectively, to
settle its Purchase Contract with Cash and (ii) payment of the amount required
to settle such contract by such Holder on or prior to 11:00 a.m., New York City
time, on the Business Day immediately preceding the Purchase Contract Settlement
Date in lawful money of the United States by certified or cashiers' check or
wire transfer in immediately available funds payable to or upon the order of the
Company, then the Collateral Agent shall promptly invest any Cash received from
a Holder in connection with a Cash Settlement in Permitted Investments. Upon
receipt of the proceeds upon the maturity of the Permitted Investments on the
Purchase Contract Settlement Date, the Collateral Agent shall pay the portion of
such proceeds and deliver any certified or cashiers' checks received and any
funds so wired, in an aggregate amount equal to the Purchase Price, to the
Company on the Purchase Contract Settlement Date, and shall distribute any funds
in respect of the interest earned from the Permitted Investments to the Purchase
Contract Agent for payment to the relevant Holders.
(b) If a Holder of an Income PRIDES fails to notify the Purchase Contract
Agent of its intention to make a Cash Settlement in accordance with Section
5.3(a)(i) of the Purchase Contract Agreement, such failure shall constitute an
event of default under the Purchase Contract Agreement and hereunder, and the
Holder shall be deemed to have consented to the disposition
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of the Pledged Capital Securities pursuant to the remarketing as described in
Section 5.3(b) of the Purchase Contract Agreement, which is incorporated herein
by reference. If a Holder of an Income PRIDES does notify the Purchase Contract
Agent as provided in Section 5.3(a)(i) of the Purchase Contract Agreement of its
intention to pay the Purchase Price in cash, but fails to make such payment as
required by Section 5.3(a)(ii) of the Purchase Contract Agreement, such failure
will constitute an event of default under the Purchase Contract Agreement and
hereunder, and the Capital Securities of such a Holder will not be remarketed
but instead the Collateral Agent, for the benefit of the Company, will exercise
its rights as a secured party with respect to such Capital Securities at the
direction of the Company to retain or dispose of the Collateral in accordance
with applicable law. In addition, in the event of a Failed Remarketing as
described in Section 5.4(b) of the Purchase Contract Agreement, such Failed
Remarketing shall constitute an event of default hereunder by such Holder and
the Collateral Agent, for the benefit of the Company, will also exercise its
rights as a secured party with respect to such Capital Securities at the
direction of the Company to retain or dispose of the Collateral in accordance
with applicable law.
(c) If a Holder of a Growth PRIDES fails to notify the Purchase Contract
Agent of such Holder's intention to make a Cash Settlement in accordance with
Section 5.3(d)(i) of the Purchase Contract Agreement, or if a Holder of a Growth
PRIDES does notify the Purchase Contract Agent as provided in paragraph
5.3(d)(i) of the Purchase Contract Agreement of its intention to pay the
Purchase Price in cash, but fails to make such payment as required by paragraph
5.3(d)(ii) of the Purchase Contract Agreement, such failure shall constitute an
event of default hereunder by such Holder and upon the maturity of any Pledged
Treasury Securities or the Treasury Portfolio, if any, held by the Collateral
Agent on the Business Day immediately preceding the Purchase Contract Settlement
Date, the principal amount of the Pledged Treasury Securities or the Treasury
Portfolio received by the Collateral Agent shall, upon written direction of the
Company, be invested promptly in Permitted Investments. On the Purchase Contract
Settlement Date, an amount equal to the Purchase Price will be remitted to the
Company as payment thereof. In the event the sum of the proceeds from the
related Pledged Treasury Securities or the Treasury Portfolio, as the case may
be, and the investment earnings earned from such investments is in excess of the
aggregate Purchase Price of the Purchase Contracts being settled thereby, the
Collateral Agent will distribute such excess to the Purchase Contract Agent for
the benefit of the Holder of the related Growth PRIDES or Income PRIDES when
received.
Section 4.5 Early Settlement. Upon written notice to the Collateral Agent
by the Purchase Contract Agent that one or more Holders of Securities have
elected to effect Early Settlement of their respective obligations under the
Purchase Contracts forming a part of such Securities in accordance with the
terms of the Purchase Contracts and the Purchase Contract Agreement (setting
forth the number of such Purchase Contracts as to which such Holders have
elected to effect Early Settlement), and that the Purchase Contract Agent has
received from such Holders, and paid to the Company as confirmed in writing by
the Company, the related Early Settlement Amounts pursuant to the terms of the
Purchase Contracts and the Purchase Contract Agreement and that all conditions
to such Early Settlement have been satisfied, then the Collateral Agent shall
release from the Pledge, (a) Pledged Capital Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio in the case of a Holder
of Income
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PRIDES or (b) Pledged Treasury Securities in the case of a Holder of Growth
PRIDES, as the case may be, with a principal amount equal to the product of (i)
the Stated Amount times (ii) the number of such Purchase Contracts as to which
such Holders have elected to effect Early Settlement and shall Transfer all such
Pledged Capital Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio or Pledged Treasury Securities, as the case may be, free
and clear of the Pledge created hereby, to the Purchase Contract Agent for the
benefit of the Holders.
Section 4.6 Application of Proceeds Settlement. (a) In the event a Holder
of Income PRIDES (if a Tax Event Redemption has not occurred) has not elected to
make an effective Cash Settlement by notifying the Purchase Contract Agent in
the manner provided for in paragraph 5.3(a)(i) in the Purchase Contract
Agreement or has not made an Early Settlement of the Purchase Contract(s)
underlying its Income PRIDES, such Holder shall be deemed to have elected to pay
for the shares of Common Stock to be issued under such Purchase Contract(s) from
the Proceeds of the related Pledged Capital Securities. The Collateral Agent
shall, by 10:00 a.m., New York City time, on the fourth Business Day immediately
preceding the Purchase Contract Settlement Date, without any instruction from
such Holder of Income PRIDES, present the related Pledged Capital Securities to
the Remarketing Agent for remarketing. Upon receiving such Pledged Capital
Securities, the Remarketing Agent, pursuant to the terms of the Remarketing
Agreement and the Remarketing Underwriting Agreement, will use its reasonable
efforts to remarket such Pledged Capital Securities on such date at a price not
less than approximately 100.5% of the aggregate Value of such Pledged Capital
Securities, plus accumulated and unpaid distributions, if any, thereon. After
deducting as the remarketing fee an amount not exceeding 25 basis points (.25%)
of the aggregate Value of the Pledged Capital Securities from any amount of such
Proceeds in excess of the aggregate Value, plus such accumulated and unpaid
distributions of the remarketed Pledged Capital Securities, the Remarketing
Agent will remit the entire amount of the Proceeds of such remarketing to the
Collateral Agent. On the Purchase Contract Settlement Date, the Collateral Agent
shall apply that portion of the Proceeds from such remarketing equal to the
aggregate Value, plus such accumulated and unpaid distributions of such Pledged
Capital Securities, to satisfy in full the obligations of such Holders of Income
PRIDES to pay the Purchase Price to purchase the Common Stock under the related
Purchase Contracts. The remaining portion of such Proceeds, if any, shall be
distributed by the Collateral Agent to the Purchase Contract Agent for payment
to the Holders. If the Remarketing Agent advises the Collateral Agent in writing
that it cannot remarket the related Pledged Capital Securities of such Holders
of Income PRIDES at a price not less than 100% of the aggregate Value of such
Pledged Capital Securities plus any accumulated and unpaid distributions, thus
resulting in a Failed Remarketing and an event of default under the Purchase
Contract Agreement and hereunder, the Collateral Agent, for the benefit of the
Company will, at the written direction of the Company, retain or dispose of the
Pledged Capital Securities in accordance with applicable law and satisfy in
full, from any such disposition or retention, such Holder's obligation to pay
the Purchase Price for the Common Stock.
(b) In the event a Holder of Growth PRIDES or Income PRIDES (if a Tax Event
Redemption has occurred) has not made an Early Settlement of the Purchase
Contract(s)
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underlying its Growth PRIDES or Income PRIDES, such Holder shall be deemed to
have elected to pay for the shares of Common Stock to be issued under such
Purchase Contract(s) from the Proceeds of the related Pledged Treasury
Securities or the Treasury Portfolio, as the case may be. On the Business Day
immediately prior to the Purchase Contract Settlement Date, the Collateral Agent
shall, at the written direction of the Purchase Contract Agent, invest the Cash
proceeds of the maturing Pledged Treasury Securities or the Treasury Portfolio,
as the case may be, in overnight Permitted Investments. Without receiving any
instruction from any such Holder of Growth PRIDES or Income PRIDES, the
Collateral Agent shall apply the Proceeds of the related Pledged Treasury
Securities or Treasury Portfolio to the settlement of such Purchase Contracts on
the Purchase Contract Settlement Date.
In the event the sum of the Proceeds from the related Pledged Treasury
Securities or Treasury Portfolio and the investment earnings from the investment
in overnight Permitted Investments is in excess of the aggregate Purchase Price
of the Purchase Contracts being settled thereby, the Collateral Agent shall
distribute such excess, when received, to the Purchase Contract Agent for the
benefit of the Holders.
(c) Pursuant to the Remarketing Agreement and subject to the terms of the
Remarketing Underwriting Agreement, on or prior to the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, but no earlier than
the Payment Date immediately preceding the Purchase Contract Settlement Date,
holders of Separate Capital Securities may elect to have their Separate Capital
Securities remarketed by delivering their Separate Capital Securities, together
with a notice of such election, substantially in the form of Exhibit C hereto,
to the Custodial Agent. The Custodial Agent will hold such Separate Capital
Securities in an account separate from the Collateral Account. A holder of
Separate Capital Securities electing to have its Separate Capital Securities
remarketed will also have the right to withdraw such election by written notice
to the Custodial Agent, substantially in the form of Exhibit D hereto, on or
prior to the fifth Business Day immediately preceding the Purchase Contract
Settlement Date, upon which notice the Custodial Agent will return such Separate
Capital Securities to such holder. On the fourth Business Day immediately
preceding the Purchase Contract Settlement Date, the Custodial Agent will
deliver to the Remarketing Agent for remarketing all Separate Capital Securities
delivered to the Custodial Agent pursuant to this Section 4.6(c) and not
withdrawn pursuant to the terms hereof prior to such date. The portion of the
proceeds from such remarketing equal to the aggregate Value of such Separate
Capital Securities will automatically be remitted by the Remarketing Agent to
the Custodial Agent for the benefit of the holders of such Separate Capital
Securities. In addition, after deducting as the remarketing fee an amount not
exceeding 25 basis points (.25%) of the Value of the remarketed Separate Capital
Securities, from any amount of such proceeds in excess of the aggregate Value of
the remarketed Separate Capital Securities plus any accrued and unpaid
distributions (including deferred distributions, if any), the Remarketing Agent
will remit to the Custodial Agent the remaining portion of the proceeds, if any,
for the benefit of such holders. If, despite using its reasonable efforts, the
Remarketing Agent advises the Custodial Agent in writing that it cannot remarket
the related Separate Capital Securities of such holders at a price not less than
100% of the aggregate Value of such Separate Capital Securities plus accrued and
unpaid distributions and thus resulting in a Failed Remarketing, the Remarketing
Agent will promptly
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return such Capital Securities to the Custodial Agent for redelivery to such
holders. In the event of a dissolution of the Trust and the distribution of the
Debentures as described in the Declaration, all references to "Separate Capital
Securities" in this Section 4.6(c) shall be deemed to be references to
Debentures which are not pledged hereunder or required to be part of the
Collateral.
ARTICLE V
Voting Rights -- Capital Securities.
The Purchase Contract Agent may exercise, or refrain from exercising,
any and all voting and other consensual rights pertaining to the Pledged Capital
Securities or any part thereof for any purpose not inconsistent with the terms
of this Agreement and in accordance with the terms of the Purchase Contract
Agreement; provided, that the Purchase Contract Agent shall not exercise or, as
the case may be, shall not refrain from exercising such right if, in the
judgment of the Company, such action would impair or otherwise have a material
adverse effect on the value of all or any of the Pledged Capital Securities; and
provided, further, that the Purchase Contract Agent shall give the Company and
the Collateral Agent at least five days' prior written notice of the manner in
which it intends to exercise, or its reasons for refraining from exercising, any
such right. Upon receipt of any notices and other communications in respect of
any Pledged Capital Securities, including notice of any meeting at which holders
of Capital Securities are entitled to vote or solicitation of consents, waivers
or proxies of holders of Capital Securities, the Collateral Agent shall use
reasonable efforts to send promptly to the Purchase Contract Agent such notice
or communication, and as soon as reasonably practicable after receipt of a
written request therefor from the Purchase Contract Agent, execute and deliver
to the Purchase Contract Agent such proxies and other instruments in respect of
such Pledged Capital Securities (in form and substance satisfactory to the
Collateral Agent) as are prepared by the Purchase Contract Agent with respect to
the Pledged Capital Securities.
ARTICLE VI
Rights and Remedies; Distribution of the Debentures; Tax Event Redemption
Section 6.1 Rights and Remedies of the Collateral Agent. (a) In addition to
the rights and remedies specified in Section 4.4 hereof or otherwise available
at law or in equity, after an event of default hereunder, the Collateral Agent
shall have all of the rights and remedies with respect to the Collateral of a
secured party under the Uniform Commercial Code (or any successor thereto) as in
effect in the State of New York from time to time (the "Code") (whether or not
the Code is in effect in the jurisdiction where the rights and remedies are
asserted) and the TRADES Regulations and such additional rights and remedies to
which a secured party is entitled under the laws in effect in any jurisdiction
where any rights and remedies hereunder may be asserted. Wherever reference is
made in this Agreement to any section of the Code, such reference shall be
deemed to include a reference to any provision of the Code which is a successor
to, or amendment of, such section. Without limiting the generality of the
foregoing, such remedies may include, to the extent permitted by applicable law,
(i) retention of the Pledged Capital Securities or other Collateral in full
satisfaction of the Holders' obligations under the
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Purchase Contracts or (ii) sale of the Pledged Capital Securities or other
Collateral in one or more public or private sales.
(b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio or on account of principal payments of any Pledged
Treasury Securities as provided in Article III hereof in satisfaction of the
obligations of the Holder of the Securities of which such Pledged Treasury
Securities, or the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, as
applicable, is a part under the related Purchase Contracts, the inability to
make such payments shall constitute an event of default hereunder and the
Collateral Agent shall have and may exercise, with reference to such Pledged
Treasury Securities, or such appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as applicable, and such obligations of such Holder, any and all of
the rights and remedies available to a secured party under the Code and the
TRADES Regulations after default by a debtor, and as otherwise granted herein or
under any other law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) the Stated Amount of or,
cash distributions on, the Pledged Capital Securities, (ii) the principal amount
of the Pledged Treasury Securities, or (iii) the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, subject, in each case, to the provisions of Section
3, and as otherwise granted herein.
(d) The Purchase Contract Agent, individually and as attorney-in-fact for
each Holder of Securities, in the event such Holder becomes the Holder of a
Growth PRIDES, agrees that, from time to time, upon the written request of the
Collateral Agent, the Purchase Contract Agent or such Holder shall execute and
deliver such further documents and do such other acts and things as the
Collateral Agent may reasonably request in order to maintain the Pledge, and the
perfection and priority thereof, and to confirm the rights of the Collateral
Agent hereunder. The Purchase Contract Agent shall have no liability to any
Holder for executing any documents or taking any such acts requested by the
Collateral Agent hereunder, except for liability for its own negligent act, its
own negligent failure to act, its bad faith or its own willful misconduct.
Section 6.2 Distribution of the Debentures; Investment Company Event; Tax
Event Redemption. Upon the occurrence of an Investment Company Event or a
liquidation of the Trust, a principal amount of the Debentures constituting the
assets of the Trust and underlying the Capital Securities equal to the aggregate
stated liquidation amount of the Pledged Capital Securities shall be delivered
to the Collateral Agent in exchange for the Pledged Capital Securities. In the
event the Collateral Agent receives such Debentures in respect of Pledged
Capital Securities upon the occurrence of an Investment Company Event or
liquidation of the Trust, the Collateral Agent shall Transfer the Debentures to
the Collateral Account in the manner specified herein (including, without
limitation, physical delivery thereof as set forth in Section
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2.1) for Pledged Capital Securities to secure the obligations of the Holders of
Income PRIDES to purchase the Company's Common Stock under the related Purchase
Contracts. Thereafter, the Collateral Agent shall have such security interests,
rights and obligations with respect to the Debentures as it had in respect of
the Pledged Capital Securities as provided in Articles II, III, IV, V and VI
hereof, and any reference herein to the Pledged Capital Securities shall be
deemed to be referring to such Debentures.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principal Amount of Debentures
shall be delivered to the Collateral Agent by the Property Trustee or upon a
dissolution of the Trust and the distribution of the related Debentures by the
Debenture Trustee on or prior to 12:30 p.m., New York City time, by check or
wire transfer in immediately available funds at such place and at such account
as may be designated by the Collateral Agent in exchange for the Pledged Capital
Securities or Debentures, as the case may be. In the event the Collateral Agent
receives such Redemption Price, the Collateral Agent will, at the written
direction of the Company, apply an amount equal to the Redemption Amount of such
Redemption Price to purchase from the Quotation Agent the Treasury Portfolio and
promptly remit the remaining portion of such Redemption Price to the Purchase
Contract Agent for payment to the Holders of Income PRIDES. The Collateral Agent
shall Transfer the Treasury Portfolio to the Collateral Account in the manner
specified herein for Pledged Capital Securities to secure the obligation of all
Holders of Income PRIDES to purchase Common Stock of the Company under the
Purchase Contracts constituting a part of such Income PRIDES, in substitution
for the Pledged Capital Securities. Thereafter the Collateral Agent shall have
such security interests, rights and obligations with respect to the Treasury
Portfolio as it had in respect of the Pledged Capital Securities or Debentures,
as the case may be, as provided in Articles II, III, IV, V and VI, and any
reference herein to the Pledged Capital Securities or the Debentures shall be
deemed to be reference to such Treasury Portfolio.
Section 6.3 Substitutions. Whenever a Holder has the right to substitute
Treasury Securities, Capital Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, for Collateral held by
the Collateral Agent, such substitution shall not constitute a novation of the
security interest created hereby.
ARTICLE VII
Representations and Warranties; Covenants.
Section 7.1 Representations and Warranties. The Holders from time to time,
acting through the Purchase Contract Agent as their attorney-in-fact (it being
understood that the Purchase Contract Agent shall not be liable for any
representation or warranty made by or on behalf of a Holder), hereby represent
and warrant to the Collateral Agent, which representations and warranties shall
be deemed repeated on each day a Holder Transfers Collateral that:
(a) such Holder has the power to grant a security interest in and lien
on the Collateral;
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(b) such Holder is the sole beneficial owner of the Collateral and, in
the case of Collateral delivered in physical form, is the sole holder of
such Collateral and is the sole beneficial owner of, or has the right to
Transfer, the Collateral it Transfers to the Collateral Agent, free and
clear of any security interest, lien, encumbrance, call, liability to pay
money or other restriction other than the security interest and lien
granted under Section 2.1 hereof;
(c) upon the Transfer of the Collateral to the Collateral Account, the
Collateral Agent, for the benefit of the Company, will have a valid and
perfected first priority security interest therein (assuming that any
central clearing operation or any Intermediary or other entity not within
the control of the Holder involved in the Transfer of the Collateral,
including the Collateral Agent, gives the notices and takes the action
required of it hereunder and under applicable law for perfection of that
interest and assuming the establishment and exercise of control pursuant to
Section 2.2 hereof); and
(d) the execution and performance by the Holder of its obligations
under this Agreement will not result in the creation of any security
interest, lien or other encumbrance on the Collateral other than the
security interest and lien granted under Section 2.1 hereof or violate any
provision of any existing law or regulation applicable to it or of any
mortgage, charge, pledge, indenture, contract or undertaking to which it is
a party or which is binding on it or any of its assets.
Section 7.2 Covenants. The Holders from time to time, acting through the
Purchase Contract Agent as their attorney-in-fact (it being understood that the
Purchase Contract Agent shall not be liable for any covenant made by or on
behalf of a Holder), hereby covenant to the Collateral Agent that for so long as
the Collateral remains subject to the Pledge:
(a) neither the Purchase Contract Agent nor such Holders will create
or purport to create or allow to subsist any mortgage, charge, lien, pledge
or any other security interest whatsoever over the Collateral or any part
of it other than pursuant to this Agreement; and
(b) neither the Purchase Contract Agent nor such Holders will sell or
otherwise dispose (or attempt to dispose) of the Collateral or any part of
it except for the beneficial interest therein, subject to the pledge
hereunder, transferred in connection with the Transfer of the Securities.
ARTICLE VIII
The Collateral Agent.
Section 8.1 Appointment, Powers and Immunities. The Collateral Agent shall
act as Agent for the Company hereunder with such powers as are specifically
vested in the Collateral Agent by the terms of this Agreement, together with
such other powers as are reasonably incidental thereto. Each of the Collateral
Agent, the Custodial Agent and the Securities Intermediary: (a) shall have no
duties or responsibilities except those expressly set forth in this Agreement
and no implied covenants or obligations shall be inferred from this Agreement
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against any of them, nor shall any of them be bound by the provisions of any
agreement by any party hereto beyond the specific terms hereof; (b) shall not be
responsible for any recitals contained in this Agreement, or in any certificate
or other document referred to or provided for in, or received by it under, this
Agreement, the Securities or the Purchase Contract Agreement, or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement (other than as against the Collateral Agent), the Securities or the
Purchase Contract Agreement or any other document referred to or provided for
herein or therein or for any failure by the Company or any other Person (except
the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be) to perform any of its obligations hereunder or thereunder or for
the perfection, priority or, except as expressly required hereby, maintenance of
any security interest created hereunder; (c) shall not be required to initiate
or conduct any litigation or collection proceedings hereunder (except in the
case of the Collateral Agent, pursuant to directions furnished under Section 8.2
hereof, subject to Section 8.6 hereof); (d) shall not be responsible for any
action taken or omitted to be taken by it hereunder or under any other document
or instrument referred to or provided for herein or in connection herewith or
therewith, except for its own negligence, bad faith or willful misconduct; and
(e) shall not be required to advise any party as to selling or retaining, or
taking or refraining from taking any action with respect to, the Securities or
other property deposited hereunder. Subject to the foregoing, during the term of
this Agreement, the Collateral Agent shall take all reasonable action in
connection with the safekeeping and preservation of the Collateral hereunder.
No provision of this Agreement shall require the Collateral Agent, the
Custodial Agent or the Securities Intermediary to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder. In no event shall the Collateral Agent, the Custodial Agent or
the Securities Intermediary be liable for any amount in excess of the Value of
the Collateral. Notwithstanding the foregoing, the Collateral Agent, the
Custodial Agent, the Purchase Contract Agent and Securities Intermediary, each
in its individual capacity, hereby waive any right of setoff, bankers lien,
liens or perfection rights as securities intermediary or any counterclaim with
respect to any of the Collateral.
Section 8.2 Instructions of the Company. The Company shall have the right,
by one or more instruments in writing executed and delivered to the Collateral
Agent, the Custodial Agent or the Securities Intermediary, as the case may be,
to direct the time, method and place of conducting any proceeding for the
realization of any right or remedy available to the Collateral Agent, or of
exercising any power conferred on the Collateral Agent, the Custodial Agent or
the Securities Intermediary, as the case may be, or to direct the taking or
refraining from taking of any action authorized by this Agreement; provided,
however, that (i) such direction shall not conflict with the provisions of any
law or of this Agreement and (ii) the Collateral Agent, the Custodial Agent and
the Securities Intermediary shall be adequately indemnified as provided herein.
Nothing in this Section 8.2 shall impair the right of the Collateral Agent in
its discretion to take any action or omit to take any action which it deems
proper and which is not inconsistent with such direction.
Section 8.3 Reliance by Collateral Agent. Each of the Securities
Intermediary, the Custodial Agent and the Collateral Agent shall be entitled
conclusively to rely upon any
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certification, order, judgment, opinion, notice or other communication
(including, without limitation, any thereof by telephone or facsimile) believed
by it to be genuine and correct and to have been signed or sent by or on behalf
of the proper Person or Persons (without being required to determine the
correctness of any fact stated therein), and upon advice and statements of legal
counsel and other experts selected by the Collateral Agent, the Custodial Agent
or the Securities Intermediary, as the case may be. As to any matters not
expressly provided for by this Agreement, the Collateral Agent, the Custodial
Agent and the Securities Intermediary shall in all cases be fully protected in
acting, or in refraining from acting, hereunder in accordance with instructions
given by the Company in accordance with this Agreement.
Section 8.4 Rights in Other Capacities. The Collateral Agent, the Custodial
Agent and the Securities Intermediary and their affiliates may (without having
to account therefor to the Company) accept deposits from, lend money to, make
their investments in and generally engage in any kind of banking, trust or other
business with the Purchase Contract Agent, any Holder of Securities and any
holder of Separate Capital Securities (and any of their respective subsidiaries
or affiliates) as if it were not acting as the Collateral Agent, the Custodial
Agent or the Securities Intermediary, as the case may be, and the Collateral
Agent, the Custodial Agent and the Securities Intermediary and their affiliates
may accept fees and other consideration from the Purchase Contract Agent, any
Holder of Securities or any holder of Separate Capital Securities without having
to account for the same to the Company; provided that each of the Securities
Intermediary, the Custodial Agent and the Collateral Agent covenants and agrees
with the Company that it shall not accept, receive or permit there to be created
in favor of itself and shall take no affirmative action to permit there to be
created in favor of any other Person, any security interest, lien or other
encumbrance of any kind in or upon the Collateral and the Collateral shall not
be commingled with any other assets of any such Person.
Section 8.5 Non-Reliance on Collateral Agent. None of the Securities
Intermediary, the Custodial Agent or the Collateral Agent shall be required to
keep itself informed as to the performance or observance by the Purchase
Contract Agent or any Holder of Securities of this Agreement, the Purchase
Contract Agreement, the Securities or any other document referred to or provided
for herein or therein or to inspect the properties or books of the Purchase
Contract Agent or any Holder of Securities. The Collateral Agent, the Custodial
Agent and the Securities Intermediary shall not have any duty or responsibility
to provide the Company or the Remarketing Agent with any credit or other
information concerning the affairs, financial condition or business of the
Purchase Contract Agent, any Holder of Securities or any holder of Separate
Capital Securities (or any of their respective subsidiaries or affiliates) that
may come into the possession of the Collateral Agent, the Custodial Agent or the
Securities Intermediary or any of their respective affiliates.
Section 8.6 Compensation and Indemnity. The Company agrees: (i) to pay each
of the Collateral Agent and the Custodial Agent from time to time such
compensation as shall be agreed in writing between the Company and the
Collateral Agent or the Custodial Agent, as the case may be, for all services
rendered by each of them hereunder and (ii) to indemnify the Collateral Agent,
the Custodial Agent and the Securities Intermediary for, and to hold each of
them harmless from and against, any loss, liability or reasonable out-of-pocket
expense incurred
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without negligence, willful misconduct or bad faith on its part, arising out of
or in connection with the acceptance or administration of its powers and duties
under this Agreement, including the reasonable out-of-pocket costs and expenses
(including reasonable fees and expenses of counsel) of defending itself against
any claim or liability in connection with the exercise or performance of such
powers and duties. The Collateral Agent, the Custodial Agent and the Securities
Intermediary shall each promptly notify the Company of any third party claim
which may give rise to the indemnity hereunder and give the Company the
opportunity to participate in the defense of such claim with counsel reasonably
satisfactory to the indemnified party, and no such claim shall be settled
without the written consent of the Company, which consent shall not be
unreasonably withheld.
Section 8.7 Failure to Act. In the event of any ambiguity in the provisions
of this Agreement or any dispute between or conflicting claims by or among the
parties hereto or any other Person with respect to any funds or property
deposited hereunder, the Collateral Agent and the Custodial Agent shall be
entitled, after prompt notice to the Company and the Purchase Contract Agent, at
its sole option, to refuse to comply with any and all claims, demands or
instructions with respect to such property or funds so long as such dispute or
conflict shall continue, and neither the Collateral Agent nor the Custodial
Agent shall be or become liable in any way to any of the parties hereto for its
failure or refusal to comply with such conflicting claims, demands or
instructions. The Collateral Agent and the Custodial Agent shall be entitled to
refuse to act until either (i) such conflicting or adverse claims or demands
shall have been finally determined by a court of competent jurisdiction or
settled by agreement between the conflicting parties as evidenced in a writing,
satisfactory to the Collateral Agent or the Custodial Agent, as the case may be,
or (ii) the Collateral Agent or the Custodial Agent, as the case may be, shall
have received security or an indemnity reasonably satisfactory to the Collateral
Agent or the Custodial Agent, as the case may be, sufficient to save the
Collateral Agent or the Custodial Agent, as the case may be, harmless from and
against any and all loss, liability or reasonable out-of-pocket expense which
the Collateral Agent or the Custodial Agent, as the case may be, may incur by
reason of its acting without bad faith, willful misconduct or gross negligence.
The Collateral Agent or the Custodial Agent may in addition elect to commence an
interpleader action or seek other judicial relief or orders as the Collateral
Agent or the Custodial Agent, as the case may be, may deem necessary.
Notwithstanding anything contained herein to the contrary, neither the
Collateral Agent nor the Custodial Agent shall be required to take any action
that is in its opinion contrary to law or to the terms of this Agreement, or
which would in its opinion subject it or any of its officers, employees or
directors to liability.
Section 8.8 Resignation of Collateral Agent. Subject to the appointment and
acceptance of a successor Collateral Agent or Custodial Agent as provided below,
(a) the Collateral Agent and the Custodial Agent may resign at any time by
giving notice thereof to the Company and the Purchase Contract Agent as
attorney-in-fact for the Holders of Securities, (b) the Collateral Agent and the
Custodial Agent may be removed at any time by the Company and (c) if the
Collateral Agent or the Custodial Agent fails to perform any of its material
obligations hereunder in any material respect for a period of not less than 20
days after receiving written notice of such failure by the Purchase Contract
Agent and such failure shall be continuing, the Collateral Agent or the
Custodial Agent may be removed by the Purchase
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Contract Agent. The Purchase Contract Agent shall promptly notify the Company of
any removal of the Collateral Agent pursuant to clause (c) of the immediately
preceding sentence. Upon any such resignation or removal, the Company shall have
the right to appoint a successor Collateral Agent or Custodial Agent, as the
case may be. If no successor Collateral Agent or Custodial Agent, as the case
may be, shall have been so appointed and shall have accepted such appointment
within 30 days after the retiring Collateral Agent's or Custodial Agent's giving
of notice of resignation or such removal, then the retiring Collateral Agent or
Custodial Agent, as the case may be, may petition any court of competent
jurisdiction for the appointment of a successor Collateral Agent or Custodial
Agent, as the case may be. Each of the Collateral Agent and the Custodial Agent
shall be a bank which has an office in New York, New York with a combined
capital and surplus of at least $50,000,000. Upon the acceptance of any
appointment as Collateral Agent or Custodial Agent, as the case may be,
hereunder by a successor Collateral Agent or Custodial Agent, as the case may
be, such successor shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Collateral Agent or
Custodial Agent, as the case may be, and the retiring Collateral Agent or
Custodial Agent, as the case may be, shall take all appropriate action to
transfer any money and property held by it hereunder (including the Collateral)
to such successor. The retiring Collateral Agent or Custodial Agent shall, upon
such succession, be discharged from its duties and obligations as Collateral
Agent or Custodial Agent hereunder. After any retiring Collateral Agent's or
Custodial Agent's resignation hereunder as Collateral Agent or Custodial Agent,
the provisions of this Section 8.8 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Collateral Agent or Custodial Agent. Any resignation or removal of the
Collateral Agent hereunder shall be deemed for all purposes of this Agreement as
the simultaneous resignation or removal of the Custodial Agent and the
Securities Intermediary.
Section 8.9 Right to Appoint Agent or Advisor. The Collateral Agent shall
have the right to appoint agents or advisors in connection with any of its
duties hereunder, and the Collateral Agent shall not be liable for any action
taken or omitted by, or in reliance upon the advice of, such agents or advisors
selected in good faith. The appointment of agents pursuant to this Section 8.9
shall be subject to prior consent of the Company, which consent shall not be
unreasonably withheld.
Section 8.10 Survival. The provisions of this Article 8 shall survive
termination of this Agreement and the resignation or removal of the Collateral
Agent or the Custodial Agent.
Section 8.11 Exculpation. Anything in this Agreement to the contrary
notwithstanding, in no event shall any of the Collateral Agent, the Custodial
Agent or the Securities Intermediary or their officers, employees or agents be
liable under this Agreement to any third party for indirect, special, punitive,
or consequential loss or damage of any kind whatsoever, including lost profits,
whether or not the likelihood of such loss or damage was known to the Collateral
Agent, the Custodial Agent or the Securities Intermediary, or any of them,
incurred without any act or deed that is found to be attributable to gross
negligence, bad faith or willful misconduct on the part of the Collateral Agent,
the Custodial Agent or the Securities Intermediary.
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ARTICLE IX
Amendment.
Section 9.1 Amendment Without Consent of Holders. Without the consent of any
Holders or the holders of any Separate Capital Securities, the Company, the
Collateral Agent, the Custodial Agent, the Securities Intermediary and the
Purchase Contract Agent, at any time and from time to time, may amend this
Agreement, in form satisfactory to the Company, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Purchase Contract Agent,
for any of the following purposes:
(1) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company; or
(2) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company so long as such covenants or such surrender do not adversely affect
the validity, perfection or priority of the security interests granted or
created hereunder; or
(3) to evidence and provide for the acceptance of appointment
hereunder by a successor Collateral Agent, Securities Intermediary or
Purchase Contract Agent; or
(4) to cure any ambiguity, to correct or supplement any provisions
herein which may be inconsistent with any other such provisions herein, or
to make any other provisions with respect to such matters or questions
arising under this Agreement, provided such action shall not adversely
affect the interests of the Holders.
Section 9.2 Amendment with Consent of Holders. With the consent of the
Holders of not less than a majority of the Purchase Contracts at the time
outstanding, by Act of said Holders delivered to the Company, the Purchase
Contract Agent or the Collateral Agent, as the case may be, the Company, when
duly authorized, the Purchase Contract Agent, the Collateral Agent, the
Custodial Agent and the Securities Intermediary may amend this Agreement for the
purpose of modifying in any manner the provisions of this Agreement or the
rights of the Holders in respect of the Securities; provided, however, that no
such supplemental agreement shall, without the consent of the Holder of each
Outstanding Security adversely affected thereby,
(1) change the amount or type of Collateral underlying a Security
(except for the rights of holders of Income PRIDES to substitute the
Treasury Securities for the Pledged Capital Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may
be, or the rights of Holders of Growth PRIDES to substitute Capital
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as applicable, for the Pledged Treasury Securities), impair the
right of the Holder of any Security to receive distributions on the
underlying Collateral or otherwise adversely affect the Holder's rights in
or to such Collateral; or
24
<PAGE>
(2) otherwise effect any action that would require the consent of the
Holder of each Outstanding Security affected thereby pursuant to the
Purchase Contract Agreement if such action were effected by an agreement
supplemental thereto; or
(3) reduce the percentage of Purchase Contracts the consent of whose
Holders is required for any such amendment.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed amendment, but it shall be
sufficient if such Act shall approve the substance thereof.
Section 9.3 Execution of Amendments. In executing any amendment permitted
by this Section, the Collateral Agent, the Custodial Agent, the Securities
Intermediary and the Purchase Contract Agent shall be entitled to receive and
(subject to Section 6.1 hereof, with respect to the Collateral Agent, and
Section 7.1 of the Purchase Contract Agreement, with respect to the Purchase
Contract Agent) shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such amendment is authorized or permitted by this
Agreement and that all conditions precedent, if any, to the execution and
delivery of such amendment have been satisfied.
Section 9.4 Effect of Amendments. Upon the execution of any amendment under
this Article 9, this Agreement shall be modified in accordance therewith, and
such amendment shall form a part of this Agreement for all purposes; and every
Holder of Certificates theretofore or thereafter authenticated, executed on
behalf of the Holders and delivered under the Purchase Contract Agreement shall
be bound thereby.
Section 9.5 Reference to Amendments. Security Certificates authenticated,
executed on behalf of the Holders and delivered after the execution of any
amendment pursuant to this Section may, and shall if required by the Collateral
Agent or the Purchase Contract Agent, bear a notation in form approved by the
Purchase Contract Agent and the Collateral Agent as to any matter provided for
in such amendment. If the Company shall so determine, new Security Certificates
so modified as to conform, in the opinion of the Collateral Agent, the Purchase
Contract Agent and the Company, to any such amendment may be prepared and
executed by the Company and authenticated, executed on behalf of the Holders and
delivered by the Purchase Contract Agent in accordance with the Purchase
Contract Agreement in exchange for Outstanding Security Certificates.
ARTICLE X
Miscellaneous.
Section 10.1 No Waiver. No failure on the part of any party hereto or any
of its agents to exercise, and no course of dealing with respect to, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by any party hereto or
any of its agents of any right, power or remedy hereunder preclude any other
25
<PAGE>
or further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.
Section 10.2 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Without limiting
the foregoing, the above choice of law is expressly agreed to by the Securities
Intermediary, the Collateral Agent and the Holders from time to time acting
through the Purchase Contract Agent, as their attorney-in-fact, in connection
with the establishment and maintenance of the Collateral Account. The Company,
the Collateral Agent and the Holders from time to time of the Securities, acting
through the Purchase Contract Agent as their attorney-in-fact, hereby submit to
the nonexclusive jurisdiction of the United States District Court for the
Southern District of New York and of any New York state court sitting in New
York City for the purposes of all legal proceedings arising out of or relating
to this Agreement or the transactions contemplated hereby. The Company, the
Collateral Agent and the Holders from time to time of the Securities, acting
through the Purchase Contract Agent as their attorney-in-fact, irrevocably
waive, to the fullest extent permitted by applicable law, any objection which
they may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.
Section 10.3 Notices. All notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) delivered to the
intended recipient at the "Address for Notices" specified below its name on the
signature pages hereof or, as to any party, at such other address as shall be
designated by such party in a notice to the other parties. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
Section 10.4 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the respective successors and assigns of the
Company, the Collateral Agent, the Custodial Agent, the Securities Intermediary
and the Purchase Contract Agent, and the Holders from time to time of the
Securities, by their acceptance of the same, shall be deemed to have agreed to
be bound by the provisions hereof and to have ratified the agreements of, and
the grant of the Pledge hereunder by, the Purchase Contract Agent.
Section 10.5 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
Section 10.6 Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) the
invalidity or
26
<PAGE>
unenforceability of any provision hereof in any jurisdiction shall not affect
the validity or enforceability of such provision in any other jurisdiction.
Section 10.7 Expenses, Etc. The Company agrees to reimburse the Collateral
Agent and the Custodial Agent for: (a) all reasonable out-of-pocket costs and
expenses of the Collateral Agent and the Custodial Agent (including, without
limitation, the reasonable fees and expenses of counsel to the Collateral Agent
and the Custodial Agent), in connection with (i) the negotiation, preparation,
execution and delivery or performance of this Agreement and (ii) any
modification, supplement or waiver of any of the terms of this Agreement; (b)
all reasonable costs and expenses of the Collateral Agent (including, without
limitation, reasonable fees and expenses of counsel) in connection with (i) any
enforcement or proceedings resulting or incurred in connection with causing any
Holder of Securities to satisfy its obligations under the Purchase Contracts
forming a part of the Securities and (ii) the enforcement of this Section 10.7;
and (c) all transfer, stamp, documentary or other similar taxes, assessments or
charges levied by any governmental or revenue authority in respect of this
Agreement or any other document referred to herein and all costs, expenses,
taxes, assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest contemplated
hereby.
Section 10.8 Security Interest Absolute. All rights of the Collateral Agent
and security interests hereunder, and all obligations of the Holders from time
to time hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any provision of the
Purchase Contracts or the Securities or any other agreement or instrument
relating thereto;
(b) any change in the time, manner or place of payment of, or any
other term of, or any increase in the amount of, all or any of the
obligations of Holders of Securities under the related Purchase Contracts,
or any other amendment or waiver of any term of, or any consent to any
departure from any requirement of, the Purchase Contract Agreement or any
Purchase Contract or any other agreement or instrument relating thereto; or
(c) any other circumstance which might otherwise constitute a defense
available to, or discharge of, a borrower, a guarantor or a pledgor.
27
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
COX COMMUNICATIONS, INC.
By: /s/ Dallas S. Clement
Name: Dallas S. Clement
Title: Vice President and Treasurer
Address for Notices:
Cox Communications, Inc.
1400 Lake Hearn Drive
Atlanta, Georgia 30319
Attention: Dallas S. Clement
Telecopy: (404) 847-6336
THE FIRST NATIONAL BANK OF CHICAGO,
as Purchase Contract Agent and as
attorney-in-fact of the Holders
from time to time of the Securities
By: /s/ Janice Ott Rotunno
Name: Janice Ott Rotunno
Title: Vice President
Address for Notices:
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, IL 60670-0126
Attention: Corporate Trust Services Division
Telecopy: (312) 407-1708
THE BANK OF NEW YORK, as Collateral Agent,
Custodial Agentand as Securities Intermediary
By: /s/ Marie E. Trimboli
Name: Marie E. Trimboli
Title: Assistant Treasurer
28
<PAGE>
Address for Notices:
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Corporate Trust Administration
Telecopy: (212) 815-5915
29
<PAGE>
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Corporate Trust Administration
Re: FELINE PRIDES of Cox Communications, Inc.
(the "Company"), and Cox Trust II
We hereby notify you in accordance with Section [4.1] [4.2] of the
Pledge Agreement, dated as of August 12, 1999, (the "Pledge Agreement") among
the Company, yourselves, as Collateral Agent, Custodial Agent and Securities
Intermediary and ourselves, as Purchase Contract Agent and as attorney-in-fact
for the holders of [Income PRIDES] [Growth PRIDES] from time to time, that the
holder of Securities listed below (the "Holder") has elected to substitute
[$_____ aggregate principal amount of Treasury Securities] [$_______Stated
Amount of Capital Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio] in exchange for an equal Value of [Pledged Capital
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio] [Pledged Treasury Securities] held by you in accordance with the
Pledge Agreement and has delivered to us a notice stating that the Holder has
Transferred [Treasury Securities] [Capital Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio] to you, as Collateral
Agent. We hereby instruct you, upon receipt of such [Pledged Treasury
Securities] [Pledged Capital Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio], to release the [Capital Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio] [Treasury
Securities] related to such [Income PRIDES] [Growth PRIDES] to us in accordance
with the Holder's instructions. Capitalized terms used herein but not defined
shall have the meaning set forth in the Pledge Agreement.
Date: _____________________
By: ______________________
Name: ____________________
Title: ___________________
Signature Guarantee: ___________________
<PAGE>
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Capital Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio] for the [Pledged Capital
Securities or the Treasury Portfolio] [Pledged Treasury Securities]:
- -------------------------------- ---------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
- --------------------------------
Address
- --------------------------------
- --------------------------------
<PAGE>
EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, IL 60670-0126
Attention: Corporate Trust Services Division
Re: FELINE PRIDES of Cox Communications, Inc.
(the "Company"), and Cox Trust II
The undersigned Holder hereby notifies you that it has delivered to The
Bank of New York, as Collateral Agent, [$_______ aggregate principal amount of
Treasury Securities] [$ aggregate Stated Amount of Capital Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio] in exchange
for an equal Value of [Pledged Capital Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio] [Pledged Treasury Securities] held
by the Collateral Agent, in accordance with Section 4.1 of the Pledge Agreement,
dated August 12, 1999 (the "Pledge Agreement"), between you, the Company and the
Collateral Agent. The undersigned Holder hereby instructs you to instruct the
Collateral Agent to release to you on behalf of the undersigned Holder the
[Pledged Capital Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio] [Pledged Treasury Securities] related to such [Income
PRIDES] [Growth PRIDES]. Capitalized terms used herein but not defined shall
have the meaning set forth in the Pledge Agreement.
Date: _________________________
Signature Guarantee: _______________________
Please print name and address of Registered Holder:
- -------------------------------- ---------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
- --------------------------------
Address
- --------------------------------
- --------------------------------
<PAGE>
EXHIBIT C
INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Corporate Trust Administration
Re: Capital Securities of Cox Communications, Inc.
(the "Company"), and Cox Trust II
The undersigned hereby notifies you in accordance with Section 4.6(c)
of the Pledge Agreement, dated as of August 12, 1999 (the "Pledge Agreement"),
among the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent, and The First National Bank of Chicago, as Purchase Contract
Agent and as attorney-in-fact for the Holders of Income PRIDES and Growth PRIDES
from time to time, that the undersigned elects to deliver $__________ stated
liquidation amount of Capital Securities for delivery to the Remarketing Agent
on the fourth Business Day immediately preceding the Purchase Contract
Settlement Date for remarketing pursuant to Section 4.6(c) of the Pledge
Agreement. The undersigned will, upon request of the Remarketing Agent, execute
and deliver any additional documents deemed by the Remarketing Agent or by the
Company to be necessary or desirable to complete the sale, assignment and
transfer of the Capital Securities tendered hereby.
The undersigned hereby instructs you, upon receipt of the Proceeds of
such remarketing from the Remarketing Agent to deliver such Proceeds to the
undersigned in accordance with the instructions indicated herein under "A.
Payment Instructions." The undersigned hereby instructs you, in the event of
Failed Remarketing, upon receipt of the Capital Securities tendered herewith
from the Remarketing Agent, to be delivered to the person(s) and the address(es)
indicated herein under "B. Delivery Instructions."
With this notice, the undersigned hereby (i) represents and warrants
that the undersigned has full power and authority to tender, sell, assign and
transfer the Capital Securities tendered hereby and that the undersigned is the
record owner of any Capital Securities tendered herewith in physical form or a
participant in The Depositary Trust Company ("DTC") and the beneficial owner of
any Capital Securities tendered herewith by book-entry transfer to your account
at DTC and (ii) agrees to be bound by the terms and conditions of Section 4.6(c)
of the Pledge Agreement. Capitalized terms used herein but not defined shall
have the meaning set forth in the Pledge Agreement.
<PAGE>
Date: ________________________
By:
----------------------------
Name:
Title:
Signature Guarantee: ____________________
Please print name and address:
- -------------------------------- ---------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
- --------------------------------
Address
- --------------------------------
- --------------------------------
<PAGE>
A. PAYMENT INSTRUCTIONS
Proceeds of the remarketing should be paid by check in the name of the person(s)
set forth below and mailed to the address set forth below.
Name(s)_____________________________
(Please Print)
Address ____________________________
(Please Print)
- ------------------------------------
- ------------------------------------
(Zip Code)
- ------------------------------------
(Tax Identification or Social Security Number)
B. DELIVERY INSTRUCTIONS
In the event of a Failed Remarketing, Capital Securities which are in physical
form should be delivered to the person(s) set forth below and mailed to the
address set forth below.
Name(s)_____________________________
(Please Print)
Address ____________________________
(Please Print)
- ------------------------------------
- ------------------------------------
(Zip Code)
- ------------------------------------
(Tax Identification or Social Security Number)
In the event of a Failed Remarketing, Capital Securities which are in book-entry
form should be credited to the account at The Depositary Trust Company set forth
below.
-----------------------
DTC Account Number
Name of Account Party:
------------------------
<PAGE>
EXHIBIT D
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Corporate Trust Administration
Re: Capital Securities of Cox Communications, Inc.
(the "Company"), and Cox Trust II
The undersigned hereby notifies you in accordance with Section 4.6(c)
of the Pledge Agreement, dated as of August 12, 1999 (the "Pledge Agreement")
among the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent and The First National Bank of Chicago, as Purchase Contract
Agent and as attorney-in-fact for the Holders of Income PRIDES and Growth PRIDES
from time to time, that the undersigned elects to withdraw the $_____ aggregate
stated liquidation amount of Capital Securities delivered to the Custodial Agent
on ___________, 2002 for remarketing pursuant to Section 4.6(c) of the Pledge
Agreement. The undersigned hereby instructs you to return such Capital
Securities to the undersigned in accordance with the undersigned's instructions.
With this notice, the Undersigned hereby agrees to be bound by the terms and
conditions of Section 4.6(c) of the Pledge Agreement. Capitalized terms used
herein but not defined shall have the meaning set forth in the Pledge Agreement.
Date:
--------------------
By:
----------------------
Name:
----------------------
Title:
----------------------
Signature Guarantee:
-----------------
<PAGE>
- -------------------------------- ---------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
- --------------------------------
Address
- --------------------------------
- --------------------------------
<PAGE>
A. DELIVERY INSTRUCTIONS
In the event of a Failed Remarketing, Capital Securities which are in physical
form should be delivered to the person(s) set forth below and mailed to the
address set forth below.
Name(s)_____________________________
(Please Print)
Address ____________________________
(Please Print)
- ------------------------------------
- ------------------------------------
(Zip Code)
- ------------------------------------
(Tax Identification or Social Security Number)
In the event of a Failed Remarketing, Capital Securities which are in book-entry
form should be credited to the account at The Depositary Trust Company set forth
below.
-----------------------
DTC Account Number
Name of Account Party:
------------------------
Exhibit 4.4
FIRST SUPPLEMENTAL INDENTURE
Dated as of August 12, 1999
between
COX COMMUNICATIONS, INC.,
AS ISSUER
and
THE BANK OF NEW YORK,
AS TRUSTEE
<PAGE>
Table of Contents
Page
ARTICLE I
DEFINITIONS
SECTION 1.1. Definition of Terms..........................................4
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
SECTION 2.1. Designation, Principal Amount and Authorized Denomination....7
SECTION 2.2. Maturity.....................................................7
SECTION 2.3. Form and Payment.............................................7
SECTION 2.4. Global Debenture.............................................8
SECTION 2.5. Interest.....................................................9
ARTICLE III
REDEMPTION OF THE DEBENTURES
SECTION 3.1. Tax Event Redemption........................................10
SECTION 3.2. Redemption Procedure for Debentures.........................10
SECTION 3.3. No Sinking Fund.............................................11
SECTION 3.4. Option to Put Debentures....................................11
SECTION 3.5. Repurchase Procedure for Debentures.........................11
ARTICLE IV
EXPENSES
SECTION 4.1. Payment of Expenses.........................................12
SECTION 4.2. Payment Upon Resignation or Removal.........................12
ARTICLE V
FORM OF DEBENTURE
SECTION 5.1. Form of Debenture...........................................12
ARTICLE VI
ORIGINAL ISSUE OF DEBENTURES
SECTION 6.1. Original Issue of Debentures................................21
SECTION 6.2. Calculation of Original Issue Discount......................21
ARTICLE VII
MISCELLANEOUS
SECTION 7.1. Ratification of Indenture...................................21
SECTION 7.2. Trustee Not Responsible for Recitals........................21
<PAGE>
SECTION 7.3. Governing Law...............................................21
SECTION 7.4. Separability................................................21
SECTION 7.5. Counterparts................................................22
<PAGE>
FIRST SUPPLEMENTAL INDENTURE, dated as of August 12, 1999 (the "First
Supplemental Indenture"), between COX COMMUNICATIONS, INC., a corporation duly
organized and existing under the laws of the State of Delaware, (the "Company"),
and The Bank of New York, a New York banking corporation, as trustee (the
"Trustee").
WHEREAS, the Company executed and delivered the indenture, dated as of
June 27, 1995 (the "Base Indenture"), to the Trustee to provide for the future
issuance of the Company's debentures, notes, bonds or other evidences of
indebtedness (the "Securities"), to be issued from time to time in one or more
series as might be determined by the Company under the Base Indenture;
WHEREAS, pursuant to the terms of the Base Indenture, the Company
desires to provide for the establishment of a new series of its Securities to be
known as its 7% Senior Debentures due 2004 (the "Debentures"), the form and
substance of such Debentures and the terms, provisions and conditions thereof to
be set forth as provided in the Base Indenture and this First Supplemental
Indenture (together, the "Indenture");
WHEREAS, Cox Trust II, a Delaware statutory business trust (the
"Trust"), has offered to the public its 7% Capital Securities (the "Capital
Securities"), representing preferred, undivided beneficial interests in the
assets of the Trust, and proposes to invest the proceeds from such offering,
together with the proceeds of the issuance and sale by the Trust to the Company
of its 7% Common Securities (the "Common Securities" and together with the
Capital Securities, the "Trust Securities"), in the Debentures; and
WHEREAS, the Company has requested that the Trustee execute and deliver
this First Supplemental Indenture and all requirements necessary to make this
First Supplemental Indenture a valid instrument in accordance with its terms,
and to make the Debentures, when executed by the Company and authenticated and
delivered by the Trustee, the valid obligations of the Company and all acts and
things necessary have been done and performed to make this First Supplemental
Indenture enforceable in accordance with its terms, and the execution and
delivery of this First Supplemental Indenture has been duly authorized in all
respects:
NOW THEREFORE, in consideration of the purchase and acceptance of the
Debentures by the Holders thereof, and for the purpose of setting forth, as
provided in the Indenture, the form and substance of the Debentures and the
terms, provisions and conditions thereof, the Company covenants and agrees with
the Trustee as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. Definition of Terms.
Unless the context otherwise requires:
(a) a term defined in the Indenture has the same meaning when used in this
First Supplemental Indenture;
4
<PAGE>
(b) a term defined anywhere in this First Supplemental Indenture has the
same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) headings are for convenience of reference only and do not affect
interpretation;
(e) the following terms have the meanings given to them in the Declaration:
Administrative Trustees; Authorized Newspaper; Capital Security Certificate;
Clearing Agency; Common Securities Guarantee; Delaware Trustee; Distributions;
DTC; FELINE PRIDES; Growth PRIDES; Guarantee; Income PRIDES; Investment Company
Event; Pricing Agreement; Property Trustee; Purchase Contract Agreement; Reset
Agent; Reset Announcement Date; Reset Spread; Treasury Securities; Two-Year
Benchmark Treasury; and Underwriting Agreement.
(f) the following terms have the meanings given to them in this Section
1.1(f):
"Applicable Principal Amount" means either (i) if the Tax Event
Redemption Date occurs prior to August 16, 2002, the aggregate principal amount
of the Debentures corresponding to the aggregate stated liquidation amount of
the Capital Securities which are components of Income PRIDES on the Tax Event
Redemption Date or (ii) if the Tax Event Redemption occurs on or after August
16, 2002, the aggregate principal amount of the Debentures corresponding to the
aggregate stated liquidation amount of the Capital Securities outstanding on
such Tax Event Redemption Date.
"Business Day" means any day other than a Saturday, Sunday or any other
day on which banking institutions and trust companies in The City of New York
are permitted or required by any applicable law to close.
"Collateral Agent" has the meaning set forth in the Purchase Contract
Agreement.
"Coupon Rate" shall have the meaning set forth in Section 2.5.
"Debenture Repayment Price" shall have the meaning set forth in Section
3.4.
"Declaration" means the Amended and Restated Declaration of Trust of
Cox Trust II, a Delaware statutory business trust, dated as of August 12, 1999.
"Dissolution Event" means that, as a result of the occurrence and
continuation of a Tax Event, an Investment Company Event or otherwise, the Trust
is to be dissolved in accordance with the Declaration, and, except in the case
of a Tax Event Redemption, the Debentures held by the Property Trustee are to be
distributed to the holders of the Trust Securities issued by the Trust pro rata
in accordance with the Declaration.
"Failed Remarketing" shall have the meaning set forth in Section 5.4(b)
of the Purchase Contract Agreement.
"Global Debentures" shall have the meaning set forth in Section 2.4.
5
<PAGE>
"Non Book-Entry Capital Securities" shall have the meaning set forth in
Section 2.4.
"Over-Allotment Option" shall mean the option granted to the
underwriters pursuant to the Underwriting Agreement to purchase up to an
additional 1,950,000 Feline PRIDES, in any combination of Income PRIDES and
Growth PRIDES, and an additional number of Capital Securities equal to the
number of additional Growth PRIDES so purchased, in order to satisfy
over-allotments.
"Purchase Contract" shall have the meaning set forth in the Purchase
Contract Agreement.
"Purchase Contract Agreement" shall mean that certain agreement dated
August 12, 1999 between the Company and The First National Bank of Chicago, as
purchase contract agent.
"Purchase Contract Settlement Date" means August 16, 2002.
"Put Option" shall have the meaning set forth in Section 3.4.
"Quotation Agent" means (i) Merrill Lynch Government Securities, Inc.
and its respective successors, provided, however, that if the foregoing shall
cease to be a Primary Treasury Dealer, the Company shall substitute therefor
another Primary Treasury Dealer, and (ii) any other Primary Treasury Dealer
selected by the Company.
"Redemption Amount" means for each Debenture, the product of (i) the
principal amount of such Debenture and (ii) a fraction whose numerator is the
Treasury Portfolio Purchase Price and whose denominator is the Applicable
Principal Amount of the Treasury Portfolio.
"Tax Event" means the receipt by the Trust of an opinion of a
nationally recognized independent tax counsel experienced in such matters to the
effect that, as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein affecting taxation, (b) any amendment to or change in an interpretation
or application of such laws or regulations by any legislative body, court,
governmental agency or regulatory authority or (c) any interpretation or
pronouncement that provides for a position with respect to such laws or
regulations that differs from the generally accepted position on the date the
Trust Securities are issued, which amendment or change is effective or which
interpretation or pronouncement is announced on or after the date of issuance of
the Trust Securities under the Declaration, there is more than an insubstantial
risk that (i) interest payable by the Company on the Debentures would not be
deductible, in whole or in part, by the Company for federal income tax purposes
or (ii) the Trust would be subject to more than a de minimis amount of other
taxes, duties or other governmental charges.
"Tax Event Redemption Date" shall have the meaning set forth in Section
3.1 hereof.
"Treasury Portfolio" means with respect to the Applicable Principal
Amount of Debentures (a) if the Tax Event Redemption Date occurs prior to August
16, 2002, a portfolio of zero-coupon U.S. Treasury Securities consisting of (i)
interest or principal strips of U.S. Treasury Securities which mature on or
prior to August 15, 2002 in an aggregate amount equal to
6
<PAGE>
the Applicable Principal Amount and (ii) with respect to each scheduled interest
payment date on the Debentures that occurs after the Tax Event Redemption Date,
principal or interest strips of U.S. Treasury Securities which mature on or
prior to such date in an aggregate amount equal to the aggregate interest
payment that would be due on the Applicable Principal Amount of the Debentures
on such date, and (b) if the Tax Event Redemption Date occurs after August 16,
2002, a portfolio of zero-coupon U.S. Treasury Securities consisting of (i)
principal or interest strips of U.S. Treasury Securities which mature on or
prior to August 15, 2004 in an aggregate amount equal to the Applicable
Principal Amount and (ii) with respect to each scheduled interest payment date
on the Debentures that occurs after the Tax Event Redemption Date, interest or
principal strips of such U.S. Treasury Securities which mature on or prior to
such date in an aggregate amount equal to the aggregate interest payment that
would be due on the Applicable Principal Amount of the Debentures on such date.
"Treasury Portfolio Purchase Price" means the lowest aggregate price
quoted by a primary U.S. government securities dealer in New York City (a
"Primary Treasury Dealer") to the Quotation Agent on the third Business Day
immediately preceding the Tax Event Redemption Date for the purchase of the
Treasury Portfolio for settlement on the Tax Event Redemption Date.
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
SECTION 2.1. Designation, Principal Amount and Authorized Denomination.
There is hereby authorized a series of Securities designated the 7%
Senior Debentures due 2004 (the "Debentures"), limited in aggregate principal
amount to $670,103,100 (or up to $770,618,600, if the Over-Allotment Option is
exercised in full), which amount to be issued shall be as set forth in any
written order of the Company for the authentication and delivery of Debentures
pursuant to the Base Indenture. The denominations in which debentures shall be
issuable is $50 and integral multiples thereof.
SECTION 2.1 Maturity.
The Maturity Date will be August 16, 2004.
SECTION 2.2 Form and Payment.
Except as provided in Section 2.4, the Debentures shall be issued in
fully registered certificated form without interest coupons bearing identical
terms. Principal and interest on the Debentures issued in certificated form will
be payable, the transfer of such Debentures will be registrable and such
Debentures will be exchangeable for Debentures bearing identical terms and
provisions at the office or agency of the Trustee; provided, however, that
payment of interest may be made at the option of the Company by check mailed to
the Holder at such address as shall appear in the Debt Security Register.
Notwithstanding the foregoing, so long as the Holder of any Debentures is the
Property Trustee, the payment of the principal of and interest (including
expenses and taxes of the Trust set forth in Section 4.1 hereof, if any) on such
Debentures held
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by the Property Trustee will be made at such place and to such account as may be
designated by the Property Trustee.
SECTION 2.4 Global Debenture.
(a) In connection with a Dissolution Event,
(i) the Debentures in certificated form may be presented to the
Trustee by the Property Trustee in exchange for a global Debenture in an
aggregate principal amount equal to the aggregate principal amount of all
outstanding Debentures (a "Global Debenture"), to be registered in the name of
the Clearing Agency, or its nominee, and delivered by the Property Trustee to
the Clearing Agency for crediting to the accounts of its participants pursuant
to the instructions of the Administrative Trustees. The Company upon any such
presentation shall execute a Global Debenture in such aggregate principal amount
and deliver the same to the Trustee for authentication and delivery in
accordance with the Indenture. The Trustee, upon receipt of such Global
Debenture, together with an Officers' Certificate requesting authentication,
will authenticate such Global Debenture. Payments on the Debentures issued as a
Global Debenture will be made to the Clearing Agency; and
(ii) if any Capital Securities are held in non book-entry
certificated form, the Debentures in certificated form may be presented to the
Trustee by the Property Trustee and any Capital Security Certificate which
represents Capital Securities other than Capital Securities held by the Clearing
Agency or its nominee ("Non Book-Entry Capital Securities") will be deemed to
represent beneficial interests in the Debentures presented to the Trustee by the
Property Trustee having an aggregate principal amount equal to the aggregate
liquidation amount of the Non Book-Entry Capital Securities until such Capital
Security Certificates are presented to the Property Trustee for transfer or
reissuance at which time such Capital Security Certificates will be cancelled
and a Debenture, registered in the name of the Holder of the Capital Security
Certificate or the transferee of the Holder of such Capital Security
Certificate, as the case may be, with an aggregate principal amount equal to the
aggregate liquidation amount of the Capital Security Certificate cancelled, will
be executed by the Company and delivered to the Trustee for authentication and
delivery in accordance with the Indenture to such Holder. The Trustee, upon
receipt of such Debenture together with an Officers' Certificate requesting
authentication, shall authenticate such Debenture. On issue of such Debentures,
Debentures with an equivalent aggregate principal amount that were presented by
the Property Trustee to the Trustee will be deemed to have been cancelled.
(b) Unless and until it is exchanged for the Debentures in registered form,
a Global Debenture may be transferred, in whole but not in part, only to another
nominee of the Clearing Agency, or to a successor Clearing Agency selected or
approved by the Company or to a nominee of such successor Clearing Agency.
(c) If at any time the Clearing Agency notifies the Company that it is
unwilling or unable to continue as a Clearing Agency or if at any time the
Clearing Agency for such series shall no longer be registered or in good
standing under the Securities Exchange Act of 1934, as amended, or other
applicable statute or regulation, and a successor Clearing Agency for such
series is not appointed by the Company within 90 days after the Company receives
such notice or becomes
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aware of such condition, as the case may be, the Company will execute, and,
subject to Article II of the Indenture, the Trustee, upon written notice from
the Company, will authenticate and deliver the Debentures in certificated
registered form without coupons, in authorized denominations, and in an
aggregate principal amount equal to the principal amount of the Global Debenture
in exchange for such Global Debenture. In addition, the Company may at any time
determine that the Debentures shall no longer be represented by a Global
Debenture. In such event the Company will execute, and subject to Section 2.05
of the Base Indenture, the Trustee, upon receipt of an Officers' Certificate
evidencing such determination by the Company, will authenticate and deliver the
Debentures in certificated registered form without coupons, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Debenture in exchange for such Global Debenture. Upon the
exchange of the Global Debenture for such Debentures in certificated registered
form without coupons, in authorized denominations, the Global Debenture shall be
cancelled by the Trustee. Such Debentures in certificated registered form issued
in exchange for the Global Debenture shall be registered in such names and in
such authorized denominations as the Clearing Agency, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Trustee. The Trustee shall deliver such Securities to the Clearing Agency for
delivery to the Persons in whose names such Securities are so registered.
SECTION 2.5. Interest.
(a) Each Debenture will bear interest initially at the rate of 7% per annum
(the "Coupon Rate") from the original date of issuance until August 16, 2002,
and thereafter at the rate determined by the Reset Agent and notified to the
Trustee by the Company (the "Reset Rate") until the principal thereof becomes
due and payable, and on any overdue principal and (to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment of
interest at the rate of 7% until August 16, 2002 and at the Reset Rate
thereafter, compounded quarterly, payable (subject to the provisions of Article
IV herein) quarterly in arrears on February 16, May 16, August 16 and November
16 of each year (each, an "Interest Payment Date") commencing on November 16,
1999, to the Person in whose name such Debenture or any predecessor Debenture is
registered, at the close of business on the regular record date for such
interest installment, which, in respect of (i) Debentures of which the Property
Trustee is the Holder and the Capital Securities are in book-entry only form or
(ii) a Global Debenture, shall be the close of business on the Business Day next
preceding that Interest Payment Date. Notwithstanding the foregoing sentence, if
(i) the Debentures are held by the Property Trustee and the Capital Securities
are no longer in book-entry only form or (ii) the Debentures are not represented
by a Global Debenture, the Company may select a regular record date for such
interest installment which shall be more than 15 Business Days but less than 60
Business Days prior to an Interest Payment Date.
(b) The Coupon Rate on the Debentures will be reset on the third Business
Day immediately preceding the Purchase Contract Settlement Date to the Reset
Rate (which Reset Rate will become effective on and after the Purchase Contract
Settlement Date). On the tenth (10) Business Day immediately preceding the
Purchase Contract Settlement Date, the Reset Announcement Date, the Reset Spread
and the relevant Two-Year Benchmark Treasury will be announced by the Company
and the Company shall deliver an Officers' Certificate to the Trustee containing
such information. On the Business Day immediately following such Reset
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Announcement Date, the Holders of Debentures will be notified of such Reset
Spread and Two-Year Benchmark Treasury by the Company. Such notice shall be
sufficiently given to such Holders of Debentures if published in an Authorized
Newspaper.
(c) Not later than 10 calendar days nor more than 15 calendar days
immediately preceding the Reset Announcement Date, the Company will request that
the Clearing Agency or its nominee (or any successor Clearing Agency or its
nominee) or the Property Trustee, notify the Holders of Debentures of such Reset
Announcement Date and the procedures to be followed by such holders of
Debentures wishing to settle the related Purchase Contract with separate cash on
the Business Day immediately preceding the Purchase Contract Settlement Date.
(d) The amount of interest payable for any period will be computed on the
basis of a 360-day year consisting of twelve 30-day months. Except as provided
in the following sentence, the amount of interest payable for any period shorter
than a full quarterly period for which interest is computed, will be computed on
the basis of the actual number of days elapsed in such a 90-day period. In the
event that any date on which interest is payable on the Debentures is not a
Business Day, then payment of interest payable on such date will be made on the
next succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
ARTICLE III
REDEMPTION OF THE DEBENTURES
SECTION 3.1. Tax Event Redemption.
If a Tax Event shall occur and be continuing, the Company may, at its
option, redeem the Debentures in whole (but not in part) at any time at a
Redemption Price per Debenture equal to the Redemption Amount plus accrued and
unpaid interest (including compound interest) thereon, together with the
expenses and taxes of the Trust set forth in Section 4.1 hereof, if any, to the
date of such redemption (the "Tax Event Redemption Date"). If, following the
occurrence of a Tax Event, the Company exercises its option to redeem the
Debentures, then the proceeds of such redemption, if distributed to the Property
Trustee as the sole Holder of such Debentures, will be applied by the Property
Trustee to redeem Trust Securities having an aggregate liquidation amount equal
to the aggregate principal amount of the Debentures so redeemed, at the
Redemption Price. If, following the occurrence of a Tax Event, the Company
exercises its option to redeem the Debentures, the Company shall appoint the
Quotation Agent to assemble the Treasury Portfolio in consultation with the
Company. Upon exercise of its option to redeem the Debentures, the Company shall
in the notice to the Trustee pursuant to Section 3.03 of the Base Indenture
specify the Redemption Price and the Redemption Amount. The Trustee shall have
no duty or liability to determine or verify such amount. Notice of any
redemption will be mailed at least 30 days but not more than 60 days before the
Tax Event Redemption Date to each registered Holder of the Debentures to be
prepaid at its registered address. Unless the Company defaults in payment of the
Redemption Price, on and after the redemption date interest shall cease to
accrue on such Debentures.
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SECTION 3.2. Redemption Procedure for Debentures.
Payment of the Redemption Price to each Holder of Debentures shall be
made by the Trustee (subject to its receipt of funds), no later than 12:00 noon,
New York City time, on the Tax Event Redemption Date, by check or wire transfer
in immediately available funds (provided the necessary wire instructions have
been provided to the Trustee at least 15 days prior to the Tax Event Redemption
Date) at such place and to such account as may be designated by each such Holder
of Debentures, including the Property Trustee or the Collateral Agent, as the
case may be. If the Trustee holds immediately available funds sufficient to pay
the Redemption Price of the Debentures (or, if the Company is acting as paying
agent or the Property Trustee (if other than the Trustee) has received the
Redemption Price), then, on such Tax Event Redemption Date, such Debentures will
cease to be outstanding and interest thereon will cease to accrue, whether or
not such Debentures have been received by the Company, and all other rights of
the Holder in respect of the Debentures shall terminate and lapse (other than
the right to receive the Redemption Price upon delivery of such Debentures but
without interest on such Redemption Price).
SECTION 3.3. No Sinking Fund.
The Debentures are not entitled to the benefit of any sinking fund.
SECTION 3.4. Option to Put Debentures.
If a Failed Remarketing has occurred, the Company shall immediately
notify the Trustee in writing thereof and each Holder of Debentures who holds
such Debentures on the day immediately following the Purchase Contract
Settlement Date shall have the right (the "Put Option") on or after the Business
Day immediately following the Purchase Contract Settlement Date, upon at least
three Business Days' prior notice, to require the Company to repurchase such
Holder's Debentures on September 1, 2002 (the "Put Option Exercise Date"),
either in whole or in part, at a repayment price per Debenture equal to $50,
plus accrued and unpaid interest, if any, thereon to the date of payment (the
"Debenture Repayment Price").
SECTION 3.5. Repurchase Procedure for Debentures.
(a) In order for the Debentures to be repurchased on the Put Option
Exercise Date, the Company must receive on or prior to 5:00 p.m. New York City
time on the third Business Day immediately preceding the Put Option Exercise
Date, at the principal executive offices of Cox Communications, Inc. in Atlanta,
Georgia, the Debentures to be repurchased with the form entitled "Option to
Elect Repayment" on the reverse of or otherwise accompanying such Debentures
duly completed. Any such notice received by the Company shall be irrevocable.
All questions as to the validity, eligibility (including time of receipt) and
acceptance of the Debentures for repayment shall be determined by the Company,
whose determination shall be final and binding. All such Debentures repurchased
by the Company shall be presented by the Company to the Trustee for cancellation
thereof.
(b) Payment of the Debenture Repayment Price to Holders of Debentures shall
be made either through the Trustee, subject to the Trustee's receipt of payment
from the Company in accordance with the terms of the Indenture or through the
Trustee or the Company acting as paying agent, no later than 12:00 noon, New
York City time, on the Put Option Exercise Date, and to such account as may be
designated by such Holders. If the Trustee holds immediately available funds
sufficient to pay the Debenture Repayment Price of the Debentures presented for
repayment (or, if the Company is acting as
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paying agent and the Property Trustee (if other than the Trustee) has received
the Debenture Repayment Price), then, immediately prior to the close of business
on the Business Day immediately preceding the Put Option Exercise Date, such
Debentures will cease to be outstanding and interest thereon will cease to
accrue, whether or not such Debentures have been received by the Company, and
all other rights of the Holder in respect of the Debentures, including the
Holder's right to require the Company to repay such Debentures, shall terminate
and lapse (other than the right to receive the Debenture Repayment Price upon
delivery of such Debentures but without interest on such Debenture Repayment
Price). Neither the Trustee nor the Company will be required to register or
cease to be registered the transfer of any Debentures for which repayment has
been elected.
ARTICLE IV
EXPENSES
SECTION 4.1. Payment of Expenses.
In connection with the offering, sale and issuance of the Debentures to
the Property Trustee and in connection with the sale of the Trust Securities by
the Trust, the Company, in its capacity as borrower with respect to the
Debentures, shall pay all costs and expenses relating to the offering, sale and
issuance of the Debentures, including commissions to the underwriters payable
pursuant to the Underwriting Agreement and the Pricing Agreement and
compensation and expenses of the Trustee and its counsel under the Indenture in
accordance with the provisions of the Base Indenture.
SECTION 4.2. Payment Upon Resignation or Removal.
Upon termination of this First Supplemental Indenture or the Base
Indenture or the removal or resignation of the Trustee, the Company shall pay to
the Trustee all amounts then owing to the Trustee under Section 7.06 of the Base
Indenture. Upon termination of the Trust Agreement or the removal or resignation
of the Delaware Trustee or the Property Trustee, as the case may be, pursuant to
Section 5.6 of the Declaration, the Company shall pay to the Delaware Trustee or
the Property Trustee, as the case may be, all amounts accrued to the date of
such termination, removal or resignation.
ARTICLE V
FORM OF DEBENTURE
SECTION 5.1. Form of Debenture.
The Debentures and the Trustee's Certificate of Authentication to be
endorsed thereon are to be substantially in the following forms:
[IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT - This Debenture
is a Global Debenture within the meaning of the Indenture hereinafter referred
to and
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is registered in the name of the Clearing Agency or a nominee of the
Clearing Agency. This Debenture is exchangeable for Debentures registered in the
name of a person other than the Clearing Agency or its nominee only in the
limited circumstances described in the Indenture, and no transfer of this
Debenture (other than a transfer of this Debenture as a whole by the Clearing
Agency to a nominee of the Clearing Agency or by a nominee of the Clearing
Agency to the Clearing Agency or another nominee of the Clearing Agency) may be
registered except in limited circumstances.
Unless this Debenture is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the issuer
or its agent for registration of transfer, exchange or payment, and any
Debenture issued is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of The Depository Trust Company and
any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.]
No. ___________________
CUSIP No. ______________ $_____________________
COX COMMUNICATIONS, INC.
7% SENIOR DEBENTURE DUE 2004
COX COMMUNICATIONS, INC., a Delaware corporation (the "Company", which
term includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to __________________________,
the principal sum of ($______________) on August 16, 2004 (such date is
hereinafter referred to as the "Maturity Date"), and to pay interest on said
principal sum from August 12, 1999, or from the most recent interest payment
date (each such date, an "Interest Payment Date") to which interest has been
paid or duly provided for, quarterly in arrears on February 16, May 16, August
16, and November 16 of each year, commencing on November 16, 1999, initially at
the rate of 7% per annum until August 16, 2002, and at the Reset Rate thereafter
until the principal hereof shall have become due and payable, and on any overdue
principal and premium, if any, and (without duplication and to the extent that
payment of such interest is enforceable under applicable law) on any overdue
installment of interest at the rate of 7% until August 16, 2002, and at the
Reset Rate thereafter, compounded quarterly. The interest rate will be reset on
the third business day preceding August 16, 2002 to the Reset Rate (as
determined by the Reset Agent). The amount of interest payable on any Interest
Payment Date shall be computed on the basis of a 360-day year consisting of
twelve 30-day months. In the event that any date on which interest is payable on
this Debenture is not a Business Day, then payment of interest payable on such
date will be made on the next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such delay), except that, if
such Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same force
and effect as if made on such date. The interest installment so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the person in whose name this Debenture is
registered at the close of business on the regular record date for such interest
installment, which in the case of a Global
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Debenture shall be the close of business on the Business Day next preceding such
Interest Payment Date; provided, however, if pursuant to the terms of the
Indenture the Debentures are no longer represented by a Global Debenture, the
Company may select such regular record date for such interest installment which
shall be more than one Business Day but less than 60 Business Days prior to an
Interest Payment Date. Any such interest installment not punctually paid or duly
provided for shall forthwith cease to be payable to the registered Holders on
such regular record date and may be paid to the Person in whose name this
Debenture is registered at the close of business on a special record date to be
fixed by the Trustee for the payment of such defaulted interest, notice whereof
shall be given to the registered Holders of this series of Debentures not less
than 10 days prior to such special record date, or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Debentures may be listed, and upon such notice as may be
required by such exchange all as more fully provided in the Indenture. The
principal of (and premium, if any) and the interest on this Debenture shall be
payable at the office or agency of the Trustee maintained for that purpose in
any coin or currency of the United States of America that at the time of payment
is legal tender for payment of public and private debts; provided, however, that
payment of interest may be made at the option of the Company by check mailed to
the registered Holder at such address as shall appear in the Debt Security
Register or by wire transfer to an account appropriately designated by the
Holder entitled thereto. Notwithstanding the foregoing, so long as the Holder of
this Debenture is the Property Trustee or the Collateral Agent, the payment of
the principal of (and premium, if any) and interest on this Debenture will be
made at such place and to such account as may be designated in writing by the
Property Trustee or the Collateral Agent.
The indebtedness evidenced by this Debenture is, to the extent provided
in the Indenture, senior and unsecured and will rank in right of payment on
parity with all other senior unsecured obligations of the Company.
This Debenture shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee.
The provisions of this Debenture are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
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IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
Dated:
COX COMMUNICATIONS, INC.
By: _________________________
Name:
Title:
By: _________________________
Name:
Title:
Attest:
By: ___________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series designated therein referred
to in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK,
as Trustee
By ______________________
Authorized Signatory
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(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Securities of the
Company (herein sometimes referred to as the "Securities"), specified in the
Indenture, all issued or to be issued in one or more series under and pursuant
to an Indenture dated as of June 27, 1995 (the "Base Indenture"), duly executed
and delivered between the Company and The Bank of New York, as Trustee (the
"Trustee") (as supplemented by the First Supplemental Indenture, dated August
12, 1999, the "Indenture"), to which Indenture and all indentures supplemental
thereto reference is hereby made for a description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the Trustee, the
Company and the Holders of the Securities. By the terms of the Indenture, the
Securities are issuable in series that may vary as to amount, date of maturity,
rate of interest and in other respects as provided in the Indenture. This series
of Securities is limited in aggregate principal amount as specified in said
First Supplemental Indenture.
If a Tax Event shall occur and be continuing, the Company may, at its
option, redeem Debentures in whole (but not in part) at any time at a Redemption
Price per Debenture equal to the Redemption Amount plus accrued and unpaid
interest thereon, together with expenses and taxes of the Trust, if any, to the
Tax Event Redemption Date. The Redemption Price shall be paid to each Holder of
the Debenture by the Company, no later than 12:00 noon, New York City time, on
the Tax Event Redemption Date, by check or wire transfer in immediately
available funds, at such place and to such account as may be designated by each
such Holder.
The Debentures are not entitled to the benefit of any sinking fund.
If a Failed Remarketing has occurred, each Holder of this Debenture who
holds this Debenture on the day immediately following the Purchase Contract
Settlement Date shall have the right (the "Put Option") on or after the Business
Day immediately following the Purchase Contract Settlement Date, upon at least
three Business Days' prior notice, to require the Company to repurchase such
Holder's Debentures on September 1, 2002 (the "Put Option Exercise Date"),
either in whole or in part, at a repayment price per Debenture equal to $50,
plus accrued and unpaid interest, if any, thereon to the date of payment (the
"Debenture Repayment Price"). In order for the Debentures to be so repurchased,
the Company must receive, on or prior to 5:00 p.m. New York City Time on the
third Business Day immediately preceding the Put Option Exercise Date, at the
principal executive offices of Cox Communications, Inc. in Atlanta, Georgia, the
Debentures to be repurchased with the form entitled "Option to Elect Repayment"
on the reverse of or otherwise accompanying such Debentures duly completed. Any
such notice received by the Company shall be irrevocable. All questions as to
the validity, eligibility (including time of receipt) and acceptance of the
Debentures for repayment shall be determined by the Company, whose determination
shall be final and binding. The payment of the Debenture Repayment Price in
respect of such Debentures shall be made, either through the Trustee or the
Company acting as paying agent, no later than 12:00 noon, New York City time, on
the Put Option Exercise Date.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration
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shall become, due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Debentures of each series affected at the time
outstanding, as defined in the Indenture, to execute supplemental indentures for
the purpose of, among other things, adding any provisions to or changing in any
manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or of modifying in any manner the rights of the Holders
of the Debentures; provided, however, that, among other things, no such
supplemental indenture shall (i) reduce the principal amount thereof, or reduce
the rate or extend the time of payment of interest thereon, or reduce any
premium payable upon the redemption thereof, without the consent of the Holder
of each Debenture so affected, or (ii) reduce the aforesaid percentage of
Debentures, the Holders of which are required to consent to any such
supplemental indenture, without the consent of the Holders of each Debenture
then outstanding and affected thereby. The Indenture also contains provisions
permitting the Holders of a majority in aggregate principal amount of the
Securities of any series at the time outstanding affected thereby, on behalf of
all of the Holders of the Debentures of such series, to waive a Default or Event
of Default with respect to such series, and its consequences, except a Default
or Event of Default in the payment of the principal of or premium, if any, or
interest on any of the Securities of such series or a Default in respect of a
provision that under Section 9.02 of the Indenture cannot be amended without the
consent of each holder affected thereby. Any such consent or waiver by the
registered Holder of this Debenture (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such Holder and upon all future
Holders and owners of this Debenture and of any Debenture issued in exchange for
or in place hereof (whether by registration of transfer or otherwise),
irrespective of whether or not any notation of such consent or waiver is made
upon this Debenture.
No reference herein to the Indenture and no provision of this Debenture
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Debenture at the time and place and at the rate and in the
money herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, this Debenture is transferable by the registered Holder hereof on the
Debt Security Register of the Company, upon surrender of this Debenture for
registration of transfer at the office or agency of the Trustee in the City of
New York and State of New York accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company or the Trustee duly
executed by the registered Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Debentures of authorized denominations
and for the same aggregate principal amount and series will be issued to the
designated transferee or transferees. No service charge will be made for any
such transfer, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and the Registrar may deem
and treat the registered holder hereof as the absolute owner hereof (whether or
not this Debenture shall be overdue and notwithstanding
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any notice of ownership or writing hereon made by anyone other than the
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any paying agent nor any
Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, shareholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
The Indenture imposes certain limitations on the ability of the Company
to, among other things, merge or consolidate with any other Person or sell,
assign, transfer or lease all or substantially all of its properties or assets.
All such covenants and limitations are subject to a number of important
qualifications and exceptions. The Company must report periodically to the
Trustee on compliance with the covenants in the Indenture.
The Debentures of this series are issuable only in registered form
without coupons in denominations of $50 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Debentures of this series so issued are exchangeable for a like aggregate
principal amount of Debentures of this series of a different authorized
denomination, as requested by the Holder surrendering the same.
All terms used in this Debenture that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
This Debenture shall be deemed to be a contract made under the internal
laws of the State of New York, and for all purposes shall be construed in
accordance with the laws of said State, without regard to conflicts of laws
principles.
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OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Company
to repay $_____ principal amount of the within Debenture, pursuant to its terms,
on the "Put Option Exercise Date," together with any interest thereon accrued
but unpaid to the date of repayment, to the undersigned at:
- --------------------------------------------------------------------
- --------------------------------------------------------------------
- --------------------------------------------------------------------
(Please print or type Name and Address of the Undersigned)
and to issue to the undersigned, pursuant to the terms of the Indenture, a new
Debenture or Debentures representing the remaining aggregate principal amount of
this Debenture.
For this Option to Elect Repayment to be effective, this Debenture with
the Option to Elect Repayment duly completed must be received by the Company at
Cox Communications, Inc., Attn: Treasurer, 1400 Lake Hearn Drive, Atlanta,
Georgia 30319, no later than 5:00 p.m. on the third Business Day immediately
preceding September 1, 2002.
Dated: Signature: ___________________________
Signature Guarantee: _________________
Note: The signature to this Option to Elect Repayment must correspond with the
name as written upon the face of the within Debenture in every particular
without alteration or enlargement or any change whatsoever.
19
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Debenture to:
- --------------------------------------------------------------------
- --------------------------------------------------------------------
- --------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------
- --------------------------------------------------------------------
- --------------------------------------------------------------------
(Insert address and zip code of assignee)
agent to transfer this Debenture on the books of the Trust. The agent may
substitute another to act for him or her.
Date: _____________________
Signature: _______________________
Signature Guarantee: ______________
(Sign exactly as your name appears on the other side of this Debenture)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Debt
Security Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
20
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ARTICLE VI
ORIGINAL ISSUE OF DEBENTURES
SECTION 6.1. Original Issue of Debentures.
Debentures in the aggregate principal amount of $670,103,100 (or,
$770,618,600, if the Over-Allotment Option is exercised) may, upon execution of
this First Supplemental Indenture, be executed by the Company and delivered to
the Trustee for authentication, and the Trustee shall thereupon authenticate and
deliver said Debentures to or upon the written order of the Company, signed by
its Chairman, its Vice Chairman, its President, or any Vice President and its
Secretary or Assistant Secretary, a Treasurer or an Assistant Treasurer, without
any further action by the Company.
SECTION 6.2. Calculation of Original Issue Discount.
The Company shall file with the Trustee promptly at the end of each
calendar year (i) a written notice specifying the amount of original issue
discount (including daily rates and accrual periods) accrued on Outstanding
Securities as of the end of such year and (ii) such other specific information
relating to such original issue discount as may then be relevant under the
Internal Revenue Code of 1986, as amended from time to time.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1. Ratification of Indenture.
The Indenture as supplemented by this First Supplemental Indenture, is
in all respects ratified and confirmed, and this First Supplemental Indenture
shall be deemed part of the Indenture in the manner and to the extent herein and
therein provided.
SECTION 7.2. Trustee Not Responsible for Recitals.
The recitals herein contained are made by the Company and not by the
Trustee, and the Trustee assumes no responsibility for the correctness thereof.
The Trustee makes no representation as to the validity or sufficiency of this
First Supplemental Indenture.
SECTION 7.3. Governing Law.
This First Supplemental Indenture and each Debenture shall be deemed to
be a contract made under the internal laws of the State of New York, and for all
purposes shall be construed in accordance with the laws of said State, without
regard to conflicts of laws principles.
SECTION 7.4. Separability.
In case any one or more of the provisions contained in this First
Supplemental Indenture or in the Debentures shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this
21
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First Supplemental Indenture or of the Debentures, but this First Supplemental
Indenture and the Debentures shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or therein.
SECTION 7.5. Counterparts.
This First Supplemental Indenture may be executed in any number of
counterparts each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed by their respective officers
thereunto duly authorized, on the date or dates indicated in the acknowledgments
and as of the day and year first above written.
COX COMMUNICATIONS, INC.,
as Issuer
By: /s/ Dallas S. Clement
Name: Dallas S. Clement
Title: Vice President and Treasurer
THE BANK OF NEW YORK ,
as Trustee
By: /s/ Marie E. Trimboli
Name: Marie E. Trimboli
Title: Assistant Treasurer
Exhibit 8.1
August 12, 1999
Cox Communications, Inc.
1400 Lake Hearn Drive
Atlanta, Georgia 30319
Cox Trust II
c/o Cox Communications, Inc.
1400 Lake Hearn Drive
Atlanta, Georgia 30319
The several Underwriters listed in
Schedule A to the Underwriting Agreement
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
World Financial Center
North Tower
250 Vesey Street
New York, New York 10281
Re: Cox Communications, Inc.
Cox Trust II
13,000,000 FELINE PRIDES(SM) and 7% Capital Securities
Ladies and Gentlemen:
This opinion is being delivered to you pursuant to Section 5(c) of the
Underwriting Agreement, dated August 9, 1999 (the "Underwriting Agreement"),
among Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Morgan Stanley & Co. Incorporated, Banc of America Securities LLC and J.P.
Morgan Securities Inc. (collectively, the "Underwriters"), Cox Communications,
Inc., a Delaware corporation ("CCI" or the "Company") and Cox Trust II, a
Delaware statutory business trust (the "Trust"), providing for the issuance and
sale to the Underwriters, acting severally and not jointly, on this date of
13,000,000 of the Company's FELINE PRIDES, consisting of 11,700,000 Income
PRIDES and 1,300,000 Growth PRIDES (the "Securities"). We have served as tax
counsel to the Company and the Trust in connection with the issuance and sale of
the Securities, and this opinion is being rendered to the Company, the Trust and
the Underwriters at the request of the Company. Capitalized terms used herein
that are not otherwise defined herein shall have the same meanings as in the
Underwriting Agreement.
<PAGE>
Cox Communications, Inc.
Cox Trust II
Merrill Lynch & Co.
August 12, 1999
Page 2
In rendering this opinion, our examination of documents has been limited to
the examination of originals or copies of the following:
a. The Registration Statement on Form S-3 (File No. 333-82575) and all
amendments thereto (the "Registration Statement"), in the form represented
to us as having been transmitted via the EDGAR system to the Securities and
Exchange Commission (the "SEC") on August 6, 1999.
b. The Prospectus in the form represented to us as having been
transmitted via the EDGAR system to the SEC on August 10, 1999 (the "Final
Prospectus").
c. The Prospectus Supplement to the Final Prospectus in the form
represented to us as having been transmitted via the EDGAR system to the
SEC on August 10, 1999 (the "Prospectus Supplement" and, together with the
Final Prospectus, the "Prospectus").
d. The Certificate of Trust of Cox Trust II, dated as of July 21,
1999, as filed in the office of the Secretary of State of Delaware on July
21, 1999.
e. The Declaration of Trust of Cox Trust II, dated as of July 21,1999,
by and among the Company, as sponsor, and The Bank of New York, a New York
banking corporation ("BONY"), and The Bank of New York (Delaware), a
Delaware banking corporation ("BONY (Delaware)"), as trustees of the Trust.
f. The Amended and Restated Declaration of Trust of Cox Trust II,
dated as of August 12, 1999, by and among the Company, as sponsor, the
trustees of the Trust named therein, and the holders, from time to time, of
undivided beneficial interests in the Trust (including Annex I and Exhibits
A-1 and A-2 thereto).
g. The Indenture, dated as of June 27, 1995, by and between the
Company and BONY as trustee, relating to debt securities.
h. The First Supplemental Indenture for Debt Securities, dated as of
August 12, 1999 (the "Supplemental Indenture"), by an between the Company
and BONY as trustee, relating to debt securities.
i. The Capital Securities Guarantee Agreement, dated as of August 12,
1999, by and among the Company and BONY as trustee of the Trust.
We have not reviewed any documents other than those listed above.
For purposes of this opinion letter, we have assumed that (i) all
signatures on documents we have examined are genuine, (ii) all documents
submitted to us as originals are authentic, (iii) all documents submitted to us
as copies conform to the originals, (iv) the individuals who
<PAGE>
Cox Communications, Inc.
Cox Trust II
Merrill Lynch & Co.
August 12, 1999
Page 3
executed any such documents on behalf of any person had the authority and
capacity to do so, (v) all documents made available to us are accurate and
complete, (vi) there are no other agreements between any of the parties to the
agreements reviewed by us that would modify the terms of such agreements or that
would contain provision that bear upon or are inconsistent with the opinions
stated herein, and (vii) all agreements reviewed by us are valid, binding upon
and enforceable against the parties thereto in accordance with their terms.
Our opinion is conditioned on, among other things, the initial and
continuing accuracy of the facts, information, covenants, and representations
set forth in the documents referred to above and the statements and
representations made by the Company and the Trusts and full compliance by the
parties with the terms of the documents set forth above.
In rendering our opinion, we have considered the provisions of the Internal
Revenue Code of 1986, as amended, Treasury Regulations (proposed, temporary and
final) promulgated thereunder, current positions of the Internal Revenue Service
contained in published Revenue Rulings and Revenue Procedures, and judicial
decisions and administrative pronouncements, in each case in effect on the date
hereof, all of which are subject to change or modification at any time (which
changes may be retroactively applied), and we do not opine with respect to any
law, regulation, rule, or governmental policy that may be enacted or adopted
after the date hereof, nor assume any responsibility to advise you of future
changes in our opinion. A change in the authorities upon which the opinion is
based could affect our conclusions. There can be no assurance, moreover, that
any opinion expressed herein will be accepted by the Internal Revenue Service
or, if challenged, by a court. Our opinion is based on the assumption that the
issues discussed herein would be fully litigated. Further, we express no opinion
as to any other matter, including any other federal tax matter or any state or
local tax matter.
Based upon and subject to the foregoing and all other assumptions,
qualifications and exceptions set forth herein, we are of the opinion that:
1. The Trust will be classified for United States federal income tax
purposes as a grantor trust and will not be subject to federal income taxation
as an association (or publicly traded partnership) taxable as a corporation.
2. The Cox II Debentures will be classified as indebtedness for United
States federal income tax purposes.
<PAGE>
Cox Communications, Inc.
Cox Trust II
Merrill Lynch & Co.
August 12, 1999
Page 4
This letter is solely for your information in connection with the offerings
contemplated by the Registration Statement and, except as provided above, is not
to be quoted in whole or in part or otherwise referred to, nor is it to be filed
with any governmental agency or other person, without the prior written consent
of this firm.
Very truly yours,
DOW, LOHNES & ALBERTSON, PLLC
By: /s/ Linda A. Fritts
Linda A. Fritts
Member
