<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 7, 1996
------------
Merrill Lynch & Co., Inc.
-------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 1-7182 13-2740599
- ----------------- ----------- ------------------
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
World Financial Center, North Tower, New York, New York 10281-1220
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 449-1000
--------------
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events
- ------- -------------
Exhibits are filed herewith in connection with Post-Effective Amendment No.
1 to the Registration Statement on Form S-3 (File No. 33-65135) filed by Merrill
Lynch & Co., Inc. (the "Company") with the Securities and Exchange Commission
covering Senior Debt Securities, Subordinated Debt Securities and Warrants
issuable under an indenture dated as of April 1, 1983 and restated as of April
1, 1987, as amended and supplemented as of May 1, 1996, by the Eighth
Supplemental Indenture, between the Company and Chemical Bank (successor by
merger to Manufacturers Hanover Trust Company) (collectively, the "Indenture").
The Company will offer 8,500,000 STRYPES 6% STRYPES Due June 1, 1999 Payable
with Shares of Common Stock of Cox Communications, Inc. ("STRYPES"). The
exhibits consist of the form of Underwriting Agreement, Registration Agreement,
Indenture, STRYPES Certificate and STRYPES Agreement relating thereto.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
- ------- -------------------------------------------------------------------
EXHIBITS
1(a) - Underwriting Agreement among the Company, Cox Enterprises,
Inc. and the Underwriter.
1(b) - Registration Agreement among the Company, Cox Enterprises,
Inc., Cox Communications, Inc. and the Underwriter.
4(a) - Senior Indenture, dated as of April 1, 1983, as amended and restated,
between the Company and Chemical Bank (successor by merger to
Manufacturers Hanover Trust Company), incorporated herein by reference
to Exhibit 99(c) to Registrant's Registration Statement on Form 8-A
dated July 20, 1992.
4(b) - Eighth Supplemental Indenture to the Senior Indenture between
the Company and Chemical Bank (successor by merger to Manufacturers
Hanover Trust Company).
4(c) - Certificate representing the STRYPES.
10 - STRYPES Agreement among the Company, Merrill Lynch Capital Services,
Inc. and Cox Enterprises, Inc. relating to shares of Cox Common Stock.
2
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SIGNATURE
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, thereto duly authorized.
MERRILL LYNCH & CO., INC.
------------------------------
(Registrant)
By: /s/ Theresa Lang
-------------------------
Theresa Lang
Treasurer
Date: June 7, 1996
3
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
MERRILL LYNCH & CO., INC.
EXHIBITS TO CURRENT REPORT ON
FORM 8-K/A DATED JUNE 7, 1996
COMMISSION FILE NUMBER 1-7182
<PAGE>
EXHIBIT INDEX
Exhibit
Number Page
- ------ ----
1(a) - Underwriting Agreement among the Company,
Cox Enterprises, Inc. and the Underwriter.
1(b) - Registration Agreement among the Company, Cox
Enterprises, Inc., Cox Communications, Inc.
and the Underwriter.
4(a) - Senior Indenture, dated as of April 1, 1983, as
amended and restated, between the Company and
Chemical Bank (successor by merger to Manufacturers Hanover Trust
Company), incorporated herein by reference to Exhibit 99(c) to
Registrant's Registration
Statement on Form 8-A dated July 20, 1992.
4(b) - Eighth Supplemental Indenture to the Senior Indenture between
the Company and Chemical Bank (successor by merger to Manufacturers
Hanover Trust Company).
4(c) - Certificate representing the STRYPES.
10 - STRYPES Agreement among the Company, Merrill Lynch Capital Services,
Inc. and Cox Enterprises, Inc. relating to shares of Cox Common Stock.
<PAGE>
EXHIBIT 1(a)
______________________________________________________________________________
______________________________________________________________________________
MERRILL LYNCH & CO., INC.
(a Delaware corporation)
UNDERWRITING AGREEMENT
----------------------
Dated: May 22, 1996
______________________________________________________________________________
______________________________________________________________________________
<PAGE>
TABLE OF CONTENTS
SECTION 1. Representations and Warranties.................................. 4
-----------------------------
Representations and Warranties by the Company............................ 4
Compliance with Registration Requirements...................... 4
Incorporated Documents......................................... 5
Independent Accountants........................................ 6
Financial Statements........................................... 6
No Material Adverse Change in Business......................... 6
Good Standing of the Company................................... 6
Good Standing of Subsidiaries.................................. 6
Authorization of Agreement..................................... 7
Authorization of the Indenture................................. 7
Authorization of the Securities................................ 7
Authorization of the STRYPES Agreement......................... 8
Description of Securities, Indenture and STRYPES Agreement..... 8
Absence of Defaults and Conflicts.............................. 8
Absence of Labor Dispute....................................... 9
Absence of Proceedings......................................... 9
Exhibits....................................................... 9
Possession of Intellectual Property............................ 9
Absence of Further Requirements................................ 10
Possession of Licenses and Permits............................. 10
Title to Property.............................................. 10
Compliance with Cuba Act....................................... 11
Representations and Warranties by CEI................................. 11
Good Standing of CEI........................................... 11
Delivery of Cox Common Stock................................... 11
Authorization of Agreement..................................... 11
Authorization of the STRYPES Agreement......................... 11
Absence of Defaults and Conflicts.............................. 12
Absence of Further Requirements................................ 12
Cox Registration Statement and Prospectus...................... 12
Officer's Certificates................................................ 13
SECTION 2. Sale and Delivery to Underwriter; Closing...................... 13
-----------------------------------------
Initial Securities.................................................... 13
Option Securities..................................................... 13
Payment............................................................... 13
Denominations; Registration........................................... 14
SECTION 3 Covenants...................................................... 14
---------
Covenants of the Company.............................................. 14
Compliance with Securities Regulations and Commission Requests. 14
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Filing of Amendments............................................... 14
Delivery of ML&Co. Registration Statements......................... 15
Delivery of ML&Co. Prospectuses.................................... 15
Continued Compliance with Securities Laws.......................... 15
Blue Sky Qualifications............................................ 16
Rule 158........................................................... 16
Use of Proceeds.................................................... 16
Listing............................................................ 16
Reporting Requirements............................................. 16
Covenants of CEI........................................................ 16
Restriction on Sale of Securities.................................. 16
Purpose Statement.................................................. 17
SECTION 4. Payment of Expenses............................................. 17
-------------------
Expenses Payable by the Company......................................... 17
Expenses Payable by CEI................................................. 17
Termination of Agreement................................................ 17
SECTION 5. Conditions...................................................... 18
----------
Conditions of Underwriter's Obligations................................. 18
Effectiveness of ML&Co. Registration Statement..................... 18
Effectiveness of Cox Registration Statement........................ 18
Opinion of Counsel for the Company................................. 18
Opinion of Counsel for Cox and CEI................................. 18
Company Officers' Certificate...................................... 18
Cox Officers' Certificate.......................................... 19
CEI Officer's Certificate.......................................... 19
Company Accountant's Comfort Letter................................ 19
Cox Accountant's Comfort Letters................................... 20
Company Bring-down Comfort Letter.................................. 20
Cox Bring-down Comfort Letter...................................... 20
Maintenance of Rating.............................................. 20
Approval of Listing................................................ 20
No Objection....................................................... 20
Lock-up Agreements................................................. 20
Conditions to Purchase of Option Securities........................ 20
Additional Documents............................................... 21
Conditions of the Company's Obligations................................. 22
Effectiveness of Cox Registration Statement........................ 22
Opinion of Counsel for the Company................................. 22
Opinion of Counsel for Cox and CEI................................. 22
Cox Officers' Certificate.......................................... 22
CEI Officer's Certificate.......................................... 22
Cox Accountant's Comfort Letters................................... 22
Cox Bring-down Comfort Letter...................................... 23
Conditions to Sale of Option Securities............................ 23
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Termination of Agreement................................................ 23
SECTION 6. Indemnification................................................ 24
---------------
Indemnification of the Underwriter by the Company....................... 24
Indemnification of the Underwriter and the Company by CEI............... 25
Indemnification of the Company, Directors and Officers.................. 26
Actions against Parties; Notification................................... 26
Settlement without Consent if Failure to Reimburse...................... 27
Conditions of Indemnification by CEI.................................... 27
SECTION 7. Contribution................................................... 27
------------
SECTION 8. Representations, Warranties and Agreements to Survive Delivery. 30
--------------------------------------------------------------
SECTION 9. Termination of Agreement....................................... 30
------------------------
Termination; General.................................................. 30
Liabilities........................................................... 30
SECTION 10. Notices........................................................ 30
---------
SECTION 11. Parties........................................................ 31
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SECTION 12. GOVERNING LAW AND TIME......................................... 31
----------------------
SECTION 13. Effect of Headings............................................. 31
------------------
iii
<PAGE>
MERRILL LYNCH & CO., INC.
(a Delaware corporation)
6% STRYPES/SM/ DUE June 1, 1999
Payable with Shares of Common Stock of Cox Communications, Inc.
UNDERWRITING AGREEMENT
----------------------
May 22, 1996
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Merrill Lynch & Co., Inc., a Delaware corporation (the "Company"), and Cox
Enterprises, Inc., a Delaware corporation ("CEI"), confirm their respective
agreements with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated (the "Underwriter") with respect to the issue and sale by the
Company and the purchase by the Underwriter of an aggregate of 8,500,000 of the
Company's Structured Yield Product Exchangeable for Stock/SM/, 6% STRYPES/SM/
Due June 1, 1999 (each, a "STRYPES") and with respect to the grant by the
Company to the Underwriter of the option described in Section 2(b) hereof to
purchase all or any part of 1,275,000 additional STRYPES to cover over-
allotments, if any. The aforesaid 8,500,000 STRYPES (the "Initial Securities")
to be purchased by the Underwriter and all or any part of the 1,275,000 STRYPES
subject to the option described in Section 2(b) hereof (the "Option Securities")
are hereinafter called, collectively, the "Securities." The Securities are to be
issued pursuant to an indenture, dated as of April 1, 1983 and restated as of
April 1, 1987, as amended and supplemented as of May 1, 1996 (the "Indenture"),
between the Company and Chemical Bank (successor by merger to Manufacturers
Hanover Trust Company), as trustee (the "Trustee").
__________________________
/SM/ Service mark of Merrill Lynch & Co., Inc.
1
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The STRYPES will be payable at maturity or upon redemption by delivery of
shares of Class A Common Stock, par value $1.00 per share (the "Cox Common
Stock"), of Cox Communications, Inc., a Delaware corporation ("Cox"), subject to
the Company's option to deliver at maturity, in lieu of shares of Cox Common
Stock, cash with an equal value. The Company, Cox and the Underwriter are
concurrently entering into an agreement dated the date hereof (the "Registration
Agreement") relating to the registration of shares of Cox Common Stock
deliverable by the Company pursuant to the STRYPES.
The Company understands that the Underwriter proposes to make a public
offering of the Securities as soon as the Underwriter deems advisable after this
Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 33-65135) for the
registration of debt securities, including the Securities, and warrants under
the Securities Act of 1933, as amended (the "1933 Act"), and the offering
thereof from time to time in accordance with Rule 415 of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations"),
and the Company has filed post-effective amendment no. 1 thereto, including a
preliminary prospectus and preliminary prospectus supplement relating to the
offering of the Securities. Promptly after execution and delivery of this
Agreement, the Company will either (i) prepare and file a prospectus and
prospectus supplement in accordance with the provisions of Rule 430A ("Rule
430A") of the 1933 Act Regulations and paragraph (b) of Rule 424 ("Rule 424(b)")
of the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (an
"ML&Co. Term Sheet") in accordance with the provisions of Rule 434 and Rule
424(b). The information included in such prospectus and prospectus supplement
or in such ML&Co. Term Sheet, as the case may be, that was omitted from such
registration statement (as so amended) at the time it became effective but that
is deemed to be part of such registration statement (as so amended) at the time
it became effective (i) pursuant to paragraph (b) of Rule 430A is referred to as
"Rule 430A Information" or (ii) pursuant to paragraph (d) of Rule 434 is
referred to as "Rule 434 Information." Any prospectus and prospectus supplement
relating to the offering of the Securities used before such registration
statement (as so amended) became effective, and any prospectus and prospectus
supplement relating to the offering of the Securities that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information, that was used
after such effectiveness and prior to the execution and delivery of this
Agreement, in each case excluding any Cox preliminary prospectus (as defined
below) attached as Appendix A thereto, are herein called, collectively, an
"ML&Co. preliminary prospectus." Such registration statement (as so amended),
including the exhibits thereto, the schedules thereto, if any, and the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act, at the time it became effective and including the Rule 430A Information and
the Rule 434 Information, as applicable, is herein called the "ML&Co.
Registration Statement." Any registration statement filed by the Company
pursuant to Rule 462(b) of the 1933 Act Regulations is herein referred to as the
"ML&Co. Rule 462(b) Registration Statement," and after such filing the term
"ML&Co. Registration Statement" shall include the ML&Co. Rule 462(b)
Registration Statement. The final prospectus and final prospectus supplement
relating to the offering of the Securities, including the documents
2
<PAGE>
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act, but excluding any Cox Prospectus (as defined below) attached as Appendix A
thereto, in the form first furnished to the Underwriter for use in connection
with the offering of the Securities are collectively referred to herein as the
"ML&Co. Prospectus." If Rule 434 is relied on, the term "ML&Co. Prospectus"
shall refer to the ML&Co. preliminary prospectus dated May 8, 1996 together with
the ML&Co. Term Sheet and all references in this Agreement to the date of the
ML&Co. Prospectus shall mean the date of the ML&Co. Term Sheet. For purposes of
this Agreement, all references to the ML&Co. Registration Statement, any ML&Co.
preliminary prospectus, the ML&Co. Prospectus or any ML&Co. Term Sheet or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the ML&Co.
Registration Statement, any ML&Co. preliminary prospectus or the ML&Co.
Prospectus (or other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which
is incorporated by reference in the ML&Co. Registration Statement, any ML&Co.
preliminary prospectus or the ML&Co. Prospectus, as the case may be, and shall
be deemed to exclude all financial statements and schedules and other
information which is included or incorporated by reference in any Cox
preliminary prospectus or the Cox Prospectus which is attached as Appendix A to
any ML&Co. preliminary prospectus or the ML&Co. Prospectus; and all references
in this Agreement to amendments or supplements to the ML&Co. Registration
Statement, any ML&Co. preliminary prospectus or the ML&Co. Prospectus shall be
deemed to mean and include the filing of any document under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), which is incorporated by
reference in the ML&Co. Registration Statement, such ML&Co. preliminary
prospectus or the ML&Co. Prospectus, as the case may be.
Cox has filed with the Commission a registration statement on Form S-3 (No.
333-03351) covering the registration of (i) the shares of Cox Common Stock
deliverable at maturity or upon redemption of the Securities and (ii) 4,225,000
shares of Cox Common Stock (the "Pledged Shares") that may be pledged to and
sold by or on behalf of the ML&Co. Subsidiary (as defined below) under the 1933
Act, including the related preliminary prospectus or prospectuses. Each
prospectus used before such registration statement became effective is herein
called a "Cox preliminary prospectus." Such registration statement, including
the exhibits thereto, the schedules thereto, if any, and the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act, at the time it became effective, is herein called the "Cox Registration
Statement." Any registration statement filed by Cox pursuant to Rule 462(b) of
the 1933 Act Regulations is herein referred to as the "Cox Rule 462(b)
Registration Statement," and after such filing the term "Cox Registration
Statement" shall include the Cox Rule 462(b) Registration Statement. The final
prospectus, including the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the 1933 Act, in the form first furnished to the
Underwriter for use in connection with the offering of the Securities is herein
called the "Cox Securities Prospectus." The prospectus, including the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act, in the form furnished from time to time to the ML&Co. Subsidiary for use in
connection with the sale of the Pledged Shares is
3
<PAGE>
herein called the "Pledged Share Prospectus" and, together with the Cox
Securities Prospectus, the "Cox Prospectus." For purposes of this Agreement,
all references to the Cox Registration Statement, any Cox preliminary
prospectus, the Cox Prospectus or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission pursuant
to EDGAR.
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the Cox
Registration Statement, any Cox preliminary prospectus or the Cox Prospectus (or
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Cox Registration Statement, any Cox preliminary prospectus
or the Cox Prospectus, as the case may be; and all references in this Agreement
to amendments or supplements to the Cox Registration Statement, any Cox
preliminary prospectus or the Cox Prospectus shall be deemed to mean and include
the filing of any document under the 1934 Act which is incorporated by reference
in the Cox Registration Statement, such Cox preliminary prospectus or the Cox
Prospectus, as the case may be.
Prior to the closing under this Agreement, the Company, Merrill Lynch
Capital Services, Inc., a wholly-owned subsidiary of the Company (the "ML&Co.
Subsidiary"), and CEI will enter into a contract (the "STRYPES Agreement")
pursuant to which CEI will be obligated to deliver to the ML&Co. Subsidiary,
immediately prior to the maturity date or date of redemption of the Securities,
a number of shares of Cox Common Stock equal to the number required by the
Company to pay and discharge or redeem all of the Securities, subject to CEI's
option, exercisable in its sole discretion, to satisfy its obligation under the
STRYPES Agreement by delivering immediately prior to the maturity date a
specified amount of cash in lieu of such shares. Under the STRYPES Agreement,
the Company has agreed to pay and discharge the STRYPES by delivering to the
holders thereof at maturity the form of consideration that the ML&Co. Subsidiary
receives from CEI.
SECTION 1. Representations and Warranties.
------------------------------
(a) Representations and Warranties by the Company. The Company represents
and warrants to the Underwriter as of the date hereof, as of the Closing Time
referred to in Section 2(c) hereof, and as of each Date of Delivery (if any)
referred to in Section 2(b) hereof, and agrees with the Underwriter, as follows:
(i) Compliance with Registration Requirements. The Company meets
-----------------------------------------
the requirements for use of Form S-3 under the 1933 Act. Each of the
ML&Co. Registration Statement and any ML&Co. Rule 462(b) Registration
Statement has become effective under the 1933 Act and no stop order
suspending the effectiveness of the ML&Co. Registration Statement or any
ML&Co. Rule 462(b) Registration Statement has been issued under the 1933
Act and no proceedings for that purpose have been instituted or are pending
or, to the knowledge of the Company, are contemplated by the Commission,
and any request on the part of the Commission for additional information
has been complied with.
4
<PAGE>
At the respective times the ML&Co. Registration Statement, any
ML&Co. Rule 462(b) Registration Statement and any post-effective amendments
thereto became effective and at the Closing Time (and, if any Option
Securities are purchased, at the Date of Delivery), the ML&Co. Registration
Statement, the ML&Co. Rule 462(b) Registration Statement and any amendments
and supplements thereto complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and the
Trust Indenture Act of 1939, as amended (the "1939 Act"), and the rules and
regulations of the Commission under the 1939 Act (the "1939 Act
Regulations"), and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
Neither the ML&Co. Prospectus nor any amendments or supplements thereto, at
the time the ML&Co. Prospectus or any such amendment or supplement was
issued and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), included or will include an untrue
statement of a material fact or omitted or will omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If Rule 434 is
used, the Company will comply with the requirements of Rule 434. The
representations and warranties in this subsection shall not apply to (A)
statements in or omissions from the ML&Co. Registration Statement or ML&Co.
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by the Underwriter expressly for use in
the ML&Co. Registration Statement or ML&Co. Prospectus or (B) that part of
the ML&Co. Registration Statement that constitutes the Statement of
Eligibility on Form T-1 (the "Form T-1") under the 1939 Act of the Trustee.
Each ML&Co. preliminary prospectus and the prospectus relating to
the offering of the Securities filed as part of the ML&Co. Registration
Statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the 1933 Act, complied when so filed in all
material respects with the 1933 Act Regulations and, if applicable, each
ML&Co. preliminary prospectus and the ML&Co. Prospectus delivered to the
Underwriter for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or deemed
----------------------
to be incorporated by reference in the ML&Co. Registration Statement and
the ML&Co. Prospectus, when they became effective or at the time they were
or hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations or the 1934 Act and the rules and regulations of the Commission
thereunder (the "1934 Act Regulations"), as applicable, and, when read
together with the other information in the ML&Co. Prospectus, at the time
the ML&Co. Registration Statement became effective, at the time the ML&Co.
Prospectus was issued and at the Closing Time (and, if any Option
Securities are purchased, at the Date of Delivery), did not and will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading.
5
<PAGE>
(iii) Independent Accountants. The accountants who certified the
-----------------------
financial statements and supporting schedules included in the ML&Co.
Registration Statement are independent public accountants as required by
the 1933 Act and the 1933 Act Regulations.
(iv) Financial Statements. The financial statements included in
--------------------
the ML&Co. Registration Statement and the ML&Co. Prospectus, together with
the related schedules and notes, present fairly the financial position of
the Company and its consolidated subsidiaries at the dates indicated and
the statement of operations, stockholders' equity and cash flows of the
Company and its consolidated subsidiaries for the periods specified; said
financial statements have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved. The supporting schedules, if any,
included in the ML&Co. Registration Statement present fairly in accordance
with GAAP the information required to be stated therein. The selected
financial data and the summary financial information included in the ML&Co.
Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited financial
statements included in the ML&Co. Registration Statement.
(v) No Material Adverse Change in Business. Since the respective
--------------------------------------
dates as of which information is given in the ML&Co. Registration Statement
and the ML&Co. Prospectus, except as otherwise stated therein, (A) there
has been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business (a "Material Adverse
Effect"), (B) there have been no transactions entered into by the Company
or any of its subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company and its
subsidiaries considered as one enterprise, and (C) except for regular
quarterly dividends on its outstanding common stock and regular dividends
on its outstanding preferred stock in amounts per share that are consistent
with past practice, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
(vi) Good Standing of the Company. The Company has been duly
----------------------------
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the ML&Co. Prospectus and to enter into and perform its
obligations under this Agreement, the Indenture and the STRYPES Agreement;
and the Company is duly qualified as a foreign corporation to transact
business and is in good standing in each other jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify
or to be in good standing would not result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each subsidiary of the
-----------------------------
Company which is a "significant subsidiary" as defined in Rule 1-02 of
Regulation S-X under the 1933 Act (each a "Subsidiary" and, collectively,
the "Subsidiaries") has been duly organized and is
6
<PAGE>
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the ML&Co. Prospectus and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not result
in a Material Adverse Effect; except as otherwise disclosed in the ML&Co.
Registration Statement, all of the issued and outstanding capital stock of
each such Subsidiary has been duly authorized and validly issued and is
fully paid and non-assessable and is owned by the Company, directly or
through subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity; and none of the outstanding
shares of capital stock of any Subsidiary was issued in violation of the
preemptive or similar rights of any securityholder of such Subsidiary. The
only subsidiaries of the Company are (A) the subsidiaries listed in Exhibit
21 to the Annual Report on Form 10-K of the Company filed with the
Commission under Section 13 of the 1934 Act for the fiscal year ended
December 29, 1995 and (B) certain other subsidiaries which, considered in
the aggregate as a single subsidiary, do not constitute a "significant
subsidiary" as defined in Rule 1-02 of Regulation S-X under the 1933 Act.
(viii) Authorization of Agreement. This Agreement has been duly
--------------------------
authorized, executed and delivered by the Company.
(ix) Authorization of the Indenture. The Indenture has been duly
------------------------------
authorized by the Company, duly qualified under the 1939 Act and duly
executed and delivered by the Company and (assuming the due authorization,
execution and delivery by the Trustee) will constitute a valid and binding
agreement of the Company, enforceable against the Company in accordance
with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(x) Authorization of the Securities. The Securities have been duly
-------------------------------
authorized by the Company for issuance and sale to the Underwriter pursuant
to this Agreement and, at the Closing Time, will have been duly executed by
the Company and, when authenticated by the Trustee in the manner provided
for in the Indenture and delivered against payment of the purchase price
therefor as provided in this Agreement, will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance
with their terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law), and will be
in the form contemplated by, and entitled to the benefits of, the
Indenture.
7
<PAGE>
(xi) Authorization of the STRYPES Agreement. The STRYPES Agreement has
--------------------------------------
been duly authorized by the Company and the ML&Co. Subsidiary and, at the
Closing Time, will have been duly executed and delivered by the Company and
the ML&Co. Subsidiary and (assuming the due authorization, execution and
delivery by CEI) will constitute a valid and binding agreement of the
Company and the ML&Co. Subsidiary, enforceable against the Company and the
ML&Co. Subsidiary in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights
generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(xii) Description of Securities, Indenture and STRYPES Agreement.
----------------------------------------------------------
The Securities, the Indenture and the STRYPES Agreement will conform in all
material respects to the respective statements relating thereto contained
in the ML&Co. Prospectus and will be in substantially the respective forms
filed or incorporated by reference, as the case may be, as exhibits to the
ML&Co. Registration Statement.
(xiii) Absence of Defaults and Conflicts. Neither the Company nor
---------------------------------
any of its subsidiaries is in violation of its charter or by-laws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound, or to which any of the property or
assets of the Company or any subsidiary is subject (collectively,
"Agreements and Instruments") except for such defaults that would not
result in a Material Adverse Effect; and (A) the execution, delivery and
performance by the Company of this Agreement, the Indenture, the Securities
and the STRYPES Agreement and the consummation of the transactions
contemplated herein, therein and in the ML&Co. Registration Statement
(including the issuance and sale of the Securities and the delivery of
shares of Cox Common Stock pursuant thereto and the use of the proceeds
from the sale of the Securities as described in the ML&Co. Prospectus under
the caption "Supplemental Use of Proceeds") and compliance by the Company
with its obligations hereunder and under the Indenture, the Securities and
the STRYPES Agreement and (B) the execution, delivery and performance by
the ML&Co. Subsidiary of the STRYPES Agreement and the consummation of the
transactions contemplated therein and compliance by the ML&Co. Subsidiary
with its obligations under the STRYPES Agreement have been duly authorized
by all necessary corporate action and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any subsidiary
pursuant to, the Agreements and Instruments (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not
result in a Material Adverse Effect), nor will such action result in any
violation of the provisions of the charter or by-laws of the Company or any
subsidiary or, to the best of the Company's knowledge, any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government,
8
<PAGE>
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any subsidiary or any of their assets,
properties or operations. As used herein, a "Repayment Event" means any
event or condition which gives the holder of any note, debenture or other
evidence of indebtedness of the Company or any subsidiary (or any person
acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the
Company or any subsidiary.
(xiv) Absence of Labor Dispute. No labor dispute with the
------------------------
employees of the Company or any subsidiary exists or, to the knowledge of
the Company, is imminent which may reasonably be expected to result in a
Material Adverse Effect.
(xv) Absence of Proceedings. There is no action, suit, proceeding,
----------------------
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or affecting the Company or any
subsidiary, which is required to be disclosed in the ML&Co. Registration
Statement (other than as disclosed therein), or which, individually or in
the aggregate, might reasonably be expected to result in a Material Adverse
Effect, or which, individually or in the aggregate, might reasonably be
expected to materially and adversely affect the properties or assets
thereof or the consummation of the transactions contemplated in this
Agreement, the Indenture or the STRYPES Agreement (including the issuance
and sale of the Securities and the delivery of shares of Cox Common Stock
pursuant thereto) or the performance by the Company of its obligations
hereunder or thereunder or the performance by the ML&Co. Subsidiary of its
obligations under the STRYPES Agreement; the aggregate of all pending legal
or governmental proceedings to which the Company or any subsidiary is a
party or of which any of their respective property or assets is the subject
which are not described in the ML&Co. Registration Statement, including
ordinary routine litigation incidental to the business, could not
reasonably be expected to result in a Material Adverse Effect.
(xvi) Exhibits. There are no contracts or documents which are of a
--------
character required to be described in the ML&Co. Registration Statement,
the ML&Co. Prospectus or the documents incorporated by reference therein or
to be filed as exhibits thereto which have not been so described or filed
as required.
(xvii) Possession of Intellectual Property. The Company and its
-----------------------------------
subsidiaries own or possess, or can acquire on reasonable terms, adequate
trademarks, service marks, trade names and other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
now operated by them, and neither the Company nor any of its subsidiaries
has received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of the
Company or any of its subsidiaries therein, and which infringement or
conflict (if the subject of any unfavorable decision, ruling or finding) or
invalidity or inadequacy, singly or in the aggregate, would result in a
Material Adverse Effect.
9
<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 (A) for the performance by the Company of its
obligations under this Agreement or the STRYPES Agreement or the
consummation by the Company of the transactions contemplated herein or
therein (including the issuance and sale of the Securities and the delivery
of shares of Cox Common Stock pursuant thereto) or for the due execution,
delivery or performance of the Indenture by the Company or (B) for the
performance by the ML&Co. Subsidiary of its obligations under the STRYPES
Agreement or the consummation by the ML&Co. Subsidiary of the transactions
contemplated therein, except, in each case, such as have been already
obtained or as may be required under the 1933 Act or the 1933 Act
Regulations or state securities laws and except for the qualification of
the Indenture under the 1939 Act.
(xix) Possession of Licenses and Permits. The Company and the
----------------------------------
subsidiaries 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; the Company and its
subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not,
singly or in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except when
the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xx) Title to Property. The Company and its subsidiaries have good
-----------------
and marketable title to all real property owned by the Company and its
subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (A) are
described in the ML&Co. Prospectus or (B) do not, singly or in the
aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company or any of its subsidiaries; and all of the leases and subleases
material to the business of the Company and its subsidiaries, considered as
one enterprise, and under which the Company or any of its subsidiaries
holds properties described in the ML&Co. Prospectus, are in full force and
effect, and neither the Company nor any subsidiary has any notice of any
material claim of any sort that has been asserted by anyone adverse to the
rights of the Company or any subsidiary under any of the leases or
subleases mentioned above, or affecting or questioning the rights of the
Company or such subsidiary to the continued possession of the leased or
subleased premises under any such lease or sublease.
10
<PAGE>
(xxi) Compliance with Cuba Act. The Company has complied with, and
------------------------
is and will be in compliance with, the provisions of that certain Florida
act relating to disclosure of doing business with Cuba, codified as Section
517.075 of the Florida statutes, and the rules and regulation thereunder
(collectively, the "Cuba Act") or is exempt therefrom.
(b) Representations and Warranties by CEI. CEI represents and warrants to
each of the Company and the Underwriter as of the date hereof, as of the Closing
Time referred to in Section 2(c) hereof, and as of each Date of Delivery (if
any) referred to in Section 2(b) hereof, and agrees with each of the Company and
the Underwriter, as follows:
(i) Good Standing of CEI. CEI has been duly organized and is
--------------------
validly existing as a corporation in good standing under the laws of the
State of Delaware and has corporate power and authority to enter into and
perform its obligations under this Agreement and the STRYPES Agreement.
(ii) Delivery of Cox Common Stock. At the date hereof, Cox
----------------------------
Holdings, Inc., a Delaware corporation and wholly-owned subsidiary of CEI,
is the sole registered owner of and has all rights in and to at least
14,000,000 shares of Cox Common Stock, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity. If
immediately prior to maturity or redemption of the Securities CEI delivers
to the ML&Co. Subsidiary shares of Cox Common Stock pursuant to the STRYPES
Agreement, upon delivery by CEI to the ML&Co. Subsidiary of such shares of
Cox Common Stock pursuant to the STRYPES Agreement, the ML&Co. Subsidiary
will be the sole registered owner of the shares of Cox Common Stock so
delivered and, assuming the ML&Co. Subsidiary purchased for value in good
faith and without notice of any adverse claim, the ML&Co. Subsidiary will
have acquired all rights in and to such shares of Cox Common Stock, free
and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity. The delivery of shares of Cox Common Stock to the ML&Co.
Subsidiary at maturity or upon redemption of the Securities in accordance
with the STRYPES Agreement is not, and at the time of delivery of such
shares will not be, subject to any right of first refusal or similar rights
of any person pursuant to any contract to which CEI or any of its
subsidiaries is a party or by which any of them is bound.
(iii) Authorization of Agreement. This Agreement has been duly
--------------------------
authorized, executed and delivered by CEI.
(iv) Authorization of the STRYPES Agreement. The STRYPES Agreement
--------------------------------------
has been duly authorized by CEI and, at the Closing Time, will have been
duly executed and delivered by CEI and (assuming the due authorization,
execution and delivery by the Company and the ML&Co. Subsidiary) will
constitute a valid and binding agreement of CEI, enforceable against CEI in
accordance with its terms, except as the enforcement thereof may be limited
by bankruptcy, insolvency (including, without limitation, all laws relating
to fraudulent transfers), reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law).
Amounts received by CEI at Closing Time and at each
11
<PAGE>
Date of Delivery, if any, pursuant to the STRYPES Agreement will not be
used by CEI for the purpose, whether immediate, incidental or ultimate, of
buying or carrying a margin stock, as such terms are defined in Regulation
G promulgated by the Board of Governors of the Federal Reserve System.
(v) Absence of Defaults and Conflicts. The execution, delivery and
---------------------------------
performance by CEI of this Agreement and the STRYPES Agreement and the
consummation by CEI of the transactions contemplated herein and therein and
compliance by CEI with its obligations hereunder and thereunder have been
duly authorized by all necessary corporate action and do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or CEI Repayment Event
(as defined below) under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of CEI or any of
its subsidiaries pursuant to, any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or any other agreement or
instrument to which CEI or any of its subsidiaries is a party or by which
it or any of them may be bound, or to which any of the property or assets
of CEI or any of its subsidiaries is subject (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not,
singly or in the aggregate, materially and adversely affect the ability of
CEI to perform its obligations under this Agreement or the STRYPES
Agreement), nor will such action result in any violation of the provisions
of the charter or by-laws of CEI or any of its subsidiaries, or any
applicable law, statute, rule, regulation, judgment, order, writ or decree
of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over CEI or any of its subsidiaries or any of
their assets, properties or operations (except for such violations that
would not, singly or in the aggregate, materially and adversely affect the
ability of CEI to perform its obligations under this Agreement or the
STRYPES Agreement). As used herein, a "CEI Repayment Event" means any
event or condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf) the
right to require the repurchase, redemption or repayment of all or a
portion of such indebtedness by CEI or any of its subsidiaries.
(vi) Absence of Further Requirements. No filing with, or
-------------------------------
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the execution, delivery or performance by CEI
of this Agreement or the STRYPES Agreement or the consummation by CEI of
the transactions contemplated by this Agreement or the STRYPES Agreement,
except such as have been already obtained or as may be required under the
1933 Act or the 1933 Act Regulations or state securities laws.
(vii) Cox Registration Statement and Prospectus. CEI is familiar
-----------------------------------------
with the representations and warranties of Cox contained in Section 1(a) of
the Registration Agreement and the information included or incorporated by
reference in the Cox Registration Statement and the Cox Prospectus and has
no reason to believe that (A) the representations and warranties of Cox
contained in Section 1(a) of the Registration Agreement are not true and
correct, (B) the Cox Registration Statement, any Cox Rule
12
<PAGE>
462(b) Registration Statement or any post-effective amendments thereto, at
the respective times the Cox Registration Statement, any Cox Rule 462(b)
Registration Statement or any post-effective amendments thereto became
effective, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading or (C) the Cox Prospectus or any
amendment or supplement thereto, at the time the Cox Prospectus was issued,
at the time any such amended or supplemented prospectus was issued or at
the Closing Time (and, if any Option Securities are purchased, at the Date
of Delivery), included or will include an untrue statement of a material
fact or omitted or will omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(c) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Underwriter shall be deemed
a representation and warranty by the Company to the Underwriter as to the
matters covered thereby. Any certificate signed by any officer of CEI or any of
its subsidiaries delivered to the Underwriter or the Company shall be deemed a
representation and warranty by CEI to the Underwriter or the Company, as the
case may be, as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriter; Closing.
-----------------------------------------
(a) Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company agrees to sell to the Underwriter, and the Underwriter agrees to
purchase from the Company, at the price per STRYPES set forth in Schedule A, the
Initial Securities.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants an option to the Underwriter to purchase up
to an additional 1,275,000 STRYPES at the price per STRYPES set forth in
Schedule A. The option hereby granted will expire 30 days after the date hereof
and may be exercised in whole or in part from time to time only for the purpose
of covering over-allotments which may be made in connection with the offering
and distribution of the Initial Securities upon notice by the Underwriter to the
Company setting forth the number of Option Securities as to which the
Underwriter is then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of delivery (a
"Date of Delivery") shall be determined by the Underwriter, but shall not be
later than seven full business days after the exercise of said option, nor in
any event prior to the Closing Time, as hereinafter defined.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Brown &
Wood, One World Trade Center, New York, New York 10048, or at such other place
as shall be agreed upon by the Underwriter and the Company, at 10:00 A.M.
(Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern time) on any given day) business day after the date hereof, or such
other time not later than ten business days after such date as shall be agreed
upon by the Underwriter and the Company (such time and date of payment and
delivery being herein called "Closing Time").
13
<PAGE>
In addition, in the event that any or all of the Option Securities are purchased
by the Underwriter, payment of the purchase price for, and delivery of
certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Underwriter and
the Company, on each Date of Delivery as specified in the notice from the
Underwriter to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Underwriter of certificates for the Securities to be purchased by it.
(d) Denominations; Registration. Certificates for the Initial Securities
and the Option Securities, if any, shall be in such denominations and registered
in such names as the Underwriter may request in writing at least one full
business day before the Closing Time or the relevant Date of Delivery, as the
case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Underwriter in The City of New York not later than 10:00 A.M. (Eastern time) on
the business day prior to the Closing Time or the relevant Date of Delivery, as
the case may be.
SECTION 3. Covenants.
---------
(a) Covenants of the Company. The Company covenants with the Underwriter
as follows:
(i) Compliance with Securities Regulations and Commission Requests.
--------------------------------------------------------------
The Company, subject to Section 3(a)(ii), will comply with the requirements
of Rule 430A or Rule 434, as applicable, and will notify the Underwriter
immediately, and confirm the notice in writing, (A) when any post-effective
amendment to the ML&Co. Registration Statement shall become effective, or
any supplement to the ML&Co. Prospectus or any amended ML&Co. Prospectus
shall have been filed, (B) of the receipt of any comments from the
Commission, (C) of any request by the Commission for any amendment to the
ML&Co. Registration Statement or any amendment or supplement to the ML&Co.
Prospectus or for additional information, and (D) of the issuance by the
Commission of any stop order suspending the effectiveness of the ML&Co.
Registration Statement or of any order preventing or suspending the use of
any ML&Co. preliminary prospectus, or of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction,
or of the initiation or threatening of any proceedings for any of such
purposes. The Company will promptly effect the filings necessary pursuant
to Rule 424(b) and will take such steps as it deems necessary to ascertain
promptly whether the form of prospectus transmitted for filing under Rule
424(b) was received for filing by the Commission and, in the event that it
was not, it will promptly file such prospectus. The Company will use its
best efforts to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest possible
moment.
(ii) Filing of Amendments. The Company will give the Underwriter
--------------------
notice of its intention to file or prepare any amendment to the ML&Co.
Registration Statement (including any filing under Rule 462(b)), any ML&Co.
Term Sheet or any amendment, supplement or revision to either the
prospectus relating to the offering of the Securities
14
<PAGE>
included in the ML&Co. Registration Statement at the time it became
effective or to the ML&Co. Prospectus, whether pursuant to the 1933 Act,
the 1934 Act or otherwise, will furnish the Underwriter with copies of any
such documents a reasonable amount of time prior to such proposed filing or
use, as the case may be, and will not file or use any such document to
which the Underwriter or counsel for the Underwriter shall reasonably
object.
(iii) Delivery of ML&Co. Registration Statements. The Company has
------------------------------------------
furnished or will deliver to the Underwriter, without charge, and to CEI
and counsel for CEI signed copies of the ML&Co. Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents incorporated
or deemed to be incorporated by reference therein) and signed copies of all
consents and certificates of experts. If applicable, the copies of the
ML&Co. Registration Statement and each amendment thereto furnished to the
Underwriter and CEI will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T.
(iv) Delivery of ML&Co. Prospectuses. The Company has delivered to
-------------------------------
the Underwriter, without charge, as many copies of each ML&Co. preliminary
prospectus as the Underwriter reasonably requested, and the Company hereby
consents to the use of such copies for purposes permitted by the 1933 Act.
The Company will furnish to the Underwriter, without charge, during the
period when the ML&Co. Prospectus is required to be delivered under the
1933 Act or the 1934 Act, such number of copies of the ML&Co. Prospectus
(as amended or supplemented) as the Underwriter may reasonably request. If
applicable, the ML&Co. Prospectus and any amendments or supplements thereto
furnished to the Underwriter will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
(v) Continued Compliance with Securities Laws. The Company will
-----------------------------------------
comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and
the 1934 Act Regulations so as to permit the completion of the distribution
of the Securities as contemplated in this Agreement and in the ML&Co.
Prospectus. If at any time when a prospectus is required by the 1933 Act
to be delivered in connection with sales of the Securities, any event shall
occur or condition shall exist as a result of which it is necessary, in the
reasonable opinion of counsel for the Underwriter or for the Company, to
amend the ML&Co. Registration Statement or amend or supplement the ML&Co.
Prospectus in order that the ML&Co. Prospectus will not include any untrue
statements of a material fact or omit to state a material fact necessary in
order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the reasonable opinion of either such counsel, at
any such time to amend the ML&Co. Registration Statement or amend or
supplement the ML&Co. Prospectus in order to comply with the requirements
of the 1933 Act or the 1933 Act Regulations, the Company will promptly
prepare and file with the Commission, subject to Section 3(a)(ii), such
amendment or supplement as may be necessary to correct such statement or
omission or to make the ML&Co. Registration Statement or the ML&Co.
Prospectus comply with such requirements, and the Company will furnish to
the
15
<PAGE>
Underwriter such number of copies of such amendment or supplement as the
Underwriter may reasonably request.
(vi) Blue Sky Qualifications. The Company will use its best
-----------------------
efforts, in cooperation with the Underwriter, to qualify the Securities for
offering and sale under the applicable securities laws of such states and
other jurisdictions of the United States as the Underwriter may designate
and to maintain such qualifications in effect for a period of not less than
one year from the later of the effective date of the ML&Co. Registration
Statement and any ML&Co. Rule 462(b) Registration Statement; provided,
however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation or as
a dealer in securities in any jurisdiction in which it is not so qualified
or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. In each jurisdiction
in which the Securities have been so qualified, the Company will file such
statements and reports as may be required by the laws of such jurisdiction
to continue such qualification in effect for a period of not less than one
year from the effective date of the ML&Co. Registration Statement and any
ML&Co. Rule 462(b) Registration Statement.
(vii) Rule 158. The Company will timely file such reports pursuant
--------
to the 1934 Act as are necessary in order to make generally available to
its securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(viii) Use of Proceeds. The Company will use the net proceeds
---------------
received by it from the sale of the Securities in the manner specified in
the ML&Co. Prospectus under "Supplemental Use of Proceeds."
(ix) Listing. The Company will use its best efforts to effect the
-------
listing of the Securities on the New York Stock Exchange.
(x) Reporting Requirements. The Company, during the period when the
----------------------
ML&Co. Prospectus is required to be delivered under the 1933 Act or the
1934 Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act
and the 1934 Act Regulations.
(b) Covenants of CEI.
(i) Restriction on Sale of Securities. During a period of 120 days
---------------------------------
from the date of this Agreement, CEI will not, without the prior written
consent of the Underwriter, (x) offer, sell, contract to sell or otherwise
dispose of, directly or indirectly, any shares of Cox Common Stock,
securities convertible into, exchangeable for or repayable with shares of
Cox Common Stock, or rights or warrants to acquire shares of Cox Common
Stock, or (y) cause to be filed any registration statement under the 1933
Act with respect to any shares of Cox Common Stock, securities convertible
into, exchangeable for or repayable with shares of Cox Common Stock, or
rights or warrants to acquire shares of Cox Common Stock. The foregoing
sentence shall not apply to (A) options to purchase
16
<PAGE>
shares of Cox Common Stock granted pursuant to employee benefit plans of
CEI existing at the date of this Agreement; or (B) shares of Cox Common
Stock issued upon exercise of options outstanding at the date of this
Agreement; or (C) any transfer of shares of Cox Common Stock to an
affiliate (as such term is defined in Rule 405 promulgated under the 1933
Act) or affiliates of CEI, provided, however, that in any such case it
shall be a condition to the transfer that the transferee execute an
agreement stating that the transferee is receiving and holding such shares
of Cox Common Stock subject to the foregoing restrictions and that there
shall be no further transfer of such securities except in accordance
therewith.
(ii) Purpose Statement. At or prior to Closing Time, CEI will
-----------------
deliver to the ML&Co. Subsidiary a duly executed purpose statement on Form
F. R. G-3 of the Board of Governors of the Federal Reserve System.
SECTION 4. Payment of Expenses. (a) Expenses Payable by the Company.
-------------------
The Company will pay all expenses incident to the performance of its obligations
under this Agreement, including (i) the preparation, printing and filing of the
ML&Co. Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, printing
and delivery to the Underwriter of this Agreement, the Indenture, the STRYPES
Agreement and such other documents as may be required in connection with the
offering, purchase, sale, issuance or delivery of the Securities, (iii) the
preparation, issuance and delivery of the certificates for the Securities to the
Underwriter, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors, (v) the qualification of the Securities under
securities laws in accordance with the provisions of Section 3(a)(vi) hereof,
including filing fees and the reasonable fees and disbursements of the Company's
counsel in connection therewith and in connection with the preparation of the
Blue Sky Survey and any supplement thereto, (vi) the printing and delivery to
the Underwriter of copies of each ML&Co. preliminary prospectus, any ML&Co. Term
Sheets and of the ML&Co. Prospectus and any amendments or supplements thereto,
(vii) the preparation, printing and delivery to the Underwriter of copies of the
Blue Sky Survey and any supplement thereto, (viii) the fees and expenses of the
Trustee, including the fees and disbursements of counsel for the Trustee in
connection with the Indenture and the Securities, (ix) any fees payable in
connection with the rating of the Securities, (x) the filing fees incident to,
and the reasonable fees and disbursements of counsel to the Underwriter in
connection with, the review by the National Association of Securities Dealers,
Inc. (the "NASD") of the terms of the sale of the Securities and (xi) the fees
and expenses incurred in connection with the listing of the Securities on the
New York Stock Exchange.
(b) Expenses Payable by CEI. CEI will pay all expenses incident to the
performance of its obligations under this Agreement, including the fees and
disbursements of CEI's counsel and advisors.
(c) Termination of Agreement. If this Agreement is terminated by the
Underwriter in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company shall reimburse the Underwriter for all of its out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Underwriter.
17
<PAGE>
SECTION 5. Conditions.
----------
(a) Conditions of Underwriter's Obligations. The obligations of the
Underwriter hereunder are subject to the accuracy of the representations and
warranties of the Company and CEI contained in Sections 1(a) and 1(b) hereof,
respectively, to the accuracy of the representations and warranties of Cox
contained in the Registration Agreement, to the accuracy of the statements in
certificates of any officer of the Company, Cox or CEI delivered pursuant to the
provisions hereof, to the performance by the Company and CEI of their respective
covenants and other obligations hereunder, to the performance by Cox of its
covenants and other obligations under the Registration Agreement, and to the
following further conditions:
(1) Effectiveness of ML&Co. Registration Statement. The ML&Co.
----------------------------------------------
Registration Statement, including any ML&Co. Rule 462(b) Registration
Statement, has become effective and at Closing Time no stop order
suspending the effectiveness of the ML&Co. Registration Statement shall
have been issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission, and any request on the part of the Commission
for additional information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriter. A prospectus containing the
Rule 430A Information shall have been filed with the Commission in
accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with
the requirements of Rule 430A) or, if the Company has elected to rely upon
Rule 434, an ML&Co. Term Sheet shall have been filed with the Commission in
accordance with Rule 424(b).
(2) Effectiveness of Cox Registration Statement. The Cox
-------------------------------------------
Registration Statement, including any Cox Rule 462(b) Registration
Statement, has become effective and at Closing Time no stop order
suspending the effectiveness of the Cox Registration Statement shall have
been issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission, and any request on the part of the Commission
for additional information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriter.
(3) Opinion of Counsel for the Company. At Closing Time, the
----------------------------------
Underwriter shall have received the favorable opinion, dated as of Closing
Time, of Brown & Wood, counsel for the Company, in form and substance
satisfactory to the Underwriter, to the effect set forth in Exhibit A
hereto and to such further effect as the Underwriter may reasonably
request.
(4) Opinion of Counsel for Cox and CEI. At Closing Time, the
----------------------------------
Underwriter shall have received the favorable opinion, dated as of Closing
Time, of Dow, Lohnes & Albertson, counsel for Cox and CEI, in form and
substance satisfactory to the Underwriter, to the effect set forth in
Exhibit B hereto and to such further effect as the Underwriter may
reasonably request.
(5) Company Officers' Certificate. At Closing Time, there shall not
-----------------------------
have been, since the date hereof or since the respective dates as of which
information is given in the
18
<PAGE>
ML&Co. Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business, and the Underwriter shall
have received a certificate of the President or a Vice President of the
Company and of the chief financial or chief accounting officer of the
Company, dated as of Closing Time, to the effect that (i) there has been no
such material adverse change, (ii) the representations and warranties in
Section 1(a) hereof are true and correct with the same force and effect as
though expressly made at and as of Closing Time, (iii) the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to Closing Time, and (iv) no stop order
suspending the effectiveness of the ML&Co. Registration Statement has been
issued and no proceedings for that purpose have been instituted or are
pending or are contemplated by the Commission.
(6) Cox Officers' Certificate. At Closing Time, there shall not
-------------------------
have been, since the date hereof or since the respective dates as of which
information is given in the Cox Prospectus, any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of Cox and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and
the Underwriter shall have received a certificate of the President or a
Vice President of Cox and of the chief financial or chief accounting
officer of Cox, dated as of Closing Time, in which such officers, without
incurring personal liability, shall state that (i) there has been no such
material adverse change, (ii) the representations and warranties of Cox
contained in Section 1(a) of the Registration Agreement are true and
correct with the same force and effect as though expressly made at and as
of Closing Time, (iii) Cox has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to
Closing Time pursuant to the Registration Agreement, and (iv) no stop order
suspending the effectiveness of the Cox Registration Statement has been
issued and no proceedings for that purpose have been instituted or, to the
best of their knowledge, are pending or are contemplated by the Commission.
(7) CEI Officer's Certificate. At Closing Time, the Underwriter
-------------------------
shall have received a certificate of the President or a Vice President of
CEI, dated as of Closing Time, in which such officer, without incurring
personal liability, shall state that (i) the representations and warranties
of CEI contained in Section 1(b) hereof are true and correct with the same
force and effect as though expressly made at and as of Closing Time and
(ii) CEI has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied at or prior to Closing Time.
(8) Company Accountant's Comfort Letter. At the time of the
-----------------------------------
execution of this Agreement, the Underwriter shall have received from
Deloitte & Touche LLP a letter dated such date, in form and substance
satisfactory to the Underwriter, containing statements and information of
the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in the ML&Co. Registration Statement and the ML&Co.
Prospectus.
19
<PAGE>
(9) Cox Accountant's Comfort Letters. At the time of the execution of this
--------------------------------
Agreement, the Underwriter shall have received from each of Deloitte &
Touche LLP and Ernst & Young LLP a letter dated such date, in form and
substance satisfactory to the Underwriter, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in the Cox Registration Statement
and the Cox Prospectus.
(10) Company Bring-down Comfort Letter. At Closing Time, the
---------------------------------
Underwriter shall have received from Deloitte & Touche LLP a letter, dated
as of Closing Time, to the effect that they reaffirm the statements made in
the letter furnished by them pursuant to Section 5(a)(8) hereof, except
that the "specified date" referred to shall be a date not more than three
business days prior to Closing Time.
(11) Cox Bring-down Comfort Letter. At Closing Time, the
-----------------------------
Underwriter shall have received from Deloitte & Touche LLP a letter, dated
as of Closing Time, to the effect that they reaffirm the statements made in
the letter furnished by them pursuant to Section 5(a)(9) hereof, except
that the "specified date" referred to shall be a date not more than three
business days prior to Closing Time.
(12) Maintenance of Rating. Since the date of this Agreement, there
---------------------
shall not have occurred a downgrading in the rating assigned to any of the
Company's securities by any "nationally recognized statistical rating
agency", as that term is defined by the Commission for purposes of Rule
436(g)(2) under the 1933 Act, and no such organization shall have publicly
announced that it has under surveillance or review its rating of any of the
Company's securities.
(13) Approval of Listing. At Closing Time, the Securities shall
-------------------
have been approved for listing on the New York Stock Exchange, subject only
to official notice of issuance.
(14) No Objection. The NASD shall not have raised any objection
------------
with respect to the fairness and reasonableness of the underwriting terms
and arrangements.
(15) Lock-up Agreements. At the date of this Agreement, the
------------------
Underwriter shall have received an agreement substantially in the form of
Exhibit C hereto signed by each of the persons and entities listed on
Schedule B hereto.
(16) Conditions to Purchase of Option Securities. In the event that
-------------------------------------------
the Underwriter exercises its option provided in Section 2(b) hereof to
purchase all or any portion of the Option Securities, the representations
and warranties of the Company and CEI contained herein, the representations
and warranties of Cox contained in the Registration Agreement and the
statements in any certificates furnished by the Company, Cox or CEI
hereunder shall be true and correct as of each Date of Delivery and, at the
relevant Date of Delivery, the Underwriter shall have received:
20
<PAGE>
(A) Company Officers' Certificate. A certificate, dated such Date
of Delivery, of the President or a Vice President of the Company and
of the chief financial or chief accounting officer of the Company
confirming that the certificate delivered at Closing Time pursuant
to Section 5(a)(5) hereof is true and correct as of such Date of
Delivery.
(B) Cox Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of Cox and of the
chief financial or chief accounting officer of Cox confirming that
the certificate delivered at Closing Time pursuant to Section
5(a)(6) hereof is true and correct as of such Date of Delivery.
(C) CEI Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of CEI confirming
that the certificate delivered at Closing Time pursuant to Section
5(a)(7) hereof is true and correct as of such Date of Delivery.
(D) Opinion of Counsel for the Company. The favorable opinion of
Brown & Wood, counsel for the Company, in form and substance
reasonably satisfactory to the Underwriter, dated such Date of
Delivery, relating to the Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(a)(3) hereof.
(E) Opinion of Counsel for Cox and CEI. The favorable opinion of
Dow, Lohnes & Albertson, counsel for Cox and CEI, in form and
substance reasonably satisfactory to the Underwriter, dated such
Date of Delivery, to the same effect as the opinion required by
Section 5(a)(4) hereof.
(F) Company Bring-down Comfort Letter. A letter from Deloitte &
Touche LLP, in form and substance reasonably satisfactory to the
Underwriter and dated such Date of Delivery, substantially the same
in form and substance as the letter furnished to the Underwriter
pursuant to Section 5(a)(10) hereof, except that the "specified
date" in the letter furnished pursuant to this paragraph shall be a
date not more than five days prior to such Date of Delivery.
(G) Cox Bring-down Comfort Letter. A letter from Deloitte & Touche
LLP, in form and substance reasonably satisfactory to the
Underwriter and dated such Date of Delivery, substantially the same
in form and substance as the letter furnished to the Underwriter
pursuant to Section 5(a)(11) hereof, except that the "specified
date" in the letter furnished pursuant to this paragraph shall be a
date not more than five days prior to such Date of Delivery.
(17) Additional Documents. At Closing Time and at each Date of
--------------------
Delivery, counsel for the Underwriter shall have been furnished with such
documents and opinions as they may require for the purpose of enabling them
to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of
21
<PAGE>
any of the representations or warranties, or the fulfillment of any of the
conditions, contained herein or in the Registration Agreement; and all
proceedings taken by the Company in connection with the issuance and sale
of the Securities as herein contemplated shall be reasonably satisfactory
in form and substance to the Underwriter and counsel for the Underwriter.
(b) Conditions of the Company's Obligations. The obligations of the
Company hereunder are subject to the accuracy of the representations and
warranties of CEI contained in Section 1(b) hereof, to the accuracy of the
representations and warranties of Cox contained in the Registration Agreement,
to the accuracy of the statements in certificates of any officer of Cox or CEI
delivered pursuant to the provisions hereof, to the performance by CEI of its
covenants and other obligations hereunder, to the performance by Cox of its
covenants and other obligations under the Registration Agreement, and to the
following further conditions:
(1) Effectiveness of Cox Registration Statement. The Cox
-------------------------------------------
Registration Statement, including any Cox Rule 462(b) Registration
Statement, has become effective and at Closing Time no stop order
suspending the effectiveness of the Cox Registration Statement shall have
been issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission, and any request on the part of the Commission
for additional information shall have been complied with to the reasonable
satisfaction of counsel to the Company.
(2) Opinion of Counsel for the Company. At Closing Time, the
----------------------------------
Company shall have received the favorable opinion, dated as of Closing
Time, of Brown & Wood, counsel for the Company, to the same effect as the
opinion required by Section 5(a)(3) hereof.
(3) Opinion of Counsel for Cox and CEI. At Closing Time, the
----------------------------------
Company shall have received the favorable opinion, dated as of Closing
Time, of Dow, Lohnes & Albertson, counsel for Cox and CEI, to the same
effect as the opinion required by Section 5(a)(4) hereof.
(4) Cox Officers' Certificate. At Closing Time, the Company shall
-------------------------
have received a certificate of the President or a Vice President of Cox and
of the chief financial or chief accounting officer of Cox, dated as of
Closing Time, to the same effect as the certificate delivered to the
Underwriter pursuant to Section 5(a)(6) hereof.
(5) CEI Officer's Certificate. At Closing Time, the Company shall
-------------------------
have received a certificate of the President or a Vice President of CEI,
dated as of Closing Time, to the same effect as the certificate delivered
to the Underwriter pursuant to Section 5(a)(7) hereof.
(6) Cox Accountant's Comfort Letters. At the time of the execution
--------------------------------
of this Agreement, the Company shall have received from each of Deloitte &
Touche LLP and Ernst & Young LLP a letter dated such date, in form and
substance reasonably
22
<PAGE>
satisfactory to the Company, substantially the same in form and substance
as the letter delivered to the Underwriter pursuant to Section 5(a)(9)
hereof.
(7) Cox Bring-down Comfort Letter. At Closing Time, the Company
-----------------------------
shall have received from Deloitte & Touche LLP a letter, dated as of
Closing Time, in form and substance reasonably satisfactory to the Company,
substantially the same in form and substance as the letter delivered to the
Underwriter pursuant to Section 5(a)(11) hereof.
(8) Conditions to Sale of Option Securities. In the event that the
---------------------------------------
Underwriter exercises its option provided in Section 2(b) hereof to
purchase all or any portion of the Option Securities, the representations
and warranties of CEI contained herein, the representations and warranties
of Cox contained in the Registration Agreement and the statements in any
certificates furnished by Cox or CEI hereunder shall be true and correct as
of each Date of Delivery and, at the relevant Date of Delivery, the Company
shall have received:
(A) Cox Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of Cox and of the
chief financial or chief accounting officer of Cox confirming that
the certificate delivered at Closing Time pursuant to Section
5(b)(4) hereof is true and correct as of such Date of Delivery.
(B) CEI Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of CEI confirming
that the certificate delivered at Closing Time pursuant to Section
5(b)(5) hereof is true and correct as of such Date of Delivery.
(C) Opinion of Counsel for the Company. The favorable opinion,
dated such Date of Delivery, of Brown & Wood, counsel for the
Company, to the same effect as the opinion required by Section
5(a)(16)(D) hereof.
(D) Opinion of Counsel for Cox and CEI. The favorable opinion,
dated such Date of Delivery, of Dow, Lohnes & Albertson, counsel for
Cox and CEI, to the same effect as the opinion required by Section
5(a)(16)(E) hereof.
(E) Cox Bring-down Comfort Letter. A letter from Deloitte & Touche
LLP, in form and substance reasonably satisfactory to the Company
and dated such Date of Delivery, substantially the same in form and
substance as the letter furnished to the Underwriter pursuant to
Section 5(a)(16)(G) hereof.
(c) Termination of Agreement. If any condition specified in subsection (a)
of this Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement, or, in the case of any condition to the purchase of
Option Securities on a Date of Delivery which is after the Closing Time, the
obligations of the Underwriter to purchase the relevant Option Securities, may
be terminated by the Underwriter by notice to the Company and CEI at any time at
or prior to Closing Time or such Date of Delivery, as the case may be, and such
termination
23
<PAGE>
shall be without liability of any party to any other party except as provided in
Section 4 and except that Sections 1, 6, 7 and 8 shall survive any such
termination and remain in full force and effect. If any condition specified in
subsection (b) of this Section shall not have been fulfilled when and as
required to be fulfilled, this Agreement, or, in the case of any condition to
the sale of Option Securities on a Date of Delivery which is after the Closing
Time, the obligations of the Company to sell the relevant Option Securities, may
be terminated by the Company by notice to the Underwriter and CEI at any time at
or prior to Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party except as
provided in Section 4 and except that Sections 1, 6, 7 and 8 shall survive any
such termination and remain in full force and effect.
SECTION 6. Indemnification.
---------------
(a) Indemnification of the Underwriter by the Company. The Company agrees
to indemnify and hold harmless the Underwriter and each person, if any, who
controls the Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the ML&Co. Registration
Statement (or any amendment thereto), including the Rule 430A Information
and the Rule 434 Information, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact
contained in any ML&Co. preliminary prospectus or the ML&Co. Prospectus (or
any amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, referred to under (i) above; provided
that (subject to Section 6(e) below) any such settlement is effected with
the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the
Underwriter), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, referred to under (i) above, to the
extent that any such expense is not paid under (i) or (ii) above;
24
<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 the
Underwriter expressly for use in the ML&Co. Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any ML&Co. preliminary prospectus or the ML&Co.
Prospectus (or any amendment or supplement thereto).
Insofar as this indemnity agreement may permit indemnification for
liabilities under the 1933 Act of any person who controls an underwriter within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and who,
at the date of this Agreement, is a director or officer of the Company or
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act, such indemnity agreement is subject to the undertaking of
the Company in the ML&Co. Registration Statement under Item 17 thereof.
(b) Indemnification of the Underwriter and the Company by CEI. Subject to
Section 6(f) below, CEI agrees to indemnify and hold harmless (1) the
Underwriter and each person, if any, who controls the Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and (2) the
Company and each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act, as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Cox Registration
Statement (or any amendment thereto), or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
Cox preliminary prospectus or the Cox Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, referred to under (i) above; provided
that (subject to Section 6(e) below) any such settlement is effected with
the written consent of CEI; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the Underwriter
or the Company, as the case may be), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue statement or omission,
25
<PAGE>
or any such alleged untrue statement or omission, referred to under (i)
above, to the extent that any such expense is not paid under (i) or (ii)
above;
provided, however, that this indemnity agreement shall not apply to (A) any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to Cox by the
Underwriter expressly for use in the Cox Registration Statement (or any
amendment thereto), or any Cox preliminary prospectus or the Cox Prospectus (or
any amendment or supplement thereto) or (B) any loss, liability, claim, damage
or expense to the extent arising out of any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to Cox by the Company expressly for use in
the Cox Registration Statement (or any amendment thereto), or any Cox
preliminary prospectus or the Cox Prospectus (or any amendment or supplement
thereto).
(c) Indemnification of the Company, Directors and Officers. The
Underwriter agrees to indemnify and hold harmless the Company, its directors,
each of its officers who signed the ML&Co. Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the ML&Co.
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any ML&Co.
preliminary prospectus or the ML&Co. Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by the Underwriter expressly for use in the ML&Co. Registration
Statement (or any amendment thereto) or such ML&Co. preliminary prospectus or
the ML&Co. Prospectus (or any amendment or supplement thereto).
(d) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. 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
26
<PAGE>
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 6 or Section 7 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(e) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) and 6(b)(ii) effected without its written consent if (i) such
settlement is entered into more than 60 days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall have received
notice of the terms of such settlement at least 30 days prior to such settlement
being entered into and (iii) such indemnifying party shall not have reimbursed
such indemnified party in accordance with such request prior to the date of such
settlement.
(f) Conditions of Indemnification by CEI. The obligations and liabilities
of CEI under Section 6(b) hereof with respect to untrue statements or omissions
or alleged untrue statements or omissions made in the Cox Registration Statement
(or any amendment thereto), or any Cox preliminary prospectus or the Cox
Prospectus (or any amendment or supplement thereto), other than in reliance upon
and in conformity with written information furnished to Cox by CEI expressly for
use in the Cox Registration Statement (or any amendment thereto) or such Cox
preliminary prospectus or the Cox Prospectus (or any amendment or supplement
thereto), shall be subject to the following terms and conditions:
(i) the indemnified party shall have previously requested
indemnification for the loss, liability, claim, damage or expense arising
out of such untrue statements or omissions or alleged untrue statements or
omissions from Cox under Section 4(a) of the Registration Agreement;
(ii) CEI shall have received notice of the indemnified party's
request for indemnification from Cox; and
(iii) Cox shall have failed to pay or reimburse such indemnified
party, within 60 days from the date such request was made, in accordance
with such request.
SECTION 7. Contribution.
------------
(a) If the indemnification provided for in Sections 6(a) and 6(c) is for
any reason unavailable to or insufficient to hold harmless an indemnified party
in respect of any losses, liabilities, claims, damages or expenses referred to
therein, then the Company and the Underwriter
27
<PAGE>
shall contribute to the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such indemnified party, as incurred, (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Underwriter on the other hand from the
offering of the Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company on the one hand and of the
Underwriter on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriter on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount received by the Underwriter, in each case as
set forth on the cover of the ML&Co. Prospectus, or, if Rule 434 is used, the
corresponding location on the ML&Co. Term Sheet, bear to the aggregate initial
public offering price of the Securities as set forth on such cover.
The relative fault of the Company on the one hand and the Underwriter on
the other hand shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or by the Underwriter and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
Notwithstanding the provisions of this Section 7(a), the Underwriter shall
not be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which the
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
The Company and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 7(a) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 7(a). The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7(a) shall be
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.
28
<PAGE>
For purposes of this Section 7(a), each person, if any, who controls the
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as the Underwriter, and
each director of the Company, each officer of the Company who signed the ML&Co.
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company.
(b) If the indemnification provided for in Section 6(b) hereof is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then CEI on the one hand and the Underwriter and the Company on the
other hand shall contribute to the aggregate amount of such losses, liabilities,
claims, damages and expenses incurred by such indemnified party, as incurred,
(i) in such proportion as is appropriate to reflect the relative benefits
received by CEI on the one hand and by the Underwriter and the Company on the
other hand from the offering of the Securities pursuant to this Agreement or
(ii) if the allocation provided by clause (i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of CEI on
the one hand and of the Underwriter and the Company on the other hand in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations. The relative benefits received from the offering of
the Securities pursuant to this Agreement shall be deemed to be such that the
Underwriter and the Company shall be responsible for that portion of the
aggregate amount of such losses, liabilities, claims, damages and expenses
represented by the percentage that the total underwriting discount received by
the Underwriter, as set forth on the cover of the ML&Co. Prospectus, or, if Rule
434 is used, the corresponding location on the ML&Co. Term Sheet, bears to the
aggregate initial public offering price of the Securities as set forth on such
cover and CEI shall be responsible for the balance. The relative fault of CEI
on the one hand and the Underwriter and the Company on the other hand shall be
determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by CEI or Cox on the one
hand or by the Underwriter or the Company on the other hand and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
Notwithstanding the provisions of this Section 7(b), the Underwriter and
the Company shall not be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by the
Underwriter and distributed to the public were offered to the public exceeds the
amount of any damages which the Underwriter and the Company have otherwise been
required to pay by reason of any such untrue or alleged untrue statement or
omission or alleged omission.
CEI, the Underwriter and the Company agree that it would not be just and
equitable if contribution pursuant to this Section 7(b) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 7(b). The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7(b) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in
29
<PAGE>
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7(b), each person, if any, who controls the
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as the Underwriter, and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
--------------------------------------------------------------
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company, Cox or CEI submitted pursuant hereto,
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Underwriter or controlling person, or
by or on behalf of the Company or CEI, and shall survive delivery of the
Securities to the Underwriter.
SECTION 9. Termination of Agreement.
------------------------
(a) Termination; General. The Underwriter may terminate this Agreement, by
notice to the Company and CEI, at any time at or prior to Closing Time (i) if
there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the ML&Co. Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has been, since the time of
execution of this Agreement, or since the respective dates as of which
information is given in the Cox Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of Cox and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, or (iii) if there has
occurred any material adverse change in the financial markets in the United
States, any outbreak of hostilities or escalation thereof or other calamity or
crisis or any change or development involving a prospective change in national
or international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Underwriter,
impracticable to market the Securities or to enforce contracts for the sale of
the Securities, or (iv) if trading in any securities of the Company or in the
Cox Common Stock has been suspended or limited by the Commission or the New York
Stock Exchange, or if trading generally on the American Stock Exchange or the
New York Stock Exchange or in the Nasdaq National Market has been suspended or
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the NASD or any other governmental authority, or
(v) if a banking moratorium has been declared by either federal or New York
authorities.
30
<PAGE>
(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7 and 8 shall survive such termination and remain in full force and effect.
SECTION 10. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriter shall be directed to it at North Tower, World Financial Center, New
York, New York 10281-1328, attention of Douglas Squires, Managing Director;
notices to the Company shall be directed to it at 100 Church St., 12th Floor,
New York, New York 10007, attention of the Secretary, with a copy to the
Treasurer at World Financial Center, South Tower, New York, New York 10080-6105;
and notices to CEI shall be directed to it at 1400 Lake Hearn Drive, Atlanta,
Georgia 30319, attention of Andrew A. Merdek.
SECTION 11. Parties. This Agreement shall each inure to the benefit of and
-------
be binding upon each of the Underwriter, the Company and CEI and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the parties hereto and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the parties hereto and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from the Underwriter shall be deemed to
be a successor by reason merely of such purchase.
SECTION 12. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
----------------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 13. Effect of Headings. The Article and Section headings herein
------------------
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
31
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the Underwriter, the Company and CEI in accordance with its terms.
Very truly yours,
MERRILL LYNCH & CO., INC.
By_________________________________
Name:
Title:
COX ENTERPRISES, INC.
By_________________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By__________________________________
Authorized Signatory
32
<PAGE>
SCHEDULE A
MERRILL LYNCH & CO. INC
6% STRYPES/SM/ DUE June 1, 1999
1. The initial public offering price of the Securities shall be
$22.875 per STRYPES.
2. The purchase price for the Securities to be paid by the
Underwriter shall be $22.185 per STRYPES, being an amount equal to the
initial public offering price set forth above less $.69 per STRYPES.
3. The "Threshold Appreciation Price" with respect to the Securities
shall be $27.91.
__________________________
/SM/ Service mark of Merrill Lynch & Co., Inc.
Sch A - 1
<PAGE>
SCHEDULE B
James C. Kennedy
James O. Robbins
Barry R. Elson
Alex B. Best
Ajit M. Dalvi
Jimmy W. Hayes
Robert C. O'Leary
David M. Woodrow
Margaret A. Belville
Claus F. Kroeger
James A. Hatcher
John R. Dillon
David E. Easterly
Robert F. Erburu
Sch B - 1
<PAGE>
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)(3)
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the ML&Co.
Prospectus and to enter into and perform its obligations under the
Underwriting Agreement.
(iii) The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(iv) Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S") has
been duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware, has corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the ML&Co. Prospectus and is duly qualified as a foreign
corporation to transact business and is in good standing in the State of New
York; all of the issued and outstanding capital stock of MLPF&S has been duly
authorized and validly issued, is fully paid and non-assessable and, to the
best of our knowledge, is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity; none of the outstanding shares of capital stock
of MLPF&S was issued in violation of the preemptive or similar rights of any
securityholder of MLPF&S.
(v) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
(vi) The Indenture has been duly authorized, executed and delivered by
the Company and (assuming the due authorization, execution and delivery
thereof by the Trustee) constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except
as the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of creditors'
rights generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
A-1
<PAGE>
(vii) The Securities are in the form contemplated by the Indenture, have
been duly authorized by the Company and, assuming that the Securities have
been duly authenticated by the Trustee in the manner described in its
certificate delivered to you today (which fact such counsel need not determine
by an inspection of the Securities), the Securities have been duly executed,
issued and delivered by the Company and constitute valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting enforcement
of creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law), and will be entitled to the benefits of
the Indenture.
(viii) The STRYPES Agreement has been duly authorized, executed and
delivered by the Company and the ML&Co. Subsidiary and (assuming the due
authorization, execution and delivery thereof by CEI) constitutes a valid and
binding agreement of the Company and the ML&Co. Subsidiary, enforceable
against the Company and the ML&Co. Subsidiary in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of creditors'
rights generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(ix) The Indenture has been duly qualified under the 1939 Act.
(x) The Securities, the Indenture and the STRYPES Agreement conform in
all material respects as to legal matters to the descriptions thereof
contained in the ML&Co. Prospectus.
(xi) The ML&Co. Registration Statement, including any ML&Co. Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act; any
required filing of the ML&Co. Prospectus pursuant to Rule 424(b) has been made
in the manner and within the time period required by Rule 424(b); and, to the
best of our knowledge, no stop order suspending the effectiveness of the
ML&Co. Registration Statement or any ML&Co. Rule 462(b) Registration Statement
has been issued under the 1933 Act and no proceedings for that purpose have
been instituted or are pending or threatened by the Commission.
(xii) The ML&Co. Registration Statement, including any ML&Co. Rule
462(b) Registration Statement, the Rule 430A Information and the Rule 434
Information, as applicable, the ML&Co. Prospectus, excluding the documents
incorporated by reference therein, and each amendment or supplement to the
ML&Co. Registration Statement and ML&Co. Prospectus, excluding the documents
incorporated by reference therein, as of their respective effective or issue
dates (other than the financial statements and supporting schedules included
therein or omitted therefrom, and the Trustee's Statement of Eligibility on
Form T-1 (the "Form T-1"), as to which we need express no opinion) complied as
to form in all material respects with the requirements of the 1933 Act and the
1933 Act Regulations.
A-2
<PAGE>
(xiii) The documents incorporated by reference in the ML&Co. Prospectus
(other than the financial statements and supporting schedules included therein
or omitted therefrom, as to which we need express no opinion), when they
became effective or were filed with the Commission, as the case may be,
complied as to form in all material respects with the requirements of the 1933
Act or the 1934 Act, as applicable, and the rules and regulations of the
Commission thereunder.
(xiv) The Cox Registration Statement, including any Cox Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act; any
required filing of the Cox Prospectus pursuant to Rule 424(b) has been made in
the manner and within the time period required by Rule 424(b); and, to the
best of our knowledge, no stop order suspending the effectiveness of the Cox
Registration Statement or any Cox Rule 462(b) Registration Statement has been
issued under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or threatened by the Commission.
(xv) The Cox Registration Statement, including any Cox Rule 462(b)
Registration Statement, the Cox Prospectus, excluding the documents
incorporated by reference therein, and each amendment or supplement to the Cox
Registration Statement and Cox Prospectus, excluding the documents
incorporated by reference therein, as of their respective effective or issue
dates (other than the financial statements and supporting schedules included
therein or omitted therefrom, as to which we need express no opinion) complied
as to form in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations.
(xvi) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than under the 1933 Act and
the 1933 Act Regulations, which have been obtained, or as may be required
under the securities or blue sky laws of the various states and except for the
qualification of the Indenture under the 1939 Act, as to which we need express
no opinion) is necessary or required in connection with the due authorization,
execution and delivery of the Underwriting Agreement by the Company or the due
execution, delivery or performance of the Indenture or the STRYPES Agreement
by the Company or for the offering, issuance, sale or delivery of the
Securities or for the due execution, delivery or performance of the STRYPES
Agreement by the ML&Co. Subsidiary.
(xvii) (A) The execution, delivery and performance by the Company of
the Underwriting Agreement, the Indenture, the Securities and the STRYPES
Agreement and the consummation by the Company of the transactions contemplated
in the Underwriting Agreement, the STRYPES Agreement and in the ML&Co.
Registration Statement (including the issuance and sale of the Securities and
the delivery of shares of Cox Common Stock pursuant thereto and the use of the
proceeds from the sale of the Securities as described in the ML&Co. Prospectus
under the caption "Supplemental Use of Proceeds") and compliance by the
Company with its obligations under the Underwriting Agreement, the Indenture,
the Securities and the STRYPES Agreement and (B) the execution, delivery and
performance by the ML&Co. Subsidiary of the STRYPES Agreement and the
consummation by the ML&Co. Subsidiary of the transactions contemplated therein
and compliance by the ML&Co. Subsidiary with its obligations under the STRYPES
Agreement do not and will not, whether with or without the giving of notice or
lapse of time or both, conflict
A-3
<PAGE>
with or constitute a breach of, or default or Repayment Event (as defined in
Section 1(a)(xiii) of the Underwriting Agreement) under or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any subsidiary pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or any other
agreement or instrument, known to us, to which the Company or any subsidiary
is a party or by which it or any of them may be bound, or to which any of the
property or assets of the Company or any subsidiary is subject (except for
such conflicts, breaches or defaults or liens, charges or encumbrances that
would not have a Material Adverse Effect), nor will such action result in any
violation of the provisions of the charter or by-laws of the Company or any
subsidiary, or any applicable law, statute, rule, regulation, judgment, order,
writ or decree, known to us, of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any
subsidiary or any of their respective properties, assets or operations.
We have participated in conferences with officers and representatives of
the Company and Cox, representatives of the independent accountants of the
Company and Cox, and the Underwriter at which the contents of the ML&Co.
Registration Statement and Prospectus, the contents of the Cox Registration
Statement and Prospectus and related matters were discussed and, although we
are not passing upon or assuming responsibility for the accuracy, completeness
or fairness of the statements contained or incorporated by reference in said
Registration Statements and Prospectuses and have made no independent check or
verification thereof, on the basis of the foregoing, nothing has come to our
attention that would lead us to believe (i) that the ML&Co. Registration
Statement or any amendment thereto, including the Rule 430A Information and
Rule 434 Information (if applicable), (except for financial statements and
schedules and other financial data included or incorporated by reference
therein or omitted therefrom and the Form T-1, as to which we need make no
statement), at the time such ML&Co. Registration Statement or any such
amendment became effective or at the date of the Underwriting Agreement,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the ML&Co. Prospectus or any
amendment or supplement thereto (except for financial statements and schedules
and other financial data included or incorporated by reference therein or
omitted therefrom, as to which we need make no statement), at the time the
ML&Co. Prospectus was issued, at the time any such amended or supplemented
prospectus was issued or at the Closing Time, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or (ii) that the Cox
Registration Statement or any amendment thereto, (except for financial
statements and schedules and other financial data included or incorporated by
reference therein or omitted therefrom, as to which we need make no
statement), at the time such Cox Registration Statement or any such amendment
became effective, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Cox Prospectus or any
amendment or supplement thereto (except for financial statements and schedules
and other financial data included or incorporated by reference therein or
omitted therefrom, as to which we need make no statement), at the time the Cox
Prospectus was issued, at the time any such amended or supplemented prospectus
was issued or at the Closing Time, included or includes an untrue statement of
a material fact or omitted or omits to state a material fact necessary in
order to make
A-4
<PAGE>
the statements therein, in the light of the circumstances under which they
were made, not misleading.
In rendering such opinion, such counsel may rely as to matters of fact (but
not as to legal conclusions), to the extent they deem proper, on certificates of
responsible officers of the Company and public officials.
A-5
<PAGE>
Exhibit B
FORM OF OPINION OF COX'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)(4)
(i) Cox has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, has
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Cox Prospectus and to enter into and
perform its obligations under the Registration Agreement and is duly qualified
as a foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a Material
Adverse Effect.
(ii) CEI has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation and has corporate power and authority to enter into and perform
its obligations under the Underwriting Agreement and the STRYPES Agreement.
(iii) The shares of issued and outstanding capital stock of Cox have
been duly authorized and validly issued and are fully paid and non-assessable;
and none of the outstanding shares of capital stock of Cox was issued in
violation of the preemptive rights of any securityholder of Cox.
(iv) Cox Holdings is the sole registered owner of and has all rights as a
registered owner in and to at least 14,000,000 shares of Cox Common Stock,
which, to the best of our knowledge, is owned free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity.
(v) Each material subsidiary of Cox (set forth on Schedule A hereto)
(each, a "Subsidiary" and collectively, the "Subsidiaries") 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
Cox 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 Cox 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 Cox Registration Statement, all of the capital
stock of each Subsidiary owned by Cox, directly or through subsidiaries, has
been duly authorized and validly
B-1
<PAGE>
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.
(vi) The Registration Agreement has been duly authorized, executed and
delivered by Cox.
(vii) The Underwriting Agreement has been duly authorized, executed and
delivered by CEI.
(viii) The STRYPES Agreement has been duly authorized, executed and
delivered by CEI and (assuming the due authorization, execution and delivery
thereof by the other parties thereto) constitutes a valid and binding
agreement of CEI, enforceable against CEI in accordance with its terms, except
as the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of creditors'
rights generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(ix) The Cox Registration Statement, including any Cox Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act; any
required filing of the Cox Prospectus pursuant to Rule 424(b) has been made in
the manner and within the time period required by Rule 424(b); and, to the
best of our knowledge, no stop order suspending the effectiveness of the Cox
Registration Statement or any Cox Rule 462(b) Registration Statement has been
issued under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or threatened by the Commission.
(x) The Cox Registration Statement, including any Cox Rule 462(b)
Registration Statement, the Cox Prospectus, excluding the documents
incorporated by reference therein, and each amendment or supplement to the Cox
Registration Statement and Cox Prospectus, excluding the documents
incorporated by reference therein, as of their respective effective or issue
dates (other than the financial statements and supporting schedules or other
financial or statistical data included therein or omitted therefrom, as to
which we need express no opinion) complied as to form in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations.
(xi) The documents incorporated by reference in the Cox Prospectus (other
than the financial statements and supporting schedules or other financial or
statistical data included therein or omitted therefrom, as to which we need
express no opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all material respects
with the requirements of the 1933 Act or the 1934 Act, as applicable, and the
rules and regulations of the Commission thereunder.
(xii) The form of certificate used to evidence the Cox Common Stock
complies in all material respects with all applicable statutory requirements,
with any applicable requirements of the charter and by-laws of Cox.
B-2
<PAGE>
(xiii) To our knowledge and other than as set forth in the Cox
Prospectus, there is not pending any action, suit, proceeding, inquiry or
investigation, to which Cox or any subsidiary is a party, or to which the
property of Cox or any subsidiary is subject, before or brought by any court
or governmental agency or body, domestic or foreign, (including the U.S.
Federal Communications Commission ("FCC")) which might reasonably be expected
to result in a Material Adverse Effect, or which might reasonably be expected
to materially and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in the Registration Agreement or
the performance by Cox of its obligations thereunder; and, to the best of our
knowledge, no such action, suit, proceeding, inquiry or investigation is
threatened in writing by governmental authorities or others.
(xiv) The information in the Prospectus under "Business--Legislation and
Regulation", "Certain Transactions" and "Description of Capital Stock", and in
the Registration Statement under Items 14 and 15, to the extent that it
constitutes matters of law, summaries of legal matters, Cox's charter and
bylaws or legal proceedings, or legal conclusions, has been reviewed by us and
fairly present the information called for with respect to such matters of law
and fairly summarize the matters referred to therein.
(xv) To the best of our knowledge, there are no statutes or regulations,
and no legal or governmental proceedings pending or threatened to which Cox or
any of its subsidiaries is a party or to which any of the properties of Cox or
any of its subsidiaries is subject, that are required to be described in the
Cox Prospectus that are not described as required.
(xvi) All descriptions in the Cox Registration Statement of contracts
and other documents to which Cox or its subsidiaries are a party are accurate
in all material respects; to the best of our knowledge, there are no
franchises, contracts, indentures, mortgages, loan agreements, notes, leases
or other instruments required to be described or referred to in the Cox
Registration Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed or incorporated by reference as
exhibits thereto, and the descriptions thereof or references thereto are
correct in all material respects.
(xvii) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign, (including the FCC) (other than
under the 1933 Act and the 1933 Act Regulations, which have been obtained, or
as may be required under the securities or blue sky laws of the various
states, as to which we need express no opinion) is necessary or required in
connection with the due authorization, execution, and delivery by Cox of the
Registration Agreement or the performance by Cox of its obligations
thereunder.
(xviii) The execution, delivery and performance of the Registration
Agreement and the consummation of the transactions contemplated in the
Registration Agreement and in the Cox Registration Statement and compliance by
Cox with its obligations under the Registration Agreement do not and will not,
whether with or without the giving of notice or lapse of time or both,
conflict with or constitute a breach of, or default or Repayment Event (as
defined in Section 1(a)(xi) of the Registration Agreement) under or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of Cox or any subsidiary pursuant to, any
B-3
<PAGE>
contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or any other agreement or instrument, known to us, to which Cox or any
subsidiary is a party or by which it or any of them may be bound, or to which
any of the property or assets of Cox or any subsidiary is subject (except for
such conflicts, breaches or defaults or liens, charges or encumbrances that
would not have a Material Adverse Effect), nor will such action result in any
violation of the provisions of the charter or by-laws of Cox or any
subsidiary, or, 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 Cox or
any subsidiary or any of their respective properties, assets or operations.
(xix) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency (including the FCC) (other than under the 1933 Act and the
1933 Act Regulations, which have been obtained, or as may be required under
the securities or blue sky laws of the various states, as to which we need
express no opinion) is necessary or required in connection with the due
authorization, execution and delivery by CEI of the Underwriting Agreement or
the STRYPES Agreement or the performance by CEI of its obligations thereunder.
(xx) The execution, delivery and performance by CEI of the Underwriting
Agreement and the STRYPES Agreement and the consummation by CEI of the
transactions contemplated therein and compliance by CEI with its obligations
thereunder do not and will not, whether with or without the giving of notice
or lapse of time or both, conflict with or constitute a breach of, or default
or CEI Repayment Event under or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of CEI or any of its
subsidiaries pursuant to, any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or any other agreement or instrument,
known to us, to which CEI or any of its subsidiaries is a party or by which it
or any of them may be bound, or to which any of the property or assets of CEI
or any of its subsidiaries is subject (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not, singly or in the
aggregate, materially and adversely affect the ability of CEI to perform its
obligations under the Underwriting Agreement or the STRYPES Agreement), nor
will such action result in any violation of the provisions of the charter or
by-laws of CEI or any of its subsidiaries, or, 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 CEI or any of its subsidiaries or any of their
respective assets, properties or operations (except for such violations that
would not, singly or in the aggregate, materially and adversely affect the
ability of CEI to perform its obligations under the Underwriting Agreement or
the STRYPES Agreement).
(xxi) Cox has been granted and presently holds the FCC authorizations
necessary for Cox to conduct its business as presently conducted or proposed
to be conducted, except such as would 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.
B-4
<PAGE>
(xxii)To our knowledge after due inquiry, we are of the opinion that Cox
is not, nor with the giving of notice or lapse of time or both would be, in
violation of any judgment, injunction, order or decree of the FCC other than
those that would not have, singly or in the aggregate with all such other
violations, a Material Adverse Effect.
(xxiii)The execution, delivery and performance of the Registration
Agreement by Cox, and the execution, delivery and performance of the
Underwriting Agreement and the STRYPES Agreement by CEI, do not violate the
Communications Act of 1934, as amended, or any rules or the regulations
thereunder binding on Cox, CEI or their respective subsidiaries or any order,
writ, judgment, injunction, decree or award of the FCC binding on Cox, CEI or
their respective subsidiaries of which we have knowledge after due inquiry.
(xxiv)The execution, delivery and performance of the STRYPES Agreement
does not constitute the transfer or assignment, directly or indirectly, of any
license existing as of the date hereof issued by the FCC in connection with
the operations of Cox or the transfer of control of Cox within the meaning of
Section 310(d) of the Communications Act of 1934, as amended.
(xxv) Cox is not an "investment company" or an entity "controlled" by an
"investment company," as such terms are defined in the 1940 Act.
We have participated in conferences with officers and representatives of
Cox, representatives of the independent accountants of Cox, and the
Underwriter at which the contents of the Cox Registration Statement and the
Cox Prospectus and related matters were discussed and, although we are not
passing upon or assuming responsibility for the accuracy, completeness or
fairness of the statements contained or incorporated by reference in the Cox
Registration Statement and the Cox Prospectus and have made no independent
check or verification thereof except as described in paragraph (xv) above, on
the basis of the foregoing, nothing has come to our attention that would lead
us to believe that the Cox Registration Statement or any amendment thereto
(except for financial statements and schedules and other financial data
included or incorporated by reference therein or omitted therefrom, as to
which we need make no statement), at the time such Cox Registration Statement
or any such amendment became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Cox Prospectus or any amendment or supplement thereto (except for financial
statements and schedules and other financial data included or incorporated by
reference therein or omitted therefrom, as to which we need make no
statement), at the time the Cox Prospectus was issued, at the time any such
amended or supplemented prospectus was issued or at the Closing Time, included
or includes an untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the State of New
York, the corporate laws of the State of Delaware or the federal laws of the
United States of America, to the extent such counsel deems proper and
specified in such opinion, upon the opinion of other counsel whom such counsel
believes to be reliable, provided that such counsel furnishes copies thereof
to the Underwriter and
B-5
<PAGE>
states that such opinion of such local counsel is satisfactory in form and
substance and the Underwriter and counsel for the Underwriter are entitled to
rely thereon, and (B) as to matters of fact (but not as to legal conclusions),
to the extent they deem proper, on certificates of responsible officers of
Cox, CEI and public officials. As used in this Exhibit B, the term "Material
Adverse Effect" shall have the meaning ascribed to such term in the
Registration Agreement.
B-6
<PAGE>
[FORM OF LOCK-UP FROM DIRECTORS, OFFICERS OR OTHER
STOCKHOLDERS PURSUANT TO SECTION 5(a)(15)]
Exhibit C
___________, 1996
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Re: Proposed Public Offering of STRYPES by Merrill Lynch & Co. Inc.
---------------------------------------------------------------
Ladies and Gentlemen:
The undersigned, a stockholder [and an officer and/or director] of Cox
Communications, Inc., a Delaware corporation (the "Company"), understands that
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch") proposes to enter into an Underwriting Agreement (the
"Underwriting Agreement") with Merrill Lynch & Co., Inc. ("ML&Co.") and Cox
Enterprises, Inc. providing for the public offering of ML&Co.'s Structured Yield
Product Exchangeable for Stock/sm/, 6% STRYPES/sm/ due JUNE 1, 1999 (the
"STRYPES Offering"), payable at maturity or upon redemption with shares of Class
A Common Stock, par value $1.00 per share (the "Cox Common Stock"), of the
Company. For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the undersigned agrees with Merrill Lynch that,
during a period of 120 days from the date of the Underwriting Agreement, the
undersigned will not, without the prior written consent of Merrill Lynch, offer,
sell, contract to sell or otherwise dispose of, directly or indirectly, any
shares of Cox Common Stock or any securities convertible into, exchangeable for
or repayable with shares of Cox Common Stock, whether now owned or hereafter
acquired by the undersigned or with respect to which the undersigned has or
hereafter acquires the power of disposition, or cause to be filed any
registration statement under the Securities Act of 1933, as amended, with
respect to any of the foregoing.
Notwithstanding anything to the contrary herein, if the closing of the STRYPES
Offering has not occurred prior to September 30, 1996, this Lock-up Agreement
shall be of no further force and effect.
Very truly yours,
Signature:
Print Name:
C-1
<PAGE>
EXHIBIT 1(b)
______________________________________________________________________________
______________________________________________________________________________
COX COMMUNICATIONS, INC.
(a Delaware corporation)
REGISTRATION AGREEMENT
----------------------
Dated: May 22, 1996
______________________________________________________________________________
______________________________________________________________________________
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
SECTION 1. Representations and Warranties.................................................... 3
------------------------------
Representations and Warranties by the Company............................................ 3
Compliance with Registration Requirements......................................... 3
Incorporated Documents............................................................ 4
Independent Accountants........................................................... 4
Financial Statements.............................................................. 4
No Material Adverse Change in Business............................................ 5
Good Standing of the Company...................................................... 5
Good Standing of Subsidiaries..................................................... 5
Capitalization.................................................................... 6
Description of Common Stock....................................................... 6
Authorization of Agreement........................................................ 6
Absence of Defaults and Conflicts................................................. 6
Absence of Labor Dispute.......................................................... 6
Absence of Proceedings............................................................ 7
Accuracy of Exhibits.............................................................. 7
Possession of Intellectual Property............................................... 7
Absence of Further Requirements................................................... 7
Possession of Licenses and Permits................................................ 7
Title to Property................................................................. 8
Compliance with Cuba Act.......................................................... 8
Investment Company Act............................................................ 8
Environmental Laws................................................................ 8
Officer's Certificates................................................................... 9
SECTION 2. Covenants of the Company.......................................................... 9
------------------------
Compliance with Securities Regulations and Commission Requests........................... 9
Filing of Amendments..................................................................... 9
Delivery of Cox Registration Statements.................................................. 10
Delivery of Cox Prospectuses............................................................. 10
Continued Compliance with Securities Laws................................................ 10
Blue Sky Qualifications.................................................................. 10
Rule 158................................................................................. 11
Restriction on Sale of Securities........................................................ 11
Reporting Requirements................................................................... 11
SECTION 3. Payment of Expenses............................................................... 11
-------------------
Expenses................................................................................. 11
SECTION 4. Indemnification................................................................... 12
---------------
Indemnification of Underwriter and ML&Co................................................. 12
Indemnification of Company, Directors, Officers.......................................... 13
Actions against Parties; Notification.................................................... 13
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Settlement without Consent if Failure to Reimburse..................................... 14
SECTION 5. Contribution.................................................................. 14
------------
SECTION 6. Representations, Warranties and Agreements to Survive Delivery................ 15
--------------------------------------------------------------
SECTION 7. Termination................................................................... 15
-----------
SECTION 8. Notices....................................................................... 15
-------
SECTION 9. Parties....................................................................... 16
-------
SECTION 10. GOVERNING LAW................................................................. 16
-------------
SECTION 11. Effect of Headings............................................................ 16
------------------
</TABLE>
-ii-
<PAGE>
COX COMMUNICATIONS, INC.
(a Delaware corporation)
REGISTRATION AGREEMENT
----------------------
May 22, 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
MERRILL LYNCH & CO., INC.
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Cox Communications, Inc., a Delaware corporation (the "Company"), and Cox
Enterprises, Inc., a Delaware corporation ("CEI"), confirm their respective
agreements with Merrill Lynch & Co., Inc., a Delaware corporation ("ML&Co."),
and with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
(the "Underwriter"), in connection with the proposed issue and sale by ML&Co. to
the Underwriter, pursuant to an underwriting agreement, dated the date hereof
(the "Underwriting Agreement"), among ML&Co., CEI and the Underwriter, of an
aggregate of 8,500,000 of ML&Co.'s Structured Yield Product Exchangeable for
Stock/SM/, 6% STRYPES/SM/ due June 1, 1999 (each, a "STRYPES"), payable at
maturity or upon redemption by delivery of shares of Class A Common Stock, par
value $1.00 per share (the "Cox Common Stock"), of the Company, and, at the
option of the Underwriter, all or any part of 1,275,000 additional STRYPES to
cover over-allotments, if any. The aforesaid 8,500,000 STRYPES (the "Initial
Securities") to be purchased by the Underwriter and all or any part of the
1,275,000 STRYPES subject to the option described in Section 2(b) of the
Underwriting Agreement (the "Option Securities") are hereinafter called,
collectively, the "Securities." Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to them in the Underwriting Agreement.
1
<PAGE>
The Company understands that the Underwriter proposes to make a public
offering of the Securities as soon as the Underwriter deems advisable after this
Agreement and the Underwriting Agreement have been executed and delivered. The
Company acknowledges that the execution and delivery of this Agreement is a
condition to the execution and delivery of the Underwriting Agreement by the
Underwriter and ML&Co. and that, in consideration of the execution and delivery
of the Underwriting Agreement by the Underwriter and ML&Co., the Company is
willing to make the representations, warranties and covenants herein contained.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-03351) covering the
registration of (i) the shares of Cox Common Stock deliverable at maturity or
upon redemption of the Securities and (ii) 4,225,000 shares of Cox Common Stock
(the "Pledged Shares") that may be pledged to and sold by or on behalf of the
ML&Co. Subsidiary (as defined below) under the Securities Act of 1933, as
amended (the "1933 Act"), including the related preliminary prospectus or
prospectuses. Each prospectus used before such registration statement became
effective is herein called a "Cox preliminary prospectus." Such registration
statement, including the exhibits thereto, the schedules thereto, if any, and
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, at the time it became effective, is herein called the "Cox
Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the rules and regulations of the Commission under the 1933 Act (the
"1933 Act Regulations") is herein referred to as the "Cox Rule 462(b)
Registration Statement," and after such filing the term "Cox Registration
Statement" shall include the Cox Rule 462(b) Registration Statement. The final
prospectus, including the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the 1933 Act, in the form first furnished to the
Underwriter for use in connection with the offering of the Securities is herein
called the "Cox Securities Prospectus." The prospectus, including the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act, in the form furnished from time to time to the ML&Co. Subsidiary for use in
connection with the sale of the Pledged Shares is herein called the "Pledged
Share Prospectus" and, together with the Cox Securities Prospectus, the "Cox
Prospectus." For purposes of this Agreement, all references to the Cox
Registration Statement, any Cox preliminary prospectus, the Cox Prospectus or
any amendment or supplement to any of the foregoing shall be deemed to include
the copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the Cox
Registration Statement, any Cox preliminary prospectus or the Cox Prospectus (or
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Cox Registration Statement, any Cox preliminary prospectus
or the Cox Prospectus, as the case may be; and all references in this Agreement
to amendments or supplements to the Cox Registration Statement, any Cox
preliminary prospectus or the Cox Prospectus shall be deemed to mean and include
the filing of any document under the Securities Exchange Act of 1934, as amended
(the "1934 Act"), which is incorporated by reference in the Cox Registration
Statement, such Cox preliminary prospectus or the Cox Prospectus, as the case
may be.
2
<PAGE>
Prior to the closing under the Underwriting Agreement, ML&Co., Merrill
Lynch Capital Services, Inc., a wholly-owned subsidiary of ML&Co. (the "ML&Co.
Subsidiary"), and CEI will enter into a contract (the "STRYPES Agreement"),
pursuant to which CEI will be obligated to deliver to the ML&Co. Subsidiary,
immediately prior to the maturity date or date of redemption of the Securities,
a number of shares of Cox Common Stock equal to the number required by ML&Co. to
pay and discharge or redeem all of the Securities, subject to CEI's option,
exercisable in its sole discretion, to satisfy its obligation under the STRYPES
Agreement by delivering immediately prior to the maturity date a specified
amount of cash in lieu of such shares.
SECTION 1. Representations and Warranties.
------------------------------
(a) Representations and Warranties by the Company. The Company represents
and warrants to each of the Underwriter and to ML&Co. as of the date hereof, as
of the Closing Time referred to in Section 2(c) of the Underwriting Agreement,
and as of each Date of Delivery (if any) referred to in Section 2(b) of the
Underwriting Agreement, and agrees with each of the Underwriter and ML&Co. as
follows:
(i) Compliance with Registration Requirements. The Company meets
-----------------------------------------
the requirements for the use of Form S-3 under the 1933 Act. Each of the
Cox Registration Statement and any Cox Rule 462(b) Registration Statement
has become effective under the 1933 Act and no stop order suspending the
effectiveness of the Cox Registration Statement or any Cox Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to the
knowledge of the Company, are contemplated by the Commission, and any
request on the part of the Commission for additional information has been
complied with.
At the respective times the Cox Registration Statement, any Cox Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and at the Date of Delivery if
any Option Securities are purchased and at the date of delivery of the
Pledged Share Prospectus to the ML&Co. Subsidiary if any Pledged Shares are
sold), the Cox Registration Statement, the Cox Rule 462(b) Registration
Statement and any amendments and supplements thereto complied and will
comply in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations and did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading. Neither the Cox Prospectus nor any amendments or supplements
thereto, at the time the Cox Prospectus or any such amendment or supplement
was issued and at the Closing Time (and at the Date of Delivery if any
Option Securities are purchased and at the date of delivery of the Pledged
Share Prospectus to the ML&Co. Subsidiary if any Pledged Shares are sold),
included or will include an untrue statement of a material fact or omitted
or will omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The representations and warranties in this
subsection shall not apply to statements in or omissions from the Cox
Registration Statement or Cox Prospectus made in reliance upon and in
conformity with (x) information furnished to the Company in writing by the
Underwriter expressly for use in the Cox Registration
3
<PAGE>
Statement or Cox Prospectus and (y) information furnished to the Company in
writing by ML&Co. expressly for use in the Cox Registration Statement or
Cox Prospectus.
Each Cox preliminary prospectus and the Cox Prospectus filed as part
of the Cox Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and, if applicable, each Cox preliminary prospectus and the Cox
Prospectus delivered to the Underwriter for use in connection with the
offering of the Securities was identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or deemed
----------------------
to be incorporated by reference in the Cox Registration Statement and the
Cox Prospectus, when they became effective or at the time they were or
hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations or the 1934 Act and the rules and regulations of the Commission
thereunder (the "1934 Act Regulations"), as applicable, and, when read
together with the other information in the Cox Prospectus, at the time the
Cox Registration Statement became effective, at the time the Cox Prospectus
was issued and at the Closing Time (and at the Date of Delivery if any
Option Securities are purchased and at the date of delivery of the Pledged
Share Prospectus to the ML&Co. Subsidiary if any Pledged Shares are sold),
did not and will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading.
(iii) Independent Accountants. The accountants who certified the
-----------------------
financial statements and supporting schedules of the Company and its
subsidiaries, and of Times Mirror Cable Television, Inc. and its
subsidiaries ("Times Mirror"), included in the Cox Registration Statement
are independent public accountants as required by the 1933 Act and the 1933
Act Regulations.
(iv) Financial Statements. The financial statements of the Company
--------------------
included in the Cox Registration Statement and the Cox Prospectus, together
with the related schedules and notes, present fairly the financial position
of the Company and its consolidated subsidiaries at the dates indicated and
the statement of operations, stockholders' equity and cash flows of the
Company and its consolidated subsidiaries for the periods specified; said
financial statements have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved. The financial statements of Times Mirror
included in the Cox Registration Statement and the Cox Prospectus, together
with the related notes, present fairly the financial position of Times
Mirror and its consolidated subsidiaries at the dates indicated and the
statement of operations, stockholders' equity and cash flows of Times
Mirror and its consolidated subsidiaries for the periods specified; said
financial statements have been prepared in conformity with GAAP applied on
a consistent basis throughout the periods involved. The supporting
schedules, if any, included in the Cox
4
<PAGE>
Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected financial data and
the summary financial information included in the Cox Prospectus present
fairly the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements of the Company and
its subsidiaries included in the Cox Registration Statement. The selected
pro forma financial data included in the Cox Prospectus present fairly the
information shown therein and have been compiled from pro forma financial
statements prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements.
(v) No Material Adverse Change in Business. Since the respective
--------------------------------------
dates as of which information is given in the Cox Registration Statement
and the Cox Prospectus, except as otherwise stated therein, (A) there has
been no material adverse change in the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise, whether or not arising
in the ordinary course of business (a "Material Adverse Effect"), (B) there
have been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its subsidiaries considered as
one enterprise, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(vi) Good Standing of the Company. The Company has been duly
----------------------------
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has the corporate power and authority
to own, lease and operate its properties and to conduct its business as
described in the Cox Prospectus and to enter into and perform its
obligations under this Agreement; and the Company is duly qualified as a
foreign corporation to transact business and is in good standing in each
other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each "significant subsidiary"
-----------------------------
of the Company (as such term is defined in Rule 1-02 of Regulation S-X)
(each a "Subsidiary" and, collectively, the "Subsidiaries") has been duly
organized and is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Cox Prospectus and is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not result
in a Material Adverse Effect; except as otherwise disclosed in the Cox
Registration Statement, all of the capital stock of each such Subsidiary
owned by the Company, directly or through subsidiaries, has been duly
authorized and validly issued, is fully paid and non-assessable and is
owned free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity. The only subsidiaries of the
5
<PAGE>
Company are (A) the subsidiaries listed on Exhibit 21 to the Annual Report
on Form 10-K of the Company filed with the Commission under Section 13 of
the 1934 Act and (B) certain other subsidiaries which, considered in the
aggregate as a single Subsidiary, do not constitute a "significant
subsidiary" as defined in Rule 1-02 of Regulation S-X.
(viii) Capitalization. The shares of outstanding capital stock of
--------------
the Company have been duly authorized and validly issued and are fully paid
and non-assessable; none of the outstanding shares of capital stock of the
Company was issued in violation of the preemptive or other similar rights
of any securityholder of the Company.
(ix) Description of Common Stock. The Cox Common Stock conforms to
---------------------------
all statements relating thereto contained in the Cox Prospectus and such
description conforms to the rights set forth in the instruments defining
the same.
(x) Authorization of Agreement. This Agreement has been duly
--------------------------
authorized, executed and delivered by the Company.
(xi) Absence of Defaults and Conflicts. Neither the Company nor
---------------------------------
any of its subsidiaries is in violation of its charter or bylaws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound, or to which any of the property or
assets of the Company or any subsidiary is subject (collectively,
"Agreements and Instruments") except for such defaults that would not
result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated herein and compliance by the Company with its obligations
hereunder do not and will not, whether with or without the giving of notice
or passage of time or both, conflict with or constitute a breach of, or
default or Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any subsidiary pursuant to, the Agreements and
Instruments (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not result in a Material Adverse
Effect), nor will such action result in any violation of the provisions of
the charter or bylaws of the Company or any subsidiary or any applicable
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any subsidiary or any of their
assets, properties or operations. As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note, debenture
or other evidence of indebtedness of the Company or any subsidiary (or any
person acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the
Company or any subsidiary.
(xii) Absence of Labor Dispute. No labor dispute with the
------------------------
employees of the Company or any subsidiary exists or, to the knowledge of
the Company, is imminent,
6
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that, individually or in the aggregate, may reasonably be expected to
result in a Material Adverse Effect.
(xiii) Absence of Proceedings. There is no action, suit,
----------------------
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Company, threatened, against or affecting the Company or
any subsidiary, which is required to be disclosed in the Cox Registration
Statement (other than as disclosed therein), or which, individually or in
the aggregate, might reasonably be expected to result in a Material Adverse
Effect, or which, individually or in the aggregate, might reasonably be
expected to materially and adversely affect the properties or assets
thereof or the performance by the Company of its obligations hereunder; the
aggregate of all pending legal or governmental proceedings to which the
Company or any subsidiary is a party or of which any of their respective
property or assets is the subject which are not described in the Cox
Registration Statement, including ordinary routine litigation incidental to
the business, could not reasonably be expected to result in a Material
Adverse Effect.
(xiv) Accuracy of Exhibits. There are no contracts or documents
--------------------
which are required to be described in the Cox Registration Statement, the
Cox Prospectus or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described or filed as
required.
(xv) Possession of Intellectual Property. Except as disclosed in
-----------------------------------
the Cox Prospectus, the Company and its subsidiaries own or possess, or can
acquire on reasonable terms, adequate patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary to
carry on the business now operated by them, other than those the absence of
which would not have a Material Adverse Effect and neither the Company nor
any of its subsidiaries has received any notice or is otherwise aware of
any infringement of or conflict with asserted rights of others with respect
to any Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect the
interest of the Company or any of its subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the aggregate,
would result in a Material Adverse Effect.
(xvi) Absence of Further Requirements. No filing with, or
-------------------------------
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, except such as has been already obtained or as may
be required under the 1933 Act or the 1933 Act Regulations or state
securities laws.
(xvii) Possession of Licenses and Permits. The Company and its
----------------------------------
subsidiaries own or possess such permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or
7
<PAGE>
foreign regulatory agencies or bodies necessary to conduct the business now
operated by them other than those the absence of which would not have a
Material Adverse Effect; the Company and its subsidiaries are in compliance
with the terms and conditions of all such Governmental Licenses, except
where the failure so to comply would not, singly or in the aggregate, have
a Material Adverse Effect; all of the Governmental Licenses are valid and
in full force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full force
and effect would not have a Material Adverse Effect; and neither the
Company nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such Governmental
Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material Adverse
Effect.
(xviii) Title to Property. The Company and its subsidiaries have
-----------------
good and marketable title to all material real properties owned by the
Company and its subsidiaries and good title to all other properties owned
by them, in each case, free and clear of all mortgages, pledges, liens,
security interests, claims, restrictions or encumbrances of any kind except
such as (a) are described in the Cox Prospectus or (b) do not, singly or in
the aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company or any of its subsidiaries; and all of the leases and subleases
material to the business of the Company and its subsidiaries, considered as
one enterprise, and under which the Company or any of its subsidiaries
holds properties described in the Cox Prospectus, are in full force and
effect, and neither the Company nor any subsidiary has any notice of any
material claim of any sort that has been asserted by anyone adverse to the
rights of the Company or any subsidiary under any of the leases or
subleases mentioned above, or affecting or questioning the rights of the
Company or such subsidiary to the continued possession of the leased or
subleased premises under any such lease or sublease.
(xix) Compliance with Cuba Act. The Company has complied with, and
------------------------
is and will be in compliance with, the provisions of that certain Florida
act relating to disclosure of doing business with Cuba, codified as Section
517.075 of the Florida statutes, and the rules and regulations thereunder
(collectively, the "Cuba Act") or is exempt therefrom.
(xx) Investment Company Act. The Company is not an "investment
----------------------
company" or an entity "controlled" by an "investment company" as such terms
are defined in the Investment Company Act of 1940, as amended.
(xxi) Environmental Laws. Except as described in the Cox
------------------
Registration Statement and except as would not, singly or in the aggregate,
result in a Material Adverse Effect, (A) neither the Company nor any of its
subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common
law or any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land surface
or subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of
8
<PAGE>
chemicals, pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum or petroleum products (collectively, "Hazardous
Materials") or to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials
(collectively, "Environmental Laws"), (B) the Company and its subsidiaries
have all permits, authorizations and approvals required under any
applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or threatened administrative,
regulatory or judicial actions, suits, demands, demand letters, claims,
liens, notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of its
subsidiaries and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of its
subsidiaries relating to Hazardous Materials or any Environmental Laws.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company and delivered to the Underwriter or counsel for the Underwriter or to
ML&Co. or counsel for ML&Co. in connection with the offering of the Securities
shall be deemed a representation and warranty by the Company to the Underwriter
and to ML&Co., as the case may be, as to the matters covered thereby.
SECTION 2. Covenants of the Company. The Company covenants with the
------------------------
Underwriter and with ML&Co. as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 2(b), will notify the Underwriter and ML&Co.
immediately, and confirm the notice in writing, (i) when any post-effective
amendment to the Cox Registration Statement shall become effective, or any
supplement to the Cox Prospectus or any amended Cox Prospectus shall have been
filed, (ii) of the receipt of any comments from the Commission, (iii) of any
request by the Commission for any amendment to the Cox Registration Statement or
any amendment or supplement to the Cox Prospectus or for additional information,
and (iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Cox Registration Statement or of any order preventing or
suspending the use of any Cox preliminary prospectus, or of the suspension of
the qualification of the shares of Cox Common Stock deliverable at maturity or
upon redemption of the Securities for offering or sale in any jurisdiction, or
of the initiation or threatening of any proceedings for any of such purposes.
The Company will promptly effect the filings necessary pursuant to Rule 424(b)
and will take such steps as it deems necessary to ascertain promptly whether the
form of prospectus transmitted for filing under Rule 424(b) was received for
filing by the Commission and, in the event that it was not, it will promptly
file such prospectus. The Company will use its best efforts to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Underwriter and ML&Co.
notice of its intention to file or prepare any amendment to the Cox Registration
Statement (including any filing under Rule 462(b)) or any amendment, supplement
or revision to either the
9
<PAGE>
prospectus included in the Cox Registration Statement at the time it became
effective or to the Cox Prospectus, whether pursuant to the 1933 Act, the 1934
Act or otherwise, will furnish the Underwriter and ML&Co. with copies of any
such documents a reasonable amount of time prior to such proposed filing or use,
as the case may be, and will not file or use any such document to which the
Underwriter or counsel for the Underwriter or ML&Co. or counsel for ML&Co. shall
reasonably object.
(c) Delivery of Cox Registration Statements. The Company has furnished or
will deliver to the Underwriter, counsel for the Underwriter, ML&Co. and counsel
for ML&Co., without charge, signed copies of the Cox Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents incorporated or
deemed to be incorporated by reference therein) and signed copies of all
consents and certificates of experts. If applicable, the copies of the Cox
Registration Statement and each amendment thereto furnished to the Underwriter
and ML&Co. will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(d) Delivery of Cox Prospectuses. The Company has delivered to the
Underwriter, without charge, as many copies of each Cox preliminary prospectus
as the Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to the Underwriter, without charge, during the period when the Cox
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Cox Prospectus (as amended or supplemented) as the
Underwriter may reasonably request. If applicable, the Cox Prospectus and any
amendments or supplements thereto furnished to the Underwriter and ML&Co. will
be identical to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations so as to permit the completion of
the distribution of the Securities as contemplated in the Underwriting Agreement
and to permit the sale of the Pledged Shares. If at any time when a prospectus
is required by the 1933 Act to be delivered in connection with sales of the
Securities or the Pledged Shares, any event shall occur or condition shall exist
as a result of which it is necessary, in the reasonable opinion of counsel for
the Underwriter, counsel for ML&Co. or counsel for the Company, to amend the Cox
Registration Statement or amend or supplement the Cox Prospectus in order that
the Cox Prospectus will not include any untrue statements of a material fact or
omit to state a material fact necessary in order to make the statements therein
not misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the reasonable opinion
of any such counsel, at any such time to amend the Cox Registration Statement or
amend or supplement the Cox Prospectus in order to comply with the requirements
of the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare
and file with the Commission, subject to Section 2(b), such amendment or
supplement as may be necessary to correct such statement or omission or to make
the Cox Registration Statement or the Cox Prospectus comply with such
requirements, and the Company will furnish to the Underwriter and ML&Co. such
number of copies of such amendment or supplement as the Underwriter and ML&Co.
may reasonably request.
10
<PAGE>
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriter, to qualify the shares of Cox Common Stock
deliverable at maturity or upon redemption of the Securities and the Pledged
Shares for offering and sale under the applicable securities laws of such states
and other jurisdictions of the United States as the Underwriter may designate
and to maintain such qualifications in effect through the maturity date of the
Securities; provided, however, that the Company shall not be obligated to file
any general consent to service of process or to qualify as a foreign corporation
or as a dealer in securities in any jurisdiction in which it is not so qualified
or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. In each jurisdiction in
which the shares of Cox Common Stock deliverable at maturity or upon redemption
of the Securities have been so qualified, the Company will file such statements
and reports as may be required by the laws of such jurisdiction to continue such
qualification in effect through the maturity date of the Securities.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Restriction on Sale of Securities. During a period of 120 days from
the date of this Agreement, the Company will not, without the prior written
consent of the Underwriter, (x) offer, sell, contract to sell or otherwise
dispose of, directly or indirectly, any shares of Cox Common Stock, securities
convertible into, exchangeable for or repayable with shares of Cox Common Stock,
or rights or warrants to acquire shares of Cox Common Stock or (y) file any
registration statement under the 1933 Act with respect to any shares of Cox
Common Stock, securities convertible into, exchangeable for or repayable with
shares of Cox Common Stock, or rights or warrants to acquire shares of Cox
Common Stock. The foregoing sentence shall not apply to (A) restricted shares
or options to purchase shares of Cox Common Stock granted pursuant to employee
benefit or director plans of the Company existing at the date of this Agreement;
or (B) shares of Cox Common Stock issued upon exercise of options outstanding at
the date of this Agreement; or (C) any transfer of shares of Cox Common Stock to
an affiliate (as such term is defined in Rule 405 promulgated under the 1933
Act) or affiliates of the Company, provided, however, that in any such case it
shall be a condition to the transfer that the transferee execute an agreement
stating that the transferee is receiving and holding such shares of Cox Common
Stock subject to the foregoing restrictions and that there shall be no further
transfer of such securities except in accordance therewith.
(i) Reporting Requirements. The Company, during the period when the Cox
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the rules and
regulations of the Commission thereunder.
SECTION 3. Payment of Expenses. (a) Expenses. CEI will pay all expenses
-------------------
incident to the performance of the Company's obligations under this Agreement,
including (i) the preparation, printing and filing of the Cox Registration
Statement (including financial statements and exhibits) as originally filed and
of each amendment thereto, (ii) the preparation, printing and
11
<PAGE>
delivery to the Underwriter and ML&Co. of this Agreement, (iii) the fees and
disbursements of the Company's counsel, accountants and other advisors, (iv) the
qualification of the shares of Cox Common Stock deliverable at maturity or upon
redemption of the Securities under securities laws in accordance with the
provisions of Section 2(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for ML&Co. in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (v) the printing and delivery to the Underwriter of copies of each Cox
Preliminary Prospectus and of the Cox Prospectus and any amendments or
supplements thereto, (vi) the preparation, printing and delivery to the
Underwriter of copies of the Blue Sky Survey and any supplement thereto and
(vii) the filing fees incident to, and the reasonable fees and disbursements of
counsel to the Underwriter in connection with, the review by the National
Association of Securities Dealers, Inc. of the terms of the offering and sale of
the shares of Cox Common Stock deliverable at maturity or upon redemption of the
Securities. The Company shall have no obligation whatsoever to pay the expenses
described in this Section 3(a).
SECTION 4. Indemnification.
---------------
(a) Indemnification of Underwriter and ML&Co. The Company agrees to
indemnify and hold harmless (1) the Underwriter and each person, if any, who
controls the Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act and (2) ML&Co. and each person, if any, who controls
ML&Co. within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act, as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Cox Registration
Statement (or any amendment thereto) or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
Cox preliminary prospectus or the Cox Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, referred to under (i) above; provided
that (subject to Section 4(d) below) any such settlement is effected with
the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the Underwriter
or ML&Co., as the case may be), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
12
<PAGE>
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, referred to
under (i) above, to the extent that any such expense is not paid under (i)
or (ii) above;
provided, however, that this indemnity agreement shall not apply to (A) any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by the Underwriter expressly for use in the Cox Registration Statement
(or any amendment thereto), or any Cox preliminary prospectus or the Cox
Prospectus (or any amendment or supplement thereto) or (B) any loss, liability,
claim, damage or expense to the extent arising out of any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by ML&Co.
expressly for use in the Cox Registration Statement (or any amendment thereto),
or any Cox preliminary prospectus or the Cox Prospectus (or any amendment or
supplement thereto).
(b) Indemnification of Company, Directors, Officers. The Underwriter
agrees to indemnify and hold harmless the Company, its directors, each of its
officers who signed the Cox Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of this Section,
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Cox Registration Statement (or any
amendment thereto), or any Cox preliminary prospectus or the Cox Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by the Underwriter expressly for
use in the Cox Registration Statement (or any amendment thereto) or such Cox
preliminary prospectus or the Cox Prospectus (or any amendment or supplement
thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. An indemnifying party may participate at its own expense in the
defense of any such action. If it so elects within a reasonable time after
receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume the defense of such
action with counsel chosen by it and approved by the indemnified parties
defendant in such action, unless such indemnified parties reasonably object to
such assumption on the ground that there may be legal defenses available to them
which are different from or in addition to those available to such indemnifying
party. If an indemnifying party assumes the defense of such action, the
indemnifying parties shall not be liable for any fees and expenses of counsel
for the indemnified parties incurred thereafter in connection with such action.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general
13
<PAGE>
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 4 or Section 5 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 4(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 60 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 5. Contribution. If the indemnification provided for in Section 4
------------
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then the Company on the one hand and the
Underwriter and ML&Co. on the other hand shall contribute to the aggregate
amount of such losses, liabilities, claims, damages and expenses incurred by
such indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriter and ML&Co. on the other hand from the offering of the Securities
pursuant to the Underwriting Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
Underwriter and ML&Co. on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the offering of the Securities pursuant
to the Underwriting Agreement shall be deemed to be such that the Underwriter
and ML&Co. shall be responsible for that portion of the aggregate amount of such
losses, liabilities, claims, damages and expenses represented by the percentage
that the total underwriting discount received by the Underwriter, as set forth
on the cover of the ML&Co. Prospectus, or, if Rule 434 is used, the
corresponding location on the ML&Co. Term Sheet, bears to the aggregate initial
public offering price of the Securities as set forth on such cover and the
Company shall be responsible for the balance.
The relative fault of the Company on the one hand and the Underwriter and
ML&Co. on the other hand shall be determined by reference to, among other
things, whether any such untrue
14
<PAGE>
or alleged untrue statement of a material fact or omission or alleged omission
to state a material fact relates to information supplied by the Company or CEI
on the one hand or by the Underwriter or ML&Co. on the other hand and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
Notwithstanding the provisions of this Section 5, the Underwriter and
ML&Co. shall not be required to contribute any amount in excess of the amount by
which the total price at which the Securities underwritten by the Underwriter
and distributed to the public were offered to the public exceeds the amount of
any damages which the Underwriter and ML&Co. have otherwise been required to pay
by reason of any such untrue or alleged untrue statement or omission or alleged
omission.
The Company, the Underwriter and ML&Co. agree that it would not be just and
equitable if contribution pursuant to this Section 5 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 5. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 5 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 5, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as the Underwriter; each
person, if any, who controls ML&Co. within the meaning of Section 15 of the 1933
Act shall have the same rights to contribution as ML&Co.; and each director of
the Company, each officer of the Company who signed the Cox Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company.
SECTION 6. Representations, Warranties and Agreements to Survive Delivery.
--------------------------------------------------------------
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company submitted pursuant to the Underwriting
Agreement, shall remain operative and in full force and effect, regardless of
any investigation made by or on behalf of the Underwriter or controlling person
thereof, or by or on behalf of ML&Co. or controlling person thereof or by or on
behalf of the Company, and shall survive delivery of the Securities to the
Underwriter pursuant to the Underwriting Agreement and any sale of the Pledged
Shares.
SECTION 7. Termination. In the event that the Underwriter terminates the
-----------
Underwriting Agreement as provided in Section 9 thereof, this Agreement shall
simultaneously terminate, except that the provisions of Section 3, the indemnity
agreements set forth in Section
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<PAGE>
4, the contribution provisions set forth in Section 5, and the provisions of
Section 6 shall remain in effect.
SECTION 8. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriter shall be directed to it at North Tower, World Financial Center, New
York, New York 10281-1328, attention of Douglas W. Squires, Managing Director;
notices to ML&Co. shall be directed to it at 100 Church St., 12th Floor, New
York, New York 10007, attention of the Secretary, with a copy to the Treasurer
at World Financial Center, South Tower, New York, New York 10080-6105; notices
to the Company or CEI shall be directed to it at 1400 Lake Hearn Drive, Atlanta,
Georgia 30319, attention of Andrew A. Merdek.
SECTION 9. Parties. This Agreement shall inure to the benefit of and be
-------
binding upon each of the Underwriter, ML&Co., the Company and CEI and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriter, ML&Co., the Company and CEI and their respective
successors and the controlling persons and officers and directors referred to in
Sections 4 and 5 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the Underwriter,
ML&Co., the Company and CEI and their respective successors, and said
controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation.
No purchaser of Securities from the Underwriter shall be deemed to be a
successor by reason merely of such purchase.
SECTION 10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 11. Effect of Headings. The Article and Section headings herein
------------------
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
16
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the Underwriter, ML&Co., CEI and the Company in accordance with its terms.
Very truly yours,
COX COMMUNICATIONS, INC.
By__________________________________________
Name:
Title:
COX ENTERPRISES, INC.
By__________________________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By _____________________________________
Authorized Signatory
MERRILL LYNCH & CO., INC.
By _____________________________________
Name:
Title:
17
<PAGE>
EXHIBIT 4(b)
MERRILL LYNCH & CO., INC.
TO
CHEMICAL BANK,
as Trustee
__________________________________
EIGHTH SUPPLEMENTAL INDENTURE
Dated as of May 1, 1996
__________________________________
Creating a series of Securities designated
Structured Yield Product Exchangeable for Stock/SM/
6% STRYPES/SM/ Due June 1, 1999
Supplemental to Indenture
Dated as of April 1, 1983,
as Amended
<PAGE>
TABLE OF CONTENTS
-----------------
ARTICLE ONE
DEFINITIONS
SECTION 101. Definitions................................ 2
-----------
"Business Day".......................................... 2
"CEI"................................................... 2
"Closing Price"......................................... 2
"Company"............................................... 2
"Cox"................................................... 2
"Cox Common Stock"...................................... 2
"Cox Successor"......................................... 2
"Debt Instrument"....................................... 2
"Distributed Assets".................................... 3
"Extraordinary Cash Dividend"........................... 3
"Event of Default"...................................... 3
"Forward Contract"...................................... 3
"Indenture"............................................. 3
"Initial Price"......................................... 3
"Interest Payment Date"................................. 3
"Maturity Consideration"................................ 3
"Maturity Date"......................................... 3
"Maturity Price"........................................ 3
"Notice of Default"..................................... 3
"NYSE".................................................. 3
"Payment Rate".......................................... 3
"Payment Rate Formula".................................. 3
"Principal Indenture"................................... 3
"Redemption Date"....................................... 3
"Regular Record Date"................................... 3
"Reorganization Event".................................. 3
"Securities"............................................ 3
"Share Components"...................................... 4
"STRYPES"............................................... 4
"STRYPES Certificates".................................. 4
"Supplemental Indenture"................................ 4
"Tax Event"............................................. 4
"Tax Event Date"........................................ 4
"Tax Event Redemption Price"............................ 4
"Threshold Appreciation Price".......................... 4
"Trading Day"........................................... 4
i
<PAGE>
"Transaction Value"..................................... 4
"Trustee"............................................... 4
"Unit".................................................. 4
ARTICLE TWO
THE STRYPES
SECTION 201. Description of the STRYPES.......................... 4
--------------------------
SECTION 202. Form of STRYPES..................................... 5
---------------
ARTICLE THREE
PAYMENT AND DISCHARGE OF STRYPES
SECTION 301. Payment and Discharge on the Maturity Date.......... 5
------------------------------------------
SECTION 302. No Fractional Shares................................ 6
--------------------
SECTION 303. Adjustment of Payment Rate Formula.................. 7
----------------------------------------------
(a) Adjustment for Distributions, Reclassifications, etc 7
----------------------------------------------------
(b) Adjustment for Consolidation, Merger or Other
---------------------------------------------
Reorganization Event................................ 10
--------------------
SECTION 304. Payment and Discharge With Cash..................... 11
-------------------------------
SECTION 305. Notice of Adjustments and Certain Other Events...... 11
----------------------------------------------
SECTION 306. Shares Free and Clear............................... 13
----------------------------------------------
SECTION 307. Cancellation of STRYPES Certificates................ 13
----------------------------------------------
ARTICLE FOUR
SPECIAL REDEMPTION UPON TAX EVENT
SECTION 401. Special Redemption Upon Tax Event................. 13
---------------------------------
SECTION 402. Notice of Redemption.............................. 14
--------------------
SECTION 403. No Fractional Shares.............................. 14
--------------------
SECTION 404. Deposit of Shares and Funds....................... 15
---------------------------
SECTION 405. Surrender of Certificates; Rights of Holder....... 15
-------------------------------------------
ARTICLE FIVE
TAXES
SECTION 501. Documentary, Stamp, Transfer or Similar Taxes....... 16
---------------------------------------------
SECTION 502. Treatment of STRYPES................................ 16
--------------------
ii
<PAGE>
ARTICLE SIX
AMENDMENT OF CERTAIN PROVISIONS
OF THE PRINCIPAL INDENTURE
SECTION 601. Amendments Relating to the STRYPES.................. 17
----------------------------------
SECTION 602. Interpretation of Principal Indenture............... 23
-------------------------------------
ARTICLE SEVEN
MISCELLANEOUS
SECTION 701. Effect of Supplemental Indenture.................. 24
----------------------------------
SECTION 702. Conflict with Trust Indenture Act................. 24
----------------------------------
SECTION 703. Successors and Assigns............................ 24
----------------------------------
SECTION 704. Separability Clause............................... 24
----------------------------------
SECTION 705. Benefits of Supplemental Indenture................ 24
----------------------------------
SECTION 706. Governing Law..................................... 24
----------------------------------
SECTION 707. Execution in Counterparts......................... 24
----------------------------------
SECTION 708. Responsibility for Recitals....................... 24
---------------------------
iii
<PAGE>
Eighth Supplemental Indenture, dated as of May 1, 1996 (the "Supplemental
Indenture"), by and between Merrill Lynch & Co., Inc., a corporation organized
and existing under the laws of the State of Delaware, having its principal
office at World Financial Center, New York, New York 10281 (the "Company"), and
Chemical Bank, a corporation duly organized and existing under the laws of the
State of New York and successor by merger to Manufacturers Hanover Trust
Company, having its Corporate Trust Office at 450 West 33rd Street, New York,
New York 10001, as trustee (the "Trustee").
WHEREAS, the Company has heretofore executed and delivered its Indenture,
dated as of April 1, 1983 and restated as of April 1, 1987 (as amended and
supplemented to the date hereof, the "Principal Indenture"), to the Trustee to
provide for the issuance from time to time of its unsecured and unsubordinated
debentures, notes or other evidences of senior indebtedness (the "Securities"),
unlimited as to principal amount; and
WHEREAS, the Principal Indenture, as amended by the Trust Indenture Reform
Act of 1990, and this Supplemental Indenture are hereinafter collectively
referred to as the "Indenture"; and
WHEREAS, the Company proposes to create and issue a new series of
Securities designated its Structured Yield Product Exchangeable for Stock/SM/,
6% STRYPES/SM/ Due June 1, 1999 (each such Security being referred to herein as
a "STRYPES"), the terms of which will require the Company to pay and discharge
the STRYPES on their maturity date by delivering to the Holders thereof shares
of Class A Common Stock, par value $1.00 per share ("Cox Common Stock"), of Cox
Communications, Inc., a Delaware corporation ("Cox") (or, in the event there
shall occur a Reorganization Event (as defined in Section 303(b) of Article
Three), cash, securities and/or other property in lieu thereof) and any
Distributed Assets applicable thereto or, at the option of the Company, cash, in
either case at the Payment Rate as provided herein; and
WHEREAS, Section 901 of the Principal Indenture provides that, without the
consent of any Holders, the Company, when authorized by a Board Resolution, and
the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental to the Principal Indenture, in form satisfactory to the
Trustee, (a) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301 thereof and (b) to cure any ambiguity, to
correct or supplement any provision in the Principal Indenture which may be
defective or inconsistent with any other provision of the Principal Indenture,
or to make any other provisions with respect to matters or questions arising
under the Principal Indenture which shall not adversely affect the interests of
the Holders of Securities of any series or any related coupons in any material
respect; and
_______________________
/SM/ Service mark of Merrill Lynch & Co., Inc.
<PAGE>
WHEREAS, the Company has duly authorized the execution and delivery of this
Supplemental Indenture, and all things necessary to make this Supplemental
Indenture a valid agreement of the Company, in accordance with its terms, have
been done;
NOW, THEREFORE, the Company and the Trustee, in consideration of the
premises and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, hereby covenant and agree, for the
equal and proportionate benefit of all Holders, as follows:
ARTICLE ONE
DEFINITIONS
SECTION 101. Definitions. For all purposes of the Principal Indenture and
-----------
this Supplemental Indenture relating to the series of Securities (consisting of
STRYPES) created hereby, except as otherwise expressly provided or unless the
context otherwise requires, the terms defined in this Article have the meanings
assigned to them in this Article. Capitalized terms used in the Principal
Indenture and this Supplemental Indenture but not defined herein are used as
they are defined in the Principal Indenture.
"Business Day" means any day that is not a Saturday, a Sunday or a day
on which the New York Stock Exchange, banking institutions or trust
companies in The City of New York are authorized or obligated by law or
executive order to close.
"CEI" has the meaning specified in Section 401.
"Closing Price" has the meaning specified in Section 301.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have
become such pursuant to the applicable provisions of the Principal
Indenture, and thereafter "Company" shall mean such successor corporation.
"Cox" has the meaning specified in the third recital of the Company in
this instrument.
"Cox Common Stock" has the meaning specified in the third recital of
the Company in this instrument.
"Cox Successor" has the meaning specified in Section 303(b).
"Debt Instrument" has the meaning specified in Section 502(a).
2
<PAGE>
"Distributed Assets" has the meaning specified in Section 303(a)(iii).
"Extraordinary Cash Dividend" has the meaning specified in Section
303(a)(vi).
"Event of Default" has the meaning specified in Section 601(b).
"Forward Contract" has the meaning specified in Section 502(a).
"Indenture" has the meaning specified in the second recital of the
Company in this instrument.
"Initial Price" has the meaning specified in Section 301.
"Interest Payment Date" has the meaning specified in Section 201.
"Maturity Consideration" means the number of shares of Cox Common
Stock (or, in the event there shall occur a Reorganization Event, cash,
securities and/or other property in lieu thereof) and any Distributed Assets
applicable thereto or, at the Company's option, the amount of cash, in either
case deliverable upon payment and discharge of the STRYPES on the Maturity Date
as provided in Article Three.
"Maturity Date" has the meaning specified in Section 201.
"Maturity Price" has the meaning specified in Section 301.
"Notice of Default" has the meaning specified in Section 601(b).
"NYSE" has the meaning specified in Section 301.
"Payment Rate" has the meaning specified in Section 301.
"Payment Rate Formula" has the meaning specified in Section 301.
"Principal Indenture" has the meaning specified in the first recital
of the Company in this instrument.
"Redemption Date" has the meaning specified in Section 401.
"Regular Record Date" has the meaning specified in Section 201.
"Reorganization Event" has the meaning specified in Section 303(b).
"Securities" has the meaning specified in the first recital of the
Company in this instrument.
"Share Components" has the meaning specified in Section 301.
"STRYPES" has the meaning specified in the third recital of the
Company in this instrument.
3
<PAGE>
"STRYPES Certificates" has the meaning specified in Section 202.
"Supplemental Indenture" has the meaning specified in the first
paragraph of this instrument.
"Tax Event" has the meaning specified in Section 401.
"Tax Event Date" has the meaning specified in Section 401.
"Tax Event Redemption Price" has the meaning specified in Section 401.
"Threshold Appreciation Price" has the meaning specified in Section
301.
"Trading Day" has the meaning specified in Section 301.
"Transaction Value" has the meaning specified in Section 303(b).
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee with respect to the
STRYPES shall have become such pursuant to the applicable provisions of the
Principal Indenture, and thereafter "Trustee" shall mean such successor
Trustee.
"Unit" has the meaning specified in Section 502(a).
ARTICLE TWO
THE STRYPES
SECTION 201. Description of the STRYPES. The Securities shall be known
--------------------------
and designated as the "Structured Yield Product Exchangeable for Stock, 6%
STRYPES Due June 1, 1999" of the Company. The aggregate number of STRYPES which
may be authenticated and delivered under this Supplemental Indenture is limited
to 9,775,000 with an issue price of $22.875 per STRYPES, or $223,603,125 in the
aggregate, except for STRYPES evidenced by STRYPES Certificates authenticated
and delivered upon registration of transfer of, or in exchange for, or in lieu
of, other STRYPES Certificates evidencing such STRYPES pursuant to Section 304,
305, 306 or 906 of the Principal Indenture.
The STRYPES shall mature on June 1, 1999 (the "Maturity Date"). On the
Maturity Date, the STRYPES shall be paid and discharged as provided in Article
Three of this Supplemental Indenture.
The STRYPES shall bear interest at the rate of $1.37 per STRYPES per annum
(or $.3425 per STRYPES per quarter), from May 29, 1996, or from the most recent
Interest Payment Date (as defined below) to which interest has been paid or
provided for, as the case may be, until the
4
<PAGE>
Maturity Date or such earlier date on which such STRYPES is redeemed or the
issue price of such STRYPES is repaid in accordance with the provisions of the
Indenture. Interest shall be payable in cash quarterly in arrears on March 1,
June 1, September 1 and December 1, beginning September 1, 1996, and on the
Maturity Date (each, an "Interest Payment Date"), to the Persons in whose names
the STRYPES are registered at the close of business on the last day (whether or
not a Business Day) of the calendar month immediately preceding such Interest
Payment Date (each, a "Regular Record Date"). Interest on the STRYPES shall be
computed on the basis of a 360-day year of twelve 30-day months.
The interest on the STRYPES shall be payable and the Maturity Consideration
or Tax Event Redemption Price shall be deliverable or payable at the office or
agency of the Company in the Borough of Manhattan, The City of New York
maintained for such purpose and at any other office or agency maintained by the
Company for such purpose; provided, however, that at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register.
From and after a Tax Event Date, the STRYPES will be redeemable at the
option of the Company, in whole but not in part, as provided in Article Four of
this Supplemental Indenture. The STRYPES are not subject to any sinking fund or
other mandatory redemption provisions. The STRYPES shall not be payable at the
option of the Holders prior to the Maturity Date.
The STRYPES shall be issuable only in registered form without coupons. The
STRYPES will be issued in any whole numbers. No fractional STRYPES or scrip
representing fractional STRYPES shall be issued.
SECTION 202. Form of STRYPES. The STRYPES shall be evidenced by
---------------
certificates ("STRYPES Certificates") in the form attached hereto as Exhibit A.
ARTICLE THREE
PAYMENT AND DISCHARGE OF STRYPES
SECTION 301. Payment and Discharge on the Maturity Date. On the Maturity
------------------------------------------
Date, unless previously redeemed pursuant to Section 401 of Article Four, the
Company shall pay and discharge each STRYPES by delivering to the Holder thereof
a number of shares (such number of shares being hereinafter referred to as the
"Payment Rate") of Cox Common Stock determined in accordance with the following
formula (the "Payment Rate Formula"), subject to adjustment as a result of
certain dilution events relating to the Cox Common Stock as provided for in
Section 303 of this Article Three: (a) if the Maturity Price is greater than or
equal to $27.91 per share of Cox Common Stock (the "Threshold Appreciation
Price"), .8196 shares of Cox Common Stock per STRYPES, (b) if the Maturity Price
is less than the Threshold Appreciation Price but is greater than $22.875 per
share of Cox Common Stock (the "Initial Price"), a fractional share of Cox
Common Stock per STRYPES so that the value thereof (determined based on the
Maturity Price)
5
<PAGE>
is equal to the Initial Price (such fractional share being calculated to the
nearest 1/10,000th of a share or, if there is not a nearest 1/10,000th of a
share, to the next higher 1/10,000th of a share) and (c) if the Maturity Price
is less than or equal to the Initial Price, one share of Cox Common Stock per
STRYPES. The numbers of shares of Cox Common Stock per STRYPES specified in
clauses (a) and (c) of the Payment Rate Formula are hereinafter referred to as
the "Share Components". No fractional shares of Cox Common Stock shall be
delivered on the Maturity Date as provided in Section 302 of this Article Three.
The term "Maturity Price" means, subject to Section 303(a)(v) of this
Article Three, the sum of (A) the average Closing Price per share of Cox Common
Stock on the 20 Trading Days immediately prior to, but not including, the second
Trading Day preceding the Maturity Date and (B) the fair market value (as
determined by the Board of Directors of the Company, whose determination shall
be conclusive, and described in a resolution adopted with respect thereto) as of
the third Trading Day preceding the Maturity Date of the Distributed Assets, if
any, applicable to one share of Cox Common Stock. The term "Closing Price"
means, with respect to any security on any date of determination, the closing
sale price (or, if no closing price is reported, the last reported sale price)
of such security on the New York Stock Exchange (the "NYSE") on such date or, if
such security 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 such security is so listed, or if such security is
not so listed on a United States national or regional securities exchange, as
reported by the National Association of Securities Dealers, Inc. Automated
Quotation System, or, if such security is not so reported, the last quoted bid
price for such security 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 such security on such date as determined by a
nationally recognized independent investment banking firm retained for this
purpose by the Company. The term "Trading Day" means, with respect to any
security the Closing Price of which is being determined, a day on which such
security (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
6
<PAGE>
regional securities exchange or association or over-the-counter market that is
the primary market for the trading of such security.
SECTION 302. No Fractional Shares. No fractional shares or scrip
--------------------
representing fractional shares of Cox Common Stock shall be delivered on the
Maturity Date. If more than one STRYPES shall be held at one time by the same
Holder, the number of full shares of Cox Common Stock which shall be delivered
in payment of such Holder's STRYPES shall be computed on the basis of the
aggregate number of STRYPES so held on the Maturity Date. In lieu of any
fractional share of Cox Common Stock which would otherwise be deliverable upon
payment and discharge of any STRYPES on the Maturity Date, the Company, through
any applicable Paying Agent, shall make a cash payment in respect of such
fractional interest in an amount equal to the value of such fractional share at
the Maturity Price.
SECTION 303. Adjustment of Payment Rate Formula.
----------------------------------
(a) Adjustment for Distributions, Reclassifications, etc. The Payment Rate
-----------------------------------------------------
Formula shall be subject to adjustment from time to time as follows:
(i) If Cox shall:
(A) pay a stock dividend or make a distribution with respect to
Cox Common Stock in shares of such stock;
(B) subdivide or split the outstanding shares of Cox Common
Stock into a greater number of shares;
(C) combine the outstanding shares of Cox Common Stock into a
smaller number of shares; or
(D) issue by reclassification of shares of Cox Common Stock any
shares of common stock of Cox;
then, in any such event, the Payment Rate Formula shall be adjusted so that each
Holder of any STRYPES shall thereafter be entitled to receive, upon payment and
discharge of such STRYPES on the Maturity Date (as provided in Section 301 of
this Article Three) or upon redemption of such STRYPES on the Redemption Date
(as provided in Section 401 of Article Four), the number of shares of Cox Common
Stock which such Holder would have owned or been entitled to receive immediately
following any event described above had such STRYPES been paid and discharged or
redeemed immediately prior to such event or any record date with respect
thereto. Each such adjustment shall become effective at the opening of business
on the Business Day next following the record date for determination of holders
of Cox Common Stock entitled to receive such dividend or distribution in the
case of a dividend or distribution and shall become effective immediately after
the effective date in the case of a subdivision, split, combination or
reclassification. Each such adjustment shall be made successively.
7
<PAGE>
(ii) If Cox shall, after the date hereof, issue rights or warrants to
all holders of Cox Common Stock entitling them to subscribe for or purchase
shares of Cox Common Stock (other than rights to purchase Cox Common Stock
pursuant to a plan for the reinvestment of dividends or interest) at a price per
share less than the then current market price of the Cox Common Stock, then in
each case the Payment Rate Formula shall be adjusted by multiplying each of the
Share Components in the Payment Rate Formula in effect immediately prior to the
date of issuance of such rights or warrants, by a fraction, the numerator of
which shall be the number of shares of Cox Common Stock outstanding on the date
of issuance of such rights or warrants, immediately prior to such issuance, plus
the number of additional shares of Cox Common Stock offered for subscription or
purchase pursuant to such rights or warrants, and the denominator of which shall
be the number of shares of Cox Common Stock outstanding on the date of issuance
of such rights or warrants, immediately prior to such issuance, plus the number
of additional shares of Cox Common Stock which the aggregate offering price of
the total number of shares of Cox Common Stock so offered for subscription or
purchase pursuant to such rights or warrants would purchase at such current
market price, which shall be determined by multiplying such total number of
shares by the exercise price of such rights or warrants and dividing the product
so obtained by such current market price. Such adjustment shall become
effective at the opening of business on the Business Day next following the
record date for the determination of stockholders entitled to receive such
rights or warrants. To the extent that shares of Cox Common Stock are not
delivered after the expiration of such rights or warrants, or if such rights or
warrants are not issued, the Payment Rate Formula shall be readjusted to the
Payment Rate Formula which would then be in effect had such adjustments for the
issuance of such rights or warrants been made upon the basis of delivery of only
the number of shares of Cox Common Stock actually delivered. Each such
adjustment shall be made successively. For purposes of this subparagraph (ii),
the term "current market price" shall mean the average Closing Price per share
of Cox Common Stock on the 20 Trading Days immediately prior to the date such
rights or warrants are issued; provided, however, if any event that would result
in another adjustment of the Payment Rate Formula pursuant to this Section
303(a) occurs during such 20-day period, the current market price as determined
pursuant to the foregoing shall be appropriately adjusted to reflect the
occurrence of such event.
(iii) If Cox shall pay a dividend or make a distribution to all
holders of Cox Common Stock of evidences of its indebtedness or other assets
(excluding any stock dividends or distributions referred to in subparagraph
(i)(A) above or any cash dividends that do not constitute Extraordinary Cash
Dividends (as defined in subparagraph (vi) below)) or shall issue to all holders
of Cox Common Stock rights or warrants to subscribe for or purchase any of its
securities (other than those referred to in subparagraph (ii) above) (any of the
foregoing evidences of indebtedness or other assets or rights or warrants being
referred to herein as the "Distributed Assets"), then in each such case, the
Payment Rate Formula shall be adjusted by multiplying each of the Share
Components in the Payment Rate Formula in effect on the record date referred to
below by a fraction, the numerator of which shall be the market price per share
of the Cox Common Stock on the record date for the determination of stockholders
entitled to receive such dividend or distribution or such rights or warrants,
and the denominator of which shall be such market price per share of Cox Common
Stock less the fair market value (as determined by the Board of Directors of the
Company, whose determination shall be conclusive, and described in a resolution
adopted with
8
<PAGE>
respect thereto) as of such record date, of the portion of the Distributed
Assets so distributed applicable to one share of Cox Common Stock; provided,
however, that in the event that the then fair market value (as so determined) of
the portion of the Distributed Assets so distributed applicable to one share of
Cox Common Stock is equal to or greater than the market price per share of Cox
Common Stock as of such record date, in lieu of the foregoing adjustment, (A)
the Company shall reserve such Distributed Assets (or, in the case of
Distributed Assets of a kind described in (z) below, an amount in cash equal to
the fair market value thereof, determined in the manner and as of the date
described in clause (z) below) for delivery to the Holders of the STRYPES on the
Maturity Date or the Redemption Date and, on the Maturity Date or the Redemption
Date, shall deliver to each such Holder, in addition to the shares of Cox Common
Stock (or cash in lieu thereof) to which such Holder is otherwise entitled, (x)
in respect of that portion, if any, of the Distributed Assets consisting of
cash, the amount of such Distributed Assets consisting of cash which such Holder
would have received had such Holder held the aforementioned shares of Cox Common
Stock to which such Holder is otherwise entitled immediately prior to the record
date for the determination of stockholders entitled to receive such dividend or
distribution or such rights or warrants, without interest, plus (y) in respect
of that portion, if any, of the Distributed Assets consisting of securities for
which there is an actual or when issued trading market ("marketable
securities"), the amount of such Distributed Assets consisting of marketable
securities which such Holder would have received had such Holder held the
aforementioned shares of Cox Common Stock to which such Holder is otherwise
entitled immediately prior to the record date for the determination of
stockholders entitled to receive such dividend or distribution or such rights or
warrants, plus (z) in respect of that portion, if any, of the Distributed Assets
which are of a kind other than that described in clause (x) or (y) above, an
amount in cash equal to the fair market value (as determined by the Board of
Directors of the Company, whose determination shall be conclusive, and described
in a resolution adopted with respect thereto), as of the record date for
determination of stockholders entitled to receive such dividend or distribution
or such rights or warrants, of the Distributed Assets consisting of other assets
which such Holder would have received had such Holder held the aforementioned
shares of Cox Common Stock to which such Holder is otherwise entitled
immediately prior to such record date, without interest thereon, and (B) clause
(b) of the Payment Rate Formula shall be adjusted to provide that, if the
Maturity Price is less than the Threshold Appreciation Price but is greater than
the Initial Price, each Holder of STRYPES will receive for each STRYPES on the
Maturity Date a fractional share of Cox Common Stock per STRYPES so that the
value thereof (determined based on the Maturity Price), together with the value
of any Distributed Assets applicable thereto, is equal to the Initial Price.
Each such adjustment shall become effective on the opening of business on the
Business Day next following the record date for the determination of
stockholders entitled to receive such dividend or distribution or such rights or
warrants. To the extent that such dividend or distribution is not so paid or
made, the Payment Rate Formula shall be readjusted to the Payment Rate Formula
which would then be in effect if such dividend or distribution had not occurred.
Each such adjustment shall be made successively. For purposes of this
subparagraph (iii), the term "market price" shall mean the average Closing Price
per share of Cox Common Stock on the 20 Trading Days immediately prior to such
record date for the determination of stockholders entitled to receive such
dividend or distribution or such rights or warrants; provided, however, if any
event that would result in another adjustment of the Payment Rate Formula
pursuant to this Section 303(a) occurs during such 20-day period, the market
price as determined pursuant to the foregoing shall be appropriately adjusted to
reflect the occurrence of such event.
(iv) Any shares of Cox Common Stock issuable in payment of a dividend
shall be deemed to have been issued immediately prior to the close of business
on the record date for
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such dividend for purposes of calculating the number of outstanding shares of
Cox Common Stock under subparagraph (ii) above.
(v) All adjustments to the Payment Rate Formula shall be calculated
to the nearest 1/10,000th of a share of Cox 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 Payment Rate Formula 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 Payment Rate Formula
pursuant to subparagraph (i), (ii) or (iii) of this Section 303(a), an
adjustment shall also be made to the Maturity Price solely to determine which of
clauses (a), (b) or (c) of the Payment Rate Formula in Section 301 will apply on
the Maturity Date. The required adjustment to the Maturity Price shall be made
by multiplying each of the Closing Prices used in determining the Maturity Price
by a fraction, the numerator of which shall be the Share Component in clause (c)
of the Payment Rate Formula immediately after such adjustment pursuant to
subparagraph (i), (ii) or (iii) and the denominator of which shall be the Share
Component in clause (c) of the Payment Rate Formula immediately before such
adjustment. Each such adjustment shall be made successively. This subparagraph
(v) shall be so used to adjust the definition of Maturity Price only as such
term is used for the first time in each of clauses (a), (b) and (c) of the
Payment Rate Formula.
(vi) For purposes of the foregoing, the term "Extraordinary Cash
Dividend" shall mean, with respect to any consecutive 12-month period, any cash
dividend with respect to Cox Common Stock the amount of which, together with the
aggregate amount of all other such cash dividends on the Cox Common Stock
occurring in such 12-month period, exceeds on a per share basis 10% of the
average of the Closing Prices per share of the Cox Common Stock over such 12-
month period, and for purposes of applying the formula set forth in subparagraph
(iii) above, the fair market value of such dividends being calculated pursuant
to such subparagraph (iii) shall be equal to (x) the aggregate amount of such
cash dividend together with the amounts of such other cash dividends occurring
in such period minus (y) the aggregate amount of such other cash dividends
occurring in such period for which a prior adjustment in the Payment Rate
Formula was previously made under this Section 303(a). In making the
determinations required by the foregoing sentence, the amount of cash dividends
paid on a per share basis shall be appropriately adjusted to reflect the
occurrence during such period of any event described in this Section 303(a).
(b) Adjustment for Consolidation, Merger or Other Reorganization Event. In
------------------------------------------------------------------
the event of (i) any consolidation or merger of Cox, or any surviving entity or
subsequent surviving entity of Cox (a "Cox Successor"), with or into another
entity (other than a merger or consolidation in which Cox is the continuing
corporation and in which the Cox Common Stock outstanding immediately prior to
the merger or consolidation is not exchanged for cash, securities or other
property of Cox or another corporation), (ii) any sale, transfer, lease or
conveyance to another corporation of the property of Cox or any Cox Successor as
an entirety or substantially as an entirety, (iii) any statutory exchange of
securities of Cox or any Cox Successor with another corporation (other than in
connection with a merger or acquisition) or
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(iv) any liquidation, dissolution, winding up or bankruptcy of Cox or any Cox
Successor (any such event described in clause (i), (ii), (iii) or (iv), a
"Reorganization Event"), the Payment Rate Formula used to determine the amount
payable on the Maturity Date for each STRYPES will be adjusted to provide that
each Holder of STRYPES will receive for each STRYPES on the Maturity Date cash
in an amount equal to (a) if the Transaction Value (as defined below) is greater
than or equal to the Threshold Appreciation Price, .8196 multiplied by the
Transaction Value, (b) if the Transaction Value is less than the Threshold
Appreciation Price but greater than the Initial Price, the Initial Price and (c)
if the Transaction Value is less than or equal to the Initial Price, the
Transaction Value. "Transaction Value" means (x) for any cash received in any
such Reorganization Event, the amount of cash received per share of Cox Common
Stock, (y) for any property other than cash or securities received in any such
Reorganization Event, an amount equal to the market value on the Maturity Date
of such property received per share of Cox Common Stock as determined by a
nationally recognized independent investment banking firm retained for this
purpose by the Company and (z) for any securities received in any such
Reorganization Event, an amount equal to the average Closing Price per unit of
such securities on the 20 Trading Days immediately prior to the second Trading
Day preceding the Maturity Date, multiplied by the number of such securities
received for each share of Cox Common Stock. Notwithstanding the foregoing, in
the event that property or securities, or a combination of cash, on the one
hand, and property or securities, on the other, are received in such
Reorganization Event, the Company may, at its option, in lieu of delivering cash
as described above, deliver the amount of cash, securities and other property
received per share of Cox Common Stock in such Reorganization Event determined
in accordance with clause (x), (y) or (z) above, as applicable. If the Company
elects to deliver securities or other property, Holders of the STRYPES will be
responsible for the payment of any and all brokerage and transaction costs upon
any subsequent sale of such securities or other property. The kind and amount
of securities with which the STRYPES shall be paid and discharged after
consummation of such transaction shall be subject to adjustment as described in
paragraph (a) above following the date of consummation of such transaction.
SECTION 304. Payment and Discharge With Cash.
-------------------------------
Notwithstanding the provisions of Sections 301, 302 and 303 of this Article
Three, the Company may, at its option, in lieu of delivering shares of Cox
Common Stock and any Distributed Assets applicable thereto, deliver cash in an
amount (calculated to the nearest 1/100th of a dollar per STRYPES or, if there
is not a nearest 1/100th of a dollar, then to the next higher 1/100th of a
dollar) equal to the value of such number of shares of Cox Common Stock at the
Maturity Price, plus the fair market value (as determined by the Board of
Directors of the Company, which determination shall be conclusive, and described
in a resolution adopted with respect thereto) as of the third Trading Day
preceding the Maturity Date of any such Distributed Assets applicable thereto.
Such option, if exercised by the Company, must be exercised with respect to all
shares of Cox Common Stock and Distributed Assets otherwise deliverable on the
Maturity Date upon payment and discharge of all Outstanding STRYPES. In
determining the amount of cash deliverable upon payment and discharge of the
STRYPES in lieu of shares of Cox Common Stock and any Distributed Assets
pursuant to the second preceding sentence, if more than one STRYPES shall be
held at one time by the same Holder, the amount of cash which shall be delivered
to such Holder upon payment and discharge shall be computed on the basis of the
aggregate number of STRYPES so held on the Maturity Date.
SECTION 305. Notice of Adjustments and Certain Other Events.
----------------------------------------------
(a) Whenever the Payment Rate Formula requires adjustment as herein
provided, the Company shall:
(i) forthwith compute the adjusted Payment Rate Formula in accordance
with Section 303 of this Article Three and prepare a certificate signed by an
officer of the Company setting forth the adjusted Payment Rate Formula, the
method of calculation thereof in reasonable detail, and the facts requiring such
adjustment and upon which such adjustment is based, which certificate shall be
conclusive, final and binding evidence of the correctness of the adjustment, and
file such certificate forthwith with the Trustee; and
(ii) within 10 Business Days following the occurrence of an event
that requires an adjustment to the Payment Rate Formula pursuant to Section 303
of this Article Three (or if the Company is not aware of such occurrence, as
soon as practicable after becoming so aware), provide written notice to the
Trustee and to the Holders of the STRYPES of the occurrence of
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<PAGE>
such event and a statement in reasonable detail setting forth the adjusted
Payment Rate Formula and the method by which the adjustment to the Payment Rate
Formula was determined, provided, that, in respect of any adjustment to the
Maturity Price required pursuant to Section 303(a)(v), such notice need only
disclose the factor by which each of the Closing Prices used in determining the
Maturity Price is to be multiplied in order to determine the Payment Rate on the
Maturity Date, it being understood that, until the Maturity Date, the Payment
Rate itself cannot be determined.
(b) In case at any time while any of the STRYPES are outstanding the
Company receives notice that:
(i) Cox shall declare a dividend (or any other distribution) on or in
respect of the Cox Common Stock to which Section 303(a)(i) or (iii) shall apply
(other than any cash dividends and distributions, if any, paid from time to time
by Cox that do not constitute Extraordinary Cash Dividends);
(ii) Cox shall authorize the issuance to all holders of Cox Common
Stock of rights or warrants to subscribe for or purchase shares of Cox Common
Stock or of any other subscription rights or warrants;
(iii) there shall occur any conversion or reclassification of Cox
Common Stock (other than a subdivision or combination of outstanding shares of
such Cox Common Stock) or any consolidation, merger or reorganization to which
Cox is a party and for which approval of any stockholders of Cox is required, or
the sale or transfer of all or substantially all of the assets of Cox; or
(iv) there shall occur the voluntary or involuntary dissolution,
liquidation, winding up or bankruptcy of Cox;
then the Company shall promptly cause to be delivered to the Trustee and any
applicable Paying Agent and filed at the office or agency maintained for the
purpose of payment and discharge of STRYPES on the Maturity Date in the Borough
of Manhattan, The City of New York by the Trustee (or any applicable Paying
Agent), and shall promptly cause to be mailed to the Holders of STRYPES at their
last addresses as they shall appear in the Security Register, at least 10 days
before the date hereinafter specified (or the earlier of the dates hereinafter
specified, in the event that more than one is specified), a notice stating (x)
the date on which a record is to be taken for the purpose of such dividend,
distribution or grant of rights or warrants, or, if a record is not to be taken,
the date as of which the holders of Cox Common Stock of record to be entitled to
such dividend, distribution or grant of rights or warrants are to be determined,
or (y) the date, if known by the Company, on which such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation, winding up or
bankruptcy is expected to become effective.
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(c) On or prior to the sixth Business Day preceding the Maturity Date, the
Company will notify The Depository Trust Company and the Trustee and will
publish a notice in The Wall Street Journal or another daily newspaper of
national circulation stating whether the STRYPES will be paid and discharged
with shares of Cox Common Stock or cash (or any securities or other property
that may be delivered pursuant to Section 303(b) of this Article Three) on the
Maturity Date in accordance with Section 301 of this Article Three.
SECTION 306. Shares Free and Clear. The Company hereby warrants that upon
---------------------
payment and discharge of a STRYPES on the Maturity Date pursuant to this
Supplemental Indenture, the Holder of a STRYPES shall receive all rights held by
the Company in the Maturity Consideration with which such STRYPES is at such
time payable and dischargeable pursuant to this Supplemental Indenture, free and
clear of any and all liens, claims, charges and encumbrances, other than any
liens, claims, charges and encumbrances which may have been placed on any
Maturity Consideration by the prior owner thereof prior to the time such
Maturity Consideration was acquired by the Company. Except as provided in
Section 501 of Article Five, the Company will pay all taxes and charges with
respect to the delivery of the Maturity Consideration delivered upon payment and
discharge of STRYPES hereunder. In addition, the Company further warrants that
any Maturity Consideration so delivered upon payment and discharge of STRYPES
hereunder shall be free of any transfer restrictions (other than such as are
solely attributable to any Holder's status as an affiliate of Cox).
SECTION 307. Cancellation of STRYPES Certificates. Upon receipt by the
------------------------------------
Trustee of a STRYPES Certificate delivered to it for payment and discharge of
the STRYPES evidenced thereby under this Article Three, the Trustee shall cancel
and dispose of the same as provided in Section 309 of the Principal Indenture.
ARTICLE FOUR
SPECIAL REDEMPTION UPON TAX EVENT
SECTION 401. Special Redemption Upon Tax Event. The STRYPES shall be
---------------------------------
redeemable at the option of the Company, in whole but not in part, at any time
from and after the date (the "Tax Event Date") on which a Tax Event shall occur
at a price per STRYPES (the "Tax Event Redemption Price") equal to (a) an amount
of cash equal to the sum of (x) all accrued and unpaid interest on such STRYPES
to the date fixed for redemption (the "Redemption Date"), (y) the sum of all
interest payments on such STRYPES due after the Redemption Date and on or prior
to the Maturity Date and (z) $1.37, plus (b) a number of shares of Cox Common
Stock (or any cash, securities or other property that may be delivered pursuant
to Section 303(b) of Article Three), including any Distibuted Assets applicable
thereto, determined in accordance with the Payment Rate Formula, with the
Redemption Date being deemed to be the Maturity Date for purposes of calculating
the Maturity Price.
A "Tax Event" means that Cox Enterprises, Inc. ("CEI") shall have delivered
to the Company an opinion from independent tax counsel experienced in such
matters to the effect that, as a result of (a) any amendment or proposed
amendment to, or change (including any
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<PAGE>
announced prospective change) or proposed change in, the laws (or any
regulations thereunder) of the United States or any taxing authority thereof or
therein or (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, enacted, promulgated, introduced, issued or announced
or which interpretation is issued or announced or which action is taken, on or
after May 22, 1996, there is more than an insubstantial risk that a corporation
that sells or otherwise disposes of stock in another corporation on a date that
is after May 22, 1996 and that is on or prior to the Maturity Date would not be
permitted to specifically identify the stock sold or disposed of for purposes of
determining the amount of such corporation's gain or loss on the stock sold or
disposed of for United States Federal income tax purposes.
SECTION 402. Notice of Redemption. The Company shall provide notice of
--------------------
any call for redemption of STRYPES to Holders of record of the STRYPES not less
than 10 nor more than 30 calendar days prior to the related Redemption Date.
Such notice will state the following and may contain such other information as
the Company deems advisable: (a) the Redemption Date; (b) the place or places
where certificates for the STRYPES are to be surrendered for redemption and (c)
that interest will cease to accrue on the STRYPES on the Redemption Date (except
as otherwise provided in the Indenture). Any such notice will be provided by
mail, sent to each Holder of record of STRYPES at such Holder's address as it
appears on the Security Register, first class postage prepaid; provided,
however, that failure to give such notice or any defect therein shall not affect
the validity of the proceeding for redemption of any STRYPES except as to the
Holder to whom the Company has failed to give said notice or whose notice was
defective. At or prior to the mailing of such notice of redemption, the Company
will publish a public announcement of redemption in The Wall Street Journal or
another daily newspaper of national circulation.
SECTION 403. No Fractional Shares. The Company will not be required to
--------------------
deliver any fractional share of Cox Common Stock on the Redemption Date and, in
lieu thereof, will pay an amount in cash equal to the value of such fractional
share of Cox Common Stock based on the average Closing Price per share of Cox
Common Stock on the 20 Trading Days immediately prior to, but not including, the
second Trading Day preceding the Redemption Date.
SECTION 404. Deposit of Shares and Funds. The Company's obligation to pay
---------------------------
the Tax Event Redemption Price upon redemption in accordance with Section 401 of
this Article Four shall be deemed fulfilled if, on or before a Redemption Date,
the Company shall irrevocably deposit, with a bank or trust company, or an
affiliate of a bank or trust company, having an office or agency in The City of
New York and having a capital and surplus of at least $50,000,000, or shall set
aside or make other reasonable provision for the delivery and payment of, such
number of shares of Cox Common Stock (or any cash, securities or other property
that may be delivered pursuant to Section 303(b) of Article Three), including
any Distributed Assets applicable thereto, and funds for payment of such Tax
Event Redemption Price as is required to be delivered and paid by the Company
pursuant to Section 401 of this Article Four upon the occurrence of such
redemption (and, if applicable, funds for payment of cash in lieu of the
issuance of fractional share amounts as provided by Section 403 of this Article
Four). Any interest accrued on such funds shall be paid to the Company from time
to time. Any shares of Cox Common Stock (or any cash, securities or other
property that may be delivered pursuant to Section 303(b) of Article Three),
including any Distributed Assets applicable thereto, and funds so deposited and
unclaimed at the end of two years from such Redemption Date shall be repaid and
released to the Company, after
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<PAGE>
which the Holder or Holders of such STRYPES called for redemption shall look
only to the Company for delivery of such shares of Cox Common Stock (or any
cash, securities or other property that may be delivered pursuant to Section
303(b) of Article Three), including any Distributed Assets applicable thereto,
and funds.
SECTION 405. Surrender of Certificates; Rights of Holder. Each Holder of
-------------------------------------------
STRYPES shall surrender the STRYPES Certificates evidencing such STRYPES
(properly endorsed or assigned for transfer, if the Board of Directors of the
Company shall so require and the redemption notice shall so state) to the
Company at the place designated in the notice of such redemption and shall
thereupon be entitled to receive the Tax Event Redemption Price pursuant to
Section 401 of this Article Four following such surrender and on and following
such Redemption Date. If such notice of redemption shall have been given, and if
on the Redemption Date shares of Cox Common Stock (or any cash, securities or
other property that may be delivered pursuant to Section 303(b) of Article
Three), including any Distributed Assets applicable thereto, and funds necessary
for redemption shall have been irrevocably either set aside by the Company
separate and apart from its other funds or assets in trust for the account of
the Holders of STRYPES (and so as to be and continue to be available therefor)
or deposited with a bank or trust company or an affiliate thereof as provided
herein or the Company shall have made other reasonable provision therefor, then,
notwithstanding that the STRYPES Certificates evidencing any STRYPES shall not
have been surrendered, the STRYPES evidenced thereby shall be deemed no longer
outstanding, interest on the STRYPES shall cease to accrue on the Redemption
Date and all rights of a Holder of the STRYPES shall forthwith after such date
cease and terminate, except the right to receive the shares of Cox Common Stock
(or any cash, securities or other property that may be delivered pursuant to
Section 303(b) of Article Three), including any Distributed Assets applicable
thereto, and funds constituting the Tax Event Redemption Price (and cash in lieu
of any fractional share amount) deliverable and payable pursuant to Section 401
of this Article Four without interest upon surrender of their STRYPES
Certificates therefor (unless the Company defaults on the payment of such Tax
Event Redemption Price).
ARTICLE FIVE
TAXES
SECTION 501. Documentary, Stamp, Transfer or Similar Taxes. The Company
---------------------------------------------
will pay any and all documentary, stamp, transfer or similar taxes that may be
payable in respect of the transfer and delivery of Cox Common Stock (or any
securities or other property that may be delivered pursuant to Section 303(b) of
Article Three), including any Distributed Assets applicable thereto, pursuant to
this Supplemental Indenture; provided, however, that the Company shall not be
required to pay any such tax which may be payable in respect of any transfer
involved in the delivery of Cox Common Stock (or any securities or other
property that may be delivered pursuant to Section 303(b) of Article Three),
including any Distributed Assets applicable thereto, in a name other than that
in which the STRYPES so paid and discharged were registered, and no such
transfer or delivery shall be made unless and until the Person requesting such
transfer has paid to the Company the amount of any such tax, or has established,
to the satisfaction of the Company, that such tax has been paid.
SECTION 502. Treatment of STRYPES. The parties hereto hereby agree, and
--------------------
each Holder of a STRYPES by its purchase of a STRYPES hereby agrees:
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(a) to treat, for all United States Federal, state and local tax
purposes, each STRYPES as a unit (a "Unit") consisting of (A) a debt
instrument (the "Debt Instrument") with a fixed principal amount
unconditionally payable on the Maturity Date equal to the issue price
of the STRYPES and bearing interest at the stated interest rate on the
STRYPES and (B) a forward purchase contract (the "Forward Contract")
pursuant to which the Holder is irrevocably committed to use the
principal payment due on the Debt Instrument to purchase on the
Maturity Date or upon redemption the Cox Common Stock which the
Company is obligated to deliver at that time (subject to the Company's
right to deliver cash with an equal value in lieu of the Cox Common
Stock), which treatment will require, among other things, each Holder
that is subject to United States Federal income tax in connection with
its ownership of the STRYPES to include currently in income payments
denominated as interest that are made with respect to the STRYPES in
accordance with such Holder's regular method of tax accounting and to
treat the Debt Instrument as having been issued with original issue
discount in an amount equal to 1.4% of the issue price of the STRYPES;
(b) in the case of purchases of STRYPES in connection with the original
issuance thereof, (A) to allocate $22.555 of the entire initial
purchase price of a STRYPES (i.e., the issue price of a STRYPES) to
the Debt Instrument component and to allocate the remaining $.32 of
the entire initial purchase price of a STRYPES to the Forward Contract
component and (B) to treat such acquisition of the STRYPES by the
Holder as a purchase of the Debt Instrument by the Holder for $22.555
and the making of an initial payment by the Holder with respect to the
Forward Contract of $.32;
(c) in the case of purchases and sales of STRYPES subsequent to the
original issuance thereof, the purchase price paid (or received) by a
Holder will be allocated by the Holder between the Debt Instrument and
the Forward Contract based upon their relative fair market values (as
determined on the date of acquisition or disposition);
(d) to file all United States Federal, state and local income, franchise
and estate tax returns consistent with the treatment of each STRYPES
as a Unit consisting of the Debt Instrument and the Forward Contract
(in the absence of any change or clarification in applicable law, by
regulation or otherwise, requiring a different characterization or
treatment of the STRYPES).
ARTICLE SIX
AMENDMENT OF CERTAIN PROVISIONS
OF THE PRINCIPAL INDENTURE
16
<PAGE>
SECTION 601. Amendments Relating to the STRYPES. The Principal
----------------------------------
Indenture is hereby amended, solely with respect to the STRYPES, as follows:
(a) By deleting Section 308 of the Principal Indenture in its entirety and
inserting in its stead the following:
"SECTION 308. Persons Deemed Owners. Prior to due presentment of a STRYPES
Certificate for registration of transfer of STRYPES evidenced thereby, the
Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such STRYPES Certificate is registered as the
owner of the STRYPES evidenced thereby for the purpose of receiving
delivery or payment of the Maturity Consideration or Tax Event Redemption
Price in respect of, and (subject to Sections 305 and 307) interest on,
such STRYPES and for all other purposes whatsoever, whether or not such
STRYPES be overdue, and neither the Company, the Trustee nor any agent of
the Company or the Trustee shall be affected by notice to the contrary."
(b) By deleting Section 501 of the Principal Indenture in its entirety and
inserting in its stead the following:
"SECTION 501. Events of Default. "Event of Default", wherever used herein
with respect to STRYPES, means any one of the following events (whatever
the reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) failure to deliver or pay the Maturity Consideration on the
Maturity Date, or to pay the Tax Event Redemption Price on the Redemption
Date; or
(2) failure to pay any interest on any STRYPES when due, and
continuance of such failure for a period of 30 days; or
(3) failure to perform any other covenant of the Company in this
Indenture (other than a covenant a failure in whose performance is
elsewhere in this Section specifically dealt with), and the continuance of
such failure for a period of 60 days after there has been given, by
registered or certified mail, to the Company by the Trustee, or to the
Company and the Trustee by the Holders of at least 10% of the aggregate
issue price of the Outstanding STRYPES a written notice specifying such
failure and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
(4) a court having jurisdiction in the premises shall enter a decree
or order for relief in respect of the Company in an involuntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of the Company or for any
substantial part of its property, or ordering the winding-up or liquidation
of
17
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its affairs, and such decree or order shall remain unstayed and in effect
for a period of 60 consecutive days; or
(5) the Company shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
shall consent to the entry of an order for relief in an involuntary case
under any such law, or shall consent to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or similar official) of the Company or for any substantial
part of its property, or shall fail generally to pay its debts as they
become due or shall take any corporate action in furtherance of any of the
foregoing."
(c) By deleting Section 502 of the Principal Indenture in its entirety and
inserting in its stead the following:
"SECTION 502. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default (other than an Event of Default specified in Section
501(4) or 501(5)) occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% of the aggregate issue price of
the Outstanding STRYPES may declare an amount equal to the issue price of
all the STRYPES to be due and payable immediately, by a notice in writing
to the Company (and to the Trustee if given by the Holders), and upon any
such declaration such amount shall become immediately due and payable in
cash. If an Event of Default specified in Section 501(4) or 501(5) occurs,
an amount equal to the issue price of all the STRYPES shall automatically,
and without any declaration or other action on the part of the Trustee or
any Holder, become immediately due and payable in cash.
At any time after such a declaration of acceleration has been made or an
Event of Default specified in Section 501(4) or 501(5) has occurred, and
before a judgment or decree for payment of the money due has been obtained
by the Trustee as hereinafter provided, the Holders of a majority of the
aggregate issue price of the Outstanding STRYPES, by written notice to the
Company and the Trustee, may rescind and annul such declaration or Event of
Default and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue installments of interest on all STRYPES,
(B) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest at the rate borne
by the STRYPES, and
(C) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel,
and
18
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(2) all Events of Default with respect to the STRYPES, other than the
non-payment of the amount equal to the issue price of all the STRYPES
due solely by reason of such declaration of acceleration or Event of
Default specified in Section 501(4) or 501(5), have been cured or
waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon."
(d) By deleting the first paragraph of Section 503 of the Principal
Indenture in its entirety and inserting in its stead the following:
"The Company covenants that, if default is made in the payment of any
installment of interest on any STRYPES (other than interest due on the
Maturity Date) when such interest becomes due and payable and such default
continues for a period of 30 days, the Company will, upon demand of the
Trustee, pay to it, for the benefit of the Holders of such STRYPES, an
amount equal to the issue price of all the STRYPES, the whole amount of
interest then due and payable on such STRYPES and, to the extent that
payment of such interest shall be legally enforceable, interest on any
overdue interest, at the rate borne by the STRYPES, and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
The Company further covenants that, if the Maturity Consideration or
any interest due on the Maturity Date is not delivered or paid in respect
of any STRYPES on the Maturity Date or if the Tax Event Redemption Price is
not delivered or paid in respect of any STRYPES on the Redemption Date, the
Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such STRYPES, the Maturity Consideration or Tax Event Redemption
Price, as the case may be, then due and payable on such STRYPES, the whole
amount of interest then due and payable on such STRYPES and, to the extent
that payment of such interest shall be legally enforceable, interest on any
Maturity Consideration or Tax Event Redemption Price, as the case may be,
that is overdue and on any overdue interest, at the rate borne by the
STRYPES, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel."
(e) By deleting Section 506 of the Principal Indenture in its entirety and
inserting in its stead the following:
"SECTION 506. Application of Money Collected. Any money collected by the
Trustee pursuant to this Article shall be applied in the following order,
at the date or dates fixed by the Trustee and, in case of the distribution
of such money on account of the Maturity Consideration, the Tax Event
Redemption Price or interest, upon presentation of the
19
<PAGE>
relevant STRYPES Certificate and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607;
SECOND: To the payment of any amounts then due and unpaid on the
STRYPES in respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according
to the amounts due and payable on such STRYPES; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto."
(f) By deleting Section 508 of the Principal Indenture in its entirety and
inserting in its stead the following:
"SECTION 508. Unconditional Right of Holders to Receive the Maturity
Consideration and Interest. Notwithstanding any other provision in this
Indenture, the Holder of any STRYPES shall have the right, which is
absolute and unconditional, to receive (subject to Section 502) payment of
the Maturity Consideration or Tax Event Redemption Price in respect of and
(subject to Sections 305 and 307) interest on such STRYPES and to institute
suit for the enforcement of any such payment, and such right shall not be
impaired without the consent of such Holder."
(g) By deleting the first sentence of Section 513 of the Principal
Indenture in its entirety and inserting in its stead the following:
"The Holders of not less than a majority of the aggregate issue price of
the Outstanding STRYPES may on behalf of the Holders of all STRYPES waive
any past default hereunder and its consequences, except a default
(1) in the delivery or payment of the Maturity Consideration or the
Tax Event Redemption Price or in the payment of interest on any STRYPES, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding STRYPES affected."
(h) By deleting Section 801 of the Principal Indenture in its entirety and
inserting in its stead the following:
"SECTION 801. Consolidations and Mergers of the Company and Sales, Leases
and Conveyances Permitted Subject to Certain Conditions. The Company may
consolidate with, or sell, lease or convey all or substantially all of its
assets to, or merge with or into any other corporation, provided that in
any such case, (i) either the Company shall be the continuing corporation,
or the successor corporation shall be a corporation organized and
20
<PAGE>
existing under the laws of the United States of America or a State thereof
and such successor corporation shall expressly assume the due and punctual
delivery or payment of the Maturity Consideration or Tax Event Redemption
Price in respect of and interest on all the STRYPES, according to their
tenor, and the due and punctual performance and observance of all of the
covenants and conditions of this Indenture to be performed by the Company
by supplemental indenture satisfactory to the Trustee, executed and
delivered to the Trustee 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, lease or conveyance, be in
default in the performance of any such covenant or condition."
(i) By deleting the first sentence of Section 902 of the Principal
Indenture in its entirety and inserting in its stead the following:
"With the consent of the Holders of not less than 66-2/3% of the aggregate
issue price of the Outstanding STRYPES, by Act of said Holders delivered to
the Company and the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of STRYPES under this
Indenture; provided, however, that no such supplemental indenture shall,
without the consent of the Holder of each Outstanding STRYPES affected
thereby,
(1) change the Maturity Date or the Stated Maturity of any installment
of interest on any STRYPES, or reduce the amount of Maturity Consideration
deliverable or payable on the Maturity Date or reduce the amount of
interest payable on any STRYPES or reduce the amount of cash payable with
respect to any STRYPES upon acceleration of the Maturity, or change the
provisions with respect to redemption of any STRYPES, or change any Place
of Payment where, or the coin or currency in which, any interest on or any
amount of cash payable with respect to any STRYPES is payable, or impair
the right to institute suit for the enforcement of (i) any payment on or
with respect to any STRYPES or (ii) the delivery or payment of the Maturity
Consideration or Tax Event Redemption Price with respect to any STRYPES, or
(2) reduce the percentage of the aggregate issue price of Outstanding
STRYPES, the consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for waiver (of
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences) provided for in this Indenture, or reduce
the requirements of Section 1404 for quorum or voting, or
(3) modify any of the provisions of this Section, or Section 513, or
Section 1007, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding STRYPES affected
thereby.
21
<PAGE>
(j) By deleting Section 1001 of the Principal Indenture in its entirety and
inserting in its stead the following:
"SECTION 1001. Delivery and Payment of the Maturity Consideration or Tax
Event Redemption Price and Interest. The Company covenants and agrees for
the benefit of the Holders of the STRYPES that it will duly and punctually
deliver or pay the Maturity Consideration or Tax Event Redemption Price in
respect of, and interest on, the STRYPES in accordance with the terms of
the STRYPES and this Indenture."
(k) By deleting Section 1003 of the Principal Indenture in its entirety and
inserting in its stead the following:
"SECTION 1003. Money for Security Payments to Be Held in Trust. If the
Company shall at any time act as its own Paying Agent, it will, on or
before each due date of the Maturity Consideration or Tax Event Redemption
Price in respect of, or interest on, any of the STRYPES, segregate and hold
in trust for the benefit of the Persons entitled thereto consideration in
an amount sufficient to deliver or pay the Maturity Consideration or Tax
Event Redemption Price or a sum sufficient to pay the interest so becoming
due until such consideration shall be delivered or paid to such Persons or
otherwise disposed of as herein provided and will promptly notify the
Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will, prior
to each due date of the Maturity Consideration or Tax Event Redemption
Price in respect of, or interest on, any STRYPES, deposit with a Paying
Agent consideration in an amount sufficient to deliver or pay the Maturity
Consideration or Tax Event Redemption Price or a sum sufficient to pay the
interest so becoming due, such consideration to be held as provided by the
Trust Indenture Act, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure so to
act.
The Company will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall
agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will (i) comply with the provisions of the Trust
Indenture Act applicable to it as Paying Agent and (ii) during the
continuance of any default by the Company (or any other obligor upon the
STRYPES) in the making of any payment in respect of the STRYPES, upon the
written request of the Trustee, forthwith pay to the Trustee all sums held
in trust by such Paying Agent as such.
The Company may at any time, for any purpose, pay, or by Company Order
direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon
the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability
with respect to such money.
22
<PAGE>
Any consideration deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the interest on or
delivery upon discharge of any STRYPES and remaining unclaimed for two
years after such consideration has become due and payable shall be paid to
the Company on Company Request, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such STRYPES shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust consideration, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee
or such Paying Agent, before being required to make any such repayment, may
at the expense of the Company cause to be published once, in an Authorized
Newspaper in each Place of Payment or to be mailed to Holders of the
STRYPES, or both, notice that such consideration remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days
from the date of such publication or mailing, any unclaimed balance of such
consideration then remaining will be repaid to the Company."
SECTION 602. Interpretation of Principal Indenture. Except as
-------------------------------------
otherwise specifically provided in this Supplemental Indenture, whenever in the
Principal Indenture there is mentioned, in any context, the principal of or
principal amount of any Security of any series or a percentage in principal
amount of the Outstanding Securities of any series, such mention shall be deemed
to be, solely with respect to the STRYPES, the issue price of the STRYPES or a
percentage of the aggregate issue price of the Outstanding STRYPES.
ARTICLE SEVEN
MISCELLANEOUS
SECTION 701. Effect of Supplemental Indenture. The Principal
--------------------------------
Indenture, as supplemented and amended by this Supplemental Indenture and all
other indentures supplemental thereto, is in all respects ratified and
confirmed, and the Principal Indenture, this Supplemental Indenture and all
indentures supplemental thereto shall be read, taken and construed as one and
the same instrument.
SECTION 702. Conflict with Trust Indenture Act. If any provision
---------------------------------
hereof limits, qualifies or conflicts with another provision hereof which is
required to be included in this Supplemental Indenture by any of the provisions
of the Trust Indenture Act, such required provision shall control.
SECTION 703. Successors and Assigns. All covenants and agreements in
----------------------
this Supplemental Indenture by the Company shall bind its successors and
assigns, whether so expressed or not.
SECTION 704. Separability Clause. In case any provision in this
-------------------
Supplemental Indenture or in the STRYPES shall be invalid, illegal or
unenforceable, the validity, legality and
23
<PAGE>
enforceability of the remaining provisions (or of the other series of
Securities) shall not in any way be affected or impaired thereby.
SECTION 705. Benefits of Supplemental Indenture. Nothing in this
----------------------------------
Supplemental Indenture, express or implied, shall give to any Person, other than
the parties hereto and their successors hereunder and the Holders of the
STRYPES, any benefit or any legal or equitable right, remedy or claim under this
Supplemental Indenture.
SECTION 706. Governing Law. THIS SUPPLEMENTAL INDENTURE AND EACH
-------------
STRYPES SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW
YORK AND THIS SUPPLEMENTAL INDENTURE AND EACH SUCH STRYPES SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 707. Execution in Counterparts. This 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.
SECTION 708. Responsibility for Recitals. The recitals contained
---------------------------
herein shall be taken as statements of the Company, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of the Principal Indenture or this Supplemental
Indenture.
24
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
Merrill Lynch & Co., Inc.
By:
____________________________
Name: Theresa Lang
Title: Treasurer
Chemical Bank, as Trustee
By:
____________________________
Name:
Title:
25
<PAGE>
EXHIBIT A
[Form of Face of STRYPES Certificate]
[THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE THEREOF. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS
A WHOLE BY THE DEPOSITORY TRUST COMPANY (THE "DEPOSITORY") TO A NOMINEE OF THE
DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR
A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS SECURITY IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.]
No. ____________ ___________ STRYPES
CUSIP NO. 590188777
MERRILL LYNCH & CO., INC.
Structured Yield Product Exchangeable for Stock/SM/
6% STRYPES/SM/ Due June 1, 1999
(Payable with Shares of Common Stock,
par value $1.00 per share, of Cox Communications, Inc.)
Issue Price Per STRYPES: $22.875
Merrill Lynch & Co., Inc., a Delaware corporation (hereinafter called the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay and
discharge each STRYPES evidenced hereby on June 1, 1999 (the "Maturity Date")
(subject to the Company's right to redeem the STRYPES evidenced hereby, as
described on the reverse hereof) by delivering to
_____________________________________, or registered assigns, a number of shares
(such number of shares, the "Payment Rate") of common stock, par value $1.00 per
share ("Cox
A-1
<PAGE>
Common Stock"), of Cox Communications, Inc. ("Cox") (or, in the event there
shall occur a Reorganization Event, cash, securities and/or other property in
lieu thereof) and any Distributed Assets applicable thereto determined in
accordance with the Payment Rate Formula (as defined below), and to pay interest
(computed on the basis of a 360-day year of twelve 30-day months) on such
STRYPES from May 29, 1996, or from the most recent Interest Payment Date to
which interest has been paid or provided for, on March 1, June 1, September 1
and December 1 in each year, beginning September 1, 1996, and on the Maturity
Date, at the rate of $1.37 per STRYPES per annum (or $.3425 per STRYPES per
quarter), until the Maturity Date or such earlier date on which such STRYPES is
redeemed or the Issue Price of such STRYPES is repaid in accordance with the
provisions described below. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in said Indenture,
be paid to the Person in whose name this STRYPES Certificate (or one or more
Predecessor STRYPES Certificates) is registered at the close of business on the
last day (whether or not a Business Day) of the calendar month immediately
preceding such Interest Payment Date (each a "Regular Record Date"). In any case
where such Interest Payment Date shall not be a Business Day, then
(notwithstanding any other provision of said Indenture or this STRYPES
Certificate) payment of such interest need not be made on such date, but may be
made on the next succeeding Business Day with the same force and effect as if
made on such date, and, if such payment is so made, no interest shall accrue for
the period from and after such date. Any such interest not so punctually paid or
duly provided for shall forthwith cease to be payable to the registered Holder
on the relevant Regular Record Date, and may be paid to the Person in whose name
this STRYPES Certificate (or one or more Predecessor STRYPES Certificates) is
registered at the close of business on a Special Record Date for the payment of
such interest to be fixed by the Trustee hereinafter referred to, notice whereof
shall be given to Holders of STRYPES 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
STRYPES may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in said Indenture.
The Payment Rate shall be determined in accordance with the following
formula (the "Payment Rate Formula"), subject to adjustment as a result of
certain dilution events relating to the Cox Common Stock as provided for in the
Indenture: (a) if the Maturity Price (as defined below) is greater than or
equal to $27.91 per share of Cox Common Stock (the "Threshold Appreciation
Price"), .8196 shares of Cox Common Stock per STRYPES, (b) if the Maturity Price
is less than the Threshold Appreciation Price but is greater than $22.875 per
share of Cox Common Stock (the "Initial Price"), a fractional share of Cox
Common Stock per STRYPES so that the value thereof (determined based on the
Maturity Price) is equal to the Initial Price (such fractional share being
calculated to the nearest 1/10,000th of a share or, if there is not a nearest
1/10,000th of a share, to the next higher 1/10,000th of a share) and (c) if the
Maturity Price is less than or equal to the Initial Price, one share of Cox
Common Stock per STRYPES. Notwithstanding the foregoing, the Company may, at its
option, in lieu of delivering shares of Cox Common Stock and any Distributed
Assets applicable thereto, deliver cash in an amount equal to the value of such
number of shares of Cox Common Stock at the Maturity Price, plus the fair market
value (as determined by the Board of Directors of the Company, which
determination shall be conclusive, and described in a resolution adopted with
respect thereto) as of the third Trading Day preceding the Maturity Date of any
such Distributed Assets applicable thereto, all as provided in the Indenture.
Such number of shares of Cox Common Stock (or, in the event there shall occur a
Reorganization Event as provided in the Indenture, cash, securities and/or other
property in lieu thereof) and any Distributed Assets applicable thereto or, at
the Company's option, the amount of cash, in either case deliverable upon
payment and discharge hereof is
A-2
<PAGE>
hereinafter referred to as the "Maturity Consideration." The term "Maturity
Price" means, except as otherwise provided in the Indenture, the sum of (A) the
average Closing Price per share of Cox Common Stock on the 20 Trading Days
immediately prior to, but not including, the second Trading Day preceding the
Maturity Date and (B) the fair market value (as determined by the Board of
Directors of the Company, whose determination shall be conclusive, and described
in a resolution adopted with respect thereto) as of the third Trading Day
preceding the Maturity Date of the Distributed Assets applicable to one share of
Cox Common Stock. The term "Closing Price" means, with respect to any security
on any date of determination, the closing sale price (or, if no closing price is
reported, the last reported sale price) of such security on the New York Stock
Exchange (the "NYSE") on such date or, if such security 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 such security is so
listed, or if such security is not so listed on a United States national or
regional securities exchange, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System, or, if such security is not
so reported, the last quoted bid price for such security 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 such security on such
date as determined by a nationally recognized independent investment banking
firm retained for this purpose by the Company. The term "Trading Day" means,
with respect to any security the Closing Price of which is being determined, a
day on which such security (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 such security.
Interest on the STRYPES evidenced hereby will be payable, and delivery of
the Maturity Consideration in payment of the STRYPES evidenced hereby on the
Maturity Date will be made, upon surrender of this STRYPES Certificate, at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York, and payment of interest on the STRYPES
evidenced by this STRYPES Certificate (and, if the Company elects to deliver
cash in lieu of Cox Common Stock on the Maturity Date, the amount of cash
payable on the Maturity Date) will be made in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts; provided, however, that at the option of the
Company payment of interest may be made by check mailed to the address of the
Person entitled thereto as such address shall appear on the Securities Register.
ADDITIONAL PROVISIONS OF THIS STRYPES CERTIFICATE ARE CONTAINED ON THE
REVERSE HEREOF AND SUCH PROVISIONS SHALL HAVE THE SAME EFFECT AS THOUGH FULLY
SET FORTH IN THIS PLACE.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee by manual signature, this STRYPES Certificate shall not be
entitled to any benefit under
A-3
<PAGE>
the Indenture, or be valid or obligatory for any purpose. "Structured Yield
Product Exchangeable for Stock" and "STRYPES" are service marks of Merrill Lynch
& Co., Inc.
IN WITNESS WHEREOF, Merrill Lynch & Co., Inc. has caused this instrument to
be duly executed under its corporate seal.
Dated:
Merrill Lynch & Co., Inc.
By:_____________________________
Name: Theresa Lang
Title: Treasurer
Attest:______________________________
Name: Gregory T. Russo
Title: Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This certificate evidences Securities of the series designated herein and
referred to in the within-mentioned Indenture.
Chemical Bank, as Trustee
By:_______________________________
Authorized Officer
A-4
<PAGE>
[Form of Reverse of STRYPES Certificate]
MERRILL LYNCH & CO., INC.
Structured Yield Product Exchangeable for Stock
6% STRYPES Due June 1, 1999
(Payable with Shares of Common Stock, par value $1.00 per share,
of Cox Communications, Inc.)
This STRYPES Certificate evidences part of a duly authorized issue of
unsecured and unsubordinated debentures, notes or other evidences of senior
indebtedness (hereinafter called the "Securities") of the Company of the series
hereinafter specified, all such Securities issued and to be issued under an
indenture dated as of April 1, 1983 and restated as of April 1, 1987, as amended
and supplemented as of May 1, 1996, between the Company and Chemical Bank
(successor by merger to Manufacturers Hanover Trust Company), as Trustee (the
indenture dated as of April 1, 1983 and restated as of April 1, 1987, as
amended, restated and supplemented from time to time, the "Indenture"), to which
Indenture and all other indentures supplemental thereto reference is hereby made
for a statement of the rights and limitation of rights thereunder of the Holders
of the Securities and of the rights, obligations, duties and immunities of the
Trustee for each series of Securities and of the Company, and the terms upon
which the Securities are and are to be authenticated and delivered. As provided
in the Indenture, the Securities may be issued in one or more series, which
different series may be issued in various aggregate principal amounts, may be
denominated in currencies other than U.S. Dollars (including composite
currencies), may mature at different times, may bear interest, if any, at
different rates, may be subject to different redemption provisions, if any, may
be subject to different sinking, purchase and analogous funds, if any, may be
subject to different covenants and Events of Default and may otherwise vary as
in the Indenture provided or permitted. This STRYPES Certificate evidences
Securities of the series designated as Structured Yield Product Exchangeable for
Stock, 6% STRYPES Due June 1, 1999 (each, a "STRYPES").
The STRYPES will be redeemable at the option of the Company, in whole but
not in part, at any time from and after the date (the "Tax Event Date") on which
a Tax Event (as defined below) shall occur at a price per STRYPES (the "Tax
Event Redemption Price") equal to (a) an amount of cash equal to the sum of (x)
all accrued and unpaid interest on such STRYPES to the date fixed for redemption
(the "Redemption Date"), (y) the sum of all interest payments on such STRYPES
due after the Redemption Date and on or prior to the Maturity Date and (z)
$1.37, plus (b) a number of shares of Cox Common Stock (or, in the event there
shall occur a Reorganization Event, cash, securities and/or other property in
lieu thereof), including any Distributed Assets applicable thereto, determined
in accordance with the Payment Rate Formula, with the Redemption Date being
deemed to be the Maturity Date for purposes of calculating the Maturity Price.
A-5
<PAGE>
A "Tax Event" means that CEI shall have delivered to the Company an opinion
from independent tax counsel experienced in such matters to the effect that, as
a result of (a) any amendment or proposed amendment to, or change (including any
announced prospective change) or proposed change in, the laws (or any
regulations thereunder) of the United States or any taxing authority thereof or
therein or (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, enacted, promulgated, introduced, issued or announced
or which interpretation is issued or announced or which action is taken, on or
after May 22, 1996, there is more than an insubstantial risk that a corporation
that sells or otherwise disposes of stock in another corporation on a date that
is after May 22, 1996 and that is on or prior to the Maturity Date would not be
permitted to specifically identify the stock sold or disposed of for purposes of
determining the amount of such corporation's gain or loss on the stock sold or
disposed of for United States Federal income tax purposes.
The STRYPES are not subject to any sinking fund or other mandatory
redemption provisions. The STRYPES are not payable at the option of the Holders
prior to the Maturity Date.
If an Event of Default with respect to the STRYPES, as defined in the
Indenture, shall occur and be continuing, then an amount equal to the issue
price of all the STRYPES may be declared immediately due and payable in cash in
the manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the STRYPES under the Indenture at any
time by the Company and the Trustee with the consent of the Holders of 66-2/3%
of the aggregate issue price of the Outstanding STRYPES. The Indenture also
contains provisions permitting the Holders of a majority of the aggregate issue
price of the Outstanding STRYPES, on behalf of the Holders of all STRYPES, to
waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences with respect to
the STRYPES. Any such consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future Holders of the
STRYPES evidenced by this STRYPES Certificate and of any STRYPES evidenced by a
STRYPES Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent of waiver is made upon this
STRYPES Certificate.
No reference herein to the Indenture and no provision of this STRYPES
Certificate or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to deliver or pay the interest on,
and Maturity Consideration in respect of, the STRYPES evidenced by this STRYPES
Certificate at the times, place and rate, and in the manner, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the STRYPES evidenced by this STRYPES Certificate are transferable on the
Security Register
A-6
<PAGE>
of the Company, upon surrender of this STRYPES Certificate for registration of
transfer at the office or agency of the Company to be maintained for that
purpose in The City of New York, New York, or at any other office or agency of
the Company maintained for that purpose, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new STRYPES Certificates,
evidencing the same aggregate number of STRYPES, will be issued to the
designated transferee or transferees.
No service charge shall be made for any such transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection with the registration of such transfer
or exchange, other than certain exchanges not involving any transfer. Certain
terms used in this STRYPES Certificate which are defined in the Indenture have
the meanings set forth therein.
This STRYPES Certificate shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York. The Company,
the Trustee and any agent of the Company or the Trustee may treat the Person in
whose name this STRYPES Certificate is registered as the owner of the STRYPES
evidenced hereby for the purpose of receiving payment as herein provided and for
all other purposes, whether or not the STRYPES be overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
A-7
<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 UNIF GIFT MIN -- _____ Custodian _______
common (Cust) (Minor)
TEN ENT -- as tenants by the Under Uniform Gifts to Minors Act
entireties ________________________
(State)
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.
ASSIGNMENT
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 typewrite name and address including postal
zip code of assignee)
___________________________ STRYPES and all rights thereunder, hereby
irrevocably constituting and appointing
______________________________________________________ attorney to transfer said
STRYPES on the books of the Company, with full power of substitution in the
premises.
Dated:
------------------------------------
NOTICE: The signature to this
assignment must correspond with
the name as written upon on the
face of the within Security in
every particular, without
alteration or enlargement or
any change whatever.
A-8
<PAGE>
EXHIBIT 4(c)
[Form of Face of STRYPES Certificate]
[THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE THEREOF. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS
A WHOLE BY THE DEPOSITORY TRUST COMPANY (THE "DEPOSITORY") TO A NOMINEE OF THE
DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR
A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS SECURITY IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.]
No. ____________ ___________ STRYPES
CUSIP NO. 590188777
MERRILL LYNCH & CO., INC.
Structured Yield Product Exchangeable for Stock/SM/
6% STRYPES/SM/ Due June 1, 1999
(Payable with Shares of Common Stock,
par value $1.00 per share, of Cox Communications, Inc.)
Issue Price Per STRYPES: $22.875
Merrill Lynch & Co., Inc., a Delaware corporation (hereinafter called the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay and
discharge each STRYPES evidenced hereby on June 1, 1999 (the "Maturity Date")
(subject to the Company's right to redeem the STRYPES evidenced hereby, as
described on the reverse hereof) by delivering to
_____________________________________, or registered assigns, a number of shares
(such number of shares, the "Payment Rate") of common stock, par value $1.00 per
share ("Cox Common Stock"), of Cox Communications, Inc. ("Cox") (or, in the
event there shall occur a
<PAGE>
Reorganization Event, cash, securities and/or other property in lieu thereof)
and any Distributed Assets applicable thereto determined in accordance with the
Payment Rate Formula (as defined below), and to pay interest (computed on the
basis of a 360-day year of twelve 30-day months) on such STRYPES from May 29,
1996, or from the most recent Interest Payment Date to which interest has been
paid or provided for, on March 1, June 1, September 1 and December 1 in each
year, beginning September 1, 1996, and on the Maturity Date, at the rate of
$1.37 per STRYPES per annum (or $.3425 per STRYPES per quarter), until the
Maturity Date or such earlier date on which such STRYPES is redeemed or the
Issue Price of such STRYPES is repaid in accordance with the provisions
described below. The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in said Indenture, be paid
to the Person in whose name this STRYPES Certificate (or one or more Predecessor
STRYPES Certificates) is registered at the close of business on the last day
(whether or not a Business Day) of the calendar month immediately preceding such
Interest Payment Date (each a "Regular Record Date"). In any case where such
Interest Payment Date shall not be a Business Day, then (notwithstanding any
other provision of said Indenture or this STRYPES Certificate) payment of such
interest need not be made on such date, but may be made on the next succeeding
Business Day with the same force and effect as if made on such date, and, if
such payment is so made, no interest shall accrue for the period from and after
such date. Any such interest not so punctually paid or duly provided for shall
forthwith cease to be payable to the registered Holder on the relevant Regular
Record Date, and may be paid to the Person in whose name this STRYPES
Certificate (or one or more Predecessor STRYPES Certificates) is registered at
the close of business on a Special Record Date for the payment of such interest
to be fixed by the Trustee hereinafter referred to, notice whereof shall be
given to Holders of STRYPES 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 STRYPES may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in said Indenture.
The Payment Rate shall be determined in accordance with the following
formula (the "Payment Rate Formula"), subject to adjustment as a result of
certain dilution events relating to the Cox Common Stock as provided for in the
Indenture: (a) if the Maturity Price (as defined below) is greater than or
equal to $27.91 per share of Cox Common Stock (the "Threshold Appreciation
Price"), .8196 shares of Cox Common Stock per STRYPES, (b) if the Maturity Price
is less than the Threshold Appreciation Price but is greater than $22.875 per
share of Cox Common Stock (the "Initial Price"), a fractional share of Cox
Common Stock per STRYPES so that the value thereof (determined based on the
Maturity Price) is equal to the Initial Price (such fractional share being
calculated to the nearest 1/10,000th of a share or, if there is not a nearest
1/10,000th of a share, to the next higher 1/10,000th of a share) and (c) if the
Maturity Price is less than or equal to the Initial Price, one share of Cox
Common Stock per STRYPES. Notwithstanding the foregoing, the Company may, at its
option, in lieu of delivering shares of Cox Common Stock and any Distributed
Assets applicable thereto, deliver cash in an amount equal to the value of such
number of shares of Cox Common Stock at the Maturity Price, plus the fair market
value (as determined by the Board of Directors of the Company, which
determination shall be conclusive, and described in a resolution adopted with
respect thereto) as of the third Trading Day preceding the Maturity Date of any
such Distributed Assets applicable thereto, all as provided in the Indenture.
Such number of shares of Cox Common Stock (or, in
2
<PAGE>
the event there shall occur a Reorganization Event as provided in the Indenture,
cash, securities and/or other property in lieu thereof) and any Distributed
Assets applicable thereto or, at the Company's option, the amount of cash, in
either case deliverable upon payment and discharge hereof is hereinafter
referred to as the "Maturity Consideration." The term "Maturity Price" means,
except as otherwise provided in the Indenture, the sum of (A) the average
Closing Price per share of Cox Common Stock on the 20 Trading Days immediately
prior to, but not including, the second Trading Day preceding the Maturity Date
and (B) the fair market value (as determined by the Board of Directors of the
Company, whose determination shall be conclusive, and described in a resolution
adopted with respect thereto) as of the third Trading Day preceding the Maturity
Date of the Distributed Assets applicable to one share of Cox Common Stock. The
term "Closing Price" means, with respect to any security on any date of
determination, the closing sale price (or, if no closing price is reported, the
last reported sale price) of such security on the New York Stock Exchange (the
"NYSE") on such date or, if such security 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 such security is so listed, or if
such security is not so listed on a United States national or regional
securities exchange, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System, or, if such security is not so
reported, the last quoted bid price for such security 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 such security on such
date as determined by a nationally recognized independent investment banking
firm retained for this purpose by the Company. The term "Trading Day" means,
with respect to any security the Closing Price of which is being determined, a
day on which such security (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 such security.
Interest on the STRYPES evidenced hereby will be payable, and delivery of
the Maturity Consideration in payment of the STRYPES evidenced hereby on the
Maturity Date will be made, upon surrender of this STRYPES Certificate, at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York, and payment of interest on the STRYPES
evidenced by this STRYPES Certificate (and, if the Company elects to deliver
cash in lieu of Cox Common Stock on the Maturity Date, the amount of cash
payable on the Maturity Date) will be made in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts; provided, however, that at the option of the
Company payment of interest may be made by check mailed to the address of the
Person entitled thereto as such address shall appear on the Securities Register.
ADDITIONAL PROVISIONS OF THIS STRYPES CERTIFICATE ARE CONTAINED ON THE
REVERSE HEREOF AND SUCH PROVISIONS SHALL HAVE THE SAME EFFECT AS THOUGH FULLY
SET FORTH IN THIS PLACE.
3
<PAGE>
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee by manual signature, this STRYPES Certificate shall not be
entitled to any benefit under the Indenture, or be valid or obligatory for any
purpose. "Structured Yield Product Exchangeable for Stock" and "STRYPES" are
service marks of Merrill Lynch & Co., Inc.
IN WITNESS WHEREOF, Merrill Lynch & Co., Inc. has caused this instrument to
be duly executed under its corporate seal.
Dated:
Merrill Lynch & Co., Inc.
By:_____________________________
Name: Theresa Lang
Title: Treasurer
Attest:______________________________
Name: Gregory T. Russo
Title: Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This certificate evidences Securities of the series designated herein and
referred to in the within-mentioned Indenture.
Chemical Bank, as Trustee
By:_______________________________
Authorized Officer
4
<PAGE>
[Form of Reverse of STRYPES Certificate]
MERRILL LYNCH & CO., INC.
Structured Yield Product Exchangeable for Stock
6% STRYPES Due June 1, 1999
(Payable with Shares of Common Stock, par value $1.00 per share,
of Cox Communications, Inc.)
This STRYPES Certificate evidences part of a duly authorized issue of
unsecured and unsubordinated debentures, notes or other evidences of senior
indebtedness (hereinafter called the "Securities") of the Company of the series
hereinafter specified, all such Securities issued and to be issued under an
indenture dated as of April 1, 1983 and restated as of April 1, 1987, as amended
and supplemented as of May 1, 1996, between the Company and Chemical Bank
(successor by merger to Manufacturers Hanover Trust Company), as Trustee (the
indenture dated as of April 1, 1983 and restated as of April 1, 1987, as
amended, restated and supplemented from time to time, the "Indenture"), to which
Indenture and all other indentures supplemental thereto reference is hereby made
for a statement of the rights and limitation of rights thereunder of the Holders
of the Securities and of the rights, obligations, duties and immunities of the
Trustee for each series of Securities and of the Company, and the terms upon
which the Securities are and are to be authenticated and delivered. As provided
in the Indenture, the Securities may be issued in one or more series, which
different series may be issued in various aggregate principal amounts, may be
denominated in currencies other than U.S. Dollars (including composite
currencies), may mature at different times, may bear interest, if any, at
different rates, may be subject to different redemption provisions, if any, may
be subject to different sinking, purchase and analogous funds, if any, may be
subject to different covenants and Events of Default and may otherwise vary as
in the Indenture provided or permitted. This STRYPES Certificate evidences
Securities of the series designated as Structured Yield Product Exchangeable for
Stock, 6% STRYPES Due June 1, 1999 (each, a "STRYPES").
The STRYPES will be redeemable at the option of the Company, in whole but
not in part, at any time from and after the date (the "Tax Event Date") on which
a Tax Event (as defined below) shall occur at a price per STRYPES (the "Tax
Event Redemption Price") equal to (a) an amount of cash equal to the sum of (x)
all accrued and unpaid interest on such STRYPES to the date fixed for redemption
(the "Redemption Date"), (y) the sum of all interest payments on such STRYPES
due after the Redemption Date and on or prior to the Maturity Date and (z)
$1.37, plus (b) a number of shares of Cox Common Stock (or, in the event there
shall occur a Reorganization Event, cash, securities and/or other property in
lieu thereof), including any Distributed Assets applicable thereto, determined
in accordance with the Payment Rate Formula, with the Redemption Date being
deemed to be the Maturity Date for purposes of calculating the Maturity Price.
5
<PAGE>
A "Tax Event" means that CEI shall have delivered to the Company an opinion
from independent tax counsel experienced in such matters to the effect that, as
a result of (a) any amendment or proposed amendment to, or change (including any
announced prospective change) or proposed change in, the laws (or any
regulations thereunder) of the United States or any taxing authority thereof or
therein or (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, enacted, promulgated, introduced, issued or announced
or which interpretation is issued or announced or which action is taken, on or
after May 22, 1996, there is more than an insubstantial risk that a corporation
that sells or otherwise disposes of stock in another corporation on a date that
is after May 22, 1996 and that is on or prior to the Maturity Date would not be
permitted to specifically identify the stock sold or disposed of for purposes of
determining the amount of such corporation's gain or loss on the stock sold or
disposed of for United States Federal income tax purposes.
The STRYPES are not subject to any sinking fund or other mandatory
redemption provisions. The STRYPES are not payable at the option of the Holders
prior to the Maturity Date.
If an Event of Default with respect to the STRYPES, as defined in the
Indenture, shall occur and be continuing, then an amount equal to the issue
price of all the STRYPES may be declared immediately due and payable in cash in
the manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the STRYPES under the Indenture at any
time by the Company and the Trustee with the consent of the Holders of 66-2/3%
of the aggregate issue price of the Outstanding STRYPES. The Indenture also
contains provisions permitting the Holders of a majority of the aggregate issue
price of the Outstanding STRYPES, on behalf of the Holders of all STRYPES, to
waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences with respect to
the STRYPES. Any such consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future Holders of the
STRYPES evidenced by this STRYPES Certificate and of any STRYPES evidenced by a
STRYPES Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent of waiver is made upon this
STRYPES Certificate.
No reference herein to the Indenture and no provision of this STRYPES
Certificate or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to deliver or pay the interest on,
and Maturity Consideration in respect of, the STRYPES evidenced by this STRYPES
Certificate at the times, place and rate, and in the manner, herein prescribed.
6
<PAGE>
As provided in the Indenture and subject to certain limitations therein set
forth, the STRYPES evidenced by this STRYPES Certificate are transferable on the
Security Register of the Company, upon surrender of this STRYPES Certificate for
registration of transfer at the office or agency of the Company to be maintained
for that purpose in The City of New York, New York, or at any other office or
agency of the Company maintained for that purpose, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new STRYPES
Certificates, evidencing the same aggregate number of STRYPES, will be issued to
the designated transferee or transferees.
No service charge shall be made for any such transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection with the registration of such transfer
or exchange, other than certain exchanges not involving any transfer. Certain
terms used in this STRYPES Certificate which are defined in the Indenture have
the meanings set forth therein.
This STRYPES Certificate shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York. The Company,
the Trustee and any agent of the Company or the Trustee may treat the Person in
whose name this STRYPES Certificate is registered as the owner of the STRYPES
evidenced hereby for the purpose of receiving payment as herein provided and for
all other purposes, whether or not the STRYPES be overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
7
<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 UNIF GIFT MIN -- _____ Custodian _______
common (Cust) (Minor)
TEN ENT -- as tenants by the Under Uniform Gifts to Minors Act
entireties ________________________
(State)
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.
ASSIGNMENT
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 typewrite name and address including postal
zip code of assignee)
___________________________ STRYPES and all rights thereunder, hereby
irrevocably constituting and appointing
______________________________________________________ attorney to transfer said
STRYPES on the books of the Company, with full power of substitution in the
premises.
Dated:
-------------------------------------------------------------
NOTICE: The signature to this assignment must correspond with
the name as written upon on the face of the within Security
in every particular, without alteration or enlargement or any
change whatever.
8
<PAGE>
EXHIBIT 10
STRYPES AGREEMENT
-----------------
THIS AGREEMENT is made as of this 22nd day of May, 1996, between MERRILL
LYNCH CAPITAL SERVICES, INC. ("MLCS"), a Delaware corporation and wholly-owned
subsidiary of MERRILL LYNCH & CO., INC., a Delaware corporation ("ML & Co."), ML
& Co. and COX ENTERPRISES, INC., a Delaware corporation ("CEI").
WHEREAS, ML & Co. has filed with the Securities and Exchange Commission
(the "SEC") a registration statement on Form S-3 (File No. 33-65135) and Post-
Effective Amendment No. 1 thereto contemplating the offering of up to 9,775,000
of its Structured Yield Product Exchangeable for Stock/SM/, 6% STRYPES/SM/ Due
June 1, 1999 (the "STRYPES"), the terms of which require ML & Co. to pay and
discharge the STRYPES on June 1, 1999 (the "Maturity Date") by delivering to the
holders thereof a specified number of shares of Class A Common Stock, par value
$1.00 per share (the "Cox Common Stock"), of Cox Communications, Inc., a
Delaware corporation ("Cox"), or, at ML & Co.'s option, cash with an equal
value. The terms of the STRYPES permit ML & Co., from and after a Tax Event
Date, to redeem the STRYPES, in whole but not in part, at the Tax Event
Redemption Price (as such terms are defined in the Supplemental Indenture
referred to below), consisting of a specified number of shares of Cox Common
Stock and an amount of cash determined as set forth in the Supplemental
Indenture (such amount of cash payable upon redemption being hereinafter
referred to as the "Redemption Cash Component").
WHEREAS, ML & Co. has agreed, pursuant to an underwriting agreement dated
the date hereof (the "Underwriting Agreement") among ML & Co., CEI and Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (the
"Underwriter"), to issue and sell to the Underwriter an aggregate of 8,500,000
STRYPES (the "Initial STRYPES") and, at the Underwriter's option, all or any
part of 1,275,000 additional STRYPES (the "Option STRYPES") to cover over-
allotments, if any.
WHEREAS, the STRYPES are to be issued under an indenture, dated as of April
1, 1983 and restated as of April 1, 1987 (as amended and supplemented, the
"Principal Indenture"), between ML & Co. and Chemical Bank (successor by merger
to Manufacturers Hanover Trust Company), as trustee (the "Trustee"), as further
amended and supplemented by the Eighth Supplemental Indenture, dated as of May
__, 1996 (the "Supplemental Indenture"), between ML & Co. and the Trustee,
relating to the STRYPES. The Principal Indenture, as amended and supplemented
by the Supplemental Indenture, is hereinafter referred to as the "Indenture."
- -------------
/SM/ Service mark of Merrill Lynch & Co., Inc.
<PAGE>
WHEREAS, in order to obtain the cash and/or shares of Cox Common Stock,
including any Distributed Assets required to be delivered to ML & Co. pursuant
to the Subsidiary STRYPES (the "Distributed Assets"), (or, in the event there
shall occur a Reorganization Event, cash, securities and/or other property in
lieu thereof) required to satisfy its obligations under the STRYPES, ML & Co.
has agreed to purchase from MLCS, and MLCS has agreed to sell to ML & Co., (i)
concurrent with the issuance and sale of the Initial STRYPES, an obligation of
MLCS in the form of Exhibit A hereto, the aggregate principal amount of which
will be equal to the net proceeds to ML & Co. from the sale of the Initial
STRYPES, less an amount equal to certain of ML & Co.'s expenses in connection
with the offering of the Initial STRYPES, and the payment terms (other than the
interest rate) of which will be identical to the payment terms of the Initial
STRYPES (the "Initial Subsidiary STRYPES") and (ii) concurrent with each
issuance and sale of any Option STRYPES, an additional obligation of MLCS in the
form of Exhibit A hereto, the aggregate principal amount of which will be equal
to the net proceeds to ML & Co. from the sale of such Option STRYPES, less an
amount equal to certain of ML & Co.'s expenses in connection with the offering
of the Option STRYPES, and the payment terms (other than the interest rate) of
which will be identical to the payment terms of such Option STRYPES (an "Option
Subsidiary STRYPES"); the Initial Subsidiary STRYPES and each Option Subsidiary
STRYPES are hereinafter collectively referred to as the "Subsidiary STRYPES."
WHEREAS, CEI, through its wholly-owned subsidiary Cox Holdings, Inc. ("Cox
Holdings"), owns a number of shares of Cox Common Stock in excess of the maximum
number that would be required by MLCS to satisfy its obligations under the
Subsidiary STRYPES.
WHEREAS, in exchange for certain consideration to be paid by MLCS and to be
established hereunder, MLCS and CEI desire to provide for the Periodic Payments
(as defined herein) and for the future acquisition, sale and delivery of that
number of shares of Cox Common Stock, including any Distributed Assets, (or, in
the event there shall occur a Reorganization Event, cash, securities and/or
other property in lieu thereof) that would be required by MLCS to pay and
discharge the Subsidiary STRYPES on the Maturity Date or redeem the Subsidiary
STRYPES on the Redemption Date, without taking into account any default with
respect to the Subsidiary STRYPES or any acceleration of the maturity of the
Subsidiary STRYPES resulting therefrom. The number of shares of Cox Common
Stock, including any Distributed Assets, (or, in the event there shall occur a
Reorganization Event, such cash, securities and/or other property in lieu
thereof) that would be required to pay and discharge the Subsidiary STRYPES on
the Maturity Date, without taking into account any default with respect to the
Subsidiary STRYPES or any acceleration of the maturity of the Subsidiary STRYPES
resulting therefrom, are hereinafter referred to as the "Maturity Contract
Shares", and the number of shares of Cox Common Stock, including any Distributed
Assets, (or, in the event there shall occur a Reorganization Event, such cash,
securities and/or other property in lieu thereof) that would be required to
redeem the Subsidiary STRYPES on the Redemption Date, without taking into
account any default with respect to the Subsidiary STRYPES or any acceleration
of the maturity of the Subsidiary STRYPES resulting therefrom are hereinafter
referred to as the "Redemption Contract Shares"; the Maturity Contract Shares
and the Redemption Contract Shares are hereinafter collectively referred to as
the "Contract Shares".
2
<PAGE>
WHEREAS, CEI and MLCS desire that, at the option of CEI, the respective
future acquisition, sale and delivery obligations with respect to the Maturity
Contract Shares can be settled entirely, but not less than entirely, through
cash settlement in lieu of delivery of the Maturity Contract Shares.
WHEREAS, CEI will initially place in escrow, pursuant to an Escrow
Agreement dated as of May 29, 1996 (the "Escrow Agreement"), among MLCS, CEI and
The First National Bank of Chicago, as escrow agent (the "Escrow Agent"), an
aggregate of 13,294,000 shares of Cox Common Stock.
WHEREAS, CEI will agree, pursuant to a Collateral Agreement dated as of May
29, 1996 (the "Collateral Agreement"), among MLCS, CEI and The First National
Bank of Chicago, as collateral agent (the "Collateral Agent"), under the
circumstances set forth therein, to pledge and grant to MLCS a first priority
lien on, and security interest in, and right to set off against, all of CEI's
right, title and interest in and to the shares of Cox Common Stock (or, in the
event there shall occur a Reorganization Event, cash, securities and/or other
property in lieu thereof) held thereunder.
WHEREAS, the ownership, voting rights and rights to receive any dividends
or other distributions in respect of the Escrow Shares (as defined herein) shall
remain with CEI unless and until delivery, if any, of such Escrow Shares to MLCS
pursuant to the provisions of this Agreement.
NOW, THEREFORE, in consideration of their mutual covenants herein
contained, the parties hereto, intending to be legally bound, hereby mutually
covenant and agree as follows:
1.
Definitions
-----------
1.1. Definitions. Capitalized words and phrases used herein and not
-----------
otherwise defined shall have the meanings ascribed to them in the Supplemental
Indenture.
2.
Periodic Payments and Future Delivery of Maturity Contract Shares or Cash
-------------------------------------------------------------------------
Settlement
- ----------
2.1. Periodic Payments; Acquisition, Sale and Delivery. On the basis of
-------------------------------------------------
the representations and warranties herein set forth and subject to the terms and
conditions herein set forth, (i) CEI agrees to make the periodic payments to
MLCS required by Section 2.3 hereof, and (ii) on the Maturity Date Closing (as
defined in Section 2.4 hereof), CEI agrees to assign, transfer, convey and
deliver to MLCS (or to cause Cox Holdings to assign, transfer, convey and
3
<PAGE>
deliver to MLCS), and MLCS agrees to acquire from CEI (or Cox Holdings), the
Maturity Contract Shares.
2.2. Consideration.
-------------
(a) The consideration to be paid by MLCS in exchange for CEI's obligations
hereunder to make the Periodic Payments and to deliver (or cause to be
delivered) the Contract Shares in respect of the Initial Subsidiary STRYPES (the
"Firm Consideration Amount") shall be $188,572,500 in cash. Upon the terms and
subject to the conditions of this Agreement, MLCS shall deliver to CEI the Firm
Consideration Amount on May 29, 1996 (the "Firm Payment Date") at the offices of
Brown & Wood, One World Trade Center, New York, New York 10048, or at such other
place as shall be agreed upon by MLCS and CEI.
(b) ML & Co. shall deliver promptly to MLCS and CEI notice of any exercise
by the Underwriter of its option to purchase any Option STRYPES, stating the
number of Option STRYPES as to which the Underwriter is then exercising the
option and the time and date of payment and delivery for such Option STRYPES
(any such time and date of delivery, a "Date of Delivery"). The consideration to
be paid by MLCS in exchange for CEI's obligations hereunder to make the Periodic
Payments and to deliver (or cause to be delivered) the Contract Shares in
respect of any Option Subsidiary STRYPES (the "Option Consideration Amount")
shall be an amount in cash equal to 100% of the aggregate principal amount of
such Option Subsidiary STRYPES. Upon the terms and subject to the conditions of
this Agreement, MLCS shall deliver to CEI the Option Consideration Amount on the
related Date of Delivery at the offices of Brown & Wood, One World Trade Center,
New York, New York 10048, or at such other place as shall be agreed upon by MLCS
and CEI.
(c) Payment of the Firm Consideration Amount and the Option Consideration
Amount shall be made by Fedwire transfer of immediately available funds to an
account designated by CEI, or such other form of payment specified by CEI,
against delivery by CEI or Cox Holdings to the Escrow Agent of the number of
shares of Cox Common Stock, including any Distributed Assets, (or, in the event
there shall occur a Reorganization Event, cash, securities and/or other property
in lieu thereof) necessary to comply with CEI's obligations under Section 6.1
hereof.
2.3. Periodic Payments. (a) On or prior to 10:00 a.m., New York City
-----------------
time, on September 1, 1996 and on each March 1, June 1, September 1, and
December 1, to and including June 1, 1999, CEI shall pay to MLCS, by Fedwire
transfer of immediately available funds to an account designated by MLCS, an
amount equal to the total interest payments due on the Subsidiary STRYPES on
such dates (each such payment being hereinafter referred to as a "Periodic
Payment").
(b) Any Periodic Payment (or portion thereof) not paid when due shall bear
interest until paid in full at a rate per annum equal to the Prime Rate plus 2%
per annum. For purposes of the foregoing, "Prime Rate" shall mean, for any day,
the prime rate quoted in The Wall Street
4
<PAGE>
Journal (New York Edition) for the immediately preceding Business Day; provided,
however, if more than one rate is so quoted, the Prime Rate shall be the average
of the prime rates so quoted.
2.4. Delivery upon Maturity. Consummation of the acquisition, sale and
----------------------
delivery of the Maturity Contract Shares shall take place on a date mutually
agreeable to MLCS and CEI, not later than one (1) Trading Day prior to the
Maturity Date (or such later date acceptable to MLCS so as to permit MLCS to
meet its obligations under the Subsidiary STRYPES) (the "Maturity Date
Closing"). Delivery of the certificates representing the Maturity Contract
Shares (unless the Maturity Contract Shares are represented by one or more
global certificates registered in the name of a depositary or a nominee of a
depositary, in which event MLCS's interest in such Maturity Contract Shares
shall be noted in a manner satisfactory to MLCS and its counsel) shall be made
at the offices of MLCS, or at such other place as shall be agreed upon by MLCS
and CEI. Any certificates for the Maturity Contract Shares delivered shall be
registered in MLCS's name (or endorsed in blank or otherwise registered as
requested by MLCS).
2.5. Cash Settlement. Notwithstanding the provisions of Sections 2.1 and
---------------
2.4 hereof, CEI shall have the option, exercisable in its sole discretion, to
require that its obligation contained therein be settled, in whole, through a
cash payment at the Maturity Date Closing in lieu of delivery of the Maturity
Contract Shares. The amount of such cash settlement payment shall be equal to
the value of the Maturity Contract Shares at the Maturity Price (the "Share
Value"). On or prior to the day seven Business Days preceding the Maturity Date
(or such later date acceptable to MLCS so as to permit MLCS to meet its
obligations under the Subsidiary STRYPES), CEI shall notify MLCS whether it will
exercise its option to require cash settlement pursuant to this Section 2.5.
2.6. Maturity Date Closing Condition. If a Reorganization Event shall
-------------------------------
have occurred, CEI's right to deliver (or cause to be delivered) to MLCS
hereunder securities and/or other property received pursuant to such
Reorganization Event shall be conditioned upon such securities and/or other
property so delivered being (a) transferable after such delivery without
contemporaneous registration under the Securities Act of 1933, as amended (the
"1933 Act"), and (b) free of any transfer restrictions. If the condition set
forth in the preceding sentence shall not be satisfied, then, notwithstanding
the provisions hereof, the parties respective obligations contained in clause
(ii) of Section 2.1 shall be settled, in whole, through a cash payment at the
Maturity Date Closing in lieu of delivery of the Maturity Contract Shares as
provided in Section 2.5.
3.
Early Satisfaction and Discharge
--------------------------------
3.1. Early Satisfaction and Discharge. Except as provided in Section 8.1
--------------------------------
hereof, CEI shall have the option, exercisable at any time from and after the
Tax Event Date, to require that the parties satisfy and discharge their
respective obligations hereunder, on a date fixed by CEI
5
<PAGE>
for early settlement (the "Early Settlement Date Closing" and, together with the
Maturity Date Closing, a "Closing"), in the following manner:
(i) CEI shall assign, transfer, convey and deliver to MLCS (or shall
cause Cox Holdings to assign, transfer, convey and deliver to MLCS), and
MLCS shall acquire from CEI (or Cox Holdings), the Redemption Contract
Shares; and
(ii) CEI shall deliver to MLCS the Redemption Cash Component.
CEI shall provide notice of its intention to require early satisfaction and
discharge of this Agreement to MLCS and ML & Co. not less than 15 nor more than
30 calendar days prior to the Early Settlement Date Closing (or at such other
time as shall be acceptable to both MLCS and ML & Co. that will permit ML & Co.
to meet its obligations under Section 402 of the Supplemental Indenture).
3.2. Payment and Delivery. Consummation of the acquisition, sale and
--------------------
delivery of the Redemption Contract Shares and delivery of the Redemption Cash
Component shall take place at the Early Settlement Date Closing. Payment of the
Redemption Cash Component shall be made by Fedwire transfer of immediately
available funds to an account designated by MLCS, or such other form of payment
specified by MLCS. Delivery of the certificates representing the Redemption
Contract Shares (unless the Redemption Contract Shares are represented by one or
more global certificates registered in the name of a depositary or a nominee of
a depositary, in which event MLCS's interest in such Redemption Contract Shares
shall be noted in a manner satisfactory to MLCS and its counsel) shall be made
at the offices of MLCS, or at such other place as shall be agreed upon by MLCS
and CEI. Any certificates for the Redemption Contract Shares delivered shall be
registered in MLCS's name (or endorsed in blank or otherwise registered as
requested by MLCS).
4.
Representations and Warranties of CEI
-------------------------------------
CEI represents and warrants to MLCS as of the date hereof and as of the
date of each Closing as follows:
(a) CEI has been duly organized and is validly existing as a corporation in
good standing under the laws of the State of Delaware.
(b) This Agreement, the Escrow Agreement and the Collateral Agreement have
been duly authorized, executed and delivered by CEI and (assuming the due
authorization, execution and delivery by the other parties thereto) constitute
valid and binding agreements of CEI, enforceable against CEI in accordance with
their respective terms, except as the enforcement hereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of
6
<PAGE>
creditors' rights generally and except as enforcement hereof is subject to
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law).
(c) (i) At the date hereof, Cox Holdings is the sole registered owner of
and has all rights in and to at least 14,000,000 shares of Cox Common Stock,
free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity; and (ii) to the extent CEI elects to deliver the Contract
Shares at Closing, upon delivery of such Contract Shares against payment
therefor pursuant to this Agreement, MLCS will be the sole registered owner of
such Contract Shares and, assuming MLCS purchased for value in good faith and
without notice of any adverse claim, MLCS will have acquired all rights in and
to such Contract Shares, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity.
(d) No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority or
agency is necessary or required for the execution, delivery or performance by
CEI of this Agreement, the Escrow Agreement or the Collateral Agreement or the
consummation by CEI or Cox Holdings of the transactions contemplated herein and
therein, except such as have been already obtained or as may be required under
the 1933 Act or the rules and regulations promulgated thereunder or state
securities laws; and CEI has full right, power and authority to enter into this
Agreement, the Escrow Agreement and the Collateral Agreement and to sell,
assign, transfer and deliver (or cause to be sold, assigned, transferred and
delivered) the Contract Shares pursuant to this Agreement.
(e) The execution, delivery and performance by CEI of this Agreement, the
Escrow Agreement and the Collateral Agreement and the consummation by CEI or Cox
Holdings of the transactions contemplated herein and therein and compliance by
CEI with its obligations hereunder and thereunder do not and will not, whether
with or without the giving of notice or passage of time or both, conflict with
or constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any shares of Cox Common
Stock owned by CEI or Cox Holdings pursuant to, any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or any other
agreement or instrument to which CEI or Cox Holdings is a party or by which CEI
or Cox Holdings is bound, or to which any shares of Cox Common Stock owned by
CEI or Cox Holdings is subject (except for such conflicts, breaches or defaults
or liens, charges or encumbrances that would not, singly or in the aggregate,
materially and adversely affect the ability of CEI to perform its obligations
under this Agreement, the Escrow Agreement and the Collateral Agreement), nor
will such action result in any violation of the provisions of the charter or by-
laws of CEI or Cox Holdings, or any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over CEI or Cox Holdings or any
of their respective assets, properties or operations (except for violations that
would not, singly or in the aggregate, materially and adversely affect the
ability of CEI to perform its obligations under this Agreement, the Escrow
Agreement and the Collateral Agreement).
7
<PAGE>
5.
Representations and Warranties of MLCS
--------------------------------------
MLCS represents and warrants to CEI as of the date hereof and as of the
date of each Closing as follows:
(a) MLCS has been duly organized and is validly existing as a corporation
in good standing under the laws of the State of Delaware.
(b) This Agreement, the Escrow Agreement and the Collateral Agreement have
been duly authorized, executed and delivered by MLCS and (assuming the due
authorization, execution and delivery by the other parties thereto) constitute
valid and binding agreements of MLCS, enforceable against MLCS in accordance
with their respective terms, except as the enforcement hereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement hereof is
subject to general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(c) No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority or
agency is necessary or required for the execution, delivery or performance by
MLCS of this Agreement, the Escrow Agreement and the Collateral Agreement or the
consummation by MLCS of the transactions contemplated herein and therein, except
such as have been already obtained or as may be required under the 1933 Act or
the rules and regulations promulgated thereunder or state securities laws; and
MLCS has full right, power and authority to enter into this Agreement, the
Escrow Agreement and the Collateral Agreement and to purchase the Contract
Shares pursuant to this Agreement.
(d) The execution, delivery and performance by MLCS of this Agreement, the
Escrow Agreement and the Collateral Agreement and the consummation by MLCS of
the transactions contemplated herein and therein and compliance by MLCS with its
obligations hereunder and thereunder do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
MLCS pursuant to, any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or any other agreement or instrument to which MLCS
is a party or by which MLCS is bound, or to which any of the property or assets
of MLCS is subject (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not, singly or in the aggregate, materially
and adversely affect the ability of MLCS to perform its obligations under this
Agreement, the Escrow Agreement and the Collateral Agreement), nor will such
action result in any violation of the provisions of the charter or by-laws of
MLCS, or any applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government
8
<PAGE>
instrumentality or court, domestic or foreign, having jurisdiction over MLCS or
any of its assets, properties or operations (except for violations that would
not, singly or in the aggregate, materially and adversely affect the ability of
MLCS to perform its obligations under this Agreement, the Escrow Agreement and
the Collateral Agreement).
6.
Covenants
---------
6.1. Escrow. (a) CEI shall cause to be held during the term of this
------
Agreement:
(i) collectively by the Escrow Agent in the Maximum Share Escrow
Account under the Escrow Agreement and by the Collateral Agent in the
Maximum Share Collateral Account under the Collateral Agreement an
aggregate number of shares of Cox Common Stock and any Distributed Assets
(or, in the event there shall occur a Reorganization Event, cash,
securities and/or other property in lieu thereof) at least equal to the
maximum number of shares of Cox Common Stock and any Distributed Assets
(or, in the event there shall occur a Reorganization Event, cash,
securities and/or other property in lieu thereof) that would be required by
MLCS to pay and discharge all Subsidiary STRYPES on the Maturity Date (the
"Maximum Contract Shares"); and
(ii) collectively by the Escrow Agent in the Periodic Payment Escrow
Account under the Escrow Agreement and by the Collateral Agent in the
Periodic Payment Collateral Account under the Collateral Agreement an
aggregate number of shares of Cox Common Stock (or such other assets
permitted by the Escrow Agreement and the Collateral Agreement) (the
"Periodic Payment Shares" and, together with the Maximum Contract Shares,
the "Escrow Shares") so that the fraction (expressed as a percentage)
obtained by dividing (x) the sum of all Periodic Payments due and unpaid
and to become due on or prior to the Maturity Date by (y) the total value
of the Periodic Payment Shares then held by the Escrow Agent and the
Collateral Agent, based upon the Closing Price at the end of each calendar
month (the "Specified Percentage") at the date hereof shall be 50% and at
the times hereafter shall be less than or equal to 60%. In the event the
Specified Percentage exceeds 60%, CEI shall promptly effect deliveries
pursuant to the Escrow Agreement and/or the Collateral Agreement such that
immediately following such delivery the Specified Percentage is 50% or less
and CEI is in compliance with its obligations under the Escrow Agreement
and the Collateral Agreement.
(b) CEI shall cause the Escrow Shares to bear the legends required by the
Escrow Agreement and the Collateral Agreement, and to cause the required orders
to be given to the Transfer Agent for the Cox Common Stock in order to restrict
the transfer thereof.
6.2. Collateral. If at any time after the date hereof (i) the credit
----------
rating assigned by Moody's Investors Services, Inc. ("Moody's") to the long-term
senior unsecured debt of CEI ("Senior Debt") shall be lowered by Moody's or (ii)
the credit rating assigned by Standard &
9
<PAGE>
Poor's Ratings Services, a division of McGraw Hill, Inc. ("S&P"), to the Senior
Debt shall be lowered by S&P, then CEI shall deliver, or cause to be delivered
by the Escrow Agent, to the Collateral Agent to be held as collateral pursuant
to the Collateral Agreement, a number of Escrow Shares so that, immediately
after such delivery, the total number of Escrow Shares held as collateral
pursuant to the terms of the Collateral Agreement is equal to the sum of (x) the
Applicable Percentage of the Periodic Payment Shares and (y) the Applicable
Percentage of the Maximum Contract Shares. Each Applicable Percentage shall be
determined based upon the lower of the credit ratings assigned to the Senior
Debt by Moody's and S&P (or, if only one of Moody's or S&P has assigned a rating
to the Senior Debt, such rating) or a substitute rating agency or agencies as
follows:
<TABLE>
<CAPTION>
Applicable
Credit Ratings Percentage
-------------- -----------
Periodic Maximum
Payment Contract
Moody's S&P Shares Shares
------- --- --------- --------
<S> <C> <C> <C>
Baa1 or higher A- or higher 0% 0%
BBB+ 100% 0%
Baa2 BBB 100% 25%
Baa3 BBB- 100% 75%
Below Baa3 Below BBB- 100% 100%
</TABLE>
In the event the Senior Debt is not rated by Moody's or S&P or if a Collateral
Event of Default has occurred and is continuing, the Applicable Percentage of
Periodic Payment Shares and the Applicable Percentage of Maturity Contract
Shares shall each be 100%.
6.3. No Default. CEI agrees that at all times from the date hereof through
----------
the Closing hereunder, it will conduct its affairs so that compliance with its
obligations hereunder and under the Escrow Agreement and the Collateral
Agreement do not and will not result in any violation of its charter or by-laws
or conflict with or constitute a breach or default (or in any situation that,
with the giving of notice or the passage of time, or both, would result in
default) in the performance or observance of any obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage, deed of trust, loan
or credit agreement, note, lease or other agreement or instrument to which CEI
is a party or by which it may be bound or to which any of the property or assets
of CEI is subject.
6.4. Taxes. (a) CEI shall pay any and all documentary, stamp, transfer or
-----
similar taxes and charges that may be payable in respect of the entry into this
Agreement and the transfer and delivery of the Contract Shares pursuant hereto.
(b) MLCS and CEI hereby agree:
10
<PAGE>
(i) to treat, for all United States Federal, state and local tax
purposes, this Agreement as a unit (a "Unit") consisting of (A) a debt
instrument (the "Debt Instrument") with a fixed principal amount
unconditionally payable on the Maturity Date equal to the total Firm
Consideration Amount and the Option Consideration Amount (the "Total
Consideration Amount") payable by MLCS hereunder and bearing interest in an
amount equal to the Periodic Payments and (B) a forward contract (the
"Forward Contract") pursuant to which MLCS is irrevocably committed to use
the principal payment due on the Debt Instrument to purchase on the
Maturity Date or the Early Settlement Date Closing the Contract Shares
which CEI is obligated to deliver at that time (subject to CEI's right to
deliver cash with an equal value in lieu of the Contract Shares), which
treatment will require, among other things, MLCS to include currently in
income as ordinary interest the Periodic Payments that are made under this
Agreement by CEI in accordance with MLCS's regular method of tax
accounting and to include in income as ordinary interest original issue
discount in an amount equal to 1.4% of the Total Consideration Amount under
a constant yield method.
(ii) to allocate $185,932,485 of the Firm Consideration Amount to the
Debt Instrument component and to allocate the remaining $2,640,015 of the
Firm Compensation Amount to the Forward Contract component, and to allocate
98.6% of the Option Consideration Amount to the Debt Instrument component
and to allocate 1.4% of the Option Consideration Amount to the Forward
Contract component;
(iii) to file all United States Federal, state and local income,
franchise and estate tax returns consistent with the treatment of this
Agreement as a Unit consisting of the Debt Instrument and the Forward
Contract and consistent with the allocation described above in (ii) (in the
absence of any change or clarification in applicable law, by regulation or
otherwise, requiring a different characterization or treatment of this
Agreement).
6.5. Amounts Due to Trustee. ML & Co. shall pay any and all amounts due to
----------------------
the Trustee under Section 607 of the Indenture.
6.6. Certain Notices. (a) ML & Co. shall notify MLCS and CEI of any
---------------
notice of default with respect to the STRYPES received by ML & Co. from the
Trustee or any holders of STRYPES pursuant to the Indenture as promptly as
reasonably practicable after receipt thereof.
(b) In case at any time while any of the STRYPES are outstanding CEI
receives notice that:
11
<PAGE>
(i) Cox shall declare a dividend (or any other distribution) on or in
respect of the Cox Common Stock to which Section 303(a)(i) or 303(a)(iii)
of the Supplemental Indenture shall apply (other than any cash dividends
and distributions, if any, paid from time to time by Cox that do not
constitute Extraordinary Cash Dividends);
(ii) Cox shall authorize the issuance to all holders of Cox Common
Stock of rights or warrants to subscribe for or purchase shares of Cox
Common Stock or of any other subscription rights or warrants;
(iii) there shall occur any conversion or reclassification of Cox
Common Stock (other than a subdivision or combination of outstanding shares
of such Cox Common Stock) or any consolidation, merger or reorganization to
which Cox is a party and for which approval of any stockholders of Cox is
required, or the sale or transfer of all or substantially all of the assets
of Cox; or
(iv) there shall occur the voluntary or involuntary dissolution,
liquidation, winding up or bankruptcy of Cox;
then CEI shall promptly notify MLCS and ML & Co. of such fact and of (x) the
date on which a record is to be taken for the purpose of such dividend,
distribution or grant of rights or warrants, or, if a record is not to be taken,
the date as of which the holders of Cox Common Stock of record to be entitled to
such dividend, distribution or grant of rights or warrants are to be determined,
or (y) the date, if known by CEI, on which such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation, winding up or bankruptcy is
expected to become effective.
6.7. No Supplemental Indentures or Amendments Without Consent. ML & Co.
--------------------------------------------------------
shall not, without the consent of MLCS and CEI, enter into any indenture
supplemental to the Indenture that would adversely affect any obligation of CEI
hereunder, including, without limitation, by increasing the consideration that
CEI is obligated to deliver at Closing pursuant to this Agreement. ML & Co. and
CEI shall not, without the consent of CEI, amend the Subsidiary STRYPES in any
respect that would adversely affect any obligation of CEI hereunder, including,
without limitation, by increasing the consideration that CEI is obligated to
deliver at Closing pursuant to this Agreement.
6.8. Limitations on Trading During Certain Days. Each of CEI and ML & Co.
------------------------------------------
hereby agrees that it will not, and it will cause each of its Majority-Owned
Subsidiaries not to, buy or sell shares of Cox Common Stock for their own
account during the 20 Trading Days immediately prior to the second Trading Day
preceding the Maturity Date or any Redemption Date of the STRYPES (or, in the
case of a Tax Event (as defined in the Supplemental Indenture) that occurs less
than 20 Trading Days prior to a Redemption Date, during the period from and
after the occurrence of such Tax Event). For purposes hereof, "Majority-Owned
Subsidiaries" with respect to either party means a subsidiary more than 50% of
whose outstanding securities
12
<PAGE>
representing the right to vote for the election of directors is owned by such
party and/or one or more of such party's other Majority-Owned Subsidiaries.
6.9. Payment and Discharge of STRYPES. MLCS agrees that it shall pay and
--------------------------------
discharge its obligations under the Subsidiary STRYPES by delivering to ML & Co.
on the Maturity Date the form of consideration that it receives from CEI
hereunder. ML & Co. agrees that it shall pay and discharge its obligations
under the STRYPES by delivering to the holders of the STRYPES on the Maturity
Date the form of consideration that it receives from MLCS under the Subsidiary
STRYPES.
6.10. Redemption. In the event that CEI exercises its option granted
----------
pursuant to Section 3.1 hereof, MLCS agrees that it shall effect the redemption
of the Subsidiary STRYPES and ML & Co. agrees that it shall effect the
redemption of the STRYPES.
6.11. Further Assurances. From time to time on and after the date hereof
------------------
through the date of Closing, each of the parties hereto shall use its best
efforts to take, or cause to be taken, all action and to do, or cause to be
done, all things necessary, proper and advisable to consummate and make
effective as promptly as practicable the transactions contemplated by this
Agreement in accordance with the terms and conditions hereof, including (i)
using best efforts to remove any legal impediment to the consummation of such
transactions and (ii) the execution and delivery of all such deeds, agreements,
assignments and further instruments of transfer and conveyance necessary, proper
or advisable to consummate and make effective the transactions contemplated by
this Agreement in accordance with the terms and conditions hereof.
7.
Conditions to Closing
---------------------
7.1. CEI's Conditions to Each Closing. CEI's obligation to consummate the
--------------------------------
transactions contemplated hereunder is conditioned upon (i) the purchase and
sale of the Initial STRYPES pursuant to the Underwriting Agreement having been
consummated as contemplated therein, (ii) CEI having received, at or prior to
the date of such Closing, notice from MLCS specifying the number of shares of
Cox Common Stock and any Distributed Assets, or such cash, securities or other
property as may have been received in a Reorganization Event, that would be
required by MLCS to pay and discharge all of the Subsidiary STRYPES on the
Maturity Date or to redeem all of the Subsidiary STRYPES on the Redemption Date,
as applicable, without taking into account any default with respect to the
Subsidiary STRYPES or any acceleration of the maturity of the Subsidiary STRYPES
resulting therefrom, (iii) the representations and warranties of MLCS contained
in Article 5 hereof being true and correct as of the date of such Closing, and
(iv) the performance by MLCS and ML & Co. of their respective covenants and
other obligations hereunder.
13
<PAGE>
7.2. MLCS's Conditions to each Closing. MLCS's obligation to consummate
---------------------------------
the transactions contemplated hereunder is conditioned upon (i) the purchase and
sale of the Initial STRYPES pursuant to the Underwriting Agreement having been
consummated as contemplated therein, (ii) the representations and warranties of
CEI contained in Article 4 hereof being true and correct as of the date of such
Closing, and (iii) the performance by CEI of its covenants and other obligations
hereunder.
8.
Acceleration of Delivery
------------------------
8.1. Events of Default; Acceleration of Delivery. If one or more of the
-------------------------------------------
following events (each an "Event of Default") shall occur:
(i) CEI shall fail to make any Periodic Payment when due, and such
failure shall continue for a period of three (3) days;
(ii) CEI shall commence a voluntary case or other proceeding seeking a
liquidation, reorganization or other relief with respect to itself or its
debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary
case or other proceeding commenced against it, or shall take any corporate
action to authorize any of the foregoing;
(iii) an involuntary case or other proceeding shall be commenced
against CEI seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or
any substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of 60 days;
or an order for relief shall be entered against CEI, under the federal
bankruptcy laws as now or hereafter in effect; or
(iv) a Collateral Event of Default within the meaning of the
Collateral Agreement;
then, (A) the Periodic Payment Shares and the Maximum Contract Shares (together,
the "Aggregate Acceleration Value") shall become immediately deliverable and
payable by CEI to MLCS in accordance with the Escrow Agreement and the
Collateral Agreement and (B) CEI's rights under Sections 2.5 and 3.1 hereof
shall terminate immediately.
14
<PAGE>
9.
Miscellaneous
-------------
9.1. Adjustments of Payment Rate Formula; Selection of Independent
-------------------------------------------------------------
Investment Banking Firm. MLCS shall provide CEI reasonable opportunity to
- -----------------------
review the calculations pertaining to any adjustment of the Payment Rate Formula
made pursuant to Section 303 of the Supplemental Indenture. If, pursuant to the
terms and conditions of the Supplemental Indenture and the Subsidiary STRYPES,
MLCS shall be required to retain a nationally recognized independent investment
banking firm for any purpose provided in the Supplemental Indenture or the
Subsidiary STRYPES, such nationally recognized independent investment banking
firm shall be selected and retained by MLCS only after consultation with CEI and
shall be reasonably acceptable to CEI.
9.2. Notices. All notices and other communications hereunder shall be in
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writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to MLCS shall be directed to it
at North Tower, World Financial Center, New York, New York 10281-1322,
attention of _______________, with a copy to the Treasurer of ML & Co. at World
Financial Center, South Tower, New York, New York, 10080-6105; notices to CEI
shall be directed to it at 1400 Lake Hearn Drive, Atlanta, Georgia 30319,
attention of Treasurer.
9.3. Governing Law; Consent to Jurisdiction. This Agreement shall be
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governed by and construed in accordance with the laws of the State of New York
applicable to agreements made and to be performed wholly within such State. For
the purpose of any suit, action or proceeding arising out of or relating to this
Agreement, the parties hereto hereby expressly and irrevocably consent and
submit to the non-exclusive jurisdiction of any competent court in the place of
its domicile and any United States Federal court sitting in the Borough of
Manhattan, City and State of New York, and expressly and irrevocably waive, to
the extent permitted under applicable law, any immunity from the jurisdiction
thereof and any claim or defense in such suit, action or proceeding based on a
claim of improper venue, forum non conveniens or any similar basis to which it
might otherwise be entitled.
9.4. Entire Agreement. Except as expressly set forth herein, this
----------------
Agreement constitutes the entire agreement among the parties with respect to the
subject matter hereof and supersedes all prior agreements, understandings and
negotiations, both written and oral, among the parties with respect to the
subject matter of this Agreement.
9.5. Amendments; Waivers. Any provision of this Agreement may be amended
-------------------
or waived if, and only if, such amendment or waiver is in writing and signed, in
the case of an amendment, by MLCS, ML & Co. and CEI or, in the case of a waiver,
by the party against whom the waiver is to be effective. No failure or delay by
any party in exercising any right, power or privilege hereunder shall operate as
a waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right,
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power or privilege. The rights and remedies herein provided shall be cumulative
and not exclusive of any rights or remedies provided by law.
9.6. Successors, Assigns. The provisions of this Agreement shall be
-------------------
binding upon and accrue to the benefit of the parties hereto and their
respective heirs, successors and permitted assigns. Notwithstanding the
foregoing, neither this Agreement nor any right, remedy, obligation or liability
arising hereunder or by reason hereof shall be assignable by any party hereto
without the prior written consent of the other parties hereto.
9.7. No Third Party Rights. This Agreement is not intended and shall not
---------------------
be construed to create any rights in any person other than CEI, MLCS and ML &
Co. and no person shall assert any rights as third party beneficiary hereunder.
9.8. Counterparts. This Agreement may be signed in any number of
------------
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
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IN WITNESS WHEREOF, the parties have signed this Agreement as of the date
and year first above written.
MERRILL LYNCH CAPITAL SERVICES, INC. COX ENTERPRISES, INC.
By___________________________________ By______________________________
Name: Name:
Title: Title:
MERRILL LYNCH & CO., INC.
By___________________________________
Name:
Title:
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