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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM T-3
FOR APPLICATIONS FOR QUALIFICATION OF INDENTURES UNDER THE
TRUST INDENTURE ACT OF 1939
Scott Cable Communications, Inc.
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(Name of applicant)
Four Landmark Square, Suite 302, Stamford CT 06901
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(Address of principal executive offices)
SECURITIES TO BE ISSUED UNDER THE INDENTURE TO BE QUALIFIED
Title of Class Amount
-------------- ------
16% Junior Subordinated Pay-in-Kind $38,925,797
Notes due July 18, 2002
Approximate date of proposed public offering: Not Applicable
Name and address of agent for service:
Bruce A. Armstrong
President and Chief Executive Officer
Scott Cable Communications, Inc.
Four Landmark Square, Suite 302
Stamford, CT 06901
(203) 323-1100
with copies to:
Stanley E. Bloch, Esq.
Baer Marks & Upham LLP
805 Third Avenue
New York, NY 10022
(212) 702-5700
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1. General Information.
Scott Cable Communications, Inc. ("Scott" or the "Company") is a
corporation incorporated under the laws of the State of Texas.
2. Securities Act Exemption Applicable.
In February 1996, the Company and other corporations who held the then
issued and outstanding capital stock of the Company (the "Holding Companies,"
and together with Scott, the "Debtors") filed a voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (the "Bankruptcy Code"). On December 6,
1996, the United States Bankruptcy Court for the District of Delaware approved
the Debtors' Second Amended Joint Plan of Reorganization dated October 31, 1996,
as modified (the "Plan of Reorganization"). Pursuant to the Plan of
Reorganization, (a) each holder of an allowed Class 6 Claim (as defined therein)
is entitled to receive (i) its pro rata share of a cash payment of $6,087,153
(representing accrued interest of $5,087,153, a $500,000 payment to reduce the
principal amount of its claim and a restructuring fee of $500,000), (ii) a
negotiable certificate representing each holder's pro rata share of an undivided
interest in the Company's 15% Senior Subordinated Pay-in-Kind Notes due March
18, 2002 in the initial aggregate principal amount of $49,500,000 (the "Second
Secured PIK Notes") and 75,000 shares of the Company's Class C Common Stock, par
value $.10 per share (the "Class C Stock"), and (iii) a negotiable certificate
representing each holder's pro rata share of an undivided interest in 15% of the
Company's 16% Junior Subordinated Pay-in-Kind Notes due July 18, 2002 in the
initial aggregate principal amount of $38,925,797 (the "Third Secured PIK
Notes") and (b) each holder of an allowed Class 7 Claim (as defined therein) was
entitled to receive (i) a negotiable certificate representing each holder's pro
rata share of an undivided interest in 85% of the Third Secured PIK Notes and
(ii) its pro rata share of 24,000 shares of the Company's Class B Common Stock,
par value $.10 per share (the "Class B Stock"). Section 1145 of the Bankruptcy
Code exempts from the registration requirements of the Securities Act of 1933,
as amended, the issuance by the Company of, among other things, the Third
Secured PIK Notes pursuant to the Plan of Reorganization.
3. Affiliates.
The following table sets forth, as of January 20, 1997, those persons who
may be deemed "affiliates" of the Company and the respective voting securities
owned by each or such other bases of control:
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Voting Securities
or Other
Name Bases of Control
---- ----------------
Scott Cable Management Company, Inc.(1) Manager of the Company's operations
pursuant to the Management Agreement
Mr. Bruce A. Armstrong(2) Control of Manager
Media/Communications Partners Limited 15,466 shares of Class B Common Stock
Partnership et al.(3)
Allstate Insurance Company(4) 7,999 shares of Class B Common Stock
- ----------
(1) The Company and Scott Cable Management Company, Inc. (the "Manager") have
entered into a management agreement, dated December 18, 1996, pursuant to
which the Manager acts as the manager, supervisor and operator of the
Company's cable television systems and directs all actions with respect to
operations and management other than extraordinary decisions. The Manager
is the registered owner of 1,000 shares of the Company's Class A Common
Stock, par value $.10 per share (the "Class A Stock").
(2) Mr. Bruce A. Armstrong, the Company's President and Chief Executive
Officer, is the sole stockholder of the Manager and may be deemed to
beneficially own the shares of Class A Stock held by the Manager. See
"Directors and Executive Officers -- Manager" and "Principal Owners of
Voting Securities."
(3) Media/Communications Partners Limited Partnership, Chestnut Street Partners,
Inc., Milk Street Partners, Inc. and TA Investors hold 13,920, 665, 240 and
641 shares, respectively, of the Class B Common Stock or 15,466 shares in
the aggregate (representing an aggregate of approximately 47.6% of the
combined voting power of the Company's Common Stock). Such entities are
under common control. Richard H. Churchhill, Jr., a director of the Company,
is an officer of, or equity holder in, each of Media/Communications
Partners Limited Partnership, Chestnut Street Partners, Inc., Milk Street
Partners, Inc. and TA Investors and may be deemed to beneficially own the
shares of Common Stock held by these entities in proportion to his
percentage of equity ownership in such entities.
(4) Such shares represent approximately 24.6% of the combined voting power of
the Company's Common Stock.
4. Directors and Executive Officers.
Manager. The Company and Scott Cable Management Company, Inc., the
Manager, entered into a management agreement, dated December 18, 1996 (the
"Management Agreement"), pursuant to which the Manager acts as the manager,
supervisor and operator of the Company's cable television systems and directs
all actions concerning the operation and management of the systems other than
extraordinary decisions. The Management Agreement terminates on December 31,
1999, unless earlier terminated in accordance with its terms. Bruce A.
Armstrong, a member of the Company's Board of Directors and its President and
Chief Executive Officer, is the sole stockholder of the Manager. All of the
Company's executive officers, other than Mr. J. Paul Morbeck, are employees of
an affiliate of the Manager.
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Directors and Executive Officers. The following table sets forth certain
information concerning the directors and executive officers of the Company:
Name Age Positions with the Company
---- --- --------------------------
Bruce A. Armstrong(1)(5)...... 49 President, Chief Executive Officer and
Director
John M. Flanagan, Jr.(1)(5)... 53 Senior Vice President, Chief Financial
Officer and Director
Day L. Patterson(1)(5)........ 53 Senior Vice President, General Counsel
and Secretary
Steven C. Fox(1)(5)........... 46 Vice President, Treasurer and Assistant
Secretary
Jerold S. Earl(1)(5).......... 48 Vice President -- Engineering
J. Paul Morbeck(1)............ 45 Vice President
Richard H. Churchill, Jr.(2).. 44 Director
William Derrough(3)........... 32 Director
Jarlath Johnston(4)........... 48 Director
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(1) The mailing address of Messrs. Armstrong, Flanagan, Patterson, Fox, Earl
and Morbeck is Scott Cable Communications, Inc., Four Landmark Square,
Suite 302, Stamford CT 06901.
(2) The mailing address of Mr. Churchill is c/o Media/Communications Partners
Limited Partnership, 75 State Street, Boston, Massachusetts 02109.
(3) The mailing address of Mr. Derrough is 11111 Santa Monica Boulevard, Suite
210, Los Angeles, CA 90025.
(4) The mailing address of Mr. Johnston is 301 East 79th Street, New York, New
York 10021.
(5) Messrs. Armstrong, Flanagan, Patterson, Fox and Earl are employees of an
affiliate of the Manager.
Composition of the Board of Directors. The Company's Amended and Restated
Articles of Incorporation (the "Articles") provide that the Board of Directors
will consist of five members as of the effective date of the Plan of
Reorganization, two who are considered to be Class A Common Stock directors, two
who are considered to be Class C Common Stock directors (until such stock is
converted into Class A Common Stock, at which time there will be four Class A
Common Stock directors) and one who is considered to be a Class B Common Stock
director. Directors are elected annually. See "Capitalization."
As of January 22, 1997, Messrs. Armstrong and Flanagan serve as Class A
Common Stock directors, Mr. Churchhill serves as the Class B Common Stock
director and Messrs. Derrough and Johnston serve as Class C Common Stock
Directors.
Special Provisions Regarding Board Action. Except as otherwise provided in
the Articles or below, an act of a majority of the members of the Board of
Directors present at any meeting at which a quorum is present constitutes Board
authorization. Notwithstanding the foregoing, the Articles provide that a vote
of four of the Company's five directors is required for Board authorization
regarding the following Company actions: incurrence of significant additional
debt; extraordinary capital expenditures; the declaration of any dividend; the
commencement of a voluntary case under the Bankruptcy Code or any similar
bankruptcy or insolvency proceeding; or the consent of an involuntary petition
for relief. In
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addition, the Class C Common Stock directors have the sole responsibility to
make decisions on behalf of the Board of Directors with respect to the early
termination of the Management Agreement as a result of the breach thereof, the
selection of a new manager upon such termination, and whether the Management
Agreement will be renewed at the end of its term.
5. Principal Owners of Voting Securities.
The Company has three classes of common stock issued and outstanding. The
following table sets forth certain information, as of January 20, 1997,
regarding each person known by the Company to own of record whether,
beneficially or otherwise, ten percent or more of each class of the Company's
outstanding voting securities and the total voting power with respect thereto.*
<TABLE>
<CAPTION>
Class A Class B Class C
Common Stock(1) Common Stock(2) Common Stock (3) Percent of
------------------- ------------------ -------------------
Name and Number Percent Number Percent Number Percent Total
Mailing Address of Shares of Class of Shares of Class of Shares of Class Voting Securities
--------------- --------- -------- --------- -------- --------- -------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Fleet National Bank, as
depositary(4)....... -- -- -- -- 75,000 100% 23.1%
Media/Communications Partners --
Limited Partnership et al(5) -- 15,466 64.4% -- -- 47.6
Allstate Insurance Company(6) -- -- 7,999 33.3 -- -- 24.6
Scott Cable Management
Company, Inc.(7).... 1,000 100% -- -- -- -- 3.1
Bruce A. Armstrong(8).. -- -- -- -- -- -- --
Richard H. Churchill, Jr. (9) -- -- -- -- -- -- --
</TABLE>
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* Pursuant to a pledge agreement dated as of December 18, 1996 (the "Pledge
Agreement") by and among all of the record holders of the Company's issued
and outstanding shares of Common Stock and Finova Capital Corporation
("Finova"), individually and as agent for the lenders (the "Lenders") under
the loan agreement dated as of December 18, 1996 between the Company and the
Lenders (the "Loan Agreement"), all of such shares have been pledged to the
Lenders as collateral for the Company's obligations under the Loan
Agreement.
(1) Each share of the Company's Class A Common Stock generally has ten votes per
share. The holders of Class A Common Stock, voting as a separate class, are
entitled to elect two of the Company's five directors, except as otherwise
described herein. No share of Class A Common Stock may be transferred until
all of the shares of Class C Common Stock have been converted into shares of
Class A Common Stock pursuant to the Articles, except as otherwise provided
in the Management Agreement. See "Directors and Executive Officers --
Manager" and "Capitalization -- Class A Common Stock."
(2) Each share of the Company's Class B Common Stock generally has ten votes
per share. The holders of Class B Common Stock, voting as a separate
class, are entitled to elect one of the Company's five directors. See
"Capitalization -- Class B Common Stock."
(3) Each share of the Company's Class C Common Stock generally has one vote
per share. The holders of Class C Common Stock, voting as a separate
class, are entitled to elect two of the Company's five directors. Each
share of Class C Common Stock will automatically convert into one share of
Class A Common Stock upon the earlier of December 31, 1999 or a
"transaction event" (as defined under the caption "Capitalization" below).
The beneficial ownership of the Class C Common Stock is transferable only
with the proportional share of the Second Secured PIK Notes issued to the
holders under the Plan of Reorganization. See "Capitalization -- Class C
Common Stock."
(4) Pursuant to the terms of the deposit agreement, dated as of December 18,
1996 (the "Deposit Agreement"), by and among the Company, Fleet National
Bank, as depositary (the "Depositary"), and Fleet National Bank, as
trustee for holders (the "Holders") of the Second Secured PIK Notes, the
Depositary is the record holder of the 75,000 shares of Class C Stock on
behalf of the Holders, and not as principal, and, accordingly, it has no
obligation to vote such shares other than pursuant to the written
instructions of the Holders in accordance with such agreement. The
Depositary disclaims beneficial ownership of the 75,000 shares of Class C
Stock held by it pursuant to the Deposit Agreement. The mailing address of
Fleet National Bank is Corporate Trust Department, One Federal Street,
Boston, Massachusetts 02110.
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(5) Media/Communications Partners Limited Partnership, Chestnut Street
Partners, Inc., Milk Street Partners, Inc. and TA Investors hold 13,920,
665, 240 and 641 shares, respectively, of the Class B Common Stock or
15,466 shares in the aggregate (representing an aggregate of approximately
47.6% of the combined voting power of the Company's Common Stock). Such
entities are under common control. The mailing address of all of such
entities is c/o Media/Communications Partners Limited Partnership, 75
State Street, Boston, Massachusetts 02109.
(6) The mailing address of Allstate Insurance Company is 3075 Sanders Road,
Building G5D, Northbrook, Illinois 60062.
(7) The Company and Scott Cable Management Company, Inc. have entered into a
management agreement, dated December 18, 1996, pursuant to which the
Manager acts as the manager, supervisor and operator of the Company's
cable television systems and directs all actions with respect to
operations and management other than extraordinary decisions. The Manager
is the registered owner of 1,000 shares of the Company's Class A Stock.
(8) Mr. Bruce A. Armstrong, the Company's President and Chief Executive
Officer, is the sole stockholder of the Manager and may be deemed to
beneficially own the shares of Class A Stock held by the Manager. See
"Directors and Executive Officers -- Manager" and "Principal Owners of
Voting Securities."
(9) Mr. Churchill, a director of the Company, is an officer of, or equity holder
in, each of Media/Communications Partners Limited Partnership, Chestnut
Street Partners, Inc., Milk Street Partners, Inc. and TA Investors and may
be deemed to beneficially own shares of Common Stock held by such entities
in proportion to his percentage of equity ownership in such entities.
6. Underwriters.
No person within the three-year period prior to the date hereof has acted
as an "underwriter" (as such term is defined under the Trust Indenture Act of
1939, as amended) of any of the Company's currently issued and outstanding
securities.
7. Capitalization.
The following table sets forth certain information regarding each
authorized class of equity securities of the Company as of January 20, 1997.
Title of Class Amount Authorized Amount Outstanding
-------------- ----------------- ------------------
Class A Common Stock 76,000 shares 1,000 shares
Class B Common Stock 24,000 shares 24,000 shares
Class C Common Stock 75,000 shares 75,000 shares
General. Pursuant to the Articles, the Company has the authority to issue
175,000 shares of common stock, $0.10 par value per share (the "Common Stock"),
of which 76,000 shares are designated as Class A Common Stock ("Class A Stock"),
24,000 shares are designated as Class B Common Stock ("Class B Stock") and
75,000 shares are designated as Class C Common Stock ("Class C Stock"). All of
the classes of the Company's Common Stock have the same preferences, limitations
and relative rights other than with respect to voting rights and provisions
regarding conversion and transferability. The Articles prohibit the Company from
issuing non-voting equity securities.
Class A Common Stock. Each share of Class A Stock has ten votes per share,
except that with respect to the election of directors the holders of Class A
Stock, voting as a separate class, are entitled to elect two of the Company's
five directors and upon certain circumstances four of the five directors. The
Class A Stock may not be transferred until the Class C Stock has automatically
converted into Class A Stock in accordance with its terms, except as otherwise
provided in the Management Agreement. See "Directors and Executive Officers --
Manager."
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Class B Common Stock. Each share of Class B Stock has ten votes per share,
except that with respect to the election of directors the holders of Class B
Stock, voting as a separate class, are entitled to elect one of the Company's
five directors.
Class C Common Stock. Each share of Class C Stock has one vote per share,
except that with respect to the election of directors the holders of Class C
Stock, voting as a separate class, are entitled to elect two of the Company's
five directors. Each share of the Class C Stock will automatically convert into
one share of Class A Stock upon the earlier of December 31, 1999 or a
"transaction event". A "transaction event" generally includes any merger,
consolidation, liquidation or dissolution of the Company, the sale of all of the
Company's systems and any similar transactions, including the reclassification
of the Company's capital stock or the distribution of assets to its
shareholders. Upon the conversion of the Class C Stock into Class A Stock, the
holders of the Class A Stock (including the holders of shares of converted Class
C Stock), voting as a separate class, will be entitled to elect four out of five
of the Company's directors. The beneficial ownership of the Class C Stock may be
transferred only with the proportional share of the Second Secured PIK Notes
issued to the Holders pursuant to the Plan of Reorganization.
Any amendment to the Articles concerning approval by the Board of
Directors of certain determinations concerning the Management Agreement must be
approved by the affirmative vote of a majority of the shares of the holders of
the Class C Stock, voting as a separate class.
8. Analysis of Indenture Provisions.
The terms of the indenture securities include those stated in the
indenture, dated as of December 18, 1996, between the Company and Fleet National
Bank, as Trustee, with respect to the Third Secured PIK Notes (the "Indenture")
and those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (the "TIA"). The following analysis of certain provisions of
the Indenture makes use of certain capitalized terms defined in the Indenture
and not herein and such terms shall have the meanings given to them in the
Indenture and shall be incorporated by reference herein. The following analysis
does not purport to be a complete description of the Indenture provisions
discussed and is qualified in its entirety by reference to the Indenture, which
provisions are incorporated by reference as part of such analysis. (Section
references are to the relevant provisions of the Indenture.)
A. Default Provisions.
An "Event of Default" occurs under the Indenture if: (1) the Company
defaults in the payment of interest on the Securities when the same becomes due
and payable and the default continues for a period of 30 days; or (2) the
Company defaults in the payment of principal on the Securities when the same
becomes due and payable at maturity, upon acceleration, redemption or otherwise;
or (3) the Company fails to observe or perform any covenant or agreement (other
than those referred to in subparagraph (1) or (2) above or
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specifically addressed elsewhere herein) made by it in the Indenture and such
failure continues for a period of 30 days after written notice of such failure
is given by the Trustee; or (4) any representation or warranty made by or on
behalf of the Company in or pursuant to any of the Indenture Instruments or in
any instrument or document furnished in compliance with the Indenture
Instruments proves to be false or misleading in any material respect on the date
as of which it is made; or (5) (i) the Company defaults (as principal or
guarantor or other surety) in the payment of any principal of or premium or
interest on any Indebtedness for Borrowed Money of the Company beyond the grace
period, if any, applicable thereto and the aggregate amount of such payments
then in default beyond such grace period exceeds $100,000 or (ii) any default
occurs in respect of any issue of Indebtedness for Borrowed Money of the Company
outstanding in a principal amount of at least $300,000, or in respect of any
agreement or instrument relating to any such issue of Indebtedness for Borrowed
Money, and such default continues beyond the grace period, if any, applicable
thereto, and in each case, such default continues uncured or unwaived for a
period of 60 days after written notice thereof is given by the Trustee or, if as
a result of such default the related Indebtedness has been accelerated; or (6)
(A) the Company is (i) generally not paying its debts as they become due, (ii)
files, or consents, by answer or otherwise, to the filing against it of, a
petition for relief or reorganization or arrangement or any other petition in
bankruptcy or insolvency under the laws of any jurisdiction, (iii) makes an
assignment for the benefit of creditors, (iv) consents to the appointment of a
custodian, receiver, trustee or other officer with similar powers for the
Company, or for any substantial part of the Property of the Company or (v)
adjudicated insolvent; (B) any Governmental Body of competent jurisdiction
enters an order appointing, without consent of the Company, a custodian,
receiver, trustee or other officer with similar powers with respect to the
Company, or with respect to any substantial part of the Property belonging to
the Company, or if an order for relief is entered in any case or proceeding for
liquidation or reorganization or otherwise to take advantage of any bankruptcy
or insolvency law of any jurisdiction, or ordering the dissolution, winding-up
or liquidation of the Company or if any petition for any such relief is filed
against the Company and such petition is not dismissed or stayed within 60 days;
or (7) there exists a final judgment or award against the Company which has been
outstanding for a period of 30 days or more from the date of entry and has not
been discharged in full or stayed pending appeal, if the aggregate amount of all
such judgments and awards exceeds $300,000; or (8) the Company fails to comply
with the terms of its articles of incorporation or bylaws; or (9) any material
portion of the Collateral is seized or taken by a Governmental Body or Person
(including, but not limited to, the Senior Creditors pursuant to the terms of
the Loan Agreement), or the Company fails to maintain or cause to be maintained
the Security Interests and priority of the Indenture Instruments as against any
Person, or the title and rights of the Company to any material portion of the
Collateral has become the subject matter of litigation which could reasonably be
expected to result in impairment or loss of the security provided by the
Indenture Instruments. (Section 5.1)
Subject to the terms of the Subordination Agreement (Senior) and the
Subordination Agreement (Junior) if an Event of Default (other than an Event of
Default specified in (6) above) occurs and is continuing, the Trustee may, by
notice to the Company or the Holders
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of at least 25% in aggregate principal amount of the Securities then outstanding
may, by written notice to the Company and the Trustee, and the Trustee will,
upon the request of such Holders, declare the aggregate principal amount of the
Securities outstanding, together with accrued but unpaid interest thereon to the
date of payment, to be due and payable and, upon any such declaration, the same
will become and be due and payable. If an Event of Default specified in (6)
above occurs, all unpaid principal and accrued interest on the Securities then
outstanding will ipso facto become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Holder. Upon
payment of such principal amount, interest, and premium, if any, all of the
Company's obligations under the Securities and the Indenture, other than
obligations relating to the compensation and indemnification of the Trustee,
will terminate. The Holders of a majority in aggregate principal amount of the
Securities then outstanding by notice to the Trustee may rescind an acceleration
and its consequences if (i) all existing Events of Default, other than the
non-payment of the principal and interest on the Securities which have become
due solely by such declaration of acceleration, have been cured or waived as
provided in the Indenture, (ii) to the extent the payment of such interest is
lawful, interest on overdue installments of interest and overdue principal,
which has become due otherwise than by such declaration of acceleration, has
been paid, and (iii) the rescission would not conflict with any judgment or
decree of a court of competent jurisdiction. (Section 5.2)
B. Authentication and Delivery of Securities.
A Security will not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Security. The signature
will be conclusive evidence that the Security has been authenticated under the
Indenture.
The Trustee will authenticate the Securities, excluding Secondary
Securities, for original issue in the aggregate principal amount of up to
$38,925,797 upon a written order of the Company in the form of an Officers'
Certificate. The Officers' Certificate will specify the amount of the Securities
to be authenticated and the date on which the Securities will be authenticated.
The aggregate principal amount of Securities outstanding at any time may not
exceed $38,925,797, except for any Securities that may be issued pursuant to the
immediately following paragraph and except as otherwise provided in the
Indenture. Upon the written order of the Company in the form of an Officers'
Certificate, the Trustee will authenticate the Securities in substitution of the
Securities originally issued to reflect any name change of the Company.
The Company will, on each Interest Payment Date prior to (and including)
the Interest Payment Date five years and six months after the issue date, pay
interest in additional Securities in lieu of the payment in whole of interest in
cash on the Securities as provided in paragraph 1 of the Securities. The Company
will give written notice to the Trustee of the amount of interest to be paid in
Secondary Securities not less than five business days prior to the relevant
Interest Payment Date, and the Trustee or an authenticating agent (upon written
order of the Company signed by an officer of the Company given not less than
five nor more than 45
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days prior to such Interest Payment Date) will authenticate for original issue
(pro rata to each Holder of any Securities of such record date) Secondary
Securities in an aggregate principal amount equal to the amount of cash interest
not paid on such Interest Payment Date, rounded to the nearest dollar. Except as
set forth in the following paragraph, each issuance of Secondary Securities in
lieu of the payment of interest in cash on the Securities will be made pro rata
with respect to the outstanding Securities, and the Company will have the right
to aggregate amounts of interest payable in the form of Secondary Securities to
a Holder of outstanding Securities and issue to such Holder a single Secondary
Security in payment thereof. Any Secondary Securities may be denominated a
separate series if the Company deems it necessary to do so in order to comply
with any law or other applicable regulation or requirement, with appropriate
distinguishing designations. Notwithstanding the foregoing and subject to the
Subordination Agreement (Senior) and the Subordination Agreement (Junior), the
Company will have the option to pay interest in cash (upon written order of the
Company signed by an Officer of the Company given not less than five or more
than 45 days prior to an Interest Payment Date). (Section 2.2)
Securities outstanding at any time are all of the Securities authenticated
by the Trustee, including the Secondary Securities, except as otherwise provided
in the Indenture.
(Section 2.8)
C. Release of Collateral.
The Trustee will not at any time release Collateral from the Liens created
by the Indenture and the Security Instruments unless such release is (i) in
accordance with the provisions of the Indenture and the Security Instruments and
the terms of the Subordination Agreement (Senior) and the Subordination
Agreement (Junior) or (ii) of Collateral (x) which is the subject of a Permitted
Asset Sale or a sale otherwise permitted by the terms of the Loan Agreement or
(y) upon which the Agent has released its Permitted Senior Indebtedness Liens.
Pursuant to the terms of the Subordination Agreement (Junior), any Collateral
subject to subordinated liens will be deemed to be released if such Collateral
is sold by the Company with the consent of the trustee of the indenture relative
to the Second Secured PIK Notes, provided the net proceeds of the sale are first
applied to the payment of the Senior Indebtedness (as defined in the
Subordination Agreement).
The release of any Collateral from the Lien of the Security Instruments
will not be deemed to impair the security under the Indenture in contravention
of the provisions thereof if and to the extent the Collateral is released
pursuant to the Indenture and the Security Instruments. To the extent
applicable, the Company will cause TIA ss. 314(d) relating to the release of
property from the Lien of the Security Instruments and relating to the
substitution therefor of any property to be subjected to the Lien of the
Security Instruments to be complied with. Any certificate or opinion required by
TIA ss. 314(d) may be made by an officer of the Company, except in cases where
TIA ss. 314(d) requires that such certificate or opinion be made by an
independent person, which person will be an independent engineer, appraiser or
other expert selected or approved by the Trustee in the exercise of reasonable
care. (Section 8.3)
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The Company will be entitled to obtain a full release of all of the
Collateral from the Liens of the Indenture and of the Security Instruments upon
compliance with the conditions precedent for satisfaction and discharge of the
Indenture. Upon delivery by the Company to the Trustee of an Officers'
Certificate and an Opinion of Counsel, each to the effect that such conditions
precedent have been complied with, and that such documentation, if any, as may
be required by the TIA (including, without limitation, ss. 314(d) of the TIA)
prior to the release of such Collateral has been provided to the Trustee, the
Trustee will take all necessary action (at the request of and the expense of the
Company) to release and reconvey to the Company without recourse all of the
Collateral, and will deliver such Collateral in its possession to the Company
including, without limitation, the execution and delivery of releases and
satisfactions wherever required. (Section 8.4(a))
The Company will be entitled to obtain a release of, and the Trustee will
release, items of Collateral (the "Released Interests") subject to a Permitted
Asset Sale upon compliance with the following conditions precedent (which the
Company is required to deliver to the Trustee):
(1) A written request by the Company requesting release of Released
Interests, such request (A) specifically describing the proposed Released
Interests, (B) stating that the consideration to be received is at least
equal to the Fair Market Value of the Released Interests on the date the
agreement of sale was entered into ("Valuation Date"), (C) stating that
either (i) the release of such Released Interests will not materially
impair the value of the remaining Collateral or materially interfere with
or impede the Trustee's ability to realize the value of the remaining
Collateral and will not materially impair the maintenance and operation of
the remaining Collateral or (ii) the sale has been approved by 100% of the
Company's Board of Directors, (D) confirming the sale of, or an agreement
to sell, such Released Interests in a bona fide sale to a person that is
not an Affiliate of the Company, or in the event that such sale is to a
person that is such an Affiliate, that such sale has been approved by 100%
of the Company's Board of Directors, (E) certifying that such Permitted
Asset Sale complies with the terms and conditions of the Indenture and (F)
in the event there is to be a substitution of property for the Collateral
subject to the Permitted Asset Sale, specifying the property intended to
be substituted for the Collateral to be disposed of; and
(2) An Officers' Certificate of the Company certifying that (A) such
sale covers only the Released Interests, (B) all proceeds from the sale of
any of the Released Interests will be deposited and all Net Sale Proceeds
from the sale of any of the Released Interests will be applied pursuant to
the terms of the Indenture, and (C) all conditions precedent to such
release have been complied with; and
(3) All documentation required by the TIA (including, without
limitation, ss. 314(d) of the TIA), if any, prior to the release of
Collateral by the Trustee, and, in the event there is to be a substitution
of property for the Collateral subject to the
11
<PAGE>
Permitted Asset Sale, all documentation required by the TIA to effect the
substitution of such new Collateral and to subject such new Collateral to
the Lien of the relevant Security Instruments and all documents required
thereunder; and
(4) An Opinion of Counsel stating that the documents that have been
or will be delivered to the Trustee in connection with such release
conform to the requirements of the Indenture and that all conditions
precedent provided for relating to such release have been complied with.
Upon compliance by the Company with the conditions precedent set forth
above, the Trustee will cause to be released and reconveyed to the Company the
Released Interest without recourse by executing a release in the form provided
by the Company. (Section 8.4(b))
The Company will be entitled to obtain a release of, and the Trustee will
release, items of Collateral taken by eminent domain or expropriation or sold
pursuant to the exercise by the United States of America or any state,
municipality, province or other governmental authority thereof of any right
which it may then have to purchase, or to designate a purchaser or to order a
sale of, all or any part of the Collateral, upon compliance with the following
conditions precedent (which the Company is required to deliver to the Trustee):
(i) An Officers' Certificate of the Company certifying that (A) such
Collateral has been taken by eminent domain or expropriation and the
amount of the award therefor, or that such property has been sold pursuant
to a right vested in the United States of America, or a state,
municipality, province or other governmental authority thereof to
purchase, or to designate a purchaser, or order a sale of such Collateral
and the amount of the proceeds of such sale, and (B) all conditions
precedent to such release have been complied with; and
(ii) An Opinion of Counsel to the effect that (A) such property has
been lawfully taken by exercise of the right of eminent domain, or has
been sold pursuant to the exercise of a right vested in the United States
of America or a state, municipality, province or other governmental
authority to purchase, or to designate a purchaser or order a sale of,
such property, (B) in the case of any such taking by eminent domain, the
award for such property has become final or an appeal therefrom is not
advisable in the interests of the Company or the Holders, (C) the
documents that have been or will be delivered to the Trustee in connection
with such release conform to the requirements of the Indenture, and (D)
all conditions precedent relating to such release have been complied with;
and
(iii) Subject to the Subordination Agreement (Senior) and
Subordination Agreement (Junior), cash equal to the amount of the award
for such property or the Net Sale Proceeds are deposited with the Trustee
and held subject to the disposition
12
<PAGE>
thereof pursuant to the Subordination Agreement (Senior) and Subordination
Agreement (Junior); and
(iv) All documentation required by the TIA (including, without
limitation, ss.314(d) of the TIA), if any, prior to the release of
Collateral by the Trustee.
Upon compliance by the Company with the conditions precedent set forth
above, the Trustee will cause to be released and reconveyed to the Company
without recourse the aforementioned items of Collateral by executing a release
in the form provided by the Company. (Section 8.4(c))
D. Satisfaction and Discharge of the Indenture.
The Indenture will be discharged and will cease to be of further effect as
to all outstanding Securities when:
(1) all Securities theretofore authenticated and delivered (except
lost, stolen or destroyed Securities which have been replaced or paid and
Securities for whose payment money has theretofore been deposited in trust and
thereafter repaid to the Company) have been delivered to the Trustee for
cancellation; or
(2)(i) all Securities not theretofore delivered to the Trustee for
cancellation have become due and payable by reason of the making of a notice of
redemption or otherwise and the Company has irrevocably deposited or caused to
be deposited with the Trustee as trust funds in trust for the purpose an amount
sufficient to pay and discharge the entire indebtedness on the Securities not
theretofore delivered to the Trustee for cancellation for principal, premium, if
any, and accrued interest to the date of maturity or redemption; (ii) the
Company has paid all sums payable by it under the Indenture; and (iii) the
Company has delivered irrevocable instructions to the Trustee to apply the
deposited money toward the payment of the Securities at maturity or the
redemption date, as the case may be. (Section 11.1)
The Company will deliver an Officers' Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been complied with. (Section 11.2)
13
<PAGE>
E. Evidence of Compliance.
Upon any request or application by the Company to the Trustee to take any
action under the Indenture, the Company will be required to furnish to the
Trustee: (a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in the Indenture
relating to the proposed action have been complied with; and (b) an Opinion of
Counsel stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in the Indenture, other than the Officers' Certificate
required by Section 8.4 of the Indenture, is required to include: (1) a
statement that the person making such certificate or opinion has read such
covenant or condition; (2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based; (3) a statement that, in the opinion of
such person, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and (4) a statement as to whether or not, in
the opinion of each such person, such condition or covenant has been complied
with; provided, however, that with respect to matters of fact an Opinion of
Counsel may rely on an Officers' Certificate or certificates of public
officials.
(Section 12.5)
See the discussion of release of collateral in Item 8.C above.
9. Other Obligors.
The Company is the only obligor under the Indenture governing the Third
Secured PIK Notes.
14
<PAGE>
Contents of Application for Qualification.
This application for qualification comprises:
A. Pages numbered 1 to 16, consecutively;
B. The statement of eligibility and qualification of each trustee under
the indenture to be qualified; and
C. The following exhibits in addition to those filed as a part of the
statement of eligibility and qualification of each trustee.
Exhibit T3A Restated Articles of Incorporation of the Company, dated
December 12, 1996.
Exhibit T3B. By-laws of the Company, dated December 23, 1987, as amended.
Exhibit T3C. Indenture, dated as of December 18, 1996, between the
Company, as Issuer, and Fleet National Bank, as Trustee,
with respect to the 16% Junior Subordinated Pay-in-Kind
Notes due July 18, 2002.
Exhibit T3D. Not Applicable.
Exhibit T3E. Not Applicable.
Exhibit T3F. Cross reference sheet showing the location in the indenture
of the provisions inserted therein pursuant to Section 310
through 318(a), inclusive, of the Trust Indenture Act of
1939.
15
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, Scott
Cable Communications, Inc., a corporation organized and existing under the laws
of Texas (the "applicant"), has duly caused this application to be signed on its
behalf by the undersigned, thereunto duly authorized, and its seal to be
hereunto affixed and attested, all in the City of Stamford, and State of
Connecticut, on the 27th day of January, 1997.
SCOTT CABLE COMMUNICATIONS, INC.
By:/s/ Bruce A. Armstrong
-----------------------------------
Bruce A. Armstrong
President and Chief Executive Officer
(SEAL)
Attest:
Name: /s/ John M. Flanagan, Jr.
- ----- -------------------------
Title: Senior Vice President and
Chief Financial Officer
16
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM T-1
----------
STATEMENT OF ELIGIBILITY AND QUALIFICATION UNDER THE
TRUST INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
----------
/ / CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(B)(2)
FLEET NATIONAL BANK
---------------------------------------------------------
(Exact name of trustee as specified in its charter)
<TABLE>
<S> <C>
Not applicable 04-317415
- ------------------------------- -----------------------------
(State of incorporation (I.R.S. Employer
if not a national bank) Identification No.)
One Monarch Place, Springfield, MA 01102
- ---------------------------------------- -----------------------------
(Address of principal executive offices) (Zip Code)
</TABLE>
Pat Beaudry, 777 Main Street, Hartford, CT 06115 (203) 728-2065
--------------------------------------------------------------
(Name, address and telephone number of agent for service)
SCOTT CABLE COMMUNICATIONS, INC.
---------------------------------------------------
(Exact name of obligor as specified in its charter)
<TABLE>
<S> <C>
Texas 75-1766202
- ------------------------------- -----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Four Landmark Square, Suite 302, Stamford, CT 06901
- ---------------------------------------- -----------------------------
(Address of principal executive offices) (Zip Code)
</TABLE>
15% Senior Subordinated Pay-in-Kind Notes due March 18, 2002
16% Junior Subordinated Pay-in-Kind Notes due July 18, 2002
------------------------------------------------------------------
(Title of the indenture securities)
<PAGE>
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject,
The Comptroller of the Currency,
Washington, D.C.
Federal Reserve Bank of Boston
Boston, Massachusetts
Federal Deposit Insurance Corporation
Washington, D.C.
(b) Whether it is authorized to exercise
corporate trust powers:
The trustee is so authorized.
Item 2. Affiliations with obligor and underwriter. If the obligor or
any underwriter for the obligor is an affiliate of the trustee,
describe each such affiliation.
None with respect to the trustee.
Item 16. List of exhibits.
List below all exhibits filed as a part of this statement of
eligibility and qualification.
(1) A copy of the Articles of Association of the trustee as
now in effect.
(2) A copy of the Certificate of Authority of the trustee
to do business.
(3) A copy of the Certification of Fiduciary Powers of the
trustee.
(4) A copy of the By-Laws of the trustee as now in effect.
(5) Consent of the trustee required by Section 321(b)
of the Act.
(6) A copy of the latest Consolidated Reports of Condition
and Income of the trustee published pursuant to law or
the requirements of its supervising or examining authority.
NOTES
In as much as this Form T-1 is filed prior to the ascertainment by the trustee
of all facts on which to base answers to Item 2, the answers to said Items are
based upon incomplete information. Said Items may, however, be considered
correct unless amended by an amendment to this Form T-1.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939,
the trustee, Fleet National Bank, a national banking association organized and
existing under the laws of the United States, has duly caused this statement of
of eligibility and qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Hartford, and State of
Connecticut, on the 27th day of January, 1997.
FLEET NATIONAL BANK,
AS TRUSTEE
By: /s/ Kathy Larimore
-Kathy Larimore-----
<PAGE>
EXHIBIT 1
ARTICLES OF ASSOCIATION
OF
FLEET NATIONAL BANK
FIRST. The title of this Association, which shall carry on the business of
banking under the laws of the United States, shall be "Fleet National Bank."
SECOND. The main office of the Association shall be in Springfield, Hampden
County Commonwealth of Massachusetts. The general business of the Association
shall be conducted at its main office and its branches.
THIRD. The board of directors of this Association shall consist of not less
than five (5) nor more than twenty-five (25) shareholders, the exact number of
directors within such minimum and maximum limits to be fixed and determined
from time to time by resolution of a majority of the full board of directors or
by resolution of the shareholders at any annual or special meeting thereof.
Unless otherwise provided by the laws of the United States, any vacancy in the
board of directors for any reason, including an increase in the number thereof,
may be filled by action of the board of directors.
FOURTH. The annual meeting of the shareholders for the election of directors
and the transaction of whatever other business may be brought before said
meeting shall be held at the main office or such other place as the board of
directors may designate, on the day of each year specified therefore in the
bylaws, but if no election is held on that day, it may be held on any
subsequent day according to the provisions of law; and all elections shall be
held according to such lawful regulations as may be prescribed by the board of
directors.
FIFTH. The authorized amount of capital stock of this Association shall be
eight million five hundred thousand (8,500,000) shares of which three million
five hundred thousand (3,500,000) shares shall be common stock with a
par value of six and 25/100 dollars ($6.25) each, and of which five million
(5,000,000) shares without par value shall be preferred stock. The capital
stock may be increased or decreased from time to time, in accordance with
the provisions of the laws of the United States.
No holder of shares of the capital stock of any class of the Association shall
have any pre-emptive or preferential right of subscription to any shares of any
class of stock of the Association, whether now or hereafter authorized, or to
any obligations convertible into stock of the Association, issued or sold, nor
any right of subscription to any thereof other than such, if any, as the board
of directors, in its discretion, may from time to time determine and at such
price as the board of directors may from time to time fix.
<PAGE>
The board of directors of the Association is authorized, subject to limitations
prescribed by law and the provisions of this Article, to provide for the
issuance from time to time in one or more series of any number of the preferred
shares, and to establish the number of shares be included in each series, and
to fix the designation, relative rights, preferences, qualifications and
limitations of the shares of each such series. The authority of the board of
directors with respect to each series shall include, but not be limited to,
determination of the following:
a. The number of shares constituting that series and the distinctive
designation of that series;
b. The dividend rate on the shares of that series, whether dividends shall be
cumulative, and, if so, from which date or dates, and whether they shall be
payable in preference to, or in another relation to, the dividends payable
to any other class or classes or series of stock;
c. Whether that series shall have voting rights, in addition to the voting
rights provided by law, and, if so, the terms of such voting rights;
d. Whether that series shall have conversion or exchange privileges, and,
if so, the terms and conditions of such conversion or exchange, including
provision for the adjustment of the conversion or exchange rate in such
events as the board of directors shall determine;
e. Whether or not the shares of that series shall be redeemable, and, if so,
the terms and conditions of such redemption, including the manner of
selecting shares for redemption if less than all shares are to be redeemed,
the date or dates upon or after which they shall be redeemable, and the
amount per share payable in case of redemption, which amount may vary under
different conditions and at different redemption dates;
f. Whether that series shall be entitled to the benefit of a sinking fund to
be applied to the purchase or redemption of shares of that series, and, if
so, the terms and amounts of such sinking fund;
g. The right of the shares of that series to the benefit of conditions and
restrictions upon the creation of indebtedness of the Association or any
subsidiary, upon the issue of any additional stock (including additional
shares of such series or of any other series) and upon the payment of
dividends or the making of other distributions on, and the purchase,
redemption or other acquisition by the Association or any subsidiary of
any outstanding stock of the Association;
h. The right of the shares of that series in the event of voluntary or
involuntary liquidation, dissolution or winding up of the Association and
whether such rights shall be in preference to, or in another relation to,
the comparable rights of any other class or classes or series of stock; and
i. Any other relative, participating, optional or other special rights,
qualifications, limitations or restrictions of that series.
Shares of any series of preferred stock which have been redeemed (whether
through the operation of a sinking fund or otherwise) or which, if convertible
or exchangeable, have been converted into or exchanged for shares of stock of
any other class or classes shall have the status of authorized and unissued
shares of preferred stock of the same series and may be reissued as a part of
the series of which they were originally a part or may be reclassified and
reissued as part of a new series of preferred stock to be created by resolution
or resolutions of the board of directors or as part of any other series or
preferred stock, all subject to the conditions and the restrictions adopted by
the board of directors providing for the issue of any series of preferred
stock and by the provisions of any applicable law.
Subject to the provisions of any applicable law, or except as otherwise
provided by the resolution or resolutions providing for the issue of any series
of preferred stock, the holders of outstanding shares of common stock shall
exclusively possess voting power for the election of directors and for all
purposes, each holder of record of shares of common stock being entitled to one
vote for each share of common stock standing in his name on the books of the
Association.
Except as otherwise provided by the resolution or resolutions providing for the
issue of any series of preferred stock, after payment shall have been made to
the holders of preferred stock of the full amount of dividends to which they
shall be entitled pursuant to the resolution or resolutions providing for the
issue of any other series of preferred stock, the holders of common stock shall
be entitled, to the exclusion of the holders of preferred stock of any and all
series, to receive such dividends as from time to time may be declared by the
board of directors.
Except as otherwise provided by the resolution or resolutions for the issue
of any series of preferred stock, in the event of any liquidation, dissolution
or winding up of the Association, whether voluntary or involuntary, after
payment shall have been made to the holders of preferred stock of the full
amount to which they shall be entitled pursuant to the resolution or
resolutions providing for the issue of any series of preferred stock the
holders of common stock shall be entitled, to the exclusion of the holders of
preferred stock of any and all series, to share, ratable according to the
number of shares of common stock held by them, in all remaining assets of the
Association available for distribution to its shareholders.
The number of authorized shares of any class may be increased or decreased by
the affirmative vote of the holders of a majority of the stock of the
Association entitled to vote.
<PAGE>
SIXTH. The board of directors shall appoint one of its members president of
this Association, who shall be chairman of the board, unless the board appoints
another director to be the chairman. The board of directors shall have the
power to appoint one or more vice presidents; and to appoint a secretary and
such other officers and employees as may be required to transact the business
of this Association.
The board of directors shall have the power to define the duties of the
officers and employees of the Association; to fix the salaries to be paid to
them; to dismiss them; to require bonds from them and to fix the penalty
thereof; to regulate the manner in which any increase of the capital of the
Association shall be made; to manage and administer the business and affairs of
the Association; to make all bylaws that it may be lawful for them to make; and
generally to do and perform all acts that it may be legal for a board of
directors to do and perform.
SEVENTH. The board of directors shall have the power to change the location of
the main office to any other place within the limits of the City of Hartford,
Connecticut, without the approval of the shareholders but subject to the
approval of the Comptroller of the Currency; and shall have the power to
establish or change the location of any branch or branches of the Association
to any other location, without the approval of the shareholders but subject to
the approval of the Comptroller of the Currency.
EIGHTH. The corporate existence of this Association shall continue until
terminated in accordance with the laws of the United States.
NINTH. The board of directors of this Association, or any three or more
shareholders owning, in the aggregate, not less than ten percent (10%) of the
stock of this Association, may call a special meeting of shareholders at any
time. Unless otherwise provided by the laws of the United States, a notice of
the time, place and purpose of every annual and special meeting of the
shareholders shall be given by first class mail, postage prepaid, mailed at
least ten (10) days prior to the date of such meeting to each shareholder of
record at his address as shown upon the books of this Association.
TENTH. (a) Right to Indemnification. Each person who was or is made a party
or is threatened to be made a party to any threatened, pending or completed
action, suit, or proceeding, whether civil, criminal, administrative, or
investigative (hereinafter a "proceeding"), by reason of the fact that he or
she is or was a director, officer or employee of the Association or is or was
serving at the request of the Association as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, limited
liability company, trust, or other enterprise, including service with respect
to an employee benefit plan, shall be indemnified and held harmless by the
Association to the fullest extent authorized by the law of the state in which
the Association's ultimate parent company is incorporated, except as provided
in subsection (b). The aforesaid indemnity shall protect the indemnified
person against all expense, liability and loss (including attorney's fees,
judgements, fines ERISA excise taxes or penalties, and amounts paid in
settlement) reasonably incurred by such person in connection with such a
proceeding. Such indemnification shall continue as to a person who has ceased
to be a director, officer or employee and shall inure to the benefit of his or
her heirs, executors, and administrators, but shall only cover such person's
period of service with the Association. The Association may, by action of its
Board of Directors, grant rights to indemnification to agents of the
Association and to any director, officer, employee or agent of any of its
subsidiaries with the same scope and effect as the foregoing indemnification
of directors and officers.
(b) Restrictions on Indemnification. Notwithstanding the foregoing, (i) no
person shall be indemnified hereunder by the Association against expenses,
penalties, or other payments incurred in an administrative proceeding or action
instituted by a federal bank regulatory agency which proceeding or action
results in a final order assessing civil money penalties against that person,
requiring affirmative action by that person in the form of payments to the
Association, or removing or prohibiting that person from service with the
Association, and any advancement of expenses to that person in that proceeding
must be repaid; and (ii) no person shall be indemnified hereunder by the
Association and no advancement of expenses shall be made to any person
hereunder to the extent such indemnification or advancement of expenses would
violate or conflict with any applicable federal statute now or hereafter in
force or any applicable final regulation or interpretation now or hereafter
adopted by the Office of the Comptroller of the Currency ("OCC") or the Federal
Deposit Insurance Corporation ("FDIC"). The Association shall comply with any
requirements imposed on it by any such statue or regulation in connection with
any indemnification or advancement of expenses hereunder by the Association.
With respect to proceedings to enforce a claimant's rights to indemnification,
the Association shall indemnify any such claimant in connection with such a
proceeding only as provided in subsection (d) hereof.
(c) Advancement of Expenses. The conditional right to indemnification
conferred in this section shall be a contract right and shall include the
right to be paid by the Association the reasonable expenses (including
attorney's fees) incurred in defending a proceeding in advance of its final
disposition (an "advancement of expenses"); provided, however, that an
advancement of expenses shall be made only upon (i) delivery to the Association
of a binding written undertaking by or on behalf of the person receiving the
advancement to repay all amounts so advanced if it is ultimately determined
that such person is not entitled to be indemnified in such proceeding,
including if such proceeding results in a final order assessing civil money
penalties against that person, requiring affirmative action by that person
in the form of payments to the Association, or removing or prohibiting that
person from service with the Association, and (ii) compliance with any other
actions or determinations required by applicable law, regulation or OCC or FDIC
interpretation to be taken or made by the Board of Directors of the Association
<PAGE>
or other persons prior to an advancement of expenses. The Association shall
cease advancing expenses at any time its Board of Directors believes that any
of the prerequisites for advancement of expenses are no longer being met.
(d) Right of Claimant to Bring Suit. If a claim under subsection (a) of the
section is not paid in full by the Association within thirty (30) days after
written claim has been received by the Association, the claimant may at any time
thereafter bring suit against the Association to recover the unpaid amount
of the claim. If successful in whole or in part in any such suit, or in a
suit brought by the Association to recover an advancement of expenses pursuant
to the terms of an undertaking, the claimant shall be entitled to be paid also
the expense of prosecuting or defending such claim. It shall be a defense to
any such action brought by the claimant to enforce a right to indemnification
hereunder (other than an action brought to enforce a claim for an advancement
of expenses where the required undertaking, if any, has been tendered to the
Association) that the claimant has not met any applicable standard for
indemnification under the law of the state in which the Association's ultimate
parent company is incorporated. In any suit brought by the Association to
recover an advancement of expenses pursuant to the terms of an undertaking, the
Association shall be entitled to recover such expenses upon a final
adjudication that the claimant has not met any applicable standard for
indemnification standard for indemnification under the law of the state in
which the Association's ultimate parent company is incorporated.
(e) Non-Exclusivity of Rights. The rights to indemnification and the
advancement of expenses conferred in this section shall not be exclusive of any
other right which any person may have or hereafter acquired under any statute,
agreement, vote of stockholders or disinterested directors or otherwise.
(f) Insurance. The Association may purchase, maintain, and make payment or
reimbursement for reasonable premiums on, insurance to protect itself and any
director, officer, employee or agent of the Association or another corporation,
partnership, joint venture, trust or other enterprise against any expense,
liability or loss, whether or not the Association would have the power to
indemnify such person against such expense, liability or loss under the law of
the state in which the Association's ultimate parent company is incorporated;
provided however, that such insurance shall explicitly exclude insurance
coverage for a final order of a federal bank regulatory agency assessing civil
money penalties against an Association director, officer, employee or agent.
ELEVENTH. These articles of association may be amended at any regular or
special meeting of the shareholders by the affirmative vote of the holders of a
majority of the stock of this Association, unless the vote of the holders of
greater amount of stock is required by law, and in that case by the vote of the
holders of such greater amount. The notice of any shareholders' meeting at
which an amendment to the articles of association of this Association is to be
considered shall be given as hereinabove set forth.
I hereby certify that the articles of association of this Association, in their
entirety, are listed above in items first through eleventh.
Secretary/Assistant Secretary
- --------------------------------------------------
Dated at , as of .
--------------------------------------- --------------------
Revision of February 15, 1996
<PAGE>
EXHIBIT 2
[LOGO]
- --------------------------------------------------------------------------------
COMPTROLLER OF THE CURRENCY
ADMINISTRATOR OF NATIONAL BANKS
- --------------------------------------------------------------------------------
Washington, D.C. 20219
CERTIFICATE
I, Eugene A. Ludwig, Comptroller of the Currency, do hereby certify
that:
(1) The Comptroller of the Currency, pursuant to Revised Statutes
324, et seq., as amended, 12 U.S.C. 1, et seq., as amended, has possession,
custody and control of all records pertaining to the chartering, regulation and
supervision of all National Banking Associations.
(2) "Fleet National Bank of Connecticut", Hartford, Connecticut,
(Charter No. 1338), is a National Banking Association formed under the
laws of the United States and is authorized thereunder to transact the
business of banking on the date of this Certificate.
IN TESTIMONY WHEREOF, I have hereunto
subscribed my name and caused my seal of
office to be affixed to these presents at
the Treasury Department, in the City of
Washington and District of Columbia, this
4th day of April, 1996.
/s/ EUGENE A. LUDWIG
----------------------------------
Comptroller of the Currency
<PAGE>
EXHIBIT 3
[LOGO]
- --------------------------------------------------------------------------------
COMPTROLLER OF THE CURRENCY
ADMINISTRATOR OF NATIONAL BANKS
- --------------------------------------------------------------------------------
Washington, D.C. 20219
Certification of Fiduciary Powers
I, Eugene A. Ludwig, Comptroller of the Currency, do hereby certify
the records in this Office evidence "Fleet National Bank of Connecticut",
Hartford, Connecticut, (Charter No. 1338), was granted, under the hand
and seal of the Comptroller, the right to act in all fiduciary capacities
authorized under the provisions of The Act of Congress approved
September 28, 1962, 76 Stat. 668, 12 U.S.C. 92a. I further certify the
authority so granted remains in full force and effect.
IN TESTIMONY WHEREOF, I have hereunto
subscribed my name and caused my seal of
Office of the Comptroller of the Currency
to be affixed to these presents at the
Treasury Department, in the City of
Washington and District of Columbia, this
4th day of April, 1996.
/s/ EUGENE A. LUDWIG
----------------------------------
Comptroller of the Currency
<PAGE>
EXHIBIT 4
AMENDED AND RESTATED BY-LAWS OF
FLEET NATIONAL BANK
ARTICLE I
MEETINGS OF SHAREHOLDERS
Section 1. Annual Meeting. The regular annual meeting of the shareholders for
the election of Directors and the transaction of any other business that may
properly come before the meeting shall be held at the Main Office of the
Association, or such other place as the Board of Directors may designate, on
the fourth Thursday of April in each year at 1:15 o'clock in the afternoon
unless some other hour of such day is fixed by the Board of Directors.
If, from any cause, an election of Directors is not made on such day, the Board
of Directors shall order the election to be held on some subsequent day, of
which special notice shall be given in accordance with the provisions of law,
and of these bylaws.
Section 2. Special Meetings. Special meetings of the shareholders may be called
at any time by the Board of Directors, the President, or any shareholders
owning not less than twenty-five percent (25%) of the stock of the Association.
Section 3. Notice of Meetings of Shareholders. Except as otherwise provided
by law, notice of the time and place of annual or special meetings of the
shareholders shall be mailed, postage prepaid, at least ten (10) days before
the date of the meeting to each shareholder of record entitled to vote thereat
at his address as shown upon the books of the Association; but any failure to
mail such notice to any shareholder or any irregularity therein, shall not
affect the validity of such meeting or of any of the proceedings thereat.
Notice of a special meeting shall also state the purpose of the meeting.
Section 4. Quorum; Adjourned Meetings. Unless otherwise provided by law, a
quorum for the transaction of business at every meeting of the shareholders
shall consist of not less than two-fifths (2/5) of the outstanding capital
stock represented in person or by proxy; less than such quorum may adjourn the
meeting to a future time. No notice need be given of an adjourned annual or
special meeting of the shareholders if the adjournment be to a definite place
and time.
Section 5. Votes and Proxies. At every meeting of the shareholders, each
share of the capital stock shall be entitled to one vote except as otherwise
provided by law. A majority of the votes cast shall decide every question
or matter submitted to the shareholder at any meeting, unless otherwise
provided by law or by the Articles of Association or these By-laws. Share-
holders may vote by proxies duly authorized in writing and filed with the
Cashier, but no officer, clerk, teller or bookeeper of the Association may act
as a proxy.
<PAGE>
Section 6. Nominations to Board of Directors. At any meeting of shareholders
held for the election of Directors, nominations for election to the Board of
Directors may be made, subject to the provisions of this section, by any share-
holder of record of any outstanding class of stock of the Association entitled
to vote for the election of Directors. No person other than those whose names
are stated as proposed nominees in the proxy statement accompanying the notice
of the meeting may be nominated as such meeting unless a shareholder shall have
given to the President of the Association and to the Comptroller of the
Currency, Washington, DC written notice of intention to nominate such other
person mailed by certified mail or delivered not less than fourteen (14) days
nor more than fifty (50) days prior to the meeting of shareholders at which
such nomination is to be made; provided, however, that if less than twenty-one
(21) days' notice of such meeting is given to shareholders, such notice of
intention to nominate shall be mailed by certified mail or delivered to said
President and said Comptroller on or before the seventh day following the day
on which the notice of such meeting was mailed. Such notice of intention to
nominate shall contain the following information to the extent known to the
notifying shareholder: (a) the name and address of each proposed nominee; (b)
the principal occupation of each proposed nominee; (c) the total number of
shares of capital stock of the Association that will be voted for each proposed
nominee; (d) the name and residence address of the notifying shareholder; and
(e) the number of shares of capital stock of the Association owned by the
notifying shareholder. In the event such notice is given, the proposed nominee
may be nominated either by the shareholder giving such notice or by any other
shareholder present at the meeting at which such nomination is to be made.
Such notice may contain the names of more than one proposed nominee, and if
more than one is named, any one or more of those named may be nominated.
Section 7. Action Taken Without a Shareholder Meeting. Any action requiring
shareholder approval or consent may be taken without a meeting and without
notice of such meeting by written consent of the shareholders.
ARTICLE II
DIRECTORS
Section 1. Number. The Board of Directors shall consist of such number of
shareholders, not less than five (5) nor more than twenty-five (25), as from
time to time shall be determined by a majority of the votes to which all of its
shareholders are at the time entitled, or by the Board of Directors as
hereinafter provided.
Section 2. Mandatory Retirement for Directors. No person shall be elected a
director who has attained the age of 68 and no person shall continue to serve
as a director after the date of the first meeting of the stockholders of the
Association held on or after the date on which such person attains the age of
68; provided, however, that any director serving on the Board as of December
15, 1995 who has attanined the age of 65 on or prior to such date shall be
permitted to continue to serve as a director until the date of the first
meeting of the stockholders of the Association held on or after the date on
which such person attains the age of 70.
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<PAGE>
Section 3. General Powers. The Board of Directors shall exercise all the
coporate powers of the Association, except as expressly limited by law, and
shall have the control, management, direction and dispositon of all its
property and affairs.
Section 4. Annual Meeting. Immediately following a meeting of shareholders
held for the election of Directors, the Cashier shall notify the directors-
elect who may be present of their election and they shall then hold a meeting
at the Main Office of the Association, or such other place as the Board of
Directors may designate, for the purpose of taking their oaths, organizing the
new Board, electing officers and transacting any other business that may come
before such meeting.
Section 5. Regular Meeting. Regular meetings of the Board of Directors shall
be held without notice at the Main Office of the Association, or such other
place as the Board of Directors may designate, at such dates and times as the
Board shall determine. If the day designated for a regular meeting falls on a
legal holiday, the meeting shall be held on the next business day.
Section 6. Special Meetings. A special meeting of the Board of Directors may
be called at anytime upon the written request of the Chairman of the Board, the
President, or of two Directors, stating the purpose of the meeting. Notice of
the time and place shall be given not later than the day before the date of the
meeting, by mailing a notice to each Director at his last known address, by
delivering such notice to him personally, or by telephoning.
Section 7. Quorum; Votes. A majority of the Board of Directors at the time
holding office shall constitute a quorum for the transaction of all business,
except when otherwise provided by law, but less than a quorum may adjourn
a meeting from time to time, and the meeting may be held, as adjourned, without
further notice. If a quorum is present when a vote is taken, the affirmative
vote of a majority of Directors present is the act of the Board of Directors.
Section 8. Action by Directors Without a Meeting. Any action requiring
Director approval or consent may be taken without a meeting and without notice
of such meeting by written consent of all the Directors.
Section 9. Telephonic Participation in Directors' Meetings. A Director or
member of a Committee of the Board of Directors may participate in a meeting of
the Board or of such Committee may participate in a meeting of the Board or of
such Committee by means of a conference telephone or similar communications
equipment enabling all Directors participating in the meeting to hear one
another, and participation in such a meeting shall constitute presence in person
at such a meeting.
Section 10. Vacancies. Vacancies in the Board of Directors may be filled by
the remaining members of the Board at any regular or special meeting of the
Board.
Section 11. Interim Appointments. The Board of Directors shall, if the share-
holders at any meeting for the election of Directors have determined a number
of Directors less than twenty-five (25), have the power, by affirmative vote of
the majority of all the Directors, to increase such number of Directors to not
more than twenty-five (25) and to elect Directors to fill the resulting
vacancies and to serve until the next annual meeting of shareholders or the
next election of Directors; provided, however, that the number of Directors
shall not be so increased by more than two (2) if the number last determined
by shareholders was fifteen (15) or less, or increased by more than four (4) if
the number last determined by shareholders was sixteen (16) or more.
Section 12. Fees. The Board of Directors shall fix the amount and direct the
payment of fees which shall be paid to each Director for attendance at any
meeting of the Board of Directors or of any Committees of the Board.
ARTICLE III
COMMITTEES OF THE BOARD
Section 1. Executive Committee. The Board of Directors shall appoint from its
members an Executive Committee which shall consist of such number of persons as
the Board of Directors shall determine; the Chairman of the Board and the
President shall be members ex-officio of the Executive Committee with full
voting power. The Chairman of the Board or the President may from time to time
appoint from the Board of Directors as temporary additional members of the
Executive Committee, with full voting powers, not more than two members to serve
for such periods as the Chairman of the Board or the President may determine.
The Board of Directors shall designate a member of the Executive Committee to
serve as Chairman thereof. A meeting of the Executive Committee may be called
at any time upon the written request of the Chairman of the Board, the President
or the Chairman of the Executive Committee, stating the purpose of the meeting.
Not less than twenty four hours' notice of said meeting shall be given to each
member of the Committee personally, by telephoning, or by mail. The Chairman of
the Executive Committee or, in his absence, a member of the Committee chosen by
a majority of the members present shall preside at meetings of the Executive
Committee.
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<PAGE>
The Executive Committee shall possess and may exercise all the powers of the
Board when the Board is not in session except such as the Board, only, by law,
is authorized to exercise; it shall keep minutes of its acts and proceedings
and cause same to be presented and reported at every regular meeting and at any
special meeting of the Board including specifically, all its actions relating
to loans and discounts.
All acts done and powers and authority conferred by the Executive Committee,
from time to time, within the scope of its authority, shall be deemed to be,
and may be certified as being, the acts of and under the authority of the
Board.
Section 2. Risk Management Committee. The Board shall appoint from its
members a Risk Management Committee which shall consist of such number as the
Board shall determine. The Board shall designate a member of the Risk
Management Committee to serve as Chairman thereof. It shall be the duty of the
Risk Management Committee to (a) serve as the channel of communication with
management and the Board of Directors of Fleet Financial Group, Inc. to assure
that formal processes supported by management information systems are in place
for the identification, evaluation and management of significant risks inherent
in or associated with lending activities, the loan portfolio, asset-liablity
management, the investment portfolio, trust and investment advisory activities,
the sale of nondeposit investment products and new products and services and
such additional activities or functions as the Board may determine from time
to time; (b) assure the formulation and adoption of policies approved by the
Risk Management Committee or Board governing lending activities, management of
the loan portfolio, the maintenance of an adequate allowance for loan and lease
losses, asset-liability management, the investment portfolio, the retail
sale of non-deposit investment products, new products and services and such
additional activities or functions as the Board may determine from time to time
(c) assure that a comprehensive independent loan review program is in place for
the early detection of problem loans and review significant reports of the loan
review department, management's responses to those reports and the risk
attributed to unresolved issues; (d) subject to control of the Board, exercise
general supervision over trust activities, the investment of trust funds, the
disposition of trust investments and the acceptance of new trusts and the terms
of such acceptance, and (e) perform such additional duties and exercise such
additional powers of the Board as the Board may determine from time to time.
Section 3. Audit Committee. The Board shall appoint from its members and
Audit Committee which shall consist of such number as the Board shall determine
no one of whom shall be an active officer or employee of the Association or
Fleet Financial Group, Inc. or any of its affiliates. In addition, members of
the Audit Committee must not (i) have served as an officer or employee of the
Association or any of its affiliates at any time during the year prior to their
appointment; or (ii) own, control, or have owned or controlled at any time
during the year prior to appointment, ten percent (10%) or more of any
outstanding class of voting securities of the Association. At least two (2)
members of the Audit Committee must have significant executive, professional,
educational or regulatory experience in financial, auditing, accounting,
or banking matters. No member of the Audit Commitee may have significant
direct or indirect credit or other relationships with the Association, the
termination of which would materially adversely affect the Association's
financial condition or results of operations.
The Board shall designate a member of the Audit Committee to serve as Chairman
thereof. It shall be the duty of the Audit Committee to (a) cause a continuous
audit and examination to be made on its behalf into the affairs of the
Association and to review the results of such examination; (b) review
significant reports of the internal auditing department, management's responses
to those reports and the risk attributed to unresolved issues; (c) review the
basis for the reports issued under Section 112 of The Federal Deposit Insurance
Corporation Improvement Act of 1991; (d) consider, in consultation with the
independent auditor and an internal auditing executive, the adequacy of the
Association's internal controls, including the resolution of identified material
weakness and reportable conditions; (e) review regulatory communications
received from any federal or state agency with supervisory jurisdiction or
other examining authority and monitor any needed corrective action by
management; (f) ensure that a formal system of internal controls is in place
for maintaining compliance with laws and regulations; (g) cause an audit of the
Trust Department at least once during each calendar year and within 15 months
of the last such audit or, in liew thereof, adopt a continuous audit system and
report to the Board each calendar year and within 15 months of the previous
report on the performance of such audit function; and (h) perform such
additional duties and exercise such additional powers of the Board as the Board
may determine from time to time.
The Audit Committee may consult with internal counsel and retain its own
outside counsel without approval (prior or otherwise) from the Board or
management and obligate the Association to pay the fees of such counsel.
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<PAGE>
Section 4. Community Affairs Committee. The Board shall appoint from its
members a Community Affairs Committee which shall consist of such number as the
Board shall determine. The Board shall designate a member of the Community
Affairs Committee to serve as Chairman thereof. It shall be the duty of the
Commmunity Affairs Committee to (a) oversee compliance by the Association with
the Community Reinvestment Act of 1977, as amended, and the regulations
promulgated thereunder; and (b) perform such additional duties and exercise such
additional powers of the Board as the Board may determine from time to time.
Section 5. Regular Meetings. Except for the Executive Committee which shall
meet on an ad hoc basis as set forth in Section 1 of this Article, regular
meetings of the Committees of the Board of Directors shall be held, without
notice, at such time and place as the Committee or the Board of Directors may
appoint and as often as the business of the Association may require.
Section 6. Special Meetings. A Special Meeting of any of the Committees of
the Board of Directors may be called upon the written request of the Chairman
of the Board or the President, or of any two members of the respective
Committee, stating the purpose of the meeting. Not less than twenty-four
hours' notice of such special meeting shall be given to each member of the
Committee personally, by telephoning, or by mail.
Section 7. Emergency Meetings. An Emergency Meeting of any of the Committees
of the Board of Directors may be called at the request of the Chairman of the
Board or the President, who shall state that an emergency exists, upon not
less than one hour's notice to each member of the Committee personally or by
telephoning.
Section 8. Action Taken Without a Committee Meeting. Any Committee of the
Board of Directors may take action without a meeting and without notice of such
meeting by resolution assented to in writing by all members of such Committee.
Section 9. Quorum. A majority of a Committee of the Board of Directors shall
constitute a quorum for the transaction of any business at any meeting of such
Committee. If a quorum is not available, the Chairman of the Board or the
President shall have power to make temporary appointments to a Committee of-
members of the Board of Directors, to act in the place and stead of members who
temporarily cannot attend any such meeting; provided, however, that any
temporary appointment to the Audit Committee must meet the requirements for
members of that Committee set forth in Section 3 of this Article.
Section 10. Record. The committes of the Board of Directors shall keep a
record of their respective meetings and proceedings which shall be presented
at the regular meeting of the Board of Directors held in the calendar month
next following the meetings of the Committees. If there is no regular Board
of Directors meeting held in the calendar month next following the meeting of
a Committee, then such Committee's records shall be presented at the next
regular Board of Directors meeting held in a month subsequent to such Committee
meeting.
Section 11. Changes and Vacancies. The Board of Directors shall have power
to change the members of any Committee at any time and to fill vacancies on any
Committee; provided, however, that any newly appointed member of the Audit
Committee must meet the requirements for members of that Committee set forth in
Section 3 of this Article.
Section 12. Other Committees. The Board of Directors may appoint, from time
to time, other committees of one or more persons, for such purposes and with
such powers as the Board may determine.
ARTICLE IV
WAIVER OF NOTICE OF MEETINGS
Section 1. Waiver. Whenever notice is required to be given to any shareholder,
Director, or member of a Committee of the Board of Directors, such notice may
be waived in writing either before or after such meeting by any shareholder,
Director or Committee member respectively, as the case may be, who may be
entitled to such notice; and such notice will be deemed to be waived by
attendance at any such meeting.
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<PAGE>
ARTICLE V
OFFICERS AND AGENTS
Section 1. Officers. The Board shall appoint a Chairman of the Board and a
President, and shall have the power to appoint one or more Executive Vice
Presidents, one or more Senior Vice Presidents, one or more Vice Presidents, a
Cashier, a Secretary, an Auditor, a Controller, one or more Trust Officers and-
such other officers as are deemed necessary or desirable for the proper
transaction of business of the Association. The Chairman of the Board and the
President shall be appointed from members of the Board of Directors. Any two
or more offices, except those of President and Cashier, or Secretary, may be
held by the same person. The Board may, from time to time, by resolution
passed by a majority of the entire Board, designate one or more officers of the
Association or of an affiliate or of Fleet Financial Group, Inc. with power to
appoint one or more Vice Presidents and such other officers of the Association
below the level of Vice President as the officer or officers designated in such
resolution deem necessary or desirable for the proper transaction of the
business of the Association.
Section 2. Chairman of the Board. The chairman of the Board shall preside at
all meetings of the Board of Directors. Subject to definition by the Board of
Directors, he shall have general executive powers and such specific powers and
duties as from time to time may be conferred upon or assigned to him by the
Board of Directors.
Section 3. President. The President shall preside at all meetings of the
Board of Directors if there be no Chairman or if the Chairman be absent.
Subject to definition by the Board of Directors, he shall have general
executive powers and such specific powers and duties as from time to time may
be conferred upon or assigned to him by the Board of Directors.
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<PAGE>
Section 4. Cashier and Secretary. The Cashier shall be the Secretary of the
Board and of the Executive Committee, and shall keep accurate minutes of their
meetings and of all meetings of the shareholders. He shall attend to the
giving of all notices required by these By-laws. He shall be custodian of the
corporate seal, records, documents and papers of the Association. He shall
have such powers and perform such duties as pertain by law or regulation to the
office of Cashier, or as are imposed by these By-laws, or as may be delegated
to him from time to time by the Board of Directors, the Chairman of the Board
or the President.
Section 5. Auditor. The Auditor shall be the chief auditing officer of the
Association. He shall continuously examine the affairs of the Association and
from time to time shall report to the Board of Directors. He shall have such
powers and perform such duties as are conferred upon, or assigned to him by
these By-laws, or as may be delegated to him from time to time by the Board
of Directors.
Section 6. Officers Seriatim. The Board of Directors shall designate from
time to time not less than two officers who shall in the absence or disability
of the Chairman or President or both, succeed seriatim to the duties and
responsibilities of the Chairman and President respectively.
Section 7. Clerks and Agents. The Board of Directors may appoint, from time
to time, such clerks, agents and employees as it may deem advisable for the
prompt and orderly transaction of the business of the Association, define
their duties, fix the salaries to be paid them and dismiss them. Subject to
the authority of the Board of Directors, the Chairman of the Board or the
President, or any other officer of the Association authorized by either of them
may appoint and dismiss all or any clerks, agents and employees and prescribe
their duties and the conditions of their employment, and from time to time
fix their compensation.
Section 8. Tenure. The Chairman of the Board of Directors and the President
shall, except in the case of death, resignation, retirement or disqualification
under these By-laws, or unless removed by the affirmative vote of at least two-
thirds of all of the members of the Board of Directors, hold office for the
term of one year or until their respective successors are appointed. Either
of such officers appointed to fill a vacancy occurring in an unexpired term
shall serve for such unexpired term of such vacancy. All other officers,
clerks, agents, attorneys-in-fact and employees of the Association shall hold
office during the pleasure of the Board of Directors or of the officer or
committee appointing them respectively.
ARTICLE VI
TRUST DEPARTMENT
Section 1. General Powers and Duties. All fiduciary powers of the Association
shall be exercised through the Trust Department, subject to such regulations as
the Comptroller of the Currency shall from time to time establish. The Trust
Department shall be to placed under the management and immediate supervision
of an officer or officers appointed by the Board of Directors. The duties of
all officers of the Trust Department shall be to cause the policies and
instructions of the Board and the Risk Management Committee with respect to the
trusts under their supervision to be carried out, and to supervise the due
performance of the trusts and agencies entrusted to the Association and under
their supervision, in accordance with law and in accordance with the terms of
such trusts and agencies.
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<PAGE>
ARTICLE VII
BRANCH OFFICES
Section 1. Establishment. The Board of Directors shall have full power to
establish, to discontinue, or, from time to time, to change the location of any
branch office, subject to such limitations as may be provided by law.
Section 2. Supervision and Control. Subject to the general supervision and
control of the Board of Directors, the affairs of branch offices shall be
under the immediate supervision and control of the President or of such other
officer or officers, employee or employees, or other individuals as the Board
of Directors may from time to time determine, with such powers and duties as
the Board of Directors may confer upon or assign to him or them.
ARTICLE VIII
SIGNATURE POWERS
Section 1. Authorization. The power of officers, employees, agents and
attorneys to sign on behalf of and to affix the seal of the Association shall
be prescribed by the Board of Directors or by the Executive Committee or by
both; provided that the President is authorized to restrict such power of any
officer, employee, agent or attorney to the business of a specific department
or departments, or to a specific branch office or branch offices. Facsimile
signatures may be authorized.
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<PAGE>
ARTICLE IX
STOCK CERTIFICATES AND TRANSFERS
Section 1. Stock Records. The Trust Department shall have custody of the
stock certificate books and stock ledgers of the Association, and shall make
all transfers of stock, issue certificates thereof and disburse dividends
declared thereon.
Section 2. Form of Certificate. Every shareholder shall be entitled to a
certificate conforming to the requirements of law and otherwise in such form
as the Board of Directors may approve. The certificates shall state on the
face thereof that the stock is transferable only on the books of the
Association and shall be signed by such officers as may be prescribed from time
to time by the Board of Directors or Executive Committee. Facsimile signatures
may be authorized.
Section 3. Transfers of Stock. Transfers of stock shall be made only on the
books of the Association by the holder in person, or by attorney duly
authorized in writing, upon surrender of the certificate therefor properly
endorsed, or upon the surrender of such certificate accompanied by a properly
executed written assignment of the same, or a written power of attorney to
sell, assign or transfer the same or the shares represented thereby.
Section 4. Lost Certificate. The Board of Directors or Executive Committee
may order a new certificate to be issued in place of a certificate lost or
destroyed, upon proof of such loss or destruction and upon tender to the
Association by the shareholder, of a bond in such amount and with or without
surety, as may be ordered, indemnifying the Association against all liability,
loss, cost and damage by reason of such loss or destruction and the issuance
of a new certificate.
Section 5. Closing Transfer Books. The Board of Directors may close the
transfer books for a period not exceeding thirty days preceding any regular
or special meeting of the shareholders, or the day designated for the payment
of a dividend or the allotment of rights. In lieu of closing the transfer
books the Board of Directors may fix a day and hour not more than thirty days
prior to the day of holding any meeting of the shareholders, or the day
designated for the payment of a dividend, or the day designated for the
allotment of rights, or the day when any change of conversion or exchange of
capital stock is to go into effect, as the day as of which shareholders
entitled to notice of and to vote at such meetings or entitled to such dividend
or to such allotment of rights or to exercise the rights in respect of any
such change, conversion or exchange of capital stock, shall be determined, and
only such shareholders as shall be shareholders of record on the day and hour
so fixed shall be entitled to notice of and to vote at such meeting or to
receive payment of such dividend or to receive such allotment of rights or to
exercise such rights, as the case may be.
ARTICLE X
THE CORPORATE SEAL
Section 1. Seal. The following is an impression of the seal of the
Association adopted by the Board of Directors.
ARTICLE XI
BUSINESS HOURS
Section 1. Business Hours. The main office of this Association and each
branch office thereof shall be open for business on such days, and for such
hours as the Chairman, or the President, or any Executive Vice President, or
such other officer as the Board of Directors shall from time to time
designate, may determine as to each office to conform to local custom and
convenience, provided that any one or more of the main and branch offices or
certain departments thereof may be open for such hours as the President, or
such other officer as the Board of Directors shall from time to time designate,
may determine as to each office or department on any legal holiday on which
work is not prohibited by law, and provided further that any one or more of
the main and branch offices or certain departments thereof may be ordered
closed or open on any day for such hours as to each office or department as
the President, or such other officer as the Board of Directors shall from time
to time designate, subject to applicable laws regulations, may determine when
such action may be required by reason of disaster or other emergency condition.
ARTICLE IX
CHANGES IN BY-LAWS
Section 1. Amendments. These By-laws may be amended upon vote of a majority
of the entire Board of Directors at any meeting of the Board, provided ten (10)
day's notice of the proposed amendment has been given to each member of the
Board of Directors. No amendment may be made unless the By-law, as amended, is
consistent with the requirements of law and of the Articles of Association.
These By-laws may also be amended by the Association's shareholders.
A true copy
Attest:
Secretary/Assistant Secretary
- ---------------------------------------
Dated at , as of .
--------------------------------------- ----------------------
Revision of January 11, 1993
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<PAGE>
EXHIBIT 5
CONSENT OF THE TRUSTEE
REQUIRED BY SECTION 321(b)
OF THE TRUST INDENTURE ACT OF 1939
The undersigned, as Trustee under the Indenture to be entered into between
Scott Cable Communications, Inc. and Fleet National Bank, as Trustee, does
hereby consent that, pursuant to Section 321(b) of the Trust Indenture Act of
1939, reports of examinations with respect to the undersigned by Federal,
State, Territorial or District authorities may be furnished by such authorities
to the Securities and Exchange Commission upon request therefor.
FLEET NATIONAL BANK,
AS TRUSTEE
By: /s/ Kathy Larimore
Kathy Larimore--
Its: Assistant Vice President
Dated: January 27, 1997
<PAGE>
Board of Governors of the
Federal Reserve System
OMB Number: 7100-0036
Federal Deposit Insurance
Corporation
OMB Number: 3064-0052
Office of the Comptroller
of the Currency
OMB Number: 1557-0081
Expires March 31, 1999
Federal Financial Institutions Examination Council
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[LOGO] [1]
Please refer to page i,
Table of Contents, for
the required disclosure
of estimated burden.
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CONSOLIDATED REPORTS OF CONDITION AND INCOME FOR
A BANK WITH DOMESTIC AND FOREIGN OFFICES -- FFIEC 031
(960930)
REPORT AT THE CLOSE OF BUSINESS SEPTEMBER 30, 1996 --------
(RCRI 9999)
This report is required by law: 12 U.S.C. Section 324 (State member banks); 12
U.S.C. Section 1817 (State nonmember banks); and 12 U.S.C. Section 161
(National banks).
This report form is to be filed by banks with branches and consolidated
subsidiaries in U.S. territories and possessions, Edge or Agreement
subsidiaries, foreign branches, consolidated foreign subsidiaries, or
international Banking Facilities.
- -------------------------------------------------------------------------------
NOTE: The Reports of Condition and Income must be signed by an authorized
officer and the Report of Condition must be attested to by not less than two
directors (trustees) for State nonmember banks and three directors for State
member and National banks.
I, Giro S. DeRosa, Vice President
---------------------------------------------------
Name and Title of Officer Authorized to Sign Report
of the named bank do hereby declare that these Reports of Condition and Income
(including the supporting schedules) have been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and are
true to the best of my knowledge and belief.
/s/ Giro DeRosa
- -----------------------------------------------------
Signature of Officer Authorized to Sign Report
10/26/96
- -----------------------------------------------------
Date of Signature
The Reports of Condition and Income are to be prepared in accordance with
Federal regulatory authority instructions.
NOTE: These instructions may in some cases differ from generally accepted
accounting principles.
We, the undersigned directors (trustees), attest to the correctness of this
Report of Condition (including the supporting schedules) and declare that it
has been examined by us and to the best of our knowledge and belief has been
prepared in conformance with the instructions issued by the appropriate Federal
regulatory authority and is true and correct.
/s/ [SIGNATURE ILLEGIBLE]
- -----------------------------------------------------
Director (Trustee)
/s/ [SIGNATURE ILLEGIBLE]
- -----------------------------------------------------
Director (Trustee)
/s/ [SIGNATURE ILLEGIBLE]
- -----------------------------------------------------
Director (Trustee)
- -------------------------------------------------------------------------------
FOR BANKS SUBMITTING HARD COPY REPORT FORMS:
STATE MEMBER BANKS: Return the original and one copy to the appropriate Federal
Reserve District Bank.
STATE NONMEMBER BANKS: Return the original only in the special return address
envelope provided. If express mail is used in lieu of the special return
address envelope, return the original only to the FDIC, c/o Quality Data
Systems, 2127 Espey Court, Suite 204, Crofton, MD 21114.
NATIONAL BANKS: Return the original only in the special return address envelope
provided. If express mail is used in lieu of the special return address
envelope, return the original only to the FDIC, c/o Quality Data Systems, 2127
Espey Court, Suite 204, Crofton, MD 21114.
- -------------------------------------------------------------------------------
0 2 4 9 9
FDIC Certificate Number -----------
(RCRI 9050)
[ADDRESS LABEL]
<PAGE>
FFIEC 031
Page i
/2/
Consolidated Reports of Condition and Income for
Bank With Domestic and Foreign Offices
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
SIGNATURE PAGE COVER
REPORT OF INCOME
Schedule RI -- Income Statement ................................... RI-1, 2, 3
Schedule RI-A -- Changes in Equity Capital .............................. RI-4
Schedule RI-B -- Charge-offs and Recoveries and Changes in
Allowance for Loan and Lease Losses ............................... RI-4, 5
Schedule RI-C -- Applicable Income Taxes by Taxing Authority ............ RI-5
Schedule RI-D -- Income from International Operations ................... RI-6
Schedule RI-E -- Explanations ........................................ RI-7, 8
REPORT OF CONDITION
Schedule RC -- Balance Sheet ......................................... RC-1, 2
Schedule RC-A -- Cash and Balances Due From Depository Institutions ..... RC-3
Schedule RC-B -- Securities ....................................... RC-3, 4, 5
Schedule RC-C -- Loans and Lease Financing
Receivables:
Part I. Loans and Leases ......................................... RC-6, 7
Part II. Loans to Small Businesses and Small Farms
(included in the forms for June 30 only) ............... RC-7a, 7b
Schedule RC-D -- Trading Assets and Liabilities
(to be completed only by selected banks) ............................. RC-8
Schedule RC-E -- Deposit Liabilities ............................ RC-9, 10, 11
Schedule RC-F -- Other Assets .......................................... RC-11
Schedule RC-G -- Other Liabilities ..................................... RC-11
Schedule RC-H -- Selected Balance Sheet Items for
Domestic Offices .................................................... RC-12
Schedule RC-I -- Selected Assets and Liabilities of IBFs ............... RC-13
Schedule RC-K -- Quarterly Averages .................................... RC-13
Schedule RC-L -- Off Balance Sheet Items ....................... RC-14, 15, 16
Schedule RC-M -- Memoranda ......................................... RC-17, 18
Schedule RC-N -- Past Due and Nonaccrual Loans, Leases,
and Other Assets ................................................ RC-19, 20
Schedule RC-O -- Other Data for Deposit Insurance Assessments ...... RC-21, 22
Schedule RC-R -- Regulatory Capital ................................ RC-23, 24
Optional Narrative Statement Concerning the Amounts Reported
in the Reports of Condition and Income .............................. RC-25
Special Report (to be completed by all banks)
Schedule RC-J -- Repricing Opportunities (sent only to and to be
completed only by savings banks)
DISCLOSURE OF ESTIMATED BURDEN
THE ESTIMATED AVERAGE BURDEN ASSOCIATED WITH THIS INFORMATION COLLECTION IS
32.2 HOURS PER RESPONDENT AND IS ESTIMATED TO VARY FROM 15 TO 230 HOURS PER
RESPONSE, DEPENDING ON INDIVIDUAL CIRCUMSTANCES. BURDEN ESTIMATES INCLUDE THE
TIME FOR REVIEWING INSTRUCTIONS, GATHERING AND MAINTAINING DATA IN THE REQUIRED
FORM, AND COMPLETING THE INFORMATION COLLECTION, BUT EXCLUDE THE TIME FOR
COMPILING AND MAINTAINING BUSINESS RECORDS IN THE NORMAL COURSE OF A
RESPONDENT'S ACTIVITIES. COMMENTS CONCERNING THE ACCURACY OF THIS BURDEN
ESTIMATE AND SUGGESTIONS FOR REDUCING THIS BURDEN SHOULD BE DIRECTED TO THE
OFFICE OF INFORMATION AND REGULATORY AFFAIRS, OFFICE OF MANAGEMENT AND BUDGET,
WASHINGTON, D.C. 20503, AND TO ONE OF THE FOLLOWING:
SECRETARY
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, D.C. 20551
LEGISLATIVE AND REGULATORY ANALYSIS DIVISION
OFFICE OF THE COMPTROLLER OF THE CURRENCY
WASHINGTON, D.C. 20219
ASSISTANT EXECUTIVE SECRETARY
FEDERAL DEPOSIT INSURANCE CORPORATION
WASHINGTON, D.C. 20429
For information or assistance, National and State nonmember banks should
contact the FDIC's Call Reports Analysis Unit, 550 17th Street, NW, Washington,
D.C. 20429, toll-free on (800) 688-FDIC(3342), Monday through Friday between
8:00 a.m. and 5:00 p.m., Eastern time. State member banks should contact their
Federal Reserve District Bank.
<PAGE>
Legal Title of Bank: Fleet National Bank
Address: One Monarch Place
City, State Zip: Springfield, MA 01102
FDIC Certificate No.: 0 2 4 9 9
---------
Call Date: 9/30/96
ST-BK: 25-0590 FFIEC 031
Page RI-1
CONSOLIDATED REPORT OF INCOME
FOR THE PERIOD JANUARY 1, 1996-SEPTEMBER 30, 1996
All Report of Income schedules are to be reported on a calendar year-to-date
basis in thousands of dollars.
SCHEDULE RI--INCOME STATEMENT
<TABLE>
<CAPTION>
I480
-------------------------
Dollars Amounts in Thousands RIAD Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Interest income:
a. Interest and fee income on loans:
(1) In domestic offices:
(a) Loans secured by real estate .............................................. 4011 854,388 1.a.(1)(a)
(b) Loans to depository institutions .......................................... 4019 1,052 1.a.(1)(b)
(c) Loans to finance agricultural production and other loans to farmers ....... 4024 405 1.a.(1)(c)
(d) Commercial and industrial loans ........................................... 4012 850,473 1.a.(1)(d)
(e) Acceptances of other banks ................................................ 4026 261 1.a.(1)(e)
(f) Loans to individuals for household, family, and other personal expenditures:
(1) Credit cards and related plans ........................................ 4054 13,229 1.a.(1)(f)(1)
(2) Other ................................................................. 4055 144,012 1.a.(1)(f)(2)
(g) Loans to foreign governments and official institutions ..................... 4056 0 1.a.(1)(g)
(h) Obligations (other than securities and leases) of states and political
subdivisions in the U.S.:
(1) Taxable obligations ................................................... 4503 0 1.a.(1)(h)(1)
(2) Tax-exempt obligations ................................................ 4504 7,756 1.a.(1)(h)(2)
(i) All other loans in domestic offices ....................................... 4058 115,822 1.a.(1)(1)
(2) In foreign offices, Edge and Agreement subsidiaries, and IBFs ................. 4059 2,981 1.a.(2)
b. Income from lease financing receivables:
(1) Taxable leases ................................................................ 4505 114,095 1.b.(1)
(2) Tax-exempt leases ............................................................. 4307 1,130 1.b.(2)
c. Interest income on balances due from depository institutions: (1)
(1) In domestic offices ........................................................... 4105 1,047 1.c.(1)
(2) In foreign offices, Edge and Agreement subsidiaries, and IBFs .................. 4106 142 1.c.(2)
d. Interest and dividend income on securities:
(1) U.S. Treasury securities and U.S. Government agency and corporation
obligations ................................................................... 4027 323,294 1.d.(1)
(2) Securities issued by states and political subdivisions in the U.S.:
(a) Taxable securities ........................................................ 4506 0 1.d.(2)(a)
(b) Tax-exempt securities ..................................................... 4507 4,736 1.d.(2)(b)
(3) Other domestic debt securities ................................................ 3657 12,668 1.d.(3)
(4) Foreign debt securities ....................................................... 3658 4,985 1.d.(4)
(5) Equity securities (including investments in mutual funds) ..................... 3659 15,296 1.d.(5)
e. Interest income from trading assets ............................................... 4069 429 i.e.
</TABLE>
- --------------
(1) Includes interest income on time certificates of deposit not held for
trading.
3
<PAGE>
Legal Title of Bank: Fleet National Bank Call Date: 9/30/96
Address: One Monarch Place ST-BK: 25-0590 FFIEC 031
City, State Zip: Springfield, MA 01102 Page RI-2
FDIC Certificate No.: 0 2 4 9 9
-----------
SCHEDULE RI--CONTINUED
<TABLE>
<CAPTION>
--------------
Dollar Amounts in Thousands Year-to-date
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Interest income (continued) RIAD Bil Mil Thou
f. Interest income on federal funds sold and securities purchased under
agreements to resell in domestic offices of the bank and of its Edge
and Agreement subsidiaries, and in IBFs.............................. 4020 25,381 1.f.
g. Total interest income (sum of items 1.a through 1.f)................. 4107 2,493,582 1.g.
2. Interest expense:
a. Interest on deposits:
(1) Interest on deposits in domestic offices:
(a) Transaction accounts (NOW accounts, ATS accounts, and
telephone and preauthorized transfer accounts)............. 4508 10,989 2.a.(1)(a)
(b) Nontransaction accounts:
(1) Money market deposit accounts (MMDAs)................. 4509 196,360 2.a.(1)(b)(1)
(2) Other savings deposits................................ 4511 38,216 2.a.(1)(b)(2)
(3) Time certificates of deposit of $100,000 or more...... 4174 130,069 2.a.(1)(b)(3)
(4) All other time deposits............................... 4512 310,562 2.a.(1)(b)(4)
(2) Interest on deposits in foreign offices, Edge and Agreement
subsidiaries, and IBFs.......................................... 4172 74,619 2.a.(2)
b. Expense of federal funds purchased and securities sold under
agreements to repurchase in domestic offices of the bank and of its
Edge and Agreement subsidiaries, and in IBFs......................... 4180 221,536 2.b.
c. Interest on demand notes issued to the U.S. Treasury, trading
liabilities, and other borrowed money................................ 4185 145,395 2.c.
d. Interest on mortgage indebtedness and obligations under capitalized
leases............................................................... 4072 630 2.d.
e. Interest on subordinated notes and debentures........................ 4200 47,710 2.e.
f. Total interest expense (sum of items 2.a through 2.e)................ 4073 1,176,086 2.f.
-----------------------
3. Net interest income (item 1.g minus 2.f)................................. RIAD 4074 1,317,496 3.
-----------------------
4. Provisions:
-----------------------
a. Provision for loan and lease losses.................................. RIAD 4230 24,179 4.a.
b. Provision for allocated transfer risk................................ RIAD 4243 0 4.b.
-----------------------
5. Noninterest income:
a. Income from fiduciary activities..................................... 4070 217,705 5.a.
b. Service charges on deposit accounts in domestic offices.............. 4080 169,866 5.b.
c. Trading revenue (must equal Schedule RI, sum of Memorandum
items 8.a through 8.d)............................................... A220 16,406 5.c.
d. Other foreign transaction gains (losses)............................. 4076 781 5.d.
e. Not applicable
f. Other noninterest income:
(1) Other fee income................................................ 5407 576,559 5.f.(1)
(2) All other noninterest income*................................... 5408 270,460 5.f.(2)
-----------------------
g. Total noninterest income (sum of items 5.a through 5.f).............. RIAD 4079 1,251,777 5.g.
6. a. Realized gains (losses) on held-to-maturity securities............... RIAD 3521 1 6.a.
b. Realized gains (losses) on available-for-sale securities............. RIAD 3196 16,196 6.b.
-----------------------
7. Noninterest expense:
a. Salaries and employee benefits....................................... 4135 480,905 7.a.
b. Expenses of premises and fixed assets (net of rental income)
(excluding salaries and employee benefits and mortgage interest)..... 4217 164,769 7.b.
c. Other noninterest expense*........................................... 4092 942,296 7.c.
-----------------------
d. Total noninterest expense (sum of items 7.a through 7.c)............. RIAD 4093 1,587,970 7.d.
-----------------------
8. Income (loss) before income taxes and extraordinary items and other
-----------------------
adjustments (item 3 plus or minus items 4.a, 4.b, 5.g, 6.a, 6.b, and 7.d) RIAD 4301 973,321 8.
9. Applicable income taxes (on item 8)...................................... RIAD 4302 397,990 9.
-----------------------
10. Income (loss) before extraordinary items and other adjustments (item 8
-----------------------
minus 9)................................................................. RIAD 4300 575,331 10.
-----------------------
</TABLE>
- --------------------
*Describe on Schedule RI-E--Explanations.
4
<PAGE>
Legal Title of Bank: Fleet National Bank Call Date: 9/30/96
Address: One Monarch Place ST-BK: 25-0590 FFIEC 031
City, State Zip: Springfield, MA 01102 Page RI-3
FDIC Certificate No.: 0 2 4 9 9
---------
SCHEDULE RI--CONTINUED
<TABLE>
<CAPTION>
Year-to-date
--------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
11. Extraordinary items and other adjustments:
a. Extraordinary items and other adjustments, gross of income taxes* ..... 4310 0 11.a.
b. Applicable income taxes (on item 11.a)* ............................... 4315 0 11.b.
c. Extraordinary items and other adjustments, net of income taxes
(item 11.a minus 11.b) ................................................ RIAD 4320 0 11.c
12. Net income (loss) (sum of items 10 and 11.c) ............................. RIAD 4340 575,331 12.
-------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
------
I481 <-
Memoranda ------------
Year-to-date
--------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Interest expense incurred to carry tax-exempt securities, loans, and leases acquired after
August 7, 1986, that is not deductible for federal income tax purposes ......................... 4513 2,092 M.1.
2. Income from the sale and servicing of mutual funds and annuities in domestic offices
(included in Schedule RI, item 8) .............................................................. 8431 33,068 M.2.
3.-4. Not applicable
5. Number of full-time equivalent employees on payroll at end of current period (round to Number
nearest whole number) .......................................................................... 4150 12,552 M.5.
6. Not applicable
7. If the reporting bank has restated its balance sheet as a result of applying push down MM DD YY
accounting this calendar year, report the date of the bank's acquisition ....................... 9106 00/00/00 M.7.
8. Trading revenue (from cash instruments and off-balance sheet derivative instruments)
(sum of Memorandum items 8.a through 8.d must equal Schedule RI, item 5.c): Bil Mil Thou
a. Interest rate exposures ..................................................................... 8757 2,536 M.8.a.
b. Foreign exchange exposures .................................................................. 8758 13,870 M.8.b.
c. Equity security and index exposures ......................................................... 8759 0 M.8.c.
d. Commodity and other exposures ............................................................... 8760 0 M.8.d.
9. Impact on income of off-balance sheet derivatives held for purposes other than trading:
a. Net increase (decrease) to interest income .................................................. 8761 (1,530) M.9.a.
b. Net (increase) decrease to interest expense ................................................. 8762 (7,731) M.9.b.
c. Other (noninterest) allocations ............................................................. 8763 235 M.9.c.
10. Credit losses on off-balance sheet derivatives (see instructions) .............................. A251 0 M.10.
--------------------
</TABLE>
- ------------
*Describe on Schedule RI-E--Explanations.
5
<PAGE>
Legal Title of Bank: Fleet National Bank
Address: One Monarch Place
City, State Zip: Springfield, MA 01102
FDIC Certificate No.: 02499
Call Date: 9/30/96
ST-BK: 25-0590 FFIEC 031
Page RI-4
SCHEDULE RI-A--CHANGES IN EQUITY CAPITAL
Indicate decreases and losses in parentheses.
<TABLE>
<CAPTION>
I483 <-
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ---------------------------------------------------------- ---- --- --- ----
<S> <C> <C> <C> <C>
1. Total equity capital originally reported in the December
31, 1995, Reports of Condition and Income................ 3215 1,342,473 1.
2. Equity capital adjustments from amended Reports of
Income, net*............................................. 3216 0 2.
3. Amended balance end of previous calendar year
(sum of items 1 and 2)................................... 3217 1,342,473 3.
4. Net income (loss) (must equal Schedule RI, item 12)...... 4340 575,331 4.
5. Sale, conversion, acquisition, or retirement of
capital stock, net....................................... 4346 0 5.
6. Changes incident to business combinations, net........... 4356 4,161,079 6.
7. LESS: Cash dividends declared on preferred stock......... 4470 0 7.
8. LESS: Cash dividends declared on common stock............ 4460 625,239 8.
9. Cumulative effect of changes in accounting principles
from prior years* (see instructions for this schedule)... 4411 0 9.
10. Corrections of material accounting errors from prior
years* (see instructions for this schedule).............. 4412 0 10.
11. Change in net unrealized holding gains (losses) on
available-for-sale securities............................ 8433 (30,167) 11.
12. Foreign currency translation adjustments................. 4414 0 12.
13. Other transactions with parent holding company* (not
included in items 5, 7, or 8 above)...................... 4415 (1,003,722) 13.
14. Total equity capital end of current period (sum of
items 3 through 13) (must equal Schedule RC, item 28).... 3210 4,419,755 14.
- -----------
*Describe on Schedule RI-E--Explanations.
</TABLE>
SCHEDULE RI-B--CHARGE-OFFS AND RECOVERIES AND CHANGES
IN ALLOWANCE FOR LOAN AND LEASE LOSSES
PART I. CHARGE-OFFS AND RECOVERIES ON LOANS AND LEASES
Part I excludes charge-offs and recoveries through
the allocated transfer risk reserve.
<TABLE>
<CAPTION>
I486 <-
------------------------------------------------
(Column A) (Column B)
Charge-offs Recoveries
------------------------------------------------
Calendar year-to-date
------------------------------------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou RIAD Bil Mil Thou
- ---------------------------------------------------------- ---- --- --- ---- ---- --- --- ----
<S> <C> <C> <C> <C> <C>
1. Loans secured by real estate: ////////////////////////////////////////////////////////////
a. To U.S. addressees (domicile)....................... 4651 52,012 4661 10,568 1.a.
b. To non-U.S. addressees (domicile)................... 4652 0 4662 0 1.b.
2. Loans to depository institutions and acceptances
of other banks: ////////////////////////////////////////////////////////////
a. To U.S. banks and other U.S. depository institutions 4653 0 4663 0 2.a.
b. To foreign banks.................................... 4654 0 4664 0 2.b.
3. Loans to finance agricultural production and other
loans to farmers....................................... 4655 6 4665 89 3.
4. Commercial and industrial loans: ////////////////////////////////////////////////////////////
a. To U.S. addressees (domicile)....................... 4645 58,172 4617 39,649 4.a.
b. To non-U.S. addressees (domicile)................... 4646 0 4618 102 4.b.
5. Loans to individuals for household, family, and /////////////////////////////////////////////////////////////
other personal expenditures: ////////////////////////////////////////////////////////////
a. Credit cards and related plans...................... 4656 1,340 4666 1,125 5.a.
b. Other (includes single payment, installment, and all
student loans)...................................... 4657 17,633 4667 2,946 5.b.
6. Loans to foreign governments and official institutions.. 4643 0 4627 0 6.
7. All other loans......................................... 4644 2,987 4628 750 7.
8. Lease financing receivables: /////////////////////////////////////////////////////////////
a. Of U.S. addressees (domicile)........................ 4658 11,644 4668 3,670 8.a.
b. Of non-U.S. addressees (domicile).................... 4659 0 4669 0 8.b.
Total (sum of items 1 through 8)........................ 4635 143,794 4605 58,899 9.
</TABLE>
6
<PAGE>
Call Date: 9/30/96 ST-BK: 25-0590 FFIEC 031
Page RI-5
Legal Title of Bank: Fleet National Bank
Address: One Monarch Place
City, State Zip: Springfield, MA 01102
FDIC Certificate No.: 0 2 4 9 9
---------
SCHEDULE RI-B -- CONTINUED
PART I. CONTINUED
<TABLE>
<CAPTION>
-------------------------------------------
(Column A) (Column B)
Charge-offs Recoveries
-------------------------------------------
Calendar year-to-date
-----------------------------------------------
Memoranda Dollar Amounts in Thousands RIAD Bil Mil Thou RIAD Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1-3. Not applicable
4. Loans to finance commercial real estate, construction, and land
development activities (not secured by real estate) included in
Schedule RI-B, part I, items 4 and 7, above ......................... 5409 513 5410 1,374 M.4.
5. Loans secured by real estate in domestic offices (included in
Schedule RI-B, part I, item 1, above):
a. Construction and land development ................................ 3582 189 3583 253 M.5.a.
b. Secured by farmland .............................................. 3584 145 3585 220 M.5.b.
c. Secured by 1-4 family residential properties:
(1) Revolving, open-end loans secured by 1-4 family residential
properties and extended under lines of credit ................ 5411 3,647 5412 536 M.5.c.(1)
(2) All other loans secured by 1-4 family residential properties.. 5413 23,744 5414 2,707 M.5.c.(2)
d. Secured by multifamily (5 or more) residential properties ........ 3588 4,055 3589 395 M.5.d.
e. Secured by nonfarm nonresidential properties ..................... 3590 20,232 3591 6,457 M.5.e.
-------------------------------------------
</TABLE>
PART II. CHANGES IN ALLOWANCE FOR LOAN AND LEASE LOSSES
<TABLE>
<CAPTION>
--------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Balance originally reported in the December 31, 1995, Reports of Condition and Income .. 3124 266,943 1.
2. Recoveries (must equal part I, item 9, column B above) ................................. 4605 58,899 2.
3. LESS: Charge-offs (must equal part I, item 9, column A above) .......................... 4635 143,794 3.
4. Provision for loan and lease losses (must equal Schedule RI, item 4.a) ................. 4230 24,179 4.
5. Adjustments* (see instructions for this schedule) ...................................... 4815 634,542 5.
6. Balance end of current period (sum of items 1 through 5) (must equal Schedule RC,
item 4.b) .............................................................................. 3123 840,769 6.
</TABLE>
- -----------------
* Describe on Schedule RI-E -- Explanations.
SCHEDULE RI-C -- APPLICABLE INCOME TAXES BY TAXING AUTHORITY
SCHEDULE RI-C IS TO BE REPORTED WITH THE DECEMBER REPORT OF INCOME.
<TABLE>
<CAPTION>
---------
I489 <-
--------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Federal ................................................................................... 4780 N/A 1.
2. State and local ........................................................................... 4790 N/A 2.
3. Foreign ................................................................................... 4795 N/A 3.
4. Total (sum of items 1 through 3) (must equal sum of Schedule RI, items 9 and 11.b) ........ 4770 N/A 4.
---------------------------
5. Deferred portion of item 4 ................................... RIAD 4772 N/A 5.
-------------------------------------------------
</TABLE>
7
<PAGE>
Call Date: 9/30/96 ST-BK: 25-0590 FFIEC 031
Page RI-6
Legal Title of Bank: Fleet National Bank
Address: One Monarch Place
City, State Zip: Springfield, MA 01102
FDIC Certificate No.: 0 2 4 9 9
---------
SCHEDULE RI-D--INCOME FROM INTERNATIONAL OPERATIONS
For all banks with foreign offices, Edge or Agreement subsidiaries, or IBFs
where international operations account for more than 10 percent of total
revenues, total assets, or net income.
PART I. ESTIMATED INCOME FROM INTERNATIONAL OPERATIONS
<TABLE>
<CAPTION>
-------
I492
--------------------
Year-to-date
--------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou <-
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Interest income and expense booked at foreign offices, Edge and Agreement subsidiaries, //////////////////
and IBFs: //////////////////
a. Interest income booked................................................................... 4837 N/A 1.a.
b. Interest expense booked.................................................................. 4838 N/A 1.b.
c. Net interest income booked at foreign offices, Edge and Agreement subsidiaries, and //////////////////
IBFs (item 1.a minus 1.b)................................................................ 4839 N/A 1.c.
2. Adjustments for booking location of international operations: //////////////////
a. Net interest income attributable to international operations booked at domestic offices.. 4840 N/A 2.a.
b. Net interest income attributable to domestic business booked at foreign offices.......... 4841 N/A 2.b.
c. Net booking location adjustment (item 2.a minus 2.b)..................................... 4842 N/A 2.c.
3. Noninterest income attributable to international operations: //////////////////
a. Noninterest income attributable to international operations.............................. 4097 N/A 3.a.
b. Provision for loan and lease losses attributable to international operations............. 4235 N/A 3.b.
c. Other noninterest expense attributable to international operations....................... 4239 N/A 3.c.
d. Net noninterest income (expense) attributable to international operations (item 3.a //////////////////
minus 3.b and 3.c)....................................................................... 4843 N/A 3.d.
4. Estimated pretax income attributable to international operations before capital allocation //////////////////
adjustment (sum of items 1.c, 2.c, and 3.d).................................................. 4844 N/A 4.
5. Adjustment to pretax income for internal allocations to international operations to reflect //////////////////
the effects of equity capital on overall bank funding costs.................................. 4845 N/A 5.
6. Estimated pretax income attributable to international operations after capital allocation //////////////////
adjustment (sum of items 4 and 5)............................................................ 4846 N/A 6.
7. Income taxes attributable to income from international operations as estimated in item 6..... 4797 N/A 7.
8. Estimated net income attributable to international operations (item 6 minus 7)............... 4341 N/A 8.
---------------------
Memoranda
---------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------
1. Intracompany interest income included in item 1.a above...................................... 4847 N/A M.1.
2. Intracompany interest expense included in item 1.b above..................................... 4848 N/A M.2.
---------------------
PART II. SUPPLEMENTARY DETAILS ON INCOME FROM INTERNATIONAL OPERATIONS REQUIRED
BY THE DEPARTMENTS OF COMMERCE AND TREASURY FOR PURPOSES OF THE U.S.
INTERNATIONAL ACCOUNTS AND THE U.S. NATIONAL INCOME AND PRODUCT ACCOUNTS
--------------------
YEAR-to-date
---------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------
1. Interest income booked at IBFs............................................................... 4849 N/A 1.
2. Interest expense booked at IBFs.............................................................. 4850 N/A 2.
3. Noninterest income attributable to international operations booked at domestic offices //////////////////
(excluding IBFs): //////////////////
a. Gains (losses) and extraordinary items................................................... 5491 N/A 3.a.
b. Fees and other noninterest income........................................................ 5492 N/A 3.b.
4. Provision for loan and lease losses attributable to international operations booked at //////////////////
domestic offices (excluding IBFs)............................................................ 4852 N/A 4.
5. Other noninterest expense attributable to international operations booked at domestic //////////////////
offices (excluding IBFs)..................................................................... 4853 N/A 5.
---------------------
</TABLE>
8
<PAGE>
Call Date: 9/30/96 ST-BK: 25-0590 FFIEC 031
Page RI-7
Legal Title of Bank: Fleet National Bank
Address: One Monarch Place
City, State Zip: Springfield, MA 01102
FDIC Certificate No.: 0 2 4 9 9
---------
SCHEDULE RI-E--EXPLANATIONS
SCHEDULE RI-E IS TO BE COMPLETED EACH QUARTER ON A CALENDAR YEAR-TO-DATE BASIS.
Detail all adjustments in Schedule RI-A and RI-B, all extraordinary items and
other adjustments in Schedule RI, and all significant items of other noninterest
income and other noninterest expense in Schedule RI. (See instructions for
details.)
<TABLE>
<CAPTION>
I495
--------------
Year-to-date
------------------------- <-
Dollars Amounts in Thousands RIAD Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. All other noninterest income (from Schedule RI, item 5.f.(2))
Report amounts that exceed 10% of Schedule RI, item 5.f.(2):
a. Net gains on other real estate owned .............................................. 5415 0 1.a.
b. Net gains on sales of loans ....................................................... 5416 0 1.b.
c. Net gains on sales of premises and fixed assets ................................... 5417 0 1.c.
Itemize and describe the three largest other amounts that exceed 10% of Schedule RI,
item 5.f.(2):
d. TEXT 4461 Income on Mortgages Held For Resale 4461 115,563 1.d.
-----------------------------------------------------------------------------------
e. TEXT 4462 Gain From Branch Divestitures 4462 77,976 1.e.
-----------------------------------------------------------------------------------
f. TEXT 4463 4463 1.f.
--- -------------------------------------------------------------------------------
2. Other noninterest expense (from Schedule RI, item 7.c):
a. Amortization expense of intangible assets ......................................... 4531 207,168 2.a.
Report amounts that exceed 10% of Schedule RI, item 7.c:
b. Net losses on other real estate owned ............................................. 5418 0 2.b.
c. Net losses on sales of loans ...................................................... 5419 0 2.c.
d. Net losses on sales of premises and fixed assets .................................. 5420 0 2.d.
Itemize and describe the three largest other amounts that exceed 10% of Schedule RI,
Item 7.c:
e. TEXT 4464 Intercompany Corporate Support Function Charges 4464 219,071 2.e.
-----------------------------------------------------------------------------------
f. TEXT 4467 Intercompany Data Processing & Programming Charges 4467 238,115 2.f.
-----------------------------------------------------------------------------------
g. TEXT 4468 4468 2.g.
-----------------------------------------------------------------------------------
3. Extraordinary items and other adjustments (from Schedule RI, item 11.a) and applicable
income tax effect (from Schedule RI, item 11.b) (itemize and describe all
extraordinary items and other adjustments):
a. (1) TEXT 4469 4469 3.a.(1)
-------------------------------------------------------------------------------
(2) Applicable income tax effect RIAD 4486 3.a.(2)
------------ -----------
b. (1) TEXT 4487 4487 3.b.(1)
-------------------------------------------------------------------------------
(2) Applicable income tax effect RIAD 4488 3.b.(2)
------------ -----------
c. (1) TEXT 4489 4489 3.c.(1)
-------------------------------------------------------------------------------
(2) Applicable income tax effect RIAD 4491 3.c.(2)
-----------
4. Equity capital adjustments from amended Reports of Income (from Schedule RI-A, item 2)
(itemize and describe all adjustments:
a. TEXT 4492 4492 4.a.
-----------------------------------------------------------------------------------
b. TEXT 4493 4493 4.b.
-----------------------------------------------------------------------------------
5. Cumulative effect of changes in accounting principles from prior years
(from Schedule RI-A, item 9) (itemize and describe all changes in accounting
principles):
a. TEXT 4494 4494 5.a.
-----------------------------------------------------------------------------------
B. TEXT 4495 4495 5.b.
-----------------------------------------------------------------------------------
6. Corrections of material accounting errors from prior years (from Schedule RI-A,
item 10) (itemize and describe all corrections):
a. TEXT 4496 4496 6.a.
-----------------------------------------------------------------------------------
b. TEXT 4497 4497 6.b.
-----------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
Call Date: 9/30/96 ST-BK: 25-0590 FFIEC 031
Page RI-8
Legal Title of Bank: Fleet National Bank
Address: One Monarch Place
City, State Zip: Springfield, MA 01102
FDIC Certificate No.: 0 2 4 9 9
---------
SCHEDULE RI-E--CONTINUED
<TABLE>
<CAPTION>
--------------
Year-to-date
-----------------------
Dollars Amounts in Thousands RIAD Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
7. Other transactions with parent holding company (from Schedule RI-A, item 13)
(itemize and describe all such transactions):
a. TEXT 4498 Fleet National Bank Surplus Distribution to FFG 4498 (1,003,722) 7.a.
--------------------------------------------------------------------------------
b. TEXT 4499 4499 7.b
--------------------------------------------------------------------------------
8. Adjustments to allowance for loan and lease losses (from Schedule RI-B, part II,
item 5) (itemize and describe all adjustments):
a. TEXT 4521 12/31/95 ending Balance of Pooled Entities 4521 636,497 8.a.
--------------------------------------------------------------------------------
b. TEXT 4522 Divested Allowance Related to Sold Loans 4522 (1,955) 8.b.
-------------------------------------------------------------------------------- -----------------------
9. Other explanations (the space below is provided for the bank to briefly describe,
at its option, any other significant items affecting the Report of Income): I498 I499 <-
No comment /x/ (RIAD 4769) -----------------------
Other explanations (please type or print clearly):
(TEXT) 4769)
</TABLE>
10
<PAGE>
Call Date: 9/30/96 ST-BK: 25-0590 FFIEC 031
Page RC-1
Legal Title of Bank: Fleet National Bank
Address: One Monarch Place
City, State Zip: Springfield, MA 01102
FDIC Certificate No.: 0 2 4 9 9
---------
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR SEPTEMBER 30, 1996
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400
Dollar Amounts in Thousands RCFC Bil Mil Thou <-
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin(1)....................... 0081 3,929,278 1.a.
b. Interest-bearing balances(2)................................................ 0071 30,710 1.b.
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column A).................. 1754 284,288 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D)................ 1773 7,315,890 2.b.
3. Federal funds sold and securities purchased under agreements to resell in
domestic offices of the bank and of its Edge and Agreement subsidiaries,
and in IBFs:
a. Federal funds sold.......................................................... 0276 32,521 3.a.
b. Securities purchased under agreements to resell............................. 0277 0 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income
(from Schedule RC-C).................................RCFD 2122 32,002,964 4.a.
b. LESS: Allowance for loan and lease losses.............RCFD 3123 840,769 4.b.
c. LESS: Allocated transfer risk reserve.................RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and reserve
(item 4.a minus 4.b and 4.c)............................................... 2125 31,162,195 4.d.
5. Trading assets (from Schedule RC-D)............................................ 3545 48,111 5.
6. Premises and fixed assets (including capitalized leases)....................... 2145 560,725 6.
7. Other real estate owned (from Schedule RC-M)................................... 2150 22,784 7.
8. Investments in unconsolidated subsidiaries and associated companies
(from Schedule RC-M).......................................................... 2130 0 8.
9. Customers' liability to this bank on acceptances outstanding................... 2155 14,235 9.
10. Intangible assets (from Schedule RC-M)......................................... 2143 2,311,234 10.
11. Other assets (from Schedule RC-F).............................................. 2160 3,699,236 11.
12. Total assets (sum of items 1 through 11)....................................... 2170 49,411,207 12.
</TABLE>
- ----------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
11
<PAGE>
Legal Title of Bank: Fleet National Bank Call Date: 9/30/96
Address: One Monarch Place ST-BK: 25-0590 FFIEC 031
City, State Zip: Springfield, MA 01102 Page RC-2
FDIC Certificate No.: 0 2 4 9 9
---------
SCHEDULE RC--CONTINUED
<TABLE>
<CAPTION>
-----------------------
Dollar Amounts in Thousands Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E,
part I) ................................................................................. RCON 2200 33,574,312 13.a.
----------------------
(1) Noninterest-bearing(1) ...................................... RCON 6631 10,385,307 13.a.(1)
(2) Interest-bearing ............................................ RCON 6636 23,189,005 13.a.(2)
----------------------
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E,
part II) ................................................................................ RCFN 2200 1,817,711 13.b.
----------------------
(1) Noninterest-bearing ......................................... RCFN 6631 36 13.b.(1)
(2) Interest-bearing ............................................ RCFN 6636 1,817,675 13.b.(2)
----------------------
14. Federal funds purchased and securities sold under agreements to repurchase in domestic
offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs:
a. Federal funds purchased ................................................................. RCFD 0278 4,393,064 14.a.
b. Securities sold under agreements to repurchase .......................................... RCFD 0279 133,568 14.b
15. a. Demand notes issued to the U.S. Treasury ................................................ RCON 2840 1,589,048 15.a.
b. Trading liabilities (from Schedule RC-D) ................................................ RCFD 3548 34,078 15.b.
16. Other borrowed money:
a. With a remaining maturity of one year or less ........................................... RCFD 2332 575,600 16.a.
b. With a remaining maturity of more than one year ......................................... RCFD 2333 647,284 16.b.
17. Mortgage indebtedness and obligations under capitalized leases ............................. RCFD 2910 11,403 17.
18. Bank's liability on acceptances executed and outstanding ................................... RCFD 2920 14,235 18.
19. Subordinated notes and debentures .......................................................... RCFD 3200 1,213,219 19.
20. Other liabilities (from Schedule RC-G) ..................................................... RCFD 2930 987,930 20.
21. Total liabilities (sum of items 13 through 20) ............................................. RCFD 2948 44,991,452 21.
22. Limited-life preferred stock and related surplus ........................................... RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus .............................................. RCFD 3838 125,000 23.
24. Common stock ............................................................................... RCFD 3230 19,487 24.
25. Surplus (exclude all surplus related to preferred stock) ................................... RCFD 3839 2,551,927 25.
26. a. Undivided profits and capital reserves .................................................. RCFD 3632 1,739,604 26.a
b. Net unrealized holding gains (losses) on available-for-sale securities .................. RCFD 8434 (16,263) 26.b
27. Cumulative foreign currency translation adjustments ........................................ RCFD 3284 0 27.
28. Total equity capital (sum of items 23 through 27) .......................................... RCFD 3210 4,419,755 28.
29. Total liabilities, limited-life preferred stock, and equity capital (sum of items 21,
22, and 28) ................................................................................ RCFD 3300 49,411,207 29.
----------------------
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
<TABLE>
<CAPTION>
Number
------------------
<S> <C> <C> <C>
1. Indicate in the box at the right the number of the statement below that best describes the
most comprehensive level of auditing work performed for the bank by independent external
auditors as of any date during 1995 ........................................................... RCFD 6724 N/A M.1.
------------------
</TABLE>
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- ------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
12
<PAGE>
<TABLE>
<S> <C> <C>
Legal Title of Bank: Fleet National Bank Call Date: 9/30/96 ST-BK: 25-0590 FFIEC 031
Address: One Monarch Place Page RC-3
City State Zip: Springfield, MA 01102
FDIC Certificate No.: 0 2 4 9 9
---------
</TABLE>
SCHEDULE RC-A--CASH AND BALANCES DUE FROM DEPOSITORY INSTITUTIONS
Exclude assets held for trading.
<TABLE>
<CAPTION>
C405
--------------------------------------------
(Column A) (Column B)
Consolidated Domestic
Bank Offices
-------------------- ---------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCON Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Cash items in process of collection, unposted debits, and currency and
coin..................................................................... 0022 3,629,071 1.
a. Cash items in process of collection and unposted debits............... 0020 2,937,263 1.a.
b. Currency and coin..................................................... 0080 691,808 1.b.
2. Balances due from depository institutions in the U.S..................... 0082 153,295 2.
a. U.S. branches and agencies of foreign banks (including their IBFs).... 0083 0 2.a.
b. Other commercial banks in the U.S. and other depository institutions
in the U.S. (including their IBFs).................................... 0085 153,370 2.b
3. Balances due from banks in foreign countries and foreign central banks... 0070 8,998 3.
a. Foreign branches of other U.S. Banks.................................. 0073 454 3.a.
b. Other banks in foreign countries and foreign central banks............ 0074 9,045 3.b.
4. Balances due from Federal Reserve Banks.................................. 0090 168,048 0090 168,048 4.
5. Total (sum of items 1 through 4) (total of column A must equal
Schedule RC, sum of items 1.a and 1.b)................................... 0010 3,959,988 0010 3,959,412 5.
--------------------------------------------
Memorandum Dollar Amounts in Thousands RCON Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Noninterest-bearing balances due from commercial banks in the U.S. (included in item 2,
column B above) 0050 122,585 M.1.
</TABLE>
SCHEDULE RC-B--SECURITIES
Exclude assets held for trading.
<TABLE>
<CAPTION>
C410
-----------------------------------------------------------------------------------------
Held-to-maturity Available-for-sale
------------------------------------------- -------------------------------------------
(Column A) (Column B) (Column C) (Column D)
Amortized Cost Fair Value Amortized Cost Fair Value(1)
-------------------- -------------------- -------------------- --------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. U.S. Treasury securities....... 0211 250 0213 250 1286 1,501,551 1287 1,483,819 1.
2. U.S. Government agency and
corporation obligations
(exclude mortgage-backed
securities):
a. Issued by U.S. Government
agencies(2)................. 1289 0 1290 0 1291 0 1293 0 2.a.
b. Issued by U.S. Government-
sponsored agencies(3)....... 1294 0 1295 0 1297 499 1298 503 2.b.
-----------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) Includes equity securities without readily determinable fair values at
historical cost in item 6.c, column D.
(2) Includes Small Business Administration "Guaranteed Loan Pool Certificates,"
U.S. Maritime Administration obligations, and Export-Import Bank
participation certificates.
(3) Includes obligations (other than mortgage-backed securities) issued by the
Farm Credit System, the Federal Home Loan Bank System, the Federal Home Loan
Mortgage Corporation, the Federal National Mortgage Association, the
Financing Corporation, Resolution Funding Corporation, the Student Loan
Marketing Association, and the Tennessee Valley Authority.
13
<PAGE>
<TABLE>
<S> <C> <C>
Legal Title of Bank: Fleet National Bank Call Date: 9/30/96 ST-BK: 25-0590 FFIEC 031
Address: One Monarch Place Page RC-4
City, State Zip: Springfield, MA 01102
FDIC Certificate No.: 0 2 4 9 9
---------
</TABLE>
SCHEDULE RC-B--CONTINUED
<TABLE>
<CAPTION>
Held-to-maturity Available-for-sale
------------------------------------ ----------------------------------------
(Column A) (Column B) (Column C) (Column D)
Amortized Cost Fair Value Amortized Cost Fair Value(1)
----------------- ----------------- ----------------- --------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
- ----------------------------- ----------------- ----------------- ----------------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3. Securities issued by states
and political subdivisions
in the U.S.:
a. General obligations...... 1676 172,838 1677 172,764 1678 0 1679 0 3.a.
b. Revenue obligations...... 1681 13,265 1686 13,268 1690 0 1691 0 3.b.
c. Industrial development
and similar obligations.. 1694 0 1695 0 1696 0 1697 0 3.c.
4. Mortgage-backed
securities (MBS):
a. Pass-through securities:
(1) Guaranteed by
GNMA................ 1698 0 1699 0 1701 826,767 1702 821,306 4.a.(1)
(2) Issued by FNMA
and FHLMC........... 1703 886 1705 886 1706 4,672,031 1707 4,668,468 4.a.(2)
(3) Other pass-through
securities.......... 1709 4 1710 4 1711 4 1713 0 4.a.(3)
b. Other mortgage-backed
securities (include
CMOs, REMICs, and
stripped MBS):
(1) Issued or
guaranteed by FNMA,
FHLMC, or GNMA...... 1714 0 1715 0 1716 0 1717 0 4.b.(1)
(2) Collateralized by
MBS issued or
guaranteed by FNMA,
FHLMC, or GNMA...... 1718 0 1719 0 1731 0 1732 0 4.b.(2)
(3) All other mortgage-
backed securities... 1733 0 1734 0 1735 481 1736 481 4.b.(3)
5. Other debt securities:
a. Other domestic debt
securities.............. 1737 0 1738 0 1739 715 1741 709 5.a.
b. Foreign debt
securities.............. 1742 97,045 1743 84,773 1744 0 1746 0 5.b.
6. Equity securities:
a. Investments in mutual
funds................... 1747 28,870 1748 28,870 6.a.
b. Other equity securities
with readily determin-
able fair values........ 1749 0 1751 0 6.b.
c. All other equity
securities(1)........... 1752 311,734 1753 311,734 6.c.
7. Total (sum of items 1
through 6) (total of
column A must equal
Schedule RC, item 2.a)
(total of column D must
equal Schedule RC,
item 2.b).................. 1754 284,288 1771 271,945 1772 7,342,648 1773 7,315,890 7.
</TABLE>
- ------------------
(1) Includes equity securities without readily determinable fair values at
historical cost in item 6.c, column D.
14
<PAGE>
Legal Title of Bank: Fleet National Bank Call Date: 9/30/96
Address: One Monarch Place ST-BK: 25-0590 FFIEC 031
City, State Zip: Springfield, MA 01102 Page RC-5
FDIC Certificate No.: 0 2 4 9 9
---------
SCHEDULE RC-B--CONTINUED
<TABLE>
<CAPTION>
--------
Memoranda C412
--------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Pledged securities(2) ................................................................. 0416 3,825,264 M.1.
2. Maturity and repricing data for debt securities(2), (3), (4) (excluding those in
nonaccrual status):
a. Fixed rate debt securities with a remaining maturity of:
(1) Three months or less ........................................................... 0343 70,352 M.2.a.(1)
(2) Over three months through 12 months ............................................ 0344 102,839 M.2.a.(2)
(3) Over one year through five years ............................................... 0345 2,792,361 M.2.a.(3)
(4) Over five years ................................................................ 0346 2,959,066 M.2.a.(4)
(5) Total fixed rate debt securities (sum of Memorandum items 2.a.(1) through
2.a.(4) ........................................................................ 0347 5,924,618 M.2.a.(5)
b. Floating rate debt securities with a repricing frequency of:
(1) Quarterly or more frequently ................................................... 4544 504,558 M.2.b.(1)
(2) Annually or more frequently, but less frequently than quarterly ................ 4545 830,398 M.2.b.(2)
(3) Every five years or more frequently, but less frequently than annually ......... 4551 0 M.2.b.(3)
(4) Less frequently than every five years .......................................... 4552 0 M.2.b.(4)
(5) Total floating rate debt securities (sum of Memorandum items 2.b.(1) through
2.b.(4) ........................................................................ 4553 1,334,956 M.2.b.(5)
c. Total debt securities (sum of Memorandum items 2.a.(5) and 2.b.(5)) (must equal
total debt securities from Schedule RC-B, sum of items 1 through 5, columns A and D,
minus nonaccrual debt securities included in Schedule RC-N, item 9, column C) ...... 0393 7,259,574 M.2.c.
3. Not applicable
4. Held-to-maturity debt securities restructured and in compliance with modified terms
(included in Schedule RC-B, items 3 through 5, column A, above) ....................... 5365 0 M.4.
5. Not applicable
6. Floating rate debt securities with a remaining maturity of one year or less(2), (4)
(included in memorandum items 2.b.(1) through 2.b.(4) above) .......................... 5519 4,700 M.6.
7. Amortized cost of held-to-maturity securities sold or transferred to available-for-
sale or trading securities during the calendar year-to-date (report the amortized cost
at date of sale or transfer) .......................................................... 1778 0 M.7.
8. High-risk mortgage securities (included in the held-to-maturity and available-for-sale
accounts in Schedule RC-B, item 4.b):
a. Amortized cost ..................................................................... 8780 0 M.8.a.
b. Fair value ......................................................................... 8781 0 M.8.b.
9. Structured notes (included in the held-to-maturity and available-for-sale accounts in
Schedule RC-B, items 2, 3, and 5):
a. Amortized cost ..................................................................... 8782 0 M.9.a.
b. Fair value ......................................................................... 8783 0 M.9.b.
---------------------
</TABLE>
- --------------
(2) Includes held-to-maturity securities at amortized cost and available-for-
sale securities at fair value.
(3) Excludes equity securities, e.g., investments in mutual funds, Federal
Reserve stock, common stock, and preferred stock.
(4) Memorandum items 2 and 6 are not applicable to savings banks that must
complete supplemental Schedule RC-J.
15
<PAGE>
Legal Title of Bank: Fleet National Bank Call Date: 9/30/96
Address: One Monarch Place ST-BK: 25-0590 FFIEC 031
City, State Zip: Springfield, MA 01102 Page RC-6
FDIC Certificate No.: 0 2 4 9 9
---------
SCHEDULE RC-C--LOANS AND LEASE FINANCING RECEIVABLES
PART I. LOANS AND LEASES
Do not deduct the allowance for loan and lease losses from amounts reported in
this schedule. Report total loans and leases, net of unearned income. Exclude
assets held for trading.
<TABLE>
<CAPTION>
C415
----------------------- -----------------------
(Column A) (Column B)
Consolidated Domestic
Bank Offices
----------------------- -----------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCON Bil Mil Thou
- ------------------------------------------------------------- ----------------------- -----------------------
<S> <C> <C> <C> <C>
1. Loans secured by real estate............................. 1410 11,784,177 1.
a. Construction and land development...................... 1415 548,373 1.a.
b. Secured by farmland (including farm residential and
other improvements).................................... 1420 2,097 1.b.
c. Secured by 1-4 family residential properties:
(1) Revolving, open-end loans secured by 1-4 family
residential properties and extended under lines
of credit.......................................... 1797 1,993,022 1.c.(1)
(2) All other loans secured by 1-4 family residential
properties:
(a) Secured by first liens......................... 5367 4,386,615 1.c.(2)(a)
(b) Secured by junior liens........................ 5368 492,852 1.c.(2)(b)
d. Secured by multifamily (5 or more) residential
properties............................................. 1460 534,555 1.d.
e. Secured by nonfarm nonresidential properties........... 1480 3,826,663 1.e.
2. Loans to depository institutions:
a. To commercial banks in the U.S. ....................... 1505 184,751 2.a.
(1) To U.S. branches and agencies of foreign banks.... 1506 0 2.a.(1)
(2) To other commercial banks in the U.S. ............ 1507 184,751 2.a.(2)
b. To other depository institutions in the U.S. ......... 1517 13,595 1517 13,595 2.b.
c. To banks in foreign countries......................... 1510 1,346 2.c.
(1) To foreign branches of other U.S. banks........... 1513 160 2.c.(1)
(2) To other banks in foreign countries............... 1516 1,186 2.c.(2)
3. Loans to finance agricultural production and other
loans to farmers......................................... 1590 5,208 1590 5,208 3.
4. Commercial and industrial loans:
a. To U.S. addressees (domicile)......................... 1763 13,126,493 1763 13,078,732 4.a.
b. To non-U.S. addressees (domicile)..................... 1764 63,365 1764 30,053 4.b.
5. Acceptances of other banks:
a. Of U.S. banks......................................... 1756 0 1756 0 5.a.
b. Of foreign banks...................................... 1757 0 1757 0 5.b.
6. Loans to individuals for household, family, and other
personal expenditures (i.e., consumer loans) (includes
purchased paper)......................................... 1975 2,129,035 6.
a. Credit cards and related plans (includes check credit
and other revolving credit plans)..................... 2008 98,959 6.a.
b. Other (includes single payment, installment, and all
student loans)........................................ 2011 2,030,076 6.b.
7. Loans to foreign governments and official institutions
(including foreign central banks)........................ 2081 0 2081 0 7.
8. Obligations (other than securities and leases) of
states and political subdivisions in the U.S.
(includes nonrated industrial development obligations)... 2107 155,642 2107 155,642 8.
9. Other loans.............................................. 1563 2,082,709 9.
a. Loans for purchasing or carrying securities
(secured and unsecured)............................... 1545 157,698 9.a.
b. All other loans (exclude consumer loans).............. 1564 1,925,011 9.b.
10. Lease financing receivables (net of unearned income).... 2165 2,456,643 10.
a. Of U.S. addressees (domicile)......................... 2182 2,456,643 10.a.
b. Of non-U.S. addressees (domicile)..................... 2183 0 10.b.
11. LESS: Any unearned income on loans reflected in
items 1-9 above.......................................... 2123 0 2123 0 11.
12. Total loans and leases, net of unearned income (sum
of items 1 through 10 minus item 11) (total of
column A must equal Schedule RC, item 4.a)............... 2122 32,002,964 2122 31,921,891 12.
</TABLE>
16
<PAGE>
Legal Title of Bank: Fleet National Bank Call Date: 9/30/96
Address: One Monarch Place ST-BK: 25-0590 FFIEC 031
City, State Zip: Springfield, MA 01102 Page RC-7
FDIC Certificate No.: 0 2 4 9 9
---------
SCHEDULE RC-C--CONTINUED
PART I. CONTINUED
<TABLE>
<CAPTION>
(Column A) (Column B)
Consolidated Domestic
Bank Offices
----------------- -----------------
Memoranda Dollar Amounts in Thousands RCFD Bil Mil Thou RCON Bil Mil Thou
- -------------------------------------------------------------------------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
1. Commercial paper included in Schedule RC-C, part I, above .................. 1496 0 1496 0 M.1.
2. Loans and leases restructured and in compliance with modified terms
(included in Schedule RC-C, part I, above and not reported as past due
or nonaccrual in Schedule RC-N, Memorandum item 1):
a. Loans secured by real estate:
(1) To U.S. addressees (domicile) ...................................... 1687 6,593 M.2.a.(1)
(2) To non-U.S. addressees (domicile) .................................. 1689 0 M.2.a.(2)
b. All other loans and all lease financing receivables (exclude loans to
individuals for household, family, and other personal expenditures) .... 8691 1,770 M.2.b.
c. Commercial and industrial loans to and lease financing receivables
of non-U.S. addresses (domicile) included in Memorandum item 2.b
above................................................................... 8692 0 M.2.c.
3. Maturity and repricing data for loans and leases(1) (excluding those in
nonaccrual status):
a. Fixed rate loans and leases with a remaining maturity of:
(1) Three months or less ............................................... 0348 1,695,265 M.3.a.(1)
(2) Over three months through 12 months ............................... 0349 1,681,892 M.3.a.(2)
(3) Over one year through five years ................................... 0356 5,059,493 M.3.a.(3)
(4) Over five years .................................................... 0357 1,758,418 M.3.a.(4)
(5) Total fixed rate loans and leases (sum of Memorandum
items 3.a.(1) through 3.a.(4))...................................... 0358 10,195,068 M.3.a.(5)
b. Floating rate loans with a repricing frequency of:
(1) Quarterly or more frequently ....................................... 4554 18,981,879 M.3.b.(1)
(2) Annually or more frequently, but less frequently than quarterly .... 4555 1,675,386 M.3.b.(2)
(3) Every five years or more frequently, but less frequently than
annually ........................................................... 4561 758,500 M.3.b.(3)
(4) Less frequently than every five years .............................. 4564 79,024 M.3.b.(4)
(5) Total floating rate loans (sum of Memorandum items 3.b.(1)
through 3.b.(4)) ................................................... 4567 21,494,789 M.3.b.(5)
c. Total loans and leases (sum of Memorandum items 3.a.(5) and
3.b.(5)) (must equal the sum of total loans and leases, net, from
Schedule RC-C, part I, item 12, plus unearned income from
Schedule RC-C, part I, item 11, minus total nonaccrual loans and
leases from Schedule RC-N, sum of items 1 through 8, column C) ......... 1479 31,689,857 M.3.c.
d. Floating rate loans with a remaining maturity of one year or less
(included in Memorandum items 3.b.(1) through 3.b.(4) above) ........... A246 0 M.3.d.
4. Loans to finance commercial real estate, construction, and land
development activities (not secured by real estate) included in
Schedule RC-C, part I, items 4 and 9, column A, page RC-6(2) ............... 2746 305,298 M.4.
5. Loans and leases held for sale (included in Schedule RC-C, part I,
above) ..................................................................... 5369 0 M.5.
------------------------
6. Adjustable rate closed-end loans secured by first liens on 1-4 family RCON Bil Mil Thou
residential properties (included in Schedule RC-C, part I, item 1.c.(2)(a), ------------------------
column B, page RC-6) .......................................................
<C> <C> <C>
5370 1,706,916 M.6.
- --------------
(1) Memorandum item 3 is not applicable to savings banks that must complete supplemental Schedule RC-J.
(2) Exclude loans secured by real estate that are included in Schedule RC-C, part I, item 1, column A.
</TABLE>
17
<PAGE>
<TABLE>
<S> <C> <C>
Legal Title of Bank: Fleet National Bank Call Date: 9/30/96 ST-BK: 25-0590 FFIEC 031
Address: One Monarch Place Page RC-8
City, State Zip: Springfield, MA 01102
FDIC Certificate No.: 0 2 4 9 9
---------
</TABLE>
SCHEDULE RC-D--TRADING ASSETS AND LIABILITIES
Schedule RC-D is to be completed only by banks with $1 billion or more in total
assets or with $2 billion or more in par/notional amount of off-balance sheet
derivative contracts (as reported in Schedule RC-L, items 14.a through 14.e,
columns A through D).
<TABLE>
<CAPTION>
-----
C420
-----------------------
Dollar Amounts in Thousands Bil Mil Thou
- -------------------------------------------------------------------------------------------------- -----------------------
<S> <C> <C> <C>
ASSETS
1. U.S. Treasury securities in domestic offices ................................................ RCON 3531 0 1.
2. U.S. Government agency and corporation obligations in domestic offices (exclude mortgage-
backed securities) .......................................................................... RCON 3532 0 2.
3. Securities issued by states and political subdivisions in the U.S. in domestic offices ...... RCON 3533 0 3.
4. Mortgage-backed securities (MBS) in domestic offices:
a. Pass-through securities issued or guaranteed by FNMA, FHLMC, or GNMA ..................... RCON 3534 0 4.a.
b. Other mortgage-backed securities issued or guaranteed by FNMA, FHLMC, or GNMA
(include CMOs, REMICs, and stripped MBS) ................................................. RCON 3535 0 4.b.
c. All other mortgage-backed securities ..................................................... RCON 3536 0 4.c.
5. Other debt securities in domestic offices ................................................... RCON 3537 0 5.
6. Certificates of deposit in domestic offices ................................................. RCON 3538 0 6.
7. Commercial paper in domestic offices ........................................................ RCON 3539 0 7.
8. Bankers acceptances in domestic offices ..................................................... RCON 3540 0 8.
9. Other trading assets in domestic offices .................................................... RCON 3541 0 9.
10. Trading assets in foreign offices ........................................................... RCFN 3542 0 10.
11. Revaluation gains on interest rate, foreign exchange rate, and other commodity and equity
contracts:
a. In domestic offices ...................................................................... RCON 3543 43,581 11.a.
b. In foreign offices ....................................................................... RCFN 3544 4,530 11.b.
12. Total trading assets (sum of items 1 through 11) (must equal Schedule RC, item 5) ........... RCFD 3545 48,111 12.
-----------------------
LIABILITIES Bil Mil Thou
-----------------------
13. Liability for short positions ............................................................... RCFD 3546 0 13.
14. Revaluation losses on interest rate, foreign exchange rate, and other commodity and equity
contracts ................................................................................... RCFD 3547 34,078 14.
15. Total trading liabilities (sum of items 13 and 14) (must equal Schedule RC, item 15.b) ...... RCFD 3548 34,078 15.
-----------------------
</TABLE>
18
<PAGE>
Legal Title of Bank: Fleet National Bank Call Date: 9/30/96
Address: One Monarch Place ST-BK: 25-0590 FFIEC 031
City, State Zip: Springfield, MA 01102 Page RC-9
FDIC Certificate No.: 0 2 4 9 9
---------
SCHEDULE RC-E--DEPOSIT LIABILITIES
PART I. DEPOSITS IN DOMESTIC OFFICES
<TABLE>
<CAPTION>
--------
C425
---------------------------------------------------------------
Nontransaction
Transaction Accounts Accounts
------------------------------------------- ---------------
(Column A) (Column B) (Column C)
Total transaction Memo: Total Total
accounts (including demand deposits nontransaction
total demand (included in accounts
deposits) column A) (including MMDAs)
------------------- ------------------- -------------------
Dollar Amounts in Thousands RCON Bil Mil Thou RCON Bil Mil Thou RCON Bil Mil Thou
- ------------------------------------------------------ ------------------- ------------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Deposits of:
1. Individuals, partnerships, and corporations ....... 2201 9,213,807 2240 8,820,326 2346 21,863,734 1.
2. U.S. Government ................................... 2202 36,789 2280 36,769 2520 29,856 2.
3. States and political subdivisions in the U.S. ..... 2203 683,890 2290 461,287 2530 680,014 3.
4. Commercial banks in the U.S. ...................... 2206 653,505 2310 653,505 2550 771 4.
5. Other depository institutions in the U.S. ......... 2207 225,732 2312 225,732 2349 2,968 5.
6. Banks in foreign countries ........................ 2213 11,881 2320 11,881 2236 0 6.
7. Foreign governments and official institutions
(including foreign central banks) ................. 2216 1,386 2300 1,386 2377 0 7.
8. Certified and official checks ..................... 2330 169,979 2330 169,979 8.
9. Total (sum of items 1 through 8) (sum of
columns A and C must equal Schedule RC,
item 13.a) ........................................ 2215 10,996,969 2210 10,380,865 2385 22,577,343 9.
------------------- ------------------- -------------------
</TABLE>
Memoranda
<TABLE>
<CAPTION>
Dollar Amounts in Thousands RCON Bil Mil Thou
- ----------------------------------------------------------------------------------------------------- -----------------
<S> <C> <C>
1. Selected components of total deposits (i.e., sum of item 9, columns A and C):
a. Total Individual Retirement Accounts (IRAs) and Keogh Plan accounts .......................... 6835 2,679,044 M.1.a.
b. Total brokered deposits ...................................................................... 2365 1,542,597 M.1.b.
c. Fully insured brokered deposits (included in Memorandum item 1.b above):
(1) Issued in denominations of less than $100,000 ............................................ 2343 2,240 M.1.c.(1)
(2) Issued either in denominations of $100,000 or in denominations greater than
$100,000 and participated out by the broker in shares of $100,000 or less ................ 2344 1,540,357 M.1.c.(2)
d. Maturity data for brokered deposits:
(1) Brokered deposits issued in denominations of less than $100,000 with a remaining
maturity of one year or less (included in Memorandum item 1.c.(1) above) ................. A243 110 M.1.d.(a)
(2) Brokered deposits issued in denominations of $100,000 or more with a remaining
maturity of one year or less (included in Memorandum item 1.b above) ..................... A244 601,205 M.1.d.(2)
e. Preferred deposits (uninsured deposits of states and political subdivisions in the U.S.
reported in item 3 above which are secured or collateralized as required under state law) .... 5590 477,275 M.1.e.
2. Components of total nontransaction accounts (sum of Memorandum items 2.a through 2.d
must equal item 9, column C above):
a. Savings deposits:
(1) Money market deposit accounts (MMDAs) .................................................... 6810 10,310,776 M.2.a.(1)
(2) Other savings deposits (excludes MMDAs) .................................................. 0352 2,519,554 M.2.a.(2)
b. Total time deposits of less than $100,000 .................................................... 6648 7,097,828 M.2.b.
c. Time certificates of deposit of $100,000 or more ............................................. 6645 2,649,185 M.2.c.
d. Open-account time deposits of $100,000 or more ............................................... 6646 0 M.2.d.
3. All NOW accounts (included in column A above) .................................................... 2398 616,104 M.3.
-------------------
4. Not applicable
</TABLE>
19
<PAGE>
Call Date: 9/30/96 ST-BK: 25-0590 FFIEC 031
Legal Title of Bank: Fleet National Bank Page PR-10
Address: One Monarch Place
City, State Zip: Springfield, MA 01102
FDIC Certificate No.: 0 2 4 9 9
---------
SCHEDULE RC-E--CONTINUED
PART I. CONTINUED
Memoranda (continued)
<TABLE>
<CAPTION>
Dollar Amounts in Thousands RCON Bil Mil Thou
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
5. Maturity and repricing data for time deposits of less than $100,000 (sum of
Memorandum items 5.a.(1) through 5.b.(3) must equal memorandum item 2.b above):(1)
a. Fixed rate time deposits of less than $100,000 with a remaining maturity of:
(1) Three months or less ................................................................ A225 1,708,719 M.5.a.(1)
(2) Over three months through 12 months ................................................. A226 3,119,370 M.5.a.(2)
(3) Over one year ....................................................................... A227 2,182,483 M.5.a.(3)
b. Floating rate time deposits of less than $100,000 with a repricing frequency of:
(1) Quarterly or more frequently ........................................................ A228 87,256 M.5.b.(1)
(2) Annually or more frequently, but less frequently than quarterly ..................... A229 0 M.5.b.(2)
(3) Less frequently than annually ....................................................... A230 0 M.5.b.(3)
c. Floating rate time deposits of less than $100,000 with a remaining maturity of
one year or less (included in memorandum items 5.b.(1) through 5.b.(3) above) ........... A231 59,897 M.5.c.
6. Maturity and repricing data for time deposits of $100,000 or more (i.e., time certificates
of deposit of $100,000 or more and open-account time deposits of $100,000 or more)
(sum of Memorandum items 6.a.(1) through 6.b.(4) must equal the sum of Memorandum
items 2.c and 2.d above):(1)
a. Fixed rate time deposits of $100,000 or more with a remaining maturity of:
(1) Three months or less ................................................................ A232 660,156 M.6.a.(1)
(2) Over three months through 12 months ................................................. A233 868,600 M.6.a.(2)
(3) Over one year through five years .................................................... A234 1 ,111,843 M.6.a.(3)
(4) Over five years ..................................................................... A235 8,586 M.6.a.(4)
b. Floating rate time deposits of $100,000 or more with a repricing frequency of:
(1) Quarterly or more frequently ........................................................ A236 0 M.6.b.(1)
(2) Annually or more frequently, but less frequently than quarterly ..................... A237 0 M.6.b.(2)
(3) Every five years or more frequently, but less frequently than annually .............. A238 0 M.6.b.(3)
(4) Less frequently than every five years ............................................... A239 0 M.6.b.(4)
c. Floating rate time deposits of $100,000 or more with a remaining maturity of
one year or less (included in Memorandum items 6.b.(1) through 6.b.(4) above) ........... A240 0 M.6.c.
-----------------
</TABLE>
- --------------------
(1) Memorandum items 5 and 6 are not applicable to savings banks that must
complete supplemental Schedule RC-J.
20
<PAGE>
Call Date: 9/30/96 ST-BK: 25-0590 FFIEC 031
Legal Title of Bank: Fleet National Bank Page RC-11
Address: One Monarch Place
City, State Zip: Springfield, MA 01102
FDIC Certificate No.: 0 2 4 9 9
---------
SCHEDULE RC-E--CONTINUED
PART II. DEPOSITS IN FOREIGN OFFICES (INCLUDING EDGE AND
AGREEMENT SUBSIDIARIES AND IBFS)
<TABLE>
<CAPTION>
-------------------------
Dollars Amounts in Thousands RCFN Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Deposits of:
1. Individuals, partnerships, and corporations........................................... 2621 1,746,651 1.
2. U.S. banks (including IBFs and foreign branches of U.S. banks) ....................... 2623 0 2.
3. Foreign banks (including U.S. branches and agencies of foreign banks,
including their IBFs)............................................................... 2625 0 3.
4. Foreign governments and official institutions (including foreign central banks)....... 2650 0 4.
5. Certified and official checks ........................................................ 2330 0 5.
6. All other deposits.................................................................... 2668 71,060 6.
7. Total (sum of items 1 through 6) (must equal Schedule RC, item 13.b).................. 2200 1,817,711 7.
-------------------------
Memorandum Dollars Amounts in Thousands RCFN Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------
1. Time deposits with a remaining maturity of one year or less
(included in Part II, item 7 above)................................................ A245 1,817,674 M.1.
</TABLE>
SCHEDULE RC-F--OTHER ASSETS
<TABLE>
<CAPTION>
C430
-----------------------------
Dollars Amounts in Thousands Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Income earned, not collected on loans................................................. RCFD 2164 161,790 1.
2. Net deferred tax assets(1)............................................................ RCFD 2148 0 2.
3. Excess residential mortgage servicing fees receivable................................. RCFD 5371 153,788 3.
4. Other (itemize and describe amounts that exceed 25% of this item)..................... RCFD 2168 3,383,658 4.
------------- --------------------------
a. TEXT 3549 Mortgages Held For Resale RCFD 3549 1,555,298 4.a.
------------- ------------------------------------------
b. TEXT 3550 RCFD 3550 4.b.
------------- ------------------------------------------
c. TEXT 3551 RCFD 3551 4.c.
-----------------------------------------------------------------------------------
5. Total (sum of items 1 through 4) (must equal Schedule RC, item 11).................... RCFD 2160 3,699,236 5.
-------------------------
Memorandum Dollars Amounts in Thousands RCFN Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------
1. Deferred tax assets disallowed for regulatory capital purposes........................ RCFD 5610 0 M.1.
</TABLE>
SCHEDULE RC-G--OTHER LIABILITIES
<TABLE>
<CAPTION>
C435
-----------------------------
Dollars Amounts in Thousands Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. a. Interest accrued and unpaid on deposits in domestic offices(2)..................... RCON 3645 47,460 1.a.
b. Other expenses accrued and unpaid (includes accrued income taxes payable).......... RCFD 3646 565,126 1.b.
2. Net deferred tax liabilities(1)....................................................... RCFD 3049 268,231 2.
3. Minority interest in consolidated subsidiaries........................................ RCFD 3000 0 3.
4. Other (itemize and describe amounts that exceed 25% of this item)..................... RCFD 2938 107,113 4.
------------- --------------------------
a. TEXT 3552 RCFD 3552 4.a.
------------- ------------------------------------------
b. TEXT 3553 RCFD 3553 4.b.
------------- ------------------------------------------
c. TEXT 3554 RCFD 3554 4.c.
-----------------------------------------------------------------------------------
5. Total (sum of items 1 through 4) (must equal Schedule RC, item 20).................... RCFD 2930 987,930 5.
</TABLE>
- --------------
(1) See discussion of deferred income taxes in Glossary entry on"income taxes."
For savings banks, include "dividends" accrued and unpaid on deposits.
21
<PAGE>
Call Date: 9/30/96 ST-BK: 25-0590 FFIEC 031
Legal Title of Bank: Fleet National Bank Page RC-12
Address: One Monarch Place
City, State Zip: Springfield, MA 01102
FDIC Certificate No.: 0 2 4 9 9
---------
SCHEDULE RC-H--SELECTED BALANCE SHEET ITEMS FOR DOMESTIC OFFICES
<TABLE>
<CAPTION>
--------
C440 <-
--------------------
Domestic Offices
--------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Customers' liability to this bank on acceptances outstanding .................................. 2155 14,235 1.
2. Bank's liability on acceptances executed and outstanding ...................................... 2920 14,235 2.
3. Federal funds sold and securities purchased under agreements to resell ........................ 1350 32,521 3.
4. Federal funds purchased and securities sold under agreements to repurchase .................... 2800 4,526,632 4.
5. Other borrowed money .......................................................................... 3190 1,222,884 5.
EITHER ////////////////////
6. Net due from own foreign offices, Edge and Agreement subsidiaries, and IBFs ................... 2163 N/A 6.
OR ////////////////////
7. Net due to own foreign offices, Edge and Agreement subsidiaries, and IBFs ..................... 2941 1,800,174 7.
8. Total assets (excludes net due from foreign offices, Edge and Agreement subsidiaries, and ////////////////////
IBFs) ......................................................................................... 2192 49,324,712 8.
9. Total liabilities (excludes net due to foreign offices, Edge and Agreement subsidiaries, and ////////////////////
IBFs) ......................................................................................... 3129 43,104,783 9.
--------------------
<CAPTION>
Items 10-17 include held-to-maturity and available-for-sale securities in domestic offices.
--------------------
RCON Bil Mil Thou
--------------------
10. U.S. Treasury securities ...................................................................... 1779 1,484,069 10.
11. U.S. Government agency and corporation obligations (exclude mortgage-backed ////////////////////
securities) ................................................................................... 1785 503 11.
12. Securities issued by states and political subdivisions in the U.S. ............................ 1786 186,103 12.
13. Mortgage-backed securities (MBS): ////////////////////
a. Pass-through securities: ////////////////////
(1) Issued or guaranteed by FNMA, FHLMC, or GNMA ........................................... 1787 5,490,660 13.a.(1)
(2) Other pass-through securities .......................................................... 1869 4 13.a.(2)
b. Other mortgage-backed securities (include CMOs, REMICs, and stripped MBS): ////////////////////
(1) Issued or guaranteed by FNMA, FHLMC, or GNMA ........................................... 1877 0 13.b.(1)
(2) All other mortgage-backed securities ................................................... 2253 481 13.b.(2)
14. Other domestic debt securities ................................................................ 3159 709 14.
15. Foreign debt securities ....................................................................... 3160 97,045 15.
16. Equity securities: ////////////////////
a. Investments in mutual funds ................................................................ 3161 28,870 16.a.
b. Other equity securities with readily determinable fair values .............................. 3162 0 16.b.
c. All other equity securities ................................................................ 3169 311,734 16.c.
17. Total held-to-maturity and available-for-sale securities (sum of items 10 through 16) ......... 3170 7,600,178 17.
--------------------
<CAPTION>
Memorandum (to be completed only by banks with ibfs and other "foreign" offices)
--------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------
EITHER ////////////////////
1. Net due from the IBF of the domestic offices of the reporting bank ............................ 3051 0 M.1.
OR ////////////////////
2. Net due to the IBF of the domestic offices of the reporting bank .............................. 3059 N/A M.2.
--------------------
</TABLE>
22
<PAGE>
Call Date: 9/30/96 ST-BK: 25-0590 FFIEC 031
Legal Title of Bank: Fleet National Bank Page RC-13
Address: One Monarch Place
City, State Zip: Springfield, MA 01102
FDIC Certificate No.: 0 2 4 9 9
---------
SCHEDULE RC-I--SELECTED ASSETS AND LIABILITIES OF IBFs
To be completed only by banks with IBFs and other "foreign" offices.
<TABLE>
<CAPTION>
C445
--------------------
Dollar Amounts in Thousands RCFN Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Total IBF assets of the consolidated bank (component of Schedule RC, item 12)............... 2133 0 1.
2. Total IBF loans and lease financing receivables (component of Schedule RC-C, part I,
item 12, column A........................................................................... 2076 0 2.
3. IBF commercial and industrial loans (component of Schedule RC-C, part I, item 4,
column A)................................................................................... 2077 0 3.
4. Total IBF liabilities (component of Schedule RC, item 21)................................... 2898 0 4.
5. IBF deposit liabilities due to banks, including other IBFs (component of Schedule RC-E,
part II, items 2 and 3)..................................................................... 2379 0 5.
6. Other IBF deposit liabilities (component of Schedule RC-E, part II, items 1, 4, 5 and 6).... 2381 0 6.
--------------------
</TABLE>
SCHEDULE RC-K--QUARTERLY AVERAGES(1)
<TABLE>
<CAPTION>
C455
------------------------------
Dollar Amounts in Thousands Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
1. Interest-bearing balances due from depository institutions........................ RCFD 3381 11,877 1.
2. U.S. Treasury securities and U.S. Government agency and corporation
obligations(2).................................................................... RCFD 3382 7,015,138 2.
3. Securities issued by states and political subdivisions in the U.S.(2)............. RCFD 3383 170,402 3.
4. a. Other debt securities(2)....................................................... RCFD 3647 98,284 4.a.
b. Equity securities(3) (includes investments in mutual funds and Federal
Reserve stock)................................................................. RCFD 3648 347,251 4.b.
5. Federal funds sold and securities purchased under agreements to resell in
domestic offices of the bank and of its Edge and Agreement subsidiaries,
and in IBFs....................................................................... RCFD 3365 34,682 5.
Loans:
a. Loans in domestic offices:
(1) Total loans................................................................ RCON 3360 28,984,270 6.a.(1)
(2) Loans secured by real estate............................................... RCON 3385 11,632,311 6.a.(2)
(3) Loans to finance agricultural production and other loans to farmers........ RCON 3386 5,556 6.a.(3)
(4) Commercial and industrial loans............................................ RCON 3387 12,739,363 6.a.(4)
(5) Loans to individuals for household, family, and other personal
expenditures............................................................... RCON 3388 2,145,195 6.a.(5)
b. Total loans in foreign offices, Edge and Agreement subsidiaries, and IBFs...... RCFN 3360 70,538 6.b.
7. Trading assets.................................................................... RCFD 3401 78,267 7.
8. Lease financing receivables (net of unearned income).............................. RCFD 3484 2,345,903 8.
9. Total assets(4)................................................................... RCFD 3368 48,195,765 9.
LIABILITIES
10. Interest-bearing transaction accounts in domestic offices (NOW accounts, ATS
accounts, and telephone and preauthorized transfer accounts) (exclude demand
deposits)......................................................................... RCON 3485 621,447 10.
11. Nontransaction accounts in domestic offices:
a. Money market deposit accounts (MMDAs).......................................... RCON 3486 9,575,516 11.a.
b. Other savings deposits......................................................... RCON 3487 3,366,546 11.b.
c. Time certificates of deposit of $100,000 or more............................... RCON 3345 2,591,101 11.c.
d. All other time deposits........................................................ RCON 3469 7,248,888 11.d.
12. Interest-bearing deposits in foreign offices, Edge and Agreement subsidiaries,
and IBFs.......................................................................... RCFN 3404 1,891,869 12.
13. Federal funds purchased and securities sold under agreements to repurchase in
domestic offices of the bank and of its Edge and Agreement subsidiaries, and in
IBFs.............................................................................. RCFD 3353 5,441,316 13.
14. Other borrowed money.............................................................. RCFD 3355 1,166,403 14.
-------------------------------
</TABLE>
- ----------
(1) For all items, banks have the option of reporting either (1) an average of
daily figures for the quarter, or (2) an average of weekly figures (i.e.,
the Wednesday of each week of the quarter).
(2) Quarterly averages for all debt securities should be based on amortized
cost.
(3) Quarterly averages for all equity securities should be based on historical
cost.
(4) The quarterly average for total assets should reflect all debt securities
(not held for trading) at amortized cost, equity securities with readily
determinable fair values at the lower of cost or fair value, and equity
securities without readily determinable fair values at historical cost.
23
<PAGE>
<TABLE>
<S> <C> <C>
Legal Title of Bank: Fleet National Bank Call Date: 9/30/96 ST-BK: 25-0590 FFIEC 031
Address: One Monarch Place Page RC-14
City, State Zip: Springfield, MA 01102
FDIC Certificate No.: 0 2 4 9 9
---------
</TABLE>
Schedule RC-L--Off-Balance Sheet Items
Please read carefully the instructions for the preparation of Schedule RC-L.
Some of the amounts reported in Schedule RC-L are regarded as volume indicators
and not necessarily as measures of risk.
<TABLE>
<CAPTION>
C460
-----------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- ---------------------------------------------------------------------------------- -----------------------
<S> <C> <C> <C>
1. Unused commitments:
a. Revolving, open-end lines secured by 1-4 family residential properties,
e.g., home equity lines.................................................... 3814 1,603,462 1.a.
b. Credit card lines.......................................................... 3815 35,582 1.b.
c. Commercial real estate, construction, and land development:
(1) Commitments to fund loans secured by real estate....................... 3816 447,874 1.c.(1)
(2) Commitments to fund loans not secured by real estate................... 6550 467,237 1.c.(2)
d. Securities underwriting.................................................... 3817 0 1.d.
e. Other unused commitments................................................... 3818 18,958,713 1.e.
2. Financial standby letters of credit and foreign office guarantees............. 3819 2,194,339 2.
a. Amount of financial standby letters of credit conveyed to others
RCFD 3820 85,446 2.a.
3. Performance standby letters of credit and foreign office guarantees........... 3821 173,093 3.
a. Amount of performance standby letters of credit conveyed to others
RCFD 3822 11,025 3.a.
4. Commercial and similar letters of credit...................................... 3411 155,635 4.
5. Participations in acceptances (as described in the instructions)
conveyed to others by the reporting bank...................................... 3428 13,822 5.
6. Participations in acceptances (as described in the instructions)
acquired by the reporting (nonaccepting) bank................................. 3429 11,805 6.
7. Securities borrowed........................................................... 3432 0 7.
8. Securities lent (including customers' securities lent where the customer
is indemnified against loss by the reporting bank)............................ 3433 200,546 8.
9. Loans transferred (i.e., sold or swapped) with recourse that have been
treated as sold for Call Report purposes:
a. FNMA and FHLMC residential mortgage loan pools:
(1) Outstanding principal balance of mortgages transferred as of the
report date............................................................ 3650 239,132 9.a.(1)
(2) Amount of recourse exposure on these mortgages as of the report date... 3651 239,132 9.a.(2)
b. Private (nongovernment-issued or -guaranteed) residential mortgage loan
pools:
(1) Outstanding principal balance of mortgages transferred as of the
report date............................................................ 3652 32,676 9.b.(1)
(2) Amount of recourse exposure on these mortgages as of the report date... 3653 32,676 9.b.(2)
c. Farmer Mac agricultural mortgage loan pools:
(1) Outstanding principal balance of mortgages transferred as of the
report date............................................................ 3654 0 9.c.(1)
(2) Amount of recourse exposure on these mortgages as of the report date... 3655 0 9.c.(2)
d. Small business obligations transferred with recourse under Section 208
of the Riegle Community Development and Regulatory Improvement Act
of 1994:
(1) Outstanding principal balance of small business obligations
transferred as of the report date...................................... A249 0 9.d.(1)
(2) Amount of retained recourse on these obligations as of the
report date............................................................ A250 0 9.d.(2)
10. When-issued securities:
a. Gross commitments to purchase............................................. 3434 0 10.a.
b. Gross commitments to sell................................................. 3435 0 10.b.
11. Spot foreign exchange contracts............................................... 8765 1,897,509 11.
12. All other off-balance sheet liabilities (exclude off-balance sheet
derivatives) (itemize and describe each component of this item over 25%
of Schedule RC, item 28, "Total equity capital").............................. 3430 0 12.
a. TEXT 3555 RCFD 3555 12.a.
b. TEXT 3556 RCFD 3556 12.b.
c. TEXT 3557 RCFD 3557 12.c.
d. TEXT 3558 RCFD 3558 12.d.
</TABLE>
24
<PAGE>
<TABLE>
<S> <C> <C>
Legal Title of Bank: Fleet National Bank Call Date: 9/30/96 ST-BK: 25-0590 FFIEC 031
Address: One Monarch Place Page RC-15
City, State Zip: Springfield, MA 01102
FDIC Certificate No.: 0 2 4 9 9
---------
</TABLE>
SCHEDULE RC-L--CONTINUED
<TABLE>
<CAPTION>
-----------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
13. All other off-balance sheet assets (exclude off-balance sheet derivatives)
itemize and describe each component of this item over 25% of Schedule RC,
item 28, "Total equity capital").................................................... 5591 0 13.
------------- --------------------------
a. TEXT 5592 RCFD 5592 13.a.
------------- ------------------------------------------
b. TEXT 5593 RCFD 5593 13.b.
------------- ------------------------------------------
c. TEXT 5594 RCFD 5594 13.c.
------------- ------------------------------------------
d. TEXT 5595 RCFD 5594 13.d.
-----------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-----------
C461
---------------------------------------------------------------------------------------
(Column A) (Column B) (Column C) (Column D)
Dollar Amounts in Thousands Interest Rate Foreign Exchange Equity Derivative Commodity and
- ------------------------------ Contracts Contracts Contracts Other Contracts
Off-balance Sheet Derivatives ---------------------------------------------------------------------------------------
Position Indicators Tril Bil Mil Thou Tril Bil Mil Thou Tril Bil Mil Thou Tril Bil Mil Thou
- ------------------------------ ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
14. Gross amounts (e.g.,
notional amounts) (for each
column, sum of items 14.a
through 14.e must equal
sum of items 15, 16.a, and
16.b):
---------------------- --------------------- --------------------- --------------------
744,062 0 0 42,510 14.a.
---------------------- --------------------- --------------------- --------------------
a. Futures contracts...... RCFD 8693 RCFD 8694 RCFD 8695 RCFD 8696
---------------------- --------------------- --------------------- --------------------
b. Forward contracts...... 2,569,500 1,809,728 0 27,422 14.b.
---------------------- --------------------- --------------------- --------------------
RCFD 8697 RCFD 8698 RCFD 8699 RCFD 8700
---------------------- --------------------- --------------------- --------------------
c. Exchange-traded option
contracts:
---------------------- --------------------- --------------------- --------------------
(1) Written options.... 0 0 0 0 14.c.(1)
---------------------- --------------------- --------------------- --------------------
RCFD 8701 RCFD 8702 RCFD 8703 RCFD 8704
---------------------- --------------------- --------------------- --------------------
(2) Purchased options.. 902,500 0 0 1,746 14.c.(2)
---------------------- --------------------- --------------------- --------------------
d. Over-the-counter option
contracts: RCFD 8705 RCFD 8706 RCFD 8707 RCFD 8708
---------------------- --------------------- --------------------- --------------------
(1) Written options.... 1,251,332 1,443 0 0 14.d.(1)
---------------------- --------------------- --------------------- --------------------
RCFD 8709 RCFD 8710 RCFD 8711 RCFD 8712
---------------------- --------------------- --------------------- --------------------
(2) Purchased options.. 13,125,235 1,443 0 0 14.d.(2)
---------------------- --------------------- --------------------- --------------------
RCFD 8713 RCFD 8714 RCFD 8715 RCFD 8716
---------------------- --------------------- --------------------- --------------------
e. Swaps.................. 18,810,986 0 0 0 14.e.
---------------------- --------------------- --------------------- --------------------
RCFD 3450 RCFD 3826 RCFD 8719 RCFD 8720
---------------------- --------------------- --------------------- --------------------
15. Total gross notional
amount of derivative
contracts held for
trading................... 5,345,761 1,812,614 0 1,746 15.
---------------------- --------------------- --------------------- --------------------
RCFD A126 RCFD A127 RCFD 8723 RCFD 8724
---------------------- --------------------- --------------------- --------------------
16. Total gross notional
amount of derivative
contracts held for
purposes other than
trading:
---------------------- --------------------- --------------------- --------------------
a. Contracts not marked to
market................. 3,930,500 0 0 42,510 16.a.
---------------------- --------------------- --------------------- --------------------
RCFD 8725 RCFD 8726 RCFD 8727 RCFD 8728
---------------------- --------------------- --------------------- --------------------
b. Contracts not marked
to market.............. 28,127,354 0 0 27,422 16.b.
---------------------- --------------------- --------------------- --------------------
RCFD 8729 RCFD 8730 RCFD 8731 RCFD 8732
---------------------- --------------------- --------------------- --------------------
</TABLE>
25
<PAGE>
Legal Title of Bank: Fleet National Bank Call Date: 9/30/96
Address: One Monarch Place ST-BK: 25-0590 FFIEC 031
City, State Zip: Springfield, MA 01102 Page RC-16
FDIC Certificate No.: 0 2 4 9 9
---------
SCHEDULE RC--L--CONTINUED
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
(Column A) (Column B) (Column C) (Column D)
Dollar Amounts in Thousands Interest Rate Foreign Exchange Equity Derivative Commodity and
- ----------------------------- Contracts Contracts Contracts Other Contracts
Off-balance Sheet Derivatives -------------------------------------------------------------------------------------
Position Indicators RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
17. Gross fair values of
derivative contracts:
a. Contracts held for
trading:
(1) Gross positive
fair value............. 8733 29,453 8734 18,658 8735 0 8736 61 17.a.(1)
(2) Gross negative
fair value............. 8737 20,216 8738 13,862 8739 0 8740 0 17.a.(2)
b. Contracts held for
purposes other than
trading that are marked
to market:
(1) Gross positive
fair value............. 8741 655 8742 0 8743 0 8744 2,261 17.b.(1)
(2) Gross negative
fair value 8745 4,613 8746 0 8747 0 8748 0 17.b.(2)
c. Contracts held for
purposes other than
trading that are not
marked to market:
(1) Gross positive
fair value............. 8749 67,825 8750 0 8751 0 8752 123 17.c.(1)
(2) Gross negative
fair value............. 8753 112,527 8754 0 8755 0 8756 0 17.c.(2)
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Memoranda Dollar Amounts in Thousands RCFD Bil Mil Thou
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1.-2. Not applicable
3. Unused commitments with an original maturity exceeding one year that are reported in
Schedule RC-L, items 1.a through 1.e, above (report only the unused portions of commitments
that are fee paid or otherwise legally binding)................................................. 3833 16,723,351 M.3.
a. Participations in commitments with an original maturity ------------------------
exceeding one year conveyed to others............................. RCFD 3834 | 1,632,422 M.3.a.
------------------------
4. To be completed only by banks with $1 billion or more in total assets:
Standby letters of credit and foreign office guarantees (both financial and performance) issued
to non-U.S. addressees (domicile) included in Schedule RC-L, items 2 and 3, above............... 3377 332,359 M.4.
5. Installment loans to individuals for household, family, and other personal expenditures that
have been securitized and sold without recourse (with servicing retained), amounts outstanding
by type of loan:
a. Loans to purchase private passenger automobiles (to be completed for the
September report only)....................................................................... 2741 6,842 M.5.a.
b. Credit cards and related plans (TO BE COMPLETED QUARTERLY)................................... 2742 0 M.5.b.
c. All other consumer installment credit (including mobile home loans) (to be completed for the
September report only)....................................................................... 2743 0 M.5.c.
---------------------------
</TABLE>
26
<PAGE>
<TABLE>
<S> <C> <C>
Legal Title of Bank: Fleet National Bank Call Date: 9/30/96 ST-BK: 25-0590 FFIEC 031
Address: One Monarch Place Page RC-17
City, State Zip: Springfield, MA 01102
FDIC Certificate No.: 0 2 4 9 9
---------
</TABLE>
SCHEDULE RC-M--MEMORANDA
<TABLE>
<CAPTION>
C465
-------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Extensions of credit by the reporting bank to its executive officers, directors, principal
shareholders, and their related interests as of the report date:
a. Aggregate amount of all extensions of credit to all executive officers, directors,
principal shareholders, and their related interests...................................... 6164 550,070 1.a
b. Number of executive officers, directors, and principal shareholders to whom the amount of
all extensions of credit by the reporting bank (including extensions of credit to related
interests) equals or exceeds the lesser of $500,000 or 5 percent Number
----------------
of total capital as defined for this purpose in agency regulations. RCFD 6165 22 1.b
----------------
2. Federal funds sold and securities purchased under agreements to resell with U.S. branches
and agencies of foreign banks(1) (included in Schedule RC, items 3.a and 3.b)............... 3405 0 2.
3. Not applicable.
4. Outstanding principal balance of 1-4 family residential mortgage loans serviced for others
(include both retained servicing and purchased servicing):
a. Mortgages serviced under a GNMA contract ................................................ 5500 25,856,990 4.a.
b. Mortgages serviced under a FHLMC contract:
(1) Serviced with recourse to servicer................................................... 5501 54,298 4.b.(1)
(2) Serviced without recourse to servicer................................................ 5502 34,252,992 4.b.(2)
c. Mortgages serviced under a FNMA contract:
(1) Serviced under a regular option contract............................................. 5503 184,834 4.c.(1)
(2) Serviced under a special option contract............................................. 5504 40,751,543 4.c.(2)
d. Mortgages serviced under other servicing contracts....................................... 5505 11,239,928 4.d.
5. To be completed only by banks with $1 billion or more in total assets:
Customers' liability to this bank on acceptances outstanding (sum of items 5.a and 5.b must
equal Schedule RC, item 9):
a. U.S. addressees (domicile)............................................................... 2103 14,104 5.a.
b. Non-U.S. addressees (domicile)........................................................... 2104 131 5.b.
6. Intangible assets:
a. Mortgage servicing rights............................................................... 3164 1,534,859 6.a.
b. Other identifiable intangible assets:
(1) Purchased credit card relationships................................................. 5506 0 6.b.(1)
(2) All other identifiable intangible assets............................................ 5507 116,198 6.b.(2)
c. Goodwill................................................................................ 3163 660,177 6.c.
d. Total (sum of items 6.a through 6.c) (must equal schedule RC, item 10).................. 2143 2,311,234 6.d.
e. Amount of intangible assets (included in item 6.b. (2) above) that have been
grandfathered or are otherwise qualifying for regulatory capital purposes............... 6442 0 6.e.
7. Mandatory convertible debt, net of common or perpetual stock dedicated to redeem the debt.. 3295 75,000 7.
</TABLE>
- ------------
(1) Do not report federal funds sold and securities purchased under agreements
to resell with other commercial banks in the U.S. in this item.
27
<PAGE>
Legal Title of Bank: Fleet National Bank Call Date: 9/30/96
Address: One Monarch Place ST-BK: 25-0590 FFIEC 031
City, State Zip: Springfield, MA 01102 Page RC-18
FDIC Certificate No.: 0 2 4 9 9
-----------
SCHEDULE RC-M--CONTINUED
<TABLE>
<CAPTION>
-------------------------
Dollar Amounts in Thousands Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
8. a. Other real estate owned:
(1) Direct and indirect investments in real estate ventures........................ RCFD 5372 0 8.a.(1)
(2) All other real estate owned:
(a) Construction and land development in domestic offices...................... RCON 5508 2,221 8.a.(2)(a)
(b) Farmland in domestic offices............................................... RCON 5509 0 8.a.(2)(b)
(c) 1-4 family residential properties in domestic offices...................... RCON 5510 9,228 8.a.(2)(c)
(d) Multifamily (5 or more) residential properties in domestic offices......... RCON 5511 441 8.a.(2)(d)
(e) Nonfarm nonresidential properties in domestic offices...................... RCON 5512 10,894 8.a.(2)(e)
(f) In foreign offices......................................................... RCFN 5513 0 8.a.(2)(f)
(3) Total (sum of items 8.a.(1) and 8.a.(2)) (Must equal Schedule RC, item 7)...... RCFD 2150 22,784 8.a.(3)
b. Investments in unconsolidated subsidiaries and associated companies:
(1) Direct and indirect investments in real estate ventures........................ RCFD 5374 0 8.b.(1)
(2) All other investments in unconsolidated subsidiaries and associated companies.. RCFD 5375 0 8.b.(2)
(3) Total (sum of items 8.b.(1) and 8.b.(2)) (must equal Schedule RC, item 8)...... RCFD 2130 0 8.b.(3)
c. Total assets of unconsolidated subsidiaries and associated companies............... RCFD 5376 0 8.c.
9. Noncumulative perpetual preferred stock and related surplus included in Schedule RC,
item 23, "Perpetual preferred stock and related surplus".............................. RCFD 3778 125,000 9.
10. Mutual fund and annuity sales in domestic offices during the quarter (include
proprietary, private label, and third party products):
a. Money market funds................................................................. RCON 6441 129,353 10.a.
b. Equity securities funds............................................................ RCON 8427 105,157 10.b.
c. Debt securities funds.............................................................. RCON 8428 10,646 10.c.
d. Other mutual funds................................................................. RCON 8429 0 10.d.
e. Annuities.......................................................................... RCON 8430 97,532 10.e.
f. Sales of proprietary mutual funds and annuities (included in items 10.a through
10.e above)........................................................................ RCON 8784 220,741 10.f.
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
--------------------
Memorandum Dollar Amounts in Thousands RCFD Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Interbank holdings of capital instruments (to be completed for the December report only):
a. Reciprocal holdings of banking organizations' capital instruments....................... 3836 N/A M.1.a.
b. Nonreciprocal holdings of banking organizations' capital instruments.................... 3837 N/A M.1.b.
--------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
28
<PAGE>
Legal Title of Bank: Fleet National Bank Call Date: 9/30/96
Address: One Monarch Place ST-BK: 25-0590 FFIEC 031
City, State Zip: Springfield, MA 01102 Page RC-19
FDIC Certificate No.: 0 2 4 9 9
-----------
SCHEDULE RC-N--PAST DUE AND NONACCRUAL LOANS, LEASES,
AND OTHER ASSETS
<TABLE>
<CAPTION>
The FFIEC regards the information reported in ----
all of Memorandum item 1, in items 1 through 10, C470
column A, and in Memorandum items 2 through 4, -------------------------------------------------------------- <-
column A, as confidential. (Column A) (Column B) (Column C)
Past due Past due 90 Nonaccrual
30 through 89 days or more
days and still and still
accruing accruing
------------------ ------------------ ------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Loans secured by real estate: ////////////////// ////////////////// //////////////////
a. To U.S. addresses (domicile) ................. 1245 1246 63,732 1247 236,175 1.a.
b. To non-U.S. addressees (domicile) ............ 1248 1249 0 1250 0 1.b.
2. Loans to depository institutions and acceptances ///// ////////////////// //////////////////
of other banks: ///// ////////////////// //////////////////
a. To U.S. banks and other U.S. depository ///// ////////////////// //////////////////
institutions ................................. 5377 5378 160 5379 0 2.a.
b. To foreign banks ............................. 5380 5381 0 5382 0 2.b.
3. Loans to finance agricultural production and ///// ////////////////// //////////////////
other loans to farmers .......................... 1594 1597 0 1583 715 3.
4. Commercial and industrial loans: ///// ////////////////// //////////////////
a. To U.S. addressees (domicile) ................ 1251 1252 5,283 1253 60,030 4.a.
b. To non-U.S. addressees (domicile) ............ 1254 1255 0 1256 0 4.b.
5. Loans to individuals for household, family, and ///// ////////////////// //////////////////
other personal expenditures: ///// ////////////////// //////////////////
a. Credit cards and related plans ............... 5383 5384 1,272 5385 968 5.a.
b. Other (includes single payment, installment, ///// ////////////////// //////////////////
and all student loans) ....................... 5386 5387 22,269 5388 9,380 5.b.
6. Loans to foreign governments and official ///// ////////////////// //////////////////
institutions .................................... 5389 5390 0 5391 0 6.
7. All other loans ................................. 5459 5460 7,982 5461 645 7.
8. Lease financing receivables: ///// ////////////////// //////////////////
a. Of U.S. addressees (domicile) ................ 1257 1258 114 1259 5,194 8.a.
b. Of non-U.S. addressees (domicile) ............ 1271 1272 0 1791 0 8.b.
9. Debt securities and other assets (exclude other ///// ////////////////// //////////////////
real estate owned and other repossessed assets) . 3505 3506 0 3507 25,944 9.
----- ------------------ ------------------
<CAPTION>
Amounts reported in items 1 through 8 above include guaranteed portions of past due and nonaccrual loans and
leases. Report in item 10 below certain guaranteed loans and have already been included in the amounts reported in
items 1 through 8.
------------------ ------------------ ------------------
RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
10. Loans and leases reported in items 1 ------------------ ------------------ ------------------
through 8 above which are wholly or partially ///// ////////////////// //////////////////
guaranteed by the U.S. Government ............... 5612 5613 16,166 5614 15,817 10.
a. Guaranteed portion of loans and leases ///// ////////////////// //////////////////
included in item 10 above .................... 5615 5616 15,781 5617 11,488 10.a.
------------------ ------------------ ------------------
</TABLE>
29
<PAGE>
<TABLE>
<S> <C> <C>
Legal Title of Bank: Fleet National Bank Call Date: 9/30/96 ST-BK: 25-0590 FFIEC 031
Address: One Monarch Place Page RC-20
City, State Zip: Springfield, MA 01102
FDIC Certificate No.: 0 2 4 9 9
---------
</TABLE>
SCHEDULE RC-N -- CONTINUED
<TABLE>
<CAPTION>
C473
------
(Column A) (Column B) (Column C)
Past Due Past Due 90 Nonaccrual
30 through 89 days or more
days and still and still
Memoranda accruing accruing
------------------ ------------------ ------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
--------------------------- ------------------ ------------------ ------------------
<S> <C> <C> <C>
1. Restructured loans and leases included in ////
Schedule RC-N, items 1 through 8, above (and not ////
reported in Schedule RC-C, part I, Memorandum ////
item 2).............................................. 1658
2. Loans to finance commercial real estate, ////
construction, and land development activities ////
(not secured by real estate) included in ///// ////////////////// //////////////////
Schedule RC-N, items 4 and 7, above................. 6558 6559 0 6560 2,851 M.2.
---- ------------------ ------------------
3. Loans secured by real estate in domestic offices RCON RCON Bil Mil Thou RCON Bil Mil Thou
---- ------------------ ------------------
(included in Schedule RC-N, item 1, above): ///// ////////////////// //////////////////
a. Construction and land development................ 2759 2769 589 3492 22,571 M.3.a.
b. Secured by farmland.............................. 3493 3494 0 3495 159 M.3.b.
c. Secured by 1-4 family residential properties: ///// ////////////////// //////////////////
(1) Revolving, open-end loans secured by ///// ////////////////// //////////////////
1-4 family residential properties and ///// ////////////////// //////////////////
extended under lines of credit............... 5398 5399 3,769 5400 13,509 M.3.c.(1)
(2) All other loans secured by 1-4 family ///// ////////////////// //////////////////
residential properties....................... 5401 5402 53,378 5403 90,447 M.3.c.(2)
d. Secured by multifamily (5 or more) residential ///// ////////////////// //////////////////
properties....................................... 3499 3500 774 3501 9,472 M.3.d.
e. Secured by nonfarm nonresidential properties..... 3502 3503 5,222 3504 100,017 M.3.e.
---- ------------------ ------------------
</TABLE>
<TABLE>
<CAPTION>
---- ------------------
(Column B)
Pa Past due 90
thr? days or more
---- ------------------
RCFD RCFD Bil Mil Thou
---- ------------------
<S> <C> <C>
4. Interest rate, foreign exchange rate, and other ///// //////////////////
commodity and equity contracts: ///// //////////////////
a. Book value of amounts carried as assets.......... 3522 3528 0 M.4.a.
b. Replacement cost of contracts with a ///// //////////////////
positive replacement cost........................ 3529 3530 0 M.4.b.
</TABLE>
30
<PAGE>
<TABLE>
<S> <C>
Legal Title of Bank: Fleet National Bank Call Date: 9/30/96 ST-BK: 25-0590
Address: One Monarch Place Page RC-21
City, State Zip: Springfield, MA 01102
FDIC Certificate No.: |0|2|4|9|9|
SCHEDULE RC-O -- OTHER DATA FOR DEPOSIT INSURANCE ASSESSMENTS
</TABLE>
<TABLE>
<CAPTION>
C475
-----------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- ---------------------------------------------------------------------------------- -----------------------
<S> <C> <C>
1. Unposted debits (see instructions):
a. Actual amount of all unposted debits....................................... 0030 64 1.a.
OR
b. Separate amount of unposted debits:
(1) Actual amount of unposted debits to demand deposits.................... 0031 N/A 1.b.(1)
(2) Actual amount of unposted debits to time and savings deposits(1)....... 0032 N/A 1.b.(2)
2. Unposted credits (see instructions):
a. Actual amount of all unposted credits...................................... 3510 64 2.a.
OR
b. Separate amount of unposted credits:
(1) Actual amount of unposted credits to demand deposits................... 3512 N/A 2.b.(1)
(2) Actual amount of unposted credits to time and savings deposits(1)...... 3514 N/A 2.b.(2)
3. Uninvested trust funds (cash) held in bank's own trust department (not
included in total deposits in domestic offices)............................... 3520 145,532 3.
4. Deposits of consolidated subsidiaries in domestic offices and in insured
branches in Puerto Rico and U.S. territories and possessions (not included in
total deposits):
a. Demand deposits of consolidated subsidiaries............................... 2211 194,247 4.a.
b. Time and savings deposits(1) of consolidated subsidiaries.................. 2351 17,598 4.b.
c. Interest accrued and unpaid on deposits of consolidated subsidiaries....... 5514 9 4.c.
5. Deposits in insured branches in Puerto Rico and U.S. territories
and possessions:
a. Demand deposits in insured branches (included in Schedule RC-E, Part II)... 2229 0 5.a.
b. Time and savings deposits(1) in insured branches (included
in Schedule RC-E, Part II)................................................. 2383 0 5.b.
c. Interest accrued and unpaid on deposits in insured branches
(included in Schedule RC-G, item 1.b)...................................... 5515 0 5.c.
Item 6 is not applicable to state nonmember banks that have not been authorized
by the Federal Reserve to act as pass-through correspondents.
6. Reserve balances actually passed through to the Federal Reserve by the
reporting bank on behalf of its respondent depository institutions that are
also reflected as deposit liabilities of the reporting bank:
a. Amount reflected in demand deposits (included in Schedule RC-E, Part I,
item 4 or 5, column B)..................................................... 2314 0 6.a.
b. Amount reflected in time and savings deposits(1) (included in
Schedule RC-E, Part I, item 4 or 5, column A or C, but not column B)....... 2315 0 6.b.
7. Unamortized premiums and discounts on time and savings deposits:(1)
a. Unamortized premiums....................................................... 5516 786 7.a.
b. Unamortized discounts...................................................... 5517 0 7.b.
- -------------------------------------------------------------------------------------------------------------------------
8. To be completed by banks with "Oakar deposits."
Total "Adjusted Attributable Deposits" of all institutions acquired under
Section 5(d)(3) of the Federal Deposit Insurance Act (from most recent FDIC
Oakar Transaction Worksheet(s))............................................... 5518 2,188,589 8.
- -------------------------------------------------------------------------------------------------------------------------
9. Deposits in lifeline accounts................................................. 5596 9.
10. Benefit-responsive "Depository Institution Investment Contracts" (included in
total deposits in domestic offices)........................................... 8432 0 10.
</TABLE>
- ---------------
(1) For FDIC insurance assessment purposes, "time and savings deposits" consists
of nontransaction accounts and all transaction accounts other than demand
deposits.
31
<PAGE>
<TABLE>
<S> <C> <C>
Legal Title of Bank: Fleet National Bank Call Date: 9/30/96 ST-BK: 25-0590 FFIEC 031
Address: One Monarch Place Page RC-22
City, State Zip: Springfield, MA 01102
FDIC Certificate No.: 0 2 4 9 9
---------
</TABLE>
SCHEDULE RC-O--CONTINUED
<TABLE>
<CAPTION>
------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
11. Adjustments to demand deposits in domestic offices reported in Schedule RC-E for //////////////////
certain reciprocal demand balances: //////////////////
a. Amount by which demand deposits would be reduced if reciprocal demand balances //////////////////
between the reporting bank and savings associations were reported on a net basis //////////////////
rather than a gross basis in Schedule RC-E ............................................... 8785 0 11.a.
b. Amount by which demand deposits would be increased if reciprocal demand balances //////////////////
between the reporting bank and U.S. branches and agencies of foreign banks were //////////////////
reported on a gross basis rather than a net basis in Schedule RC-E ....................... A181 0 11.b.
c. Amount by which demand deposits would be reduced if cash items in process of //////////////////
collection were included in the calaculation of net reciprocal demand balances between //////////////////
the reporting bank and the domestic offices of U.S. banks and savings associations //////////////////
in Schedule RC-E ......................................................................... A182 0 11.c.
------------------
<CAPTION>
Memoranda (To Be Completed Each Quarter Except As Noted)
------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------
1. Total deposits in domestic offices of the bank (sum of Memorandum items 1.a.(1) and //////////////////
1.b.(1) must equal Schedule RC, item 13.a): //////////////////
a. Deposit accounts of $100,000 or less: //////////////////
(1) Amount of deposit accounts of $100,000 or less ....................................... 2702 18,512,871 M.1.a.(1)
(2) Number of deposit accounts of $100,000 or less (to be Number //////////////////
--------------------------
completed for the June report only) ....................... RCON 3779 N/A ////////////////// M.1.a.(2)
--------------------------
b. Deposit accounts of more than $100,000: //////////////////
(1) Amount of deposit accounts of more than $100,000 ..................................... 2710 15,061,441 M.1.b.(1)
Number //////////////////
--------------------------
(2) Number of deposit accounts of more than $100,000 .......... RCON 2722 28,530 ////////////////// M.1.b.(2)
----------------------------------------------
2. Estimated amount of uninsured deposits in domestic offices of the bank:
a. An estimate of your bank's uninsured deposits can be determined by multiplying the
number of deposit accounts of more than $100,000 reported in Memorandum item 1.b.(2)
above by $100,000 and subtracting the result from the amount of deposit accounts of
more than $100,000 reported in Memorandum item 1.b.(1) above.
Indicate in the appropriate box at the right whether your bank has a method or YES NO
procedure for determining a better estimate of uninsured deposits than the ------------------
estimate described above ................................................................. 6861 /// x M.2.a.
------------------
RCON Bil Mil Thou
b. If the box marked YES has been checked, report the estimate of uninsured deposits ------------------
determined by using your bank's method or procedure ...................................... 5597 N/A M.2.b.
------------------
- -----------------------------------------------------------------------------------------------------------------------------
Person to whom questions about the Reports of Condition and Income should be directed: C477 <-
----
Pamela S. Flynn, Vice President (401) 278-5194
- ------------------------------------------------------------------------------ --------------------------------------------
Name and Title (TEXT 8901) Area code/phone number/extension (TEXT 8902)
</TABLE>
32
<PAGE>
<TABLE>
<S> <C> <C>
Legal Title of Bank: Fleet National Bank Call Date: 9/30/96 ST-BK: 25-0590 FFIEC 031
Address: One Monarch Place Page RC-23
City, State Zip: Springfield, MA 01102
FDIC Certificate No.: 0 2 4 9 9
---------
</TABLE>
SCHEDULE RC-R--CONTINUED
This schedule must be completed by all banks as follows: Banks that reported
total assets of $1 billion or more in Schedule RC, item 12, for June 30, 1995,
must complete items 2 through 9 and Memoranda items 1 and 2. Banks with assets
of less than $1 billion must complete items 1 through 3 below or Schedule RC-R
in its entirety, depending on their response to item 1 below.
<TABLE>
<S> <C> <C> <C> <C>
--------------
C480
1. Test for determining the extent to which Schedule RC-R must be completed. To be ---------------
completed only by banks with total assets of less than $1 billion. Indicate in the Yes No
appropriate box at the right whether the bank has total capital greater than or -------------------------
equal to eight percent of adjusted total assets ..................................... RCFD 6056 1.
-------------------------
For purposes of this test, adjusted total assets equals total assets less cash, U.S. Treasuries, U.S.
Government agency obligations, and 80 percent of U.S. Government-sponsored agency obligations plus the
allowance for loan and lease losses and selected off-balance sheet items as reported on Schedule RC-L
(see instructions).
If the box marked YES has been checked, then the bank only has to complete items 2 and 3 below. If the
box marked NO has been checked, the bank must complete the remainder of this schedule.
A NO response to item 1 does not necessarily mean that the bank's actual risk-based capital ratio is
less than eight percent or that the bank is not in compliance with the risk-based capital guidelines.
-----------------------------------------------------------------
NOTE: All banks are required to complete items 2 and 3 below.
See optional worksheet for items 3.a through 3.f. ------------------------------------------
----------------------------------------------------------------- (Column A) (Column B)
Dollar Amounts in Thousands Subordinated Debt(1) Other
- ---------------------------------------------------------------------- and Intermediate Limited-Life
2. Subordinated debt(1) and other limited-life capital instruments Term Preferred Stock Capital Instruments
(original weighted average maturity of at least five years) -------------------- --------------------
with a remaining maturity of: RDFD Bil Mil Thou RCFD Bil Mil Thou
------------------------------------------
a. One year or less................................................ 3780 25,737 3786 0 2.a.
b. Over one year through two years................................. 3781 737 3787 0 2.b.
c. Over two years through three years.............................. 3782 10,745 3788 0 2.c.
d. Over three years through four years............................. 3783 0 3789 0 2.d.
e. Over four years through five years.............................. 3784 0 3790 0 2.e.
f. Over five years................................................. 3785 1,101,000 3791 0 2.f.
------------------------------------------
3. Amounts used in calculated regulatory capital ratios (report amounts
determined by the bank for its own internal regulatory capital --------------------
analyses consistent with applicable capital standards): RCFD Bil Mil Thou
--------------------
a. Tier 1 capital........................................................................ 8274 3,659,643 3.a.
b. Tier 2 capital........................................................................ 8275 1,757,001 3.b.
c. Total risk-based capital.............................................................. 3792 5,416,644 3.c.
d. Excess allowance for loan and lease losses............................................ A222 264,213 3.d.
e. Risk-weighted assets (net of all deductions, including excess allowance).............. A223 45,860,269 3.e.
f. "Average total assets" (net of all assets deducted from Tier 1 capital)(2)............ A224 47,419,390 3.f.
------------------------------------------
(Column A) (Column B)
Items 4-9 and Memoranda items 1 and 2 are to be completed Assets Credit Equiv-
by banks that answered NO to Item 1 above and Recorded alent Amount
by banks with total assets of $1 billion or more. on the of Off-Balance
Balance Sheet Sheet Items(3)
-------------------- --------------------
4. Assets and credit equivalent amounts of off-balance sheet items RCFD Bil Mil Thou RCFD Bil Mil Thou
assigned to the Zero percent risk category: -------------------- --------------------
a. Assets recorded on the balance sheet:
(1) Securities issued by, other claims on, and claims
unconditionally guaranteed by, the U.S. Government
and its agencies and other OECD central governments......... 3794 2,335,793 4.a.(1)
(2) All other................................................... 3795 968,339 4.a.(2)
b. Credit equivalent amount of off-balance sheet items............. 3796 296,454 4.b.
------------------------------------------
</TABLE>
- ----------
(1) Exclude mandatory convertible debt reported in Schedule RC-M, item 7.
(2) Do not deduct excess allowance for loan and lease losses.
(3) Do not report in column B the risk-weighted amount of assets reported in
column A.
33
<PAGE>
Call Date: 9/30/96 ST-BK: 25-0590 FFIEC 031
Legal Title of Bank: Fleet National Bank Page RC-24
Address: One Monarch Place
City, State Zip: Springfield, MA 01102
FDIC Certificate No.: 0 2 4 9 9
---------
SCHEDULE RC-R--CONTINUED
<TABLE>
<CAPTION>
(Column A) (Column B)
Assets Credit Equiv-
Recorded alent Amount
on the of Off-Balance
Balance Sheet Sheet Items(1)
----------------------- -----------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou
- ------------------------------------------------------------- ----------------------- -----------------------
<S> <C> <C> <C> <C> <C>
5. Assets and credit equivalent amounts of off-balance
sheet items assigned to the 20 percent risk category:
a. Assets recorded on the balance sheet:
(1) Claims conditionally guaranteed by the U.S.
Government and its agencies and other OECD
central governments................................ 3798 692,459 5.a.(1)
(2) Claims collateralized by securities issued by the
U.S. Government and its agencies and other OECD
central governments; by securities issued by
U.S. Government-sponsored agencies; and by cash
on deposit......................................... 3799 0 5.a.(2)
(3) All other.......................................... 3800 8,538,080 5.a.(3)
b. Credit equivalent amount of off-balance sheet items.... 3801 926,409 5.b.
6. Assets and credit equivalent amounts of off-balance
sheet items assigned to the 50 percent risk category:
a. Assets recorded on the balance sheet................... 3802 5,601,621 6.a.
b. Credit equivalent amount of off-balance sheet items.... 3803 413,089 6.b.
7. Assets and credit equivalent amount of off-balance
sheet items assigned to the 100 percent risk category:
a. Assets recorded on the balance sheet................... 3804 32,091,416 7.a.
b. Credit equivalent amount of off-balance sheet items.... 3805 9,770,697 7.b.
8. Balance sheet asset values excluded from the
calculation of the risk-based capital ratio(2)............ 3806 24,268 8.
9. Total assets recorded on the balance sheet (sum of
items 4.a, 5.a, 6.a, 7.a, and 8, column A) (must equal
Schedule RC, item 12 plus items 4.b and 4.c).............. 3807 50,251,976 9.
</TABLE>
<TABLE>
<CAPTION>
Dollar Amounts in Thousands RCFD Bil Mil Thou
- ------------------------------------------------------------------------------------- -----------------------
<S> <C> <C> <C>
1. Current credit exposure across all off-balance sheet derivative contracts
covered by the risk-based capital standards........................................ 8764 118,571 M.1
</TABLE>
<TABLE>
<CAPTION>
With a remaining maturity of
------------------------------------------------------------------------------------
(Column A) (Column B) (Column C)
One year or less Over one year Over five years
through five years
------------------------------------------------------------------------------------
RCFD Tril Bil Mil Thou RCFD Tril Bil Mil Thou RCFD Tril Bil Mil Thou
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
2. Notional principal amounts
of off-balance sheet
derivative contracts(3):
a. Interest rate
contracts................. 3809 8,972,794 8766 20,272,746 8767 719,181 M.2.a.
b. Foreign exchange
contracts................. 3812 1,431,018 8769 52,587 8770 0 M.2.b.
c. Gold contracts............ 8771 15,034 8772 0 8773 0 M.2.c.
d. Other previous metals
contracts................. 8774 14,134 8775 0 8776 0 M.2.d.
e. Other commodity
contracts................. 8777 0 8778 0 8779 0 M.2.e.
f. Equity derivative
contracts................. A000 0 A001 0 A002 0 M.2.f.
</TABLE>
(1) Do not report in column B the risk-weighted amount of assets reported in
column A.
(2) Include the difference between the fair value and the amortized cost of
available-for-sale securities in item 8 and report the amortized cost of
these securities in items 4 through 7 above. Item 8 also includes on-balance
sheet asset values (or portions thereof) of off-balance sheet interest rate,
foreign exchange rate, and commodity contracts and those contracts (e.g.,
futures contracts) not subject to risk-based capital. Exclude from item 8
margin accounts and accrued receivables not included in the calculation of
credit equivalent amounts of off-balance sheet derivatives as well as any
portion of the allowance for loan and lease losses in excess of the amount
that may be included in Tier 2 capital.
(3) Exclude foreign exchange contracts with an original maturity of 14 days or
less and all futures contracts.
34
<PAGE>
Legal Title of Bank: Fleet National Bank Call Date: 9/30/96
Address: One Monarch Place ST-BK: 25-0590 FFIEC 031
City, State Zip: Springfield, MA 01102 Page RC-25
FDIC Certificate No.: 0 2 4 9 9
----------
OPTIONAL NARRATIVE STATEMENT CONCERNING THE AMOUNTS
REPORTED IN THE REPORTS OF CONDITION AND INCOME
AT CLOSE OF BUSINESS ON SEPTEMBER 30, 1996
FLEET NATIONAL BANK SPRINGFIELD MASSACHUSETTS
- ---------------------------- -------------------, ----------------------
Legal Title of Bank City State
The management of the reporting bank may, if it wishes, submit a brief
narrative statement on the amounts reported in the Reports of Condition and
Income. This optional statement will be made available to the public, along
with the publicly available data in the Reports of Condition and Income, in
response to any request for individual bank report data. However, the
information reported in column A and in all of Memorandum item 1 of Schedule
RC-N is regarded as confidential and will not be released to the public. BANKS
CHOOSING TO SUBMIT THE NARRATIVE STATEMENT SHOULD ENSURE THAT THE STATEMENT
DOES NOT CONTAIN THE NAMES OR OTHER IDENTIFICATIONS OF INDIVIDUAL BANK
CUSTOMERS, REFERENCES TO THE AMOUNTS REPORTED IN THE CONFIDENTIAL ITEMS IN
SCHEDULE RC-N, OR ANY OTHER INFORMATION THAT THEY ARE NOT WILLING TO HAVE MADE
PUBLIC OR THAT WOULD COMPROMISE THE PRIVACY OF THEIR CUSTOMERS. Banks choosing
not to make a statement may check the "No comment" box below and should make no
entries of any kind in the space provided for the narrative statement; i.e.,
DO NOT enter in this space such phrases as "No statement," "Not applicable,"
"N/A," "No comment," and "None."
The optional statement must be entered on this sheet. The statement should not
exceed 100 words. Further, regardless of the number of words, the statement
must not exceed 750 characters, including punctuation, indentation, and
standard spacing between words and sentences. If any submission should exceed
750 characters, as defined, it will be truncated at 750 characters with no
notice to the submitting bank and the truncated statement will appear as the
bank's statement both on agency computerized records and in computer-file
releases to the public.
All information furnished by the bank in the narrative statement must be
accurate and not misleading. Appropriate efforts shall be taken by the
submitting bank to ensure the statement's accuracy. The statement must be
signed, in the space provided below, by a senior officer of the bank who
thereby attests to its accuracy.
If, subsequent to the original submission, material changes are submitted for
the data reported in the Reports of Condition and Income, the existing
narrative statement will be deleted from the files, and from disclosure; the
bank, at its option, may replace it with a statement, under signature,
appropriate to the amended data.
The optional narrative statement will appear in agency records and in release
to the public exactly as submitted (or amended as described in the preceding
paragraph) by the management of the bank (except for the truncation of
statements exceeding the 750-character limit described above). THE STATEMENT
WILL NOT BE EDITED OR SCREENED IN ANY WAY BY THE SUPERVISORY AGENCIES FOR
ACCURACY OR RELEVANCE. DISCLOSURE OF THE STATEMENT SHALL NOT SIGNIFY THAT ANY
FEDERAL SUPERVISORY AGENCY HAS VERIFIED OR CONFIRMED THE ACCURACY OF THE
INFORMATION CONTAINED THEREIN. A STATEMENT TO THIS EFFECT WILL APPEAR ON ANY
PUBLIC RELEASE OF THE OPTIONAL STATEMENT SUBMITTED BY THE MANAGEMENT OF THE
REPORTING BANK.
- -------------------------------------------------------------------------------
No comment [X] (RCON 6979) C471 C472 <-
BANK MANAGEMENT STATEMENT (please type or print clearly):
(TEXT 6980)
/s/ Guo DeRosa 10/24/96
-------------------------------------- -----------------
Signature of Executive Officer of Bank Date of Signature
35
<PAGE>
EXHIBITS
Exhibit T3A Restated Articles of Incorporation of the Company, dated
December 12, 1996.
Exhibit T3B. By-laws of the Company, dated December 23, 1987, as amended.
Exhibit T3C. Indenture, dated as of December 18, 1996, between the
Company, as Issuer, and Fleet National Bank, as Trustee,
with respect to the 16% Junior Subordinated Pay-in-Kind
Notes due July 18, 2002.
Exhibit T3D. Not Applicable.
Exhibit T3E. Not Applicable.
Exhibit T3F. Cross reference sheet showing the location in the indenture
of the provisions inserted therein pursuant to Section 310
through 318(a), inclusive, of the Trust Indenture Act of
1939.
Exhibit T3A
AMENDED AND RESTATED
ARTICLES OF INCORPORATION OF
SCOTT CABLE COMMUNICATIONS, INC.
ARTICLE ONE
SCOTT CABLE COMMUNICATIONS, INC. (the "Corporation"), pursuant to the
provisions of Articles 4.07 and 4.14 of the Texas Business Corporation Act,
hereby adopts Amended and Restated Articles of Incorporation (the "New Charter")
which accurately copy the Articles of Incorporation and all amendments thereto
as in effect to date (the "Current Charter") and as further amended by such New
Charter as hereinafter set forth, and which New Charter contains no other change
in any provision thereof.
ARTICLE TWO
The Current Charter of the Corporation is amended by the provisions of the
New Charter as follows:
a. Authorized Capital - Currently, the Corporation has the authority to
issue 100,000,000 shares of common stock, $0.10 par value per share. Pursuant to
the New Charter, the Corporation shall have the authority to issue 175,000
shares of common stock, $0.10 par value per share, of which 76,000 shares shall
be designated as "Class A Common Stock", 24,000 shall be designated as "Class B
Common Stock" and 75,000 shares shall be designated as "Class C Common Stock".
b. Voting Rights - Pursuant to the Current Charter, all shares of common
stock have the same voting rights. Under the New Charter, each share of Class A
Common Stock and Class B Common Stock shall have ten votes per share, while each
share of Class C Common Stock will have one vote per share. Further, each class
will be able to elect a certain number of the directors of the Corporation.
c. Conversion Feature - None of the Corporation's currently authorized
capital is convertible. Under the New Charter, the Class C Common Stock will
automatically convert into Class A Common Stock upon the occurrence of a
designated event.
d. Restrictions on Stock - The Current Charter has no restrictions on
transfer of any shares of its Authorized Stock or against the Corporation
issuing non-voting securities. The New Charter will provide for certain
restrictions.
<PAGE>
e. Board of Directors - The Current Charter set the initial board at three
directors and does not provide for any voting requirements with respect to
action taken by the Corporation's Board of Directors. The New Charter will set
the board at five directors and will require the super majority vote of the
Corporation's Board of Directors in certain specified instances and will require
certain actions to be taken by only one of the classes of directors.
f. Indemnification - Article VIII of the Current Charter is amended to
provide for new indemnification provisions.
g. Deletions - Articles VII (repurchase of shares), IX (interested
director transactions), XI (the Corporation's initial board) and XII (the name
and address of the incorporator) of the Current Charter are deleted in their
entirety.
h. Renumbering - Articles VIII, X and XI of the Current Charter are
renumbered as Articles VII, VIII and IX respectively, of the New Charter.
ARTICLE THREE
Each such amendment made by the New Charter has been effected pursuant to
the Second Amended Joint Plan of Reorganization (the "Plan of Reorganization")
of the Corporation and certain of its affiliates in their jointly administered
Chapter 11 bankruptcy proceeding in the United States Bankruptcy Court, District
of Delaware Case No. 96-166 (PJW) pursuant to an order or decree of said
Bankruptcy Court dated December 6, 1996, which Bankruptcy Court Order or decree
approved these Amended and Restated Articles of Incorporation. Said Bankruptcy
Court had jurisdiction of the case under the United States Bankruptcy Code, 11
U.S.C. ss.ss. 101 et seq. The effective date of these Amended and Restated
Articles of Incorporation is set forth in the statement of the Corporation
hereafter filed with the Secretary of State of the State of Texas described in
ARTICLE FIVE below.
ARTICLE FOUR
The Current Charter (including the original articles of incorporation and
all amendments and supplements thereto) is hereby superseded by the New Charter
which accurately copies the entire text of the Current Charter, as amended as
set forth in Article Two above. A complete copy of the New Charter is annexed
hereto as Exhibit A.
2
<PAGE>
ARTICLE FIVE
Pursuant to Article 10.03 of the Texas Business Corporation Act, the
effectiveness of these Amended and Restated Articles of Incorporation shall be
delayed and shall occur only upon the future consummation of, and pursuant to
the terms of, the Plan of Reorganization. A statement of the Corporation that
such condition has been satisfied, and the date on which such condition was
satisfied, will hereafter be filed with the Secretary of State of the State of
Texas in accordance with said Article 10.03 of the Texas Business Corporation
Act before the 90th day following the date of the filing of these Amended and
Restated Articles of Incorporation, which date is March 12, 1997.
SCOTT CABLE COMMUNICATIONS, INC.
By: /s/ Bruce A. Armstrong
---------------------------
Bruce A. Armstrong,
President
3
<PAGE>
EXHIBIT A: TEXT OF THE
RESTATED
ARTICLES OF INCORPORATION OF
SCOTT CABLE COMMUNICATIONS, INC.
ARTICLE I
The name of the Corporation is Scott Cable Communications, Inc.
ARTICLE II
The Corporation is to have perpetual existence.
ARTICLE III
The purposes for which the Corporation is organized are and include the
transaction of any and all lawful business for which corporations may be
incorporated under the Texas Business Corporation Act.
ARTICLE IV
a. Authorized Capital - The aggregate number of shares which the
Corporation shall have authority to issue is 175,000 shares of common stock,
with each share being of the par value of $0.10, of which 76,000 shares shall be
designated Class A Common Stock, 24,000 shares shall be designated Class B
Common Stock and 75,000 shares shall be designated as Class C Common Stock. Each
designated class of shares shall have the same preferences, limitations and
relative rights, except as set forth below.
b. Class A Common Stock - As a general matter, each share of Class A
Common Stock shall have ten votes per share. With respect to the election of
directors, the holders of the Class A Common Stock, voting as a separate class,
shall be entitled to elect two of the Corporation's five directors except that,
as of the "Effective Date" as defined below, the two Class A Common Stock
directors shall be designated by the Corporation. Notwithstanding the foregoing,
upon the conversion of the Class C Common Stock into Class A Common Stock, as
set forth in subparagraph (d) below (i) the holders of the Class A Common Stock,
voting as a separate class, and including the shares of Class A Common Stock
issued upon conversion of the Class C Common Stock, shall be entitled to elect
four out of five directors, (ii) the two then current Class A Directors shall be
deemed to have resigned and the holders of the Class A Common Stock, voting as a
separate class, and including the shares of the Class A Common Stock issued upon
conversion of the Class C Common Stock, shall be entitled to elect two directors
to fill the vacancy
4
<PAGE>
created by the resignation of said Class A Directors and (iii) the two then
current Class C Directors shall become Class A Directors.
c. Class B Common Stock - As a general matter, each share of Class B
Common Stock shall have ten votes per share. The holders of the Class B Common
Stock, voting as a separate class, shall be entitled to elect one of the
Corporation's five directors, except that, as of the "Effective Date", as
defined below, the Class B Common Stock director shall be designated by the
Corporation.
d. Class C Common Stock - Each share of Class C Common Stock shall have
one vote per share. The holders of the Class C Common Stock, voting as a
separate class, shall be entitled to elect two of the Corporation's five
directors except that, as of the "Effective Date", as defined below, the two
Class C Common Stock directors shall be designated by the "Committee", as
defined below. Each share of Class C Common Stock shall automatically be
converted into one share of Class A Common Stock upon the earlier to occur of
December 31, 1999 or a "Transaction Event", as defined below. All Class C Common
Stock that is so converted shall be deemed permanently cancelled and shall not
be available for reissue. Effective immediately upon such conversion, the
holders of the Class C Common Stock shall no longer be entitled to elect two of
the Corporation's five directors, the then current Class C Common Stock
directors shall become Class A Directors.
e. Special Voting Provisions - Any amendment to Article IX, paragraph (d)
shall require the affirmative vote of a majority of the holders of the Class C
Common Stock, voting as a separate class.
*f. Restrictions on Transfer - The Class A Common Stock shall not be
transferable until the Class C Common Stock has converted into Class A Common
Stock, as set forth in Article IV, paragraph (d) above, except as provided
otherwise in the "Management Agreement", as defined in Article IX paragraph (e)
below. Further, beneficial ownership of the Class C Common Stock shall only be
transferable with the proportional share of the new promissory note to be issued
by the Corporation to holders of the Class 6 and 7 Claims pursuant to the "Plan
of Reorganization", as defined below.
- ----------
* The Texas Business Corporation Act requires that transfer restrictions appear
in the articles of incorporation, by laws or shareholder's agreement as well as
noted conspicuously on the fact of the stock certificate(s). Since the Plan does
not specifically contemplate by law amendments, and to obviate the need for
another document (a shareholder's agreement), we have put the plan restrictions
in the amended charter.
5
<PAGE>
g. Non Voting Equity Securities - The Corporation is prohibited from
issuing non voting equity securities.
h. Certain Definitions -
(i) "Bankruptcy Proceedings" shall mean the Corporation's bankruptcy
case (No. 96-166 (PJW)), jointly administered with certain affiliates, in the
United States Bankruptcy Court for the District of Delaware.
(ii) "Committee" shall mean the Official Creditors' Committee
appointed in the Bankruptcy Proceedings.
(iii) "Effective Date" shall mean the date on which the Plan of
Reorganization is consummated.
(iv) "Plan of Reorganization" shall mean the Corporation's Second
Amended Joint Plan of Reorganization in its Bankruptcy Proceedings, as amended.
(v) "Transaction Event" shall mean (i) the merger, consolidation,
liquidation, reorganization or dissolution of the Corporation, (ii) the sale of
all of the cable television systems currently owned by the Corporation and (iii)
any similar transaction including, without limitation, the reclassification of
the capital stock of the Corporation or the dividend or other distribution of
any corporate assets to the Corporation's shareholders.
ARTICLE V
No Shareholder of this Corporation shall, by reason of his holding shares
hereof, have any preemptive or preferential right to purchase or subscribe to
any shares of any class of this Corporation, now or hereafter to be authorized,
or any notes, debentures, bonds or other securities convertible into or carrying
options or warrants to purchase shares of any class, now or hereafter to be
authorized, whether or not the issuance of any such shares or such notes,
debentures, bonds or other securities, would adversely affect the dividend or
voting rights of such Shareholder, other than such rights, if any, as the Board
of Directors, in its discretion from time to time, may grant and at such price
as the Board of Directors in its discretion may fix; and the Board of Directors
may issue shares of any class in this Corporation or any notes, debentures,
bonds or other securities convertible into or carrying options or warrants to
purchase shares of any class, without offering any such shares of any class,
either in whole or in part, to the existing Shareholders of any class.
6
<PAGE>
ARTICLE VI
The Corporation will not commence business until it has received, for the
issuance of its shares, consideration of the value of One Thousand Dollars
($1,000), consisting of money, labor done or property actually received, which
sum is not less than One Thousand Dollars ($1,000).
ARTICLE VII
The Corporation shall indemnify each director or officer of the
Corporation against reasonable expenses incurred by him in connection with a
proceeding in which he is a named defendant or respondent to the maximum extent
permitted, and in the manner prescribed, by the Texas Business Corporation Act
or other applicable law.
The Corporation may indemnify a person who was, is, or is threatened to be
made, a named defendant or respondent in a proceeding because the person is or
was a director, officer, employee or agent of the Corporation, or (although such
person neither is nor was an officer, employee or agent of the Corporation) is
or was serving at the request of the Corporation as a director, officer,
partner, venturer, proprietor, trustee, employee, agent or similar functionary
of another foreign or domestic corporation for profit subject to the provisions
of the Texas Business Corporation Act, corporation for profit organized under
laws other than the laws of Texas, partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other enterprise, against any
judgments, penalties (including excise and similar taxes), fines, settlements
and reasonable expenses actually incurred by the person in connection with the
proceeding to the maximum extent permitted, and in the manner prescribed, by the
Texas Business Corporation Act or other applicable law.
The Corporation may advance expenses to directors, officers, employees and
agents of the Corporation, and other persons serving at the request of the
Corporation (as provided above in this Article), to the maximum extent
permitted, and in the manner prescribed, by the Texas Business Corporation Act
or other applicable law.
The Corporation may purchase and maintain insurance or establish and
maintain another arrangement on behalf of any person who is or was a director,
officer, employee or agent of the Corporation, or who is or was serving at the
request of the Corporation as a director, officer, partner, venturer,
proprietor, trustee, employee, agent or similar functionary of another foreign
or domestic corporation for profit subject to the provisions of the Texas
Business Corporation Act, corporation for profit organized under laws other than
the laws of Texas, partnership, joint venture, sole proprietorship, trust,
employee benefit plan or other enterprise, against or in respect of any
liability asserted against him and incurred by him in such a capacity or arising
out of his status as such a person, whether or not the Corporation would have
7
<PAGE>
the power to indemnify him against such liability under the provisions of these
Amended and Restated Articles of Incorporation or by statute. If the insurance
or other arrangement is with a person or entity that is not regularly engaged in
the business of providing insurance coverage, the insurance or arrangement may
provide for payment of a liability with respect to which the Corporation would
not have the power to indemnify the person only if including coverage for the
additional liability has been approved by the shareholders of the Corporation.
Without limiting the power of the Corporation to purchase, procure,
establish or maintain any kind of insurance or other arrangement, the
Corporation, may for the benefit of persons indemnified by the Corporation, (1)
create a trust fund; (2) establish any form of self-insurance; (3) secure its
indemnity obligation by grant of a security interest or other lien on the assets
of the Corporation; or (4) establish a letter of credit, guaranty or surety
arrangement. The insurance or other arrangement may be purchased, procured,
maintained or established within the Corporation or with any insurer or other
person deemed appropriate by the Board of Directors regardless of whether all or
part of the stock or other securities of the insurer or other person are owned
in whole or part by the Corporation. In the absence of fraud, the judgment of
the Board of Directors as to the terms and conditions of the insurance or other
arrangement and the identity of the insurer or other person participating in an
arrangement shall be conclusive and the insurance or arrangement shall not be
voidable and shall not subject the directors approving the insurance or
arrangement to liability, on any ground, regardless of whether directors
participating in the approval are beneficiaries of the insurance arrangement.
Any indemnification of or advance of expenses to a director in accordance
with this Article or the provisions of any statute shall be reported in writing
to the shareholders with or before the notice or waiver of notice of the next
shareholders' meeting or with or before the next submission to shareholders of a
consent to action without a meeting and, in any case, within the 12-month period
immediately following the date of the indemnification or advance.
These indemnification provisions shall inure to each of the directors,
officers, employees and agents of the Corporation, and other persons serving at
the request of the Corporation (as provided above in this Article), whether or
not the claim asserted against him is based on matters that antedate the
adoption of this Article, and in the event of his death shall extend to his
legal representatives; but such rights shall not be exclusive of any rights to
which he may be entitled.
For purposes of this Article, (1) the term "expenses" includes court costs
and attorneys' fees, (2) the term "proceeding" means any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative,
arbitrative or investigative, any appeal in such an action, suit or proceeding,
and any inquiry or investigation that could lead to such an action, suit or
proceeding, and
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(3) the term "director" means any person who is or was a director of the
Corporation and any person who, while a director of the Corporation, is or was
serving at the request of the Corporation as a director, officer, partner,
venturer, proprietor, trustee, employee, agent or similar functionary of another
corporation for profit subject to the provisions of the Texas Business
Corporation Act, corporation for profit organized under laws other than the laws
of Texas, partnership, joint venture, sole proprietorship, trust, employee
benefit plan or other enterprise.
Notwithstanding any provision of this Article VII to the contrary, the
Corporation shall purchase and maintain insurance to the extent required in
order to comply with the Plan of Reorganization, as defined in Article IV,
paragraph (h) above.
ARTICLE VIII
The post office address of its registered office is c/o CT Corporation
System, 350 North St. Paul Street, Dallas, Texas 75201, and the name of its
registered agent at such address is CT Corporation System.
ARTICLE IX
(a) Current Directors - The number of Directors constituting the Board of
Directors prior to the Effective Date shall be fixed by, or in the manner
provided in, the Bylaws of the Corporation, and the names and addresses of the
persons who are serving as Directors of the Corporation prior to the Effective
Date are:
Bruce A. Armstrong
Four Landmark Square
Suite 302
Stamford, Connecticut 06901
John M. Flanagan, Jr.
Four Landmark Square
Suite 302
Stamford, Connecticut 06901
(b) Number and Classes of Directors - As of the Effective Date, as defined
in Article IV paragraph (h) above the Board of Directors of the Corporation
shall consist of five directors; two directors shall be considered Class A
Common Stock Directors, one director shall be considered the Class B Common
Stock Director and two directors shall be considered Class C Common Stock
Directors until the Class C Common Stock is converted, as described in Article
IV paragraph (d) above, after which time there shall be four Class A Common
Stock directors, and one Class B
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Common Stock director. Except with respect to the appointment of directors as of
the Effective Date, as described in Article IV above, directors shall be elected
annually.
(c) Action by the Board - As a general matter and subject to subparagraph
(d) of this Article IX, the act of a majority of the directors present at any
meeting at which there is quorum shall be the act of the Board of Directors of
the Corporation. Notwithstanding the foregoing, however, a vote of four of the
five directors of the Corporation shall be required with respect to each of the
following: (i) the incurrence of significant additional debt by the Corporation,
(ii) extraordinary capital expenditures by the Corporation not provided for in
the Corporation's projections presented as part of the Plan of Reorganization,
as defined in Article IV Paragraph (h) above, (iii) the declaration of any
dividend, (iv) the commencement of a voluntary case under the "Bankruptcy Code",
as defined below, or any similar bankruptcy or insolvency proceeding and (v) the
consent to an involuntary petition for relief under the "Bankruptcy Code" as
defined below, or any similar bankruptcy or insolvency proceeding.
(d) Special Provisions re: New Management Agreement - In addition, the
Class C Common Stock Directors shall have the sole responsibility for making any
decision on behalf of the Corporation's Board of Directors with respect to (i)
whether the "New Management Agreement", as defined below, should be terminated
as a result of a breach thereof, (ii) the selection of a new manager upon any
such breach and (iii) whether the "New Management Agreement", as defined below,
shall be renewed at the end of its term.
(e) Certain Definitions:
(i) "Bankruptcy Code" means Title 11 of the United States Code, 11 U.S.C.
ss.ss. 101 et seq., as now in effect or hereafter amended to the extent such
amendment is applicable to the Corporation's Bankruptcy Proceeding.
(ii) "New Management Agreement" means the New Management Agreement being
entered into or to be entered into between, among others, the Corporation and
Scott Cable Management Company, Inc. in connection with the Plan of
Reorganization.
10
Exhibit T3B
These By-Laws replace original By-Laws by virtue of the Merger of Simmons
Communications Merger Corp. and Scott Cable Communications, Inc.
<PAGE>
Exhibit T3B
SIMMONS COMMUNICATIONS MERGER CORP.*
* * * * *
B Y - L A W S
* * * * *
ARTICLE I
OFFICES
Section 1. The registered office shall be located in Dallas, Texas.
Section 2. The corporation may also have offices at such other places both
within and without the State of Texas as the board of directors may from time to
time determine or the business of the corporation may require.
ARTICLE II
ANNUAL MEETINGS OF SHAREHOLDERS
Section 1. All meetings of shareholders for the election of directors
shall be held in New York, New York, at such place as may be fixed from time to
time by the board of directors. Said meetings may also be held at such other
place either within or without the State of Texas as shall be designated from
time to time by the board of directors and stated in the notice of the meeting.
Section 2. Annual meetings of shareholders, commencing with the year 1988,
shall be held on the 27th day of May if not a legal holiday, and if a legal
holiday, then on the next
* These By-Laws became the By-Laws of Scott Cable Communications, Inc. (the
"Company") by virtue of the merger of Simmons Communications Merger Corp.
with and into the Company.
<PAGE>
secular day following, at 10:00 A. M., at which they shall elect by a plurality
vote a board of directors, and transact such other business as may properly be
brought before the meeting.
Section 3. Written or printed notice of the annual meeting stating the
place, day and hour of the meeting shall be delivered not less than ten nor more
than fifty days before the date of the meeting, either personally or by mail, by
or at the direction of the president, the secretary, or the officer or persons
calling the meeting, to each shareholder of record entitled to vote at such
meeting.
ARTICLE III
SPECIAL MEETINGS OF SHAREHOLDERS
Section 1. Special meetings of shareholders for any purpose other than the
election of directors may be held at such time and place within or without the
State of Texas as shall be stated in the notice of the meeting or in a duly
executed waiver of notice thereof.
Section 2. Special meetings of the shareholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the articles of
incorporation, may be called by the president, the board of directors, or the
holders of not less than one-tenth of all the shares entitled to vote at the
meeting.
Section 3. Written or printed notice of a special meeting stating the
place, day and hour of the meeting and the purpose or purposes for which the
meeting is called, shall be delivered not less than ten nor more than fifty days
before the date of the meeting, either personally or by mail, by or at the
direction of the president, the secretary, or the officer or persons calling the
meeting, to each shareholder of record entitled to vote at such meeting.
3
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Section 4. The business transacted at any special meeting of shareholders
shall be limited to the purposes stated in the notice.
ARTICLE IV
QUORUM AND VOTING OF STOCK
Section 1. A majority of the shareholders, holding shares of stock issued
and outstanding and entitled to vote, represented in person or by proxy, shall
constitute a quorum at all meetings of the shareholders for the transaction of
business except as otherwise provided by statute or by the articles of
incorporation. If, however, such quorum shall not be present or represented at
any meeting of the shareholders, the shareholders present in person or
represented by proxy shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall be
present or represented. At such adjourned meeting at which a quorum shall be
present or represented any business may be transacted which might have been
transacted at the meeting as originally notified.
Section 2. If a quorum is present, the affirmative vote of a majority of
the shares of stock represented at the meeting shall be the act of the
shareholders unless the vote of a greater number of shares of stock is required
by law or the articles of incorporation.
Section 3. Each outstanding share of stock, having voting power, shall be
entitled to one vote on each matter submitted to a vote at a meeting of
shareholders. A shareholder may vote either in person or by proxy executed in
writing by the shareholder or by his duly authorized attorney-in-fact.
4
<PAGE>
Section 4. Any action required to be taken at a meeting of the
shareholders may be taken without a meeting if a consent in writing, setting
forth the action so taken, shall be signed by all of the shareholders entitled
to vote with respect to the subject matter thereof.
ARTICLE V
DIRECTORS
Section 1. The number of directors shall be one.(1) Directors need not be
residents of the State of Texas nor shareholders of the corporation. The
directors, other than the first board of directors, shall be elected at the
annual meeting of the shareholders, and each director elected shall serve until
the next succeeding annual meeting and until his successor shall have been
elected and qualified. The first board of directors shall hold office until the
first annual meeting of shareholders.
Section 2. Any vacancy occurring in the board of directors may be filled
by the shareholders at an annual or a special meeting or by the affirmative vote
of a majority of the remaining directors though less than a quorum of the board
of directors. A director elected to fill a vacancy shall be elected for the
unexpired portion of the term of his predecessor in office.
Any directorship to be filled by reason of an increase in the number of
directors may be filled by election at an annual meeting or at a special meeting
of shareholders called for that purpose. A director elected to fill a newly
created directorship shall serve until the next succeeding annual meeting of
shareholders and until his successor shall have been elected and
- ----------
(1) The first sentence was amended on January 16, 1988 to read: "The number of
directors of the Corporation shall be no less than one nor more than
seven".
5
<PAGE>
qualified. Any directorship to be filled by reason of an increase in the number
of directors may also be filled by the board of directors for a term of office
until the next election of directors by shareholders; provided no more than two
directorships may be so filled during a period between any two successive annual
meetings of shareholders.
Whenever the holders of any class or series of shares are entitled to
elect one or more directors by the provisions of the articles of incorporation,
any vacancies in such directorships and any newly created directorships of such
class or series to be filled by reason of an increase in the number of such
directors may be filled by the affirmative vote of a majority of the directors
elected by such class or series then in office or by a sole remaining director
so elected, or by the vote of the holders of the outstanding shares of such
class or series, and such directorships shall not in any case be filled by the
vote of the remaining directors or the holders of the outstanding shares as a
whole unless otherwise provided in the articles of incorporation.
Section 3. The business affairs of the corporation shall be managed by its
board of directors which may exercise all such powers of the corporation and do
all such lawful acts and things as are not by statute or by the articles of
incorporation or by these by-laws directed or required to be exercised or done
by the shareholders.
Section 4. The directors may keep the books of the corporation, except
such as are required by law to be kept within the state, outside of the State of
Texas, at such place or places as they may from time to time determine.
Section 5. The board of directors, by the affirmative vote of a majority
of the directors then in office, and irrespective of any personal interest of
any of its members, shall
6
<PAGE>
have authority to establish reasonable compensation of all directors for
services to the corporation as directors, officers or otherwise.
ARTICLE VI
MEETINGS OF THE BOARD OF DIRECTORS
Section 1. Meetings of the board of directors, regular or special, may be
held either within or without the State of Texas.
Section 2. The first meeting of each newly elected board of directors
shall be held at such time and place as shall be fixed by the vote of the
shareholders at the annual meeting and no notice of such meeting shall be
necessary to the newly elected directors in order legally to constitute the
meeting, provided a quorum shall be present, or it may convene at such place and
time as shall be fixed by the consent in writing of all the directors.
Section 3. Regular meetings of the board of directors may be held upon
such notice, or without notice, and at such time and at such place as shall from
time to time be determined by the board.
Section 4. Special meetings of the board of directors may be called by the
president on five days' notice to each director, either personally or by mail or
by telegram; special meetings shall be called by the president or secretary in
like manner and on like notice on the written request of two directors.
Section 5. Attendance of a director at any meeting shall constitute a
waiver of notice of such meeting, except where a director attends for the
express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened. Neither the
7
<PAGE>
business to be transacted at, nor the purpose of, any regular or special meeting
of the board of directors need be specified in the notice or waiver of notice of
such meeting.
Section 6. A majority of the directors shall constitute a quorum for the
transaction of business unless a greater number is required by law or by the
articles of incorporation. The act of a majority of the directors present at any
meeting at which a quorum is present shall be the act of the board of directors,
unless the act of a greater number is required by statute or by the articles of
incorporation. If a quorum shall not be present at any meeting of directors, the
directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
Section 7. Unless otherwise restricted by the articles of incorporation or
these by-laws, any action required or permitted to be taken at any meeting of
the board of directors or of any committee thereof may be taken without a
meeting, if all members of the board or committee, as the case may be, consent
thereto in writing which shall set forth the action taken and be signed by all
members of the board of directors or of the committee as the case may be.
ARTICLE VII
COMMITTEES OF DIRECTORS
Section 1. The board of directors, by resolution adopted by a majority of
the full board of directors, may designate from among its members an executive
committee and one or more other committees, each of which shall be comprised of
one or more members and, to the extent provided in the resolution, shall have
and may exercise all of the authority of the board of directors, except that no
such committee shall have the authority of the board of directors in reference
to amending the articles of incorporation, approving a plan of merger or
consolidation,
8
<PAGE>
recommending to the shareholders the sale, lease, or exchange of all or
substantially all of the property and assets of the corporation otherwise than
in the usual and regular course of its business, recommending to the
shareholders a voluntary dissolution of the corporation or a revocation thereof,
amending, altering, or repealing the bylaws of the corporation or adopting new
bylaws for the corporation, filling vacancies in the board of directors or any
committee, filling any directorship to be filled by reason of an increase in the
number of directors, electing or removing officers or members of any committee,
fixing the compensation of any member of a committee, or altering or repealing
any resolution of the board of directors which by its terms provides that it
shall not be so amendable or repealable; and, unless the resolution expressly so
provides, no committee shall have the power or authority to declare a dividend
or to authorize the issuance of shares of the corporation.
ARTICLE VIII
NOTICES
Section 1. Whenever, under the provisions of the statutes or of the
articles of incorporation or of these by-laws, notice is required to be given to
any director or shareholder, it shall not he construed to mean personal notice,
but such notice may be given in writing, by mail, addressed to such director or
shareholder, at his address as it appears on the records of the corporation,
with postage thereon prepaid, and such notice shall be deemed to be given at the
time when the same shall be deposited in the United States mail. Notice to
directors may also be given by telegram.
Section 2. Whenever any notice whatever is required to be given under the
provisions of the statutes or under the provisions of the articles of
incorporation or these by-
9
<PAGE>
laws, a waiver thereof in writing signed by the person or persons entitled to
such notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice.
ARTICLE IX
OFFICERS
Section 1. The officers of the corporation shall be chosen by the board of
directors and shall be a president and a secretary. The board of directors may
also elect or appoint such other officers, including assistant officers and
agents as may be deemed necessary.
Section 2. The board of directors at its first meeting after each annual
meeting of shareholders shall choose a president and a secretary neither of whom
need be a member of the board.
Section 3. The board of directors may also appoint such other officers and
agents as it shall deem necessary who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the board of directors.
Section 4. The salaries of all officers and agents of the corporation
shall be fixed by the board of directors.
Section 5. The officers of the corporation shall hold office until their
successors are chosen and qualify. Any officer elected or appointed by the board
of directors may be removed at any time by the affirmative vote of a majority of
the board of directors. Any vacancy occurring in any office of the corporation
shall be filled by the board of directors.
10
<PAGE>
THE PRESIDENT
Section 6. The president shall be the chief executive officer of the
corporation, shall preside at all meetings of the shareholders and the board of
directors, shall have general and active management of the business of the
corporation and shall see that all orders and resolutions of the board of
directors are carried into effect.
Section 7. He shall execute bonds, mortgages and other contracts requiring
a seal, under the seal of the corporation, except where required or permitted by
law to be otherwise signed and executed and except where the signing and
execution thereof shall be expressly delegated by the board of directors to some
other officer or agent of the corporation.
THE VICE-PRESIDENTS
Section 8. The vice-president, if there is one, or if there shall be more
than one, the vice-presidents in the order determined by the board of directors,
shall, in the absence or disability of the president, perform the duties and
exercise the powers of the president and shall perform such other duties and
have such other powers as the board of directors may from time to time
prescribe.
THE SECRETARY AND ASSISTANT SECRETARIES
Section 9. The secretary shall attend all meetings of the board of
directors and all meetings of the shareholders and record all the proceedings of
the meetings of the corporation and of the board of directors in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. He shall give, or cause to be given, notice of all meetings of
the shareholders and special meetings of the board of directors, and shall
perform such other duties as may be prescribed by the board of directors or
president, under whose
11
<PAGE>
supervision he shall be. He shall have custody of the corporate seal of the
corporation and he, or an assistant secretary, shall have authority to affix the
same to any instrument requiring it and when so affixed, it may be attested by
his signature or by the signature of such assistant secretary. The board of
directors may give general authority to any other officer to affix the seal of
the corporation and to attest the affixing by his signature.
Section 10. The assistant secretary, if there is one, or if there be more
than one, the assistant secretaries in the order determined by the board of
directors, shall, in the absence or disability of the secretary, perform the
duties and exercise the powers of the secretary and shall perform such other
duties and have such other powers as the board of directors may from time to
time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 11. The treasurer, if there is one, shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the corporation in such depositories as may be designated by the board of
directors.
Section 12. He shall disburse the funds of the corporation as may be
ordered by the board of directors, taking proper vouchers for such
disbursements, and shall render to the president and the board of directors, at
its regular meetings, or when the board of directors so requires, an account of
all his transactions as treasurer and of the financial condition of the
corporation.
12
<PAGE>
Section 13. If required by the board of directors, he shall give the
corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the board of directors for the faithful performance of the
duties of his office and for the restoration to the corporation, in case of his
death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the corporation.
Section 14. The assistant treasurer, if there is one, or, if there shall
be more than one, the assistant treasurers in the order determined by the board
of directors, shall, in the absence or disability of the treasurer, perform the
duties and exercise the powers of the treasurer and shall perform such other
duties and have such other powers as the board of directors may from time to
time prescribe.
ARTICLE X
CERTIFICATES FOR SHARES
Section 1. The shares of the corporation shall be represented by
certificates signed by the president and secretary or such other officers as may
be elected or appointed, and may be sealed with the seal of the corporation or a
facsimile thereof.
When the corporation is authorized to issue shares of more than one class
there shall be set forth upon the face or back of the certificate, or the
certificate shall have a statement that the corporation will furnish to any
shareholder upon request and without charge, a full statement of the
designations, preferences, limitations and relative rights of the shares of each
class authorized to be issued and, if the corporation is authorized to issue any
preferred or special class in series, the variations in the relative rights and
preferences between the shares of each
13
<PAGE>
such series so far as the same have been fixed and determined and the authority
of the board of directors to fix and determine the relative rights and
preferences of subsequent series. When the corporation is authorized to issue
shares of more than one class, every certificate shall also set forth upon the
face or the back of such certificate a statement that there is set forth in the
articles of incorporation on file in the office of the Secretary of State a full
statement of all the designations, preferences, limitations and relative rights,
including voting rights, of the shares of each class authorized to be issued and
the corporation will furnish a copy of such statement to the record holder of
the certificate without charge on written request to the corporation at its
principal place of business or registered office. Every certificate shall have
noted thereon any information required to be set forth by the Texas Business
Corporation Act and such information shall be set forth in the manner provided
in said Act.
Section 2. The signatures of the officers of the corporation upon a
certificate may be facsimiles if the certificate is countersigned by a transfer
agent, or registered by a registrar, other than the corporation itself or an
employee of the corporation. In case any officer who has signed or whose
facsimile signature has been placed upon such certificate shall have ceased to
be such officer before such certificate is issued, it may be issued by the
corporation with the same effect as if he were such officer at the date of its
issue.
LOST CERTIFICATES
Section 3. The board of directors may direct a new certificate to be
issued in place of any certificate theretofore issued by the corporation alleged
to have been lost or destroyed. When authorizing such issue of a new
certificate, the board of directors, in its discretion and as a condition
precedent to the issuance thereof, may prescribe such terms and conditions as it
14
<PAGE>
deems expedient, and may require such indemnities as it deems adequate, to
protect the corporation from any claim that may be made against it with respect
to any such certificate alleged to have been lost or destroyed.
TRANSFERS OF SHARES
Section 4. Upon surrender to the corporation or the transfer agent of the
corporation of a certificate representing shares duly endorsed or accompanied by
proper evidence of succession, assignment or authority to transfer, a new
certificate shall be issued to the person entitled thereto, and the old
certificate cancelled and the transaction recorded upon the books of the
corporation.
CLOSING OF TRANSFER BOOKS
Section 5. For the purpose of determining shareholders entitled to notice
of or to vote at any meeting of shareholders, or any adjournment thereof or
entitled to receive payment of any dividend, or in order to make a determination
of shareholders for any other proper purpose, the board of directors may provide
that the stock transfer books shall be closed for a stated period but not to
exceed, in any case, fifty days. If the stock transfer books shall be closed for
the purpose of determining shareholders entitled to notice of or to vote at a
meeting of shareholders, such books shall be closed for at least ten days
immediately preceding such meeting. In lieu of closing the stock transfer books,
the board of directors may fix in advance a date as the record date for any such
determination of shareholders, such date in any case to be not more than fifty
days and, in case of a meeting of shareholders, not less than ten days prior to
the date on which the particular action, requiring such determination of
shareholders, is to be taken. If the stock transfer books are not closed and no
record date is fixed for the
15
<PAGE>
determination of shareholders entitled to notice of or to vote at a meeting of
shareholders, or shareholders entitled to receive payment of a dividend, the
date on which notice of the meeting is mailed or the date on which the
resolution of the board of directors declaring such dividend is adopted, as the
case may be, shall be the record date for such determination of shareholders.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such determination shall
apply to any adjournment thereof.
REGISTERED SHAREHOLDERS
Section 6. The corporation shall be entitled to recognize the exclusive
right of a person registered on its books as the owner of shares to receive
dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Texas.
LIST OF SHAREHOLDERS
Section 7. The officer or agent having charge of the transfer books for
shares shall make, at least ten days before each meeting of shareholders, a
complete list of the shareholders entitled to vote at such meeting, arranged in
alphabetical order, with the address of each and the number of shares held by
each, which list, for a period of ten days prior to such meeting, shall be kept
on file at the registered office of the corporation and shall be subject to
inspection by any shareholder at any time during usual business hours. Such list
shall also be produced and kept open at the time and place of the meeting and
shall be subject to the inspection of any shareholder during the whole time of
the meeting. The original share ledger or transfer book,
16
<PAGE>
or a duplicate thereof, shall be prima facie evidence as to who are the
shareholders entitled to examine such list or share ledger or transfer book or
to vote at any meeting of the shareholders.
ARTICLE XI
GENERAL PROVISIONS
DIVIDENDS
Section 1. Subject to the provisions of the articles of incorporation
relating thereto, if any, dividends may be declared by the board of directors at
any regular or special meeting, pursuant to law. Dividends may be paid in cash,
in property or in shares of the capital stock, subject to any provisions of the
articles of incorporation.
Section 2. Before payment of any dividend, there may be set aside out of
any funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve fund to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
CHECKS
Section 3. All checks or demands for money and notes of the corporation
shall be signed by such officer or officers or such other person or persons as
the board of directors may from time to time designate.
17
<PAGE>
FISCAL YEAR
Section 4. The fiscal year of the corporation shall be fixed by resolution
of the board of directors.
SEAL
Section 5. The corporate seal shall have inscribed thereon the name of the
corporation, the year of its organization and the words "Corporate Seal, Texas".
The seal may be used by causing it or a facsimile thereof to be impressed or
affixed or in any manner reproduced.
ARTICLE XII
AMENDMENTS
Section 1. These by-laws may be altered, amended, or repealed or new
by-laws may be adopted by the affirmative vote of a majority of the board of
directors at any regular or special meeting of the board subject to repeal or
change at any regular or special meeting of shareholders at which a quorum is
present or represented, by the affirmative vote of a majority of the stock
entitled to vote, provided notice of the proposed repeal or change be contained
in the notice of such meeting.
ARTICLE XIII
INDEMNIFICATION
Section 1. OF OFFICERS AND DIRECTORS. The Corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative,
18
<PAGE>
by reason of the fact that he is or was a director or an officer of the
Corporation, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding to the fullest extent and in the manner set
forth in and permitted by the General Corporation Law, and any other applicable
law, as from time to time in effect. Such right of indemnification shall not be
deemed exclusive of any other rights to which such director or officer may be
entitled apart from the foregoing provisions. The foregoing provisions of this
Section 8.1 shall be deemed to be a contract between the Corporation and each
director and officer who serves in such capacity at any time while this Article
XIII and the relevant provisions of the General Corporation Law and other
applicable law, if any, are in effect, and any repeal or modification thereof
shall not affect any rights or obligations then existing with respect to any
state of facts then or theretofore existing or any action, suit or proceeding
theretofore or thereafter brought or threatened based in whole or in part upon
any such state of facts.
Section 2. INDEMNIFICATION OF OTHER PERSONS. The Corporation may indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he is or
was an employee or agent of the Corporation, or is or was serving at the request
of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, or other enterprise, against
expenses (including attorneys' fees) judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding to the fullest extent and in the manner set forth in
and permitted by the General Corporation Law,
19
<PAGE>
and any other applicable law, as from time to time in effect. Such right of
indemnification shall not be deemed exclusive of any other rights to which any
such person may be entitled apart from the foregoing provisions.
20
<PAGE>
CERTIFICATE BY SECRETARY
The undersigned, being the Secretary of the Corporation, hereby certifies
that the foregoing copy of bylaws are a true and correct copy of the bylaws of
the corporation and are in effect as of the date hereof.
IN WITNESS WHEREOF, I have signed this certification as of the 23rd day of
December, 1987.
/s/ Charles G. Lowe
----------------------------------
Charles G. Lowe, Secretary
Exhibit T3C
SCOTT CABLE COMMUNICATIONS, INC., as Issuer
AND
FLEET NATIONAL BANK, as Trustee
------------------------
INDENTURE
Dated as of December 18, 1996
------------------------
$38,925,797
16% Junior Subordinated Pay-in-Kind Notes due July 18, 2002
<PAGE>
INDENTURE
(16% Junior Subordinated)
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture dated as of December 18, 1996
Trust Indenture Act Indenture
Section Section
- ------------------ ---------
310 (a)(1)............................................... 7.10
(a)(2)............................................... 7.10
(a)(3)............................................... N.A.
(a)(4)............................................... N.A.
(a)(5)............................................... 7.10
(b).................................................. 7.8; 7.10; 13.2
(c).................................................. N.A.
311 (a) ................................................. 7.11
(b).................................................. 7.11
(c).................................................. N.A.
312 (a).................................................. 2.5
(b).................................................. 13.3
(c).................................................. 13.3
313 (a).................................................. 7.6
(b)(1)............................................... N.A.
(b)(2)............................................... 7.6
(c).................................................. 7.6; 13.2
(d).................................................. 7.6
314 (a).................................................. 4.10; 13.2
(b).................................................. N.A.
(c)(1)............................................... 7.2; 13.4
(c)(2)............................................... 7.2; 13.4
(c)(3)............................................... N.A.
(d).................................................. N.A.
(e).................................................. 11.5
(f).................................................. N.A.
315 (a).................................................. 7.1(b)
(b).................................................. 7.5; 13.2
(c).................................................. 7.1(a)
(d).................................................. 7.1(c)
(e).................................................. 6.11
316 (a)(last sentence)................................... 2.9
(a)(1)(A)............................................ 6.5
(a)(1)(B)............................................ 6.4
(a)(2)............................................... N.A.
(b).................................................. 6.7
317 (a)(1)............................................... 6.8
(a)(2)............................................... 6.9
(b).................................................. 2.4
2
<PAGE>
INDENTURE
(16% Junior Subordinated)
318 (a).................................................. 13.1
(c).................................................. 13.1
- ----------
N.A. means Not Applicable
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
3
<PAGE>
INDENTURE
(16% Junior Subordinated)
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions............................................ 1
Section 1.2. Incorporation by Reference of TIA...................... 14
Section 1.3. Time Periods........................................... 15
Section 1.4. References............................................. 15
Section 1.5. Issuer's Knowledge..................................... 15
ARTICLE II
THE SECURITIES
Section 2.1. Form and Dating........................................ 15
Section 2.2. Execution and Authentication........................... 16
Section 2.3. Registrar and Paying Agent............................. 17
Section 2.4. Paying Agent To Hold Assets in Trust................... 18
Section 2.5. Securityholder Lists................................... 18
Section 2.6. Transfer and Exchange.................................. 18
Section 2.7. Replacement Securities................................. 19
Section 2.8. Outstanding Securities................................. 19
Section 2.9. Treasury Securities.................................... 20
Section 2.10. Cancellation........................................... 20
Section 2.11. Defaulted Interest..................................... 20
Section 2.12. CUSIP Number........................................... 20
ARTICLE III
REDEMPTION
Section 3.1. Right of Redemption and Notices to Trustee............. 21
Section 3.2. Selection of Securities To Be Redeemed................. 21
Section 3.3. Notice of Redemption................................... 21
Section 3.4. Effect of Notice of Redemption......................... 22
Section 3.5. Deposit of Redemption Price............................ 22
Section 3.6. Securities Redeemed in Part............................ 23
- --------
Note: This Table of Contents, shall not, for any purpose, be deemed to be a part
of the Indenture.
i
<PAGE>
INDENTURE
(16% Junior Subordinated)
ARTICLE IV
COVENANTS
Section 4.1. Payment of Securities.................................. 23
Section 4.2. Corporate Existence.................................... 24
Section 4.3. SEC Reports and Other Information...................... 24
Section 4.4. Future Leases.......................................... 24
Section 4.5. Future Acquisitions of Real Property................... 24
Section 4.6. Compliance with Laws................................... 25
Section 4.7. Taxes and Claims....................................... 25
Section 4.8. Maintenance of Properties and Insurance................ 25
Section 4.9. Mandatory Redemption on a Permitted Asset Sale......... 26
Section 4.10. Borrowing.............................................. 26
Section 4.11. Liens.................................................. 26
Section 4.12. Merger and Acquisition................................. 26
Section 4.13. Contingent Liabilities................................. 27
Section 4.14. Distributions.......................................... 27
............................................................... 27
Section 4.15. Investments, Loans..................................... 27
Section 4.16. Fundamental Business Changes........................... 27
Section 4.17. Sale or Transfer of Assets............................. 28
Section 4.18. Acquisition of Additional Properties................... 28
Section 4.19. Issuance of Equity Interests........................... 28
Section 4.20. Transactions with Affiliates........................... 28
Section 4.21. Compliance with ERISA.................................. 29
ARTICLE V
DEFAULT AND REMEDIES
Section 5.1. Events of Default...................................... 30
Section 5.2. Acceleration........................................... 31
Section 5.3. Other Remedies......................................... 32
Section 5.4. Waiver of Past Defaults................................ 32
Section 5.5. Control by Majority.................................... 33
Section 5.6. Limitation on Suits.................................... 33
Section 5.7. Rights of Holders To Receive Payment................... 33
Section 5.8. Collection Suit by Trustee............................. 34
Section 5.9. Trustee May File Proofs of Claim....................... 34
Section 5.10. Priorities............................................. 35
Section 5.11. Undertaking for Costs.................................. 35
ARTICLE VI
TRUSTEE
ii
<PAGE>
INDENTURE
(16% Junior Subordinated)
Section 6.1. Duties of Trustee...................................... 36
Section 6.2. Rights of Trustee...................................... 37
Section 6.3. Individual Rights of Trustee........................... 38
Section 6.4. Trustee's Disclaimer................................... 38
Section 6.5. Notice of Default...................................... 38
Section 6.6. Reports By Trustee to Holders.......................... 38
Section 6.7. Compensation and Indemnity............................. 39
Section 6.8. Replacement of Trustee................................. 39
Section 6.9. Successor Trustee by Merger, Etc....................... 41
Section 6.10. Eligibility; Disqualification.......................... 41
Section 6.11. Co-Trustee............................................. 41
Section 6.12. Preferential Collection of Claims Against Issuer....... 42
ARTICLE VII
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 7.1. Without Consent of Holders............................. 43
Section 7.2. With Consent of Holders................................ 44
Section 7.3. Compliance with TIA.................................... 45
Section 7.4. Revocation and Effect of Consents...................... 45
Section 7.5. Notation on or Exchange of Securities.................. 46
Section 7.6. Trustee To Sign Amendments, Etc........................ 46
ARTICLE VIII
COLLATERAL AND SECURITY
Section 8.1. Collateral............................................. 46
Section 8.2. Possession and Use of Collateral....................... 47
Section 8.3. Release of Collateral.................................. 47
Section 8.4. Specified Releases of Collateral....................... 47
Section 8.5. Disposition of Collateral Without Release.............. 50
Section 8.6. Purchaser Protected.................................... 51
Section 8.7. Authorization of Actions To Be Taken by Trustee
Under the Security Documents........................... 51
Section 8.8. Authorization of Receipt of Funds by Trustee
Under the Security Documents........................... 52
ARTICLE IX
MEETINGS OF SECURITYHOLDERS
Section 9.1. Purposes for Which Meetings May Be Called.............. 52
iii
<PAGE>
INDENTURE
(16% Junior Subordinated)
Section 9.2. Manner of Calling Meetings.............................. 53
Section 9.3. Call of Meetings by Issuer or Holders................... 53
Section 9.4. Who May Attend and Vote at Meetings..................... 54
Section 9.5. Regulations May Be Made by Trustee; Conduct of
the Meeting; Voting Rights; Adjournment................. 54
Section 9.6. Voting at the Meeting and Record To Be Kept............. 55
Section 9.7. Exercise of Rights of Trustee or Holders May
Not Be Hindered or Delayed by Call of Meeting........... 55
ARTICLE X
SUBORDINATION
Section 10.1. Securities Subordinated to Senior Indebtedness......... 56
ARTICLE XI
SATISFACTION AND DISCHARGE
Section 11.1. Satisfaction and Discharge of the Indenture............ 56
Section 11.2. Conditions to Satisfaction and Discharge of the
Indenture.............................................. 57
ARTICLE XII
MISCELLANEOUS
Section 12.1. TIA Controls......................................... 57
Section 12.2. Notices.............................................. 57
Section 12.3. Communications by Holders with Other Holders......... 58
Section 12.4. Certificate and Opinion as to Conditions Precedent... 59
Section 12.5. Statements Required in Certificate or Opinion........ 59
Section 12.6. Rules by Trustee, Paying Agent, Registrar............ 59
Section 12.7. Governing Law........................................ 60
Section 12.8. No Adverse Interpretation of Other Agreements........ 60
Section 12.9. No Recourse Against Others........................... 60
Section 12.10. Successors........................................... 60
Section 12.11. Duplicate Originals.................................. 60
Section 12.12. Severability......................................... 60
Section 12.13. Actions by Trustee................................... 61
Section 12.14. Notes Issued In Accordance With Plan................. 61
Exhibit A Form of Series A Security
iv
<PAGE>
INDENTURE
(16% Junior Subordinated)
Exhibit B Form of Series B Security
Exhibit C Form of Series C Security
v
<PAGE>
INDENTURE
(16% Junior Subordinated)
INDENTURE dated as of December 18, 1996, between SCOTT CABLE
COMMUNICATIONS, INC., a Texas corporation ("Issuer"), and FLEET NATIONAL BANK, a
national banking association, as Trustee.
Each party hereto agrees as follows for the benefit of each other party
and for the equal and ratable benefit of the Holders of the 16% Junior
Subordinated Pay-in-Kind Notes due July 18, 2002:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions.
Accountants: Deloitte & Touche LLP or any other nationally recognized
independent certified public accounting firm selected by Issuer.
Affiliate: any Person that directly or indirectly, through one or more
intermediaries, controls or is controlled by or is under common control with
another Person. The term "control" means possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
person, whether through the ownership of voting securities or equity interests,
by contract or otherwise. For the purposes hereof Scott Management and Bruce A.
Armstrong shall be deemed to be an Affiliate of Issuer.
Agent: any Registrar, Paying Agent or co-Registrar of the Securities.
Assignment of Leases: a collateral assignment of leases executed by Issuer
in favor of Trustee.
Assignment of Management Agreement: a collateral assignment of the
Management Agreement executed by Issuer in favor of Trustee and acknowledged by
Scott Management.
Bankruptcy Court: the United States Bankruptcy Court for the District of
Delaware.
Bankruptcy Law: the United States Bankruptcy Code, Title 11 U.S. Code or
any similar federal, state or foreign law for the relief of debtors, any
successor statute thereto, and the rules, regulations and legally binding
policies promulgated thereunder, as amended and in effect from time to time.
Board of Directors: with respect to any person, the Board of Directors of
such person or any committee of the Board of Directors of such person duly
authorized, with respect to any particular matter, to exercise the power of the
Board of Directors of such person.
1
<PAGE>
INDENTURE
(16% Junior Subordinated)
Board Resolution: with respect to any person, a duly adopted resolution of
the Board of Directors of such person.
Business Day: any day other than a Saturday, Sunday or other day on which
banks in New York, New York, Boston, Massachusetts or Phoenix, Arizona are
authorized or required by law to close.
Capitalized Lease: any lease of Property, the obligations for the rental
of which are required to be capitalized in accordance with GAAP.
Cash Equivalents: the aggregate of Issuer's (i) cash on hand or in any
bank or trust company, and checks on hand and in transit, (ii) monies on deposit
in any money market account, and (iii) treasury bills, certificates of deposit,
commercial paper and readily marketable securities at current market value
having, in each instance, a maturity of not more than 180 days.
Chief Financial Officer: the chief financial officer of Issuer, who shall
be a duly elected officer of Issuer.
Class A Stock: the Class A Common Stock of Issuer.
Class B Stock: the Class B Common Stock of Issuer.
Class C Stock: the Class C Common Stock of Issuer.
Code: the Internal Revenue Code of 1986, any successor statute thereto,
and the rules, regulations and legally binding policies promulgated thereunder,
as amended and in effect from time to time.
Collateral: (i) all existing and after-acquired Property of Issuer,
including without limitation all of Issuer's existing and after-acquired
accounts, goods, equipment, inventory, fixtures, general intangibles,
instruments, chattel paper, documents, money, deposit accounts and investment
property and (ii) all proceeds of the foregoing.
Custodian: any receiver, trustee, assignee, liquidator, sequestrator or
similar official under any Bankruptcy Law.
Default: any event which is, or after notice or passage of time or both
would be, an Event of Default.
Employee Benefit Plan: any employee benefit plan within the meaning of
Section 3(3) of ERISA which (i) is maintained for employees of Issuer or any
ERISA Affiliate or (ii) has at any time within the preceding six years been
maintained for the employees of Issuer or any ERISA Affiliate.
2
<PAGE>
INDENTURE
(16% Junior Subordinated)
Environmental Laws: any and all federal, state and local laws that relate
to or impose liability or standards of conduct concerning public or occupational
health and safety or protection of the environment, as now or hereafter in
effect and as have been or hereafter may be amended or reauthorized, including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. ss.9601 et seq.), the Hazardous Materials
Transportation Act (42 U.S.C. ss.1802 et seq.), the Resource Conservation and
Recovery Act (42 U.S.C. ss.6901 et seq.), the Federal Water Pollution Control
Act (33 U.S.C. ss.1251 et seq.), the Toxic Substances Control Act (15 U.S.C.
ss.2601 et seq.), the Clean Air Act (42 U.S.C. ss.7901 et seq.), the National
Environmental Policy Act (42 U.S.C. ss.4231 et seq.), the Refuse Act (33 U.S.C.
ss.407 et seq.), the Safe Drinking Water Act (42 U.S.C. ss.300(f) et seq.), the
Occupational Safety and Health Act (29 U.S.C. ss.651 et seq.), and all rules,
regulations, codes, ordinances and guidance documents promulgated or published
thereunder, and the provisions of any licenses, permits, orders and decrees
issued pursuant to any of the foregoing.
ERISA: the Employee Retirement Income Security Act of 1974, and any
successor statute thereto, and the rules, regulations and legally binding
policies promulgated thereunder, as amended and in effect from time to time.
ERISA Affiliate: any Person who is a member of a group which is under
common control with Issuer, who together with Issuer is treated as a single
employer within the meaning of Section 414(b), (c) and (m) of the Code.
Event of Default: as defined in Section 5.1.
Exchange Act: the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated by the SEC thereunder.
Fair Market Value with respect to any property or assets, the price which
could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing buyer, neither of which is under pressure
or compulsion to complete the transaction.
Franchise: an authorization, or renewal thereof, whether in the form of a
franchise, permit, license, resolution, contract, certificate, agreement or
otherwise, issued by a Franchisor authorizing the construction and/or operation
of a cable system.
Franchise Agreement: any agreement pursuant to which a Franchise is
granted to a Issuer and all permitted amendments, modifications and supplements
thereto.
Franchisor: any Governmental Body empowered by federal, state or local law
to grant a Franchise.
GAAP: generally accepted accounting principles as in effect from time to
time, which shall include but shall not be limited to the official
interpretations thereof by the Financial Accounting Standards Board or any
successor thereto.
3
<PAGE>
INDENTURE
(16% Junior Subordinated)
Governmental Body: any foreign, federal, state, municipal or other
government, or any department, commission, board, bureau, agency, public
authority or instrumentality thereof or any court or arbitrator.
Holder: the person in whose name a Security is registered on the
Registrar's books.
Indebtedness: all liabilities, obligations and reserves, contingent or
otherwise, which, in accordance with GAAP, would be reflected as a liability on
a balance sheet or would be required to be disclosed in a financial statement,
including, without duplication: (i) Indebtedness for Borrowed Money, (ii)
obligations secured by any Lien upon Property,(iii) guaranties, letters of
credit and other contingent obligations and (iv) liabilities in respect of
unfunded vested benefits under any Pension Plan or in respect of withdrawal
liabilities incurred under ERISA by Issuer or any ERISA Affiliate to any
Multiemployer Plan.
Indebtedness for Borrowed Money: without duplication, all Indebtedness (i)
in respect of money borrowed, (ii) evidenced by a note, debenture or other like
written obligation to pay money (including, without limitation, all of Issuer's
Obligations set forth in (i) thereof, Permitted Senior Indebtedness and
Subordinated Indebtedness), (iii) in respect of rent or hire of Property under
Capitalized Leases or for the deferred purchase price of Property, (iv) in
respect of obligations under conditional sales or other title retention
agreements and (v) all guaranties of any or all of the foregoing.
Indenture: this Indenture, as amended or supplemented from time to time in
accordance with the terms hereof.
Indenture Instruments:
(i) Indenture; Securities;
(ii) Subordination Agreement (Junior) and Subordination Agreement
(Senior); (iii) Security Instruments;
(iv) Uniform Commercial Code financing statements filed in
connection with the issuance of the Securities; and
(v) other instruments and documents as Trustee and/or Holders
reasonably may require in connection with the transactions
contemplated by this Indenture.
Interest Payment Date: the stated maturity of an installment of interest
on the Securities.
Issue Date: the date of first issuance of the Securities pursuant to this
Indenture.
4
<PAGE>
INDENTURE
(16% Junior Subordinated)
Issuer: the party named as such above and shall include, unless the
context requires otherwise, any subsidiary.
Issuer Capital Stock: all of the issued and outstanding capital stock of
Issuer and all warrants, options and other rights to purchase capital stock of
the Issuer.
Issuer's Obligations: (i) any and all Indebtedness due or to become due,
now existing or hereafter arising, of Issuer to Holder pursuant to the terms of
this Indenture or any other Indenture Instrument and (ii) the performance of the
covenants of Issuer contained in the Indenture Instruments.
Landlord: a lessor under a lease of real property.
Landlord Consent and Waiver: a landlord consent and waiver in favor of
Trustee executed by the Landlord under each Lease.
Lease: any lease of real estate under which Issuer is the lessee.
Leasehold Property: any real estate which is the subject of a Lease.
Lien: any mortgage, pledge, assignment, lien, charge, encumbrance or
security interest of any kind, or the interest of a vendor or lessor under any
conditional sale agreement, Capitalized Lease or other title retention
agreement.
Loan Agreement: the Loan Agreement, dated as of the Issue Date, by and
among the Issuer as borrower and FINOVA Capital Corporation, in its individual
capacity and as agent for all lenders thereunder, as the same may be amended,
extended, renewed, restated, supplemented or otherwise modified (in each case,
in whole or in part, and without limitation as to amount, terms, conditions,
covenants and other provisions) from time to time. The term "Loan Agreement"
shall include all related or ancillary documents, including, without limitation,
any guarantee agreements and security documents.
Management Agreement: the Management Agreement dated as of December 18,
1996 between Issuer and Scott Management.
Material Adverse Effect: (i) a material adverse effect upon the business,
operations, Property, profits or condition (financial or otherwise) of Issuer or
upon the validity, enforceability or priority of the Security Interests or (ii)
a material impairment of the ability of Issuer to perform its obligations under
any Loan Instrument to which it is a party or of Trustee or any Holder to
enforce or collect any of Issuer's Obligations.
Maturity Date: July 18, 2002.
Mortgages: a mortgage on each parcel of Real Property executed by Issuer
in favor of Trustee.
5
<PAGE>
INDENTURE
(16% Junior Subordinated)
Multiemployer Plan: any multiemployer plan as defined pursuant to Section
3(37) of ERISA to which Issuer or any ERISA Affiliate makes, or accrues an
obligation to make, contributions, or has made, or been obligated to make,
contributions within the preceding six years.
Net Sale Proceeds: the gross proceeds payable to Issuer in connection with
any Permitted Asset Sale, less all reasonable, customary and documented costs
and expenses of such Permitted Asset Sale; provided, however, that Issuer shall
not be deemed in receipt of any Net Sales Proceeds required to be deposited in
escrow to secure customary indemnities under documents executed in connection
with the Permitted Asset Sale giving rise to such Net Sale Proceeds until such
Net Sale Proceeds are released from escrow to Issuer.
Officer: with respect to any Person, the Chairman of the Board, the
President, any Vice President, the Chief Financial Officer, the Controller, or
the Secretary of such Person.
Officers' Certificate: with respect to any person, a certificate signed by
two Officers or by an Officer and either an Assistant Treasurer or an Assistant
Secretary of such person and otherwise complying with the requirements of
Sections 12.4 and 12.5.
Operating Lease: any lease, other than Pole Attachment Agreements, which,
under GAAP, is not required to be capitalized.
Opinion of Counsel: a written opinion from legal counsel who is reasonably
acceptable to Trustee complying with the requirements of Sections 12.4 and 12.5.
Unless otherwise required by Trustee, the legal counsel may be an employee of or
counsel to Issuer.
Ordinances: the statutes, laws, rules, regulations, resolutions and
ordinances, as amended and in effect from time to time, pursuant to which a
Franchise may be granted.
Paying Agent: as defined in Section 2.3.
PBGC: the Pension Benefit Guaranty Corporation or any Governmental Body
succeeding to the functions thereof.
Pension Plan: any Employee Benefit Plan, other than a Multiemployer Plan,
which is subject to the provisions of Part 3 of Subtitle B of Title I of ERISA,
Title IV of ERISA, or Section 412 of the Code and which (i) is maintained for
employees of Issuer or any ERISA Affiliate, or (ii) has at any time within the
preceding six years been maintained for the employees of Issuer or any ERISA
Affiliates.
Permitted Asset Sale: any bona fide sale of any Property of Issuer in an
arm's-length transaction to a Person who is not an Affiliate of Issuer, except
to the extent permitted by Section 4.20, provided that the gross proceeds
payable to Issuer in connection therewith are (i) not less than the Fair Market
Value of such Property and (ii) payable solely in cash.
6
<PAGE>
INDENTURE
(16% Junior Subordinated)
Permitted Asset Sale Purchase Date: as defined in Section 4.9.
Permitted Liens: any of the following Liens:
(i) the Security Interests;
(ii) the Permitted Senior Indebtedness Liens;
(iii) Liens for taxes or assessments and similar charges, which
either are (A) not delinquent or (B) being contested
diligently and in good faith by appropriate proceedings, and
as to which the Issuer has set aside reserves on its books;
(iv) statutory Liens, such as mechanic's, materialman's,
warehouseman's, carrier's or other like Liens, incurred in
good faith in the ordinary course of business, provided that
the underlying obligations relating to such Liens are paid in
the ordinary course of business, or are being contested
diligently and in good faith by appropriate proceedings and as
to which Issuer has set aside reserves on its books, or the
payment of which obligations are otherwise secured;
(v) zoning ordinances, easements, licenses, reservations,
provisions, covenants, conditions, waivers or restrictions on
the use of Property and other title exceptions;
(vi) Liens in respect of judgments or awards with respect to which
no Event of Default would exist pursuant to subsection 5.1(g);
and
(vii) Liens to secure payment of insurance premiums (A) to be paid
in accordance with applicable laws in the ordinary course of
business relating to payment of worker's compensation, or (B)
that are required for the participation in any fund in
connection with worker's compensation, unemployment insurance,
old-age pensions or other social security program.
Permitted Prior Liens: any of the following Liens:
(i) the Permitted Senior Indebtedness Liens;
(ii) the Permitted Liens described in clauses (iii) and (iv) of the
definition of Permitted Liens that are accorded priority to
the Security Interests by law; and
(iii) the Permitted Liens described in clauses (v) and (vii) of the
definition of Permitted Liens, subject to the limitations set
forth therein.
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INDENTURE
(16% Junior Subordinated)
Permitted Senior Indebtedness: Indebtedness (i) under the Loan Agreement
issued in connection therewith and any refinancing thereof to the extent such
refinancing does not shorten the Weighted Average Life to Maturity of such
Indebtedness (ii) under the Senior Subordinated Notes, (iii) incurred to
purchase tangible personal property or Indebtedness incurred to lease tangible
personal property pursuant to Capitalized Leases, provided that (x) such
Indebtedness existing as of the Issue Date shall not exceed $50,000, (y) during
any Yearly Period after the Issue Date the amount of such Indebtedness at any
one time outstanding during such Yearly Period shall not exceed $100,000, and
(z) no Event of Default exists at the time or will be caused as a result of the
incurrence of any Indebtedness described in clause (y).
Permitted Senior Indebtedness Liens: Liens that secure Permitted Senior
Indebtedness, provided that, with respect to such Indebtedness described in
clause (iii) of the definition thereof, each such Lien attaches only to the
Property purchased or leased with the proceeds of the Permitted Senior
Indebtedness incurred with respect to such Property.
Person: any individual, firm, corporation, business enterprise, trust,
association, joint venture, partnership, Governmental Body or other entity,
whether acting in an individual, fiduciary or other capacity.
Plan of Reorganization: Debtors' Second Amended Joint Plan of
Reorganization dated October 31, 1996, as amended or modified, in Case No.
96-166 (PJW) (Jointly Administered) filed with the Bankruptcy Court.
Pole Attachment Agreement: any agreement, whether now in existence or
hereafter created, between Issuer and a municipality or public or private
utility company pursuant to which Issuer is permitted to use the utility poles,
trenches or easements of such public utility on which to string or in which to
bury the coaxial, fiber optic or other cable used to operate any portion of the
System.
Pole Attachment Authority: any Person who has entered into a Pole
Attachment Agreement with Issuer.
Property: all types of real, personal or mixed property and all types of
tangible or intangible property.
Qualified Depository: a member bank of the Federal Reserve System having a
combined capital and surplus of at least $100,000,000.
Real Property: all interests in real estate directly or indirectly owned
by Issuer other than the Leasehold Property.
Record Date: the Record Dates specified in the Securities; provided that
if any such date is not a Business Day, the Record Date shall be the first day
immediately preceding such specified day that is a Business Day.
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INDENTURE
(16% Junior Subordinated)
Redemption Date: when used with respect to any Security to be redeemed,
means the date fixed for such redemption pursuant to this Indenture and the
Securities.
Redemption Price: when used with respect to any Security to be redeemed,
means the price fixed for such redemption pursuant to this Indenture and the
Securities.
Registrar: as defined in Section 2.3.
Scott Management: Scott Cable Management Company, Inc., a Connecticut
corporation.
Scott Management Fees: the management fees payable to Scott Management
pursuant to Section 5 of the Management Agreement.
SEC: the Securities and Exchange Commission.
Secondary Securities: as defined in Section 2.2.
Securities: each of the Series A and Series B 16% Junior Subordinated
Pay-in-Kind Notes due July 18, 2002 of Issuer, and any Secondary Securities
issued in respect thereof, in each case, issued pursuant to this Indenture, as
the same may be modified or amended from time to time and refinancings thereof,
to the extent such refinancing indebtedness is permitted to be incurred under
this Indenture.
Securities Act: the Securities Act of 1933, the Exchange Act, any
successor statute thereto, and the rules, regulations and legally binding
policies of the Securities and Exchange Commission promulgated thereunder, as
amended and in effect from time to time.
Security Agreement: a security agreement executed by Issuer in favor of
Trustee.
Security Instruments: collectively, the Security Agreement, the Assignment
of Leases, the Mortgages and the Assignment of Management Agreement.
Security Interests: the Liens in the Collateral granted to Trustee
pursuant to the Security Instruments and any other document now or hereafter
executed by Issuer which purports to grant a Lien on the Property of Issuer in
favor of Trustee.
Senior Creditors: the holders of the Senior Notes and the Senior
Subordinated Notes.
Senior Notes: any promissory notes executed and delivered by issuer to
evidence indebtedness under the Loan Agreement.
Senior Subordinated Notes: the $49,500,000 principal amount of the 15%
Senior Subordinated Pay-in-Kind Notes due March 18, 2002, including any
securities issued in lieu of cash interest payments thereon.
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INDENTURE
(16% Junior Subordinated)
Senior Subordinated Notes Indenture: the indenture between Issuer and
[Trustee for Senior Sub Debt] dated as of December 18, 1996, as amended and
supplemented from time to time in accordance with the terms hereof.
Shareholders: collectively, Scott Management, Media/Communications
Partners Limited Partnership, a Delaware limited partnership, Chestnut Street
Partners, Inc., a Massachusetts corporation, Milk Street Partners, Inc., a
Massachusetts corporation, TA Investors, a Massachusetts general partnership,
Northeast Ventures II, a Connecticut general partnership, Allstate Insurance
Company, an Illinois insurance corporation and Fleet National Bank, as
Depositary.
Subordinated Credit Instruments: the Junior Subordinated Notes Indenture,
the Junior Subordinated Notes and all other documents and instruments executed
in connection with the Indebtedness evidenced thereby.
Subordinated Creditors: the holders of the Junior Subordinated Notes.
Subordinated Indebtedness: all Indebtedness now or hereafter owed by
Issuer to the Subordinated Creditors, whether pursuant to the Subordinated
Credit Instruments or otherwise.
Subordination Agreement (Junior): a subordination agreement among Trustee,
Issuer and the trustee of the Senior Subordinated Note Indenture on behalf of
the holder of the Senior Subordinated Notes.
Subordination Agreement (Senior): a subordination agreement among Trustee,
Issuer, the trustee of the Senior Subordinated Note Indenture, and the holders
of the Senior Notes.
Subsidiary: any Person in which Issuer owns or controls, directly or
indirectly, 25% or more of the securities or equity interests of such Person.
Termination Event: (i) a "Reportable Event" described in Section 4043 of
ERISA for which the thirty day notice requirement has not been waived; or (ii)
the withdrawal of Issuer or any ERISA Affiliate from a Pension Plan during a
plan year in which it was a "substantial employer" as defined in Section
4001(a)(2); or (iii) the termination of a Pension Plan, the filing of a notice
of intent to terminate a Pension Plan or the treatment of a Pension Plan
amendment as a termination under Section 4041 of ERISA; or (iv) the institution
of proceedings to terminate, or the appointment of a trustee with respect to,
any Pension Plan by the PBGC; or (v) any other event or condition which would
constitute grounds under Section 4042(a) of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan; or (vi) the partial or
complete withdrawal of Issuer or any ERISA Affiliate from a Multiemployer Plan;
or (vii) the imposition of a lien pursuant to Section 412 of the Code or Section
302 of ERISA; or (viii) any event or condition which results in the
reorganization or insolvency of a Multiemployer Plan under Sections 4241 or 4245
of ERISA; or (ix) any event or condition which results in the termination of a
Multiemployer Plan under
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INDENTURE
(16% Junior Subordinated)
Section 4041A of ERISA or the institution by the PBGC of proceedings to
terminate a Multiemployer Plan under Section 4042 of ERISA.
TIA: the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb),
as amended, as in effect on the date on which this Indenture is qualified under
the TIA, except as otherwise provided in Section 7.3.
"Total Available Amount" means the total amount available for payment as
principal on the Series A and Series B 16% Junior Subordinated Pay-in-Kind Notes
due July 18, 2002 of Issuer, on the Maturity Date or such earlier date upon
which payment of principal hereon is due and payable as a result of a redemption
in accordance with Article III, a Permitted Asset Sale or an Event of Default
pursuant to the terms of the Indenture, after payment of all Permitted Senior
Indebtedness, but not to exceed the Total Face Amount.
Total Directors Fees: the aggregate of all fees paid to the Board of
Directors of Issuer appointed by the holders of Class C Stock, including
directors appointed by such holders upon the conversion of Class C Stock to
Class A Stock, as directors fees through and including the date the calculation
is being made.
Total Face Amount: $38,925,797.
Total Series A Principal Amount: the sum of (a) 85% of the Total Available
Amount and (b) Total Directors Fees.
Total Series B Principal Amount: the difference of (a) Total Available
Amount and (b) Total Series A Principal Amount.
Trustee: the party named as such in this Indenture until a successor
replaces it in accordance with the provisions of this Indenture and thereafter
means such successor.
Trust Officer: any officer of Trustee assigned by Trustee to administer
its corporate trust matters.
U.S. Government Obligations: direct non-callable obligations of, or
non-callable obligations guaranteed by, the United States of America for the
payment of which obligation or guarantee the full faith and credit of the United
States of America is pledged.
U.S. Legal Tender: such coin or currency of the United States of America
as at the time of payment shall be legal tender for the payment of public and
private debts.
Weighted Average Life to Maturity: when applied to any Indebtedness at any
date, the number of years obtained by dividing (i) the sum of the products
obtained by multiplying (x) the amount of each then remaining installment,
sinking fund, serial maturity or other required payments of principal, including
payment at final maturity, in respect thereof, by (y) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date
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INDENTURE
(16% Junior Subordinated)
and the making of such payment, by (ii) the then outstanding principal amount of
such Indebtedness.
Yearly Period: each fiscal year of Issuer; provided that the first Yearly
Period shall begin on the Issue Date and shall end on December 31, 1997.
Section 1.2. Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such provision
is incorporated by reference in, and made a part of, this Indenture. The
following TIA terms used in this Indenture have the following meanings:
Commission: the SEC.
indenture securities: the Securities.
indenture security holder: a Holder.
indenture to be qualified: this Indenture.
indenture trustee or institutional trustee: Trustee.
obligor on the indenture securities: Issuer or any other obligor on the
Securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
Section 1.3. Time Periods.
In this Indenture and the other Indenture Instruments, in the computation
of periods of time from a specified date to a later specified date, (i) the word
"from" means "from and including," (ii) the words "to" and "until" each mean
"to, but excluding" and (iii) the words "through," "end of" and "expiration"
each mean "through and including." Unless otherwise specified, all references in
this Indenture and the other Indenture Instruments to (i) a "month" shall be
deemed to refer to a calendar month, (ii) a "quarter" shall be deemed to refer
to a calendar quarter and (iii) a "year" shall be deemed to refer to a calendar
year.
Section 1.4. References.
All references in this Indenture to "Article," "Section," "subsection,"
"subparagraph," "clause" or "Exhibit," unless otherwise indicated, shall be
deemed to refer to an Article, Section, subsection, subparagraph, clause or
Exhibit, as applicable, of this Indenture.
Section 1.5. Issuer's Knowledge.
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INDENTURE
(16% Junior Subordinated)
Any statements, representations or warranties that are based upon the best
knowledge of Issuer or an officer thereof shall be deemed to have been made
after due inquiry by Issuer or an officer, as applicable, with respect to the
matter in question.
ARTICLE II
THE SECURITIES
Section 2.1. Form and Dating.
The Securities and Trustee's certificate of authentication shall be
substantially in the form of Exhibit A with respect to the Series A Securities,
in the form of Exhibit B with respect to the Series B Securities, and in the
form of Exhibit C with respect to the Secondary Securities. The Securities may
have notations, legends or endorsements required by law, stock exchange rule or
usage. Issuer and Trustee shall approve the form of the Securities and any
notation, legend or endorsement on them. Each Security shall be dated the date
of its authentication.
Each Security issued shall be identical in every respect, except as to
principal amount, and except further that on the Maturity Date or such earlier
date as when payment of principal is due, each Series A Security shall be
entitled to its pro rata share of Total Series A Principal Amount, each Series B
shall be entitled to its pro rata share to Total Series B Principal Amount and
each Secondary Security shall be entitled to the amount stated on its face as
principal.
The terms and provisions contained in the Securities shall constitute, and
are hereby expressly made, a part of this Indenture and, to the extent
applicable, Issuer and Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
Section 2.2. Execution and Authentication.
An Officer or an Assistant Secretary, shall sign (either of whom shall, in
each case, have been duly authorized by all requisite corporate actions) the
Securities for Issuer by manual or facsimile signature.
If an Officer whose signature is on a Security was an Officer at the time
of such execution but no longer holds that office at the time Trustee
authenticates the Security, the Security shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of Trustee
manually signs the certificate of authentication on the Security. The signature
shall be conclusive evidence that the Security has been authenticated under this
Indenture.
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INDENTURE
(16% Junior Subordinated)
Trustee shall authenticate Securities, excluding Secondary Securities, for
original issue in the aggregate principal amount of up to $38,925,797 upon a
written order of Issuer in the form of an Officers' Certificate. The Officers'
Certificate shall specify the amount of Securities to be authenticated and the
date on which the Securities are to be authenticated. The aggregate principal
amount of Securities outstanding at any time may not exceed $38,925,797, except
for any Securities that may be issued pursuant to the immediately following
paragraph and except as provided in Section 2.7 and 2.8. Upon the written order
of Issuer in the form of an Officers' Certificate, Trustee shall authenticate
Securities in substitution of Securities originally issued to reflect any name
change of Issuer.
Issuer shall, on each Interest Payment Date prior to (and including) the
Interest Payment Date five years and six months after the Issue Date, pay
interest in additional Securities ("Secondary Securities") in lieu of the
payment in whole of interest in cash on the Securities as provided in paragraph
1 of the Securities. Issuer shall give written notice to Trustee of the amount
of interest to be paid in Secondary Securities not less than five Business Days
prior to the relevant Interest Payment Date, and Trustee or an authenticating
agent (upon written order of Issuer signed by an Officer of Issuer given not
less than five nor more than 45 days prior to such Interest Payment Date) shall
authenticate for original issue (pro rata to each Holder of any Securities of
such record date) Secondary Securities in an aggregate principal amount equal to
the amount of cash interest not paid on such Interest Payment Date, rounded to
the nearest dollar. Except as set forth in the following paragraph each issuance
of Secondary Securities in lieu of the payment of interest in cash on the
Securities shall be made pro rata with respect to the outstanding Securities,
and Issuer shall have the right to aggregate amounts of interest payable in the
form of Secondary Securities to a Holder of outstanding Securities and issue to
such Holder a single Secondary Security in payment thereof. Any Secondary
Securities may be denominated a separate series if Issuer deems it necessary to
do so in order to comply with any law or other applicable regulation or
requirement, with appropriate distinguishing designations. Notwithstanding the
forgoing and subject to the Subordination Agreement (Senior) and the
Subordination Agreement (Junior), Issuer shall have the option to pay interest
in cash (upon written order of Issuer signed by and Officer of Issuer given not
less than five or more than 45 days prior to an Interest Payment Date).
Trustee may appoint an authenticating agent reasonably acceptable to
Issuer to authenticate Securities. Unless otherwise provided in the appointment,
an authenticating agent may authenticate Securities whenever Trustee may do so.
Each reference in this Indenture to authentication by Trustee includes
authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with Issuer and Affiliates of Issuer.
Section 2.3. Registrar and Paying Agent.
The Issuer shall maintain an office or agency in the Borough of Manhattan,
The City of New York, where (a) Securities may be presented or surrendered for
registration of transfer or for exchange ("Registrar"), (b) Securities may be
presented or surrendered for payment ("Paying Agent") and (c) notices and
demands to or upon Issuer in respect of the Securities
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INDENTURE
(16% Junior Subordinated)
and this Indenture may be served. Issuer may also from time to time designate
one or more other offices or agencies where the Securities may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve Issuer of its obligation to maintain an office or agency in
the Borough of Manhattan, The City of New York, for such purposes. The Registrar
shall keep a register of the Securities and of their transfer and exchange.
Issuer, upon notice to Trustee, may have one or more co-Registrars and one or
more additional paying agents reasonably acceptable to Trustee. The term "Paying
Agent" includes any additional paying agent. Issuer initially appoints Trustee
as Registrar and Paying Agent until such time as Trustee has resigned or a
successor has been appointed. The Trustee's office in the City of New York, c/o
First Chicago Trust Company, 14 Wall Street, 8th Floor, New York, New York
10005, Attn: Corporate Trust Operations, shall be the office of the Issuer
referred to in the first sentence of this Section 2.3.
Issuer shall enter into an appropriate agency agreement with any Agent not
a party to this Indenture, which agreement shall implement the provisions of
this Indenture that relate to such Agent. Issuer shall notify Trustee, in
advance, of the name and address of any such Agent. If Issuer fails to maintain
a Registrar or Paying Agent within the Borough of Manhattan, The City of New
York, Trustee shall act as such.
Section 2.4. Paying Agent To Hold Assets in Trust.
Issuer shall require each Paying Agent other than Trustee to agree in
writing that each Paying Agent shall hold in trust for the benefit of Holders or
Trustee all assets and/or Secondary Securities held by Paying Agent for the
payment of principal of, or interest on, the Securities (whether such assets
have been distributed to it by Issuer or any other obligor on the Securities),
and that it shall notify Trustee of any Default by Issuer (or any other obligor
on the Securities) in making any such payment. Issuer at any time may require a
Paying Agent to distribute all assets and/or Secondary Securities held by it to
Trustee and account for any assets disbursed and Trustee may at any time during
the continuance of any payment Default, upon written request to a Paying Agent,
require such Paying Agent to distribute all assets and/or Secondary Securities
held by it to Trustee and to account for any assets so distributed. Upon
distribution to Trustee of all assets that shall have been delivered by Issuer
to Paying Agent, Paying Agent shall have no further liability for such assets
and/or Secondary Securities.
Section 2.5. Securityholder Lists.
Trustee shall preserve in as current a form as is reasonably practicable
the most recent list available to it of the names and addresses of Holders. If
Trustee is not the Registrar, Issuer shall furnish to Trustee on or before each
Interest Payment Date and at such other times as Trustee may request in writing
a list in such form and as of such date as Trustee may reasonably require of the
names and addresses of Holders, which list may be conclusively relied upon by
Trustee.
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INDENTURE
(16% Junior Subordinated)
Section 2.6. Transfer and Exchange.
When a Security is presented to the Registrar or a co-registrar with a
request to register a transfer, the Registrar shall register the transfer as
requested if the requirements of the Registrar are met. The Registrar need not
transfer or exchange any Securities selected for redemption. Also, it need not
transfer or exchange any Securities for a period of 30 days before a selection
of Securities to be redeemed. When Securities are presented to the Registrar or
a co-registrar with a request to exchange them for an equal principal amount of
Securities of other authorized denominations, the Registrar shall make the
exchange as requested if the requirements of the Registrar are met. Issuer shall
cooperate with the Registrar in meeting its requirements. To permit transfers,
registration and exchanges, Trustee shall authenticate Securities at the
Registrar's request. No service charge shall be made for any transfer,
registration or exchange, but Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith, but
not for any exchange pursuant to Section 2.10, 3.6 or 7.5.
Section 2.7. Replacement Securities.
If a mutilated Security is surrendered to Trustee or if the Holder of a
Security claims that the Security has been lost, destroyed or wrongfully taken,
Issuer shall issue and Trustee shall authenticate a replacement Security if
Trustee's requirements are met. If required by Trustee or Issuer, such Holder
must provide an indemnity bond or other indemnity, sufficient in the judgment of
both Issuer and Trustee, to protect Issuer, Trustee or any Agent from any loss
which any of them may suffer if a Security is replaced. Issuer may charge such
Holder for its reasonable, out-of-pocket expenses in replacing a Security,
including reasonable fees and expenses of counsel. Every replacement Security
shall constitute an additional obligation of Issuer.
Section 2.8. Outstanding Securities.
Securities outstanding at any time are all the Securities that have been
authenticated by Trustee, including the Secondary Securities, except those
cancelled by it, those delivered to it for cancellation and those described in
this Section as not outstanding. A Security does not cease to be outstanding
because Issuer or any of its Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.7 (other than a mutilated
Security surrendered for replacement), it ceases to be outstanding unless
Trustee receives proof satisfactory to it that the replaced Security is held by
a bona fide purchaser. A mutilated Security ceases to be outstanding upon
surrender of such Security and replacement thereof pursuant to Section 2.7.
If on a Redemption Date or the Maturity Date Paying Agent holds U.S. Legal
Tender or U.S. Government Obligations sufficient to pay all of the principal and
interest due on the Securities payable on that date, then on and after that date
such Securities cease to be outstanding and interest on them ceases to accrue.
16
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INDENTURE
(16% Junior Subordinated)
Section 2.9. Treasury Securities.
In determining whether the Holders of the required aggregate principal
amount of Securities have concurred in any direction, waiver or consent,
Securities owned by Issuer or any of its Affiliates shall be disregarded, except
that, for the purposes of determining whether Trustee shall be protected in
relying on any such direction, waiver or consent, only Securities that Trustee
knows or has reason to know are so owned shall be disregarded. Notwithstanding
the foregoing and except as otherwise provided by the TIA, 662/3% of Securities
not owned by Issuer or any of its Affiliates shall be sufficient to approve any
such direction, waiver or consent.
Section 2.10. Cancellation.
Issuer at any time may deliver Securities to Trustee for cancellation. The
Registrar and Paying Agent shall forward to Trustee any Securities surrendered
to them for transfer, exchange or payment. Trustee, or at the direction of
Trustee, the Registrar or Paying Agent, and no one else, shall cancel and, at
the written direction of Issuer, shall dispose of all Securities surrendered for
transfer, exchange, payment or cancellation. Subject to Section 2.7, Issuer may
not issue new Securities to replace Securities that it has paid or delivered to
Trustee for cancellation. If Issuer or any Subsidiary shall acquire any of the
Securities, such acquisition shall not operate as a redemption or satisfaction
of the Indebtedness represented by such Securities unless and until the same are
surrendered to Trustee for cancellation pursuant to this Section 2.10.
Section 2.11. Defaulted Interest.
If Issuer defaults in a payment of interest on the Securities, it shall,
unless Trustee fixes another record date pursuant to Section 5.10, pay the
defaulted interest, plus (to the extent lawful) any interest payable on the
defaulted interest, to the persons who are Holders on a subsequent special
record date, which date shall be the fifteenth day next preceding the date fixed
by Issuer for the payment of defaulted interest or the next succeeding Business
Day if such date is not a Business Day. At least 15 days before the subsequent
special record date, Issuer shall mail to each Holder, with a copy to Trustee, a
notice that states the subsequent special record date, the payment date and the
amount of defaulted interest, and interest payable on such defaulted interest,
if any, to be paid.
Section 2.12. CUSIP Number.
Issuer in issuing the Securities may use a "CUSIP" number, and if so,
Trustee shall use the CUSIP number in notices of redemption or exchange as a
convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Securities, and that reliance may be placed only
on the other identification numbers printed on the Securities.
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INDENTURE
(16% Junior Subordinated)
ARTICLE III
REDEMPTION
Section 3.1. Right of Redemption and Notices to Trustee.
Redemption of Securities, as permitted by any provision of this Indenture,
shall be made in accordance with such provision and this Article III. The Issuer
shall have the right to redeem all or any part of the Securities at 100% of
principal amount of the Security being redeemed at any time and from time to
time, in each case including accrued and unpaid interest to the Redemption Date.
In the event Issuer elects to redeem Securities in accordance with this
Section 3.1 hereof or is required to redeem Securities in accordance with
Section 4.9 hereof, Issuer shall notify Trustee of the Redemption Date and the
aggregate principal amount of the Securities to be redeemed and whether it wants
Trustee to give notice of redemption to the Holders (at Issuer's expense) at
least 10 days but not more than 60 days before the Redemption Date.
Section 3.2. Selection of Securities To Be Redeemed.
If fewer than all of the Securities are to be redeemed, Trustee shall
redeem pro rata.
Section 3.3. Notice of Redemption.
At least 10 days but not more than 60 days before a Redemption Date,
Issuer shall mail a notice of redemption by first class mail to each Holder
whose Securities or portions thereof are to be redeemed at such Holder's
registered address, with a copy to Trustee. At Issuer's request, Trustee shall
give the notice of redemption in Issuer's name and at Issuer's expense. Each
notice for redemption shall identify the Securities or portions thereof to be
redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the name and address of Paying Agent;
(4) that Securities or portions thereof called for redemption must
be surrendered to Paying Agent to collect the Redemption Price;
(5) that, unless Issuer defaults in making the redemption payment,
interest on Securities or portions thereof called for redemption ceases to
accrue on and after the Redemption Date, and the only remaining right of
the Holders of such Securities or portions thereof is to receive payment
of the Redemption Price upon surrender to Paying Agent of the Securities
or portions thereof redeemed;
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INDENTURE
(16% Junior Subordinated)
(6) if any Security is being redeemed in part, the portion of the
aggregate principal amount of such Security to be redeemed and that, after
the Redemption Date, and upon surrender of such Security, a new Security
or Securities in aggregate principal amount equal to the unredeemed
portion thereof will be issued; and
(7) if fewer than all of the Securities are to be redeemed, the
aggregate principal amount of Securities to be redeemed and the aggregate
principal amount of Securities to be outstanding after such partial
redemption.
Section 3.4. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.3,
Securities or portions thereof called for redemption become due and payable on
the Redemption Date and at the Redemption Price, provided that if a notice of
redemption is given in contemplation of a Permitted Asset Sale and such sale
does not occur, then this Section 3.4 shall not be applicable. Upon surrender to
Trustee or Paying Agent, such Securities or portions thereof called for
redemption shall be paid at the Redemption Price.
Section 3.5. Deposit of Redemption Price.
On or before 2:00 p.m. on the Redemption Date, Issuer shall deposit with
Paying Agent U.S. Legal Tender sufficient to pay the Redemption Price of all
Securities or portions thereof to be redeemed on that date (other than
Securities or portions thereof called for redemption on that date which have
been delivered by Issuer to Trustee for cancellation). Paying Agent shall
promptly return to Issuer any U.S. Legal Tender so deposited which is not
required for that purpose upon the written request of Issuer, except with
respect to monies owed as obligations to Trustee pursuant to Article VI.
If Issuer complies with the preceding paragraph, then, unless Issuer
defaults in the payment of such Redemption Price, interest on the Securities or
portions thereof to be redeemed will cease to accrue on and after the applicable
Redemption Date, whether or not such Securities are presented for payment.
If a Security or portion thereof is redeemed on or after a Record Date but
on or prior to the related Interest Payment Date, then any accrued and unpaid
interest shall be paid to the Person in whose name such Security was registered
at the close of business on such Record Date. If any Security or portion thereof
called for redemption shall not be so paid upon surrender for redemption because
of the failure of Issuer to comply with the first paragraph of this Section 3.5,
interest shall be paid on the unpaid principal, from the Redemption Date until
such principal is paid, and, to the extent lawful, on any interest not paid on
such unpaid principal, in each case at the rate provided in the Securities and
in Section 4.1 hereof.
Section 3.6. Securities Redeemed in Part.
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Upon surrender of a Security that is to be redeemed in part, Trustee shall
authenticate for the Holder a new Security or Securities equal in principal
amount to the unredeemed portion of the Security surrendered.
ARTICLE IV
COVENANTS
Until all of Issuer's Obligations are paid and performed in full Issuer
agrees that it shall:
Section 4.1. Payment of Securities.
(a) Pay the principal amount of, and interest on, as the case may
be, the Securities on the dates and in the manner provided in the
Securities. An installment shall be considered paid on the date it is due
if Trustee or Paying Agent holds on that date U.S. Legal Tender and/or, to
the extent required by Section 2.2, Secondary Securities designated for
and sufficient to pay the installment.
(b) Pay interest on overdue principal (including post-petition
interest in any proceeding under any Bankruptcy Law, to the extent
allowable as a claim in any such proceeding) at the same rate borne by the
Securities and it shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law, to the extent allowable as a
claim in any such proceeding) on overdue installments of interest (without
regard to any applicable grace period) at the same rate borne by the
Securities, to the extent lawful.
Section 4.2. Corporate Existence.
Issuer shall do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence in accordance with its
organizational documents and the rights (charter and statutory) of Issuer.
Section 4.3. SEC Reports and Other Information.
To the extent permitted by applicable law or regulation, whether or not
Issuer is subject to the requirements of Section 13 or 15(d) of the Exchange
Act, Issuer shall file with the SEC all quarterly and annual reports and such
other information, documents or other reports (or copies of such portions of any
of the foregoing as the SEC may by rules and regulations prescribe) required to
be filed pursuant to such provisions of the Exchange Act. Issuer shall file with
the Trustee, within five days after it files the same with the SEC, copies of
the quarterly and annual reports and the information, documents, and other
reports (or copies of such portions of any of the foregoing as the SEC may by
rules and regulations prescribe) that it is required to file with the SEC
pursuant to this Section 4.3. Issuer shall
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also comply with the other provisions of TIA Section 314(a). If Issuer is not
permitted by applicable law or regulations to file the aforementioned reports,
Issuer (at its own expense) shall file with the Trustee and mail, or cause the
Trustee to mail, to Holders at their addresses appearing in the register of
Securities maintained by the Registrar at the time of such mailing within five
days after it would have been required to file such information with the SEC,
all information and financial statements, including any notes thereto and with
respect to annual reports, an auditors' report by an accounting firm of
established national reputation, and a "Management's Discussion and Analysis of
Financial Condition and Results of Operations," comparable to the disclosure
that Issuer would have been required to include in annual and quarterly reports,
information, documents or other reports, including, without limitation, reports
on Forms 10-K, 10-Q and 8-K, if Issuer was subject to the requirements of such
Section 13 or Section 15(d) of the Exchange Act.
Section 4.4. Future Leases.
Deliver to Trustee, concurrently with the execution by Issuer, as lessee,
of any lease pertaining to real property, either a third leasehold mortgage upon
or a collateral assignment of such lease in favor of Trustee but only to the
extent such leasehold mortgage or collateral assignment is first required by the
Senior Creditors, and is delivered to the Senior Creditors, to secure the Senior
Notes.
Section 4.5. Future Acquisitions of Real Property.
Deliver to Trustee a third mortgage or deed of trust in favor of Trustee
on any real property acquired by the Issuer after the Issue Date, but only to
the extent such mortgage or deed of trust is first required by the Senior
Creditors, and is delivered to the Senior Creditors, to secure the Senior Notes.
Section 4.6. Compliance with Laws.
Comply with all Cable Statutes and Regulations and all other federal,
state and local laws, ordinances, requirements and regulations and all
judgments, orders, injunctions and decrees applicable to Issuer and its
operations, except such as are being contested in good faith and by appropriate
proceedings and except for such non-compliances as would not have a Material
Adverse Effect.
Section 4.7. Taxes and Claims.
Pay and discharge all material taxes, assessments and governmental charges
or levies imposed upon it or upon its income or profits, or upon any Property
belonging to it, prior to the date on which penalties attach thereto, and all
lawful claims which, if unpaid, might become a Lien (other than a Permitted
Lien) upon the Property of Issuer, provided that so long as no Lien has attached
to the Property of Issuer as a result of any of the foregoing, Issuer shall not
be required by this Section 4.7 to pay any such amount if the same is being
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contested diligently and in good faith by appropriate proceedings and as to
which Issuer has set aside reserves on its books.
Section 4.8. Maintenance of Properties and Insurance.
(a) Issuer shall cause all properties used or useful to the conduct of its
business to be maintained and kept in good condition, repair and working order
and supplied with all necessary equipment and shall cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in its judgment may be necessary, so that the business carried on in
connection therewith may be properly and advantageously conducted at all times
unless the failure to so maintain such properties (together with all other such
failures) would not have a material adverse effect on the financial condition or
results of operations of Issuer; provided, however, that nothing in this Section
4.8 shall prevent Issuer from discontinuing the operation or maintenance of any
of such properties, or disposing of any of them, if such discontinuance or
disposal is either (i) in the ordinary course of business, or (ii) is otherwise
permitted by this Indenture.
(b) Issuer shall provide or cause to be provided insurance (including
appropriate self-insurance) against loss or damage of the kinds that, in the
reasonable, good faith opinion of Issuer, are adequate and appropriate for the
conduct of the business of Issuer in a prudent manner, with reputable insurers
or with the government of the United States of America or an agency or
instrumentality thereof, in such amounts, with such deductibles, and by such
methods as shall be either (i) consistent with past practices of Issuer or (ii)
customary, in the reasonable, good faith opinion of Issuer, for corporations
similarly situated in the industry, unless the failure to provide such insurance
(together with all other such failures) would not have a Material Adverse
Effect.
(c) Issuer shall keep proper books of record and account, in which full
and correct entries shall be made of all business and financial transactions of
Issuer and reflect on its financial statements adequate accruals and
appropriations to reserves, all in accordance with GAAP.
(d) Nothing in this Section 4.8 shall be deemed to limit any obligations
of Issuer under any of the Security Instruments.
Section 4.9. Mandatory Redemption on a Permitted Asset Sale.
Subject to the terms of the Subordination Agreement (Senior) and the
Subordination Agreement (Junior) until the principal amount of the Securities
and all other amounts due under this Indenture are paid in full, Issuer shall
pay to the Trustee for the benefit of Holders an amount equal to the amount of
all Net Sale Proceeds from a Permitted Asset Sale upon receipt, but no later
than thirty days after such sale (the date of such payment to the Trustee for
the benefit of Holders, the "Permitted Asset Sale Purchase Date"). Such
redemption shall be conducted in accordance with Article III hereof.
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Section 4.10. Borrowing.
Without the prior approval of 100% of the Issuer's Board of Directors, not
create, incur, assume or suffer to exist any liability for Indebtedness for
Borrowed Money except (i) the Subordinated Indebtedness and (ii) Permitted
Senior Indebtedness.
Section 4.11. Liens.
Without the prior approval of 100% of the Issuer's Board of Directors, not
create, incur, assume or suffer to exist any Lien upon any of its Property,
whether now owned or hereafter acquired, except Permitted Liens.
Section 4.12. Merger and Acquisition.
Without the prior approval of 100% of the Issuer's Board of Directors, not
consolidate with or merge with or into any Person, or acquire directly or
indirectly all or substantially all of the capital stock, equity interests or
Property of any Person.
Section 4.13. Contingent Liabilities.
Without the prior approval of 100% of the Issuer's Board of Directors, not
assume, guarantee, endorse, contingently agree to purchase, become liable in
respect of any letter of credit, or otherwise become liable upon the obligation
of any Person, except liabilities arising from the endorsement of negotiable
instruments for deposit or collection, the posting of bonds to secure
performance to the extent necessary in connection with Issuer's Cable Business
and similar transactions in the ordinary course of business.
Section 4.14. Distributions.
Not make any dividends, distributions or other shareholder expenditures
with respect to the Issuer Capital Stock or apply any of its Property to the
purchase, redemption or other retirement of, or set apart any sum for the
payment of, or make any other distribution by reduction of capital or otherwise
in respect of, any of the Issuer Capital Stock.
Section 4.15. Investments, Loans.
Not at any time purchase or otherwise acquire, hold or invest in the
capital stock of, or any other interest in, any Person, or make any loan or
advance to, or enter into any arrangement for the purpose of providing funds or
credit to, or make any other investment, whether by way of capital contribution
or otherwise, in or with any Person, including, without limitation, any
Affiliate, except (i) investments in direct obligations of, or instruments
unconditionally guaranteed by, the United States of America or in certificates
of deposit issued by a Qualified Depository, (ii) investments in commercial or
finance paper which, at the time of investment, is rated "A" or better by
Moody's Investors Service, Inc., or Standard & Poor's Ratings Group, a Division
of McGraw-Hill, Inc., respectively, or at the equivalent
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rate by any of their respective successors, (iii) any interests in any money
market account maintained, at the time of investment, with a Qualified
Depository, the investments of which, at the time of investment, are restricted
to the types specified in clause (i) above, (iv) loans to employees of Issuer in
the aggregate amount not to exceed $25,000 outstanding at any time, (v) capital
stock of presently existing Subsidiaries and (vi) investments in equity
interests of programmers made available to Issuer by such programmers as an
inducement to carry programming of such programmers, provided the aggregate cost
of all such investments does not exceed $100,000 outstanding at any time. All
investments permitted pursuant to clauses (i), (ii) and (iii) of this Section
4.15 shall have a maturity not exceeding one year.
Section 4.16. Fundamental Business Changes.
Not materially change the nature of its business or engage in any business
other than the Cable Business.
Section 4.17. Sale or Transfer of Assets.
Without the prior approval of 100% of the Issuer's Board of Directors, not
sell, lease, assign, transfer or otherwise dispose of any Property (other than
in the ordinary course of business) except for (i) the sale or disposition of
(A) Property which is not material to or necessary for the continued operation
of its business and (B) obsolete or unusable items of equipment which promptly
are replaced with new items of equipment of like function and comparable value
to the unusable items of equipment when the same were new or not obsolete or
unusable, provided such replacement items of equipment shall become subject to
the Security Interests, (ii) Permitted Asset Sales and (iii) sales of Property
upon which the Agent (as defined in the Loan Agreement) has released its
Permitted Senior Indebtedness Liens.
Section 4.18. Acquisition of Additional Properties.
Without the prior approval of 100% of the Issuer's Board of Directors, not
acquire any additional Property except such Property as is necessary to or
useful in the operation of its business, provided such acquisitions shall be
subject to the conditions and limitations set forth in this Indenture.
Section 4.19. Issuance of Equity Interests.
Not issue or sell, permit to be issued or sold, or otherwise consent to
the transfer of, any additional capital stock or any interests convertible into
or exercisable for any such additional capital stock, except for the conversion
of the Class C Stock to Class A Stock.
Section 4.20. Transactions with Affiliates.
Without the prior approval of 100% of the Issuer's Board of
Directors, not sell, lease, assign, transfer or otherwise dispose of any
Property to any Affiliate of Issuer, lease
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Property, render or receive services or purchase assets from any such Affiliate,
or otherwise enter into any contractual relationship with any Affiliate of
Issuer, except that Issuer may (i) receive management services from Scott
Management under the terms of the Management Agreement and may pay to Scott
Management (A) Scott Management Fees provided that the aggregate amount of all
payments of Scott Management Fees with respect to any month does not exceed 4.5%
of the gross revenues of Issuer for such month; except that any payment of Scott
Management Fees with respect to December of any year may exceed 4.5% of the
gross revenues of Issuer for such month so long as the aggregate amount of all
payments of Scott Management Fees with respect to any year does not exceed 4.5%
of the gross revenues of Issuer for such year and (B) reasonable out-of-pocket
expenses and (ii) engage in such transactions with its Affiliates provided such
transactions are in the ordinary course of business of Issuer and are under
terms no less favorable to Issuer than could be obtained from an independent
third party.
Section 4.21. Compliance with ERISA.
(a) Not engage in any Termination Event which would result in a
liability to Issuer or any ERISA Affiliate in excess of $100,000;
(b) Not cause the present value of all benefit liabilities under all
Pension Plans to exceed the current value of the assets of such Pension
Plans allocable to such benefit liabilities by more than $100,000;
(c) Not cause any accumulated funding deficiency in excess of
$100,000 (as defined in Section 302 of ERISA and Section 412 of the Code)
with respect to any Pension Plan, except to the extent waived;
(d) Not fail to make any contribution or payment to any
Multiemployer Plan which Issuer or any ERISA Affiliate may be required to
make under any agreement relating to such Multiemployer Plan, or any law
pertaining thereto which results in or is likely to result in a liability
in excess of $100,000;
(e) Not engage, or permit any ERISA Affiliate to engage, in any
"prohibited transaction" as such term is defined in Section 406 of ERISA
or Section 4975 of the Code for which a civil penalty pursuant to Section
502(i) of ERISA or a tax pursuant to Section 4975 of the Code in excess of
$100,000 is imposed;
(f) Not establish any Employee Benefit Plan providing
post-retirement welfare benefits or establish or amend any Employee
Benefit Plan which establishment or amendment could result in liability to
Issuer or any ERISA affiliate or increase the obligation of Issuer or any
ERISA Affiliate to a Multiemployer Plan which liability or increase,
individually or together with all similar liabilities and increases, is
material to Issuer or any ERISA Affiliate; or
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(g) Not fail, or permit any ERISA Affiliate to fail, to establish,
maintain and operate each Employee Benefit Plan of Issuer in compliance in
all material respects with ERISA, the Code and all other applicable laws
and regulations and interpretations thereof.
ARTICLE V
DEFAULT AND REMEDIES
Section 5.1. Events of Default.
An "Event of Default" occurs if:
(a) Issuer defaults in the payment of interest on the Securities
when the same becomes due and payable and the default continues for a
period of 30 days;
(b) Issuer defaults in the payment of the principal of the
Securities when the same becomes due and payable at maturity, upon
acceleration, redemption or otherwise;
(c) Issuer shall fail to observe or perform any covenant or
agreement (other than those referred to in subparagraph (a) above or (b)
or specifically addressed elsewhere in this Section 5.1) made by it in
this Indenture and such failure shall continue for a period of 30 days
after written notice of such failure is given by the Trustee;
(d) any representation or warranty made by or on behalf of Issuer in
or pursuant to any of the Indenture Instruments or in any instrument or
document furnished in compliance with the Indenture Instruments shall
prove to be false or misleading in any material respect on the date as of
which made;
(e) (i) Issuer at any time shall be in default (as principal or
guarantor or other surety) in the payment of any principal of or premium
or interest on any Indebtedness for Borrowed Money beyond the grace
period, if any, applicable thereto and the aggregate amount of such
payments then in default beyond such grace period shall exceed $100,000 or
(ii) any default shall occur in respect of any issue of Indebtedness for
Borrowed Money of Issuer outstanding in a principal amount of at least
$300,000, or in respect of any agreement or instrument relating to any
such issue of Indebtedness for Borrowed Money, and such default shall
continue beyond the grace period, if any, applicable thereto, and in each
case, such default shall continue uncured or unwaived for a period of 60
days after written notice thereof is given by the Trustee or, if as a
result of such default the related Indebtedness has been accelerated;
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(f) (A) Issuer shall (i) generally not be paying its debts as they
become due, (ii) file, or consent, by answer or otherwise, to the filing
against it of a petition for relief or reorganization or arrangement or
any other petition in bankruptcy or insolvency under the laws of any
jurisdiction, (iii) make an assignment for the benefit of creditors, (iv)
consent to the appointment of a custodian, receiver, trustee or other
officer with similar powers for the Issuer, or for any substantial part of
the Property of the Issuer or (v) be adjudicated insolvent;
(B) any Governmental Body of competent jurisdiction shall
enter an order appointing, without consent of Issuer, a custodian,
receiver, trustee or other officer with similar powers with respect to
Issuer, or with respect to any substantial part of the Property belonging
to Issuer, or if an order for relief shall be entered in any case or
proceeding for liquidation or reorganization or otherwise to take
advantage of any bankruptcy or insolvency law of any jurisdiction, or
ordering the dissolution, winding-up or liquidation of Issuer or if any
petition for any such relief shall be filed against Issuer and such
petition shall not be dismissed or stayed within 60 days;
(g) there shall exist a final judgment or award against Issuer which
shall have been outstanding for a period of 30 days or more from the date
of the entry thereof and shall not have been discharged in full or stayed
pending appeal, if the aggregate amount of all such judgments and awards
exceeds $300,000;
(h) Issuer fails to comply with the terms of its articles of
incorporation or by- laws; or
(i) any material portion of the Collateral shall be seized or taken
by a Governmental Body or Person (including, but not limited to, the
Senior Creditors pursuant to the terms of the Loan Agreement), or Issuer
shall fail to maintain or cause to be maintained the Security Interests
and priority of the Indenture Instruments as against any Person, or the
title and rights of Issuer to any material portion of the Collateral shall
have become the subject matter of litigation which could reasonably be
expected to result in impairment or loss of the security provided by the
Indenture Instruments.
Section 5.2. Acceleration.
Subject to the terms of the Subordination Agreement (Senior) and the
Subordination Agreement (Junior) if an Event of Default (other than an Event of
Default specified in Section 5.1(f)) occurs and is continuing, Trustee may, by
notice to Issuer or the Holders of at least 25% in aggregate principal amount of
the Securities then outstanding may, by written notice to Issuer and Trustee,
and Trustee shall, upon the request of such Holders, declare the aggregate
principal amount of the Securities outstanding, together with accrued but unpaid
interest thereon to the date of payment, to be due and payable and, upon any
such declaration, the same shall become and be due and payable. If an Event of
Default specified in Section 5.1(f) occurs, all unpaid principal and accrued
interest on the Securities then outstanding shall
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ipso facto become and be immediately due and payable without any declaration or
other act on the part of Trustee or any Holder. Upon payment of such principal
amount, interest, and premium, if any, all of Issuer's obligations under the
Securities and this Indenture, other than obligations under Section 6.7, shall
terminate. The Holders of a majority in aggregate principal amount of the
Securities then outstanding by notice to Trustee may rescind an acceleration and
its consequences if (i) all existing Events of Default, other than the
non-payment of the principal and interest on the Securities which have become
due solely by such declaration of acceleration, have been cured or waived as
provided in Section 5.4, (ii) to the extent the payment of such interest is
lawful, interest on overdue installments of interest and overdue principal,
which has become due otherwise than by such declaration of acceleration, has
been paid, and (iii) the rescission would not conflict with any judgment or
decree of a court of competent jurisdiction.
Section 5.3. Other Remedies.
If an Event of Default occurs and is continuing, Trustee may pursue any
available remedy by proceeding at law or in equity to collect the payment of
principal of or interest on the Securities or to enforce the performance of any
provision of the Securities, the Security Instruments or this Indenture.
Trustee may maintain a proceeding under this Indenture, the Security
Instruments or the Securities even if it does not possess any of the Securities
or does not produce any of them in the proceeding. A delay or omission by
Trustee or any Holder in exercising any right or remedy accruing upon an Event
of Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative to the extent permitted by law.
Section 5.4. Waiver of Past Defaults.
Subject to Sections 5.7 and 7.2, the Holders of at least a majority in
aggregate principal amount of the outstanding Securities by notice to Trustee
may on behalf of the Holders of all the Securities waive any past Default under
this Indenture, the Securities or any Security Instruments and its consequences,
except a Default in the payment of principal of or interest on any Security as
specified in clauses (a) and (b) of Section 5.1 or an Event of Default specified
in Section 5.1(f). When a Default or Event of Default is so waived, it shall be
deemed cured and shall cease to exist.
Section 5.5. Control by Majority.
The Holders of at least a majority in aggregate principal amount of the
outstanding Securities may direct the time, method and place of conducting any
proceeding for any remedy available to Trustee or exercising any trust or power
conferred on it under this Indenture, the Securities or the Security
Instruments. Subject to Section 6.1, however, Trustee may refuse to follow any
direction (a) that conflicts with any law or this Indenture, or (b) that
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may involve Trustee in personal liability; provided that Trustee may take any
other action deemed proper by Trustee which is not inconsistent with such
direction.
Section 5.6. Limitation on Suits.
A Holder may not pursue any remedy with respect to this Indenture, the
Securities or the Security Instruments unless:
(1) the Holder gives written notice to Trustee of a continuing Event
of Default;
(2) the Holder or Holders of at least 25% in aggregate principal
amount of the outstanding Securities make a written request to Trustee to
pursue the remedy;
(3) such Holder or Holders offer and, if requested, provide to
Trustee indemnity satisfactory to Trustee against any loss, liability or
expense to be incurred in compliance with such request;
(4) Trustee does not comply with the request within 30 days after
receipt of the request and the offer and, if requested, provision of
indemnity; and
(5) during such 30-day period the Holder or Holders of at least 25%
in aggregate principal amount of the outstanding Securities do not give
Trustee a direction which, in the opinion of Trustee, is inconsistent with
the request.
The foregoing limitations shall not apply to a suit instituted by a Holder
for the enforcement of the payment of principal of, or interest on, any
Securities on or after the respective due dates set forth in such Securities.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holders.
Section 5.7. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of and interest on a Security, on or
after the respective due dates expressed in such Security, or to bring suit for
the enforcement of any such payment on or after such respective dates, shall not
be impaired or affected without the consent of the Holder.
Section 5.8. Collection Suit by Trustee.
If an Event of Default in payment of principal or interest specified in
clause (a) or (b) of Section 5.1 occurs and is continuing, Trustee may recover
judgment in its own name and as trustee of an express trust against Issuer for
the whole amount of principal and accrued
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interest remaining unpaid, together with interest on overdue principal and, to
the extent that payment of such interest is lawful, interest on overdue
installments of interest, in each case at the rate per annum borne by the
Securities and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of Trustee, its agents and counsel.
Section 5.9. Trustee May File Proofs of Claim.
Trustee may file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of Trustee (including any
claim for the reasonable compensation, expenses, disbursements and advances of
Trustee, its agents and counsel) and the Holders allowed in any judicial
proceedings (including, without limitation, a case or proceeding under any
Bankruptcy Law) relating to Issuer or any other obligor upon the Securities, any
of their respective creditors or any of their respective property and shall be
entitled and empowered to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same, and any
Custodian in any such judicial proceedings is hereby authorized by each Holder
to make such payments to Trustee and, in the event that Trustee shall consent to
the making of such payments directly to the Holders, to pay to Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of Trustee, its agents and counsel, and any other amounts due Trustee
under Section 6.7. Nothing herein contained shall be deemed to authorize Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize Trustee to vote
in respect of the claim of any Holder in any such proceeding.
Section 5.10. Priorities.
Subject to the Subordination Agreement (Senior) and the Subordination
Agreement (Junior), if Trustee collects any money pursuant to this Article V, it
shall pay out the money in the following order:
First: to Trustee for amounts due to it under Section 6.7 and for any
amounts due under the Security Instruments;
Second: if the Holders are forced to proceed against Issuer directly
without Trustee, to the Holders for their collection costs;
Third: to the Holders for amounts due and unpaid on the Securities for
principal and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for principal and
interest, respectively; and
Fourth: to Issuer.
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Trustee, upon prior notice to Issuer, may fix a record date and payment
date for any payment to the Holders pursuant to this Section 5.10.
Section 5.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against Trustee for any action taken or omitted by it
as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 5.11 does not apply to a suit by Trustee, a suit by a Holder
pursuant to Section 5.7, or a suit by a Holder or Holders of more than 25% in
aggregate principal amount of the outstanding Securities.
ARTICLE VI
TRUSTEE
Trustee hereby accepts the trust imposed upon it by this Indenture and
covenants and agrees to perform the same, as herein expressed.
Section 6.1. Duties of Trustee.
(a) Execute the Subordination Agreement (Senior) and the Subordination
Agreement (Junior).
(b) If a Default or an Event of Default has occurred and is continuing,
Trustee shall exercise such of the rights and powers vested in it by this
Indenture and the Security Instruments and use the same degree of care and skill
in its exercise thereof as a prudent person could exercise or use under the
circumstances in the conduct of his own affairs.
(c) Except during the continuance of a Default or an Event of Default:
(1) Trustee need perform only those duties as are specifically set
forth in this Indenture and the Security Instruments and no covenants or
obligations shall be implied in this Indenture or the Security Instruments
that are adverse to Trustee.
(2) In the absence of bad faith on its part, Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to Trustee and conforming to the requirements of this Indenture or the
Security Instruments, as the case may be. However, Trustee shall examine
the certificates and opinions to determine whether or not they conform to
the requirements of this Indenture or the relevant Security Instrument as
to form.
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(d) Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section 6.1.
(2) Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that Trustee was
negligent in ascertaining the pertinent facts.
(3) Trustee shall not be liable with respect to any action it takes
or omits to take in good faith in accordance with a direction received by
it pursuant to Section 5.5.
(e) No provision of this Indenture or any Security Instrument shall
require Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or thereunder or in
the exercise of any of its rights or powers if it shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(f) Every provision of this Indenture and the Security Instruments that in
any way relates to Trustee is subject to paragraphs (a), (b), (c) and (d) of
this Section 6.1.
(g) Trustee shall not be liable for interest on any assets received by it
except as Trustee may agree with Issuer. Assets held in trust by Trustee need
not be segregated from other assets except to the extent required by law.
Section 6.2. Rights of Trustee.
Subject to Section 6.1 and the provisions of Section 315 of the TIA:
(a) Trustee may rely on any document believed by it to be genuine and to
have been signed or presented by the proper person. Trustee need not investigate
any fact or matter stated in the document.
(b) Before Trustee acts or refrains from acting, it may consult with
counsel and may require an Officers' Certificate or an Opinion of Counsel, which
shall conform to Sections 12.4 and 12.5. Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such certificate
or opinion.
(c) Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
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(d) Trustee shall not be liable for any action that it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers other than any liabilities arising out of its own negligence.
(e) Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
notice, request, direction, consent, order, bond, debenture, or other paper or
document, but Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit.
(f) Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Indenture or any Security Instrument at the request,
order or direction of any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have offered to Trustee reasonable security
or indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby.
Section 6.3. Individual Rights of Trustee.
Trustee in its individual or any other capacity may become the owner or
pledgee of Securities and may otherwise deal with Issuer, its Subsidiaries, or
their respective Affiliates with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. However, Trustee must
comply with Sections 6.10 and 6.12.
Section 6.4. Trustee's Disclaimer.
Trustee makes no representation as to the validity or adequacy of this
Indenture, any Security Instrument or the Securities, it shall not be
accountable for Issuer's use of the proceeds from the Securities, and it shall
not be responsible for any statement in the Securities other than Trustee's
certificate of authentication. Trustee shall not be responsible for perfecting
or maintaining the perfection of any security interest granted to it under any
Security Instrument or for filing, refiling, recording or rerecording any
document, Mortgage, notice or instrument in any public office at any time or
times and shall not be responsible for seeing to the insurance on or the payment
of any taxes with respect to any property subject to any Security Instrument.
Section 6.5. Notice of Default.
If a Default or an Event of Default occurs and is continuing and if it is
known to Trustee, Trustee shall mail to each Holder notice of the uncured
Default or Event of Default within 30 days after such Default or Event of
Default occurs. Except in the case of a Default or an Event of Default in
payment of principal of, premium, if any, or interest on, any Security, Trustee
may withhold the notice if and so long as its board of directors, the executive
committee of its board of directors or a committee of its directors and/or Trust
Officers in good faith determines that withholding the notice is in the interest
of the Holders.
Section 6.6. Reports By Trustee to Holders.
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Within 60 days after each May 1st commencing with May 1, 1998, Trustee
shall, to the extent that any of the events described in TIA Section 313(a)
occurred within the previous twelve months, but not otherwise, mail to each
Holder a brief report dated as of such January 1st that complies with TIA
Section 313(a). Trustee also shall comply with TIA Sections 313(b) and 313(c).
A copy of each report at the time of its mailing to Holders shall be
mailed to Issuer and filed with the SEC and each stock exchange, if any, on
which the Securities are listed.
Issuer shall notify Trustee if the Securities become listed on any stock
exchange.
Section 6.7. Compensation and Indemnity.
Issuer shall pay to Trustee from time to time reasonable compensation for
its services. Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. Issuer shall reimburse Trustee
upon request for all reasonable disbursements, expenses and advances incurred or
made by it. Such expenses shall include the reasonable compensation,
disbursements and expenses of Trustee's agents and counsel.
Issuer shall indemnify Trustee for, and hold it harmless against, any loss
or liability incurred by it, except for such actions to the extent caused by any
negligence or bad faith on its part, arising out of or in connection with the
administration of this trust and its rights or duties hereunder and under the
Security Instruments. Trustee shall notify Issuer promptly of any claim asserted
against Trustee for which it may seek indemnity. Issuer shall defend the claim
and Trustee shall cooperate in the defense. Trustee may have separate counsel
and Issuer shall pay the reasonable fees and expenses of such counsel; provided
that Issuer will not be required to pay such fees and expenses if it assumes
Trustee's defense and there is no conflict of interest between Issuer and
Trustee in connection with such defense as reasonably determined by Trustee.
Issuer need not pay for any settlement made without its written consent. Issuer
need not reimburse any expense or indemnify against any loss or liability to the
extent incurred by Trustee through its negligence, bad faith or willful
misconduct.
To secure Issuer's payment obligations in this Section 6.7, Trustee shall
have a lien prior to the Securities on all assets held or collected by Trustee,
in its capacity as Trustee, except assets held in trust to pay principal of,
premium, if any, or interest on particular Securities.
When Trustee incurs expenses or renders services after an Event of Default
specified in Section 5.1(f) occurs or in connection with any case or proceeding
under any Bankruptcy Law, the expenses and the compensation for the services are
intended to constitute expenses of administration under any Bankruptcy Law.
Section 6.8. Replacement of Trustee.
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Trustee may resign by so notifying Issuer. The Holders of at least a
majority in aggregate principal amount of the outstanding Securities may remove
Trustee by so notifying Issuer and Trustee and may appoint a successor Trustee
with Issuer's consent. Issuer may remove Trustee if:
(1) Trustee fails to comply with Section 6.10;
(2) Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to Trustee under any Bankruptcy Law;
(3) a custodian, receiver or other public officer takes charge of
Trustee or its property; or
(4) Trustee becomes incapable of acting.
If Trustee resigns or is removed or if a vacancy exists in the office of
Trustee for any reason, Issuer shall notify each Holder of such event and shall
promptly appoint a successor Trustee. Within one year after the successor
Trustee takes office, the Holders of a majority in aggregate principal amount of
the Securities may appoint a successor Trustee to replace the successor Trustee
appointed by Issuer.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to Issuer. Immediately after that, the retiring
Trustee shall transfer all property held by it as Trustee to the successor
Trustee, subject to the lien provided in Section 6.7, the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of Trustee under this Indenture and the
Security Instruments and Issuer shall take such action as shall be necessary so
that all Collateral (including all Trust Moneys and other property in the
Collateral Account) shall continue to be subject to the Lien of the Security
Instruments in favor of Trustee (or, in the case of property or assets subject
to a Mortgage, Trustee or another trustee under such Mortgage) for the benefit
of the Holders of the Securities. A successor Trustee shall mail notice of its
succession to each Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, Issuer or the
Holders of at least 10% in aggregate principal amount of the outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If Trustee fails to comply with Section 6.10, any Holder may petition any
court of competent jurisdiction for the removal of Trustee and the appointment
of a successor Trustee.
Notwithstanding replacement of Trustee pursuant to this Section 6.8,
Issuer's obligations under Section 6.7 shall continue for the benefit of the
retiring Trustee.
Section 6.9. Successor Trustee by Merger, Etc.
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If Trustee consolidates with, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
resulting, surviving or transferee corporation without any further act shall, if
such resulting, surviving or transferee corporation is otherwise eligible
hereunder, be the successor Trustee.
Section 6.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA Sections 310(a)(1) and 310(a)(5). Trustee shall have a combined capital
and surplus of at least $100,000,000 as set forth in its most recent published
annual report of condition. Trustee shall comply with TIA Section 310(b);
provided, however, that there shall be excluded from the operation of TIA
Section 310(b)(1) any indenture or indentures under which other securities, or
certificates of interest or participation in other securities, of Issuer are
outstanding, if the requirements for such exclusion set forth in TIA Section
310(b)(1) are met.
Section 6.11. Co-Trustee.
(a) If at any time or times it shall be necessary or prudent in
order to conform to any law of any jurisdiction in which any of the Collateral
shall be located, or Trustee shall be advised by counsel satisfactory to it that
it is necessary or prudent in the interest of the Holders, or the Holders of at
least 25% in aggregate principal amount of the outstanding Securities shall in
writing so request Trustee and Issuer, or Trustee shall deem it desirable for
its own protection in the performance of its duties hereunder, Trustee and
Issuer shall execute and deliver all instruments and agreements necessary or
proper to constitute another bank or trust company, or one or more persons
approved by Trustee and Issuer, either to act as co-trustee or co-trustees (each
a "co-trustee") of all or any of the Collateral, jointly with Trustee, or to act
as separate trustee or trustees of any such property. If Issuer shall not have
joined in the execution of such instruments and agreements within 10 days after
Issuer receives a written request from Trustee to do so, or if an Event of
Default has occurred and is continuing, Trustee may act under the foregoing
provisions of this Section 6.11 without the concurrence of Issuer. Issuer hereby
appoints Trustee as its agent and attorney to act for it under the foregoing
provisions of this Section 6.11 in either of such contingencies.
(b) Every separate trustee and every co-trustee, other than any
successor Trustee appointed pursuant to Section 6.08, shall, to the extent
permitted by law, be appointed and act and be such, subject to the following
provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon Trustee hereunder shall be conferred or imposed and exercised or
performed by Trustee and such separate trustee or separate trustees or
co-trustee or co-trustees, jointly, as shall be provided in the instrument
appointing such separate trustee or separate trustees or co-trustee or
co-trustees, except to the extent that under any law of any jurisdiction
in which any particular act or acts are to be performed Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights,
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powers, duties and obligations shall be exercised and performed singly by
such separate trustee or separate trustees or co-trustee or co-trustees,
but solely at the direction of Trustee;
(ii) no trustee or co-trustee hereunder shall be personally liable
by reason of any act or omission of any other trustee or co-trustee
hereunder; and
(iii) Issuer and Trustee, at any time by an instrument in writing
executed by them jointly, may accept the resignation of or remove any such
separate trustee or co-trustee and, in that case by an instrument in
writing executed by them jointly, may appoint a successor to such separate
trustee or co-trustee, as the case may be, anything contained herein to
the contrary notwithstanding. If Issuer shall not have joined in the
execution of any such instrument within 10 days after Issuer receives a
written request from Trustee to do so, or if an Event of Default has
occurred and is continuing, Trustee shall have the power to accept the
resignation of or remove any such separate trustee or co-trustee and to
appoint a successor without the concurrence of Issuer, Issuer hereby
appointing Trustee its agent and attorney to act for it in such connection
in such contingency. If Trustee shall have appointed a separate trustee or
co-trustee as above provided, Trustee may at any time, by an instrument in
writing, accept the resignation of or remove any such separate trustee or
co-trustee and the successor to any such separate trustee or co-trustee
shall be appointed by Issuer and Trustee, or by Trustee alone pursuant to
this Section 6.11.
Section 6.12. Preferential Collection of Claims Against Issuer.
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE VII
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 7.1. Without Consent of Holders.
Issuer, when authorized by a Board Resolution, and Trustee, together, may
amend or supplement this Indenture, the Securities or the Security Instruments
without notice to or consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency; provided that
such amendment or supplement does not adversely affect the rights of any
Holder;
(2) to provide for uncertificated Securities in addition to or in
place of certificated Securities; provided, however, that the
uncertificated Securities are issued
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in registered form for purposes of Section 163(f) of the Internal Revenue
Code of 1986, as from time to time amended, or in a manner such that the
uncertificated Securities are described in Section 163(f)(2)(B) of the
Internal Revenue Code of 1986, as from time to time amended;
(3) to make any other change that does not adversely affect the
rights of any Holders;
(4) to comply with any requirements of the SEC in connection with
the qualification of this Indenture under the TIA;
(5) to give effect to the release of any Released Interests or any
other release of Collateral released in accordance with the terms of this
Indenture or the relevant Security Instrument;
(6) to evidence or effect the pledge of additional or substitute
assets or property as Collateral; or
(7) to evidence and provide for the acceptance of appointment
hereunder by a separate or successor Trustee with respect to the
Securities and to make such additions or changes as shall be necessary or
appropriate to provide for or facilitate the administration of the trusts
hereunder by more than one trustee pursuant to the requirements of Section
6.11 hereof;
provided that Issuer has delivered to Trustee an Opinion of Counsel stating that
such amendment or supplement complies with the provisions of this Section 7.1.
Section 7.2. With Consent of Holders.
Subject to Section 5.7, Issuer, when authorized by a Board Resolution, and
Trustee, together, with the written consent of the Holder or Holders of at least
a majority in aggregate principal amount of the outstanding Securities, may
amend or supplement this Indenture, the Securities or the Security Instruments,
without notice to any other Holders. Subject to Section 5.7, the Holder or
Holders of at least a majority in aggregate principal amount of the outstanding
Securities may waive future compliance by Issuer with any provision of this
Indenture, the Securities or the Security Instruments without notice to any
other Holder. Without the consent of each Holder affected, however, no
amendment, supplement or waiver, including a waiver pursuant to Section 5.4,
may:
(1) change the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver of any provision of this
Indenture, the Securities or the Security Instruments;
(2) reduce the rate or extend the time for payment of interest on
any Security;
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(3) reduce the principal amount of any Security;
(4) change the Maturity Date of any Security, or alter the
redemption provisions contained in Article III in a manner adverse to any
Holder;
(5) make any changes in the provisions concerning waivers of
Defaults or Events of Default by Holders or the rights of Holders to
recover the principal of, interest on, or redemption payment with respect
to, any Security;
(6) make any changes in Section 5.4, 5.7 or this third sentence of
this Section 7.2;
(7) make the principal of, or the interest on any Security payable
with anything or in any manner other than as provided for in this
Indenture and the Securities as in effect on the date hereof; or
(8) directly or indirectly release or terminate the Liens created by
this Indenture and the Security Instruments as to all or substantially all
of the Collateral, except as expressly permitted under this Indenture and
the Security Instruments.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, Issuer shall mail to the Holders affected thereby a notice briefly
describing the amendment, supplement or waiver. Any failure of Issuer to mail
such notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such supplemental indenture.
In connection with any amendment, supplement or waiver under this Article
VII, Issuer may, but shall not be obligated to, offer to any Holder who consents
to such amendment, supplement or waiver, or to all Holders, consideration for
such Holder's consent to such amendment, supplement or waiver.
Section 7.3. Compliance with TIA.
Every amendment, waiver or supplement of this Indenture or the Securities
shall comply with the TIA as then in effect.
Section 7.4. Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a consent to
it by a Holder is a continuing consent by the Holder and every subsequent Holder
of a Security or portion of a Security that evidences the same debt as the
consenting Holder's Security, even if
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notation of the consent is not made on any Security. However, any such Holder or
subsequent Holder may revoke the consent as to his Security or portion of his
Security by notice to Trustee or Issuer received before the date on which
Trustee receives an Officers' Certificate certifying that the Holders of the
requisite principal amount of Securities have consented (and not theretofore
revoked such consent) to the amendment, supplement or waiver. Notwithstanding
the above, nothing in this paragraph shall impair the right of any holder under
Section 316(b) of the TIA.
Issuer shall fix a record date for the purpose of determining the Holders
entitled to consent to any amendment, supplement or waiver, which record date
shall be at least 30 days prior to the first solicitation of such consent. When
a record date is fixed, then notwithstanding the last sentence of the
immediately preceding paragraph, those persons who were Holders at such record
date (or their duly designated proxies), and only those persons, shall be
entitled to revoke any consent previously given, whether or not such persons
continue to be Holders after such record date.
After an amendment, supplement or waiver becomes effective, it shall bind
every Holder, unless it makes a change described in any of clauses (1) through
(8) of Section 7.2, in which case, the amendment, supplement or waiver shall
bind only each Holder of a Security who has consented to it and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security; provided that any such waiver shall not impair
or affect the right of any Holder to receive payment of principal of and
interest on a Security, on or after the respective due dates expressed in such
Security, or to bring suit for the enforcement of any such payment on or after
such respective dates without the consent of such Holder.
Section 7.5. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security,
Trustee may require the Holder of the Security to deliver it to Trustee. Trustee
may place an appropriate notation on the Security about the changed terms and
return it to the Holder. Alternatively, if Issuer or Trustee so determines,
Issuer in exchange for the Security shall issue and Trustee shall authenticate a
new Security that reflects the changed terms.
Section 7.6. Trustee To Sign Amendments, Etc.
Trustee shall execute any amendment, supplement or waiver authorized
pursuant to this Article VII; provided that Trustee may, but shall not be
obligated to, execute any such amendment, supplement or waiver which affects
Trustee's own rights, duties or immunities under this Indenture. Trustee shall
be entitled to receive, and shall be fully protected in relying upon, an Opinion
of Counsel and Officer's Certificate from the Issuer, each stating that the
execution of any amendment, supplement or waiver authorized pursuant to this
Article VII is authorized or permitted by this Indenture.
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ARTICLE VIII
COLLATERAL AND SECURITY
Section 8.1. Collateral.
In order to secure the due and punctual payment of the principal of and
interest on the Securities when and as the same shall be due and payable,
whether on an Interest Payment Date, at maturity or by acceleration, redemption
or otherwise, and interest on the overdue principal of and (to the extent
permitted by law) interest, if any, on the Securities and the performance of all
other obligations of Issuer to the Holders or Trustee under this Indenture, the
Securities and any other documents contemplated hereby, as the case may be,
Issuer and Trustee have simultaneously with the execution of this Indenture
entered into the Security Instruments. Trustee and Issuer each hereby agree that
Trustee holds its interest in the Collateral in trust for the benefit of the
Holders pursuant to the terms of the Security Instruments. Notwithstanding
anything contained herein or in the Indenture Instruments to the contrary, the
Issuer shall be permitted to establish reserves and escrows pursuant to the Plan
of Reorganization and the Collateral shall not include any funds escrowed
thereby until released to Issuer.
Section 8.2. Possession and Use of Collateral.
Subject to and in accordance with the provisions of the Subordination
Agreement (Senior), this Indenture and the Security Instruments, so long as no
Event of Default shall have occurred and be continuing, Issuer shall have the
right to remain in possession and retain exclusive control of and to exercise
all rights with respect to the Collateral, to operate, manage, develop, lease,
use, consume and enjoy the Collateral, to alter or repair any Collateral
consisting of machinery or equipment so long as such alterations and repairs do
not diminish the value thereof or impair the Lien of the Security Instruments
thereon and to collect, receive, use, invest and dispose of the reversions,
remainders, interest, rents, lease payments, issues, profits, revenues, proceeds
and other income thereof.
Section 8.3. Release of Collateral.
(a) Trustee shall not at any time release Collateral from the Liens
created by this Indenture and the Security Instruments unless such release is
(i) in accordance with the provisions of this Indenture and the Security
Instruments, the terms of the Subordination Agreement (Senior) and the
Subordination Agreement (Junior) or (ii) of Collateral (x) which is the subject
of a Permitted Asset Sale or a sale otherwise permitted by the terms of the Loan
Agreement or (y) upon which the Agent (as defined in the Loan Agreement) has
released its Permitted Senior Indebtedness Liens.
(b) The release of any Collateral from the Lien of the Security
Instruments shall not be deemed to impair the security under this Indenture in
contravention of the provisions hereof if and to the extent the Collateral is
released pursuant to this Indenture and the Security Instruments. To the extent
applicable, Issuer shall cause TIA Section 314(d) relating to the
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release of property from the Lien of the Security Instruments and relating to
the substitution therefor of any property to be subjected to the Lien of the
Security Instruments to be complied with. Any certificate or opinion required by
TIA Section 314(d) may be made by an Officer of Issuer, except in cases where
TIA Section 314(d) requires that such certificate or opinion be made by an
independent person, which person shall be an independent engineer, appraiser or
other expert selected or approved by Trustee in the exercise of reasonable care.
Section 8.4. Specified Releases of Collateral.
(a) Satisfaction and Discharge. Issuer shall be entitled to obtain a full
release of all of the Collateral from the Liens of this Indenture and of the
Security Instruments upon compliance with the conditions precedent set forth in
Section 11.1 for satisfaction and discharge of this Indenture. Upon delivery by
Issuer to Trustee of an Officers' Certificate and an Opinion of Counsel, each to
the effect that such conditions precedent have been complied with, and that such
documentation, if any, as may be required by the TIA (including, without
limitation, Section 314(d) of the TIA) prior to the release of such Collateral
has been provided to the Trustee, Trustee shall forthwith take all necessary
action (at the request of and the expense of Issuer) to release and reconvey to
Issuer without recourse all of the Collateral, and shall deliver such Collateral
in its possession to Issuer including, without limitation, the execution and
delivery of releases and satisfactions wherever required.
(b) Dispositions of Collateral Permitted by Section 4.17. Issuer shall be
entitled to obtain a release of, and Trustee shall release, items of Collateral
(the "Released Interests") subject to a Permitted Asset Sale upon compliance
with the conditions precedent that Issuer shall have delivered to Trustee the
following:
(i) Company Order. A written request by the Issuer requesting
release of Released Interests, such request (A) specifically describing
the proposed Released Interests, (B) stating that the consideration to be
received is at least equal to the Fair Market Value of the Released
Interests on the date the agreement of sale is entered into ("Valuation
Date"), (C) stating that either (i) the release of such Released Interests
will not materially impair the value of the remaining Collateral or
materially interfere with or impede Trustee's ability to realize the value
of the remaining Collateral and will not materially impair the maintenance
and operation of the remaining Collateral, or (ii) the sale has been
approved by 100% of the Issuer's Board of Directors, (D) confirming the
sale of, or an agreement to sell, such Released Interests in a bona fide
sale to a person that is not an Affiliate of Issuer, or in the event that
such sale is to a person that is such an Affiliate, that such sale has
been approved by 100% of the Issuer's Board of Directors, (E) certifying
that such Permitted Asset Sale complies with the terms and conditions of
this Indenture and (F) in the event that there is to be a substitution of
property for the Collateral subject to the Permitted Asset Sale,
specifying the property intended to be substituted for the Collateral to
be disposed of;
(ii) Officers' Certificate. An Officers' Certificate of Issuer
certifying that (A) such sale covers only the Released Interests, (B) all
proceeds from the sale of any
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of the Released Interests will be deposited and all Net Sale Proceeds from
the sale of any of the Released Interests will be applied pursuant to
Section 4.9, and (C) all conditions precedent to such release have been
complied with; and
(iii) Compliance with TIA and Section 8.1. All documentation
required by the TIA (including, without limitation, Section 314(d) of the
TIA), if any, prior to the release of Collateral by Trustee, and, in the
event there is to be a substitution of property for the Collateral subject
to the Permitted Asset Sale, all documentation required by the TIA to
effect the substitution of such new Collateral and to subject such new
Collateral to the Lien of the relevant Security Instruments, and all
documents required by Section 8.1 hereof.
(iv) Opinion of Counsel. An Opinion of Counsel stating that the
documents that have been or are therewith delivered to Trustee in
connection with such release conform to the requirements of this Indenture
and the TIA and that all conditions precedent herein provided for relating
to such release have been complied with.
Upon compliance by Issuer with the conditions precedent set forth above,
Trustee shall cause to be released and reconveyed to Issuer the Released
Interest without recourse by executing a release in the form provided by Issuer.
(c) Eminent Domain, Expropriation and Other Governmental Takings. Issuer
shall be entitled to obtain a release of, and Trustee shall release, items of
Collateral taken by eminent domain or expropriation or sold pursuant to the
exercise by the United States of America or any State, municipality, province or
other governmental authority thereof of any right which it may then have to
purchase, or to designate a purchaser or to order a sale of, all or any part of
the Collateral, upon compliance with the conditions precedent that Issuer shall
have delivered to Trustee the following:
(i) Officers' Certificate. An Officers' Certificate of Issuer
certifying that (A) such Collateral has been taken by eminent domain or
expropriation and the amount of the award therefor, or that such property
has been sold pursuant to a right vested in the United States of America,
or a State, municipality, province or other governmental authority thereof
to purchase, or to designate a purchaser, or order a sale of such
Collateral and the amount of the proceeds of such sale, and (B) all
conditions precedent to such release have been complied with;
(ii) Opinion of Counsel. An Opinion of Counsel to the effect that
(A) such property has been lawfully taken by exercise of the right of
eminent domain, or has been sold pursuant to the exercise of a right
vested in the United States of America or a State, municipality, province
or other governmental authority to purchase, or to designate a purchaser
or order a sale of, such property, (B) in the case of any such taking by
eminent domain, the award for such property has become final or an appeal
therefrom is not advisable in the interests of Issuer or the Holders, (C)
the documents that have been or are therewith delivered to Trustee in
connection with such release
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INDENTURE
(16% Junior Subordinated)
conform to the requirements of this Indenture, and (D) all conditions
precedent herein provided relating to such release have been complied
with;
(iii) Eminent Domain or Expropriation Award. Subject to the
Subordination Agreement (Senior) and Subordination Agreement (Junior),
cash equal to the amount of the award for such property or the Net Sale
Proceeds, shall be deposited with Trustee and held subject to the
disposition thereof pursuant to the Subordination Agreement (Senior) and
Subordination Agreement (Junior); and
(iv) Compliance with TIA. All documentation required by the TIA
(including, without limitation, 2/3314(d) of the TIA), if any, prior to
the release of Collateral by Trustee.
Upon compliance by Issuer with the conditions precedent set forth above,
Trustee shall cause to be released and reconveyed to Issuer without recourse the
aforementioned items of Collateral by executing a release in the form provided
by Issuer.
Section 8.5. Disposition of Collateral Without Release.
Notwithstanding the provisions of Section 8.4, so long as no Default or
Event of Default shall have occurred and be continuing or would result
therefrom, Issuer may, without any prior release or consent by Trustee, conduct
ordinary course activities in respect of the Collateral which do not
individually or in the aggregate adversely affect the value of the Collateral,
including selling or otherwise disposing of, in any single transaction or series
of related transactions, any property subject to the Lien of this Indenture or
the Security Instruments which has become worn out or obsolete and which either
has an aggregate Fair Market Value of $100,000 per year or less or which is
replaced by property of substantially equivalent or greater value which becomes
subject to the Lien of the Security Instruments as after-acquired property;
abandoning, terminating, cancelling, releasing or making alterations in or
substitutions of any leases or contracts subject to the Lien of this Indenture
or any of the Security Instruments; surrendering or modifying any franchise,
license or permit subject to the Lien of this Indenture or any of the Security
Instruments which it may own or under which it may be operating; altering,
repairing, replacing, changing the location or position of and adding to its
structures, machinery, systems, equipment, fixtures, and appurtenances,
provided, however that no change in the location of any such Collateral subject
to the Lien of any of the Security Instruments shall be made which (1) removes
such property into a jurisdiction in which any instrument required by law to
preserve the Lien of any of the Security Instruments on such property, including
all necessary financing statements and continuation statements, has not been
recorded, registered or filed in the manner required by law to preserve the Lien
of and security interest in any of the Security Instruments on such property,
(2) does not comply with the terms of this Indenture and the Security
Instruments or (3) otherwise impairs the Lien of the Security Instruments;
demolishing, dismantling,
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INDENTURE
(16% Junior Subordinated)
tearing down or scrapping any Collateral or abandoning any thereof if, in the
good faith opinion of the Board of Directors of the Company (as evidenced by a
Board Resolution delivered to the Trustee if it involves Collateral having a
Fair Market Value in excess of $100,000) such demolition, dismantling, tearing
down, scrapping or abandonment is in the best interests of the Company, will not
interfere with or impede Trustee's ability to realize the value of the remaining
Collateral and will not impair the maintenance and operation of the remaining
Collateral, and the Fair Market Value and utility of the Collateral as an
entirety, and the security for the Securities, will not thereby be otherwise
impaired; granting a nonexclusive license of any intellectual property; and
abandoning intellectual property which has become obsolete and not used in the
business.
Section 8.6. Purchaser Protected.
No purchaser or grantee of any property or rights purporting to be
released herefrom shall be bound to ascertain the authority of Trustee to
execute the release or to inquire as to the existence of any conditions herein
prescribed for the exercise of such authority.
Section 8.7. Authorization of Actions To Be Taken by Trustee Under the Security
Documents.
Subject to the provisions of the Security Instruments and the
Subordination Agreement (Senior) and Subordination Agreement (Junior), (a)
Trustee may, in its sole discretion and without the consent of the
Holders, take all actions it deems necessary or appropriate in order to
(i) enforce any of the terms of the Security Instruments and (ii) collect
and receive any and all amounts payable in respect of the obligations of
Issuer hereunder or thereunder and (b) Trustee shall have power to
institute and to maintain such suits and proceedings as it may deem
expedient to prevent any impairment of the Collateral by any act that may
be unlawful or in violation of the Security Instruments or this Indenture,
and such suits and proceedings as Trustee may deem expedient to preserve
or protect its interests and the interests of the Holders in the
Collateral (including the power to institute and maintain suits or
proceedings to restrain the enforcement of or compliance with any
legislative or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of, or compliance
with, such enactment, rule or order would impair the security interest
thereunder or be prejudicial to the interests of the Holders or of
Trustee). Trustee is hereby expressly authorized to execute, deliver and
perform its obligations under the Security Instruments. Except during the
continuance of an Event of Default, Trustee shall not be required to take
any action under this Indenture or the Security Instruments that involves
the exercise by it of discretion. Trustee may, however, take any such
action upon the basis of, at the election of Trustee, either an Officers'
Certificate or an Opinion of Counsel, or both, of Issuer stating the
nature of the proposed action and that any such action is appropriate,
necessary or advisable under the circumstances, complies with the
Indenture and the Security Instruments and does not adversely affect the
interests of the Holders; provided that the foregoing shall not limit the
ability of Trustee to take action at its discretion in the absence of such
an Officers' Certificate or Opinion of Counsel. Except during the
continuance of an Event of Default, Trustee may refrain from taking any
such action pending receipt of such Officers' Certificate and/or Opinion
of Counsel, if so requested by it, and shall
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INDENTURE
(16% Junior Subordinated)
incur no liability to any person for failure to take any such action
pending receipt thereof. Trustee shall be fully protected in acting on the
basis of any such Officers' Certificate and/or Opinion of Counsel and
shall incur no liability to any person arising out of any action taken on
the basis thereof.
Section 8.8. Authorization of Receipt of Funds by Trustee Under the Security
Documents.
Trustee is authorized to receive any funds for the benefit of Holders
distributed under the Security Instruments and, subject to the terms of the
Subordination Agreement (Senior) and Subordination Agreement (Junior), to apply
such funds as provided in this Indenture and the Security Instruments, and to
make further distributions of such funds to the Holders in accordance with the
other provisions of this Indenture.
ARTICLE IX
MEETINGS OF SECURITYHOLDERS
Section 9.1. Purposes for Which Meetings May Be Called.
A meeting of Holders may be called at any time and from time to time
pursuant to the provisions of this Article IX for any of the following purposes:
(a) to give any notice to Issuer or to Trustee, or to give any directions
to Trustee, or to waive or to consent to the waiving of any Default or Event of
Default hereunder and its consequences, or to take any other action authorized
to be taken by Holders pursuant to any of the provisions of Article V;
(b) to remove Trustee or appoint a successor Trustee pursuant to the
provisions of Article VI;
(c) to consent to an amendment, supplement or waiver pursuant to the
provisions of Section 7.2; or
(d) to take any other action (i) authorized to be taken by or on behalf of
the Holders of any specified aggregate principal amount of the Securities under
any other provision of this Indenture, or authorized or permitted by law or (ii)
which Trustee deems necessary or appropriate in connection with the
administration of this Indenture.
Section 9.2. Manner of Calling Meetings.
Trustee may at any time call a meeting of Holders to take any action
specified in Section 9.1, to be held at such time and at such place in New York,
New York or elsewhere as Trustee shall determine. Notice of every meeting of
Holders, setting forth the time and place of such meeting and in general terms
the action proposed to be taken at such meeting,
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INDENTURE
(16% Junior Subordinated)
shall be mailed by Trustee, first-class postage prepaid, to Issuer and to the
Holders at their last addresses as they shall appear on the registration books
of the Registrar not less than 10 nor more than 60 days prior to the date fixed
for a meeting.
Any meeting of Holders shall be valid without notice if the Holders of all
Securities then outstanding are present in person or by proxy, or if notice is
waived before or after the meeting by the Holders of all Securities outstanding,
and if Issuer, any Subsidiary and Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.
Section 9.3. Call of Meetings by Issuer or Holders.
In case at any time Issuer, pursuant to a Board Resolution, or the Holders
of not less than 10% in aggregate principal amount of the Securities then
outstanding shall have requested Trustee to call a meeting of Holders to take
any action specified in Section 9.1, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and Trustee
shall not have mailed the notice of such meeting within 20 days after receipt of
such request, then Issuer or the Holders in the amount above specified may
determine the time and place in New York, New York or elsewhere for such meeting
and may call such meeting for the purpose of taking such action, by mailing or
causing to be mailed notice thereof as provided in Section 9.2, or by causing
notice thereof to be published at least once in each of two successive calendar
weeks (on any Business Day during such week) in the Wall Street Journal
(national edition) or such other newspaper or newspapers printed in the English
language, customarily published at least five days a week of a general
circulation in New York, New York, the first such publication to be not less
than 10 nor more than 60 days prior to the date fixed for the meeting.
Section 9.4. Who May Attend and Vote at Meetings.
To be entitled to vote at any meeting of Holders, a person shall (a) be a
registered Holder of one or more Securities, or (b) be a person appointed by an
instrument in writing as proxy for the registered Holder or Holders of
Securities. The only persons who shall be entitled to be present or to speak at
any meeting of Holders shall be the persons entitled to vote at such meeting and
their counsel and any representatives of Trustee and its counsel and any
representatives of Issuer and its counsel.
Section 9.5. Regulations May Be Made by Trustee; Conduct of the Meeting; Voting
Rights; Adjournment.
Notwithstanding any other provision of this Indenture, Trustee may make
such reasonable regulations as it may deem advisable for any action by or any
meeting of Holders, in regard to proof of the holding of Securities and of the
appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, and submission and examination of proxies, certificates and
other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall think appropriate. Such regulations may fix
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INDENTURE
(16% Junior Subordinated)
a record date and time for determining the Holders of record of Securities
entitled to vote at such meeting, in which case those and only those persons who
are Holders of Securities at the record date and time so fixed, or their
proxies, shall be entitled to vote at such meeting whether or not they shall be
such Holders at the time of the meeting.
Trustee shall, by an instrument in writing, appoint a temporary chairman
of the meeting, unless the meeting shall have been called by Issuer or by
Holders as provided in Section 9.3, in which case Issuer or the Holders calling
the meeting, as the case may be, shall in like manner appoint a temporary
chairman. A permanent chairman and a permanent secretary of the meeting shall be
elected by vote of the Holders of a majority in aggregate principal amount of
the Securities represented at the meeting and entitled to vote.
At any meeting each Holder or proxy shall be entitled to one vote for each
$1,000 principal amount of Securities held or represented by him; provided,
however, that no vote shall be cast or counted at any meeting in respect of any
Securities challenged as not outstanding and ruled by the chairman of the
meeting to be not outstanding. The chairman may adjourn any such meeting if he
is unable to determine whether any Holder or proxy shall be entitled to vote at
such meeting. The chairman of the meeting shall have no right to vote other than
by virtue of Securities held by him or instruments in writing as aforesaid duly
designating him as the proxy to vote on behalf of other Holders. Any meeting of
Holders duly called pursuant to the provisions of Section 9.2 or Section 9.3 may
be adjourned from time to time by vote of the Holders of a majority in aggregate
principal amount of the Securities represented at the meeting and entitled to
vote, and the meeting may be held as so adjourned without further notice.
Section 9.6. Voting at the Meeting and Record To Be Kept.
The vote upon any resolution submitted to any meeting of Holders shall be
by written ballots on which shall be subscribed the signatures of the Holders of
Securities or of their representatives by proxy and the principal amount of the
Securities voted by the ballot. The permanent chairman of the meeting shall
appoint two inspectors of votes, who shall count all votes cast at the meeting
for or against any resolution and who shall make and file with the secretary of
the meeting their verified written reports in duplicate of all votes cast at the
meeting. A record in duplicate of the proceedings of each meeting of Holders
shall be prepared by the secretary of the meeting and there shall be attached to
such record the original reports of the inspectors of votes on any vote by
ballot taken thereat and affidavits by one or more persons having knowledge of
the facts, setting forth a copy of the notice of the meeting and showing that
such notice was mailed as provided in Section 9.2 or published as provided in
Section 9.3. The record shall be signed and verified by the affidavits of the
permanent chairman and the secretary of the meeting and one of the duplicates
shall be delivered to Issuer and the other to Trustee to be preserved by
Trustee, the latter to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
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(16% Junior Subordinated)
Section 9.7. Exercise of Rights of Trustee or Holders May Not Be Hindered or
Delayed by Call of Meeting.
Nothing contained in this Article IX shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of Holders or any rights
expressly or impliedly conferred hereunder to make such call, any hindrance or
delay in the exercise of any right or rights conferred upon or reserved to
Trustee or to the Holders under any of the provisions of this Indenture or of
the Securities.
ARTICLE X
SUBORDINATION
Section 10.1. Securities Subordinated to Senior Indebtedness.
Anything herein to the contrary notwithstanding, Issuer, for itself and
its successors, and each Holder, by accepting a Security, agrees, that the
payment of the principal of and interest on and premiums, penalties, fees and
other liabilities (including, without limitation, liabilities in respect of any
indemnity, reimbursement, compensation or contribution obligations, any breach
of representation or warranty, or any rights of redemption or rescission under
this Indenture or by law or otherwise) with respect to the Securities is
subordinated, to the extent and in the manner provided in the Subordination
Agreement (Senior) and the Subordination Agreement (Junior).
ARTICLE XI
SATISFACTION AND DISCHARGE
Section 11.1. Satisfaction and Discharge of the Indenture.
This Indenture will be discharged and will cease to be of further effect
as to all outstanding Securities when:
(a) all Securities theretofore authenticated and delivered (except lost,
stolen or destroyed Securities which have been replaced or paid and Securities
for whose payment money has theretofore been deposited in trust and thereafter
repaid to Issuer) have been delivered to Trustee for cancellation; or
(b) (1) all Securities not theretofore delivered to Trustee for
cancellation have become due and payable by reason of the making of a notice of
redemption or otherwise and Issuer has irrevocably deposited or caused to be
deposited with Trustee as trust funds in trust for the purpose an amount
sufficient to pay and discharge the entire indebtedness on the
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INDENTURE
(16% Junior Subordinated)
Securities not theretofore delivered to Trustee for cancellation for principal,
premium, if any, and accrued interest to the date of maturity or redemption;
(2) Issuer has paid all sums payable by it under this Indenture; and
(3) Issuer has delivered irrevocable instructions to Trustee to
apply the deposited money toward the payment of the Securities at maturity
or the redemption date, as the case may be.
Section 11.2. Conditions to Satisfaction and Discharge of the Indenture.
Issuer shall deliver an Officers' Certificate and an Opinion of Counsel to
Trustee stating that all conditions precedent to satisfaction and discharge have
been complied with.
ARTICLE XII
MISCELLANEOUS
Section 12.1. TIA Controls.
If any provision of this Indenture limits, qualifies, or conflicts with
the duties imposed by operation of Section 3.18(c) of the TIA, the imposed
duties shall control.
Section 12.2. Notices.
Any notices or other communications required or permitted hereunder shall
be in writing, and shall be sufficiently given if made by hand delivery, by
telecopier or registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
if to Issuer:
Scott Cable Communications, Inc.
Four Landmark Square, Suite 302
Stamford, Connecticut 06901
Attention: Bruce A. Armstrong
Chief Executive Officer
Telecopy No.: (203) 325-3110
50
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INDENTURE
(16% Junior Subordinated)
Copy to:
Baer Marks & Upham LLP
805 Third Avenue
New York, New York 10022
Attention: Stanley E. Bloch
Telecopy No.: (212) 702-5941
if to Trustee:
Fleet National Bank
Corporate Trust Department
One Federal Street
Boston, Massachusetts 02110
Attn: Robert L. Bice
Telecopier No.: (617) 346-5501
Attention: Corporate Trust Administration
Each of Issuer and Trustee, by written notice to each other such person,
may designate additional or different addresses for notices to such person. Any
notice or communication to Issuer and Trustee shall be deemed to have been given
or made as of the date so delivered if personally delivered; the next business
day, if sent via a national known overnight delivery service; when receipt is
acknowledged, if telecopied; and upon receipt after mailing if sent by
registered or certified mail, postage prepaid.
Any notice or communication mailed to a Holder shall be mailed to him by
first class mail or other equivalent means at his address as it appears on the
registration books of the Registrar and shall be sufficiently given to him if so
mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders. If a notice or
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it.
Section 12.3. Communications by Holders with Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Indenture, the Security Instruments or
the Securities. Issuer, Trustee, the Registrar and any other person shall have
the protection of TIA Section 312(c).
Section 12.4. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by Issuer to Trustee to take any action
under this Indenture, Issuer shall furnish to Trustee:
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INDENTURE
(16% Junior Subordinated)
(a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Section 12.5. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture, other than the Officers' Certificate
required by Section 8.4, shall include:
(1) a statement that the person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of each such
person, such condition or covenant has been complied with; provided,
however, that with respect to matters of fact an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
Section 12.6. Rules by Trustee, Paying Agent, Registrar.
Trustee may make reasonable rules for action by or at a meeting of
Holders. Paying Agent or Registrar may make reasonable rules for its functions.
Section 12.7. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK. Each of the parties hereto agrees to
submit to the jurisdiction of the courts of the State of New York in any action
or proceeding arising out of or relating to this Indenture.
Section 12.8. No Adverse Interpretation of Other Agreements.
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INDENTURE
(16% Junior Subordinated)
This Indenture may not be used to interpret another indenture, loan or
debt agreement of any of Issuer or any Subsidiary. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
Section 12.9. No Recourse Against Others.
A director, officer, employee, stockholder or incorporator, as such, of
Issuer shall not have any liability for any obligations of Issuer under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creations. Each Holder by accepting a
Security waives and releases all such liability. Such waiver and release are
part of the consideration for the issuance of the Securities.
Section 12.10. Successors.
All agreements of Issuer in this Indenture, the Security Instruments and
the Securities shall bind their respective successors. All agreements of Trustee
in this Indenture shall bind its successor.
Section 12.11. Duplicate Originals.
All parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together shall represent the same
agreement.
Section 12.12. Severability.
In case any one or more of the provisions in this Indenture or in the
Securities shall be held invalid, illegal or unenforceable, in any respect for
any reason, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions shall not in any way be
affected or impaired thereby, it being intended that all of the provisions
hereof shall be enforceable to the full extent permitted by law.
Section 12.13. Actions by Trustee.
Notwithstanding anything contained herein or in any Security Instrument to
the contrary, Trustee shall have no obligation to foreclosure of any lien or to
take any similar remedial undertaking with respect to any real property that
comprises the Collateral unless and until Trustee shall be satisfied, in its
sole discretion, with the indemnities provided herein and/or any Security
Instrument with respect to any and/or all liabilities Trustee may incur with
respect to taking any such action.
Section 12.14. Notes Issued In Accordance With Plan.
The Notes are the New Restructured Third Secured PIK Notes referred to in
the Debtors' Second Amended Disclosure Statement and Second Amended Joint Plan
of Reorganization dated October 31, 1996 and filed by the Issuer with the United
States
53
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INDENTURE
(16% Junior Subordinated)
Bankruptcy Court for the District of Delaware, and the Notes are issued
in accordance therewith.
54
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INDENTURE
(16% Junior Subordinated)
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the date first written above.
Dated: December 18, 1996
SCOTT CABLE COMMUNICATIONS, INC.
By: /s/ Bruce A. Armstrong
------------------------------------
Name: Bruce A. Armstrong
Title: President
FLEET NATIONAL BANK
as Trustee
By: /s/ Robert L. Bice
------------------------------------
Name: Robert L. Bice
Title: Vice-President
55
<PAGE>
INDENTURE
(16% Junior Subordinated)
The indebtedness evidenced hereby is subordinate in the manner and to the extent
set forth in that certain Subordination Agreement (the "Subordination Agreement
(Senior)") dated as of December 18, 1996 by and among Scott Cable
Communications, Inc. ("Issuer"), Fleet National Bank, as Trustee under the 15%
Senior Subordinated Pay-in-Kind Notes Indenture, Fleet National Bank, as Trustee
under the 16% Junior Subordinated Pay-in-Kind Note Indenture, and FINOVA Capital
Corporation ("FINOVA"), to the indebtedness (including interest) owed by Issuer
to the holders of all of the notes issued pursuant to that certain Loan
Agreement dated as of December 18, 1996 between Issuer and FINOVA, as such Loan
Agreement has been and hereafter may be amended, modified, supplemented or
restated from time to time; and each holder hereof, by its acceptance hereof,
shall be bound by the provisions of the Subordination Agreement (Senior) and the
Subordination Agreement (Junior).
SCOTT CABLE COMMUNICATIONS, INC.
16% Junior Subordinated Pay-in-Kind Notes
due July 18, 2002
SERIES A
No. $
Scott Cable Communications, Inc., a Texas corporation ("Issuer," which term
includes any successor entity), for value received promises to pay to
_____________________ or registered assigns, the principal sum of dollars, on
July 18, 2002.
Interest payment dates: June 18 and December 18 commencing June 18, 1997.
Record dates: May 18 and November 18.
Reference is made to the further provisions of this security contained
herein, which will for all purposes have the same effect as if set forth at this
place.
A-1
<PAGE>
INDENTURE
(16% Junior Subordinated)
IN WITNESS WHEREOF, Issuer has caused this Security to be signed manually
or by facsimile by its duly authorized officers.
Dated: December 18, 1996
SCOTT CABLE COMMUNICATIONS, INC.
By:_____________________________________
Name: Bruce A. Armstrong
Title: President
A-2
<PAGE>
INDENTURE
(16% Junior Subordinated)
This is one of the Securities described in the within-mentioned Indenture.
Dated: December 18, 1996
FLEET NATIONAL BANK
as Trustee
______________________________
By:
Title:
A-3
<PAGE>
INDENTURE
(16% Junior Subordinated)
SCOTT CABLE COMMUNICATIONS, INC.
16% Junior Subordinated Pay-in-Kind Note
due July 18, 2002
SERIES A
1. Interest.
Scott Cable Communications, Inc., a Texas corporation ("Issuer"), promises
to pay interest on the principal amount of this Security at the rate per annum
shown above. Issuer shall issue additional Securities in the form of Exhibit C
to the Indenture ("Secondary Securities") in payment of any and all of the
interest due on any Interest Payment Date occurring on or prior to the Maturity
Date or, at the option of the Issuer, such interest may be made in cash. Each
issuance of Secondary Securities for the payment of interest on the Securities
shall be made pro rata with respect to the outstanding Securities. Any such
Secondary Securities shall be governed by the Indenture and shall be subject to
the same terms (including the maturity date and the rate of interest from time
to time payable thereon) as this Security (except, as the case may be, with
respect to the title, issuance date and aggregate principal amount). The term
Securities shall include the Secondary Securities that may be issued under the
Indenture.
Issuer will pay interest semi-annually in arrears on June 18 and December
18 of each year (the "Interest Payment Date"), commencing June 18, 1997.
Interest on this Security will accrue from the date of issuance or from the most
recent date to which interest has been paid. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
Issuer shall pay interest on overdue principal and interest on overdue
installments of interest, to the extent lawful, at the rate per annum borne by
the Securities.
On the Maturity Date, or such earlier date upon which payment of principal
hereon is due and payable as a result of an Event of Default pursuant to the
terms of the Indenture, each Series A Security shall be entitled to its pro rata
share of Total Series A Principal Amount (as hereinafter defined).
For purposes of this Series A Security, the following definitions shall
apply:
"Total Available Amount" means the total amount available for payment as
principal on the Series A and Series B 16% Junior Subordinated Pay-in-Kind Notes
due July 18, 2002 of Issuer, on the Maturity Date or such earlier date upon
which payment of principal hereon is due and payable as a result of a redemption
in accordance with Article III, a Permitted Asset Sale or an Event of Default
pursuant to the terms of the Indenture, after payment of all Permitted Senior
Indebtedness, but not to exceed the Total Face Amount. "Total Directors Fees"
means the aggregate of all fees paid to the Board of Directors of Issuer
appointed by the holders of Class C Stock, including directors appointed by such
holders upon
A-4
<PAGE>
INDENTURE
(16% Junior Subordinated)
the conversion of Class C Stock to Class A Stock, as directors fees through and
including the date the calculation is being made.
"Total Face Amount" means $38,925,797.
"Total Series A Principal Amount" means the sum of (a) 85% of the Total
Available Amount and (b) Total Directors Fees.
2. Method of Payment.
Issuer shall pay interest on the Securities to the persons who are the
registered Holders at the close of business on the Record Date immediately
preceding the Interest Payment Date even if the Securities are cancelled on
registration of transfer or registration of exchange after such Record Date.
Holders must surrender Securities to a Paying Agent to collect principal
payments. Issuer shall pay principal and interest in money of the United States
that at the time of payment is legal tender for payment of public and private
debts ("U.S. Legal Tender") (or, pursuant to Paragraph 1 hereof, in Secondary
Securities). However, Issuer may pay principal and interest by its check payable
in such U.S. Legal Tender or by wire transfer of federal funds (or, pursuant to
Paragraph 1 hereof, in Secondary Securities). Issuer may deliver any such
interest payment to Paying Agent or to a Holder at the Holder's registered
address.
3. Paying Agent and Registrar.
Initially, Fleet National Bank (the "Trustee"), will act as Paying Agent
and Registrar. Issuer may change any Paying Agent, Registrar or co-Registrar
without notice to the Holders. Issuer or any Subsidiary may, subject to certain
exceptions, act as Paying Agent, Registrar or co-Registrar.
4. Indenture.
Issuer issued the Securities under an Indenture, dated as of December 18,
1996 (the "Indenture"), between Issuer and Trustee. This Security is one of a
duly authorized issue of Securities of Issuer designated as its 16% Junior
Subordinated Pay-in-Kind Notes due 2002. Capitalized terms herein are used as
defined in the Indenture unless otherwise defined herein. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) (the "TIA"), as in effect on the date of the Indenture until such
time as the Indenture is qualified under the TIA, and thereafter as in effect on
the date on which the Indenture is qualified under the TIA. Notwithstanding
anything to the contrary herein, the Securities are subject to all such terms,
and Holders of Securities are referred to the Indenture and said Act for a
statement of them. The Securities are secured obligations of Issuer limited in
aggregate principal amount to $38,925,797, except for Secondary Securities and
except as otherwise provided in the Indenture.
A-5
<PAGE>
INDENTURE
(16% Junior Subordinated)
5. Redemption.
The Securities may be redeemed in accordance with Article III and Section
4.9 of the Indenture.
6. Notice of Redemption.
Notice of redemption will be mailed at least 10 days but not more than 60
days before the Redemption Date to each Holder of Securities to be redeemed at
such Holder's registered address.
Except as set forth in the Indenture, from and after any Redemption Date,
if monies for the redemption of the Securities called for redemption shall have
been deposited with Paying Agent for redemption on such Redemption Date, then,
unless Issuer defaults in the payment of such Redemption Price, the Securities
called for redemption will cease to bear interest and the only right of the
Holders of such Securities will be to receive payment of the Redemption Price.
7. Limitation on Disposition of Assets.
Under certain circumstances Issuer is required to apply the net proceeds
from Permitted Asset Sales to the repayment of Indebtedness of Issuer.
8. Subordination.
The Securities are subordinated in right of payment, in the manner and to
the extent set forth in the Indenture, the Subordination Agreement (Senior) and
the Subordination Agreement (Junior) to the prior payment in full of Senior
Indebtedness of Issuer whether outstanding on the date of the Indenture or
thereafter created, incurred, assumed or guaranteed. Each Holder, by accepting a
Security, agrees to such subordination and authorizes Trustee to give it effect.
9. Denominations; Transfer; Exchange.
The Securities are in registered form and without coupons. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption. No service
charge shall be made for any transfer, registration or exchange, but Issuer may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith, but not for any exchange pursuant to
Section 2.10 or 3.6 of the Indenture.
A-6
<PAGE>
INDENTURE
(16% Junior Subordinated)
10. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner of it
for all purposes.
11. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed for
one year, Trustee and Paying Agents will pay the money back to Issuer at its
request. After that, all liability of Trustee and such Paying Agents with
respect to such money shall cease.
12. Discharge Prior to Redemption or Maturity.
If Issuer at any time deposits with Trustee U.S. Legal Tender or U.S.
Government Obligations sufficient to pay the principal of and interest on the
Securities to redemption or maturity and complies with the other provisions of
the Indenture relating thereto, Issuer will be discharged from certain
provisions of the Indenture and the Securities (including the financial
covenants, but excluding its obligation to pay the principal of and interest on
the Securities).
13. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount of the Securities then outstanding, and
any existing Default or Event of Default or compliance with any provision may be
waived with the consent of the Holders of a majority in aggregate principal
amount, as the case may be, of the Securities then outstanding. Without notice
to or consent of any Holder, the parties thereto may amend or supplement the
Indenture or the Securities to, among other things, cure any ambiguity, defect
or inconsistency, provide for uncertificated Securities in addition to or in
place of certificated Securities, comply with Article Five of the Indenture or
comply with any requirements of the SEC in connection with the qualification of
the Indenture under the TIA, or make any other change that does not adversely
affect the rights of any Holder of a Security.
14. Successors.
When a successor assumes all the obligations of its predecessor under the
Securities and the Indenture, the predecessor will be released from those
obligations.
15. Defaults and Remedies.
If an Event of Default occurs and is continuing, Trustee or the Holders of
at least 25% in aggregate principal amount of Securities then outstanding may
declare all the Securities to be due and payable in the manner, at the time and
with the effect provided in the Indenture. Holders of Securities may not enforce
the Indenture or the Securities except as provided in the Indenture. Trustee is
not obligated to enforce the Indenture or the Securities unless it has
A-7
<PAGE>
INDENTURE
(16% Junior Subordinated)
received indemnity satisfactory to it. The Indenture permits, subject to certain
limitations therein provided, Holders of a majority in aggregate principal
amount of the Securities then outstanding to direct Trustee in its exercise of
any trust or power. Trustee may withhold from Holders of Securities notice of
any continuing Default or Event of Default (except a Default in payment of
principal or interest) if it determines that withholding notice is in their
interest.
16. Trustee Dealings with Issuer.
Trustee under the Indenture, in its individual or any other capacity, may
become the owner or pledgee of Securities and may otherwise deal with Issuer,
its Subsidiaries or their respective Affiliates as if it were not Trustee.
17. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as such, of
Issuer shall have any liability for any obligation of Issuer under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of, such obligations or their creation. Each Holder of a Security by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
18. Authentication.
This Security shall not be valid until Trustee or authenticating agent
manually signs the certificate of authentication on this Security.
19. Governing Law.
The Laws of the State of New York shall govern this Security and the
Indenture.
20. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a Security
or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by
the entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
21. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, Issuer will cause CUSIP numbers to be
printed on the Securities immediately prior to the qualification of the
Indenture under the TIA as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
22. Indenture.
A-8
<PAGE>
INDENTURE
(16% Junior Subordinated)
Each Holder, by accepting a Security, agrees to be bound by all of the
terms and provisions of the Indenture, as the same may be amended from time to
time.
Issuer will furnish to any Holder of a Security upon written request and
without charge a copy of the Indenture. Requests may be made to:
John Flanagan
Chief Financial Officer
Scott Cable Communications, Inc.
Four Landmark Square, Suite 302
Stamford, Connecticut 96091
23. Certain Information Obligations.
To the extent permitted by applicable law or regulation, whether or not
Issuer is subject to the requirements of Section 13 or 15(d) of the Exchange
Act, Issuer shall file with the SEC all quarterly and annual reports and such
other information, documents or other reports (or copies of such portions of any
of the foregoing as the SEC may by rules and regulations prescribe) required to
be filed pursuant to such provisions of the Exchange Act. Issuer shall file with
Trustee copies of the quarterly and annual reports and the information,
documents, and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) that it is required to file
with the SEC pursuant to the Indenture. At any time when Issuer is not permitted
by applicable law or regulations to file the aforementioned reports, Issuer
shall furnish Trustee and the Holders with the information that Issuer would
have had to provide to the SEC if Issuer had been subject to Section 13 or 15(d)
of the Exchange Act.
24. Issuer Indebtedness.
Each Holder acknowledges that Issuer is the sole obligor of the Securities
and no Subsidiary of Issuer is a co-obligor or a guarantor of the Securities.
A-9
<PAGE>
INDENTURE
(16% Junior Subordinated)
{FORM OF ASSIGNMENT}
I or we assign this Security to
- -_______________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code of assignee)
Please insert Social Security or other
identifying number of assignee
_________________________________________
and irrevocably appoint _______________________ agent to transfer this Security
on the books of Issuer. The agent may substitute another to act for him.
Dated: Signed:
________________________________________________________________________________
(Sign exactly as your name appears on the front of this Security)
Signature Guarantee: ____________________________________________
A-10
<PAGE>
INDENTURE
(16% Junior Subordinated)
EXHIBIT B
The indebtedness evidenced hereby is subordinate in the manner and to the extent
set forth in that certain Subordination Agreement (the "Subordination Agreement
(Senior)") dated as of December 18, 1996 by and among Scott Cable
Communications, Inc. ("Issuer"), Fleet National Bank, as Trustee under the 15%
Senior Subordinated Pay-in-Kind Notes Indenture, Fleet National Bank, as Trustee
under the 16% Junior Subordinated Pay-in-Kind Note Indenture, and FINOVA Capital
Corporation ("FINOVA"), to the indebtedness (including interest) owed by Issuer
to the holders of all of the notes issued pursuant to that certain Loan
Agreement dated as of December 18, 1996 between Issuer and FINOVA, as such Loan
Agreement has been and hereafter may be amended, modified, supplemented or
restated from time to time; and each holder hereof, by its acceptance hereof,
shall be bound by the provisions of the Subordination Agreement (Senior) and the
Subordination Agreement (Junior).
SCOTT CABLE COMMUNICATIONS, INC.
16% Junior Subordinated Pay-in-Kind Notes
due July 18, 2002
SERIES B
No. $
Scott Cable Communications, Inc., a Texas corporation ("Issuer," which term
includes any successor entity), for value received promises to pay to
_____________________ or registered assigns, the principal sum of dollars, on
July 18, 2002.
Interest payment dates: June 18 and December 18 commencing June 18, 1997.
Record dates: May 18 and November 18.
Reference is made to the further provisions of this security contained
herein, which will for all purposes have the same effect as if set forth at this
place.
B-1
<PAGE>
INDENTURE
(16% Junior Subordinated)
IN WITNESS WHEREOF, Issuer has caused this Security to be signed manually
or by facsimile by its duly authorized officers.
Dated: December 18, 1996
SCOTT CABLE COMMUNICATIONS, INC.
By:
_______________________________________
Name:
Title:
B-2
<PAGE>
INDENTURE
(16% Junior Subordinated)
This is one of the Securities described in the within-mentioned Indenture.
Dated: December 18, 1996
FLEET NATIONAL BANK
as Trustee
______________________________
By:
Title:
B-3
<PAGE>
INDENTURE
(16% Junior Subordinated)
SCOTT CABLE COMMUNICATIONS, INC.
16% Junior Subordinated Pay-in-Kind Note
due July 18, 2002
SERIES B
1. Interest.
Scott Cable Communications, Inc., a Texas corporation ("Issuer"), promises
to pay interest on the principal amount of this Security at the rate per annum
shown above. Issuer shall issue additional Securities in the form of Exhibit C
to the Indenture ("Secondary Securities") in payment of any and all of the
interest due on any Interest Payment Date occurring on or prior to the Maturity
Date or, at the option of the Issuer, such interest may be made in cash. Each
issuance of Secondary Securities for the payment of interest on the Securities
shall be made pro rata with respect to the outstanding Securities. Any such
Secondary Securities shall be governed by the Indenture and shall be subject to
the same terms (including the maturity date and the rate of interest from time
to time payable thereon) as this Security (except, as the case may be, with
respect to the title, issuance date and aggregate principal amount). The term
Securities shall include the Secondary Securities that may be issued under the
Indenture.
Issuer will pay interest semi-annually in arrears on June 18 and December
of each year (the "Interest Payment Date"), commencing June 18, 1997. Interest
on this Security will accrue from the date of issuance or from the most recent
date to which interest has been paid. Interest will be computed on the basis of
a 360-day year of twelve 30-day months.
Issuer shall pay interest on overdue principal and interest on overdue
installments of interest, to the extent lawful, at the rate per annum borne by
the Securities.
On the Maturity Date, or such earlier date upon which payment of principal
hereon is due and payable as a result of an Event of Default pursuant to the
terms of the Indenture, each Series B Security shall be entitled to its pro rata
share of Total Series B Principal Amount (as hereinafter defined).
For purposes of this Series B Security, the following definitions shall
apply:
"Total Available Amount" means the total amount available for payment as
principal on the Series A and Series B 16% Junior Subordinated Pay-in-Kind Notes
due July 18, 2002 of Issuer, on the Maturity Date or such earlier date upon
which payment of principal hereon is due and payable as a result of a redemption
in accordance with Article III, a Permitted Asset Sale or an Event of Default
pursuant to the terms of the Indenture, after payment of all Permitted Senior
Indebtedness, but not to exceed the Total Face Amount. "Total Directors Fees"
means the aggregate of all fees paid to the Board of Directors of Issuer
appointed by the holders of Class C Stock, including directors appointed by such
holders upon
B-4
<PAGE>
INDENTURE
(16% Junior Subordinated)
the conversion of Class C Stock to Class A Stock, as directors fees through and
including the date the calculation is being made.
"Total Face Amount" means $38,925,797.
"Total Series A Principal Amount" means the sum of (a) 85% of the Total
Available Amount and (b) Total Directors Fees.
"Total Series B Principal Amount" means the difference of (a) Total Available
Amount and (b) Total Series A Principal Amount.
2. Method of Payment.
Issuer shall pay interest on the Securities to the persons who are the
registered Holders at the close of business on the Record Date immediately
preceding the Interest Payment Date even if the Securities are cancelled on
registration of transfer or registration of exchange after such Record Date.
Holders must surrender Securities to a Paying Agent to collect principal
payments. Issuer shall pay principal and interest in money of the United States
that at the time of payment is legal tender for payment of public and private
debts ("U.S. Legal Tender") (or, pursuant to Paragraph 1 hereof, in Secondary
Securities). However, Issuer may pay principal and interest by its check payable
in such U.S. Legal Tender or by wire transfer of federal funds (or, pursuant to
Paragraph 1 hereof, in Secondary Securities). Issuer may deliver any such
interest payment to Paying Agent or to a Holder at the Holder's registered
address.
3. Paying Agent and Registrar.
Initially, FLEET NATIONAL BANK (the "Trustee"), will act as Paying Agent
and Registrar. Issuer may change any Paying Agent, Registrar or co-Registrar
without notice to the Holders. Issuer or any Subsidiary may, subject to certain
exceptions, act as Paying Agent, Registrar or co-Registrar.
4. Indenture.
Issuer issued the Securities under an Indenture, dated as of December 18,
1996 (the "Indenture"), between Issuer and Trustee. This Security is one of a
duly authorized issue of Securities of Issuer designated as its 16% Junior
Subordinated Pay-in-Kind Notes due 2002. Capitalized terms herein are used as
defined in the Indenture unless otherwise defined herein. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) (the "TIA"), as in effect on the date of the Indenture until such
time as the Indenture is qualified under the TIA, and thereafter as in effect on
the date on which the Indenture is qualified under the TIA. Notwithstanding
anything to the contrary herein, the Securities are subject to all such terms,
and Holders of Securities are referred to the Indenture and said Act for a
statement of them. The Securities are secured obligations of Issuer limited
B-5
<PAGE>
INDENTURE
(16% Junior Subordinated)
in aggregate principal amount to $38,925,797, except for Secondary Securities
and except as otherwise provided in the Indenture.
5. Redemption.
The Securities may be redeemed in accordance with Article III and Section
4.9 of the Indenture.
6. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more than 60
days before the Redemption Date to each Holder of Securities to be redeemed at
such Holder's registered address.
Except as set forth in the Indenture, from and after any Redemption Date,
if monies for the redemption of the Securities called for redemption shall have
been deposited with Paying Agent for redemption on such Redemption Date, then,
unless Issuer defaults in the payment of such Redemption Price, the Securities
called for redemption will cease to bear interest and the only right of the
Holders of such Securities will be to receive payment of the Redemption Price.
7. Limitation on Disposition of Assets.
Under certain circumstances Issuer is required to apply the net proceeds
from Permitted Asset Sales to the repayment of Indebtedness of Issuer.
8. Subordination.
The Securities are subordinated in right of payment, in the manner and to
the extent set forth in the Indenture, the Subordination Agreement (Senior) and
the Subordination Agreement (Junior) to the prior payment in full of Senior
Indebtedness of Issuer whether outstanding on the date of the Indenture or
thereafter created, incurred, assumed or guaranteed. Each Holder, by accepting a
Security, agrees to such subordination and authorizes Trustee to give it effect.
9. Denominations; Transfer; Exchange.
The Securities are in registered form and without coupons. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption. No service
charge shall be made for any transfer, registration or exchange, but Issuer may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in
B-6
<PAGE>
INDENTURE
(16% Junior Subordinated)
connection therewith, but not for any exchange pursuant to Section 2.10 or 3.6
of the Indenture.
10. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner of it
for all purposes.
11. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed for
one year, Trustee and Paying Agents will pay the money back to Issuer at its
request. After that, all liability of Trustee and such Paying Agents with
respect to such money shall cease.
12. Discharge Prior to Redemption or Maturity.
If Issuer at any time deposits with Trustee U.S. Legal Tender or U.S.
Government Obligations sufficient to pay the principal of and interest on the
Securities to redemption or maturity and complies with the other provisions of
the Indenture relating thereto, Issuer will be discharged from certain
provisions of the Indenture and the Securities (including the financial
covenants, but excluding its obligation to pay the principal of and interest on
the Securities).
13. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount of the Securities then outstanding, and
any existing Default or Event of Default or compliance with any provision may be
waived with the consent of the Holders of a majority in aggregate principal
amount, as the case may be, of the Securities then outstanding. Without notice
to or consent of any Holder, the parties thereto may amend or supplement the
Indenture or the Securities to, among other things, cure any ambiguity, defect
or inconsistency, provide for uncertificated Securities in addition to or in
place of certificated Securities, comply with Article Five of the Indenture or
comply with any requirements of the SEC in connection with the qualification of
the Indenture under the TIA, or make any other change that does not adversely
affect the rights of any Holder of a Security.
14. Successors.
When a successor assumes all the obligations of its predecessor under the
Securities and the Indenture, the predecessor will be released from those
obligations.
15. Defaults and Remedies.
If an Event of Default occurs and is continuing, Trustee or the Holders of
at least 25% in aggregate principal amount of Securities then outstanding may
declare all the Securities to be due and payable in the manner, at the time and
with the effect provided in the Indenture.
B-7
<PAGE>
INDENTURE
(16% Junior Subordinated)
Holders of Securities may not enforce the Indenture or the Securities except as
provided in the Indenture. Trustee is not obligated to enforce the Indenture or
the Securities unless it has received indemnity satisfactory to it. The
Indenture permits, subject to certain limitations therein provided, Holders of a
majority in aggregate principal amount of the Securities then outstanding to
direct Trustee in its exercise of any trust or power. Trustee may withhold from
Holders of Securities notice of any continuing Default or Event of Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in their interest.
16. Trustee Dealings with Issuer.
Trustee under the Indenture, in its individual or any other capacity, may
become the owner or pledgee of Securities and may otherwise deal with Issuer,
its Subsidiaries or their respective Affiliates as if it were not Trustee.
17. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as such, of
Issuer shall have any liability for any obligation of Issuer under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of, such obligations or their creation. Each Holder of a Security by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
18. Authentication.
This Security shall not be valid until Trustee or authenticating agent
manually signs the certificate of authentication on this Security.
19. Governing Law.
The Laws of the State of New York shall govern this Security and the
Indenture.
20. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a Security
or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by
the entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
21. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, Issuer will cause CUSIP numbers to be
printed on the Securities immediately prior to the qualification of the
Indenture under the TIA as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as
B-8
<PAGE>
INDENTURE
(16% Junior Subordinated)
printed on the Securities and reliance may be placed only on the other
identification numbers printed hereon.
22. Indenture.
Each Holder, by accepting a Security, agrees to be bound by all of the
terms and provisions of the Indenture, as the same may be amended from time to
time.
Issuer will furnish to any Holder of a Security upon written request and
without charge a copy of the Indenture. Requests may be made to:
John Flanagan
Chief Financial Officer
Scott Cable Communications, Inc.
Four Landmark Square, Suite 302
Stamford, Connecticut 96091
23. Certain Information Obligations.
To the extent permitted by applicable law or regulation, whether or not
Issuer is subject to the requirements of Section 13 or 15(d) of the Exchange
Act, Issuer shall file with the SEC all quarterly and annual reports and such
other information, documents or other reports (or copies of such portions of any
of the foregoing as the SEC may by rules and regulations prescribe) required to
be filed pursuant to such provisions of the Exchange Act. Issuer shall file with
Trustee copies of the quarterly and annual reports and the information,
documents, and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) that it is required to file
with the SEC pursuant to the Indenture. At any time when Issuer is not permitted
by applicable law or regulations to file the aforementioned reports, Issuer
shall furnish Trustee and the Holders with the information that Issuer would
have had to provide to the SEC if Issuer had been subject to Section 13 or 15(d)
of the Exchange Act.
24. Issuer Indebtedness.
Each Holder acknowledges that Issuer is the sole obligor of the Securities
and no Subsidiary of Issuer is a co-obligor or a guarantor of the Securities.
B-9
<PAGE>
INDENTURE
(16% Junior Subordinated)
{FORM OF ASSIGNMENT}
I or we assign this Security to
- -_______________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code of assignee)
Please insert Social Security or other
identifying number of assignee
_________________________________________
and irrevocably appoint _______________________ agent to transfer this Security
on the books of Issuer. The agent may substitute another to act for him.
Dated: Signed:
________________________________________________________________________________
(Sign exactly as your name appears on the front of this Security)
Signature Guarantee: ____________________________________________
B-10
<PAGE>
INDENTURE
(16% Junior Subordinated)
EXHIBIT C
The indebtedness evidenced hereby is subordinate in the manner and to the extent
set forth in that certain Subordination Agreement (the "Subordination Agreement
(Senior)") dated as of December 18, 1996 by and among Scott Cable
Communications, Inc. ("Issuer"), Fleet National Bank, as Trustee under the 15%
Senior Subordinated Pay-in-Kind Notes Indenture, Fleet National Bank, as Trustee
under the 16% Junior Subordinated Pay-in-Kind Note Indenture, and FINOVA Capital
Corporation ("FINOVA"), to the indebtedness (including interest) owed by Issuer
to the holders of all of the notes issued pursuant to that certain Loan
Agreement dated as of December 18, 1996 between Issuer and FINOVA, as such Loan
Agreement has been and hereafter may be amended, modified, supplemented or
restated from time to time; and each holder hereof, by its acceptance hereof,
shall be bound by the provisions of the Subordination Agreement (Senior) and the
Subordination Agreement (Junior).
SCOTT CABLE COMMUNICATIONS, INC.
16% Junior Subordinated Pay-in-Kind Notes
due July 18, 2002
SECONDARY SECURITIES
No. $
Scott Cable Communications, Inc., a Texas corporation ("Issuer," which term
includes any successor entity), for value received promises to pay to
_____________________ or registered assigns, the principal sum of
__________dollars, on July 18, 2002.
Interest payment dates: June 18 and December 18 commencing June 18, 1997.
Record dates: May 18 and November 18.
Reference is made to the further provisions of this security contained
herein, which will for all purposes have the same effect as if set forth at this
place.
C-1
<PAGE>
INDENTURE
(16% Junior Subordinated)
IN WITNESS WHEREOF, Issuer has caused this Security to be signed manually
or by facsimile by its duly authorized officers.
Dated: December 18, 1996
SCOTT CABLE COMMUNICATIONS, INC.
By:____________________________________
Name:
Title:
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<PAGE>
INDENTURE
(16% Junior Subordinated)
This is one of the Securities described in the within-mentioned Indenture.
Dated: December 18, 1996
FLEET NATIONAL BANK
as Trustee
______________________________
By:
Title:
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<PAGE>
INDENTURE
(16% Junior Subordinated)
SCOTT CABLE COMMUNICATIONS, INC.
16% Junior Subordinated Pay-in-Kind Note
due July 18, 2002
SECONDARY SECURITIES
1. Interest.
Scott Cable Communications, Inc., a Texas corporation ("Issuer"), promises
to pay interest on the principal amount of this Security at the rate per annum
shown above. Issuer shall issue additional Securities in the form of Exhibit C
to the Indenture ("Secondary Securities") in payment of any and all of the
interest due on any Interest Payment Date occurring on or prior to the Maturity
Date or, at the option of the Issuer, such interest may be made in cash. Each
issuance of Secondary Securities for the payment of interest on the Securities
shall be made pro rata with respect to the outstanding Securities. Any such
Secondary Securities shall be governed by the Indenture and shall be subject to
the same terms (including the maturity date and the rate of interest from time
to time payable thereon) as this Security (except, as the case may be, with
respect to the title, issuance date and aggregate principal amount). The term
Securities shall include the Secondary Securities that may be issued under the
Indenture.
Issuer will pay interest semi-annually in arrears on June 18 and December
18 of each year (the "Interest Payment Date"), commencing June 18, 1997.
Interest on this Security will accrue from the date of issuance or from the most
recent date to which interest has been paid. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
Issuer shall pay interest on overdue principal and interest on overdue
installments of interest, to the extent lawful, at the rate per annum borne by
the Securities.
2. Method of Payment.
Issuer shall pay interest on the Securities to the persons who are the
registered Holders at the close of business on the Record Date immediately
preceding the Interest Payment Date even if the Securities are cancelled on
registration of transfer or registration of exchange after such Record Date.
Holders must surrender Securities to a Paying Agent to collect principal
payments. Issuer shall pay principal and interest in money of the United States
that at the time of payment is legal tender for payment of public and private
debts ("U.S. Legal Tender") (or, pursuant to Paragraph 1 hereof, in Secondary
Securities). However, Issuer may pay principal and interest by its check payable
in such U.S. Legal Tender or by wire transfer of federal funds (or, pursuant to
Paragraph 1 hereof, in Secondary Securities). Issuer may deliver any such
interest payment to Paying Agent or to a Holder at the Holder's registered
address.
3. Paying Agent and Registrar.
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<PAGE>
INDENTURE
(16% Junior Subordinated)
Initially, FLEET NATIONAL BANK (the "Trustee"), will act as Paying Agent
and Registrar. Issuer may change any Paying Agent, Registrar or co-Registrar
without notice to the Holders. Issuer or any Subsidiary may, subject to certain
exceptions, act as Paying Agent, Registrar or co-Registrar.
4. Indenture.
Issuer issued the Securities under an Indenture, dated as of December 18,
1996 (the "Indenture"), between Issuer and Trustee. This Security is one of a
duly authorized issue of Securities of Issuer designated as its 16% Junior
Subordinated Pay-in-Kind Notes due 2002. Capitalized terms herein are used as
defined in the Indenture unless otherwise defined herein. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) (the "TIA"), as in effect on the date of the Indenture until such
time as the Indenture is qualified under the TIA, and thereafter as in effect on
the date on which the Indenture is qualified under the TIA. Notwithstanding
anything to the contrary herein, the Securities are subject to all such terms,
and Holders of Securities are referred to the Indenture and said Act for a
statement of them. The Securities are secured obligations of Issuer limited in
aggregate principal amount to $38,925,797, except for Secondary Securities and
except as otherwise provided in the Indenture.
5. Redemption.
The Securities may be redeemed in accordance with Article III and Section
4.9 of the Indenture.
6. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more than 60
days before the Redemption Date to each Holder of Securities to be redeemed at
such Holder's registered address.
Except as set forth in the Indenture, from and after any Redemption Date,
if monies for the redemption of the Securities called for redemption shall have
been deposited with Paying Agent for redemption on such Redemption Date, then,
unless Issuer defaults in the payment of such Redemption Price, the Securities
called for redemption will cease to bear interest and the only right of the
Holders of such Securities will be to receive payment of the Redemption Price.
7. Limitation on Disposition of Assets.
Under certain circumstances Issuer is required to apply the net proceeds
from Permitted Asset Sales to the repayment of Indebtedness of Issuer.
8. Subordination.
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<PAGE>
INDENTURE
(16% Junior Subordinated)
The Securities are subordinated in right of payment, in the manner and to
the extent set forth in the Indenture, the Subordination Agreement (Senior) and
the Subordination Agreement (Junior) to the prior payment in full of Senior
Indebtedness of Issuer whether outstanding on the date of the Indenture or
thereafter created, incurred, assumed or guaranteed. Each Holder, by accepting a
Security, agrees to such subordination and authorizes Trustee to give it effect.
9. Denominations; Transfer; Exchange.
The Securities are in registered form and without coupons. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption. No service
charge shall be made for any transfer, registration or exchange, but Issuer may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith, but not for any exchange pursuant to
Section 2.10 or 3.6 of the Indenture.
10. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner of it
for all purposes.
11. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed for
one year, Trustee and Paying Agents will pay the money back to Issuer at its
request. After that, all liability of Trustee and such Paying Agents with
respect to such money shall cease.
12. Discharge Prior to Redemption or Maturity.
If Issuer at any time deposits with Trustee U.S. Legal Tender or U.S.
Government Obligations sufficient to pay the principal of and interest on the
Securities to redemption or maturity and complies with the other provisions of
the Indenture relating thereto, Issuer will be discharged from certain
provisions of the Indenture and the Securities (including the financial
covenants, but excluding its obligation to pay the principal of and interest on
the Securities).
13. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount of the Securities then outstanding, and
any existing Default or Event of Default or compliance with any provision may be
waived with the consent of the Holders of a
C-6
<PAGE>
INDENTURE
(16% Junior Subordinated)
majority in aggregate principal amount, as the case may be, of the Securities
then outstanding. Without notice to or consent of any Holder, the parties
thereto may amend or supplement the Indenture or the Securities to, among other
things, cure any ambiguity, defect or inconsistency, provide for uncertificated
Securities in addition to or in place of certificated Securities, comply with
Article Five of the Indenture or comply with any requirements of the SEC in
connection with the qualification of the Indenture under the TIA, or make any
other change that does not adversely affect the rights of any Holder of a
Security.
14. Successors.
When a successor assumes all the obligations of its predecessor under the
Securities and the Indenture, the predecessor will be released from those
obligations.
15. Defaults and Remedies.
If an Event of Default occurs and is continuing, Trustee or the Holders of
at least 25% in aggregate principal amount of Securities then outstanding may
declare all the Securities to be due and payable in the manner, at the time and
with the effect provided in the Indenture. Holders of Securities may not enforce
the Indenture or the Securities except as provided in the Indenture. Trustee is
not obligated to enforce the Indenture or the Securities unless it has received
indemnity satisfactory to it. The Indenture permits, subject to certain
limitations therein provided, Holders of a majority in aggregate principal
amount of the Securities then outstanding to direct Trustee in its exercise of
any trust or power. Trustee may withhold from Holders of Securities notice of
any continuing Default or Event of Default (except a Default in payment of
principal or interest) if it determines that withholding notice is in their
interest.
16. Trustee Dealings with Issuer.
Trustee under the Indenture, in its individual or any other capacity, may
become the owner or pledgee of Securities and may otherwise deal with Issuer,
its Subsidiaries or their respective Affiliates as if it were not Trustee.
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INDENTURE
(16% Junior Subordinated)
17. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as such, of
Issuer shall have any liability for any obligation of Issuer under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of, such obligations or their creation. Each Holder of a Security by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
18. Authentication.
This Security shall not be valid until Trustee or authenticating agent
manually signs the certificate of authentication on this Security.
19. Governing Law.
The Laws of the State of New York shall govern this Security and the
Indenture.
20. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a Security
or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by
the entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
21. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, Issuer will cause CUSIP numbers to be
printed on the Securities immediately prior to the qualification of the
Indenture under the TIA as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
22. Indenture.
Each Holder, by accepting a Security, agrees to be bound by all of the
terms and provisions of the Indenture, as the same may be amended from time to
time.
Issuer will furnish to any Holder of a Security upon written request and
without charge a copy of the Indenture. Requests may be made to:
John Flanagan
Chief Financial Officer
Scott Cable Communications, Inc.
Four Landmark Square, Suite 302
C-8
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INDENTURE
(16% Junior Subordinated)
Stamford, Connecticut 96091
23. Certain Information Obligations.
To the extent permitted by applicable law or regulation, whether or not
Issuer is subject to the requirements of Section 13 or 15(d) of the Exchange
Act, Issuer shall file with the SEC all quarterly and annual reports and such
other information, documents or other reports (or copies of such portions of any
of the foregoing as the SEC may by rules and regulations prescribe) required to
be filed pursuant to such provisions of the Exchange Act. Issuer shall file with
Trustee copies of the quarterly and annual reports and the information,
documents, and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) that it is required to file
with the SEC pursuant to the Indenture. At any time when Issuer is not permitted
by applicable law or regulations to file the aforementioned reports, Issuer
shall furnish Trustee and the Holders with the information that Issuer would
have had to provide to the SEC if Issuer had been subject to Section 13 or 15(d)
of the Exchange Act.
24. Issuer Indebtedness.
Each Holder acknowledges that Issuer is the sole obligor of the Securities
and no Subsidiary of Issuer is a co-obligor or a guarantor of the Securities.
C-9
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INDENTURE
(16% Junior Subordinated)
{FORM OF ASSIGNMENT}
I or we assign this Security to
- -_______________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code of assignee)
Please insert Social Security or other
identifying number of assignee
_________________________________________
and irrevocably appoint _______________________ agent to transfer this Security
on the books of Issuer. The agent may substitute another to act for him.
Dated: Signed:
________________________________________________________________________________
(Sign exactly as your name appears on the front of this Security)
Signature Guarantee: ____________________________________________
C-10
Exhibit T3F
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture dated as of December 18, 1996
Trust Indenture Act Indenture
Section Section
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310 (a)(1)............................................... 7.10
(a)(2)............................................... 7.10
(a)(3)............................................... N.A.
(a)(4)............................................... N.A.
(a)(5)............................................... 7.10
(b).................................................. 7.8; 7.10; 13.2
(c).................................................. N.A.
311 (a) ................................................. 7.11
(b).................................................. 7.11
(c).................................................. N.A.
312 (a).................................................. 2.5
(b).................................................. 13.3
(c).................................................. 13.3
313 (a).................................................. 7.6
(b)(1)............................................... N.A.
(b)(2)............................................... 7.6
(c).................................................. 7.6; 13.2
(d).................................................. 7.6
314 (a).................................................. 4.10; 13.2
(b).................................................. N.A.
(c)(1)............................................... 7.2; 13.4
(c)(2)............................................... 7.2; 13.4
(c)(3)............................................... N.A.
(d).................................................. N.A.
(e).................................................. 11.5
(f).................................................. N.A.
315 (a).................................................. 7.1(b)
(b).................................................. 7.5; 13.2
(c).................................................. 7.1(a)
(d).................................................. 7.1(c)
(e).................................................. 6.11
316 (a)(last sentence)................................... 2.9
(a)(1)(A)............................................ 6.5
(a)(1)(B)............................................ 6.4
(a)(2)............................................... N.A.
(b).................................................. 6.7
317 (a)(1)............................................... 6.8
(a)(2)............................................... 6.9
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(b).................................................. 2.4
318 (a).................................................. 13.1
(c).................................................. 13.1
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N.A. means Not Applicable
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