<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2 )*
Adelphia Communications Corporation
(Name of Issuer)
Class A Common Stock, par value $.01 per share
(Title of Class of Securities)
006848105
(CUSIP Number)
Dennis P. Coyle, Esq.
General Counsel and Secretary
FPL Group, Inc.
700 Universe Boulevard
Juno Beach, Florida 33408
(561)694-4644
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
July 7, 1997
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D,
and is filing this schedule because of Rule 13d-1(b)(3) or (4),
check the following box / /.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject
class of securities, and for any subsequent amendment containing
information which would alter disclosures provided in a prior cover
page.
The information required on the remainder of this cover page shall
not be deemed to be "filed" for the purpose of Section 18 of the
Securities Exchange Act of 1934 ("Act") or otherwise subject to the
liabilities of that section of the Act but shall be subject to all
other provisions of the Act (however, see the Notes).
<PAGE>
SCHEDULE 13D
CUSIP NO. 006848105
_____________________________________________________________________
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
Telesat Cablevision, Inc.
I.R.S. Identification #: Not Required
_____________________________________________________________________
2. Check the appropriate box if a member of a group*
(a) /x/
(b) / /
_____________________________________________________________________
3. SEC Use Only
_____________________________________________________________________
4. Source of Funds*
WC
_____________________________________________________________________
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(E) / /
_____________________________________________________________________
6. Citizenship or Place of Organization
Florida
_____________________________________________________________________
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 3,449,890
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
3,449,890
11. Aggregate Amount Beneficially Owned by Each Reporting Person
3,449,890
_____________________________________________________________________
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* / /
_____________________________________________________________________
13. Percent of Class Represented by Amount in Row (11)
18.7%
_____________________________________________________________________
14. Type of Reporting Person*
CO
_____________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
SCHEDULE 13D
CUSIP NO. 006848105
_____________________________________________________________________
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
FPL Group Capital Inc
I.R.S. Identification #: Not Required
_____________________________________________________________________
2. Check the appropriate box if a member of a group*
(a) /x/
(b) / /
_____________________________________________________________________
3. SEC Use Only
_____________________________________________________________________
4. Source of Funds*
AF
_____________________________________________________________________
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(E) / /
_____________________________________________________________________
6. Citizenship or Place of Organization
Florida
_____________________________________________________________________
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 3,449,890
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
3,449,890
11. Aggregate Amount Beneficially Owned by Each Reporting Person
3,449,890
_____________________________________________________________________
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* / /
_____________________________________________________________________
13. Percent of Class Represented by Amount in Row (11)
18.7%
_____________________________________________________________________
14. Type of Reporting Person*
CO
_____________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
SCHEDULE 13D
CUSIP NO. 006848105
_____________________________________________________________________
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
FPL Group, Inc.
I.R.S. Identification #: Not Required
_____________________________________________________________________
2. Check the appropriate box if a member of a group*
(a) /x/
(b) / /
_____________________________________________________________________
3. SEC Use Only
_____________________________________________________________________
4. Source of Funds*
AF
_____________________________________________________________________
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(E) / /
_____________________________________________________________________
6. Citizenship or Place of Organization
Florida
_____________________________________________________________________
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 3,449,890
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
3,449,890
11. Aggregate Amount Beneficially Owned by Each Reporting Person
3,449,890
_____________________________________________________________________
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* / /
_____________________________________________________________________
13. Percent of Class Represented by Amount in Row (11)
18.7%
_____________________________________________________________________
14. Type of Reporting Person*
CO
_____________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
SCHEDULE 13D
CUSIP NO. 006848105
_____________________________________________________________________
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
Mayberry Investments, Inc.
I.R.S. Identification #: Not Required
_____________________________________________________________________
2. Check the appropriate box if a member of a group*
(a) /x/
(b) / /
_____________________________________________________________________
3. SEC Use Only
_____________________________________________________________________
4. Source of Funds*
OO
_____________________________________________________________________
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(E) / /
_____________________________________________________________________
6. Citizenship or Place of Organization
Delaware
_____________________________________________________________________
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 1,091,399
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
1,091,399
11. Aggregate Amount Beneficially Owned by Each Reporting Person
1,091,399
_____________________________________________________________________
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* / /
_____________________________________________________________________
13. Percent of Class Represented by Amount in Row (11)
6.8%
_____________________________________________________________________
14. Type of Reporting Person*
CO
_____________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
This document dated August 5, 1997, is filed pursuant to Section 13D
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), by Telesat Cablevision, Inc. ("Telesat"), FPL Group Capital
Inc ("Group Capital") and FPL Group, Inc. ("FPL Group") as Amendment
No. 2 ("Amendment No. 2") to their Statement on Schedule 13D dated
March 10, 1995 (the "Statement"), as amended by Amendment No. 1 dated
November 3, 1995 ("Amendment No. 1"), and by Mayberry Investments,
Inc., a Delaware corporation and wholly-owned subsidiary of Telesat
("Mayberry") as its initial statement on Schedule 13D, and relates to
the Class A Common Stock, par value $.01 per share, (the "Common
Stock") of Adelphia Communications Corporation (the "Company").
Telesat, Group Capital, FPL Group and Mayberry are hereinafter
referred to as the "Reporting Persons." Amendment No. 2 is being
jointly filed by the Reporting Persons pursuant to the joint filing
agreement filed as Exhibit 12 to this Amendment No. 2.
Item 2 of the Statement is hereby amended and
supplemented as follows:
Item 2. Identity and Background.
The information set forth in Schedule 1 to the
Statement and in Schedule 2 to Amendment No. 1 has been updated in
Schedule 3 attached hereto.
Item 3 of the Statement is hereby amended and
supplemented as follows:
Item 3. Source and Amount of Funds.
Telesat entered into a Series C Preferred Stock
Purchase Agreement by and among Telesat, the Company and Highland
Holdings (the Rigas Shareholders) ("Highland Holdings") dated June
22, 1997 (the "Stock Purchase Agreement") pursuant to which Telesat
acquired 20,000 shares (the "Shares") of Series C Cumulative
Convertible Preferred Stock (the "Series C Preferred Stock") of the
Company in exchange for $19,400,000, which funds were obtained from
the repayment of a loan from Telesat to Highland Holdings. The
Shares constitute 20% of the currently outstanding shares of Series C
Preferred Stock.
The Series C Preferred Stock is nonvoting except upon
the occurrence of certain events including, but not limited to, the
accumulation of accrued and unpaid dividends in an amount equal to
six full quarterly dividends. Upon the occurrence of any of such
events, the authorized number of members of the Company's Board of
Directors will be immediately and automatically increased by two, and
the holders of a majority of the outstanding shares of Series C
Preferred Stock, voting separately as a class, shall be entitled to
elect two directors (the "Voting Rights"). The Series C Preferred
Stock may be redeemed, in whole or in part, at the option of the
Company at any time on or after August 1, 2000 at the Applicable
Redemption Price (as defined in the Certificate of Designations).
Each holder of shares of Series C Preferred Stock shall have the
right, at such holder's option, to convert all or any portion of its
shares of Series C Preferred Stock into shares of Common Stock at the
Conversion Rate. The Conversion Rate is defined as the number of
shares of Common Stock issuable upon conversion of one share of
Series C Preferred Stock, determined by dividing the Liquidation
Preference of such shares of Series C Preferred Stock by the
Conversion Price. The Liquidation Preference is defined as $1,000
per share of Series C Preferred Stock, plus accrued and unpaid
dividends thereon. The Conversion Price is defined as $8.48, subject
to adjustment as provided in the Certificate of Designations.
Assuming a Liquidation Preference of $1,000 per share, the Shares may
be converted into approximately 2,358,490 shares of Common Stock.
The terms of the Series C Preferred Stock described herein are
qualified in their entirety by reference to the Certificate of
Designations filed as Exhibit 8 hereto and incorporated by reference
herein.
In connection with the execution of the Stock Purchase
Agreement, Telesat entered into a Registration Rights Agreement by
and among Telesat, the Company and Highland Holdings dated July 7,
1997 (the "Registration Rights Agreement") pursuant to which a holder
of more than 10% of the Series C Preferred Stock (or the Common Stock
into which it may be converted) has the right to demand that the
Company file a registration statement (on a form other than Form S-3)
under the Securities Act for such securities. The holders have two
such demand registration rights per calendar year. In addition,
pursuant to the Registration Rights Agreement, Telesat has an
unlimited number of demand registration rights for registration of
the Shares on Form S-3 so long as the Company is a registrant
entitled to use Form S-3. In addition, the Registration Rights
Agreement gives Telesat piggyback registration rights which enable it
to require that the Company register the Shares under the Securities
Act if the Company is otherwise registering any of its equity
securities. The Registration Rights Agreement is attached hereto as
Exhibit 9 and incorporated herein by reference.
In connection with the execution of the Stock Purchase
Agreement, Telesat entered into an agreement with Highland Holdings
dated June 22, 1997 (the "Highland Letter Agreement") which provides
that in the event that the Voting Rights are triggered, so long as
Telesat has not sold, transferred, assigned or converted more than
50% of the Shares (a) Highland Holdings will vote its shares
purchased pursuant to the Stock Purchase Agreement in favor of at
least one Telesat nominee for so long as Telesat and Highland
Holdings together own a majority of the outstanding shares of Series
C Preferred Stock and (b) Telesat and Highland Holdings will not vote
to fill the second board seat for so long as Highland Holdings does
not sell, transfer or assign to an unaffiliated party more than 62.5%
of the shares of Series C Preferred Stock purchased by Highland
Holdings pursuant to the Stock Purchase Agreement. The Highland
Letter Agreement also provides that Telesat will have co-sale rights
in the event of a Control Transfer by Highland Holdings of its shares
of Series C Preferred Stock or in the event of a Change of Control of
Adelphia (as such terms are defined therein). The Highland Letter
Agreement also provides that Highland Holdings will vote its shares
of Series C Preferred Stock in the manner directed by Telesat in
connection with proposals requiring the consent of holders of Series
C Preferred Stock as set forth in the Certificate of Designations,
for so long as there is no Change of Control (as such terms are
defined therein) or until Telesat sells, transfers, assigns, or
otherwise disposes of, or converts at least 50% of the Shares.
The Highland Letter Agreement is attached hereto as Exhibit 10
and incorporated herein by reference.
In connection with the execution of the Stock Purchase
Agreement, Telesat entered into a letter agreement with the Company
dated June 22, 1997 (the "Company Letter Agreement") which gives the
Company the right to purchase the Shares in whole or in part in the
event that Telesat withholds its consent to the issuance by the
Company of securities on a parity with the Shares. In such event,
the purchase price shall be equal to the greater of (i) Fair Market
Value (as such term is defined in the Company Letter Agreement), and
(ii) if such purchase occurs prior to August 1, 2000, (x) a price per
share equal to the Liquidation Preference, or if such purchase
occurs after August 1, 2000, (y) a price per share equal to the
applicable redemption price of the Shares. The Company Letter
Agreement is attached hereto as Exhibit 11 and incorporated herein by
reference.
Telesat has distributed to its wholly-owned
subsidiary, Mayberry, the 1,091,399 shares of Common Stock reported
herein, which includes the "Cable LP Shares" as defined in Amendment
No.1 and the "Shares" as defined in the Statement.
Item 4 of the Statement is hereby amended and
supplemented as follows:
Item 4. Purpose of the Transaction.
The Shares will be held for investment purposes and
not for the purpose or in connection with any transaction having the
purpose of changing the control of the Company, and other than as
disclosed in the Statement, Amendment No. 1 or this Amendment No. 2,
no Reporting Person has any present intention to effect any of the
transactions enumerated in clauses (a) through (j) of Item 4 of
Schedule 13D.
Item 5 of the Statement is hereby amended and
supplemented as follows:
Item 5. Interest in Securities of the Issuer.
As of the date hereof, FPL Group, Group Capital and
Telesat, by virtue of Rule 13d-3 under the Exchange Act, may be
deemed to share voting and dispositive power with each other over
3,449,890 shares of Common Stock, 2,358,490 of which the Reporting
Persons have a right to acquire within 60 days in connection with the
conversion of the Series C Preferred Stock. The 3,449,890 shares
represent 18.7% of 18,489,370 shares of Common Stock which is the sum
of (i) 16,130,880 shares of Common Stock outstanding as disclosed in
the Form 10-K for the fiscal year ended March 31, 1997 of the Company
(the "Form 10-K"), which is the most recently available filing by the
Company with the Securities and Exchange Commission and (ii)
2,358,490 shares of Common Stock deemed to be outstanding pursuant to
Rule 13d-3(d)(1)(i) because they are issuable upon conversion of the
Series C Preferred Stock.
As of the date hereof, Mayberry may be deemed to share
with FPL Group, Group Capital and Telesat voting and dispositive
power over 1,091,399 shares of Common Stock which represents 6.8% of
Common Stock outstanding as disclosed in the Form 10-K.
Other than as described herein, no Reporting Person
has engaged in any transaction in the Common Stock of the Company
within sixty days of the date hereof.
Item 6 of the Statement is hereby amended and
supplemented as follows:
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer.
Other than as described in the Statement, Amendment
No. 1 and this Amendment No. 2, no Reporting Person has any other
contracts, arrangements, understandings or relationships (legal or
otherwise) with any person with respect to any securities of the
Company, including, but not limited to, transfer or voting of any
such securities, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of
profits or loss, or the giving or withholding of proxies.
Item 7. Material to be Filed as Exhibits.
Exhibit 8: Certificate of Designations
Exhibit 9: Registration Rights Agreement
Exhibit 10: Highland Letter Agreement
Exhibit 11: Company Letter Agreement
Exhibit 12: Joint Filing Agreement
<PAGE>
Schedule 3
(Changes to the Information set forth in Schedules 1 and 2)
Directors and Executive Officers of Telesat:
Harry P. Cushing is no longer a director.
Richard M. Schorr is no longer Vice President and Controller.
Carmen Perez is the Assistant Controller.
Directors and Executive Officers of FPL Group Capital Inc:
Carmen M. Perez replaced Solomon L. Stamm as Assistant Controller.
Paul I. Cutler was elected as Assistant Treasurer.
Directors and Executive Officers of FPL Group:
David Blumberg retired as a director.
Alexander W. Dreyfoos, Jr. was elected as a director. The Dreyfoos
Group/Photo Electronics Corporation. Business address is 505 South
Flagler Drive, Suite 1450, West Palm Beach, FL 33401.
Directors and Executive Officers of Mayberry Investments, Inc.:
Ingrid Schaut - President, Director
James P. Higgins - Vice President, Director
Scott A. Craig - Treasurer, Director
Edward F. Tancer - Secretary
<PAGE>
Exhibit Index
Exhibit No. Title
Exhibit 8: Certificate of Designations
Exhibit 9: Registration Rights Agreement
Exhibit 10: Highland Letter Agreement
Exhibit 11: Company Letter Agreement
Exhibit 12: Joint Filing Agreement
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set forth in
this statement is true, complete and correct.
Dated: August 5, 1997 FPL GROUP, INC.
/s/ Dennis P. Coyle
Name: Dennis P. Coyle
Title: General Counsel and Secretary
Dated: August 5, 1997 FPL GROUP CAPITAL INC
/s/ Dennis P. Coyle
Name: Dennis P. Coyle
Title: Secretary
Dated: August 5, 1997 TELESAT CABLEVISION, INC.
/s/ Dennis P. Coyle
Name: Dennis P. Coyle
Title: President
Dated: August 5, 1997 MAYBERRY INVESTMENTS, INC.
/s/ Edward F. Tancer
Name: Edward F. Tancer
Title: Secretary
Exhibit 8
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL AND
OTHER SPECIAL RIGHTS OF PREFERRED
STOCK AND QUALIFICATIONS, LIMITATIONS
AND RESTRICTIONS THEREOF
OF
SERIES C CUMULATIVE
CONVERTIBLE PREFERRED STOCK
OF
ADELPHIA COMMUNICATIONS CORPORATION
_________________________
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
_________________________
Adelphia Communications Corporation (the "Corporation"), a
corporation organized and existing under the General Corporation Law
of the State of Delaware, certifies that pursuant to the authority
contained in Article Fourth of its Certificate of Incorporation, as
amended (the "Certificate of Incorporation") and in accordance with
the provisions of Section 151 of the General Corporation Law of the
State of Delaware, the Series C Preferred Stock Committee (the
"Committee") of the Board of Directors of the Corporation at a
meeting held on July 1, 1997 duly approved and adopted the following
resolution which resolution remains in full force and effect on the
date hereof:
RESOLVED, that pursuant to the authority vested in the Committee by
the Board of Directors on June 22, 1997, and pursuant to the
authority vested in the Board of Directors by the Certificate of
Incorporation, the Committee does hereby designate, create, authorize
and provide for the issuance of Series C Cumulative Convertible
Preferred Stock (the "Series C Preferred Stock"), par value $.01 per
share, with a liquidation preference of $1,000 per share, consisting
of 100,000 shares, no shares of which have heretofore been issued by
the Corporation, having the following voting powers, preferences and
relative, participating, optional and other special rights, and
qualifications, limitations and restrictions thereof as follows:
1. Certain Definitions.
Unless the context otherwise requires, the terms defined in this
Section 1 shall have, for all purposes of this resolution, the
meanings herein specified (with terms defined in the singular having
comparable meanings when used in the plural).
Affiliate. The term "Affiliate" of any specified Person shall mean
any other Person directly or indirectly controlling or controlled by
or under direct or indirect common control with such specified
Person. For purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling," "controlled by" and
"under common control with"), as used with respect to any Person,
shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by
agreement or otherwise.
Applicable Redemption Price. The term "Applicable Redemption Price"
shall mean a price per share equal to the following redemption prices
(expressed as a percentage of the Liquidation Preference thereof)
during the twelve-month periods commencing on August 1 of the years
indicated:
2000 104.00%
2001 102.00%
2002 100.00%
in each case, together with accrued and unpaid dividends (if any)
thereon to the Redemption Date.
Business Day. The term "Business Day" shall mean a day other than a
Saturday or Sunday or any federal holiday.
Capital Stock. The term "Capital Stock" shall mean (i) in the case
of a corporation, corporate stock, (ii) in the case of an association
or business entity, any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock,
(iii) in the case of a partnership, partnership interests (whether
general or limited) and (iv) any other interest or participation that
confers on a Person the right to receive a share of the profits and
losses of, or distributions of assets of, the issuing Person.
Class A Common Stock. The term "Class A Common Stock" shall mean the
Class A Common Stock, par value $.01 per share, of the Corporation.
Class B Common Stock. The term "Class B Common Stock" shall mean the
Class B Common Stock, par value $.01 per share, of the Corporation.
Common Equity. The term "Common Equity" shall mean all shares now or
hereafter authorized of any class of common stock of the Corporation,
including the Class A Common Stock and Class B Common Stock, and any
other stock of the Corporation, howsoever designated, authorized
after the Initial Issue Date, that have the right (subject always to
prior rights of any class or series of preferred stock) to
participate in the distribution of the assets and earnings of the
Corporation without limit as to per share amount.
Continuing Directors. The term "Continuing Directors" shall mean, as
of any date of determination, any member of the Board of Directors of
the Corporation who (i) was a member of such Board of Directors on
the Initial Issue Date or (ii) was nominated for election or elected
to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board at the time of
such nomination or election.
Conversion Agent. The term "Conversion Agent" shall mean the entity
designated from time to time by the Corporation to act as conversion
agent for the Series C Preferred Stock.
Conversion Date. The term "Conversion Date" shall have the meaning
set forth in Section 4(b) below.
Conversion Payments. The term "Conversion Payments" shall have the
meaning set forth in Section 4(a) below.
Conversion Price. The term "Conversion Price" shall mean $8.48,
subject to the adjustments provided in Section 4.
Conversion Rate. The term "Conversion Rate" shall mean the number of
shares of Class A Common Stock issuable upon conversion of one share
of Series C Preferred Stock, determined by dividing the Liquidation
Preference of such share of Series C Preferred Stock by the
Conversion Price.
Current Market Price. The term "Current Market Price" shall mean,
with respect to any particular security on any date of determination,
the average over the 20 Trading Days ending on the date immediately
preceding the date of such determination of the last reported sale
price, or, if no such sale takes place on any such day, the closing
bid price, in either case as reported for consolidated transactions
on the principal national securities exchange (including the Nasdaq
National Market and Nasdaq Stock Market) on which such security is
listed or admitted for trading; provided, however, that if any event
that results in an adjustment of the Conversion Rate occurs during
the period beginning on the first day of such 20-day period and
ending on the date immediately preceding the date of determination,
the Current Market Price as determined pursuant to the foregoing will
be appropriately adjusted to reflect the occurrence of such event or,
if such security is not listed on any exchange or admitted for
trading on any such exchange or market, the Current Market Price of
such security shall be the last reported bid price for such security
on the date preceding the date of such determination provided by a
New York Stock Exchange member firm designated by the Corporation or,
if no such member firm can provide such a bid price, as determined in
good faith by a majority of the independent directors of the
Corporation. In the event the Corporation is required to pay cash to
Holders of Series C Preferred Stock seeking to convert shares of
Series C Preferred Stock at a time when an insufficient number of
shares of Class A Common Stock are authorized for issuance, the
Corporation is restricted by government regulations from issuing
shares of Class A Common Stock upon conversion of any shares of
Series C Preferred Stock or in lieu of the issuance of a fractional
share, the Current Market Price shall be determined on the basis of
the average of the five Trading Days ending on and including the
third Trading Day preceding the date of such conversion, as the case
may be.
Dividend Payment Date. The term "Dividend Payment Date" shall have
the meaning set forth in Section 2(a) below.
Dividend Period. The term "Dividend Period" shall mean the period
from, and including, the Initial Issue Date to, but not including,
the first Dividend Payment Date and thereafter, each quarterly period
from, and including, the preceding Dividend Payment Date to, but not
including the next Dividend Payment Date.
Equity Interests. The term "Equity Interests" shall mean Capital
Stock and all warrants, options or other rights to acquire Capital
Stock (but excluding any debt security that is convertible into, or
exchangeable for, Capital Stock).
Executive Officer. The term "Executive Officer" shall mean any
officer of the Corporation that would be deemed to be an "executive
officer" within meaning of the rules and regulations of the
Securities and Exchange Commission.
Holder. The term "Holder" shall mean the record holder of one or
more shares of Series C Preferred Stock, as shown on the books and
records of the Transfer Agent.
Initial Issue Date. The term "Initial Issue Date" shall mean the
date that shares of Series C Preferred Stock are first issued by the
Corporation.
Junior Securities. The term "Junior Securities" shall mean any class
of stock ranking junior to the Series C Preferred Stock as to the
payment of dividends and as to rights in liquidation, dissolution or
winding up of the affairs of the Corporation. The Corporation's
Class A Common Stock and Class B Common Stock are expressly defined
and included as Junior Securities.
Liquidation Preference. The term "Liquidation Preference" shall mean
$1,000 per share of Series C Preferred Stock, plus accrued and unpaid
dividends (if any) to the date fixed for liquidation, dissolution,
winding up or reduction or decrease in capital stock, or in the case
of Parity Securities, such other amounts per share as may be set
forth in the Certificate of Designations for such Parity Securities,
as the context requires.
Market Capitalization. The term "Market Capitalization" shall mean,
as of any date, the product of the Current Market Price of the Class
A Common Stock as of such date times the number of shares of Class A
Common Stock outstanding as of such date.
Officers' Certificate. The term "Officers' Certificate" shall mean a
certificate signed on behalf of the Corporation by two officers of
the Corporation, one of whom must be the Chief Executive Officer, the
Chief Financial Officer, the Treasurer or the principal accounting
officer of the Corporation that meets the requirements of Section 11
hereof.
Parity Securities. The term "Parity Securities": shall mean any
class or series of stock of the Corporation authorized after the
Initial Issue Date that is entitled to receive payment of dividends
and to receive assets upon liquidation, dissolution or winding up of
the affairs of the Corporation on a parity with the Series C
Preferred Stock. The Corporation's Series A Preferred Stock and
Series B Preferred Stock are expressly defined and included as Parity
Securities.
Record Date. The term "Record Date" shall have the meaning set forth
in Section 2(a) below.
Redemption Date. The term "Redemption Date" shall have the meaning
set forth in Section 5(d) below.
Rights. The term "Rights" shall mean securities, rights, options or
warrants entitling a holder thereof to subscribe for or purchase any
shares of Class A Common Stock or Class B Common Stock of the
Corporation.
Securities Act. The term "Securities Act" shall mean the Securities
Act of 1933, as amended.
Senior Securities. The term "Senior Securities" shall mean any class
or series of stock of the Corporation authorized after the Initial
Issue Date ranking senior to the Series C Preferred Stock in respect
of the right to receive dividends and in respect of the right to
participate in any distribution upon liquidation, dissolution or
winding up of the affairs of the Corporation.
Series A Preferred Stock. The term "Series A Preferred Stock" shall
mean the 13% Series A Cumulative Exchangeable Preferred Stock, $.01
par value, of the Corporation.
Series B Preferred Stock. The term "Series B Preferred Stock" shall
mean the 13% Series B Cumulative Exchangeable Preferred Stock, $.01
par value, of the Corporation.
Trading Day. The term "Trading Day" with respect to either the Class
A Common Stock or Series C Preferred Stock, as the case may be, shall
mean any day on which any market (including, without limitation, any
formal or informal over the counter market) in which the applicable
security is then traded and in which a quoted price may be
ascertained is open for business.
Transfer Agent. The term "Transfer Agent" shall mean the entity
designated from time to time by the Corporation to act as the
registrar and transfer agent for the Series C Preferred Stock.
Voting Rights Trigger Event. The term "Voting Rights Trigger Event"
shall have the meaning set forth in Section 5(b) below.
2. Dividends.
(a) The Holders of shares of the Series C Preferred Stock shall be
entitled to receive, when, as and if dividends are declared by the
Board of Directors out of funds of the Corporation legally available
therefor, cumulative preferential dividends from the Initial Issue
Date of the Series C Preferred Stock accruing at the rate per share
of $81.25 per annum , or $20.3125 per quarter, payable quarterly in
arrears on January 31, April 30, July 30 and October 31 in each year
or, if any such date is not a Business Day, on the next succeeding
business day (each, a "Dividend Payment Date"), to the Holders of
record as of the immediately preceding January 15, April 15, July 15
and October 15 (each, a "Record Date"). Dividends will be payable in
cash. The first dividend payment of $20.3125 per share of Series C
Preferred Stock will be payable on October 31, 1997. Dividends
payable on the Series C Preferred Stock will be computed on the basis
of a 360-day year of twelve 30-day months and will be deemed to
accrue on a daily basis.
(b) Dividends on the Series C Preferred Stock shall accrue whether or
not the Corporation has earnings or profits, whether or not there are
funds legally available for the payment of such dividends and whether
or not dividends are declared. Dividends will accumulate to the
extent they are not paid on the Dividend Payment Date for the quarter
to which they relate; provided, however, the Corporation shall be
required to declare and pay such dividends to the extent there are
funds legally available therefor, except to the extent that it is the
good faith judgment of management of the Corporation that the use of
such funds for the payment of dividends would place the Corporation
or any of its Subsidiaries in default under any agreement relating to
the senior indebtedness of the Corporation or any of its
Subsidiaries, in which case the Corporation shall furnish to each
Holder, prior to the Dividend Payment Date at issue, a certificate to
such effect signed by the President, the Chief Executive Officer or a
Vice President or a Vice Chairman of the Company. Accumulated unpaid
dividends will bear interest at the rate of 13% per annum. The
Corporation shall take all actions required or permitted under
Delaware law to permit the payment of dividends on the Series C
Preferred Stock.
(c) No dividend whatsoever shall be declared or paid upon, or any sum
set apart for the payment of dividends upon, any outstanding share of
the Series C Preferred Stock with respect to any Dividend Period
unless all dividends for all preceding Dividend Periods have been
declared and paid upon, or declared and a sufficient sum set apart
for the payment of such dividend upon, all outstanding shares of
Series C Preferred Stock. Provided that all dividends for all
preceding Dividend Periods have been paid in full, to the extent that
cash is not available for a full dividend payment in a current
Dividend Period, the Corporation may declare and pay a partial
dividend on the Series C Preferred Stock, provided that, the Series C
Preferred Stock will share any partial dividends paid on Parity
Securities on a pro-rata basis, other than dividends paid solely in
shares of Parity Securities. Unless full cumulative dividends on all
outstanding shares of Series C Preferred Stock due for all past
Dividend Periods shall have been declared and paid, or declared and a
sufficient sum for the payment thereof set apart, then: (i) no
dividend (other than a dividend payable solely in shares of any
Junior Securities or Parity Securities, respectively) shall be
declared or paid upon, or any sum set apart for the payment of
dividends upon, any shares of Junior Securities or any Parity
Securities, respectively; (ii) no other distribution (other than as
required by the terms of the Certificate of Designations of Parity
Securities) shall be made upon or any sum set apart for the payment
of any distribution upon, any shares of Junior Securities or any
Parity Securities; (iii) no shares of Junior Securities or Parity
Securities shall be purchased, redeemed or otherwise acquired or
retired for value (excluding an exchange for shares of other Junior
Securities) by the Corporation or any of its Subsidiaries (other than
as required by the terms of the Certificate of Designations of Parity
Securities); and (iv) no monies shall be paid into or set apart or
made available for a sinking or other like fund for the purchase,
redemption or other acquisition or retirement for value of any shares
of Junior Securities or Parity Securities by the Corporation or any
of its Subsidiaries (other than as required by the terms of the
Certificate of Designations of Parity Securities). Holders of the
Series C Preferred Stock will not be entitled to any dividends,
whether payable in cash, property or stock, in excess of the full
cumulative dividends as herein described. This Section 2(c) shall
not prevent the Corporation from making Conversion Payments pursuant
to Section 4(a).
3. Distributions Upon Liquidation, Dissolution or Winding Up.
Upon any voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the Corporation or reduction or decrease in its
capital stock resulting in a distribution of assets to the holders of
any class or series of the Corporation's Capital Stock (a "reduction
or decrease in capital stock"), each Holder of shares of Parity
Securities shall be entitled to payment out of the assets of the
Corporation available for distribution of an amount equal to the
respective Liquidation Preference per share of the specific series of
Parity Securities held by such Holder (as fixed in the Certificate of
Designations for such series of Parity Securities), before any
distribution is made on any Junior Securities, including, without
limitation, Common Equity of the Corporation. After payment in full
of the Liquidation Preference to which Holders of Parity Securities
are entitled, such Holders will not be entitled to any further
participation in any distribution of assets of the Corporation.
However, neither the voluntary sale, conveyance, exchange or transfer
(for cash, shares of stock, securities or other consideration) of all
or substantially all of the property or assets of the Corporation nor
the consolidation or merger of the Corporation with or into one or
more corporations will be deemed to be a voluntary or involuntary
liquidation, dissolution or winding up of the Corporation or
reduction or decrease in capital stock, unless such sale, conveyance,
exchange or transfer shall be in connection with a liquidation,
dissolution or winding up of the business of the Corporation or
reduction or decrease in capital stock.
4. Conversion Rights.
(a) Each Holder of shares of Series C Preferred Stock shall have the
right, at such Holder's option, to convert all or any portion of its
shares of Series C Preferred Stock into shares of Class A Common
Stock at any time, unless previously redeemed or repurchased, at the
Conversion Rate (subject to the Corporation obtaining the necessary
governmental approvals). In the event that an insufficient number of
shares of Class A Common Stock are available for issuance or the
Corporation is restricted by government regulation from issuing
shares of Class A Common Stock upon conversion of any shares of
Series C Preferred Stock, (i) if the inability to honor the
conversion is due to there being an insufficient number of shares of
Class A Common Stock available for issuance, , such Holders may
require the Corporation to hold a special meeting of the stockholders
of the Corporation for the purpose of authorizing a sufficient number
of additional shares of Class A Common Stock to permit the conversion
of all of such Holders' shares of Series C Preferred Stock, or (ii)
if the Holders do not exercise the option set forth in clause (i) or
it is not available to them, the Corporation shall be required to pay
to the Holder of each share of Series C Preferred Stock seeking to
convert such share an amount per share of Class A Common Stock in
cash equal to 110% of the Current Market Price of the Class A Common
Stock as of the date of such conversion (the "Conversion Payments").
In the event that a special meeting is held pursuant to clause (i) in
the preceding sentence and the stockholders fail to authorize the
requisite number of additional shares of Class A Common Stock, each
Holder requesting said special meeting of the stockholders may either
retract the exercise of its conversion right or choose to accept a
Conversion Payment as provided above. The right to convert a share
of Series C Preferred Stock called for redemption shall terminate at
the close of business on the Redemption Date for such Series C
Preferred Stock; provided however that in the event that shares to be
converted are called for redemption during the pendency of the
meeting described in clause (i) above, then Holders of such shares
may elect to accept the Conversion Payment by giving notice thereof
to the Corporation.
(b) The right of conversion attaching to any share of Series C
Preferred Stock may be exercised by the Holder thereof by delivering
the share of Series C Preferred Stock to be converted to the office
of the Conversion Agent, accompanied by a duly signed and completed
notice of conversion in form reasonably satisfactory to the
Conversion Agent. The "Conversion Date" will be the date on which
the share of Series C Preferred Stock and the duly signed and
completed notice of conversion are so delivered. As promptly as
practicable on or after the Conversion Date (but not more than three
(3) trading days thereafter), the Corporation shall issue and deliver
to the Conversion Agent a certificate or certificates for the number
of full shares of Class A Common Stock issuable upon conversion,
together with payment in cash, determined as provided below, in lieu
of any fraction of a share. Such certificate or certificates shall
be delivered by the Conversion Agent to the appropriate Holder by
mailing certificates evidencing the shares of Class A Common Stock to
such Holders at its address set forth in the register of Holders
maintained by the Transfer Agent. All shares of Class A Common Stock
issuable upon conversion of the Series C Preferred Stock shall be
fully paid and nonassessable and shall rank pari passu with the other
shares of Class A Common Stock outstanding from time to time. Any
Series C Preferred Stock surrendered for conversion during the period
from the close of business on any Record Date to the opening of
business on the next succeeding Dividend Payment Date must be
accompanied by payment of an amount equal to the dividends declared
and payable on such Dividend Payment Date on the Series C Preferred
Stock being surrendered for conversion. In the case of any Series C
Preferred Stock that has been converted after any Record Date but
before the next Dividend Payment Date, dividends that are declared
and payable on such Dividend Payment Date shall be payable on such
Dividend Payment Date notwithstanding such conversion, and such
dividends shall be paid to the Holder of such Series C Preferred
Stock on such Record Date. No other payment or adjustment for
dividends, or for any dividends in respect of shares of Class A
Common Stock, shall by made upon conversion. Holders of Class A
Common Stock issued upon conversion shall not be entitled to receive
any dividends payable to holders of Class A Common Stock as of any
record time before the close of business on the Conversion Date.
(c) The Corporation shall not issue a fractional share of Class A
Common Stock upon conversion of Series C Preferred Stock. Instead
the Corporation shall deliver a check for an amount equal to the
applicable fraction of a share multiplied by the Current Market Price
of the Class A Common Stock calculated as of the close of business on
the Conversion Date, rounded to the nearest cent.
(d) A Holder delivering Series C Preferred Stock for conversion will
not be required to pay any taxes or duties in respect of the issue or
delivery of Class A Common Stock on conversion but will be required
to pay any tax or duty that may be payable in respect of any transfer
involved in the issue or delivery of the shares of Class A Common
Stock in a name other than that of the Holder of the Series C
Preferred Stock. Certificates representing shares of Class A Common
Stock will not be issued or delivered unless all taxes and duties, if
any, payable by the Holder have been paid.
(e) The Corporation has reserved and shall continue to reserve out of
its authorized but unissued Class A Common Stock or its Class A
Common Stock held in treasury enough shares of Class A Common Stock
to permit the conversion of at least 100,000 shares of Series C
Preferred Stock in full and shall, as soon as practical, reserve and
continue to reserve out of its authorized but unissued Class A Common
Stock held in treasury enough shares of Class A Common Stock to
permit the conversion of any other outstanding shares of Series C
Preferred Stock in full, assuming, in each case, that such conversion
took place at the Conversion Rate in effect from time to time
(provided that such reservation shall be proportionally reduced as
shares of Series C Preferred Stock are repurchased, redeemed,
converted, exchanged or retired). All shares of Class A Common Stock
that may be issued upon conversion of Series C Preferred Stock shall
be fully paid and nonassessable. The Corporation shall take all
commercially reasonable steps to comply with all securities laws
regulating the offer and delivery of shares of Class A Common Stock
upon conversion of Series C Preferred Stock and shall take all
commercially reasonable steps to list such shares on each national
securities exchange on which the Class A Common Stock is listed.
(f) If the Corporation:
(i) pays a dividend (or makes a distribution) on its Class A Common
Stock in shares of its Class A Common Stock;
(ii) subdivides its outstanding shares of Class A Common Stock into a
greater number of shares;
(iii) combines its outstanding shares of Class A Common Stock into a
smaller number of shares; or
(iv) issues any shares of its Capital Stock by reclassification of its
Class A Common Stock;
then the Conversion Price in effect immediately prior to such action
shall be adjusted so that the Holder of each share of Series C
Preferred Stock thereafter converted may receive the number of shares
of Capital Stock of the Corporation that such Holder would have owned
immediately following such action if such Holder had converted Series
C Preferred Stock immediately prior to such action. The adjustment
shall become effective immediately after the record date in the case
of a dividend or distribution and immediately after the effective
date of a subdivision, combination or reclassification. Such
adjustment shall be made successively whenever any event listed above
shall occur.
(g) If the Corporation distributes any Rights to
all holders of its Class A Common Stock entitling them to purchase
shares of Class A Common Stock and/or Class B Common Stock at a price
per share that is less than the Conversion Price on the date of
distribution of such Rights, the Conversion Price shall be reduced in
accordance with the formula:
C' = C x ((O + ((N x P) / C)) / (O + N))
where:
C' = the adjusted Conversion Price.
C = the then current Conversion Price.
O = the number of shares of Class A
Common Stock and Class B Common
Stock outstanding on the record
date for the distribution.
N = the number of additional shares of
Class A Common Stock and/or Class B
Common Stock offered.
P = the offering price per share of the
additional shares of Class A Common
Stock and/or Class B Common Stock.
The adjustment shall be made successively whenever any such Rights
are issued and shall become effective immediately after the record
date for the determination of stockholders entitled to receive such
Rights. If at the end of the period during which such Rights are
exercisable, not all Rights shall have been exercised, the Conversion
Price shall be immediately readjusted to what it would have been if
"N" in the above formula had been the number of shares actually
issued.
(h) If the Corporation distributes to all
holders of shares of its Class A Common Stock (i) any shares of any
class of Capital Stock of the Corporation other than its Class A
Common Stock, (ii) any evidence of indebtedness or other securities
of the Corporation or any Subsidiary of the Corporation, or (iii)
cash or any other assets of the Corporation (including securities,
but excluding those dividends, Rights and distributions referred to
above in this Section 4 and in Section 4(i) and Section 4(j),
dividends and distributions paid exclusively in cash and
distributions upon mergers or consolidations to which Section 4(m)
applies), the Conversion Price shall be reduced in accordance with
the formula:
C' = C - F
where:
C' = the adjusted Conversion Price.
C = the then current Conversion Price.
F = the fair market value on the record
date of the Capital Stock,
indebtedness, other securities,
cash or other assets distributed
per share of Class A Common Stock.
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the
record date for the determination of stockholders entitled to receive
the distribution.
(i) If the Corporation issues shares of Class A
Common Stock and/or Class B Common Stock for a consideration per
share less than the Conversion Price per share on the date the
Corporation issues such additional shares, the Conversion Price shall
be reduced in accordance with the formula:
C' = C x ((O + (P / C)) / A)
where:
C' = the adjusted Conversion Price.
C = the then current Conversion Price.
O = the number of shares of Class A
Common Stock and Class B Common
Stock outstanding immediately prior
to the issuance of such additional
shares.
P = the aggregate consideration
received for the issuance of such
additional shares.
A = the number of shares Class A Common
Stock and Class B Common Stock
outstanding immediately after the
issuance of such additional shares.
The adjustment shall be made successively whenever
any such issuance is made, and shall become effective immediately
after such issuance. This Section 4(i) does not apply to (i) any
transaction or issuance described in Section 4(g) or 4(h) above or
Section 4(j) below, (ii) the conversion of Series C Preferred Stock
or Class B Common Stock or the conversion, exchange or exercise of
securities issued in transactions that were subject to Sections 4(g)
or 4(h) above, (iii) Class A Common Stock or Class B Common Stock
issued to the Corporation's employees under bona fide employee
benefit plans adopted by the Board of Directors of the Corporation
and approved by the holders of Class A Common Stock and/or Class B
Common Stock when required by law, (iv) Class A Common Stock or Class
B Common Stock issued to acquire, or in the acquisition of, all or
any portion of a business as a going concern, in an arm's-length
transaction between the Corporation and an unaffiliated third party,
whether such acquisition shall be effected by purchase of assets,
exchange of securities, merger, consolidation or otherwise, (v) Class
A Common Stock or Class B Common Stock issued in a bona fide public
offering pursuant to a firm commitment underwriting or (vi) Class A
Common Stock or Class B Common Stock issued to lenders or bond
purchasers that are unaffiliated third parties in any financing
transaction on arm's-length terms (collectively, "Exempt Issuances").
(j) If the Corporation issues any Rights (other
than Series C Preferred Stock or Class B Common Stock or securities
issued in transactions described in Section 4(g) or Section 4(h)) and
for a consideration per share of Class A Common Stock and/or Class B
Common Stock initially deliverable upon conversion, exchange or
exercise of such Rights that is less than the Conversion Price per
share on the date of issuance of such Rights, the Conversion Price
shall be reduced in accordance with the formula:
C' = C x ((O + (P / C)) / (O + D))
where:
C' = the adjusted Conversion Price.
C = the then current Conversion Price.
O = the number of shares of Class A
Common Stock and Class B Common
Stock outstanding immediately prior
to the issuance of such Rights.
P = the aggregate consideration
received for the issuance of such
Rights plus the aggregate
consideration payable upon exercise
of all such Rights.
D = the maximum number of shares
deliverable upon conversion or in
exchange for or upon exercise of
such Rights at the initial
conversion, exchange or exercise
rate.
The adjustment shall be made successively whenever
any such issuance is made, and shall become effective immediately
after such issuance. If all of the Class A Common Stock and/or Class
B Common Stock deliverable upon conversion, exchange or exercise of
such Rights has not been issued when such Rights are no longer
outstanding, then the Conversion Price shall promptly be readjusted
to the Conversion Price that would then be in effect had the
adjustment upon the issuance of such Rights been made on the basis of
the actual number of shares of Class A Common Stock and/or Class B
Common Stock issued upon conversion, exchange or exercise of such
Rights. This Section 4(j) does not apply to any transaction that
would be an Exempt Issuance if shares of Class A Common Stock or
Class B Common Stock were issued instead of Rights.
(k) In case the Corporation or any of its
Subsidiaries shall, by dividend or otherwise, make distributions
exclusively in cash (excluding any cash that is distributed upon a
merger or consolidation to which Section 4(h) applies) to all the
holders of its Class A Common Stock in an aggregate amount that,
combined together with (i) the aggregate amount of all other such
all-cash distributions to all holders of its Class A Common Stock
made within the 12 months preceding the date of payment of such
distribution and in respect of which no adjustment pursuant to this
Section 4(g) has been made and (ii) the aggregate of any cash plus
the fair market value of other consideration payable in respect of
any tender or exchange offer or other stock repurchase program by the
Corporation or any of its Subsidiaries for all or any portion of the
Class A Common Stock concluded within the 12 months preceding the
date of payment of such distribution and in respect of which no
adjustment pursuant to this Section 4(g) has been made, exceeds 10%
of the Corporation's Market Capitalization on the record date for
such distribution then, and in each such case, immediately after the
close of business on such date of such distribution, the Conversion
Price shall be reduced in accordance with the formula:
C' = C - E
where:
C' = the adjusted Conversion Price.
C = the then current Conversion Price.
E = the total of such combined amount
of such dividends and distributions
per share of Class A Common Stock.
(l) In the case of the consummation of a tender
offer, exchange offer (other than an odd-lot offer) or other stock
repurchase program made by the Corporation or any Subsidiary thereof
for all or any portion of the Class A Common Stock and/or Class B
Common Stock involving the payment by the Corporation or such
Subsidiary of an aggregate consideration that, together with (i) any
cash or other consideration payable in a tender offer, exchange offer
or other stock repurchase program by the Corporation or any of its
Subsidiaries for Class A Common Stock and/or Class B Common Stock
consummated within 12 months preceding the consummation of such
tender offer, exchange offer or other stock repurchase program (the
"Expiration Time") in respect of which no adjustment has been made
pursuant to this Section 4(l) or Section 4(k) and (ii) the aggregate
amount of all such all-cash distributions referred to in Section 4(k)
above to all holders of Class A Common Stock and/or Class B Common
Stock within the 12 months preceding such Expiration Time in respect
of which no adjustments have been made, exceeds 10% of the
Corporation's Market Capitalization as of the Trading Day next
succeeding the Expiration Time, the Conversion Price shall be reduced
in accordance with the formula:
C' = C x ((M - E) / N)
where:
C' = the adjusted Conversion Price.
C = the then current Conversion Price.
M = the Conversion Price on the Trading
Day next succeeding the expiration
Time times the number of shares of
Class A Common Stock and Class B
Common Stock outstanding at the
Expiration Time (including any
tendered, exchanged or purchased
shares).
N = The Conversion Price on the Trading
Day next succeeding the Expiration
Time times the number of shares of
the Class A Common Stock and Class
B Common Stock outstanding at the
Expiration Time (less any shares
purchased in such tender offer,
exchange offer or other stock
repurchase program).
E = the total of such combined amount
of payments and distributions
described in the first paragraph of
this Section 4(l).
The reduction shall become effective immediately
prior to the opening of business on the day following the Expiration
Time.
(m) In case of any consolidation, amalgamation,
arrangement or merger of the Corporation with or into another person
or any merger of another person with or into the Corporation (other
than a merger that does not result in any reclassification,
conversion, exchange or cancellation of any class or series of the
Common Equity), or in case of any sale or transfer of all or
substantially all of the assets of the Corporation, each share of
Series C Preferred Stock then outstanding will, without the consent
of the Holder of any Series C Preferred Stock, become convertible
only into the kind and amount of securities, cash and other property
receivable upon such consolidation, amalgamation, arrangement,
merger, sale or transfer by a Holder of the number of shares of Class
A Common Stock (and other securities, if applicable) into which such
Series C Preferred Stock was convertible immediately prior thereto
(assuming such holder of Class A Common Stock (and other securities,
if applicable) failed to exercise any rights of election and that
such Series C Preferred Stock was then convertible).
(n) In addition, in the event that any other
transaction or event occurs as to which the foregoing conversion
price adjustment provisions are not strictly applicable but the
failure to make any adjustment would adversely affect the conversion
rights represented by the Series C Preferred Stock in accordance with
the essential intent and principles of such provisions, then, in each
such case, either (i) the Corporation shall appoint an investment
banking firm of recognized national standing, or any other financial
expert that does not (or whose directors, officers, employees,
affiliates or stockholders do not) have a direct or material indirect
financial interest in the Corporation or any of its Subsidiaries, who
has not been, and, at the time it is called upon to give independent
financial advice to the Corporation, is not (and none of its
directors, officers, employees, affiliates or stockholders are) a
promoter, director or officer of the Corporation or any of its
Subsidiaries, which will give their opinion upon or (ii) the Board of
Directors shall determine, consistent with the Board of Directors'
fiduciary duties to the Corporation's stockholders, the adjustment,
if any, on a basis consistent with the essential intent and
principles established in the foregoing conversion price adjustment
provisions, necessary to preserve, without dilution, the conversion
rights represented by the Series C Preferred Stock. Upon receipt of
such opinion or determination, the Corporation shall promptly mail a
copy thereof to the Holders of the Series C Preferred Stock and will
make the adjustments described therein.
(o) For purposes of any computation respecting
consideration received pursuant to a transaction described or
contemplated by this Section 4, the following shall apply:
(i) in the case of the issuance of
shares of Class A Common Stock or Class B Common Stock for
cash, the consideration shall be the amount of such cash,
provided that in no case shall any deduction be made for any
commissions, discounts or other expenses incurred by the
Corporation for any underwriting of the issue or otherwise
in connection therewith;
(ii) in the case of the issuance of
shares of Class A Common Stock or Class B Common Stock for a
consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair
market value thereof (irrespective of the accounting
treatment thereof);
(iii) whenever this Certificate of
Designations calls for the determination of "fair market
value," such fair market value shall be determined in good
faith by the Board of Directors of the Corporation and as
evidenced by a written resolution thereof; and
(iv) in the case of the issuance of
Rights, the aggregate consideration received therefor shall
be deemed to be the consideration received by the
Corporation for the issuance of such Rights plus the
additional minimum consideration, if any, to be received by
the Corporation upon the conversion or exchange or exercise
thereof (the consideration in each case to be determined in
the same manner as provided in this Section 4(o)).
(p) No adjustment in the Conversion Price need
be made unless the adjustment would require an increase or decrease
of at least 1% in the Conversion Price. Any adjustments that are not
made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 4 shall
be made to the nearest one hundredth of a cent or to the nearest
1/1000th of a share, as the case may be. No adjustment formula set
forth in this Section 4 shall be applied to result in an increase in
the Conversion Price.
(q) No adjustment in the Conversion Price need
be made under this Section 4 for (i) rights to purchase Class A
Common Stock or Class B Common Stock pursuant to a Corporation plan
for reinvestment of dividends or interest, or (ii) any change in the
par value or no par value of the Class A Common Stock or Class B
Common Stock, and in no event shall any adjustment made under this
Section 4 that would reduce the Conversion Price below the par value
of the Class A Common Stock. If an adjustment is made to the
Conversion Price upon the establishment of a record date for a
distribution subject to Sections 4(g) or 4(h) above and if such
distribution is subsequently cancelled, the Conversion Price then in
effect shall be readjusted, effective as of the date when the Board
of Directors of the Corporation determines to cancel such
distribution, to the Conversion Price that would have been in effect
if such record date had not been fixed. No adjustment in the
Conversion Price need be made under Sections 4(g) and 4(h) above if
the Corporation issues or distributes to each Holder of Series C
Preferred Stock the shares of Class A Common Stock, Class B Common
Stock, evidences of indebtedness, assets or Rights referred to in
those Sections that each Holder would have been entitled to receive
had the Series C Preferred Stock been converted into Class A Common
Stock prior to the happening of such event or the record date with
respect thereto.
(r) The Corporation shall provide to Holders of
Series C Preferred Stock reasonable notice of any event that would
result in an adjustment to the Conversion Price pursuant to any of
the adjustments in this Section 4 so as to permit the Holders to
effect a conversion of shares of Series C Preferred Stock into shares
of Class A Common Stock prior to the occurrence of such event. The
Corporation shall file with the Transfer Agent a certificate from the
Corporation's independent public accountants briefly stating the
facts requiring the adjustment and the manner of computing it.
Subject to Section 4(v) below, the certificate shall be conclusive
evidence that the adjustment is correct.
(s) The Corporation from time to time may reduce
the Conversion Price by any amount for any period of time if the
period is at least 20 Business Days and if the reduction is
irrevocable during the period, but in no event may the Conversion
Price be less than the par value of a share of Class A Common Stock.
Whenever the Conversion Price is reduced, the Corporation shall mail
to holders of Series C Preferred Stock a notice of the reduction.
The Corporation shall mail, first class, postage prepaid, the notice
at least 15 days before the date the reduced conversion price takes
effect. The notice shall state the reduced conversion price and the
period it will be in effect. A reduction of the Conversion Price
does not change or adjust the Conversion Price otherwise in effect
for purposes of Sections 4(f), 4(g), 4(h), 4(i), 4(j), 4(k) and 4(l)
above.
(t) If:
(i) the Corporation takes any action
which would require an adjustment in the Conversion Price
pursuant to Section 4(g) or 4(h) above, or clause (iv) of
Section 4(f) above;
(ii) the Corporation consolidates or
merges with, or transfers all or substantially all of its
assets to, another corporation, and stockholders of the
Corporation must approve the transaction; or
(iii) there is a dissolution or
liquidation of the Corporation;
a holder of Series C Preferred Stock may want to convert such stock
into shares of Class A Common Stock prior to the record date for or
the effective date of the transaction so that he may receive the
rights, warrants, securities or assets which a holder of shares of
Class A Common Stock on that date may receive. Therefore, the
Corporation shall mail to such holders, first class, postage prepaid,
a notice stating the proposed record or effective date, as the case
may be. The Corporation shall mail the notice at least ten days
before such date. Failure to mail the notice or any defect in it
shall not affect the validity of any transaction referred to in
clause (i), (ii) or (iii) of this Section 4(t).
(u) In any case in which this Section 4 shall
require that an adjustment as a result of any event become effective
from and after a record date, the Corporation may elect to defer
until after the occurrence of such event (i) the issuance to the
holder of any shares of Series C Preferred Stock converted after such
record date and before the occurrence of such event of the additional
shares of Class A Common Stock issuable upon such conversion over and
above the shares issuable on the basis of the Conversion Price in
effect immediately prior to adjustment and (ii) a check for any
remaining fractional shares of Class A Common Stock as provided in
Section 4(c) above.
(v) Except as provided in the immediately
following sentence, any determination that the Corporation or its
Board of Directors must make pursuant to this Section 4 shall be
conclusive. Whenever the Corporation or its Board of Directors shall
be required to make a determination under this Section 4, such
determination shall be made in good faith and may be challenged in
good faith by the Holders of a majority of the outstanding shares of
Series C Preferred Stock (with shares held by the Corporation or any
of its Affiliates not being considered to be outstanding for this
purpose), and any dispute shall be resolved by an investment banking
firm of recognized national standing selected by the Corporation and
acceptable to such Holders of Series C Preferred Stock. If such
investment banking firm resolves that the adjustment should have been
more favorable to the Holders, the Corporation shall bear the costs
of such firm and if such investment banking firm resolves that such
determination was correct or should have been less favorable to the
Holders, the Holders challenging such determination shall bear the
costs of such firm.
(w) All shares of Series C Preferred Stock
converted pursuant to this Section 4 shall be retired and shall be
restored to the status of authorized and unissued shares of
convertible exchangeable preferred stock, without designation as to
series and may thereafter be reissued as shares of any series of
convertible exchangeable preferred stock other than Series C
Preferred Stock.
(x) Overdue Conversion Payments shall bear
interest at the rate of 13% per annum.
(y) Except as set forth in this Section 4, none
of the adjustments described in this Section 4 shall duplicate
adjustments previously made or made simultaneously pursuant to other
subsections of this Section 4, or otherwise double count any
transaction.
5. Redemption at the Corporation's Option.
(a) The Series C Preferred Stock may be
redeemed, in whole or in part, at the option of the Corporation at
any time on or after August 1, 2000, at the Applicable Redemption
Price.
(b) In case of redemption of less than all of
the shares of Series C Preferred Stock at the time outstanding, the
shares to be redeemed shall be selected pro rata or by lot as
determined by the Corporation in its sole discretion.
(c) Notice of any redemption shall be sent by or
on behalf of the Corporation not more than 60 days nor less than 30
days prior to the date specified for redemption in such notice (the
"Redemption Date"), by first class mail, postage prepaid, to all
Holders of record of the Series C Preferred Stock at their respective
last addresses as they shall appear on the books of the Corporation;
provided, however, that no failure to give such notice or any defect
therein or in the mailing thereof shall affect the validity of the
proceedings for the redemption of any shares of Series C Preferred
Stock except as to the Holder to whom the Corporation has failed to
give notice or except as to the Holder to whom notice was defective.
In addition to any information required by law or by the applicable
rules of any exchange or quotation system upon which Series C
Preferred Stock may be listed or admitted to trading, such notice
shall state: (i) whether such redemption is being made pursuant to
the optional or the mandatory redemption provisions hereof; (ii) the
Redemption Date; (iii) the Applicable Redemption Price; (iv) the
number of shares of Series C Preferred to be redeemed and, if less
than all shares held by such Holder are to be redeemed, the number of
such shares to be redeemed; (v) the place or places where
certificates for such shares are to be surrendered for payment of the
Applicable Redemption Price, including any procedures applicable to
redemptions to be accomplished through book-entry transfers; (vi)
that dividends on the shares to be redeemed will cease to accrue on
the Redemption Date; (vii) the Conversion Price; (viii) that Series C
Preferred Stock called for redemption may be converted at any time
before the close of business on the Redemption Date; and (ix) that
Holders of Series C Preferred Stock must satisfy the requirements of
Section 4(b) above if such Holders desire to convert such shares.
Upon the mailing of any such notice of redemption, the Corporation
shall become obligated to redeem at the time of redemption specified
thereon all shares called for redemption.
(d) If notice has been mailed in accordance with
Section 5(c) above and provided that on or before the Redemption Date
specified in such notice, all funds necessary for such redemption
shall have been set aside by the Corporation, separate and apart from
its other funds in trust for the pro rata benefit of the Holders of
the shares so called for redemption, so as to be, and to continue to
be available therefor, then, from and after the Redemption Date,
dividends on the shares of the Series C Preferred Stock so called for
redemption shall cease to accrue, and said shares shall no longer be
deemed to be outstanding and shall not have the status of shares of
Series C Preferred Stock, and all rights of the Holders thereof as
stockholders of the Corporation (except the right to receive from the
Corporation the Applicable Redemption Price) shall cease. Upon
surrender, in accordance with said notice, of the certificates for
any shares so redeemed (properly endorsed or assigned for transfer,
if the Corporation shall so require and the notice shall so state),
such shares shall be redeemed by the Corporation at the Applicable
Redemption Price. In case fewer than all the shares represented by
any such certificate are redeemed, a new certificate or certificates
shall be issued representing the unredeemed shares without cost to
the Holder thereof.
(e) Any funds deposited with a bank or trust
company for the purpose of redeeming Series C Preferred Stock shall
be irrevocable except that:
(i) the Corporation shall be entitled
to receive from such bank or trust company the interest or
other earnings, if any, earned on any money so deposited in
trust, and the Holders of any shares redeemed shall have no
claim to such interest or other earnings; and
(ii) any balance of monies so deposited
by the Corporation and unclaimed by the Holders of the
Series C Preferred Stock entitled thereto at the expiration
of two years from the applicable Redemption Date shall be
repaid, together with any interest or other earnings earned
thereon, to the Corporation, and after any such repayment,
the Holders of the shares entitled to the funds so repaid to
the Corporation shall look only to the Corporation for
payment without interest or other earnings.
(f) No Series C Preferred Stock may be redeemed
except with funds legally available for the purpose. The Corporation
shall take all actions required or permitted under Delaware Law to
permit any such redemption.
(g) Notwithstanding the foregoing provisions of
this Section 5, unless the full cumulative dividends on all
outstanding shares of Series C Preferred Stock shall have been paid
or contemporaneously are declared and paid for all past dividend
periods, none of the shares of Series C Preferred Stock shall be
redeemed unless all outstanding shares of Series C Preferred Stock
are simultaneously redeemed.
(h) All shares of Series C Preferred Stock
redeemed pursuant to this Section 5 shall be restored to the status
of authorized and unissued shares of preferred stock, without
designation as to series and may thereafter be reissued as shares of
any series of preferred stock other than shares of Series C Preferred
Stock.
6. Voting Rights.
(a) The Holders of record of shares of
Series C Preferred Stock shall not be entitled to any voting rights
except as hereinafter provided in this Section 6 or as otherwise
provided by law.
(b) If and upon:
(i) the accumulation of accrued and
unpaid dividends on the outstanding Series C Preferred Stock
in an amount equal to six (6) full quarterly dividends
(whether or not consecutive);
(ii) the failure of the Corporation to
honor its obligations with respect to any share of Series C
Preferred Stock upon conversion thereof pursuant to Section
4 hereof;
(iii) in the event that all shares of
Series C Preferred Stock have not been converted into shares
of Class A Common Stock by August 1, 2009, the Series C
Preferred Stock shall not have been redeemed by the
Corporation by such date in accordance with Section 5;
(iv) the failure of the Corporation to
comply with any of the other covenants or agreements set
forth in this Certificate of Designations and the
continuance of such failure for 45 consecutive days or more
(each of the events described in clauses 6(b)(i) through
(iv) being referred to herein as a "Voting Rights Trigger
Event");
then the authorized number of members of the Corporation's Board of
Directors will be immediately and automatically increased by two, and
the Holders of a majority of the outstanding shares of Series C
Preferred Stock, voting separately as a class, shall be entitled to
elect two directors of the Corporation.
(c) Whenever such voting right shall
have vested, such right may be exercised initially either by written
consent or at a special meeting of the Holders of Series C Preferred
Stock, called as hereinafter provided, or at any annual meeting of
stockholders held for the purpose of electing directors, and
thereafter at such annual meetings or by the written consent of the
Holders of Series C Preferred Stock. Such right of the Holders of
Series C Preferred Stock to elect directors may be exercised until
(i) all dividends in arrears shall have been paid in full and (ii)
all other Voting Rights Trigger Events have been cured or waived, at
which time the right of the Holders of Series C Preferred Stock to
elect such number of directors shall cease, the term of such
directors previously elected shall thereupon terminate at the end of
the quarter first commencing after such voting rights terminate, and
the authorized number of directors of the Corporation shall thereupon
return to the number of authorized directors otherwise in effect, but
subject always to the same provisions for the renewal and divestment
of such special voting rights in the case of any such future Voting
Rights Trigger Events.
(d) At any time when such voting right
shall have vested in the Holders of Series C Preferred Stock and if
such right shall not already have been initially exercised, a proper
officer of the Corporation shall, upon the written request of Holders
of record of 10% or more of the Series C Preferred Stock then
outstanding, addressed to the Secretary of the Corporation, call a
special meeting of Holders of Series C Preferred Stock. Such meeting
shall be held at the earliest practicable date upon the notice
required for annual meetings of stockholders at the place for holding
annual meetings of stockholders of the Corporation or, if none, at a
place designated by a majority-in-interest of the Holders of Series C
Preferred Stock requesting such meeting. If such meeting shall not
be called by the proper officers of the Corporation within 30 days
after the personal service of such written request upon the Secretary
of the Corporation, or within 30 days after mailing the same within
the United States, by registered mail, addressed to the Secretary of
the Corporation at its principal office (such mailing to be evidenced
by the registry receipt issued by the postal authorities), then the
Holders of record of 10% of the shares of Series C Preferred Stock
then outstanding may designate in writing a Holder of Series C
Preferred Stock to call such meeting at the expense of the
Corporation, and such meeting may be called by such person so
designated upon the notice required for annual meetings of
stockholders and shall be held at the place for holding annual
meetings of the Corporation or, if none, at a place designated by
such Holder. Any Holder of Series C Preferred Stock that would be
entitled to vote at such meeting shall have access to the stock books
of the Corporation for the purpose of causing a meeting of
stockholders to be called pursuant to the provisions of this Section.
Notwithstanding the provisions of this paragraph, however, no such
special meeting shall be called if any such request is received less
than 90 days before the date fixed for the next ensuing annual or
special meeting of stockholders. The Corporation shall pay all
expenses incurred in connection with holding such special meeting and
all reasonable expenses incurred in connection with the solicitation
of votes or proxies from the Holders of the Series C Preferred Stock.
Any director elected pursuant to this Section 6(d) shall be entitled
to receive the same fees and reimbursement of expenses as may be
provided to the rest of the directors of the Corporation.
(e) If a director so elected by the
Holders of Series C Preferred Stock shall cease to serve as a
director before his term shall expire, the Holders of Series C
Preferred Stock then outstanding may, at a special meeting of the
Holders called as provided above, elect a successor to hold office
for the unexpired term of the director whose place shall be vacant.
(f) The Corporation shall not, without
the affirmative vote or consent of the Holders of a majority of the
then outstanding shares of Series C Preferred Stock (with shares held
by the Corporation not being considered to be outstanding for this
purpose):
(i) authorize, create (by way of
reclassification or otherwise) or issue any Parity
Securities, or any obligation or security convertible into
or evidencing the right to purchase any Parity Securities
(except for issuances as provided in the Corporation's
Certificate of Designations as in effect on the Initial
Issue Date with respect to its Series A Preferred Stock and
its Series B Preferred Stock); provided that the
redesignation of the Company's unissued Series B Preferred
Stock as Series A Preferred Stock, or of its unissued or
issued but not outstanding Series A Preferred Stock for the
purpose of paying pay-in-kind dividends on either its Series
A Preferred Stock or its Series B Preferred Stock shall not
require the consent of the Holders of the Series C Preferred
Stock as provided in this Section 6; or
(ii) amend or otherwise alter its
Certificate of Incorporation in any manner that adversely
affects the rights of Holders of Series C Preferred Stock or
the holders of Class A Common Stock.
(g) Without the consent of each Holder
affected, an amendment or waiver may not (with respect to any shares
of Series C Preferred Stock held by a non-consenting Holder):
(i) alter the voting rights with
respect to the Series C Preferred Stock or reduce the number
of shares of Series C Preferred Stock whose Holders must
consent to an amendment, supplement or waiver;
(ii) alter the provisions with respect
to the redemption of the Series C Preferred Stock or waive a
redemption payment with respect to any share of Series C
Preferred Stock;
(iii) reduce the Liquidation Preference
of any share of Series C Preferred Stock;
(iv) reduce the rate of or change the
time for payment of dividends on any share of Series C
Preferred Stock;
(v) alter the provisions with respect
to the conversion rights of the Series C Preferred Stock;
(vi) waive a default or event of default
in the payment of dividends (if any) on the Series C
Preferred Stock;
(vii) make any share of Series C
Preferred Stock payable in money other than that stated in
this Certificate of Designations;
(viii) make any change in the provisions
of this Certificate of Designations relating to waivers of
the rights of Holders of Series C Preferred Stock to receive
the Liquidation Preference, dividends (if any) on the Series
C Preferred Stock; or
(viii) make any change in the foregoing
amendment and waiver provisions.
(h) The Corporation shall not, without
the consent of at least 66-2/3% of the then outstanding shares of
Series C Preferred Stock (with shares held by the Corporation not
being considered to be outstanding for this purpose), authorize,
create (by way of reclassification or otherwise) or issue any Senior
Securities or any obligation or security convertible or exchangeable
into or evidencing a right to purchase, shares of any class or series
of Senior Securities.
(i) The Corporation in its sole
discretion may without the vote or consent of any Holders of the
Series C Preferred Stock amend or supplement this Certificate of
Designations:
(i) to cure any ambiguity, defect or
inconsistency;
(ii) to provide for uncertificated
Series C Preferred Stock in addition to or in place of
certificated Series C Preferred Stock; or
(iii) to make any change that would
provide any additional rights or benefits to the Holders of
the Series C Preferred Stock or that does not adversely
affect the legal rights or benefits under this Certificate
of Designations of any such Holder.
7. Certain Covenants.
(a) Payments for Consent. Neither the
Corporation nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way
of dividend or other distribution, fee or otherwise, to any Holder of
any Series C Preferred Stock for or as an inducement to any consent,
waiver or amendment of any of the terms or provisions of this
Certificate of Designations or the Series C Preferred Stock unless
such consideration is offered to be paid and is paid to all Holders
of the Series C Preferred Stock that consent, waive or agree to amend
in the time frame set forth in the solicitation documents relating to
such consent, waiver or agreement.
(b) Reports.
(i) Whether or not required by the
rules and regulations of the Securities and Exchange
Commission (the "Commission"), so long as any shares of
Series C Preferred Stock are outstanding, the Corporation
shall furnish to the Holders of Series C Preferred Stock
(i) all quarterly and annual financial information that
would be required to be contained in a filing with the
Commission on Forms 10-Q and 10-K if the Corporation were
required to file such Forms, including "Management's
Discussion and Analysis of Financial Condition and Results
of Operations" and, with respect to the annual information
only, a report thereon by the Corporation's certified
independent accountants and (ii) all current reports that
would be required to be filed with the Commission on Form 8-
K if the Corporation were required to file such reports. In
addition, whether or not required by the rules and
regulations of the Commission, the Corporation shall file a
copy of all such information and reports with the Commission
for public availability (unless the Commission will not
accept such a filing) and make such information available to
securities analysts and prospective investors upon request.
In addition, for so long as any Series C Preferred Stock
remains outstanding, the Corporation shall furnish to the
Holders and to securities analysts and prospective
investors, upon their request, the information required to
be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
(ii) The Corporation shall deliver to
the Holders, within 90 days after the end of each fiscal
year, an Officers' Certificate stating that a review of the
activities of the Corporation and its Subsidiaries during
the preceding fiscal year has been made under the supervi-
sion of the signing officers with a view to determining
whether the Corporations has kept, observed, performed and
fulfilled its obligations under this Certificate of
Designations and further stating, as to each such officer
signing such certificate, that to the best of his or her
knowledge the Corporation has kept, observed, performed and
fulfilled each and every covenant contained in this
Certificate of Designations and is not in default in the
performance or observance of any of the terms, provisions
and conditions of this Certificate of Designations (or, if
any such default shall have occurred, describing all such
defaults of which he or she may have knowledge and what
action the Corporation is taking or proposes to take with
respect thereto) and that to the best of his or her
knowledge no event has occurred and remains in existence by
reason of which payments on account of the Liquidation
Preference of or dividends, if any, on the Series C
Preferred Stock is prohibited or if such event has occurred,
a description of the event and what action the Corporation
is taking or proposes to take with respect thereto.
(iii) So long as not contrary to the then
current recommendations of the American Institute of
Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 7(b)(i) above shall
be accompanied by a written statement of the Corporation's
independent public accountants (who shall be a firm of
established national reputation) that in making the
examination necessary for certification of such financial
statements, nothing has come to their attention that would
lead them to believe that the Corporation has violated any
provisions of this Certificate of Designations or, if any
such violation has occurred, specifying the nature and
period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such
violation.
(iv) The Corporation shall, so long as
any of the shares of Series C Preferred Stock are
outstanding, deliver to the Holders, forthwith upon any
Executive Officer of the Corporation becoming aware of any
default under this Certificate of Designations, an Officers'
Certificate specifying such default and what action the
Corporation is taking or proposes to take with respect
thereto.
(c) Conflicts with By-laws. If any provisions
of the Corporation's By-laws conflict in any way with this
Certificate of Designations, the Corporation shall, so long as any of
the shares of Series C Preferred Stock are outstanding, take all
necessary actions to amend such By-laws and thereby resolve the
conflict.
8. Payment and Conversion.
(a) All amounts payable in cash with respect to
the Series C Preferred Stock shall be payable in United States
dollars at the office or agency of the Corporation maintained for
such purpose within the City and State of New York or, at the option
of the Corporation, payment of dividends (if any) may be made by
check mailed to the Holders of the Series C Preferred Stock at their
respective addresses set forth in the register of Holders of Series C
Preferred Stock maintained by the Transfer Agent, provided that all
cash payments with respect to the Global Shares (as defined below)
and shares of Series C Preferred Stock the Holders of which have
given wire transfer instructions to the Corporation will be required
to be made by wire transfer of immediately available funds to the
accounts specified by the Holders thereof. Unless otherwise
designated by the Corporation, the Corporation's office or agency in
New York shall be the office of the Paying Agent maintained for such
purpose.
(b) Any payment on the Series C Preferred Stock
due on any day that is not a Business Day need not be made on such
day, but may be made on the next succeeding Business Day with the
same force and effect as if made on such due date.
(c) The Corporation has initially appointed the
Transfer Agent to act as the Paying Agent and Conversion Agent. The
Corporation may at any time terminate the appointment of any Paying
Agent or Conversion Agent and appoint additional or other Paying
Agents and Conversion Agents, provided that until the Series C
Preferred Stock has been delivered to the Corporation for
cancellation, or moneys sufficient to pay the Liquidation Preference
and accrued dividends (if any) on the Series C Preferred Stock have
been made available for payment and either paid or returned to the
Corporation as provided in this Certificate of Designations, it shall
maintain an office or agency in the Borough of Manhattan, The City of
New York for surrender of Series C Preferred Stock for conversion.
(d) All moneys deposited with any Paying Agent
or then held by the Corporation in trust for the payment of the
Liquidation Preference and dividends (if any) on any shares of Series
C Preferred Stock which remain unclaimed at the end of two years
after such payment has become due and payable will be repaid to the
Corporation, and the Holder of such shares of Series C Preferred
Stock will thereafter look only to Corporation for payment thereof.
9. Officers' Certificate.
Each Officers' Certificate provided for in this
Certificate of Designations shall include:
(a) a statement that the officer making such
certificate or opinion has read such covenant or condition;
(b) 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;
(c) a statement that, in the opinion of such
officer, he or she 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 satisfied; and
(d) a statement as to whether or not, in the
opinion of such officer, such condition or covenant has been
satisfied.
10. Exclusion of Other Rights.
Except as may otherwise be required by law, the
shares of Series C Preferred Stock shall not have any voting powers,
preferences and relative, participating, optional or other special
rights, other than those specifically set forth in this Certificate
of Designations (as such Certificate of Designations may be amended
from time to time) and in the Certificate of Incorporation. The
shares of Series C Preferred Stock shall have no preemptive or
subscription rights.
11. Headings of Subdivisions.
The headings of the various subdivisions hereof are
for convenience of reference only and shall not affect the
interpretation of any of the provisions hereof.
12. Severability of Provisions.
If any voting powers, preferences and relative,
participating, optional and other special rights of the Series C
Preferred Stock and qualifications, limitations and restrictions
thereof set forth in this resolution (as such resolution may be
amended from time to time) is invalid, unlawful or incapable of being
enforced by reason of any rule of law or public policy, all other
voting powers, preferences and relative, participating, optional and
other special rights of Series C Preferred Stock and qualifications,
limitations and restrictions thereof set forth in this resolution (as
so amended) which can be given effect without the invalid, unlawful
or unenforceable voting powers, preferences and relative,
participating, optional and other special rights of Series C
Preferred Stock and qualifications, limitations and restrictions
thereof shall, nevertheless, remain in full force and effect, and no
voting powers, preferences and relative, participating, optional or
other special rights of Series C Preferred Stock and qualifications,
limitations and restrictions thereof herein set forth shall be deemed
dependent upon any other such voting powers, preferences and
relative, participating, optional or other special rights of Series C
Preferred Stock and qualifications, limitations and restrictions
thereof unless so expressed herein.
[The remainder of this page is intentionally left blank.]
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this
certificate to be duly executed by Timothy J. Rigas, Executive Vice
President and Chief Financial Officer, and attested by Colin Higgin,
its assistant secretary, this 2nd day of July, 1997.
ADELPHIA COMMUNICATIONS
CORPORATION
By: /s/ Timothy J. Rigas
Timothy J. Rigas
Executive Vice President and
Chief Financial Officer
ATTEST:
By: /s/ Colin Higgin
Colin Higgin
Assistant Secretary
Exhibit 9
ADELPHIA COMMUNICATIONS CORPORATION
REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT, made as of the 7th day of July, 1997, by and among
TELESAT COMMUNICATIONS, INC. ("Telesat"), HIGHLAND HOLDINGS (the
"Rigas Family") and ADELPHIA COMMUNICATIONS CORPORATION, a Delaware
corporation (the "Company").
WHEREAS, Telesat is the record and beneficial holder of 20,000 shares
of the Company's Series C Convertible Preferred Stock, par value $.01
per share (the "Series C Preferred Stock"); and
WHEREAS, the Rigas Family is the record and beneficial holder of
80,000 shares of the Series C Preferred Stock; and
WHEREAS, Telesat, the Rigas Family and the Company have reached the
agreements set forth herein and desire to provide the Registrable
Securities (as defined herein) held by Telesat and the Rigas Family
subject to the rights described herein.
NOW, therefore, in consideration of the mutual promises and covenants
contained herein and intending to be legally bound hereby, the
parties hereto agree as follows:
1. Definitions. For purposes of this Agreement:
(a) The term "Act" means the Securities Act of 1933, as amended, or
any other statute in effect from time to time corresponding to such
act.
(b) The terms "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration
statement in compliance with the Act and the declaration or ordering
of effectiveness of such registration statement.
(c) The term "Registrable Securities" means (i) the Series C Preferred
Stock held by the Holders (as herein defined), (ii) the Class A
Common Stock of the Company, par value $.01 per share (the "Class A
Common Stock") into which the Series C Preferred Stock held by the
Holders, or such additional Series C Preferred Stock which may be
issued as a dividend or distribution on such Series C Preferred
Stock, shall be converted pursuant to the Certificate of
Incorporation, and (iii) any securities of the Company issued as a
dividend or other distribution with respect to, or in exchange or in
replacement of, such Series C Preferred Stock or Class A Common
Stock. Registrable Securities, if transferred pursuant to an
exemption from registration under the Act, will remain Registrable
Securities.
(d) The term "Holder" or "Holders" means (i) Telesat and the Rigas
Family, and (ii) any other person holding Registrable Securities to
whom these registration rights have been transferred.
2. Request for Registration. If at any time the Company shall receive
a written request (specifying that it is being made pursuant to this
paragraph 2) from the Holders holding more than ten percent (10%) of
the Registrable Securities held by all Holders at that time
outstanding that the Company file a registration statement or similar
document under the Act, covering the registration of Registrable
Securities with a market value of not less than $1,000,000, then the
Company shall promptly notify all other Holders of such request and
shall use its best efforts to cause all Registrable Securities that
Holders have requested by so registered to be registered under the
Act.
The Company shall be obligated to effect two (2) registrations per
calendar year pursuant to this paragraph 2 (other than on Form S-3).
At the option of a majority-in-interest of the selling Holders, any
registration under this paragraph 2 must be for an underwriter or
underwriters of recognized national standing reasonably acceptable to
the Company.
Notwithstanding the foregoing, the Company shall not be obligated to
cause a registration statement to be filed and declared effective
pursuant to this Section 2, or if the registration statement is
effective, the Company may request the Holders not to (and upon such
request the Holders hereby agree not to) make any sales pursuant
thereto, for up to two periods of ninety (90) days each, there being
not less than 90 days between any two such periods, as the Company
shall specify, provided that the Company shall furnish to each such
Holder a certificate signed by the President, the Chief Executive
Officer or a Vice President or a Vice Chairman of the Company stating
that in the good faith judgment of the Company it would be
detrimental to the Company or its shareholders for a registration
statement to be filed or for sales to occur under an effective
registration statement.
3. Piggyback Registration. Subject to paragraph 8, if at any time or
from time to time the Company proposes to register any of its equity
securities under the Act in connection with a primary or secondary
public offering of such securities solely for cash on a form that
would also permit the registration of the Registrable Securities, the
Company shall, each such time, promptly give each Holder written
notice of such determination. Upon the written request of any Holder
given within twenty (20) days after mailing of any such notice by the
Company, the Company shall use its best efforts to cause to be
registered under the Act all of the Registrable Securities that each
such Holder has requested be registered.
4. Registrations on Form S-3. If (i) a Holder or Holders request in
writing (specifying that it is being made pursuant to this
paragraph 4) that the Company file a registration statement on Form
S-3 (or any successor form to Form S-3 regardless of its designation)
for a public offering of shares of the Registrable Securities and
(ii) the Company is a registrant entitled to use Form S-3 to register
such shares, then the Company shall notify all other Holders of such
request and shall use its best efforts to cause to be registered on
Form S-3 (or any successor form to Form S-3) all of the Registrable
Securities that each Holder requests to be so registered. Rights to
registration under this paragraph 4 are unlimited in number and are
in addition to, and not in lieu of, rights to registration under
paragraphs 2 and 3.
5. Obligations of the Company. Whenever required under paragraphs 2,
3 or 4 to use its best efforts to effect the registration of any
Registrable Securities, the Company shall, as promptly as
practicable:
(a) Prepare and file with the Securities and Exchange Commission
("SEC") a registration statement with respect to such Registrable
Securities and use its best efforts to cause such registration
statement to become and remain effective until all Registrable
Securities to be sold under such registration statement shall have
been sold by Holders, either pursuant to such registration statement
or pursuant to an exemption from the Act.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with
the provisions of the Act with respect to the disposition of all
securities covered by such registration statement.
(c) Furnish to the Holders and deliver as directed such numbers of
copies of a prospectus, including a preliminary prospectus, in
conformity with the requirements of the Act, and such other documents
as they may reasonably request in order to facilitate the disposition
of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably
appropriate for the distribution of the securities covered by the
registration statement, provided that the Company shall not be
required in connection therewith or as a condition thereto to qualify
to do business or to file a general consent to service of process in
any such states or jurisdictions, and further provided that (anything
in this Agreement to the contrary notwithstanding with respect to the
bearing of expenses) if any jurisdiction in which the securities
shall be qualified shall require that expenses incurred in connection
with the qualification of the securities in that jurisdiction be
borne by selling shareholders, then such expenses shall be payable by
selling shareholders pro rata, to the extent required by such
jurisdiction.
(e) In the event that Holders of Registrable Securities propose to
sell Registrable Securities pursuant to an underwritten offering, the
Company shall enter into a customary underwriting agreement. The
Company shall have the right to approve the managing underwriters
proposed by the Holders for such offering; provided, however, that
such approval shall not be unreasonably withheld.
6. Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this
Agreement that the Holders shall furnish to the Company such
information regarding them, the Registrable Securities held by them,
and the intended method of disposition of such securities as the
Company shall reasonably request and as shall be required in
connection with the action to be taken by the Company.
7. Expenses of Demand Registration. All expenses incurred in
connection with a registration pursuant to paragraph 2 or 4
(excluding underwriters' discounts and commissions), including
without limitation all registration and qualification fees, printers'
and accounting fees, fees and disbursements of counsel for the
Company, and the reasonable fees and disbursements of one counsel for
the selling Holders shall be borne by the Company; provided, however,
that the Company shall not be required to pay for any expenses of any
registration proceeding begun pursuant to paragraph 2 if the
registration request is subsequently withdrawn, unless the Holders
agree to forfeit their right to one demand registration pursuant to
paragraph 2; and provided further that the Holders may withdraw a
request if the audited financial statements of the Company materially
and adversely differ from the information previously disclosed to the
Holders at the time of their request, in which event the Holders
shall not be required to pay any of the expenses and shall retain the
right to require the Company to register Registrable Securities
pursuant to paragraph 2.
8. Company Registration Expenses. In the case of any registration
effected pursuant to paragraph 3, the Company shall bear all
registration and qualification fees and expenses (excluding
underwriters' discounts and commissions), including any additional
cost and disbursements of counsel for the Company that result from
the inclusion of securities held by the Holders in such registration;
provided, however, that each selling Holder shall bear the fees and
costs of its own counsel.
9. Underwriting Requirements. In connection with any offering
involving an underwriting of shares being sold pursuant to a
registration statement subject to Section 3 of this Agreement, such
Registrable Securities as are requested to be included in such
offering pursuant to this Agreement shall be included in such
offering on the same terms as other securities of the same class as
the Registrable Securities included in such offering; provided,
however, that if in the written opinion of the managing underwriter
or underwriters, the total amount of such securities to be so
registered, when added to such Registrable Securities, will exceed
the maximum amount of the Company's securities which can be marketed
without otherwise materially and adversely affecting the entire
offering, then the Company shall exclude from such offering
(a) first, all securities other than Registrable Securities held by
the Holders, being sold for the account of persons other than the
Company, (b) next, the minimum number of Registrable Securities held
by the Holders, pro rata to the extent practicable on the basis of
the number of Registrable Securities requested to be registered among
the selling Holders as is necessary in the opinion of the managing
underwriter or underwriters to reduce the size of the offering, and
(c) last, the minimum number of securities for the account of the
Company which in the opinion of the managing underwriter or
underwriters may be excluded.
10. Delay of Registration. No Holder shall have any right to take any
action to restrain, enjoin, or otherwise delay any registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Agreement.
11. Indemnification and Contribution. Subject to paragraph 8 in the
event any Registrable Securities are included in a registration
statement under this Agreement:
(a) To the extent not prohibited by law the Company will indemnify and
hold harmless each Holder requesting or joining in a registration,
any underwriter (as defined in the Act) for it, and each person, if
any, who controls such Holder or underwriter within the meaning of
the Act or the Securities Exchange Act of 1934 (the "1934 Act")
against any losses, claims, damages or liabilities, joint or several,
to which they may become subject under the Act, the 1934 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based on any untrue
or alleged untrue statement of any material fact contained in such
registration statement, including any preliminary prospectus or final
prospectus, or any amendments or supplements thereto, or arise out of
or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the
statements therein not misleading or arise out of any violation by
the Company of any rule or regulation promulgated under the Act or
the 1934 Act applicable to the Company and relating to action or
inaction required of the Company in connection with any such
registration; and will reimburse each such Holder such underwriter,
or such controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however,
that the indemnify agreement contained in this paragraph 11(a) shall
not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action to the extent that it arises out of or is
based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in connection with such
registration statement, preliminary prospectus, final prospectus, or
amendments or supplements thereto, in reliance upon and in conformity
with written information furnished expressly for use in connection
with such registration by any such Holder, underwriter or controlling
person.
(b) To the extent not prohibited by law, each Holder requesting or
joining in a registration will severally indemnify and hold harmless
the Company, each of its directors, each of its officers who have
signed the registration statement, each person, if any, who controls
the Company (within the meaning of the Act or the 1934 Act) against
any losses, claims, damages or liabilities, joint or several, to
which the Company or any such director, officer, controlling person,
agent or underwriter may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in such
registration statement, including any preliminary prospectus or final
prospectus, or any amendments or supplements thereto, or arise out of
or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in such
registration statement, preliminary or final prospectus, or
amendments or supplements thereto, in reliance upon and in conformity
with written information furnished by such Holder expressly for use
in connection with such registration; and each such Holder will
reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer, controlling person, agent or
underwriter in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this paragraph 11(b) shall not apply
to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is affected without the
consent of such Holder (which consent shall not be unreasonably
withheld).
(c) Promptly after receipt by an indemnified party under this
paragraph of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against any indemnifying party under this paragraph, notify the
indemnifying party in writing of the commencement thereof and (unless
the interest of the indemnifying party conflicts with that of the
indemnified party) the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to
assume the defense thereof with counsel mutually satisfactory to the
parties. The failure to notify an indemnifying party promptly of the
commencement of any such action, if prejudicial to his ability to
defend such action, shall relieve such indemnifying party, to the
extent that he is prejudiced thereby, of any liability to the
indemnified party under this paragraph, to the extent that he is
prejudiced thereby, of any liability to the indemnified party under
this paragraph, but the omission so to notify the indemnifying party
will not relieve him of any liability that he may have to any
indemnified party otherwise than under this paragraph.
(d) In order to provide for just and equitable contribution to joint
liability under the Act in any case in which either (i) any Holder
exercising rights under this Agreement, or any controlling person of
any such Holder, makes a claim for indemnification pursuant to this
paragraph 11 but it is judicially determined (by the entry of a final
judgment or decree by a court of competent jurisdiction and the
expiration of time to appeal or the denial of the last right of
appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that this paragraph 11 provides for
indemnification in such case, or (ii) contribution under the Act may
be required on the part of any such selling Holder or any such
controlling person in circumstances for which indemnification is
provided under this paragraph 11; then, and in each such case, the
indemnifying party, in lieu of indemnifying such indemnified party
hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage,
or expense in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and the
indemnified party on the other in connection with statements or
omissions that resulted in such loss, liability, claim, damage or
expense as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and of the indemnified party
shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission
to state a material fact relates to information supplied by the
indemnifying party or the indemnified party and the parties' relative
intent, knowledge, access to information, and opportunity to correct
or prevent such statement or omission; provided, however, that, in
any such case, (A) no such Holder will be required to contribute any
amount in excess of the public offering price of all such Registrable
Securities offered by it pursuant to such registration statement; and
(B) no person or entity guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) will be entitled to
contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.
12. Reports Under Securities Exchange Act of 1934. With a view to
making available to the Holders the benefits of Rule 144 promulgated
under the Act and any other rule or regulation of the SEC that may at
any time permit a Company agrees to use its best efforts to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144, at all times subsequent to ninety
(90) days after the effective date of the first registration
statement covering an underwritten public offering filed by the
Company;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the 1934 Act; and
(c) furnish to any Holder so long as such Holders own any of the
Registrable Securities forthwith upon request a written statement by
the Company that it has complied with the reporting requirements of
Rule 144 (at any time after ninety (90) days after the effective date
of said first registration statement filed by the Company), and of
the Act and the 1934 Act (at any time after it has become subject to
such reporting requirements), a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents
so filed by the Company as may be reasonably requested in availing
any Holder of any rule or regulation of the SEC permitting the
selling of any such securities without registration.
13. Lockup Agreement. In consideration for the Company agreeing to
its obligations under this Agreement, each Holder agrees in
connection with any registration of the Company's Class A Common
Stock or Class B Common Stock for sale by the Company to the general
public that, upon the request of the Company or the underwriters
managing any underwritten offering by the Company of the Company's
securities, not to sell, make short sale of, loan, grant any option
for the purchase of, or otherwise dispose of any Registrable
Securities (other than those included in the registration) without
the prior written consent of the Company or such underwriters, as the
case may be, for such period of time (not to exceed one hundred
twenty (120 days) from the effective date of such registration as the
Company or the underwriters may specify; provided, however, that the
Company may not discriminate among the Holders with respect to any
lockup arrangements pursuant to this Section 13.
14. Certain Limitations in Connection with Future Grants of
Registration Rights. From an after the date of this Agreement, the
Company shall not enter into any agreement with any holder or
prospective holder of any securities of the Company providing for the
granting to such holder of registration rights unless:
(a) such agreement includes the equivalent of
paragraph 13 as a term; and
(b) such registration rights, if more favorable
than those granted herein, are extended to the Holders or their
transferees permitted under paragraph 15.
15. Transfer of Demand Registration Rights. The demand
registration rights of the Holders under Sections 2 and 4 may be not
transferred except (a) to an affiliate of Telesat or the Rigas Family
(without restriction as to a minimum amount of Registrable Securities
transferred), or (b) to a person who acquires at least 25% of the
Registrable Securities originally issued to either Telesat or the
Rigas Family. The Company shall be given written notice by the
Holder at the time of such transfer stating the name and address of
the transferee and identifying the securities with respect to which
the rights under this Agreement are being assigned.
16. Entire Agreement. This Agreement and the documents
referred to herein constitute the entire agreement among the parties
with respect to the subject matter hereof and supersedes all prior
agreements and negotiations relating thereto.
17. Governing Law. This Agreement, together with the
rights and obligations of the parties hereunder shall be governed by
and construed and enforced in accordance with the laws of the State
of Delaware without regard to any jurisdiction's conflicts of laws
provisions.
18. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original but
all of which together shall constitute one and the same instrument.
19. Titles and Subtitles. The titles and subtitles used
in this Agreement are for convenience only and are not to be
considered in construing or interpreting this Agreement.
20. Notices. Any notice, request or other communication
required or permitted under this Agreement shall be given in writing
and shall be deemed to be effectively given upon (i) personal
delivery, (ii) delivery by U.S. Express Mail or other overnight
courier service which provides evidence of delivery, (iii) legible
facsimile transmission, or (iv) the expiration of three (3) days
following deposit with the United States Postal Service, by
registered or certified mail, postage prepaid, addressed, in each
case, as follows:
If to the Company:
Adelphia Communications Corporation
Attn: Timothy J. Rigas
5 West Third Street
Coudersport, Pennsylvania 16915
Telephone: (814) 274-9830
Facsimile: (814) 274-7098
with a copy to:
Buchanan Ingersoll Professional Corporation
One Oxford Centre
301 Grant Street, 21st Floor
Pittsburgh, Pennsylvania 15219
Attn: Carl E. Rothenberger, Jr., Esq.
Telephone: (412) 562-8826
Facsimile: (412) 562-1041
If to Telesat:
Telesat Cablevision, Inc.
11760 U.S. Highway One
Suite 600
N. Palm Beach, Florida 33408
Attn: Leslie J. Gelber
Telephone:
Telecopier No.: (561) 691-3615
with a copy to:
Abigail Watts-Fitzgerald
Steel Hector & Davis, LLP
200 South Biscayne Blvd.
Miami, Florida 33131
Telephone:
Facsimile: (305) 577-7001
If to the Rigas Family
Highland Holdings
5 West Third Street
Coudersport, Pennsylvania 16915
Attention: Timothy J. Rigas
Telephone: (814) 274-9830
Facsimile: (814) 274-7098
or at such other address as any party may designate by ten (10) days
advance written notice to the other party in accordance with the
provisions of this Paragraph.
21. Amendments. This Agreement may not be amended
without the written consent of the Company and the holders of at
least a majority in interest of the then outstanding Registrable
Securities.
[remainder of page intentionally left blank]
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this
Agreement to be executed by a duly authorized representative as of
the day first above written.
COMPANY:
ADELPHIA COMMUNICATIONS CORPORATION
By: /s/ Timothy J. Rigas
Name: Timothy J. Rigas
Title: Executive Vice President
TELESAT:
TELESAT CABLEVISION, INC.
By: /s/ L. J. Gelber
Name: L. J. Gelber
Title: Vice President
THE RIGAS FAMILY:
HIGHLAND HOLDINGS
By: /s/ Michael J. Rigas
Name: Michael J. Rigas
Title: Partner
Exhibit 10
June 22, 1997
Telesat Cablevision, Inc.
11760 U.S. Highway One
Suite 600
N. Palm Beach, Florida 33408
Attention: Leslie J. Gelber
Re: Series C Preferred Stock
Gentlemen:
In connection with that certain Stock Purchase Agreement
between and among Adelphia Communications Corporation ("Adelphia"),
Telesat Cablevision, Inc. ("Telesat") and Highland Holdings (the
"Private Company") of even date herewith (the "Stock Purchase
Agreement"), it is our understanding that Telesat and the Private
Company, in their capacities as holders of the shares of the Series C
Cumulative Convertible Preferred Stock of Adelphia (the "Series C
Preferred Stock") issued pursuant to the Stock Purchase Agreement
(the "Shares"), have agreed to the following terms and conditions
related to their interests in the Shares.
1. Series C Directors. With respect to the right
of a majority of holders of the outstanding shares of the Series C
Preferred Stock to elect two directors (the "Series C Directors") to
fill the Adelphia Board of Directors seats that would be created upon
the occurrence of certain Voting Rights Trigger Events as such are
described in Section 6(b) of Adelphia's Series C Preferred Stock
Certificate of Designations (the "Certificate of Designations"),
Telesat and the Private Company agree that for as long as Telesat has
not sold, transferred, assigned (other than a sale, transfer or
assignment to an Affiliate of Telesat) or converted more than 50% of
the Shares it is purchasing pursuant to the Stock Purchase Agreement
(the "Telesat Shares"): (a) the Private Company agrees to vote its
Shares in favor of at least one Telesat Series C Director nominee for
as long as Telesat and the Private Company together own a majority of
the outstanding Shares and (b) Telesat and the Private Company will
not vote to fill the second Series C Director seat; provided,
however, that if the Private Company sells, transfers or assigns, to
one or more third parties that are not part of the Rigas Family (as
defined below) more than 62.5% of the Shares which were initially
issued to the Private Company (the "Company Shares"), the agreement
contained in clause (b) shall have no further force or effect.
2. Right of Co-sale; Control Transfer.
(a) At least 30 days prior to the Private Company making any
Control Transfer, the Private Company (the "Transferring
Shareholder") shall deliver a written notice (a "Sale Notice") to
Telesat, which shall disclose in reasonable detail the proposed
number of Company Shares to be transferred (the "Offered Shares"),
the proposed terms and conditions of the Control Transfer and the
identity of the prospective transferee(s) (if known) subject to any
confidentiality terms agreed upon by the Transferring Shareholder and
the prospective transferee(s). Telesat may elect to participate in
the proposed Control Transfer by delivering written notice (the "Co-
Sale Election") to the Transferring Shareholder(s) within 15 days
after delivery of the Sale Notice.
(b) If Telesat elects to participate in such
Control Transfer, then Telesat will be entitled to sell in such
proposed Control Transfer, at the per Share price stated in the Sale
Notice, up to that number of Shares equal to (i) the Offered Shares,
multiplied by (ii) a fraction, the numerator of which shall be the
number of Shares then owned by Telesat, and the denominator of which
shall be the number of Shares then owned by Telesat plus the number
of Shares owned by the Transferring Shareholder; provided, that to
the extent the Transferring Shareholder is required in accordance
with the terms of the proposed Control Transfer to convert the
Company Shares being sold into Class A Common Stock of Adelphia, par
value $.01 per share ("Company Converted Class A Common Shares"),
prior to the transfer, then Telesat shall also be required to
convert prior to such transfer in order to participate in the Control
Transfer; provided, further, that the formula previously set forth in
this Section 2(b) shall be used to calculate the number of Shares to
be converted (shares resulting from a conversion of Shares by Telesat
to be referred to as "Telesat Converted Class A Common Shares") and
that Telesat will be entitled to sell in the proposed Control
Transfer. Except as expressly set forth in Sections 2(b) and 3(b)
hereof, Telesat shall not have any co-sale rights pursuant to this
Letter Agreement with respect to any Class A Common Stock that it
holds as a result of the conversion of the Shares or otherwise.
(c) Telesat shall state in its Co-Sale Election
the number of Telesat Shares or Telesat Converted Class A Common
Shares, as applicable, it has elected to sell in the proposed Control
Transfer. The Transferring Shareholder shall use its best efforts to
obtain the agreement of the prospective transferee(s) to the
participation of Telesat in any contemplated Control Transfer to the
extent provided in the Co-Sale Election, and the Transferring
Shareholder shall not effect a Control Transfer of any of the
Company's Shares to any prospective transferee(s) if such
transferee(s) will not permit participation by Telesat to the extent
provided by this Section 2.
(d) For purposes of this Agreement, a "Control
Transfer" means any single sale, transfer, assignment or other
disposal or a related series thereof (whether with or without
consideration and whether voluntarily or involuntarily or by
operation of law, but excluding a bona fide pledge to secure
indebtedness) or series of related sales, transfers, assignments or
other disposals to a party that is not a member of the Rigas Family
of at least 50% of the Company Shares initially issued to the Private
Company; provided, however, that if a Sale Notice has been delivered
with respect to a proposed Control Transfer and such Control Transfer
is subsequently consummated, no subsequent transfers shall be deemed
to be a Control Transfer.
3. Right of Co-Sale; Change of Control. (a) At
least 30 days prior to a proposed Change of Control, the Rigas Family
shall deliver a written notice (a "Change of Control Notice") to
Telesat, which shall disclose in reasonable detail the proposed
transaction resulting in the Change of Control; provided that Telesat
agrees to any confidentiality terms agreed upon by affected members
of the Rigas Family and the prospective acquiror. If the Change of
Control involves the sale, transfer or assignment of the Company
Shares or Company Converted Class A Common Shares, Telesat may elect
to participate in the proposed Change of Control by delivering
written notice (the "Participation Election") to the affected members
of the Rigas Family within 15 days after delivery of the Change of
Control Notice.
(b) If Telesat elects to participate in such
Change of Control, Telesat will be required to convert all of its
Shares into Class A Common Stock in order to participate. Telesat
will then be entitled to sell not less than all of the Telesat
Converted Class A Common Shares at the price per share stated in the
Change of Control Notice.
(c) The affected members of the Rigas Family
shall use their best efforts to obtain the agreement of the
prospective acquiror to the participation of Telesat in any
contemplated Change of Control. To the extent it is not possible to
obtain the agreement of the prospective acquiror, the Rigas Family or
any member thereof, at Telesat s election,shall be required to
purchase such Telesat Shares or Telesat Converted Class A Common
Shares at the price stated in the Change of Control Notice (or, if no
price is stated in such Change of Control Notice, at the greater of
(i) Fair Market Value, and (ii) (x) if such purchase is to occur
prior to August 1, 2000, at a price per share equal to the
Liquidation Preference (as defined in the Certificate of
Designations), or (y) if such purchase is to occur on or after August
1, 2000, at a price per share equal to the Applicable Redemption
Price, as defined in the Certificate of Designations) or will not
effect a Change of Control to the extent the Rigas Family or any
member of thereof can control the occurrence such Change of Control.
4. Voting of Shares. The Private Company hereby agrees
that it shall vote the Company Shares which it holds in the manner
directed by Telesat in connection with proposals requiring the
consent of the holders of the Shares pursuant to Sections 6(f), (g)
and (h) of the Certificate of Designations; provided, however, that
the agreement contained in this Section 4 shall be of no further
force or effect (a) upon the consummation of a Change of Control or a
Control Transfer, or (b) in the event that Telesat sells, transfers,
assigns or otherwise disposes of, or converts into Class A Common
Stock, at least 50% of the shares of Series C Preferred Stock
initially issued to Telesat.
5. Definitions. For the purposes of this Letter
Agreement, the following terms shall have the meanings indicated:
(a) "Change of Control" means any occurrence
resulting in (i) a P-person other than a member of the Rigas Family
becoming the beneficial owner of more than 35% of the total voting
power required to elect or designate for election a majority of
Adelphia's Board of Directors and attaching to the then outstanding
voting capital stock of Adelphia and (ii) no member of the Rigas
Family at such time being the beneficial owner of more than 35% of
the total voting power required to elect or designate for election a
majority of Adelphia's Board of Directors and attaching to the then
outstanding voting capital stock of Adelphia; provided, however, that
if a Change of Control Notice has been delivered with respect to a
proposed Change of Control and such Change of Control is subsequently
consummated, no subsequent transfers shall be deemed to be a Control
Transfer.
(b) "Immediate Family" means the spouse, child,
grandchild, grandparent, lineal descendant or ancestor, mother,
father, sister, brother, niece or nephew, (whether natural or
adopted) of a specified Person or any spouse of the foregoing.
(c) "Person" means an individual, a partnership,
a corporation, a business trust, a joint stock company, a group
(within the meaning of Section 13(d) under the Securities Exchange
Act of 1934, as amended), a trust, any unincorporated association, a
joint venture, a governmental authority or any other entity of
whatever nature.
(d) "Rigas Family" means John J. Rigas, Doris N.
Rigas, Timothy J. Rigas, Michael J. Rigas, James P. Rigas, Ellen K.
Rigas, any of the Immediate Family of any of them, any of the
respective estates or lineal descendants of any such person, any
trust created for the benefit of any such persons (so long as one or
more of the foregoing persons is the controlling trustee) and, while
and to the extent they are serving in such capacity, the executors,
administrators or personal representatives of such persons, and any
corporation, partnership or other person owned or controlled directly
or indirectly by one or more members of the Rigas Family.
(e) "Fair Market Value" means the fair market
value of the securities in question (i) as mutually agreed to by
Telesat and the Private Company, or (ii) if no such agreement is
reached within seven (7) days of Telesat's election as described
above, as determined by an appraisal conducted by two independent
appraisers, one selected by Telesat, and one by the Private Company;
provided, however, that if either the Private Company or Telesat
fails to choose an appraiser prior to fifteen (15) days after
receiving notice of the other party's choice of an independent
appraiser, such other party's choice of independent appraiser shall
be the sole appraiser for purposes of this letter. In the event that
such two appraisers are unable to agree on the Fair Market Value
within thirty (30) days following their selection, they shall jointly
appoint a third independent appraiser whose determination shall be
issued within thirty (30) days thereafter and shall be final and
binding. The Private Company and Telesat shall each bear the cost of
the respective appraiser selected by them, and the cost of the
appraisal conducted by a third appraiser shall be borne equally by
the Private Company and Telesat.
6. Assignment. Except as provided below, this
Letter Agreement may not be assigned in whole or in part and shall
not be binding upon transferees of the Shares, other than transferees
who control, are controlled by or are under common control with
either of the parties hereto ("Affiliates"). Either party may assign
this Agreement to an Affiliate of such party ("Assignee"); provided
however that such assignment shall not be effective until the
Assignee delivers to the non-assigning party an executed assumption
and undertaking pursuant to which the Assignee agrees to be bound by
and perform all of the obligations of the assigning party.
7. Counterparts. This Letter Agreement may be
executed simultaneously in separate counterparts, any one of which
need not contain the signatures of more than one party, but all such
counterparts taken together shall constitute one and the same Letter
Agreement. Delivery of executed signature pages by facsimile
transmission shall constitute effective and binding execution and
delivery of this Letter Agreement.
8. Governing Law. This Letter Agreement shall be
interpreted and construed in accordance with the laws of the
Commonwealth of Pennsylvania, without regard to its choice of law
provisions.
9. Notices. All notices, demands or other
communications to be given or delivered under or by reason of the
provisions of this Letter Agreement shall be in writing and shall be
deemed to have been given when delivered personally to the recipient,
sent to the recipient by facsimile transmission (as evidenced by a
confirmation mechanically produced simultaneously with the completion
of such transmission), reputable express courier service (charges
prepaid) or mailed to the recipient by certified or registered mail,
return receipt requested and postage prepaid. Such notices, demands
and other communications shall be sent to the Telesat and the Private
Company and at the addresses and telecopy numbers set forth in the
Stock Purchase Agreement, or to such other address or to the
attention of such other person as the recipient party has specified
by prior written notice to the sending party. For the purpose of
this notice provision, the Rigas Family shall be treated the same as
the Private Company.
If the foregoing is also your understanding of our
agreement, please sign, date and return a copy to us of this letter.
Very truly yours,
HIGHLAND HOLDINGS
By: /s/ Michael J. Rigas
Its: Executive Vice President
ACCEPTED and AGREED TO, intending
to be legally bound, as of this
___ day of July, 1997:
TELESAT CABLEVISION, INC.
By: /s/ L. J. Gelber
Its: Vice President
Exhibit 11
Adelphia Communications Corporation
Main at Water Street
Coudersport, PA 16915
June 22, 1997
Telesat Cablevision, Inc.
11760 U.S. Highway One
Suite 600
N. Palm Beach, Florida 33408
Attention: Leslie J. Gelber
Re: Series C Preferred Stock
Gentlemen:
Reference is made to Section 6(f)(i) of the Adelphia Communications
Corporation (the "Company") Certificate of Designations, Preferences
and Relative, Participating, Optional and other Special Rights of
Preferred Stock and Qualifications, Limitations and Restrictions
Thereof of Series C Cumulative Convertible Preferred Stock (the
"Series C Preferred Certificate"). Capitalized terms not otherwise
defined herein shall be defined as provided in the Series C Preferred
Certificate.
In the event that the Company proposes to create, issue and sell
Parity Securities, and Telesat Cablevision, Inc. or any of its
affiliates ("Telesat") fails to provide its consent to such creation,
issuance and sale in accordance with Section 6(f)(i), the Company
shall have the right to purchase the shares of Series C Preferred
Stock held by Telesat or any of its affiliates, in whole but not in
part, at the greater of (i) Fair Market Value, and (ii) (x) if such
purchase is to occur prior to August 1, 2000, at a price per share
equal to the Liquidation Preference, or (y) if such purchase is to
occur on or after August 1, 2000, at a price per share equal to the
Applicable Redemption Price, in any event notwithstanding any
redemption price which may be required for an optional redemption
pursuant to the Series C Preferred Certificate. For purposes of this
letter, "Fair Market Value" shall mean the fair market value of the
Series C Preferred Stock (i) as mutually agreed to by Telesat and the
Company, or (ii) if no such agreement is reached within seven (7)
days of Telesat's refusal to consent to the Company's proposal, as
determined by an appraisal conducted by two independent appraisers,
one selected by Telesat, and one by the Company; provided, however,
that if either the Company or Telesat fails to choose an appraiser
prior to fifteen (15) days after receiving notice of the other
party's choice of an independent appraiser, such other party's choice
of independent appraiser shall be the sole appraiser for purposes of
this letter. In the event that such two appraisers are unable to
agree on the Fair Market Value within thirty (30) days following
their selection, they shall jointly appoint a third independent
appraiser whose determination shall be issued within thirty (30) days
thereafter and shall be final and binding. The closing of the
payment of the purchase price for the Series C Preferred Stock shall
be held no later than fifteen (15) days following the determination
of the Fair Market Value, and payment shall be made by wire transfer
in accordance with Telesat s written instructions. The Company shall
bear the cost of all appraisals in connection with the determination
of Fair Market Value.
If the foregoing is also your understanding of our agreement, please
sign, date and return a copy to us of this letter.
Very truly yours,
ADELPHIA COMMUNICATIONS
CORPORATION
By: /s/ Michael J. Rigas
Its: Executive Vice President
ACCEPTED and AGREED TO, intending
to be legally bound, as of this
___ day of July, 1997:
TELESAT CABLEVISION, INC.
By: /s/ L. J. Gelber
Its: Vice President
Exhibit 12
Joint Filing Agreement
Be it known that the undersigned hereby agree to file
jointly a Schedule 13D, including amendments thereto, reporting the
beneficial ownership of the Class A Common Stock, par value $.01 per
share, of Adelphia Communications Corporation.
Dated: August 5, 1997 FPL GROUP, INC.
/s/ Dennis P. Coyle
Name: Dennis P. Coyle
Title: General Counsel and Secretary
Dated: August 5, 1997 FPL GROUP CAPITAL INC
/s/ Dennis P. Coyle
Name: Dennis P. Coyle
Title: Secretary
Dated: August 5, 1997 TELESAT CABLEVISION, INC.
/s/ Dennis P. Coyle
Name: Dennis P. Coyle
Title: President
Dated: August 5, 1997 MAYBERRY INVESTMENTS, INC.
/s/ Edward F. Tancer
Name: Edward F. Tancer
Title: Secretary
